Week in Review

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What We're Reading:

Europe’s energy crunch will trigger shortages. Bills will be high, but Europe will survive the winter: it’s bought enough oil and gas to get through the heating seasons. Much deeper costs will be borne by the world’s poorest countries. (The Star)

Russia had no choice but to flee Kherson, says Ukraine. In the Ukrainian capital Kyiv, a senior government figure warns that Russian forces are booby-trapping Kherson in what he claims is an attempt to turn it into a “city of death.” (BBC)

US consumer inflation eased to 7.7% over past 12 months. Price increases moderated in the United States last month in the latest sign that the inflation pressures that have gripped the nation might be easing as the economy slows and Americans grow more cautious. (AP)

Why are the US midterms important for the rest of the world? The world is watching closely to see how the U.S. midterm elections could change the country's foreign policy. If Republicans retake control of both houses of Congress, will the support for Ukraine and other allies be affected? (DW)

Russia’s Putin won’t attend upcoming G-20 summit in Bali. Russian President Vladimir Putin will not attend the Group of 20 summit in Indonesia this week, an Indonesian government official said Thursday, avoiding a possible confrontation with the United States and its allies over his war in Ukraine. (AP)

Brexit-backing Next boss says UK needs more overseas workers. The boss of retailer Next is urging the government to let more foreign workers into the U.K. to ease labor shortages. (BBC)

Tankers: diesel shortages in the EU and the US could generate more cargoes from Asia. One of the main shortages caused by the existing conditions in the energy markets and the looming sanctions, revolves around diesel. (HSN)

PHL economy expands by 7.6% in Q3. The country’s economy grew by 7.6% in the third quarter, faster than the 7 percent recorded a year ago, according to data released by the Philippine Statistics Authority. (Business Mirror)

How Bangladesh went from an economic miracle to needing IMF help. In 50 years, Bangladesh went from what U.S. diplomats once called a "basket case" to what the World Bank now calls “an inspiring story of growth.” (NPR)

Export credit coalition accused of ‘backsliding’ on fossil fuel support. A coalition of European governments has failed to agree on a common approach to ending export credit agency support for fossil fuel projects by the end of the year. (Global Trade Review)

Joe Biden to meet Xi Jinping on G20 sidelines. Joe Biden intends to explore China's “red lines” and determine any conflict of interest in the meeting, an official has said. The meeting will be the first since Biden became president. (DW)

Ebola outbreak in Uganda: Mubende, a district under lockdown. In Uganda, the government has extended a 21-day lockdown in the two districts at the epicenter of the ongoing Ebola outbreak. (BBC)

Inflation strikes disrupt trains, flights in Greece, Belgium. Workers walked off the job in Greece and Belgium on Wednesday during nationwide strikes against increasing consumer prices, disrupting transportation, forcing flight cancellations and shutting down public services in the latest European protests over the rising cost of living. (AP)

 
 

Mongolia: Economic Outlook for 2023 Is Uncertain and Mainly Dependent on China

Raphaël Cecchi, Credendo

Mongolia’s expected moderate real GDP growth (+2.5%) in 2022—after a modest +1.6% in 2021—is forecasted to accelerate to 5% in 2023. However, the latest IMF forecasts are uncertain as the main external factors behind this year’s subdued growth, namely China’s Covid containment measures, the weak economic momentum and inflation pressures, might persist next year.

China’s zero-COVID policy and sharply weaker economic activity have significantly hit landlocked Mongolia’s key exports to China because of land border closures, supply chains disruptions and poor (commodity) demand. Besides, Mongolia is suffering from inflation pressures, which are exacerbated by the impact the war in Ukraine is having on food and energy prices, and by the depreciation of the tugrik.

So far, the latter has lost 18% of its value against the U.S. dollar this year (data until Oct. 13), which has fueled inflation as well. Depreciating pressures come not only from a strong U.S. dollar, but also from a substantial widening of the country’s current account deficit from 12.8% of GDP in 2021 to an expected 20% in 2022. This deterioration is explained by the increase in imports, which is largely exceeding the jump in exports in value, as export volumes continue to drop this year as well.

In response, the central bank has sharply tightened its monetary policy by doubling its policy rate to 12% this year, a five-year high. Further rate increases are not ruled out in the future. In this context and given the risk of—at best—a slowly growing global economy putting downward pressures on global commodity demand and thus prices, Mongolia’s economic forecasts for 2023 are very uncertain as Mongolia remains very reliant on China and mining prices. Indeed, 75% of its exports go to China, whereas more than 60% of Mongolia’s imports come from China and Russia.

Volatility in mining prices is one of several external shocks weighing on Mongolia’s economic prospects, as prices could be at lower levels in case of flat global growth next year. In those turbulent and uncertain times, Mongolia’s dependence on its neighbors and the extractive sector are again accentuating the country’s structural weaknesses. This is highlighted by tourism as well. The sector, seen as a source of economic diversification, remains virtually frozen as a result of China’s zero-COVID restrictions and the war in Ukraine (e.g. sanctions), and therefore continues to harm economic activity. Another growth driver, private consumption, is affected by high inflation after households had just welcomed the lifting of COVID-19 restrictions in early 2022.

On the positive side, the expansion of the giant Oyu Tolgoi copper mine is expected to move forward in 2023 after the government and project partners reached an agreement in January. This expansion is likely to support exports and real GDP growth. Moreover, Mongolia’s political situation has stabilized since the June 2021 elections with the ruling Mongolian People's Party enjoying parliamentary majority and in control of the presidency. In a context of heightened domestic stability, social protests fueled by high living costs and unemployment appear as the main threat to stability in the short-term. 

At an international level, the war in Ukraine has raised the country’s geopolitical dimensions as it finds itself in an in-between position between Russia and China on the one hand, and the West on the other hand. While western support to its democracy is expected to rise in the future, Mongolia is keen to continue reaping economic benefits from its transit position between its two giant neighbors, Russia and especially China, its dominant trade and investment partner. Mongolia is part of China’s BRI (Belt and Road Initiative) and agreed with Gazprom at the end of February to start building a pipeline (‘Power of Siberia 2’) between Russia and China as from 2024. While the pipeline would re-orient Russian gas sales away from European customers, it would allow Mongolia to perceive valuable transit fees. The financing has yet to be found though, but an oil pipeline is also said to be considered. Those economic projects might eventually increase further Mongolia’s economic vulnerability and dependence in the long term, especially given rising world geopolitical tensions.

Credendo’s ST ratings have remained stable since 2021, mainly thanks to a slowly improving economic momentum driven by high mineral prices. However, the ST political risk (4/7) has a negative outlook. Indeed, liquidity risks have been on the rise this year, due to the steady collapse in foreign exchange reserves (-42% between January and August 2022), reflecting expensive imports and weaker export growth.

Reprinted with permission; Credendo

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3 Steps to Quell “Quiet Quitting” and Resignations

Gloria St. Martin-Lowry, president, HPWP Group

Employees are the lifeblood of a business. When workers are happy in their roles, companies experience high retention rates and increased productivity. But when employees aren’t, these benefits quickly reverse. The Great Resignation and “quiet quitting” phenomena reveal what happens when employees’ needs and expectations aren’t met.

Over the past two quarters, productivity has dropped dramatically. In the wake of the pandemic, tight labor market and ongoing battle over remote work, people are reconsidering what they do, where they do it and who they do it for. Employees know they have choices as to where and how they work. But although some might feel comfortable walking away (prompting the Great Resignation), others are just shutting down and doing the bare minimum (leading to “quiet quitting”).

“Resigners” and “quiet quitters” alike demonstrate the need for new approaches to culture and management. The new era of work is here, no matter how hard some companies might fight it. To be successful, managers must understand the necessity of flexibility and support for employees.

Building flexibility into the workplace

Currently, a flexible working arrangement is one of the top three reasons people search for new jobs. However, flexibility isn’t black and white; it means different things to different people. Some might want to be able to put in their hours at any time of day. Some might be more concerned about the location where they’re working. Others might want to take off an hour here or there for family obligations. That’s why flexible policies that don’t consider individual preferences won’t work.

Alternative models to consider include remote work (to accommodate employees across the country), hybrid work (to give local employees a space to congregate), flexible work hours (to help working parents and individuals with unique schedules) and the gig economy (to access necessary expertise without hiring full-time team members).

As a manager, you have the power to create a high-performance environment. If you can commit to change and get the rest of your company’s management team aligned, the results can be excellent. Here’s how to start:

1. Stay curious

The way your business has always done things might be comfortable, but it isn’t necessarily effective. Instead of instinctively making decisions grounded in what you think you know, challenge yourself to adopt a mindset of curiosity. If you’re curious, you ask more questions, gather more information and involve others. This helps you see more things as possible versus not possible. It gives you the opportunity to discover the best solution, not just the one you’re most familiar with.

There are many benefits to curiosity: it helps with building empathy and seeing the value of diverse thoughts. Try encouraging employees to pursue passion projects and learning opportunities. Multinational pharmaceutical corporation Novartis, for instance, requires employees to dedicate 100 hours per year to learning and developing curiosity. The company also hosts webinars, funds training and creates events to help achieve this goal.

2. Focus on outcomes, not tasks

It’s easy to get entangled by the specifics of a given task and focus on the “how” more than the “why.” But a single task isn’t worth much if it doesn’t contribute to the bigger picture. When it comes to defining remote work rules, ask yourself, “What’s the desired outcome of a role?” and “What results are expected?” Then, talk with your team about the best ways to achieve these outcomes. When you do this, you create a culture of commitment and accountability.

3. Build relationships

Employee expectations are changing, and flexibility is key in the new era of work. It’s already a factor for many in their career decisions, and it will only continue to grow in importance. You must grant employees the flexibility and autonomy they need to succeed. You’ve already taken the time to hire great people, so continue to build and strengthen those relationships instead of micromanaging their day-to-day workflows.

Building relationships is easy if you care about the people on your team. Take time to talk about more than just work. Find out about their passions, families and interests. Schedule regular one-on-one meetings and let employees lead them. Resist the temptation to make these meetings solely focused on work. People will naturally talk about what they’ve got going on, so give them space to ask questions about the business or discuss development. You can schedule other meetings to discuss project details.

These one-on-one meetings are even more critical with remote team members, as there aren’t opportunities for hallway conversations. You have to be more deliberate and intentional about relationship-building. People are more open when they know you care, so prioritize authentic and transparent communication. When you create a strong foundation with your team, they’ll be more honest, more likely to share ideas and concerns and more apt to rally around change.

You’ve been conditioned to put structure behind most things you do at work, but overly rigid strategies can also limit your organization’s growth and potential. When you and the rest of your company’s management team commit to fostering a people-first, performance-driven culture, you’ll be astonished at the resulting growth and profitability.

Gloria St. Martin-Lowry is the president of HPWP Group, a company that promotes leadership and organizational development through positivity, coaching and problem-solving. HPWP is driven to create high-performing workplaces by partnering with courageous leaders who value the contributions of team members.

Reprinted with permission; SmartBrief

Dg Okonjo-Iweala: Make Trade and Investment a Key Part of Delivering on Climate Action

WTO

At a high-level forum held on the sidelines of the COP27 in Sharm-El-Sheikh, Egypt on Nov. 9, WTO Director General Okonjo-Iweala highlighted the need to develop climate-smart policies to promote international trade and investment in mitigation and adaptation projects. She added that fostering cooperation to develop common approaches to carbon pricing was critical to driving new transformations.

“We need to build a coherent framework of trade and investment policies supported by roadmaps that can accelerate the energy transition and boost re-investments,” the Director-General said. “Climate change adaptation requires significant infrastructure investment to increase resilience and reduce vulnerabilities, and the transition to a low-carbon global economy will generate enormous investment, employment and growth opportunities.”

The Global Investment and Trade for Climate Transformation forum, convened by the WTO and the UN Conference on Trade and Development (UNCTAD), addressed what the international trade and investment communities could do to advance the Paris Climate Agreement. 

UNCTAD Secretary-General Rebecca Grynspan told the forum that recent research showed the number of new climate change investment projects announced in the last two quarters had decreased, indicating the need for climate funding, particularly in developing countries. “We must ensure that trade and investment policies are an integral part of nationally determined contributions,” she said. “That is not always the case, and we need to change that.”

Grynspan also discussed the role that trade can play in climate adaptation, highlighting the need to maintain a policy environment conducive to the cross-border flow of climate financing in order to promote international investment in mitigation and especially adaptation.

ITC Executive Director Pamela-Coke-Hamilton underlined that the voice of small businesses must be heard in the talks on transitioning to a low-carbon economy. “It’s clear that climate change has a disproportionate negative impact on developing countries,” she said. “But by extension, it’s going to have even more negative impact on small businesses, so this year, we determined that there needed to be a presence and advocacy for their voices to be heard.”

Speaking on the role of public-private partnerships in climate financing, Egypt's Minister of International Cooperation Rania A. Al Mashat said that financing was critical in the launch of a recent green hydrogen project in Egypt aimed at reducing emissions. “The key word here is financing. How can we avail financing to countries who want to actually trade with each other through a cleaner method?” she asked.

Secretary General of the International Chamber of Commerce John Denton noted the effects of trade facilitation in greening supply chains and reducing the impact of climate change.

“Let’s not forget that trade facilitation, in enabling the movement of goods across borders, actually can, if it’s done properly, reduce emissions,” he said.

CEO of the World Federation of Exchanges Nandini Sukumar stressed that trade formed a significant part of the solution to climate action. “As we come out of the pandemic and as we build back better, trade as an engine of growth, as an engine of just transition, and as an engine of inclusivity, is going to be more important than ever before.”

Outlining the role of the financial sector in assisting society toward net zero, Jean Paul Servais, chairman of the International Organization of Securities Commissions (IOSCO), said the “only way the financial sector can play a role in financing the transition is through transparent capital flows to where they are needed.”

      

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Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate