Book review : “Winners Take All: The Elite Charade of Changing the World” by Anand Giridharadas

When I decided to read Anand Giridharadas’s book “Winners Take All: The Elite Charade of Changing the World” I was looking for answers to my questions on changing the world through business. I finally ended up with even more questions! I read the book a second time, the list of questions kept getting longer, and many of my “mental models” were strongly challenged. Lastly, “Winners Take All” helped me conduct a deep introspection to reframe assumptions to make the world a better place. May be that was the author’s intention after all!

The book is an in-depth critique of many accepted “truths” today, such as:

  • The market is the most powerful vehicle for addressing the world’s problems;
  • The ideal market solutions blend social/environmental benefits and financial profits;
  • Technological innovation has the potential to solve most problems;
  • Governments and bureaucrats are obstacles for real change. Hence, solutions have to designed avoiding the public sector as much as possible.

The limits of changing the world within the “system” boundaries

 “Winners Take All” is a strong critique of rich elites self-appointed as leaders of social change.  The author argues that these elites, all in all, do more harm than good and contribute to or sustained the problems they are wanting to change.

Giridharadas claims that “elites believe and promote the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform”.  As a result, rather than fundamentally questioning the rules of the game, looking at the big picture and shaking up the system, business saviors prefer focusing on impact investing, entrepreneurship, corporate sustainability, social responsibility, philanthropy and tech-driven solutions to save the world. According to the author, the do-gooders failure stems from the fact that they are “trying to solve the problem with the tools that caused it” in the first place without challenging mainstream assumptions, addressing systemic and questioning root problems because of conflicting interests. “Those who propose to solve problems in other ways—especially by looking at power and resources and other things unsettling to winners—are sidelined” Giridharadas says.

How to take it from there?

I feel that the book’s main recommendations are as follows:

  • Supporting and improving public institutions to be a central driver of change for the good of all.
  • Yes, it is good to make doing good easier but what is more effective is to make doing bad harder (through public institutions)
  • Real and sustainable solutions to our world’s problems require daring to ask “tough” questions and address root causes not the symptoms

Selected quotes from the book

“The only thing better than controlling money and power is to control the efforts to question the distribution of money and power. The only thing better than being a fox is being a fox asked to watch over hens.”

“There is no denying that today’s elite may be among the more socially concerned elites in history. But it is also, by the cold logic of numbers, among the more predatory in history.”

“For when elites assume leadership of social change, they are able to reshape what social change is — above all, to present it as something that should never threaten winners,”

“To fight inequality means to change the system. For a privileged person, it means to look into one’s own privilege”

“Inequality is built on antecedents—preexisting conditions ranging from ingrained prejudice and historical racial, gender, and ethnic biases to regressive tax policies that cumulatively define the systems and structures that enable inequality to fester.”

“Elite networking forums (…) groom the rich to be self-appointed leaders of social change, taking on the problems people like them have been instrumental in creating or sustaining.”

“More often, though, these elites start initiatives of their own, taking on social change as though it were just another stock in their portfolio or corporation to restructure. Because they are in charge of these attempts at social change, the attempts naturally reflect their biases.”

“It is difficult to get a man to understand something when his salary depends on not understanding it. —UPTON SINCLAIR”

“Stories promoted by MarketWorld that tell us that change is easy, is a win-win, and doesn’t require sacrifice.”

“Those who propose to solve problems in other ways—especially by looking at power and resources and other things unsettling to winners—are sidelined”

“MarketWorld had shown itself willing and able to engage in the arena of politics—to “change the system”—when it came to seeking lower taxes, freer trade, the repeal of laws like Glass-Steagall, debt reduction, scaled-back regulation (…). Yet the reversal of some of the very things it had fought for was deemed too hard, too political, too vast to take on.”

“Generosity is not a substitute for justice”

“Businesspersons calling themselves “leaders” and naming themselves solvers of the most intractable social problems represent a worrisome way of erasing their role in causing them.”

 “If you want to be a thought leader and not dismissed as a critic, your job is to help the public see problems as personal and individual dramas rather than collective and systemic ones.”

“It is hard to get a man to understand something he is being paid not to understand.”

Book review: Humankind a Hopeful History by Rutger Bregman

After the success of his first bestseller Utopia for Realists, Dutch historian Rutger Bregman has just published his second book “Humankind: a hopeful history”.

The main idea in a nutshell

The book’s main thesis goes as follows: “Most people, deep down, are pretty decent” and if we want the best from people, we need to believe in their innate kindness and ability to organize themselves for the common good. Inversely, if we are looking for the worst in people, we are bound to find it even when it does not exist!

Why this is important? Because of self-fulfilling prophecy: If we assume that most people are selfish and cannot be trusted, then we will design our institutions based on that assumption, which will create exactly the kind of people that our human nature view assumed.

Rousseau vs Hobbes debate on human nature: and the winner is …

The author cites two basic ways of understanding human nature. On one hand, Thomas Hobbes, claiming that, left to their own devices, people will wage a “war of all against all”. Hence, they need the institutions of civilization to restrain their instincts. Hobbes’ view aligns with the veneer theory stating that human morality and kindness is just a thin layer over an otherwise nasty human nature. On the other hand Jean-Jacques Rousseau, stating “that man is naturally good, and that it is from these institutions alone that men become wicked”.

When we look at how schools, leisure centers, companies, prisons have been designed, it is clear that the Hobbesian view dominate (ie. our natural selfishness and aggression can only be contained by strict laws, rules and regulations). However, Bregman, which sides with Rousseau, says that scientific evidence suggests that Hobbes’s assumptions are flawed. Bregman’s solution is to leverage people’s innate kindness to rethink” the way we organize our lives and societies.

Bregman’s plethora of examples and anecdotes

The book is full of examples, research and case studies to support Bregman’s argument and to overturn many common preconceived ideas based on Hobbes view. Examples include:

  • Agora: The school with no classes, no classrooms and no curriculum.
  • Buurtzorg : The “best employer” and “Best marketing in health care” in Holland with no HR nor a marketing team!

Bregman’s 10 takeaways:

In the book’s epilogue, Bregman recommends 10 rules to live by :

  1. “When in doubt, assume the best.”
  2. “Think in win win scenarios”
  3. “Ask more questions”
  4. “Temper your empathy, train your compassion”
  5. “Try to understand the other, even if you don’t get where there are coming”
  6. “Love your owns as others love their own”
  7. “Avoid the news”
  8. “Come out of the closet : Don’t be ashamed to do good”
  9. “Be realistic”

Selected quotes from the book

  • “Crisis brought out not the worst but the best in people”
  • “Basically, (…) we are trained to see selfishness everywhere. See someone helping an elderly person cross the street? What a show-off”
  • “There is a persistent myth that by their very nature humans are selfish, aggressive and quick to panic”
  • “A drug we use daily, that’s heavily subsidized and is distributed to our children on a massive scale. That drug is the news”
  • “Poll among twelve thousand parents in ten countries revealed that prison inmates spend more time outdoors than most kids”
  • “The opposite of play is not work (…) the opposite of play is depression”
  • “Our biggest shortfall isn’t’ a bank account or budget sheet but inside ourselves. It is a shortage of what makes life meaningful. A shortage of play”

Book review : Utopia for Realists by Rutger Bregman

Utopia for Realists is a book by Dutch historian Rutger Bregman. Originally written as a series of articles in Dutch, the book has been published in several languages.

The book starts with highlighting the benefits of free trade and globalization in terms of economic prosperity and social progress in the last 200 years: life expectancies, technological advances, military conflicts at historic lows, unprecedented levels of wealth …Then, Bregman presents the flaws within the existing deregulated neoliberal economic model, such as :  

  • Raising inequalities : He is in line with the ideas of Thomas Picketty (cf. Capital & ideology book review)
  • Wages not reflecting the value of the work: Bregman cites the social effects of strikes of bankers in Ireland and garbage men in New York City in the 60s and 70s. In the latter case, the city was on its knees after few days of strike, while in Ireland, the country continued to function normally over several months during the strike.
  • “Bullshit” jobs: Bregman cites David Graeber’s work on the existence and societal harm of meaningless jobs. Bregman mentions that 37% of British workers believe that their jobs are worthless and have no value to society
  • Gross domestic product: GDP is criticized as a popular indicator to measure economic progress.

Finally, the author proposes three recommendations (utopia) to rebuilt modern society and promote a more productive and equitable life:

  • A universal and unconditional basic income paid to everybody
  • A short working week of fifteen hours
  • Open borders worldwide with the free movement of citizens between all states

First utopia: A universal and unconditional basic income paid to everybody

The most developed of three ideas is the proposal for a universal basic income (UBI). Bregman’s underlying point is that poverty reduction pays for itself, socially and economically. Indeed, simply giving people free money, leads to reductions in crime and health problems, to improved school performance, to better mental health and to economic growth. Rather than discouraging work, UBI would instead enable people to seek jobs with true opportunities for growth and advancement.

Second utopia: A short working week of fifteen hours

In 1930, Keynes predicted that we would be working 15 hours a week by 2030. Since the 1980s, economic growth has translated, however, into more working hours instead of more leisure leading to stress and overwork, which actually reduces productivity.

According to Bregman, working less reduces stress, ecological footprint, inequality and unemployment, among others. It also fits with the needs of an aging population.  What is more, Bregman argues that a shorter working week is needed to deal with the erosion of jobs caused by automation.

Third utopia: Open borders worldwide with the free movement of citizens between all states

This is the definitely the most utopian proposal. Bregman argues that open borders could wipe out all poverty and raise everybody in Africa above poverty line. Open borders for people would make the world as a whole roughly twice as rich and would boost global wealth by roughly 65 trillion US dollars

It looks great but many questions remain without clear answers …

Most of the book focuses on “the why” and “the what” and less and on “the how”. In addition, Bregman’s concepts are presented from a very Western-centric standpoint and are not challenged from developing countries perspectives. Below are some question that I think the book did not address clearly:

  • Is UBI affordable for all countries?
  • Is UBI on the top of other government welfare programs / cash benefits or it is rather a substitute?
  • What is in the increase in the tax rates to fund UBI? Will it be acceptable?
  • Is free movement possible with only some countries applying UBI? Can we really expect a country’s taxpayers to give a UBI to anyone who chooses to move there?
  • Can rich countries accommodate millions of immigrants in a short period of time when free movement is put in place?
  • Is it true that many people would like to work less (and earn less) in a society of consumerism?
  • Is the fifteen hours workweek compulsory? If so, how to enforce it?

Quotes from “Utopia for Realists”

  • “If you can’t explain your ideal to a fairly intelligent twelve-year-old, after all, it’s probably your own fault. What we need is a narrative that speaks to millions of ordinary people.”
  • “Poverty is fundamentally about a lack of cash. It’s not about stupidity”
  • “A culture that encourages us to spend money we don’t have on stuff we don’t need, in order to impress people we can’t stand. Then we go and cry on a therapist shoulder. That’s the dystopia we live in today”
  • “Borders are the single biggest cause of discrimination in all of world history“
  • “In the twenty-first century, the real elite are those born not in the right family or the right class but in the right country.”
  • “But the real crisis of our times, of my generation, is not that we don’t have it good, or even that we might be worse off later on. No, the real crisis is that we can’t come up with anything better.”
  • “The idea that the GDP still serves as an accurate gauge of social welfare is one of the most widespread myths of our times. Even politicians who fight over everything else can always agree that the GDP must grow”

Waqf and Zakat: Missing opportunities in Maghreb countries

Despite the region’s economic potential, Maghreb countries have been struggling during the last decades with socio-economic issues including poverty, unemployment and raising inequalities. It seems clear that achieving sustainable goals with a “business as usual scenario” is very unlikely especially that COVID-19 pandemic worsened economic indicators and limited governments’ leeway for   economic recovery plans. Hence, the need to close the financing gap in order to address current social and economic issues, creates important opportunities for the Zakat and Waqf in the Maghreb region.

The Islamic Social Finance Report 2020 by the Islamic Research and Training Institute is a timely contribution as it sheds light on the potential of Islamic social finance instruments to mobilize funds to alleviate socio-economic challenges in the Maghreb region. In a nutshell, the main takeaway from the above-mentioned report is that instruments such as Waqf and Zakat have a huge potential to raise social funds. For instance, Zakat can mobilize, on average, 3% of the region’s GDP, which accounts to around US$10 billion annually! However, because of lack of supporting institutional environment and infrastructure, such much-needed resources are lost.

The good news is, there is a way out and here’s how:

  • First things first: A strong political will

In my opinion, this is definitely the more critical recommendations as all significant improvements depend on it. One example of the lack of political will is the absence of adequate supporting institutions and infrastructure for Waqf and Zakat sectors in most Maghreb countries. Furthermore, even when a dedicated legal and regulatory framework exists, as in the case of Waqf, the reality shows that these institutions are far for producing the expected impact.

  • Operational excellence and innovation

The existence of a dedicated of legal and regulatory framework is necessary but not sufficient. Implementing Islamic social finance instruments requires strong, independent and professional management organizations. Waqf and Zakat funds, for instance, should be at par with international best practices in terms of asset management, human resources management, marketing and technology. The case of Fintech illustrate this argument. Technologies such as crowdfunding, blockchain and mobile offer tremendous possibilities for the social sector. Yet, Waqf and Zakat institutions in Maghreb are still turning their back to these innovations. 

  • Restoring trust

Success of Zakat and Waqf institutions in Maghreb is contingent upon restoring confidence in such institutions. For instance, in countries with an official Zakat Fund (e.g. in Algeria, Libya, Mauritania), donors unfortunately distribute a large proportion of Zakat individually. In the social finance context, the importance of communication, transparency and accountability in alleviating trust-deficit vis-à-vis ordinary citizens can hardly be overemphasized.

  • Leveraging synergies with Islamic finance institutions

Both Waqf and Zakat institutions should foster synergies with Islamic financial institutions to develop innovative financial instruments. For example, Islamic financial institutions can, not only facilitate fund raising but also provide investment instruments and blended finance mechanisms. In addition, this synergy allows financial institutions to strengthen sustainable finance positioning.

This article was first published in Islamic Finance news Volume 17 Issue 28 dated the 15th July 2020.

Capital & Ideology (Thomas Picketty) : Book review

About the book :

French economist Thomas Piketty published Capital and Ideology in French (September 2019) and then in English (March 2020). The book is somewhat an updated and enriched version of Picketty’s great success, Capital in the Twenty-First Century (2013), which focused on wealth and income inequality only in Europe and the United States.

After exploring historical and contemporary justifications for inequality, Piketty outlines, in his new book, potential means of redistributing wealth.

Key insight #1 : Inequalities are never “natural”

Inequalities are never “natural”: any regime justifies them by an ideology and builds them by laws, taxation, organization of property, education system… The system of inequality that prevails in a given country is first of all the result of political and ideological choices

The central message of Picketty is that behind every inequality is a system of justification that ensures its perpetuation. However, there is no determinism: a bifurcation is possible, if the right political and ideological mobilization is there.

“Every human society must justify its inequalities: unless reasons for them are found, the whole political and social edifice stands in danger of collapse.” 

Key insight #2: Inequalities have been growing since the 1980s after entering in the post-communist and hyper-capitalist word

After the fall of the Soviet Union, the world has entered a new unequal regime, which the author describes as “neo-proprietarist”, reviving the sacralization of private property in force in the 19th century. This regime glorifies the “society of winners “and justifies the explosion of inequalities by the fact that the most talented people deserve to enrich themselves by reward for their exceptional productivity.

Interpretation. The share of the top decile (the 10% highest incomes) in total national income ranged between 26% and 34% in 1980 in the different parts of the world and from 34% and 56% in 2018. Inequality increased everywhere, but the size of the increase varies greatly from country to country, at all levels of development. For example it was greater in the United States than in Europe (enlarged EU, 540 millions inhabitants), and greater in India than in China.

Sources and series: see

Interpretation. In 2018, the share of the top decile (the 10% highest incomes) in national income was 34% in Europe (EU+), 41% in China, 46% in Russia, 48% in the United States, 54% in Subsaharan Africa, 55% in India, 56% in Brasil and 64% in the Middle East.

Sources and series: see

Interpretation. The bottom 50% incomes of the world saw substantial growth in purchasing power between 1980 and 2018 (between +60% and +120%). the top 1% incomes saw even stronger growth (between +80% and +240%). Intermediate categories grew less. In sum, inequality decreased between the bottom and the middle of the global income distribution, and increased between the middle and the top.

Sources and series: see

Interpretation. The share of the top decile (the top 10% highest incomes) in total national income was about 50% in Western Europe in 1900-1910, before decreasing to about 30% in 1950-1980, then rising again to more than 35% in 2010-2020. Inequality grew much more strongly in the United States, where the top decile share approached 50% in 2010-2020, exceeding the level of 1900-1910. Japan was in an intermediate position.

Sources and series: see

Interpretation. The top marginal tax rate applied to the highest incomes averaged 23% in the United States from 1900 to 1932, 81% from 1932 to 1980, and 39% from 1980 to 2018. Over these same periods, the top rate was 30%, 89% and 46% in Britain, 18%, 58% and 50% in Germany, and 23%, 60% and 57% in France. Fiscal progressivity was at its highest level in the middle of the century, especially in the United States and in Britain.

Sources and series: see

Key insight #3 : Picketty’s recipe to tackle rising inequalities

  • Granting employees voting rights in (fairly large) companies with capping of large shareholders voting rights
  • Putting in place a progressive tax on income (all income), inheritance but especially on wealth (all wealth) so that capital circulates more
  • Creating a Capital endowment for any young person entering working life: A cash payout of two hundred and thirty-one thousand dollars—the equivalent of sixty per cent of the average adult’s net worth. (Piketty has called this system of capital endowment “inheritance for all.”)
  • Creating of a basic income and education capital for everyone, up to the education expenses of the privileged groups, to be used throughout life
  • Extending the carbon tax to all carbon emissions so that it takes into account the realities of climate change, with a great contribution from polluting companies
  • Renegotiating treaties and trade agreements, which force countries to compete with each other for who has the lowest taxes on wealth and income, starving national social systems and increasing financial inequality

Good Economics for Hard Times : Book review

The book was first published in November 12, 2019. The authors, Abhijit Banerjee and Esther Duflo, were jointly awarded the Nobel Prize in economics in 2019 (Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel).

In the book, Abhijit Banerjee and Esther Duflo address controversial topics such as immigration, trade, economic growth, technological disruption, universal basic and climate change. To do so, the authors rely on various experiments (randomized controlled trials) to test the effectiveness of specific policy interventions, in the same way clinical trials are performed in medicine (cf. figure below).

Thanks to its experimental focus, the book is written in an easy-to-understand style, which makes it accessible for readers who are not well versed in economics.

Some of the findings that caught my attention are as follows:

  • Increased immigration does not negatively affect local people wages
  • Ordinary people like to stay in their place. They don’t want to go to a different sector, to a different location and to a different life
  • Free trade boosts overall growth, but it also produces concentrated pockets of job losses
  • Tax cuts for the wealthy do not produce economic growth
  • Damages from climate change will be much more serious in poor countries
  • Because of distortions in the tax code (taxing humans more than capital) and industry concentration, most of automation today is more about deplacing workers than raising overall productivity
  • There is no evidence that cash transfers make people work less
  • Universal basic income is a good idea but it is very expensive. However, in the case of the US, it would require eliminating all existing welfare programs and raising the US tax level to the level of Denmark’s

Selected quotes from the book :

“Economics is too important to be left to the economists.”

“Economists are more like plumbers; we solve problems with a combination of intuition grounded in science, some guesswork aided by experience, and a bunch of pure trial and error”

“The focus on income alone is not just a convenient shortcut. It is a distorting lens that often has led the smartest economist down the wrong path, makers to the wrong decisions and too many of us to the wrong obsessions”

“We clearly don’t have all the solutions, and suspect that nobody else does either. We have much more to learn. But as long as we understand what the goal is, we can win”

“If the world warms by a degree centigrade or two, residents of North Dakota will mostly feel perfectly happy about it”

“The bulk of R&D resources these days are directed towards machine learning and big data methods designed to automate existing tasks rather than the invention of new products that would create (…) new jobs”

Covid-19: It is time for Impact finance to act now!

Sustainable development is more than ever relevant

The Covid-19 challenges are not only sanitary but also economic. The crisis has already plunged the world’s economy into a recession with negatives consequences on jobs and social stability. Low-income countries, particularly, face tremendous pressure to deal with the externalities of this crisis. In such a context, sustainable development goals have become more than ever critical (as shown in the following table). Moreover, a prolonged crisis would adversely influence the implementation of the 2030 Agenda and might wipe out the progress made in recent years in many SDGs.

SDGImpact of the crisis
Poverty (SDG1)Loss of income leading vulnerable segments of society and families to fall below poverty line
Health & wellbeing (SDG3)Devastating effect on health outcomes
Education (SDG4)Schools closed; remote learning less effective and not accessible for some
Decent work and economic growth (SDG8)Economic activities suspended, lower income, less work time, unemployment for certain occupations
Sustainable cities and communities (SDG 11)Population living in slums face higher risk of exposure to Covid-19 due to high population density and poor sanitation conditions

With all this economic mess, is impact finance pertinent now?

Impact finance is far from being immune from the current systemic crisis aside from very few sectors like technology and biotech. However, times of uncertainty and hardship create new opportunities for financiers to make an impact. Indeed, the necessity of finding solutions in providing healthcare supplies, ensuring continuous access to food and supporting small and medium-sized businesses can be a catalyst involvement in impact finance. Furthermore, it is fair to say that public sensitivity to social issues, and to a lesser extent, environmental issues will be stronger when things normalize. Islamic financial institutions will be obliged to deal with this new reality, especially that they mostly operates in low and medium income countries. Relying on isolated and sporadic social responsibility initiatives (donations, interest free loans…) will not be effective nor sustainable in the medium and long terms.

The role of digital technology going forward

The crisis has forced us to review several paradigms including the integration of digital technology in our daily life. It is true that before this crisis we had already entered the era of the fourth industrial revolution, in which the fusion of technologies blurs the boundaries between the physical, digital and biological spheres.  In the finance sector, technology has become a positive enabler to deal with the crisis’ impacts. Examples include mobile-first banking, digital currencies, crowd funding and blockchain-driven supply chain finance. For Islamic financial institutions, the crisis is, therefore, an opportunity to embrace technology at a larger scale and to roll out new tech-driven business models that address critical sustainability issues in countries where they operate. The digital transformation challenge lies in the organization’s ability to evolve its business model, to transform its processes and finally to conduct change.

This article was first published in IFN

Green financing : Turkey’s first Sukuk issuance

On 3 June 2020, Zorlu Energy made history by becoming the first green Sukuk issuer in Turkey. Zorlu Energy, a subsidiary of Zorlu Holding, operates in electricity generation, electricity and gas distribution, wholesale and trade in the energy sector. More specifically, the company has projects in sustainable infrastructure, clean transportation and renewable energy. The green Sukuk issue, which targeted qualified investors, is part of 450 M TL issuance program. The first issue has a one-year term and quarterly variable income payment. The issue’s proceeds will be directed to finance sustainable infrastructure and clean transportation investments.

Industrial Development Bank of Turkey (TKBB), the investment bank that structured Zorlu Energy green Sukuk, applied a sustainability framework aligned with the standards of the International Capital Markets Association (ICMA). Escarus acted as the external reviewer that provided the second party opinion on Zorlu Energy’s Sustainable Sukuk Framework.

Issuance elementsDetails
Program amount450 million TL
Issuance amount50 million TL
MaturityOne year
ReturnCorresponding Government Bond Yield + 4.5%
Second opinionESCARUS
Nature of the placementPrivate
Underlying assetsSustainable infrastructure and clean transportation
Underlying contractIjara

Zorlu Energy green Sukuk : Technical details

Zorlu Energy green Sukuk is definitely a good news for impact finance for the following reasons:

  • Door opener to other Turkish green and social Sukuk issuances:  After this successful maiden assurance, other Turkish companies may be interested to issue Sukuk to finance their sustainability projects in the future either in local or foreign currencies. Sustainable Sukuk allow particularly issuers to broaden their investors base to include both conventional and sharia compliant investors
  • Confirms Turkey’s ambition as a center for sustainable finance: It is true that the country has already issued several green bonds since 2016. However, the ambition of positioning Istanbul international center has a hub for sustainable and Islamic finance supposes first a diversity of structures (Sukuk, bonds, equity, REIT…). Second, a diversity of local and international investors and finally a variety of the underlying sustainable assets in sectors such as renewable energy, healthcare, education, water and transportation.  
  • Triggers sustainable Sukuk momentum globally: The first half of 2020 has been very calm in terms of green and Sukuk issuance compared to the same period in 2019. This performance is understandable as most issuers have been busy struggling with COVID19 crisis.  Now that the economic activity is slowly kicking off, Sukuk can play an important role in closing the financing gaps of government and business to offset Covid-19 aftereffects. To illustrate, the Indonesian Government raised recently $2.5b through global Covid19 Sukuk offering to address the pandemic deficit

This article was first published in IFN Volume 17 Issue 26 dated the 1st July 2020 

Au-delà de la Crise Covid-19 : Le Maroc qui fera la différence

Tanja Marina Bay international: Lancement de la commercialisation ...

Nous vivons une période qui va marquer l’histoire moderne de l’humanité. En l’espace de quelques semaines, le système économique mondial est remis en question. Notre compréhension –et approche– de la croissance, de la prospérité et de la résilience est brusquement mise à l’épreuve.

Nous cogitons sur les scénarios de l’après-crise, nous imaginons des futurs que l’on n’aurait pas osé appréhender il y a quelques mois, et nous nous retrouvons déconcertés face à notre incapacité de contrôler l’avenir, un avenir, nous le savons, immense en défis sociaux et économiques.

Les états seront confrontés à redresser des déficits budgétaires plus accentués, à rééquilibrer des taux de chômage plus élevés ; les entreprises seront amenées à reconstruire des chaînes de valeur paralysées, à réinventer parfois de nouveaux business modèles ; et les organisations de la société civile verront, de premier abord, une détérioration plus accrue d’une situation sociale déjà fragilisée.

Au Maroc, notre capacité d’agir vite, de manière agile, innovante et intégrée va déterminer notre propension à réussir ou pas ce défi.

Trois éléments primordiaux nous semblent indispensables à toute démarche adoptée par les autorités publiques pour faire face aux externalités de la crise COVID19 :

  • Une vision intégrée du développement post-Corona: Si le Maroc a brillamment mis en place une Stratégie Nationale pour le Développement Durable à l’horizon 2030, il est aujourd’hui impératif plus que jamais de définir un plan d’exécution de la stratégie de manière transverse et coordonnée à travers les trois piliers de développement : l’Etat, le secteur privé, et les organisations de la société civile. Le Maroc pendant et après cette crise doit faire appel à des mécanismes de gestion innovants où les entreprises se joignent à l’état pour traiter de la question sociale, où la société civile engendre des idées innovantes pour stimuler de nouveaux modèles de croissance, et où la réflexion en silos, qui a trop longtemps miné les efforts de développement, est remplacée par des stratégies, à petite et à grande échelles, fortement intégrées à travers les industries et les secteurs d’activité.


  • Des mécanismes hybrides : Les voies de relance de l’économie traditionnellement poursuivies dans les benchmarks du capitalisme moderne ne seront pas suffisantes à déployer une nouvelle vague de croissance à l’échelle nationale, ni internationale. Par ailleurs, notre patrimoine nous prodigue d’enseignements précieux en matière de systèmes de croissances hybrides où le social, l’environnemental et l’économique ne font qu’un et ne répondent qu’à un objectif commun et harmonieux : la croissance inclusive. Ainsi, le système du Waqf serait un excellent exemple de modèles de croissance qui allie performance financière, bien-être social et équilibre écologique. Le mécanisme de la Zakat, couplé aux technologies Fintech offrirait un autre levier de réduction des inégalités et de création d’opportunités d’autonomie financière, surtout pour les couches sociales les plus économiquement désavantagées.


  • Une communication réfléchie: Enfin, en temps de crise ou post-crise, il faut fédérer les voix, les efforts, l’attention autour d’une vision unie et d’un objectif commun : sortir gagnant du tunnel. Les autorités Marocaines déploient des mesures qui ont valu au pays l’admiration à l’international. Nous devons continuer de créer des canaux de communication où les Marocains et les Marocaines, toutes classes confondues, sont informés de la manière dont ils peuvent et doivent co-construire le Maroc de demain. Car ceci n’est pas une crise de l’Etat ou des entreprises, c’est une affaire qui commence et se termine par les citoyens.

Covid-19: What implications for the future of the banking sector?

Source : Velvet Chainsaw

With a large part of the world in forced confinement, the damage from the COVID crisis19 is mainly economic. This unprecedented situation has forced us to review several paradigms including the integration of technology in our daily life. It is true that before this crisis we had already entered the era of the fourth industrial revolution, in which the fusion of technologies blurs the boundaries between the physical, digital and biological spheres. However, the current crisis will have an accelerating effect on the generalization of this trend to all sectors of activity because, on the one hand, several psychological barriers related to digitalization will vanish. On the other hand, technology will be leveraged to prevent the effects of an upcoming crisis. We are already seeing the beginnings of these changes with examples such as the generalization of distance education, the use of telemedicine, teleworking and the distribution of public aids by smartphones. Changes that should take years (if not decades) happen now in a matter of days!

These conclusions apply to the banking sector as well. Digital channels are already emerging as the preferred distribution alternative especially with restrictions in terms of movement and in terms of staff availability. While ensuring continuity of service and addressing customer expectations, banks should take advantage of this opportunity to experience a radical overhaul of their operating models in order to adapt them to the new market reality when the crisis ends. The reliance on digital technologies and the limited use of physical branches currently will fast track the transformation of the banking landscape in the future by favoring banks with stronger digital capacities. Other external factors may further accelerate this trend. During this pandemic, banknotes have become a burden because facilitating virus transmission (some central banks disinfect banknotes). It is for this reason that the World Health Organization recommends the use of contactless payment. On the other hand, regulators could relax their requirements for Fintech during this period such as in South Korea.

Contrary to what one might think, the transition to digital and agile banking is not primarily a technological challenge because digital solutions are available on the market and, above all, have already been successfully implemented in several contexts. The challenge lies rather in the bank’s ability to evolve the business model, to transform processes, to adapt the organization and finally to conduct change.