The 2010s will go down as the decade that saw debt in low- and middle-income countries reach unsustainable levels. Sub-saharan Africa is driving the trend, designated as the region with the fastest growing debt levels in the World Bank’s International Debt Statistics 2020 report.
Several countries in the region have seen their external debt stocks more than double since the beginning of the decade, according to the report: “The average debt-to-GNI and debt-to-export ratios of countries in the region, excluding South Africa, [were] 32% and 127%, respectively; the comparable ratios for 2009 were 24% and 87%, respectively.”
Borrowing is essential for low- and middle-income nations in pursuit of poverty eradication and stable economic growth. But rising debt to unsustainable levels poses serious risks to internal economic and political stability, should governments find it increasingly difficult to meet creditor obligations. A current case in point is Lebanon, which has seen its financial crisis, spurred by unsustainable debt, spiral into political turmoil — Lebanon’s debt-to-GNI and debt-to-export ratios are 145% and 34%, respectively.
Seventy-five percent of investors lack confidence in the digital transformation strategies of banks, according to Oliver Wyman’s The State of the Financial Services Industry 2020.
Astonishingly, none of the investors surveyed for the report said that banks’ transformation plans — which can include everything from automation to customer-centric design, data analytics and cloud-based services — were both clear and credible. A data-driven articulation of digital transformation agendas was the missing element, the survey found.
While 80% of investors surveyed for the report consider digital transformation important when making investment decisions, they haven’t been equipped with the necessary metrics to be confident in banks’ plans, the report notes.
As the finance industry increasingly turns to digital products for service provision, the report says, transition agendas must clearly outline the following:
- Products or services for the proposed investment
- Purpose of the investment
- Required resources
- Expected results
- Data that supports the plan, with proof that the benefits will outweigh the costs
Ultimately, investors need to see a strong correlation between transformation and operating profitability to support banks’ plans to transition to digital.
Source: The Future of the Last-Mile Ecosystem, the World Economic Forum
Demand for delivery services is slated to grow by 78% over the next decade, according to a report from the World Economic Forum.
As demand for delivery services grows — same-day delivery demand has increased by 36% annually — so does its impact on the environment and congestion in cities. The number of delivery vehicles is on track to increase by 36%, delivery emissions by 32% and traffic congestion by 21% in urban areas over the next decade, the report says.
Left unaddressed, these issues could mean longer commutes for city dwellers, crowded roads and reduced air quality due to increasing traffic from freight trucks and commercial vehicles.
A solution to these concerns should consider business priorities along with urban-logistical and environmental concerns. A number of options have been proposed, including electric vehicle regulation, nighttime deliveries, load pooling and multi-brand parcel lockers. “Such a scenario could reduce [carbon dioxide] emissions by 30%, congestion by 30% and delivery costs by 25% by 2030 when compared to a ‘do nothing’ baseline,” the report says.
Source: Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, the World Economic Forum
Businesses worldwide will suffer supply chain disruption as biodiversity loss reaches alarming levels — even if they don’t rely directly on sourcing products from nature, according to a report from the World Economic Forum.
More than half of global GDP results from moderate or high dependencies on nature, and many supply chains have “hidden dependencies” on nature’s biodiversity, the report explains, meaning an industry’s supply chain operations may rely on nature to a much greater extent than the industry itself.
The graphic above shows six industries that receive at least 85% of their direct value without significant dependence on nature (chemicals and materials; aviation, travel and tourism; real estate; mining and metals; supply chain and transport; and retail, consumer goods and lifestyle), however, more than half of the value of their supply chains results from a moderate-to-high dependency on nature.
“Business leaders have a crucial role to play” in responding to the world’s deteriorating biodiversity, the report argues. It recommends adopting a risk management approach for “systematically identifying, assessing, mitigating and disclosing nature-related risks to avoid severe consequences.”
Source: Two Decades of Impact, the World Economic Forum and the Schwab Foundation for Social Entrepreneurship
Larger corporations stand to learn from social improvement organizations in how they approach problem-solving and create tangible change: They address some of society’s most difficult issues by tailoring solutions to communities.
More than 600 million people have benefited from social entrepreneurs’ work, be it from gaining access to clean water or finding opportunities to pursue education, according to a report from the World Economic Forum, which convenes for its Annual Meeting this week. “Extraordinary impact has been achieved where the traditional approaches of markets … have failed to empower and include communities,” the report notes.
Organizations understand the structures and inter connectivity of issues in the communities they work in and aim to address them through “contextually relevant models,” rather than from a broad, theoretical perspective, the report says.
It calls this the “decade of delivery” for the SDGs. As more businesses incorporate social positions and impact into their identity and purpose, they have the opportunity to explore alternative models of creating social change, for which local organizations have provided the blueprint.
Credit: Brink news