Starting and running a business is difficult, and one of the biggest obstacles is financing. Every business requires money to run its operations, and lack of adequate funding is often credited as one of the main reasons businesses fail.
To prevent your business from facing the same problem, it’s essential to know the different financing options. With such a wide range available, you’re bound to find something that suits your business’s needs.
So, if you’re looking to secure financing for your business, here are the different options you can choose from.
Equipment Financing
Equipment financing refers to using a lease or a loan to borrow or purchase equipment for your business. Equipment, in this case, could refer to restaurant equipment or a delivery van. It differs from other forms of finance because it involves physical assets that serve as collateral. Due to this, equipment financing typically involves lower risk and is more cost-effective than different financing types.
Equipment financing is an excellent source of finance for businesses that want to grow but can’t afford to invest in expensive equipment. Since the payment is spread out over a period, it’s an affordable option for a business. Additionally, if your industry is rapidly changing due to technology and machinery gets obsolete quickly, it makes more sense to lease equipment than to buy it.
Business Credit Cards
One source of short-term business finance is the business credit card. This source of finance is, in fact, the most common source for small businesses as they can easily use to pay for all kinds of business expenses without incurring interest, as long as the outstanding balance is paid in full by the credit-free period. In fact, 31% of businesses that seek credit apply for credit cards, making them a popular option.
For startups, especially, a business credit card is handy since it improves their purchasing power. However, it’s important to note that while the credit is free in the short run, a credit card could be quite detrimental and result in huge amounts of debt and significant interest if you fail to keep track of your spending. On the other hand, if you use your business credit card wisely, you can create a positive credit rating, which is valuable for when you want to secure a loan.
Business Loans
Business loans can provide you with money that you have to pay back over a particular period with added interest. These could vary from medium to long-term, and there is a wide range of options available, varying from government-backed to commercial loans.
Unlike venture capital, with business loans, you don’t need to give any equity and you can opt for an affordable plan and payment rate. Many countries also offer tax benefits in exchange for paying a loan in full. When you’re opting for a loan, it’s vital to be mindful of the timeline and payment terms and determine whether you can pay it. You should ideally have a plan in place to pay it back before you finalize the agreement.
Grants
Grants for small businesses are usually awarded by a government body, the government, or a charitable organization. Grants are typically provided for companies that meet certain criteria and fulfill an application process.
While they are an excellent source of funding for businesses since you don’t need to pay them back, the application process is quite competitive and is often dedicated to businesses that are part of specific sectors. When deciding whether to apply for a grant, you need to determine how much time the application process will take and how likely it is for your business to be awarded.
Crowdfunding
Crowdfunding has become a popular source of finance for a wide range of businesses, with campaigns having an average success rate of 22.4%. It typically involves getting a small amount of finance from a large number of people, all contributing to a large sum. Depending on the type, crowdfunding can be loan-based where you crowdfund a loan, rewards-based where you offer perks or rewards in exchange for the finance, or equity-based, where you offer equity in exchange for the funds.
Crowdfunding is often suited to businesses that are product based and high-tech. It’s crucial to note that crowdfunding is heavily dependent on whether you can market your business idea. If you’re able to do that, though, it’s an excellent financing source that provides you with the funds required for the development and launch phases. You can explore crowdfunding platforms such as Kickstarter, Crowdcube, and Seedrs.
Venture Capital
For companies looking to grow, venture capital is a brilliant option to choose for equity exchange. In 2018, $254 billion was invested in 18,000 startups worldwide. To obtain VC, you need to demonstrate that your business is scalable and has evidence to prove it. When a VC is interested, you also need to be prepared for an audit and should be able to provide updated plans and books. Lastly, VCs are seriously invested in your growth, which may bring pressure with it, so you need to be ready for that.
Final Thoughts
Any business owner needs to know the pros and cons of the various financing options available to them. It’s important for you to research and determine the best way forward for your business to ensure you’re securing the best financing option for your business’s long-term growth. Have you ever secured financing for your business? Which option worked out for you? Let us know in the comments below.
Various market, administrative, and planning factors may cause small businesses to fail, but accounting mistakes are up there as one of the most notorious culprits behind business failure in the modern world. Planning your finances and keeping an up-to-date record of all cash outflows and inflows can help you make better decisions and show the real direction of your business’s progress. If there are invoices, receipts, and sales documents lying everywhere, it means you need to hire a CPA firm or accounting expert to assist with bookkeeping tasks or implement flexible payroll solutions. Read on for five tips to enhance your bookkeeping habits and streamline your growth.
1. Focus on record accuracy
Keeping accurate records is often easier said than done. Once you get into management, you realize just how hard it is to account for every coin that has moved in and out of its accounts. If there are invoices, receipts, and sales documents lying everywhere, it means you need to hire a CPA firm or accounting expert to assist with bookkeeping tasks.
2. Know your tax deadlines
If you run a small limited liability company, you may be required to pay VAT, corporate tax, and PAYE quarterly. Each of these tax forms has a varying deadline that can lead to harsh penalties if not met. The best thing about working with a professional accountant is that they save you the hassle of identifying and managing your company’s tax obligations, including PAYE. All you need to do is find a reputable company to transfer the workload to and focus on increasing sales.
3. Use cloud-based accounting services
In this digital era, failing to use accounting software – whether you are doing it yourself or with the help of a CPA firm – can be detrimental to your bottom line and give competitors the edge on you.
The market offers some of the most sophisticated yet easy-to-use software and can help unify your company’s financial activities for easier assessment and interpretation. It may take a while to get the hang of such systems, but if chosen carefully, an accounting software program is bound to increase your accounting accuracy and save you tons of money in labor costs. Not to mention that you can check out this online w2 form for tax reporting to make the process easier as well.
4. Separate your business and personal finances
Keeping business and personal finances in the same account is one of the most common mistakes made by small business owners. When all your finances are in one wallet, you are likely to spend on big-ticket purchases thinking you have money to splurge. Unknowingly, you may end up exhausting your personal money and eating into your business finances.
5. Brace for major and unforeseeable expenses
Equipment replacement and upgrades will always be required for any business expansion plans. Sometimes, you need to do it for compliance or for compatibility with new software. You should brace for these large capital expenses and plan ahead to avoid business-disrupting surprises. And just so you know, the Section 179 IRS provision lets business owners deduct up to $1 million of new equipment and property in their purchase year, instead of the conventional year-over-year depreciation plan. This means that big purchases may be a pain now, but they will prove beneficial in the long run.
6. Understand labor costs before hiring
If you are going to need assistance with running your business, know that those employees will need more than just wages at the end of every month. You will also be required to pay their payroll taxes and benefits.
These costs come way faster than many business owners project. Avoid putting yourself in a position where you are compelled to reduce compensation post-hire because you were too generous during employee recruitment.
You might want to outsource administrative tasks or your marketing campaigns, such as your search engine optimization (SEO). For instance, you can outsource an SEO specialist to tackle this job or entrust it to an SEO company. The same is true with data entry jobs and cybersecurity monitoring. By doing so, you won’t need to pay in-house employees with full benefits.
However, taking this employment route also has a fair share of challenges. For example, you must still comply with employment laws. Hence, you must research how to outsource or remote employment works. Outsourcing also means entrusting and risking your business data to someone outside your organization.
7. Keep your records tidy
Clutter piling up on the desks and floor is inevitable when dealing with paperwork. However, while this is acceptable in your personal life, it can be a significant disadvantage in business and accounting. Being tidy makes it easy for you to find specific documents and papers, which saves you time and money. It can also serve as a selling point to customers who fancy promptness and efficiency.
Using online accounting software is advisable as this tool can help organize your records. Moreover, if you need professional help during the tax season, you can invite your business partner, bookkeeper, accountant, or financial advisor to your software to analyze data. Managing cash flow, sending invoices, and tracking expenses are much easier because your business accounting data are accessible in a secure place.
8. Ensure customers pay balances
The receivables column can lull you into believing you’re making headway due to the high amount of sales you are making, but that shouldn’t count unless you have received the money. While there is nothing wrong with letting customers take materials and services on credit, letting them go without paying can hurt your bottom line and slow down your journey to financial success.
Track unpaid receivables and update your records using online accounting software. That way, you can create and send reminders to yourself and your customers. To prevent unpaid receivables, suggest automatic payment scheduling at an agreed schedule or require a post-dated check.
Endnote
The corporate world is a harsh one for small business owners. The above accounting tips can help you curb finance-related mistakes that can cripple your infant venture. You can also check with an accounting expert if you need more professional advice.
If you were looking for a country to exemplify evolution, adaptation to a changing environment, you would do well to consider Colombia. Just one glance at the country’s history demonstrates that it is a country of change. Now, the government is determined to steer Colombia’s evolution in a direction that benefits all. The forthcoming Colombia Investment Summit 2020 is a significant element in engineering that evolution.
A visitor arriving by steamship in the port of Barranquilla in the early twentieth century would have found, on walking down the gangway, a country of barely four million mainly country-dwelling inhabitants who made their living from the land. Moving forward a century, the modern visitor, stooping out through the doorway of a jet airliner and into the warm, kerosene-scented air of the passenger boarding bridge, walks into a highly urbanised country of 50 million inhabitants, of which more than 70 percent live in the cities. Colombia now boasts one of the highest growth rates in Latin America. It is also one of the most ethnically and linguistically diverse countries in the world, a fact which may, by the way, help to explain the passion and drive of its people.
The economy of Colombia developed rapidly in the second half of the twentieth century, thanks largely to the country’s richness in natural resources. Now, the Colombian government is vigorously pursuing a policy of even more dynamic change, aiming to create, in the words of the president, Iván Duque, “an equitable country, based on legality and entrepreneurship”. The challenges are formidable but the elements are in place.
CIS 2020
The central plank of the government’s strategy is that of attracting foreign investment, and a major conduit in that has been the annual, and increasingly successful, Colombia Investment Summit. This year’s event, for reasons that are all too depressingly familiar to most of us all around the world, will be conducted virtually. Over the course of three days, from 7 to 9 October 2020, the summit will see contributions by people from a range of political and business organisations. They are key personalities from across the gamut of stakeholders in the drive to leverage foreign investment to the mutual benefit of the investors themselves and also to the Colombian nation, through the generation of sustainable, responsible development. It is, as the organisers aptly describe it, an “investment matchmaking” event and will be led by the Ministry of Trade, Commerce and Tourism, and by the state organisation ProColombia.
What is ProColombia?
ProColombia is the government body charged with coordinating, promoting and facilitating the drive to attract FDI to Colombia and was set up as a principal component in the country’s drive towards the “internationalisation” of Colombia. It’s an initiative that recognises that the future of the country is one of full participation in the international political, economic and commercial community, and that there are mutual benefits to be derived from foreign involvement in the development of Colombia. ProColombia’s president is Ms Flavia Santoro, who will be delivering a talk as part of CIS 2020.
Colombia has long been associated with exports in the field of mining and extraction. But now the government’s ambition is to take full advantage of the country’s equally deep reserves in other fields: those of talent, creativity, resilience, the energy of the people, its resources in the form of nature, its potential for tourism of new and creative kinds.
To that end, ProColombia is at the forefront of supporting potential investors in the decision-making process with the goal of producing profitable projects with sustainable benefits to the country.
Why Colombia?
So, why Colombia? With so many countries around the world vying for foreign investment, what is it about Colombia that should make potential investors sit up and take notice?
The country It would be fair to say that Colombia has had some very thorny issues to deal with in its internal affairs, particularly in the second half of the twentieth century. And perhaps the resulting unfavourable perception of the country in the past is one impediment in the bid to attract foreign investors today. But they should not worry. The Colombia of today can justly claim to offer political, institutional and economic stability that is unrivalled in Latin America. The country’s recent access to the OECD is just one testament to this.
In fact, Colombia is a fully signed-up member of the international community, both regionally and worldwide. To name but a few, it is a member of the Pacific Alliance (which promotes the free circulation of goods, capital, services and people in the member area), the WTO, the OAS, and the Association of Caribbean States, and an associate member of Mercosur (which has similar aims to the Pacific Alliance, for the Latin America region). Colombia is also the “C” in the CIVETS group of countries, emerging economies that are acknowledged as “ones to watch” in the future (the others are Indonesia, Vietnam, Egypt, Turkey and South Africa).
The geographical location of Colombia almost shouts out its huge benefit in making the country a strategic location for business. Situated at the gateway to the South American continent, it boasts major ports on both the Caribbean and Pacific coasts, giving access for shipping routes to both seaboards of the US. The government is currently investing in infrastructure to improve internal road links with the major ports – such projects also being major opportunities for foreign investment themselves.
And geography bestows yet one more benefit on Colombia: its time zone, which corresponds to US Eastern Standard Time (EST) (although there may be some variation because of daylight saving). Why is the time zone important? Now is a good time to talk about nearshoring.
Nearshoring In the past, a lot of businesses moved parts of their operations to parts of the world where costs were lower, such as China and India – that is to say, outsourcing, in its various guises. In general, the objective of reducing costs was met, but there were flies in the ointment, in the form of unexpected issues of language and – yes – time zone. When there are things you need to discuss with your business partners in real time, there’s no point in calling when they are tucked up in bed, sleeping soundly.
So the principal idea behind nearshoring is that you move your business processes to a location that is in the same general region as your business, and hence in a similar time zone, but where the costs are still lower than in your home territory. An added benefit of this is that, in situations where goods have to be transported in one direction or the other, the logistics routes are much shorter.
The geographical location of Colombia almost shouts out its huge benefit in making the country a strategic location for business.
The importance of such issues has been highlighted in recent times, as the world health crisis has strained supply chains to breaking point. In the face of this, companies are looking to establish supply routes that are not only shorter, but more resilient against unforeseen circumstances – in short, to “regionalise” their supply chains. From the point of view of the United States, Mexico is the nearest Latin American country and would be a strong contender for nearshoring, were it not for the fact that the poor relationship between the US and Mexico is anything but conducive to fruitful commercial partnerships.
Another critical factor in considering the nearshoring options is the flexible free-trade agreement that Colombia has with the United States, adding icing to the cake of geographical proximity. This, together with the country’s 114 free trade zones (the second-largest number in Latin America), is powerful medicine.
But does Colombia have a sufficiently skilled and educated workforce to make it feasible for foreign companies to consider moving their operations to the country? Well, yes, it turns out that indeed it does. As a result of its broad range of top-flight universities, research centres and other centres of excellence, Colombia possesses an admirable supply of trained, talented and multilingual people-power – and all at a lower cost than in, for example, Mexico. In the words of Erin Champlin, Vice President of Johnson and Johnson Global Services, which set up major offices in Bogotá, her company chose the location because of the availability of highly educated, multilingual talent and the presence of prestigious universities to recruit from. In fact, Colombia boasts a highly developed academic infrastructure and more than 3,950 research groups in science and technology.
Sectors with investment potential In its mission to facilitate the selection and implementation of appropriate ventures by potential investors, ProColombia has identified an impressive range of opportunities for them to consider. More than 200 such opportunities are scheduled for presentation during CIS 2020, in initiatives spanning areas such as infrastructure, agro-industry, technology and tourism.
Colombia is a country composed of a number of regions, each with its own distinctive characteristics – geographical, commercial, social and academic. Such variety is, in itself, an opportunity, since any prospective investor is highly likely to find the specific features they are looking for in order to set up any given business undertaking. As a very rough guide, the regions of Colombia may be said to excel in the following fields, each ripe with potential for investment:
Bogotá region:technology-based services; business process outsourcing (BPO); creative and cultural industries; cosmetics and personal care; health-related services.
Caribbean region: port infrastructure; film and music festivals; plastics and petrochemicals; metals; agrochemicals; pharmaceuticals; tourism infrastructure (hotels, theme parks, eco-tourism, adventure tourism); beaches; biodiverse landscapes; jungle landscapes.
Central region: coffee cultural landscape (UNESCO World Heritage-recognised); tourist infrastructure; 4.0 industries; IT technology; trained workforce for outsourcing; production of coffee, cocoa, cereals, fruit and vegetables; vehicle parts and accessories.
Pacific region: expanding port infrastructure (multimodal port of Buenaventura); country’s largest agricultural producer; climate for year-round production; Cali international airport; seven free trade zones; academic infrastructure and R&D centres.
Orinoco and Amazon: natural gas and oil reserves; agricultural capacity; biodiversity; tropical jungle; potential for eco-tourism; livestock and meat and dairy products; more than 385 renewable-energy projects.
Eastern region: agro-industrial output (oils, fats, cocoa, dairy products, meat); investment potential for complex health services; advanced health cluster with trained professionals; construction materials (ceramics, clays, stone, glass); geographic location for supplying other Caribbean countries.
What does CIS 2020 consist of?
CIS 2020 promises to be an exciting event, full of potential for initiatives that will be of enormous benefit to those who invest, as well as to Colombia as a whole.
With all that background in mind, what can we expect from the Colombia Investment Summit 2020? As we mentioned earlier, it’s a virtual event taking place over three days in October (from the 7th to the 9th). Attending will be 550 investors from around the world; in total, some 1,200 to 1,500 people are expected to visit. There will be more than 1,000 online business meetings.
The main address will be given by the President of Colombia, Iván Duque. The keynote speaker will be former US president Bill Clinton. On the agenda for Day 1 will be discussions encompassing investment opportunities in Colombia’s regions, and also foreign direct investment and the outlook for capital markets.
Day 2 sees virtual discussions, taking in various sectors that will be of keen interest to potential investors in Colombia: chemicals and life science; infrastructure; tourism and hospitality (including large-scale special tourism projects); and metalworking. Also under discussion will be impact investment in the country.
On Day 3, we can look forward to discussions around the agribusiness sector, the energy sector and 4.0 industries.
Throughout the three days, delegates will have ample opportunity to forge meaningful business alliances by virtue of business meetings with local companies and interaction with projects to be financed, as well as with key entities having involvement in the setting up of businesses in Colombia.
Conclusion
CIS 2020 promises to be an exciting event, full of potential for initiatives that will be of enormous benefit to those who invest, as well as to Colombia as a whole. Colombia has evolved, and will continue to do so as it finds its place in a changing world. Now is a time of great opportunity to participate in meeting the challenges posed by those changes, and help Colombia towards an evolution that will bring benefits to all.
Those who are interested in participating in the virtual event should register with the ProColombia platform. www.colombiainvestmentsummit.co/en
The promotion of exports of non-mining energy goods and services in markets with potential, the expansion of Colombian companies, the attraction of foreign direct investment to Colombia, the positioning of the country as a tourist destination for vacations and meetings and Colombia Country Brand, are the main axes on which PROCOLOMBIA focuses it’s work.
Can you imagine having a perfect life, where everything is peaceful and there are no fights, problems, injuries, or accidents? As amazing as it sounds, living such a life is impossible. Everyone has ups and downs in their lives and one is bound to face complications here and there from time to time.
The intensity of the problems may differ from one person to another, but no life is perfect and trouble-free. You may find yourself unable to solve all the problems you face on your own, which is where hiring or consulting a lawyer such as Oberheiden P.C. would come in handy. On that note, let’s get into six life situations where a good lawyer can save the day.
1. Custody
The notion of divorce is an annoying matter that no one really likes to talk about, however, it is a situation that many people face in their lives. If a married couple agrees that they cannot live under the same roof anymore, they don’t need a lawyer to finalize their divorce. If, however, they get divorced but keep fighting over child custody, a lawyer needs to interfere. Custody problems are vast and cannot be solved unless there is a lawyer who can deal with the matter professionally. Usually, both parents turn to an attorney as they can’t see eye to eye. A lawyer can solve custody-related issues, especially if your ex prevents you from seeing your kids or if you believe that your little ones are in danger of living under their supervision.
2. Accidents
If you have ever been involved in a car accident, surely you know how terrifying the experience is. No matter how serious or light the accident is, the situation leaves you in utter shock. If you were injured in a car crash, you should call your attorney immediately. First, you should make sure that the injury is not serious and if it was, you should call for help. In New York, an injured person can seek legal help to sue the irresponsible driver who caused the injury. If you live in Hempstead, you can get in touch with a personal injury attorney who can sue the other driver and help you receive good compensation.
3. Work Conflicts
It is not uncommon that you find countless problems at your workplace. From salary deductions to racial discrimination you can come across loads of different problems at work. Because not all companies adhere to labor law, numerous employees may suffer from the consequences. You might also face disputes over your contract; something that can end your career in the blink of an eye. When you face any of these situations you should have legal representation against your employer, who is going to have a lawyer himself.
4. Driving Under Influence
You will be in huge trouble if you drive under the influence of alcohol or drugs. You may have to pay a fine, loss of your driving license, carry out jail time, or all three combined. Therefore, you should consult a lawyer such as Austin DWI lawyer immediately in this case.
The lawyer will be able to reduce any changes to a small fine or maybe dismiss all charges. You should never attempt to go to court without an attorney unless you wish to accept the charges.
5. Deaths and Wills
The disputes that can happen over someone’s will can be dramatic and messy. Avoid the drama by hiring a lawyer to help you with your will or trust; when you are no longer alive, your family won’t fight over your will that has been set up by an attorney. The best way to do this is to hire a lawyer when you have your first child to set up your will and adjust it according to new circumstances or the birth of new children.
6. False Accusations
All of a sudden you might find out that you’ve been sued for a certain amount of money or an aggravated assault. If you and everyone around believe these accusations to be false, you still need a professional lawyer to prove this in court. You cannot defend yourself against any charges unless you’re a lawyer yourself.
As we get older and face life head-on, we soon realize that adulthood can sometimes be pretty complex. There are numerous occasions where you may face ample problems that you cannot resolve on your own. This is where you need to seek professional help. You’ll need a qualified lawyer to represent and defend you should unfortunate circumstances occur. If you are faced with the above 6 life situations, don’t hesitate to hire a lawyer.
The coronavirus pandemic has caused huge disruption for businesses in the UK and around the world, with extraordinary trading conditions severely testing even the strongest of companies.
In fact, figures published by market and consumer data provider, Statista, show that in April 2020 almost a quarter of all businesses in the UK paused trading or closed temporarily due to COVID-19.¹
When trade ceases so abruptly it’s extremely challenging for even the most streamlined and agile businesses to carry on, but what are the specific problems that businesses are dealing with due to coronavirus?
What problems are businesses experiencing due to COVID-19?
Inability to operate effectively, if at all
Social distancing and the national/local lockdowns have made it impossible for some businesses to trade – particularly those reliant on footfall and the physical presence of their customers.
Staff shortages due to ill health/self-isolation
Ill health among employees, and the ensuing self-isolation or quarantine, has led to huge uncertainty – businesses can’t plan effectively due to uncontrollable and unmanageable staff shortages and workforce disruptions.
Reduction in customer demand and decreased revenues
Considerably reduced footfall and a change in customer buying habits have significantly reduced revenues, leading to severe cash shortages for many businesses. Some have also experienced problems securing vital finance, being rejected for the Coronavirus Business Interruption Loan Scheme (CBILS) or the Bounce Back Loan Scheme (BBLS).
Pressure from creditors
With such widespread financial fragility businesses have come under severe pressure from their creditors to pay monies owed, and the ever-present risk of being wound up by a creditor remains.
The virus hasn’t gone away, and with a further surge predicted over the coming months what can businesses learn from the initial wave that was so shocking. Also, how can they introduce new working practices and safeguards to protect themselves in the future?
How can businesses overcome Covid-19 trading conditions?
Streamlining
A streamlined business is agile and able to change direction quickly when needed. Streamlining measures could include:
Cutting costs – selling non-essential assets and ensuring that all outgoing revenues are reasonable and necessary
Using new technology – modernising or updating business software, and making sure staff working from home are doing so securely and efficiently
Changing working hours/the working week – staggering shifts or rotas so employees face less risk of contracting the virus
Eliminating non-essential tasks and workflows to save time and financial resources
Reporting
It’s essential for business owners and directors to know and understand the figures, including:
How much cash is required to survive for the next month/six months/a year
Whether there will be any cash shortages in the coming months, and if so, when
Whether stock levels can be controlled so that vital cash isn’t tied up in inventory
The current profit and loss situation and balance sheet position – vital information that warns of approaching insolvency
Additional funding
Consideration should be given to any government-backed schemes and loans that could support the business and provide valuable additional funding to survive the coming months. Alternative sources of finance, including merchant cash advances and invoice finance, may also be appropriate.
Building resilience
Building resilience involves focused planning, potentially involving new technology, and adapting operations to meet changing customer demands/business needs. This makes the business better able to withstand the financial pressure that’s likely to continue for some time. The viability of existing suppliers should also be explored, with research into potential new suppliers providing valuable reassurance that the business can carry on if a key supplier fails.
Professional insolvency support
Early insolvency advice is crucial as it allows businesses to act quickly and with confidence in the face of adversity. A greater choice of options may be available if action is needed – informal negotiations with creditors, for example, or entering an official insolvency procedure. The UK operates a strong insolvency regime with supportive rescue and restructuring procedures available, including fast track CVA (Company Voluntary Arrangement) – just one route that provides protection from creditors.
What happens when a business has to close due to Covid-19?
If a business has to close due to Covid-19, any assets will be sold off to repay creditors – a process called liquidation. There are two types of insolvent liquidation in the UK:
Compulsory liquidation whereby a creditor obtains a winding up order from the court
Creditors’ Voluntary Liquidation (CVL), which is initiated by company directors
Creditors’ Voluntary Liquidation is a better option, as UK insolvency law requires directors to prioritise the interests of creditors when the company becomes insolvent. If they wait for a creditor to wind up the company, directors don’t fulfil their statutory duties and could be held personally liable for additional creditor losses.
A CVL also offers eligible directors the chance to claim redundancy pay. So what happens during the liquidation process, and how does a business close down in these circumstances?
Business liquidation and closure
When a business enters liquidation, a licensed insolvency practitioner (IP) is appointed to administer the process. The liquidator deals with company contracts, informs creditors of the business’ financial situation, sells company assets, and distributes the funds to creditors.
At the end of the process the company is struck off the register at Companies House and no longer exists. Additionally, directors undergo investigations by the liquidator to ensure no wrongdoing has taken place during the time leading up to insolvency.
Planning ahead for a new business trading environment
The business world has been forced into action by Covid-19. Actions that businesses may have been planning to implement in the coming years – working from home, new technology, or general streamlining – have had to be fast-tracked due to the pandemic.
Operating in a new trading environment that nobody could have predicted is certainly challenging, but there’s still time to implement protective measures. With a little support, businesses will be able to trade with more confidence, less risk of closure, and with an eye to the future rather than to the past.
The article “Data Overtakes Oil as Leading (Geopolitical) Global Commodity” published three years ago became the subject of much debate and deliberation. At the time, many economists and political commentators decried the notion as nonsense – and some still do. “Data, the leading reason why tech exists in today’s world has overtaken oil as the number one traded global commodity and is now worth exactly double budgeted global defence spending. Like oil and military spending, data is the new geopolitical ammunition of the 21st century.” Whilst that statement is now recognised by just about everyone as common knowledge, Graham Vanbergen stresses the next big shift to take place will be just as rapid, game-changing and threatening. (1)
The reality is that data today is not just the main driver of everything from shipping to science, from shopping to share-dealing, it is about to change the way we live. It will change our understanding of economics, health, national security, politics, geopolitics and even the principles of democracy.
It is nothing new to say that the biggest corporations in the world by revenue manage everything from energy, retail, automotive, healthcare, commodities, financials, telecommunications and pharmaceuticals – and they so with one common factor – data. What happens next though will somehow surprise us all once again, like the 2008 financial crash and the Covid pandemic did.
The fine balance of international trade agreements that dominates agreed flows of goods and services are showing signs of stress and decay. For instance, the World Trade Organisation started life as GATT in 1948 and required overhauling in 1995. As the World Trade Organisation selects a new director-general this month, the Geneva-based group will be faced with one acute challenge: that there is no longer a great deal for support for it. Frank Lavin, CEO of Export Now says – “For its part, the WTO is faulted for its inability to complete a trade round… with no successful trade-rounds for 25 years. To put it politely, the WTO is not designed for success. Unlike the World Bank or the IMF, the WTO has no weighted voting based on a member’s economic role or financial contribution. (2)
The WTO is really designed for textiles, food, cars and commodities – but not artificial intelligence, software and big data – and unlike the former, the latter can be transported in seconds to anywhere in the world, with or without international or domestic governance. These new products are now challenging the institutions that support civil society and chips away at protective laws that govern such things as economic activity, workers terms and conditions, privacy, democracy and the making of geopolitical decisions. It will challenge the very basis of our understanding of not just how our economies are shaped but also how our democracies evolve in the years ahead.
For context, in the last two years alone, an astonishing 90 per cent of the world’s data has been created. Approximately 2.5 quintillion bytes of data are now produced by humans every day, 40 per cent of which, is now machine-generated. By the end of next year, the entire digital universe will be ten times the size of what it was this year at the beginning of this year as exponential growth continues. Systems have gone from storing gigabytes to petabytes and then on to zettabytes (one trillion gigabytes) and now yottabytes (1,200 zettabytes). (3)
Whilst the digital age was getting a firm and steady grip of every aspect of our lives, a market accelerator unexpectedly appeared. We have witnessed how economies are rapidly changing as a result of the Covid19 pandemic. It’s not just the obvious like traditional bricks and mortar shops being rapidly replaced with online retail, it’s telemedicine, fin-tech and home-working. Many businesses are rapidly digitising their operations. Those that don’t quickly evolve face extinction as their competitive edge is snatched from underneath them.
More regulated countries, face the dilemma of falling behind. One example is how the ubiquitous state surveillance system in China has not only shaped how the state delivers public services but also how to control, punish and administer its citizenry, and in so doing, cornered the global facial recognition systems market now being sold to countries all over the world.
This then leads on to concerns over democracy and national security and the inherent risk of geopolitical fallout. Technology can be as regulatory free and borderless as two parties desire. Take for instance Palantir Technologies. It is a private American software company that specialises in big data analytics. It was born in the intelligence community, initially funded by America’s huge Department of Defence, given additional seed-funding by the CIA and is used extensively by the National Security Agency. It helps to manage America’s warfare monitoring, counter-terrorism observation and was the architect of GhostNet, a cyber-espionage network that targeted the UN and various national embassies – alongside hacking operations of foreign defence systems. It played a starring role in the huge Facebook/SCL Elections scandal that dragged Brexit over the line in 2016, which required just 1.2 million votes to get a 48/52 per cent result. Brexit has already cost the UK economy £200bn in just four years. It divided the nation, fallen out with its European partners, driven its government to break international trade agreements and laws, threatens the Union and ultimately threatens the future prospects of what was once one of the worlds most stable democracies. Unashamedly, Palantir has just filed to become a listed company on the NY stock exchange to use all of that experience in areas such as data collection for democratic outcomes and managing crucial aspects of public health. (4)
Social media is another seemingly uncontrollable threat. These companies have the ability to undermine and frustrate governments’ ability to manage anything at all – as evidenced recently over the pandemic. It is a matter of documented fact that social media has eroded trust in democracy and the institutions that uphold it all over the world. All of these things are now happening all over the world, all of the time – to a greater or lesser degree.
Traditional trade agreements do not cover these new technologies and even if they did, they would be outsmarted in short shrift. Whilst it seems like common sense to have a common response for greater regulatory international coordination, enforcement will always lag behind. For instance, regulations can be undermined by companies operating from jurisdictions with laxer rules. Profit offshoring proves that point, now it is known that something like $32trillion sits in bank accounts located in tax havens. Another example is Britain’s Electoral Commission. The governing body, was not just unprepared for what happened in the 2016 EU referendum, but to this day it still has not worked out how to defend democracy against a new wave of technology that knows no borders.
The global reality is that there is a fight on for technical supremacy – and it is this that drives the lack of international regulatory frameworks in the first place.
Hyper-globalised economies were exposed for their weaknesses in a global pandemic. Programmes to move from service delivery to localised resilience are already underway in many countries. Sustainability is now a key factor for shareholders and investors with a new top investment priority that centres around the environment, society, and governance. (5)
The big problem with the coming technology spike is that basic principles should apply to every country – at least in Western democracies – but they don’t and won’t. That point is made by Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, who says – “Countries may devise their own regulatory (technology) standards and define their own national security requirements. They may do what is required to defend these standards and their national security, including through trade and investment restrictions. But they have no right to internationalise their standards and try to impose their regulations on other countries.” Many high profile commentators echo this position.
There was a time when international trade was relatively simple. Products were shipped to mutually benefit both parties in the transaction. But hyper-globalisation ended up with trade imbalances that heavily favoured one against the other. The trade between America and China is worth around $650bn annually – well over $400bn is in China’s favour. Whilst Trump stokes his trade war, it was American corporations that off-shored its workforce to gain the upper hand against their own domestic competitors. It was unfettered competition that drove a wedge between corporations and an embittered workforce. The result then was financially distressed households supporting a populist whose wrecking tactics of the world order are cheered on. America is now heavily focused on fighting the tech supremacy war.
Take for instance Huawei. There is no real tangible evidence that it has (or has not) engaged in state-sponsored spying or surveillance and yet America is crushing its advances by legislating against the use of its products, against it acquiring US-based companies and anyone selling chips to its supply chain anywhere in the world. In so doing, America is creating very adverse side effects for national telecoms companies (170 countries already use Huawei’s products). Many countries are now facing the prospect of extracting installed systems and going to the expense of acquiring and installing new and more expensive ones. To all intents and purposes, America is using this as an economic weapon across the world to beat back just one company. It not only wants to stop Huawei from becoming a global force, it wants to stop China from gaining the upper hand. This alone is a warning that the global system of governance, of trade, of cooperation is coming to an end in a bid for technical supremacy.
What can we reasonably expect from this new world disorder? The regulatory framework we have known has already started fracturing. By its very nature, technology’s own advancement has a systems architecture designed to do one thing – beat the system.
Greatness is no accident. Successful business leaders don’t just roll out of bed and hope for sunny weather.
They plan, prepare and perform with perfect consistency. This approach begins as soon as they wake up. What happens next mostly revolves around getting healthy, happy and organized for the day ahead. To help you do the same, consider these morning routine hacks for successful business leaders.
Wake Up Early
Before you even decide how many hours to dial back your alarm, make note of when you fall asleep in the first place. If you plan to rise and shine at 5:00 am, you should be dreaming by around 9:30 pm.
Evenings are typically our least productive time, while mornings are the most demanding. It makes sense to try and complete as many tasks as possible the night before. This way, you’ll have more time in the morning to do the things that matter and enjoy the sunrise feeling a little less stressed.
You don’t necessarily have to start each day pumping iron or running marathons. Yoga, Pilates, stretching and similar activities are just as powerful. We all know that exercise has an immense impact on quality of life. Following a simple workout routine in the mornings will help you feel better, think clearer and move faster.
Meditation or deep breathing can also be added to your schedule. Just a few minutes of mindfulness is capable of controlling anxiety, enhancing awareness, improving attention span, reducing memory loss and so much more.
Eat That Frog
Based on the Brian Tracy book of the same name, the concept of eating the frog is simple. Instead of leaving it for later, complete your most difficult “frog” task first. This gets it out of the way and staves off the associated stress. Additionally, you may find that everything you tackle afterwards feels much easier.
Set Your Aim
It should go without saying that it’s crucial to map out the direction of your day. After all, how else will you know if you’re headed down the right path? Dedicate at least 10 minutes to establishing your goals and reviewing your responsibilities for the day ahead. Don’t forget to allot times for breaks – they also matter.
Take Power Showers
Even the fiercest business leaders are guaranteed to tremble when taking on the mighty cold shower. It’s good to know that the torturous task of forgoing warm water has serious benefits. This includes increasing endorphin production, which makes you feel more alert, alive and optimistic. Cold showers are also known to:
Improve metabolism
Increase circulation
Fight common illness
Enhance skin and hair health
Eat Breakfast
The premise of having to take a chunk out of your morning time just to eat something can make it enticing to forgo breakfast entirely. However, there are many healthy foods that require little to no preparation and serve as the perfect way to start your day. This includes blueberries, oatmeal, chia seeds, nuts and Greek yoghurt.
Aim to have more protein and less sugar. The latter spikes your energy levels before bringing them down to a crash, while protein sustains you for longer.
Have That Coffee
Many entrepreneurs refuse to start their day without completing their coffee-making ritual. As long as you avoid harmful additives, a cup of Joe can be safely included in your morning routine. Green tea, which also contains caffeine, is a healthy alternative.
From here, it’s as simple as making the necessary adjustments and sticking to the schedule you set. It won’t be long before you get used to the changes.
Email marketing is one of the best marketing campaigns that you can rely on. Whether you’re creating your very first email marketing campaign or have used them before in previous projects, you’ll always have to devise ways to streamline your campaign in order for it to succeed. This way, you’ll be saving money, resources, and time that you can utilize for other processes in your company. In order to make the best use of your time, you can also turn any email into an SMS message, thus ensuring that it will be read since the likelihood of customers reading a text message is much higher than that of opening up emails. Because emails increase the ROI of all your marketing channels, improving your email marketing program will be a wise step to take. If you want to find out how you can do that, these following points and Dialed-In Local will be of great help to you.
Effective Campaign Planning Tool
Assuming that you have designed a marketing strategy that will work for your brand and vision, it is crucial that you start planning everything out. This step is important for everyone to be knowledgeable about their responsibilities, what is expected of them, the topics you’ll be covering in this campaign, measurement plans, deadlines, etc. For that, you will need planning tools, such as editorial calendar templates, which you can find for free once you look for them on any search engine. What’s great about these templates is that you can add any further details about the target audience, keywords, due dates, and suggested CTAs.
Email Marketing Service
Another step you ought to consider before launching your campaign on your own is hiring an email marketing service. There are a variety of email marketing services that you can choose from. However, not all of them might work for your campaign. If you take a look at Matthew Woodward’s Aweber review, you will find insightful information on what you will need to consider before investing in an email marketing service, such as deliverability, scalability, usability, and reliability. Of course, there are other features which will be necessary for your particular campaign, which you’ll need to list these factors. This will help you decide which service to use. Fortunately, email marketing tools will allow your trials or free plans, so you’ll be able to experiment first before making up your minds.
Automatic Email Manager
While it is imperative that you build relationships with your recipients, sending the same email over and over again can be counterproductive. To avoid performing this tedious task, you can use an automatic email manager. This will also create a more compelling experience for your audience, which will eventually turn into fans and, soon enough, into advocates. Setting up an automated system can take a bit of time and learn on your part, but it will save a world of trouble once you get the hang of it.
Use Checklists
When you’re sending out emails, there are a lot of things that can go wrong. Whether you’re worried about content quality or typos, these errors can damage your relationship with your audience pretty quickly. It might even reduce the potential of getting future customers. To avoid that, you can make a checklist prior to launching your campaign in order to check the quality of emails before sending them. These checklists will effectively filter out any errors and produce error-free emails. You can find free checklist templates online for Excel or you can use a word-based checklist on Microsoft word. These templates are comprehensive enough for any email marketing campaign. However, you can create your own checklist if you have quality criteria of your own.
Employ Email Templates
When you start working on your email marketing campaign, you can either start creating templates from scratch or you can use free email templates online. What’s great about free email templates is that they are designed for specific needs. For example, if you want a Halloween newsletter, you can find templates dedicated to that purpose. If you’re looking for appropriate welcome email templates, you can easily find those as well. you can customize email templates according to your needs and without having to go through the process of testing and editing, which can take several hours of your time. Using templates can shorten that time to about half an hour.
Content Creation Tools
Content creation is one of the most important parts of streamlining an email marketing campaign. Naturally, your team will be pressured into making the perfect content in a short amount of time, which can affect the quality of the content and their productivity. Fortunately, content creation tools can help your team be productive while creating quality content and content calendar. Taxi for Email, for example, is a tool that can help users create templates that go along with your brand and vision. What is great about Taxi for Email is that it can be integrated easily into most of the major email service providers, unlike other content creation tools. In addition to this, they can minimize the risk of mistakes in your campaign content.
Utilize Email Rendering Test Tools
One major problem that email marketers often have to deal with is that emails are not rendered correctly for all email clients. Your clients are probably using different screen sizes, some of them might even be using their phones. It goes without saying that such an error can deter your clients away. At the same time, fixing the rendering issue can consume a lot of your time. For that reason, you can use email rendering test tools, such as Litmus and Acid, to minimize time spent on the testing process, increasing email quality in the process.
Track Your Progress
Measuring your performance will help you review your campaign and determine which metrics to focus on to increase the size of your email list. This process doesn’t necessarily have to involve complex analytics or data. All you need to do is to decide what went well and what didn’t at the end of the month. This will help you decide whether or not to improve your email content or your CTAs.
Creating an email campaign may sound more difficult than it actually is. However, if you use the right tools and take the right steps, you’ll have a great email marketing campaign in place in no time. These steps are crucial for the quality of your campaign, especially for start-up owners, who are already swamped with other duties, like content marketing, creative designing, social media management, and SEO.
The buyer’s journey isn’t a straight line from clicking the advert to purchasing, it is a multi-stage journey that depends on the impact of the purchase. Buying your weekly shop online is going to have a different buyer’s journey when compared to a large impact purchase such as medical treatment or housing. When you are making a bigger buying decision you are more likely to do more research around the topic to make sure that your purchase decision is right.
One thing that is clear is that more and more buyers are turning to online searches and reviews to help make an informed decision. 53% of shoppers say that they always do research before they buy online.
We didn’t realise this was potentially hurting this until one of our long term customers mentioned they had seen a negative review from a disgruntled customer when they were searching for our brand online. They mentioned that it wasn’t a good look for us – of course they would continue working with us because they knew the quality of our service but it would likely put off new customers.
This was news to us, but to our dismay he was correct. A customer who had not fully understood our service before using us had left a review on his business blog and it was ranking on the first page of Google for our brand name search (even though we had given him a full refund and let him keep the web assets we had created for his company) – hardly an ideal situation.
So we tried to figure out what exactly we could do, we reached out to him to see if we could resolve it with them but they never got back to our communication attempts. So we were a bit stumped, this is where I dived down the rabbit hole and found out about the world of online reputation management. This was a huge industry that I had never even heard of.
What do I mean by your brands “online reputation”?
So before we dive too deeply into this rabbit hole. What do I mean by “online reputation” – it all comes down to the perception that consumers have of your brand online but this doesn’t really tell you practically what it is.
When I am talking about online reputation I am talking about what happens when people look for information on your brand online. Are they greeted by positive reviews and articles or negative pieces?
These pieces of information will form the customers opinion of you before you ever speak to them. Think of it this way, when you’re looking for a restaurant for a meal with your family, you probably have a threshold of what review stars you’re willing to accept. If you see 2 stars for example there’s a good chance you’ll flick past this restaurant without second thought.
The same happens when people are looking for your business.
So How Can I Check My Online Reputation?
Checking your online reputation is very easy for the most part, at least at a broad level. You can just search for things your customer might be searching on Google.
Here are some examples:
Brand
Brand review
Review of Brand
Is brand good?
Is brand legit?
Is brand a scam?
Should I use brand?
For further inspiration you can look in your Google Search Console if it’s connected to your website as this will provide you with what customers are actually searching.
Example of bad online reputation
The True Cost Of Not Controlling Your Online Reputation
It’s hard to put an exact figure on the cost of not controlling your online reputation but one thing’s for certain is that it can affect all your marketing efforts. As we mentioned earlier over half of customers research online before making a purchase. With the dominance of Google search receiving over 85% of online searches this is probably the search engine that you should be mainly focused on maintaining.
If people are searching for your brand and they’re encountering negative articles there’s a high chance that they will at least consider using another brand or product. A staggering statistic supporting this one found in a study by Moz which showed if a customer can uncover just one negative article about a business or service 22% of people say they will decide not to purchase the product.
So you should be always monitoring your brand related searches to make sure that there aren’t negative results. Especially if you’re investing heavily in marketing efforts such as pay per click, you could be attributing poor campaign performance to advertising factors when in reality it’s a reputation issue that you’re not aware of.
To give an example of this if over 50% of shoppers are turning to online research before purchasing and 22% of them won’t purchase as you have a negative review this means that your ads could be under performing massively.
100 shoppers come to your site to purchase your product but 50 of them search online to make sure they’re making the right decision but during this research period they uncover a negative review or article this means of the 50 you could lose 11 customers.
For our industry losing 11 potential customers would be well over 6 figures per year lost.
Why we choose to outsource to Reputica to fix our reputation
We initially started to try to fix our online reputation ourselves, we thought how hard could it be? We started to ask customers to write reviews of our service on popular review platforms like clutch, yelp, Facebook etc. but this didn’t remove the bad review that was haunting us.
So we reached out to Reputica, a popular reputation management company as we realised that this wasn’t something we were going to be able to fix easily. When we spoke on the phone with their staff they were confident that they would be able to help us as they had done it for many other companies who were in the same situation.
The way that they explained the value of their service was, it allows us to keep our focus on what we’re good at, while they handle what they’re good at (managing our online reputation).
This made complete sense, we had spent so much time and resources trying to fix this issue that when we broke it down, we should have just paid Reputica from the start. Plus, they also uncovered some further issues with our online reputation that we didn’t even consider that they began monitoring and working towards fixing.
We’re able to focus on our business and maintain the service standards while Reputica protects our reputation, they send us reports of their activities and keep us informed of any changes they think that we should be aware of.
While it’s hard to put a value on the service we’re confident that removing this review from the search results will make all our marketing efforts be more efficient.
The main benefit on a personal level of using Reputica is being able to switch off from this stuff, running a business is hard enough without adding more and more tasks to my weekly checks. I always think of my brain as a computer and if I keep on adding tasks that I’m not specialised or trained in that I’m just using up RAM that is already nearly maxed out.
The article will discuss the recent attacks against Muslims in Delhi and try to examine the ‘Hindutva’ (defined as extreme Hindu nationalism) organisation, mainly the Rashtriya Swayamsevak Sangh (RSS), whose leaders and members not only participated in building a hateful environment, but were also found to be taking part in attacks against Muslims in Delhi. The term Hindutva is a far-right-wing ideology and it was first used by V.D. Savarkar, who defined it in his book Hindutva: Who is Hindu?, published in 1925. Since then it has become the core philosophy of the RSS, whose political front is India’s current ruling party the Bharatiya Janata Party (BJP).
The Hindu Mahasabha, a right-wing Hindu nationalist outfit, was formed by Savarkar in 1917. A few years later in 1925, another Hindu right-wing organisation was formed called RSS. Both organisations had very similar ideas, and they declared their primary objectives were to protect Hindus and only Hindus were allowed to become members of these organisations. A person could be a member of both organisations, (i.e. RSS and Hindu Mahasabha), at the same time. Neither Hindu extremist organisations extended their support to India’s struggle for freedom against British colonial rule, and also did not participate in the Civil Disobedience movement of 1930 or the Quit India movement of 1942.Under the leadership of Savarkar, the Hindu Mahasabha was opposed to Mahatma Gandhi’s gestures to Muslims and towards the Muslim League president Jinnah. (Siddiqui, 2018)
The founders of the RSS were Hedgewar, and Savarkar. Hedgewar became its first leader, and afterwards Golwalkar took over as the leader of the RSS.
The link between far-right ideologies in South Asia long predates the relatively recent rise of right-wing populist leaders. In the 1930s, the RSS leaders praised the ideas of Italian fascists and German Nazis and kept contact with these parties in order to help advance their extreme right-wing organisations. The RSS leaders wanted to build India along the lines of Hindu nationalism and Hindu supremacy. The founders of the RSS were Hedgewar, and Savarkar. Hedgewar became its first leader, and afterwards Golwalkar took over as the leader of the RSS. Since its inception, the RSS has opposed the Congress Party’s ideas on nationalism and secularism. (Siddiqui, 2019a) They wanted to build ‘Hindu Rastra’ and opposed the Congress Party’s struggle for India’s independence movement, which was then led by Mahatma Gandhi, Nehru, Patel and Maulana Azad. In their writings, they argued that India should resolve its “Muslim problem” in a similar way that used by the Nazis dealt with their “Jewish problem”. The RSS is the oldest fascist organisation to have survived so long.
The BJP is the political front of the RSS and most of the BJP leaders, including the Prime Minister Narendra Modi, have been members of the RSS. Even before becoming Prime Minister, Modi had reaffirmed his commitment to Hindutva: “The nation and Hindus are one. Only if Hindus develop will the nation develop. Unity of Hindus will strengthen the nation” (Organiser February 11, 2007 cited in Noorani, 2015). BJP and RSS are fully committed to the ideology of Hindutva, which is deeply rooted in hatred of India’s religious minorities, particularly Muslims and Christians. (Siddiqui, 1992; and also see 1990) At present, the RSS has millions of members spread throughout most parts of India with more than 50,000 shakhas (branches). It also runs thousands of schools where young minds are poisoned with hate against Muslims. In Uttar Pradesh State alone, there are some 20,000 RSS controlled shishumandir schools which teach that the Muslims and Christians are unreliable people stirring up hatred against both Muslims and Christians, with children being taught that both these groups are foreigners and outsiders.
Hindu group Rashtriya Swayamsevak Sangh (RSS). Express Photo By Amit Mehra
What does a ’Hindu Rastra’ really mean? The literal meaning is the establishment of a Hindu state for the benefit of the Hindu community. It also means the subversion of secularism and reducing the Muslim community to the status of second class citizens. The actual aim is to create an authoritarian state which will suppress Hindus and Muslims alike, depriving them of their democratic rights and destroying the federal structure of Indian polity, and subjecting to unprecedented levels of exploitation of both Hindus and Muslims by the domestic corporate-financial oligarchy and international financial capital.
The RSS/BJP invests money in education and introduces indoctrination at school level. So, the more the state retreats from social welfare responsibility, the more it becomes possible for these communal forces to move in and propagate their belief in as truth, which is very narrow, sectarian and divisive. (Siddiqui, 2016a) The RSS also has a long term strategy to subvert intellectual spaces, capture institutions of higher education and research, not through logical debates and facts, but through violence and intimidation and often with the aid of the state machinery. (Siddiqui, 2009) The danger is that the authoritarianism is spreading across educational institutions. From control of syllabus to control of thoughts is conducted according to the wishes of the Hindutva, which is the real danger of fascism hanging over India. Fascism assumes different forms according to historical, social and economic conditions and national peculiarities. In India, fascism seems to be emerging under the garb of nationalism, which is causing havoc to India’s constitution and democratic morality. If India would like to be part of the civilised world, its leaders should safeguard the rule of law and uphold the constitution and pluralistic values.
II. The Ideology of the RSS
Golwalkar led the RSS for many years and he was seen as its ideological guru and defined Indian nationalism in his book, We or Our Nationhood Defined, (1947: 42) as:
“The non-Hindu people in Hindustan must adopt the Hindu culture and language, must learn to respect and hold in reverence Hindu religion, must entertain no ideas but those of the glorification of the Hindu race and culture … they must cease to be foreigners, or may stay in the country wholly subordinated to the Hindu nation, claiming nothing, deserving no privileges, far less any preferential treatment – not even citizen’s rights”.His sympathies for the views of the Nazi Party are evident from the following passage from his book: “To keep up the purity of the race and its culture, Germany shocked the world by her purging the country of the Semitic races – the Jews. Race pride at its highest has been manifested here. Germany has also shown how well- nigh impossible it is for races and cultures having differences going to the root, to be assimilated into one united whole, a good lesson for us in Hindustan to learn and profit by”.
The RSS justifies violence against Muslims as necessary in the name of national security and for the so-called wellbeing of Hindus. Despite the fact, that the Hindus constitute the majority of India’s population of nearly 80%, while the Muslims constitute only 17% of the total population. The will to secure the Self has as its corollary the will to make insecure the others. In the 2002 Gujarat riots, thousands of Muslims were killed by Hindu right-wing extremists including members of the RSS/BJP. The anti-Muslim pogrom in Gujarat portrayed a stereotypical image of Muslims as constituting a danger against the Hindus, with the Hindus needing to be secured. Violence against minority Muslims is facilitated and justified in the name of achieving security for Hindus.
Despite the fact, that the Hindus constitute the majority of India’s population of nearly 80%, while the Muslims constitute only 17% of the total population.
The word often used to describe the RSS is “paramilitary”. In its near-century of existence, it has been found by several judicial commissions to have carried out attacks against minorities, particularly Muslims. Mahatma Gandhi was shot dead in 1948 by a member of the RSS, which led to the banning of the RSS for a short period. It was only allowed to begin again with the promise to abide by the law and not to indulge in violence against minorities. The RSS doesn’t, by itself, engage in electoral politics, but does so thorough the BJP, the party that has governed India since 2014, and that has, under Prime Minister Narendra Modi, been remaking India into an authoritarian, Hindu nationalist state. (Siddiqui, 2019a)
Gopal Godse, brother of Mahatma Gandhi’s assassin, Nathuram Godse, revealed in his book Gandhi’s Murder and I, that he accepted the close relationship between Savarkar and his brother Nathuram Godse. In 1948, Savarkar was charged as a co-conspirator in the assassination of Mahatma Gandhi. Soon after, he was acquitted by the Sessions Judge, only because the law required independent corroboration. However, later on in 1970, the report of Gandhi’s assassination by Justice J. L. Kapur, a former Judge of the Supreme Court, found a “conspiracy to murder by Savarkar and his group“. (Noorani, 2002)
Narendra Modi, after becoming Prime Minister in 2014, set about to further demonise the Muslim community by fulfilling the RSS agenda–a uniform civil code, the building of the Ram temple in Ayodhya, and in Kashmir, the abrogation of Article 370 of the Indian Constitution. On all these three issues, the government passed bills through parliament, which further undermined the democratic rights of the Muslim community in India. (Siddiqui, 2019b also see 2016a)
The Modi government has imposed a curfew and closed down the internet for the last 10 months in Kashmir. The security forces have been given more powers to arrest, intimidate and create fear among the local people. Kashmir is getting out of control. The agitation against the Citizenship Amendment Act (CAA) has put the BJP government on the defensive.
However, the BJP government’s anti-Muslim policy have still got support from India’s big businesses, the middle classes, and right-wing Hindu organisations, and is also supported by large sections of India’s media, both print and electronic. (Siddiqui, 2019; also see 2018)
Since the BJP came to power in 2014, Muslims have often been attacked and killed in the name of protecting cows in mostly Northern states where the BJP has strong support.Christopher Jaffrelot (2019), who has written extensively on the RSS/BJP, argues that lynchings are due to the close cooperation between the RSS/BJP and the law enforcing agencies, namely the police.
III. Recent Riots in Delhi
The planned attacks against the Muslims in Delhi are a serious threat to the very foundations of India’s pluralism and democracy. As we saw last February, members of the BJP/RSS succeeded in carrying out their attacks against Muslims in Delhi, by killing more than 60 people and also burning hundreds of houses and shops. It is a blot on the government and institutions including the police that most mainstream organisations and the media have not exposed the treachery of the RSS/BJP and have acted hand in glove with the BJP.
Delhi, the capital of India, was taken over by communal riots for four successive days in the last week of February 2020. The violence was a calculated attempt by Hindu extremists to tear apart the fabric of society. The violence also coincided with the visit of the US President Donald Trump to New Delhi, which appeared to be part of a nefarious plot by the RSS and other Hindu extremist elements to undermine the rule of law. Moreover, the failure of the law enforcement agencies to crack down on the rioters in the initial phase of the riots made matters worse. The police in Uttar Pradesh state were not free from blame either, and their behaviour at Aligarh Muslim University, and that of the Delhi Police at Jamia Millia University, where excessive use of force was used, was very undemocratic and brutal against students from a predominantly Muslim community.
A few days before the riots in Delhi, the RSS/BJP leaders were found to be publicly instigating their party members to attack Muslims, but the police failed to register first information reports (FIRs) against the BJP leaders, including the party Legislatures and Member of Parliaments, who were accused of making hate speeches: Kapil Mishra, Abhay Verma and Anurag Thakur.
Scenes of destruction at Bhajanpura in Northeast Delhi during the riots | Photo: Suraj Singh Bisht | ThePrint
The London based Economist (February 27, 2020) noted regarding the hate campaign and violence in Delhi: “Inflammatory rhetoric from Mr Modi’s party makes things worse. During local elections in the capital in February, one of his candidates led crowds in chants of “Shoot the traitors!” In reference to groups protesting the citizenship law…the riots were triggered by a local politician who declared that if the sit-in by Muslim women protesting against the citizenship law was not lifted by the time United States President Donald Trump left India, his supporters would no longer remain peaceful. Soon after, mobs went on the rampage in Muslim neighbourhoods, often with police looking mutely on, or, say many witnesses, aiding the attackers.”
Similar accounts of the violence and attacks against Muslims were noted by others. India’s newspaper, the Telegraph’s correspondent reported (February 25, 2020): “[The] violence is well planned and organised and is the direct result of incitement by BJP leader Mishra. The police did not take any action against him when he held a procession on Sunday provoking his supporters to clear the peaceful protest.” The real perpetrators of the riot were not the two individuals, but those who created an atmosphere of hate, which drew the crowds to take sides in a petty incident. It seems that this violence was planned and carried out by the RSS/BJP members.
The researcher on Hindu-Muslim violence, namely Ward Berenschot argues in his study Riot Politics, “Hindu-nationalist organisations stepped up their activities in the months preceding riots. According to several informants, the RSS started organising new weekly meetings in Isanpur in the months before the riots, which were then discontinued after the riots. This increased activity of RSS and Bajrang Dal units was also noted in other parts of Gujarat, which suggests that the preparation for the violence had been under way before the burning of the train coach in Godhra.”
Another prominent researcher, Paul Brass, who has carried out studies on communal riots and also he has done extensive fieldwork in Western Uttar Pradesh. His work Theft of an Idol is of seminal importance (Princeton University Press, 1997). He argues: “The riotous events I have here documented were not primarily ‘spontaneous’ occurrences or chance happenings and that there were identifiable culprits who had conspired to produce or who had committed acts either designed to produce or whose effects were to produce riotous and murderous results… the kinds of violence that are committed in ‘communal riots’ are, I believe, undertaken mostly by ‘specialists’, who are ready to be called out on such occasions, who profit from it, and whose activities profit others who may or may not be actually paying for the violence carried out. The local politicians and authorities are often either incompetent or they themselves desire the riots to take place, and are willing to place a communal interpretation on the precipitating incidents.”
Since BJP government came to power in 2014, Muslims are often attacked and killed on the name of ‘protecting cows’ in mostly Northern states where BJP has strong support. (Siddiqui, 2019b; also see 2016b) As Christopher Jaffrelot (2019), who has written extensively on the RSS/BJP, argues on lynching about the close cooperation between the RSS/BJP and the law enforcing agencies, namely police: “Not only has the Prime Minister abstained from condemning lynching, some legislators and Ministers have extended their blessings to the lynchers. Whenever lynchers have been arrested, the local judiciary has released them on bail. If the executive, legislature and judiciary do not effectively oppose lynching, India may remain a rule-of law country on paper and, in practice, a de facto ethno-state.”
Since BJP government came to power in 2014, Muslims are often attacked and killed on the name of ‘protecting cows’ in mostly Northern states where BJP has strong support.
These people’s protests against the CAA had a special emotive content in the national capital, symbolised by the Shaheen Bagh protests led primarily by women and children, also added to and intensified the Hindutva communal manoeuvres. On December 24, 2019, barely a fortnight after the passing of the CAA in Parliament and approximately 10 days after the Shaheen Bagh protests began, BJP leader Kapil Mishra likened the women and children protesting at the site to Pakistani agents. These were desperate efforts by the RSS/BJP, which were targeted towards polarising voters on pro- and anti-Hindutva lines and thus defeating the rival candidates in the Delhi local election.
A fact-finding report released on 17th July 2020 by the ‘Delhi Minorities Commission’ on the violence unleashed in Delhi in February 2020 has shed light on the collusion between state and non-state actors in a planned and targeted attack on members of the Muslim community. (The Wire, 2020) It also brought out the deliberate inaction by police officials, and the incitement of violence by members of the RSS/BJP, and also several central government BJP ministers used misogynist and communal slurs to refer to the anti-CAA protests led by Muslim women since December 2019. At a rally in Uttar Pradesh, chief minister Yogi Adityanath said, “Men are sleeping under quilts; women, kids are pushed forward to protest against CAA”. Historically, during any episodes of communal violence, women’s bodies are used to take revenge against a community. The episode of violence unleashed in Delhi reveals yet again a similar exertion of power with impunity. A similar pattern of violence had emerged in Gujarat by then BJP state government of Mr Modi in 2002 and Muzaffarnagar in 2013.
In February 2020 riots in Delhi, Muslim lost their property, businesses, their houses were looted and burned and their jewelleries, documents, money, amongst other valuables, were taken by the attackers. Women protesters from the Chand Bagh sit-in protest site, claimed that they had been beaten up by male police officials. The police did not help or support them when the mobs were attacking people in the area. In all, 11 mosques, 5 madrasas (or religious schools) were burned down and also a Muslim shrine and a graveyard were attacked and damaged by the Hindu extremists, the fact-finding team from the commission said in its report released recently. “Seemingly, to crush the protests, with support of the administration and police, a retaliatory plan of pro-CAA protesters was worked out to trigger violence at a large scale,” it said. The Minority Commission also noted that witnesses spoke of police failure to intervene in the rioting. “Multiple testimonies collected by this Fact-Finding Committee recount reports of police inaction even as violence unfolded before them, or of police not arriving despite being called repeatedly,” it said. (Wire, 2020)
The fact remains that the collusion between the government, the rioting Hindutva aggressors, the police, and the activists of the ruling dispensation, was the most prominent factor throughout the four days. In spite of this, the Delhi Police in its investigations have primarily targeted Muslims.
Women from Muslim community protest against CAA and NRC in Mumbai. Credit: PTI Photo
IV. Anti-minority Politics
During the last parliamentary election in India, the BJP campaigned to polarise people in a political experiment which attained unprecedented success. It aimed to consolidate India’s Hindu majority at the cost of Indian Muslims. Modi’s trusted aide Amit Shah, a hard-line Hindutva leader, was given the task of being the Bharatiya Janata Party’s national president, to recondition the saffron party on visibly extremist lines. Amit Shah was rewarded with becoming the home minister. Another Hindu extremist, RSS hard core activist and founder of the Hindu Sena Yogi Adityanath, was made Chief Minister of the UP state, India’s most populated state. (Siddiqui, 2016a; also see 2016c)
In 2019, the BJP attained a larger majority, which enabled the party to fulfil its dream of adopting laws which are seen as discriminatory against Muslims. In the past 12 months, India’s parliament has adopted a number of laws related to the Muslim community, which were promised by the RSS/BJP in the past.
First, the Modi government passed a law through Parliament criminalising the Muslim practice of instant ‘triple talaq’ (divorce). The irony was that India’s Supreme Court had already invalidated itself. It was under stood by many that making the pronouncement of the ‘triple talak’ a criminal act would be exclusionary and discriminatory against Muslims as there was no law to protect women of other religions who were abandoned by their husbands. Politically it seems that this was a direct attack on Muslim identity and citizenship, which enabled the Modi government to move much closer towards the RSS’s long-term agenda of implementing a Uniform Civil Code with an intentional Hindu majority bias. (Siddiqui, 2018)
Second, the abrogation of Article 370 was a clear case of constitutional overreach. The article was the culmination of the RSS’s long-term historic aversion to a Muslim-majority state enjoying autonomy under the constitution. The Article 370 was prepared by the Nehru government in the early 1950s, when Nehru also made a promise in the United Nations that the region of Jammu and Kashmir would remain disputed until plebiscite takes place and kept the provision to provide special status to the only majority-Muslim populated state in India, which led to a carefully crafted political-legal arrangement, which gave the Jammu and Kashmir state special status under Article 370 of the Indian constitution.
Third, the Supreme Court’s judgment in November 2019 sanctioned the construction of a Ram temple in Ayodhya city in order to put an end to a long-running dispute regarding the Babri mosque between Hindus and Muslims. The apex court accepted that the mosque, which stood on disputed land, was demolished illegally by Hindu extremists in 1992, but at the same time, the court handed over the premises to the Hindutva organisations, who according to the court were behind the crime.
Fourth, the Modi government inflicted its most savage strike on the dignity of Indian Muslims. The CAA introduced religion for the first time as a criterion for acquiring Indian citizenship and barred Muslim refugees, which undermined the spirit of India’s constitution, whose core values are liberty and equality. The constitution prohibits any discrimination between people on the basis of caste, creed, religion, or colour. But the CAA, which allowed fast-tracking of citizenship only for non-Muslim refugees, sent out a clear political message that the government regarded Indian Muslims as second-class citizens. The women sat for months to protest against the CAA citizen bill, the BJP government accused them of being antinational and pro-Pakistani. With the mainstream behind the BJP, any solidarity and sympathy for those protestors was defused by the government.
The Muslims peacefully protested against these above laws, and due to the tense political environment eventually communal violence broke out in the national capital, Delhi, in February 2020. Over 60 people were killed; most of them Muslims, and their properties were destroyed with an intention to cripple them economically.
India had barely recovered from this damage when the coronavirus pandemic hit the country. During the recent outbreak of the corona pandemic, the RSS/BJP launched a disgusting campaign by blaming Muslims for the spread of the virus to kill and harm Hindus. Burying all reason and rationality deep, the BJP leaders led a vicious campaign to portray a Muslim organisation, Tablighi Jamaat, and Indian Muslims as a whole – as the only reason coronavirus infections spread in India. The government and mainstream media blamed corona virus on Muslims and divided the people on the basis religion.
Let us briefly look at the socio-economic status of Muslims in India. In 2005 a judicial commission was appointed by the Congress Party, which was called the Sachar Commission to “obtain relevant information and conduct a literature survey on the relative social, economic and educational status of Muslims in India”. The Sachar Commission did this job extensively and unambiguously underlined that Muslims were far more disadvantaged than Hindus in every respect, particularly on socioeconomic and educational fronts. The prevalent poverty and illiteracy in the Muslim community is largely responsible for its backwardness. The commission also gave a number of recommendations in order to improve the socio-economic conditions and uplift the Muslim community from poverty. However, fifteen years have passed since its recommendations were presented, but nothing was done by the successive governments to address these issues.
A recent US State Department’s annual report was presented to the US Congress on the current situation of minorities in India. It presents a detailed account of the protests and criticism against the Indian government’s decisions on the CAA and Article 370.The report, released by US Secretary of State Mr Pompeo, notes: “religiously inspired mob violence, lynching and communal violence”, and says that “some officials of Hindu-majority parties, including from the BJP, made inflammatory public remarks or social media posts against minority communities”.
The annual report further notes: “In December, (Indian) Parliament passed the Citizenship Amendment Act (CAA), which accelerates citizenship for Hindu, Sikh, Buddhist, Jain, Parsi, and Christian migrants from Afghanistan, Bangladesh and Pakistan who entered the country on or before December 31, 2014, but not for similarly-situated migrants who are Muslims, Jews, atheists, or members of other faiths,” (pp.27) On Article 370, the US report notes: “In August, the central government revoked the semi-autonomous status of the Muslim-majority state of Jammu and Kashmir and split it into two union territories: Jammu and Kashmir, and Ladakh… The revocation sparked protests, criticism from Muslim leaders.” (pp.29)
Hindus accounts for nearly 80% of India’s population, Muslims are the second largest group of 14.9% and the rest religious groups are Christians 2.4%, Sikhs 1.8 and Buddhists 0.9%. Indian constitution provides protection to minorities and also clearly states that India is a secular state, then a secular state should not be concerned with the religion, which its citizens profess and practice. In making and implementing public policies and laws, in executive actions, public employment, education, and in dispensing justice, religion of the citizen should irrelevant. Public policies are based only on welfare of the citizens. Secular state treats all its citizens equally irrespective of their religion and faith. The Hindu extremists derive their power from state recognizing them as representatives of the majority community which they are not. A secular state is not even supposed to recognize any community. Any such recognition triggers off competitive communalism/fundamentalism and competition for more communal rights and greater share in power and state resources. Communal membership is more or less birth based. The state is reduced to protecting and promoting the hegemony of the fundamentalist/communal elite.
However, a secular state does not emerge from the vacuum. Though Indian Constitution is secular, state in India strengthens cultural entrepreneurs. As the majority in the scenario are more influential and powerful, they corner larger share in social space and national resources. For example, Supreme Court Judgment stating Hindutva is way of life, or anti-cow slaughter and anti-conversion legislations euphemistically named as Freedom of Religion Acts or non-protection of minorities by security forces during communal riots and targeting Muslim minority in police encounters. Nothing is so sacred that it should be put beyond the rational scrutiny. But that does not mean disrespecting the sentiments of the believers. One has to be not only rational, but also reasonable person when we share political space with members belonging to different communities.
V. Conclusion
The study has found that this contemporary form of fascism can be seen as a way of imposing the dictatorship of international finance capital on India while providing it with some kind of a mass base. At present, the major Indian capitalists have formed close alliance with the foreign capital and they find Hindu right-wing nationalism more suitable to serve their interests. The RSS/BJP plays a central role in this. This political group took no part in India’s struggle for independence from Britain – none of its members went to jail or participated in any anti-colonial movement. As Kavita Krishnan (2017) has emphasised, “There is a wealth of documentary evidence to show those of the RSS’ “ideological fraternity” collaborated with the colonisers and were inspired by Italian and German fascism. Savarkar promised to be the “the staunchest advocate of loyalty” to the colonial government”.
The RSS/BJP is not a liberal bourgeois party as we have seen in the West, because the origin of the RSS/BJPP is very different and their mode of functioning that accommodates different kinds of voices. (Siddiqui, 2009b)The necessity of fascism in the contemporary juncture arises from the tension between the existences of a polity in which a mass base is necessary while at the same time we live in a globalised world where the rule of international finance capital dictates the terms. This tension produces fascistic tendencies in a developing country like India.
At present, India faces an immense threat from fascism in the guise of Hindu nationalism. The process of uneven development and deepening socio-economic crisis has created conditions of backwardness and poverty, which in turn had created an opportunity for right-wing Hindu organisations to organise people on the basis of religion.
The study finds that with the adoption of neoliberal economic policy, India is surrendering its sovereignty to global finance capital. (Siddiqui, 2019a) There seems to be a “fusion” of the interests of the business and the state, which is close to an explicit definition of fascism and all these are hallmarks of fascism in India. The fusion of neo-liberalism and Hindutva is being cemented with more support from big business. Finally, the semi-fascist authoritarian right wing Indian government promises no prospects whatsoever to farmers, workers, minorities, tribal people and Dalits and provides illusory hopes to the majority of the people. The RSS is trying to divide the society along religious lines. This will shake the foundations of India’s pluralistic character.
Dr. Kalim Siddiqui is an economist, specialising in International Political Economy, Development Economics, International Trade, and International Economics. His work, which combines elements of international political economy and development economics, economic policy, economic history and international trade, often challenges prevailing orthodoxy about which policies promote overall development in less developed countries. Kalim teaches international economics at the Department of Accounting, Finance and Economics, University of Huddersfield, U.K.. He has taught economics since 1989 at various universities in Norway and U.K.
References
Noorani, A.G. (2002). Savarkar and Hindutva: The Godse Connection, New Delhi: Left Word Books. ISBN:
Siddiqui, K. (2019a). “The Economic Performance of Modi’s Government in India: The politics of Hindu right”. World Financial Review, July/August, pp. 12-26.
Siddiqui, K. (2019b). “Economic Transformation of China and India: A Comparative Political Economy Perspective”, Asian Profile, 47(3): 243-259.
Siddiqui, K. (2018a). “Hindutva, Neoliberalism and the Reinventing of India”, Alternatives Sud (in French) 25(1): 39-60. ISBN: 978-2-84950-662-2.
Siddiqui, K. (2018b). “Hindu nationalism and the Consolidation of Hate Politics in India”. The World Financial Review, September/October. ISSN 1756-3763.http://www.worldfinancialreview.com/?p=34510.
Siddiqui, K. (2016a). “The Economics and Politics of Hindu Nationalism in India”. Asian Profile, 44(6): 497-507.
Siddiqui, K. (2016b). “A Critical Study of Hindu Nationalism in India”. Journal of Business & Economic Policy, 3 (2):9-28. ISSN 2375-0766. (Print), 2375-0774 (Online) USA.
Siddiqui, K. (2009a). “Globalisation, Hindu Extremists and Violence in India”, Klassekampen, (in Norwegian), 16 February, p.10-11, Oslo, Norway. http://www.klassekampen.no/
By Terence Tse
CFOs are evolving into AI-driven transformation orchestrators, balancing finance, technology, and strategy while upskilling teams, managing risks, and driving measurable business value.
A key insight from this year’s AI for CFOs event, organized...
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Technology to Fracture Global Trade and Relations
By Graham Vanbergen
The article “Data Overtakes Oil as Leading (Geopolitical) Global Commodity” published three years ago became the subject of much debate and deliberation. At the time, many economists and political commentators decried the notion as nonsense – and some still do. “Data, the leading reason why tech exists in today’s world has overtaken oil as the number one traded global commodity and is now worth exactly double budgeted global defence spending. Like oil and military spending, data is the new geopolitical ammunition of the 21st century.” Whilst that statement is now recognised by just about everyone as common knowledge, Graham Vanbergen stresses the next big shift to take place will be just as rapid, game-changing and threatening. (1)
The reality is that data today is not just the main driver of everything from shipping to science, from shopping to share-dealing, it is about to change the way we live. It will change our understanding of economics, health, national security, politics, geopolitics and even the principles of democracy.
It is nothing new to say that the biggest corporations in the world by revenue manage everything from energy, retail, automotive, healthcare, commodities, financials, telecommunications and pharmaceuticals – and they so with one common factor – data. What happens next though will somehow surprise us all once again, like the 2008 financial crash and the Covid pandemic did.
The fine balance of international trade agreements that dominates agreed flows of goods and services are showing signs of stress and decay. For instance, the World Trade Organisation started life as GATT in 1948 and required overhauling in 1995. As the World Trade Organisation selects a new director-general this month, the Geneva-based group will be faced with one acute challenge: that there is no longer a great deal for support for it. Frank Lavin, CEO of Export Now says – “For its part, the WTO is faulted for its inability to complete a trade round… with no successful trade-rounds for 25 years. To put it politely, the WTO is not designed for success. Unlike the World Bank or the IMF, the WTO has no weighted voting based on a member’s economic role or financial contribution. (2)
The WTO is really designed for textiles, food, cars and commodities – but not artificial intelligence, software and big data – and unlike the former, the latter can be transported in seconds to anywhere in the world, with or without international or domestic governance. These new products are now challenging the institutions that support civil society and chips away at protective laws that govern such things as economic activity, workers terms and conditions, privacy, democracy and the making of geopolitical decisions. It will challenge the very basis of our understanding of not just how our economies are shaped but also how our democracies evolve in the years ahead.
For context, in the last two years alone, an astonishing 90 per cent of the world’s data has been created. Approximately 2.5 quintillion bytes of data are now produced by humans every day, 40 per cent of which, is now machine-generated. By the end of next year, the entire digital universe will be ten times the size of what it was this year at the beginning of this year as exponential growth continues. Systems have gone from storing gigabytes to petabytes and then on to zettabytes (one trillion gigabytes) and now yottabytes (1,200 zettabytes). (3)
Whilst the digital age was getting a firm and steady grip of every aspect of our lives, a market accelerator unexpectedly appeared. We have witnessed how economies are rapidly changing as a result of the Covid19 pandemic. It’s not just the obvious like traditional bricks and mortar shops being rapidly replaced with online retail, it’s telemedicine, fin-tech and home-working. Many businesses are rapidly digitising their operations. Those that don’t quickly evolve face extinction as their competitive edge is snatched from underneath them.
More regulated countries, face the dilemma of falling behind. One example is how the ubiquitous state surveillance system in China has not only shaped how the state delivers public services but also how to control, punish and administer its citizenry, and in so doing, cornered the global facial recognition systems market now being sold to countries all over the world.
This then leads on to concerns over democracy and national security and the inherent risk of geopolitical fallout. Technology can be as regulatory free and borderless as two parties desire. Take for instance Palantir Technologies. It is a private American software company that specialises in big data analytics. It was born in the intelligence community, initially funded by America’s huge Department of Defence, given additional seed-funding by the CIA and is used extensively by the National Security Agency. It helps to manage America’s warfare monitoring, counter-terrorism observation and was the architect of GhostNet, a cyber-espionage network that targeted the UN and various national embassies – alongside hacking operations of foreign defence systems. It played a starring role in the huge Facebook/SCL Elections scandal that dragged Brexit over the line in 2016, which required just 1.2 million votes to get a 48/52 per cent result. Brexit has already cost the UK economy £200bn in just four years. It divided the nation, fallen out with its European partners, driven its government to break international trade agreements and laws, threatens the Union and ultimately threatens the future prospects of what was once one of the worlds most stable democracies. Unashamedly, Palantir has just filed to become a listed company on the NY stock exchange to use all of that experience in areas such as data collection for democratic outcomes and managing crucial aspects of public health. (4)
Social media is another seemingly uncontrollable threat. These companies have the ability to undermine and frustrate governments’ ability to manage anything at all – as evidenced recently over the pandemic. It is a matter of documented fact that social media has eroded trust in democracy and the institutions that uphold it all over the world. All of these things are now happening all over the world, all of the time – to a greater or lesser degree.
Traditional trade agreements do not cover these new technologies and even if they did, they would be outsmarted in short shrift. Whilst it seems like common sense to have a common response for greater regulatory international coordination, enforcement will always lag behind. For instance, regulations can be undermined by companies operating from jurisdictions with laxer rules. Profit offshoring proves that point, now it is known that something like $32trillion sits in bank accounts located in tax havens. Another example is Britain’s Electoral Commission. The governing body, was not just unprepared for what happened in the 2016 EU referendum, but to this day it still has not worked out how to defend democracy against a new wave of technology that knows no borders.
The global reality is that there is a fight on for technical supremacy – and it is this that drives the lack of international regulatory frameworks in the first place.
Hyper-globalised economies were exposed for their weaknesses in a global pandemic. Programmes to move from service delivery to localised resilience are already underway in many countries. Sustainability is now a key factor for shareholders and investors with a new top investment priority that centres around the environment, society, and governance. (5)
The big problem with the coming technology spike is that basic principles should apply to every country – at least in Western democracies – but they don’t and won’t. That point is made by Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, who says – “Countries may devise their own regulatory (technology) standards and define their own national security requirements. They may do what is required to defend these standards and their national security, including through trade and investment restrictions. But they have no right to internationalise their standards and try to impose their regulations on other countries.” Many high profile commentators echo this position.
There was a time when international trade was relatively simple. Products were shipped to mutually benefit both parties in the transaction. But hyper-globalisation ended up with trade imbalances that heavily favoured one against the other. The trade between America and China is worth around $650bn annually – well over $400bn is in China’s favour. Whilst Trump stokes his trade war, it was American corporations that off-shored its workforce to gain the upper hand against their own domestic competitors. It was unfettered competition that drove a wedge between corporations and an embittered workforce. The result then was financially distressed households supporting a populist whose wrecking tactics of the world order are cheered on. America is now heavily focused on fighting the tech supremacy war.
Take for instance Huawei. There is no real tangible evidence that it has (or has not) engaged in state-sponsored spying or surveillance and yet America is crushing its advances by legislating against the use of its products, against it acquiring US-based companies and anyone selling chips to its supply chain anywhere in the world. In so doing, America is creating very adverse side effects for national telecoms companies (170 countries already use Huawei’s products). Many countries are now facing the prospect of extracting installed systems and going to the expense of acquiring and installing new and more expensive ones. To all intents and purposes, America is using this as an economic weapon across the world to beat back just one company. It not only wants to stop Huawei from becoming a global force, it wants to stop China from gaining the upper hand. This alone is a warning that the global system of governance, of trade, of cooperation is coming to an end in a bid for technical supremacy.
What can we reasonably expect from this new world disorder? The regulatory framework we have known has already started fracturing. By its very nature, technology’s own advancement has a systems architecture designed to do one thing – beat the system.
About the Author
References
(1) The European Financial Review: Data Overtakes Oil as Leading (Geopolitical) Global Commodity
(2) Forbes: Can The WTO Be Saved?
(3) TechJury: How much data is created
(4) Wikipedia: Palantir Technologies
(5) Harvard Business Review: The Investor Revolution