Human Brilliance, Ingenuity and Skills will always be needed

A brilliantly educational article of Brad Keywell with our compliments shed some light of what awaiting us in the near future.  This is positively a world where Human Brilliance, Ingenuity and Skills will always be needed.

The Fourth Industrial Revolution is about empowering people, not the rise of the machines

14 Jun 2017

The world is changing. There’s no way around this fact.

The Fourth Industrial Revolution is now. And, whether you know it or not, it will affect you.

Billions of people and countless machines are connected to each other. Through ground-breaking technology, unprecedented processing power and speed, and massive storage capacity, data is being collected and harnessed like never before.

Automation, machine learning, mobile computing and artificial intelligence — these are no longer futuristic concepts, they are our reality.

To many people, these changes are scary.

Previous industrial revolutions have shown us that if companies and industries don’t adapt with new technology, they struggle. Worse, they fail.

Mindset shift

But I strongly believe that these innovations will make industry – and the world – stronger and better.

The change brought by the Fourth Industrial Revolution is inevitable, not optional.

And the possible rewards are staggering: heightened standards of living; enhanced safety and security; and greatly increased human capacity.

For people, there must be a shift in mindset.

As difficult as it may be, the future of work looks very different from the past. I believe people with grit, creativity and entrepreneurial spirit will embrace this future, rather than cling to the status quo.

People can be better at their jobs with the technology of today—and the technology that is yet to come—rather than fearing that their human skills will be devalued.

Human and machine

I’m reminded of chess.

We have all heard the stories about computers beating even the greatest grandmasters. But the story is more nuanced; humans and computers play differently and each has strengths and weaknesses.

Computers prefer to retreat, but they can store massive amounts of data and are unbiased in their decision-making.

Humans can be more stubborn, but also can read their opponent’s weaknesses, evaluate complex patterns, and make creative and strategic decisions to win.

Even the creators of artificial chess-playing machines acknowledge that the best chess player is actually a team of both human and machine.

The world will always need human brilliance, human ingenuity and human skills.

Software and technology have the potential to empower people to a far greater degree than in the past—unlocking the latent creativity, perception and imagination of human beings at every level of every organization.

Power of data, power of people

This shift will enable workers on the front line, on the road and in the field to make smarter decisions, solve tougher problems and do their jobs better.

This is our mission at Uptake—to combine the power of data and the power of people, across global industries.

Here’s what this looks like:

Railroad locomotives are powered by massive, highly complex electrical engines that cost millions of dollars.

When one breaks down, the railroad loses thousands more for every hour it’s out of service (not to mention, there are a lot of angry travellers or cargo customers to deal with).

After the locomotive is towed in for repairs, technicians normally start by running diagnostic tests. These can take hours, and often require technicians to stand next to roaring engines jotting down numbers based on the diagnostic readings.

That’s the old way – or, at least, it should be.

Machines, rather than something to be feared, are the tools that will help us solve the world’s biggest problems  Image: Unsplash/Sorasak

New solutions

When locomotives operated by our customers roll into the shop for routine services, all diagnostics have already been run.

Our software has forecast when, why and how the machine is likely to break down using predictive analytics — algorithms that analyze massive amounts of data generated by the 250 sensors on each locomotive.

Our systems have examined that data within the context of similar machines, subject- matter experts, industry norms and even weather. If there’s a problem, we detect it, and direct the locomotive to a repair facility.

A mechanic can then simply pick up an iPad, and learn in a few minutes exactly what is about to break down, as well as the machine’s history and the conditions it’s been operating under.

Virtuous loop

That leaves the mechanics to do what they do best: fix it, using their experience, judgement and skill. And the mechanics decisions and actions become data that feeds back into the software, improving the analytics and predictions for the next problem.

So, technology didn’t replace mechanics; it empowered them do their job.

In the same way that chess masters and computers work best together, the mechanic used human skills that a machine can’t replicate: ingenuity, creativity and experience. And the technology detected a problem that was unknown and unseen to human eyes.

In short, when the mechanic and the technology work together, the work gets done faster, with fewer errors and better results.

Multiply this across all industries: aviation, energy, transportation, smart cities, manufacturing, natural resources, and construction.

The productivity we unleash could be reminiscent of what the world saw at the advent of the first industrial revolution. But the impact of the Fourth Industrial Revolution will run much broader, and deeper, than the first.

We’ll have the knowledge, the talent and the tools to solve some of the world’s biggest problems: hunger, climate change, disease.

Machines will supply us with the insight and the perspective we need to reach those solutions. But they won’t supply the judgement or the ingenuity. People will.

 

The WEF recommends to read more on the same subject:

 

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Chancellor Angela Merkel in Algiers on 20 and 21 February

German Chancellor Angela Merkel, calling for closer cooperation with the countries of North Africa, intends to obviously achieve, on the occasion of this visit, more of the security situation in the region and by the same consolidate the economic relations between the 2 countries.

Cooperation between the 2 countries ? How ?

German Chancellor Angela Merkel, calling for closer cooperation with the countries of North Africa, intends to obviously achieve, on the occasion of her visit, more of the security situation in the region and by the same consolidate the economic relations between the 2 countries. Chancellor Angela Merkel in Algiers on 20 and 21 February follows on the Algerian Prime Minister’s visit on 12 January 2016 that in addition to the discussed security aspects, it had enrolled as part of the consolidation of economic cooperation between Algeria and Germany notably through the germano-algerian joint commission. This latter was set up in 2010, following the visit of the president of the Algerian Republic, to Berlin.

Germany’s socio-economic

German politics traditionally are normally dominated by two large movements, the CDU – CSU (the Christian democratic union of Ms Merkel and its Bavarian ally, the Christian Social Union) and the SPD (Social Democratic Party). German diplomacy strives to develop a balanced position in its dialogue with the Arab and Muslim world. Present in several States in the region, close political foundations of the major German parties play an important role in this effort of dialogue with all of the local political movements.

Currently, the migration crisis and the situation in the Middle East do concern jointly Turkey (first host country of refugees, with 2.5 million) and Germany, (first host of the European Union). Dialogue around this issue, for which Germany is quite involved, was to find an agreement between the European Union and Turkey, which aims to permanently reduce the number of people seeking asylum in Europe. Based on three central pillars (bilateral trade rooms, Germany Trade and Invest Agency, and economic counsellors of embassies), economic diplomacy conducted by Berlin translates into a strong attention paid to large emerging countries.

Largest economy in the European Union, Germany is a federal State consisting of 16 Länder account about 82 million inhabitants to 01 January 2016 with demographic projections of 72.2 million in 2030 explaining its immigration target with a + 1.4 million migratory balance policy (2015) where the Turks represent in 2015, 9.1 million or 11.1 percent of the total population.

This may put into question its economic dynamism and eventually expose it as a result its open economy to international uncertainties including the protectionist threat of the new American president, the British Exit from the EU and the current fragility of China. Its Gross Domestic Product in 2015 was € 3026.6 billion, with a Per Capita GDP of € 37,107 with an unemployment rate of 5.0% (2015) and 4.5% for 2016, with an annual average inflation rate to 0.1% for 2015.

Meanwhile Germany continues for several years its fiscal policy that is marked by the desire to reduce debt and public deficits, in accordance with objectives set by European treaties. Public debt amounted to € 2150 billion at the end of year 2015 (71.2% of GDP) and 69.2% (2016). The Bundestag has adopted on November 25, 2016 a Federal budget for 2017 and plan for its 2018-2020 program a budget that will be balanced on the whole of the period.

The 2017 federal budget spending is € 329.1 billion, representing an increase of € 12.1 billion compared to 2016.

Tax revenues are planned at € 301.03 billion. According to the multi-annual programming of the Bund, the federal budget should be balanced and should continue to be as such on the whole of the budgetary program of 2018 to 2020 period.

Industry, which represents a significant share of GDP remained almost stable for 20 years (25.7% in 2016 and 23.0% in 1994).  Agriculture represents 0.9%, industry 28.2% and services based on new technologies 72%.

German GDP grew by 4.1% in 2010, from 3.7% in 2011, 0.5% in 2012, 0.5% in 2013, 1.6% in 2014, 1.7% in 2015, and 1.9% in 2016. Highly internationalised companies, exports represent 39% of the GDP in 2015. World Trade Organisation ranked the country in 2015 as the third largest global exporter, behind China and the United States. The density of its fabric of medium and intermediate-sized companies (the “Mittelstand”) innovative and export

Literally champion of the world for exports, Germany has with a trade surplus in current accounts at $ 297 billion for 2016 before China’s $ 245 billion, according to a study by the IFO economic Institute, while in 2015, the balance of payments surplus of China totalled $ 293 billion and that of Germany was $ 257 billion and the United States run a deficit of $ 478 billion.

For 2015, its main customers were: United States (9.5%), France (8.6%), United Kingdom (7.5%), Netherlands (6.6%), China (5.9%), Italy and Austria (4.8%) and suppliers (2015): China (9.7%), Netherlands (9.3%), China (9.7%), Netherlands (9.3%), France (7.1%), United States (6.3%), Italy (5.3%)

 

What prospects for cooperation?

According to the Secretary of State at Germany’s Ministry of Economy and Energy and co-Chair of the economic joint commission, Germany and Algeria since its independence had good relations of friendship, and I quote him :

“We are aware of the political importance of Algeria in the Arab world and Africa. Algeria is a major and reliable political partner of Europe, for example in the areas of security, regional stability and our common fight against terrorism which are the subject of a close and trusting cooperation between our countries since many years. In addition, Algeria is one of the largest national economies in Africa. It is located at the interface of the Western world, of the Eastern world and the African world, and connects, because of its geographical location, the markets of Europe, Africa and the Arab world.”

Algeria at current prices Gross Domestic Product according to the World Bank was for 2015 at $ 214 billion, with as at January 1st, 2016 a population of 40.4 million inhabitants and an economy that directly and indirectly relies on hydrocarbon exports for 97 / 98% of its foreign exchange earnings.

The volume of bilateral trade between Algeria and Germany recorded in 2014 about € 5.1 billion and no significant change between 2015 and 2016. Germany imported from Algeria for an amount of € 2.5 billion (mainly oil) and exported at a cost of about € 2.6 billion to Algeria. According to Reuters News Agency and the information site “Deutsche Welle”, there was a signing of a major contract of armament between Algeria and Germany (to be confirmed) and exports in armament of Germany destined for Algeria would have reached during the period of January to September 2016 over € 4,029 billion.

In 2015, the bulk of the external trade of Algeria remained focused on its traditional partners such as China with $ 8.22 billion, France $ 5.42, Italy with $ 4.82, Spain with $ 3.93 and Germany $ 3.38 billion. In the first eleven months of 2016, Algerian Customs data show $ 42,78 billion for imports of goods, services not included.

Italy preserved its traditional first customer position of Algeria’s in the first eleven months in 2016, by absorbing $ 4.41 billion of exports, or 17.24% of Algerian overall exports during this period. It was followed by Spain, France and the United States, as well as by Canada that have imported for respective amounts of $ 3.24 billion (12.67%), $ 2.95 billion (11.53%), $ 2.79 billion (10.9%) and $ 1.25 billion (4.91%). Paradoxically Germany does not show in this section of the Algerian exports for these seem not exactly high enough to be classed within it.

In terms of imports, China remains at the top of the supplying countries of Algeria with $ 7.7 billion representing 18.01% of imports overall Algerian between January and November. France with $ 4.37 billion (10.22%), followed by Italy with $ 4.26 billion (9.96%), Spain with $ 3.29 billion (7.71%) and Germany with $ 2.7 billion (6.34%).

So what are these prospects for the Algero-German cooperation? 

Several areas of cooperation have been identified, but the main hurdle would be that most German operators appear not to be attracted by investments in Algeria, for at least as long as the regulatory framework is really not in their favour.  According to numerous statements of many German operators and government agencies, the Algerian rule 51/49 share ownership split, that is applied to foreign investments, with total disregard for either strategic or non-strategic sectors would be the main culprit for all potential German investors including SMIs/SMEs like from many other countries to stay away from Algeria.

However some 4400 family-run companies in Germany form the backbone of the German economy, not to mention an Algerian diaspora evaluated to approximate 30,000 in Germany, are rather “well integrated”. According to German data, about 220 German companies are located in Algeria and employ around 2000 people, operating in different sectors of activity such like energy, services, hydraulics, transport and construction technology and the development of renewable energy in which Germany has a great experience. Algeria import essentially mechanical, electric, steel, equipment vehicles and chemical products and fats from Germany.

Algerian exports are, conversely, made up mainly of hydrocarbons (oil and gas) and derivatives. Despite this minimal trading far below the potential, the ‘shared’ political of the two capitals and their economic and geostrategic interests, remain, despite the world economic and financial crisis, in support of the strengthening of all economic exchanges and bilateral cooperation in all sectors. The main objective is to strengthen the partnership, while studying the economic market of the two countries to seek opportunities of cooperation so as to increase trade and bilateral cooperation especially in the sector of energy (solar, wind, and solar) and technologies.

Algeria, prioritised for next years, despite the existence of several other options, resourcing of renewable energy whilst pursuing at the same time win/win partnership with Germany for an integration and advancement of technological and managerial know-how of Algerians, with the aim to concluding contracts of cooperation with Algerian companies in all sectors including those channels where Algeria has a global comparative advantage to use its international business networks.

 

In conclusion, Germans that generally have no historical precedent with Algeria, as of their well-reputed pragmatic attitudes and well-known frankness did recently approach the Algerian Government confirming that their readiness to intensify cooperation, was it not for those recent Government measures of Algeria.  These were qualified as being counterproductive, administrative in their outlook whereas what is required should focus as the economic reference of the currency exchange balance as well as the accumulation of organisational and technological knowledge. The Algerian economy predominantly bureaucratic and rentier economy that produces the informal sphere could do with a financial and socio-educational reform, in addition to the lifting of the land system.  And it is up to the Algerians to remove those obstacles for the good implementation of the business, assuming of deep structural reforms, good governance and a visibility and coherence of socio-economic policies of the Government.  It is under these reservations, that any Algero-German cooperation could be and intensify in the context of mutual respect.

ademmebtoul@gmail.com

Updated on February 22, 2017.

The planned visit to Algiers was put off at the request of the Algerians, the German government spokesman said.

“The Algerian government asked at short notice for it to be postponed, the federal chancellor complied with this wish.”

The 3 core Responsibilities of every Government of any Nation

The best way to go about discussing the topic covered by the proposed article written by Anne-Marie Slaughter, President and Chief Executive Officer, New America and published on Monday 13 February 2017 by the WEF is to recall the failure and eventual collapse [ . . . ]

The best way to go about discussing the topic covered by the proposed article written by Anne-Marie Slaughter, President and Chief Executive Officer, New America and published on Monday 13 February 2017 by the WEF is to recall the failure and eventual collapse of the former Soviet Union and what caused its abrupt end not so far ago. Is it lack of these 3 core responsibilities of every government of any nation discussed here, from the agenda of the successive governments?

Or was it as many see it, like in those MENA’s region so-called republics due to that sprinkle of socialistic orientations in their political strategy of the 60s and 70s ? Any thoughts ?

Or is the whole thing a soft reminder directed towards the new tenant of the White House of his basic duties?

3 responsibilities every government has towards its citizens

The oldest and simplest justification for government is as protector: protecting citizens from violence.

Thomas Hobbes’ Leviathan describes a world of unrelenting insecurity without a government to provide the safety of law and order, protecting citizens from each other and from foreign foes. The horrors of little or no government to provide that function are on global display in the world’s many fragile states and essentially ungoverned regions. And indeed, when the chaos of war and disorder mounts too high, citizens will choose even despotic and fanatic governments, such as the Taliban and ISIS, over the depredations of warring bands.

The idea of government as protector requires taxes to fund, train and equip an army and a police force; to build courts and jails; and to elect or appoint the officials to pass and implement the laws citizens must not break. Regarding foreign threats, government as protector requires the ability to meet and treat with other governments as well as to fight them. This minimalist view of government is clearly on display in the early days of the American Republic, comprised of the President, Congress, Supreme Court and departments of Treasury, War, State and Justice.

Protect and provide

The concept of government as provider comes next: government as provider of goods and services that individuals cannot provide individually for themselves. Government in this conception is the solution to collective action problems, the medium through which citizens create public goods that benefit everyone, but that are also subject to free-rider problems without some collective compulsion.

The basic economic infrastructure of human connectivity falls into this category: the means of physical travel, such as roads, bridges and ports of all kinds, and increasingly the means of virtual travel, such as broadband. All of this infrastructure can be, and typically initially is, provided by private entrepreneurs who see an opportunity to build a road, say, and charge users a toll, but the capital necessary is so great and the public benefit so obvious that ultimately the government takes over.

A more expansive concept of government as provider is the social welfare state: government can cushion the inability of citizens to provide for themselves, particularly in the vulnerable conditions of youth, old age, sickness, disability and unemployment due to economic forces beyond their control. As the welfare state has evolved, its critics have come to see it more as a protector from the harsh results of capitalism, or perhaps as a means of protecting the wealthy from the political rage of the dispossessed. At its best, however, it is providing an infrastructure of care to enable citizens to flourish socially and economically in the same way that an infrastructure of competition does. It provides a social security that enables citizens to create their own economic security.

The future of government builds on these foundations of protecting and providing. Government will continue to protect citizens from violence and from the worst vicissitudes of life. Government will continue to provide public goods, at a level necessary to ensure a globally competitive economy and a well-functioning society. But wherever possible, government should invest in citizen capabilities to enable them to provide for themselves in rapidly and continually changing circumstances.

Not surprisingly, this vision of government as investor comes from a deeply entrepreneurial culture. Technology reporter Gregory Ferenstein has polled leading Silicon Valley entrepreneurs and concluded that they “want the government to be an investor in citizens, rather than as a protector from capitalism. They want the government to heavily fund education, encourage more active citizenship, pursue binding international trade alliances and open borders to all immigrants.” In the words of Alphabet Chairman Eric Schmidt: “The combination of innovation, empowerment and creativity will be our solution.”

This celebration of human capacity is a welcome antidote to widespread pessimism about the capacity of government to meet current national and global economic, security, demographic and environmental challenges. Put into practice, however, government as investor will mean more than simply funding schools and opening borders. If government is to assume that in the main citizens can solve themselves more efficiently and effectively than government can provide for them, it will have to invest not only in the cultivation of citizen capabilities, but also in the provision of the resources and infrastructure to allow citizens to succeed at scale.

Invest in talent

The most important priority of government as investor is indeed education, but education cradle-to-grave. The first five years are particularly essential, as the brain development in those years determines how well children will be able to learn and process what they learn for the rest of their lives. The government will thus have to invest in an entire infrastructure of child development from pregnancy through the beginning of formal schooling, including child nutrition and health, parenting classes, home visits and developmentally appropriate early education programmes. The teenage years are another period of brain development where special programmes, coaching and family support are likely to be needed. Investment in education will fall on barren ground if brains are not capable of receiving and absorbing it. Moreover, meaningful opportunities for continuing education must be available to citizens over the course of their lives, as jobs change rapidly and the acquisition of knowledge accelerates.

Even well-educated citizens, however, cannot live up to their full potential as creative thinkers and makers unless they have resources to work with. Futurists and business consultants John Hagel III, John Seeley Brown and Lang Davison argue in The Power of Pull that successful enterprises no longer design a product according to abstract specifications and push it out to customers, but rather provide a platform where individuals can find what they need and connect to whom they need to be successful. If government really wishes to invest in citizen talent, it will have to provide the same kind of “product” – platforms where citizens can shop intelligently and efficiently for everything from health insurance to educational opportunities to business licenses and potential business partners. Those platforms cannot simply be massive data dumps; they must be curated, designed and continually updated for a successful customer/citizens experience.

Finally, government as investor will have to find a way to be anti-scale. The normal venture capitalist approach to investment is to expect nine ventures to fail and one to take off and scale up. For government, however, more small initiatives that engage more citizens productively and happily are better than a few large ones. Multiple family restaurants in multiple towns are better than a few large national chains. Woven all together, citizen-enterprise in every conceivable area can create a web of national economic enterprise and at least a good part of a social safety net. But government is likely to have to do the weaving.

A government that believes in the talent and potential of its citizens and devote a large portion of its tax revenues to investing in its citizens to help them reach that potential is an attractive vision. It avoids the slowness and bureaucracy of direct government provision of services, although efficient government units can certainly compete. It recognizes that citizens are quicker and more creative at responding to change and coming up with new solutions.

But government investment will have to recognize and address the changing needs of citizens over their entire lifetimes, provide platforms to help them get the resources and make the connections they need, and see a whole set of public goods created by the sum of their deliberately many parts.

Further reading recommended by the WEF.

 

Never too late for a realistic industrial policy

I note with satisfaction in this month of February 2017 that the respective Departments of Energy and Transport will be taking actions as recommended alas ten years earlier, by an audit carried out under my direction and assisted by the then leaders and managers of State Oil Company ‘SONATRACH’, independent experts and world-renowned Ernst Young consultants . Having been interviewed by the economic commission of the Algerian National Congress to which [ . . . ]

For a sustainable development in Algeria . . .

I note with satisfaction in this month of February 2017 that the respective Departments of Energy and Transport will be taking actions as recommended alas ten years earlier, by an audit carried out under my direction and assisted by the then leaders and managers of State Oil Company ‘SONATRACH’, independent experts and world-renowned Ernst Young consultants (1). As it is never too late for a realistic industrial policy, it is an encouraging message to all to see and appreciate.

Having been interviewed by the economic commission of the Algerian National Congress to which I presented the main conclusions, I drew the attention of the Government of the day on the urgency of a new fuel policy, and focus on the LPG, the “Bupro” for all heavy vehicles, (positive effect on the environment), the majority of cars and trucks running on diesel or gasoline including those of administration and public enterprises. History, with strong imports between 2009 / 2015 Bill gave us reason.

Here is yet again my view on the said subject.

According to the Office of National Statistics (ONS), the National Automobile Parc (NAP) of Algeria totalled 5,683,156 vehicles as at end of 2015, an increase of 4.75% or 250,000 units  if compared to year 2014.)

By category of vehicles, the NAP in 2014 is made of individual cars with 3,483,047 units (64.2% of the total), of pickups with 1,083,990 (near 20%), of trucks with 396,377 (5.4%), of farming tractors with 146,041 (2.7%), of trailers with 134,019 (2.47%), of coaches and buses with 82,376 (1.52%), motorcycles with 20,380 (0.38%) and special vehicles with 4,756 (0.1%).

The distribution of the NAP for year 2014, according to ages of vehicles showed that the number of under 5 years had reached 1,253,731 units (23.11%), from 5 to 9 years to 933,006 vehicles (17.2%), 346,788 (6.4%) of 10 to 14 years, 15-19 years with 214,287 units (3.95%), 20 and more with 2,677,746 (49,35%). This increase in the NAP was explained by the increase in registrations of new vehicles in 2015 compared to 2014 of more than 900,000 units, or 7.72%.

For 2015, the distribution by age showed that the number of under 5 years had reached 1,368,549 units, (24.08%), from 5 to 9 years 892,196 units (15.70%), 10 – 14 years of 508,815 units (8.95%), from 15 – 19 years 187,067 (3.29%) and more than 20 years 2,726,529 (47.98%).

By spatial distribution, Algiers was top with 1,496,561 units (26.33%), Blida with 311,024 (5.47%), Oran 293,156 (5.16%), Constantine with 204,843 (3.60%) and Tizi-Ouzou with 199,507 (3.51%).

As for the imported quantities, these fell 73.74% with 53,356 vehicles imported between early January and late July 2016, against 203,174 units during the same period in 2015, or 149,818 vehicles less, according to the National Center for Statistics (CNIS) of the Customs. As a reminder, vehicles import licences awarded, were in May 2016, granted to 40 dealers of 80 applicants. Initially set to 152,000 units for year 2016, the vehicles import quota was finally reduced to 83,000 units. According to the Ministry of Trade, import to 2016 Bill does not exceed a billion Dollars up from $3.14 billion in 2015 (265,523 units) and $5.7 billion in 2014 (417,913 units).

But important note regarding all parts and accessories of all motor vehicles; these are expected to increase during the coming years if the rate of integration does not exceed 40 / 50% and if all scheduled units were assembled, it would mean a return to the old import bill, since these accessories costs decreased between 2015/2016 by only 4% without these units being still operational.

For the type of fuel used, in 2014, gasoline represented 65% and the Diesel 34%, the use of LPG being marginal, less than 2% and for 2015, gasoline represented 65,67% and Diesel 34.33% so no significant change. From January to end of May 2016, certainly because of the rising prices, Normal gasoline sales declined by 2% between the same period of 2015 to 2016, that of the Super fell 11%, an increase of 2% for Diesel, consumption rose by 2% and the LPG quantities marketed during the period from January to May 2016 experienced an increase of 14%, all according to the National Society of Marketing and Distribution of petroleum products (NAFTAL); information covered by the APS.

Thus according to NAFTAL, the aggregate of sales of fuels in the first five months of the year 2016 (figures in brackets are those of the same period of 2015).  These are:

So is a new model of energy consumption as I had recommended previously, see note (1) that Algeria had to change its model of energy consumption, to review its policy of subsidies which need to be targeted (as per lesson learned from a mission to Malaysia experience), to focus on the GPL and the GNW for all big carriers; the BUPRO to be reserved for all impoverished areas in the Highlands and the South because it does not require the separation of propane and butane, and thus save huge investments of refining complexes.

Because of the extrapolation of internal demand on growth, before a declining supply, the report predicted massive import of diesel and unleaded gasoline by 2010 / 2014. The report stressed the importance of an active policy of storage for a balanced and supportive space to avoid supply disruptions. Unfortunately, the recommendations have not been implemented. According to the report of the World Bank to 2014, fuel subsidies in 2014 have exceeded $20 billion, one third of the State’s annual budget, while the wealthy 10% of the population consumes more fuel than the remaining 90%.

Moreover, Algeria remains one of the few African countries that still uses leaded gasoline and by the way does partly import it.  According to a report by the UN program for the environment (UNEP) published in April 2014 where the sulphur content in Algerian gas was found to be between 500 and 2000 ppm must conform to international standards by generalizing unleaded gasoline. Algeria should therefore put an end to the production of leaded gasoline and produce the two well-known types of the 90 and 95 unleaded gasoline.

For this and because it is appropriate to avoid any supply disruption that poses a threat to national security, I recall that the Minister of Energy at the time announced on April 16, 2015 before MPs that storage capacity are reduced by 7 to 10 days and that an amount of $200 million would be unlocked to make that to 30 days by 2020. This is strategic management which should take into account the specificity of each region, to deal with the consequences of a shortage that can paralyze strategic sectors.

Thus, strategic inventories, distinguishing three main complementary systems, private stocks, State stocks prevailing in the USA, Japan, Germany, France and agency (public or private) stocks, are the result of Government policies established to meet a serious break in supply, related to an international oil crisis, a strike of navigation, a political boycott, a natural disaster, or even to a lack of foresight on behalf of the management of exports of some countries.

For example, for France, it is required that oil stocks for 90 days of average daily net imports or 61 days of daily domestic consumption are available. In the majority of countries, the safety stock exceeds two months.

But the most important is to have a strategic vision. Following the official statement of the Council of Ministers of 2014; reserves of natural gas were 2700 billion m³ for traditional gas and 12 billion barrels for oil, that both with the strong domestic consumption would lead towards exhaustion by 2030. Furthermore, that the Algerian economy feeds on the hydrocarbons revenues has to be taken into account.

The evolution of prices would basically determine the purchasing power of the Algerians for inflation which is back led to the deterioration of their purchasing power. The total income must be corrected to take account of the distribution of income and consumption model, for an overall aggregate would have little meaning. Several questions need to be answered for any coherent economic policy.

-First, what will happen with the inevitable exhaustion of oil in economic terms and not in profitability of physical discoveries, on the purchasing power of the average citizen? In this case compared to the real purchasing power (housing, food, clothing including health, etc.) and with the dumbing down of the middle strata, would any purchasing power suffice to say buy a car?

-Secondly, the absence of any specialised industrial units, referring to the knowledge-based economy in order to promote integrated subcontracts, what will be the currency balance of the projected units? Especially when the majority of inputs (costlier with the slippage of the Dinar) will almost be imported and must include labour, transport, training adapted to new technologies costs.

-Thirdly, by international standards, the threshold of capacity are between 300,000 and 500,000 units per year for individual cars, about 100,000 for trucks / buses and scalable with large concentrations since 2009. Accounting costs are fixed and variable; what is the break-even point for a competitive costing if compared to international standards and the new mutations of this sector?  Would producing between 1000 and 10.000 cars projects be competitive?

At what before-tax costs would Algeria produce this car and which trend will be applied when the tariff relief going to zero according to the agreement with the European Union and in this case what is the internal added value created with respect to the international price vector (balance currency taking into account depreciation and imported inputs both in hard currencies)? The hardware representing less than 20 / 30% of the total cost which like a computer, the cost is not the carcass (mechanical vision of the past), it is the software that represent 70 / 80%. And not being able to ban importation, these mini projects will they competitive in terms of cost/quality as part of the logic of international values?

-Fourthly, do we actually build a factory to make cars for a local market while the objective of the strategic management of any enterprise, would it not be either regional or global in order to ensure the financial profitability in the face of international competition and this sector is it not internationalized with sub-segments nesting at the global level?

-Fifth, the automotive industry becoming capital orientated, (digital programming eliminating all intermediate jobs) what is the number of direct and indirect jobs to be created, referring to the necessary qualification, taking into account new technologies applied to the automobile?

-Sixthly, what will be the cost and strategy of distribution networks so as to adapt to these technological changes?

-Seventh, will these cars use gasoline, Diesel, LPG, Bupro, will they be hybrid or solar. Whilst attending to the emergence of cars using new technologies, including ‘smart’ cars at horizon 2020 putting old conventional cars off the international market; in this case what will be the future of going for all these units of low capacity and using old technological methods, impossible to export in the face of fierce international competition?

In conclusion, I will never repeat enough that the engine of any development process lies in research and development, that capital money is only a means and that without a knowledge economy no project has a future.

In this twenty-first century, before a turbulent and unstable world where technological innovations are in perpetual evolution, Algeria should rethink its model of development in general and its model of energy consumption in particular; energy being at the heart of its national security, the move towards a new energy MIX would be a must.

Algeria to take only the example of transport, being similar to the majority of other economic sectors and households as a whole, will it go for solar and encourage renewable energies however delayed, and for fuels such as gasoline, Diesel, LPG, on the GNW (for all heavy vehicles), or for hybrid or solar with the technological revolution that looms upon us?

Which mode of transportation as based on the stratification of the household incomes and including all road accidents?  What will be the price of these fuels and which strategy of distribution networks to adapt to these technological changes?

In fact all these objectives cannot be achieved without a strategic vision, adding that all technical models would be inefficient, were it not carried by “reformist” responsible for its social and political forces.

 

(1) – Reference to a study “For a new policy of fuel” – Department of Energy Algiers (8 volumes) 2006/2007 – Audit performed under the direction of Dr A. Mebtoul, Professor and International Expert

 

Cooperation between the United States of America and Algeria

Few years ago, in a trip in the United States from Washington to Chicago, South Carolina, Virginia and New York, I met important political, financial and economic personalities that I shall always remember, in particular a discussion with a senior official of the Department of the Treasury in Washington. I told him “there must be cooperation between the United States of America and Algeria and a strengthening of this cooperation in the economic and security fields and beside that I am wary of some of the French positions.
His answer was the following and served me later on as a lesson; I quote as of my memory: [ . . . ]

“Lesson in geo-strategy in the United States of America”

Few years ago, in a trip in the United States from Washington to Chicago, South Carolina, Virginia and New York, I met important political, financial and economic personalities that I shall always remember, in particular a discussion with a senior official of the Department of the Treasury in Washington. I told him “there must be cooperation between the United States of America and Algeria and a strengthening of this cooperation in the economic and security fields and beside that I am wary of some of the French positions.

His answer was the following and served me later on as a lesson; I quote as of my memory:

“Mr Mebtoul, you are a serious intellectual, so let us avoid any emotions…  There are no differences of policy between the United States and Europe including France but only tactical divergences. North Africa and particularly the Maghreb region formerly French colonies, the USA work closely with the French economic and security services because of their knowledge of this region and the US do take any of their comments into consideration. . .”

“As for your country, Algeria, we consider cooperation with it as strategic and this is in all areas.”

In conclusion, may be a few small changes, but in the light of experiences, ikl is unlikely, foreign policy in its broad directions and constants of the States United of America and the France change for electoral reasons.

In conclusion, perhaps a few small changes, but in the light of experience, it is unlikely that foreign policies of the United States of America and France would change for electoral reasons.

That was then and in the light of the recent statements of some US officials, in the face of the new global geostrategic changes, the prospects for both safe and economic cooperation between the new administration of the United States of America and Algeria should be based on shared prosperity.

We must never forget that the power of a Nation and its diplomatic efficiency are based on its economy and that the United States has a global strategy; American officials I contacted speak about the necessary stabilization of North Africa and give priority to the integration of the Maghreb. The Deputy Under-Secretary of State for Egypt and the Maghreb, John Desrocher welcomed Algeria’s efforts on February 3rd, 2017 in the stabilization of the region and “its quality contribution” towards the resolution of the Libyan crisis and stabilization of the region, pointing out that the American economic operators could contribute to this effort as long as Algeria carries on “improving its business climate and diversify its economy”.

Cooperation.  In the security and economic fields only ? 

Due to the weakness of Trade in 2015, for several factors, including the economic downturn in China, a severe recession in Brazil, a drop in oil and other commodity prices and the volatility of exchange rates, according to the IMF and the WTO official statistics, world trade in volume growth remained slow in 2015, at 2.7%, and was roughly equal to that of the world GDP, which amounted to 2.4%.  Despite positive growth in the volume of trade, the value in current Dollars of exports of goods has decreased by 14% in 2015, falling to $16,000 billion, due to the decline of 15% of the export price.

At current prices, the gross domestic product (GDP) of the USA for a population of 324 million people, in the 4th quarter of 2016, reached $18,861 billion with a soft growth in 2016 according to the Department of Commerce as of end January 2017 of 1.6%. For 2015, the GDP of China was $11,385 with relatively lowest growth in 15 years (6.5% in 2016), Japan $4,116, Germany $3,371, the UK $2,849, France $2,488, India $2,183, Italy $1,819, $1,800 Brazil, Canada $1,573, South Korea $1,393 and Spain $1,235 billion. The European Union including Britain, with a GDP of $18,081 billion for a population of 510 million, remains the world first economic power; its rate of growth in 2016 has been higher than that of the USA.  Thus the USA and Europe for less than a billion people represent more than 40% of global GDP estimated at $75,700 billion in 2016.  Yet to have an objective assessment, the GDP per capita should be considered.

Meanwhile, the United States economy remains a key driver of growth for the global economy. Fluctuations in its GDP, the level of its international trade and monetary policies are followed closely by world Governments and international financial markets. Major trading partners of the United States are China, Canada and Mexico, the two partners in NAFTA, Japan, Germany and the United Kingdom; Germany and China ranking second and third, respectively. The United States remains the first trading nation (in value), their imports and their exports.

Commercial opportunities between the U.S. and Algeria outside hydrocarbons, Algeria being after all interested in the transfer of technical know-how and managerial expertise with the presence of important American companies, so as to promote cooperation especially in the field of new technologies, industry, services, agriculture and the building and infrastructure sector not to mention training. In 2013 a contract between the Algerian SONELGAZ group and the US General Electric (GE) was signed for a partnership in an industrial complex of manufacture of gas turbines in Algeria for an investment of $200 million. A company was agreed, as owned 51% by SONELGAZ and 49% by GE, will produce between six to ten turbines for gas by year 2017 — a capacity of 2,000 MW, part of which could be exported. In addition, GE won a supply contract of turbines for gas and steam with a capacity of 8,400 MW for an amount of $2.2 billion, intended to equip six power stations that Algeria plans to build by 2017.

In 2015/2016, directly and indirectly the Algerian economy was dependent on hydrocarbons to 97% of receipts in foreign currency and exports of nonhydrocarbon at 6% being made up of more than 60% of derivatives of hydrocarbons. The nominal GDP of Algeria, deflated by the Dollar that averaged of DZD109/110 per Dollar is projected to be $166 billion in 2016 against $172.3 billion in 2015, according to forecasts by the IMF for a population exceeding 40 million inhabitants.  On the trade balance as a customer in 2015, the United States represented $1,977 billion, a drop 59.04% from 2014 and as provider $2,710 billion, down from 5.48% in 2014. While exports to the USA in 2012 (source Algerian Customs), were estimated in 2012 at $10,778 billion and imports of $1,651 billion.

The United States, future energy competitor to Algeria?

Energy security is the paramount economic strategy of the USA which imported between 2011/2012 nearly 20% of its energy needs primarily from Mexico and Venezuela, the Gulf countries and few countries of Africa including Nigeria and Algeria.

What was the impact of the recent rebound of US production of oil and gases, led by technology advances that allowed extracting these non-conventional resources, and reduce their imports of oil and gas and recently in 2016 to become exporter to Europe?

The developments of unconventional resources in the U.S., such as shale oil and gas, have a major impact on prices. In view of these forecasts, the country should reach the Holy Grail of energy independence by 2020. Self-sufficiency in energy announced by the first world power will no doubt have geopolitical consequences. In the first place, the U.S. policy in the Near and Middle East will probably undergo few strategic modifications insofar as changes in the factor “energy dependence” or more precisely, “securing access and energy supply” will become less sensitive.

This will lead to a redefinition of the American national objectives, where the United States, which was in the recent past, the largest importer of oil in the world, did not hesitate to trigger or promote wars and conflicts in Africa, in the Near and the Middle East or Latin America, in order to secure their energy supply. Now soon be self-sufficient, their intervention in these areas will be based on new considerations, including that linked to the growing influence of China. This new situation can only lead to geostrategic upheaval in both political and economic arenas especially of the Algerian economy.

The development of unconventional gas in North America has closed this market to Algerian exports and weighed on prices in the spot markets, which raises the question of the profitability of exports of LNG. The ‘profitable price’ of an MBTU, the unit of measurement of the gas industry, would be for SONATRACH from $9 to $10 for the pipeline and $13 to $14 for LNG. Could Algeria that has averages LNG units size with relatively high costs compared to its competitors, requiring significant transport costs, compete to its supply to Asia, with Russia, Iran and even Qatar?

Security co operation

Moreover, the data sheet as of end of January 2017 of the Department of State of the new American administration notes that Algeria is a “strong partner including its intense work in the field of counter-terrorism and its efforts for the stabilization of the region of the Maghreb and the Sahel… These analyses come together with classified documents of the CIA and FBI and a document composed of 6 chapters of the security of the U.S. Congress research service dealing essentially with the question of Government and politics in Algeria, developed between 2013/2014 whereby the USA recognize that Algeria’s military power and dominant economy in the Maghreb region represented a key partner to the United States in its efforts to combat international terrorism

This cooperation in the area of security has taken such intensity that the leaders of the two countries have decided to structure them in a formalised framework and give a regular character in the bilateral consultations, for a better organization and visibility of the relationship between the two countries. It is for this purpose that the strategic dialogue Algeria-USA was established and the first meeting of which was held in October 2012 in Washington, after the 5th session of the 2 countries joint military dialogue. The United States considers this strategic dialogue as “the Foundation” on which the United States and Algeria aim to strengthen their future relations in political, economic, cultural, scientific and security areas. This rapprochement between the 2 countries therefore translates the convergence of views on issues of regional and international interest.

But let us not forget that the United States has a global strategy that does not fundamentally differ from that of Europe (existing tactical differences) with as a base its economic interests and its insistence for the integration of the Maghreb, under segment of the Africa continent, whose economic control through rivalries including China will be a major challenge of the 21st century.

Diversify the economy so as to establish the effectiveness of Algeria’s diplomacy

Protectionism and the advent of populist regimes are likely to accelerate this trend with a slow growth of the world economy with a negative impact on the price of oil, accentuated by the new US policy of subsidizing non-conventional energy, distorting all forecasts of OPEC countries strategy which incidentally doesn’t represent in 2016 more than about 33% of the world marketed production.

 We must not overlook the fact that the hydrocarbons based rentier economy would not be a guarantee of development if it is wasted and that the power of a Nation and diplomatic effectiveness were based on its economy. Recent events, in Libya, in Mali, in the Sahel, in Syria, the important discoveries of oil and especially gas in Eastern Mediterranean and Israel security to which the USA place strategic importance, foreshadow important geostrategic compositions at the level of the region. The USA intend to play a major role in this reconfiguration and Algeria, subject to improved governance and greater realism in new international relations, is a key player for the stabilization of the region

Adaptation strategies are required both in the economic, the political as well as in security policies, taking into account the new fourth global economic revolution which looks inevitable, at horizon 2020/2030, away from the outdated patterns of the mechanical age and the building and infrastructure development models of the 1970s / 1980s.  That might involve some sort of a cultural revolution in the Algerian leadership and would certainly raise the urgency of the transition from a rentier economy to an economy away from hydrocarbons, that would be dependent on good governance, as based on enterprise and knowledge and to glimpse at the start of the energy transition (new model of consumption) taking into account the strong domestic consumption, where widespread and poorly targeted subsidies risk to bring a premature exhaustion of the rentier cushion by year 2025/2030 with a population exceeding 50 million inhabitants.

 

Conferences and debates of Professor Abderrahmane MEBTOUL, who is guest of MaghrebEmergent‘s RadioM in Algiers on Wednesday 08/02/2017 – 9:30am – 11:30am  where he will be discussing before a panel of journalists ‘the socio-economic situation and prospects of the Algerian economy and economics of the future legislative election set for May 04, 2017’.  He will also be discussing “Algeria facing the fourth economic revolution and the energy transition” and questions of national and international news.

– All are cordially invited .

Morality of Leaders as factor of stability

 

For a Happy New Year 2017 in the Maghreb and North Africa,

by

I often had in the past, to stress on numerous occasions in my counselling activities for the Maghreb and African Governments about how the lack of integration did in fact result in the loss of several points from the region’s growth.  This was principally tied with and / or consequent to the prevailing lack of morality in the region’s leadership.  And how Morality of Leaders as factor of stability has become a factor of progress or a sine-qua-non condition for a sustainable development.

Any sustainability in development would have to take into account the current ecological challenge amongst many other things, that in this 21st century, should essentially be made through good governance and effectively be knowledge based.  For the development of whether the Maghreb or North Africa to be competitive in these globalization times and the fourth economic revolution that is looming upon us between 2020/2030, we ought to first remove all productive sectors out of the rentier economy model and incorporate them in the global arena of fair trade.

The Maghreb and Africa hold significant potential, especially in human skills, wealth that is more important than all the reserves of hydrocarbons for Algeria or Phosphate for Morocco and Tunisia.  To overcome the current situation both locally and abroad, in addition to deep sense of morality of the people responsible for running the city, the fight against corruption and illegal transfers of capital, with democratic control mechanisms should be the urgency of the hour.

One cannot ignore the effects of globalization that in the main is positive but could at the same time be perverse if unregulated.  We should for instance inscribe all future projects as part of the integration of the Maghreb, bridge between Europe, the Middle East and Africa, for the stability and prosperity of the whole region.  The Maghreb and Africa being at the crossroads, we must avoid any complacency, and contrary to the daily lives of the vast majority of the population, we should refuse letting it become a source of collective neurosis.  Whilst avoiding gloom, everything achieved in all countries of the Maghreb and Africa is after all not entirely negative, but there are many deficiencies that require to be absolutely addressed.

Would, in 2017, the present rulers of the Maghreb and Africa, toast it by chosing those resolutions that in these moments of great geo-strategic upheavals, help them to both take stock of the situation objectively, avoid running forward and possibly become aware of the gravity of the situation.  They should notably make their cultural mu, with a focus not on their personal interests but rather on the superior interests of their populations.

To meet all challenges of the future, the Maghreb and Africa rulers, need a return to CONFIDENCE through a language of truth in order to secure their respective future.  They should rehabilitate work and intelligence, and gather all political, economic, and social forces whilst avoiding any division on subtopics.  Most importantly, they should learn to respect our different sensitivities, and therefore opinions of others, by spreading a culture of tolerance.

Unanimism is generally source of decadence and confrontation of ideas very often a productive source of mutual enrichment.  The challenge of all nations in the 21st century world that is in perpetual motion would be the mastery of time.  Any country that does not move forward goes necessarily backward.  According to the majority of all international reviews, the stability of the Maghreb and Africa could be a factor of stability of the entire Mediterranean and African continent and any destabilisation would have geo-strategic implications whereby the importance of its development as a dialectic link between security and development.

Hence the importance of a broad inter-Maghreb, African and international cooperation so as to deal with above all else terrorism that is a global threat.  The Maghreb and Africa would continue to have a future with strong potential, presuming sub regional integrations, can achieve sustainable development reconciling economic efficiency, a deep social justice and consolidate unity to which I am deeply attached.

In this New Year 2017, I would like to wish that our region, North Africa and the continent of Africa, all the security and development and face the coming fiscal pressures as a shared equitable sacrifice.  I am entirely convinced that the Maghreb and Africa have all the potentialities to surpass the multidimensional crisis they are presently facing. This would involve new modes of local political, economic and social regulations, based on the Rule of Law, the development of freedoms in the broader sense our world knowing a moral crisis that will be overcome only by a profound change in international relations for a fairer world, as based on better global governance.

 

HAPPY NEW YEAR to ALL

from

Dr Abderrahmane MEBTOUL, University Professor on 26/12/2016 ademmebtoul@gmail.com

16 events that will shape 2017

AMEinfo came up with this formidable vision of next year titled 16 events that will shape 2017; we could not help but reproduce it here all for the benefit of our readers.  All comments are welcome but we would advise to address direct to AMEinfo with nevertheless a copy to MENA-Forum.  

AMEinfo, is a well known and reliable middle east online medium of information.

Historically as per Wikipedia, AMEinfo.com was initially Arabian Modern Equipment Est., incorporated in Abu Dhabi, in February 1993 by Saif Al-Suwaidi and Klaus Lovgreen. The first version of the AME Info CD-ROM database of 125,000 companies was developed and compiled late 1996 and sold some 10,000 copies.  

The listing of the events as proposed by AMEinfo summed up thus.

  •  Many events of 2016 will have repercussions spilling over into 2017
  •  Positive impacts include Saudi Vision 2030, OPEC deal
  •  The fallout of Trump’s presidency, JASTA law, Italy referendum, etc. remain to be seen

The year 2016 was eventful, to say the least, with the world shaken by several momentous events whose repercussions will spill over into 2017.

Here are 16 events of 2016 that will most probably shape the coming year:

 

Saudi Vision 2030

This vision, announced in April, is one of the top economic highlights of 2016. Its repercussions are yet to be experienced throughout 2017 and beyond. Some of the biggest follow ups to this event are the Saudi Aramco IPO, expected to take place in 2018, privatising Football Clubs in the kingdom and its green card plan.

 

Trump as president of the United States

President-elect Donald Trump filling posts for his administration, getting ready to officially take office in January. This is when his foreign policy is expected to take its final shape and impact the whole world, starting with countries of the Americas, passing through Europe and the Middle East and reaching Asia.  

(Donald Trump wins US elections 2016: What it means for MENA)

 

Brexit

The United Kingdom voted to exit the European Union last June through a national referendum. Since then, the country underwent several months of economic chaos that it tried to keep under control, especially because it had not yet left the European Union. The chaos is expected to continue until the announcement of an exit plan, expected in March 2017.  

(Brexit: Who’s next?)

 

JASTA

The Justice Against Sponsors of Terrorism Act is a law passed by the United States Congress, allowing survivors and relatives of victims of terrorist attacks to pursue cases against foreign governments in the US federal court. The bill raised tensions with Saudi Arabia – when the bill was introduced, Saudi Arabia threatened to sell up to $750 billion in United States Treasury securities and other US assets if the bill is passed. Saudi Arabia is still lobbying the US over the law.

 

Egypt’s floating of the pound

Egypt’s central bank floated the pound currency in November, devaluing by 32.3 percent to an initial guidance level of EGP 13 to the dollar and hiking interest rates by three per cent to rebalance currency markets following weeks of turbulence. According to many observers, Egypt’s floating of its currency comes in a bid to attract more investors to the country.

 

China’s AIIB development bank

China launched the Asian Infrastructure Investment Bank (AIIB), a new international development bank, seen as a rival to the current, US-led World Bank. Countries such as Australia, Britain, Germany, Italy, the Philippines and South Korea agreed to join the AIIB, recognising China’s growing economic strength.

 

Google Alphabet

Last August, Google announced creating a new public holding company, Alphabet. Alphabet become the mother of a collection of companies, including Google, which includes the search engine, YouTube and other apps; Google X, the Alphabet arm working on big breakthroughs in the industry; Google Capital, the investment arm; as well as Fiber, Calcio, Nest  and Google Ventures.

 

Panama papers leak

Roughly 11.5 million documents were leaked in April, detailing financial and attorney-client information for hundreds of thousands of offshore entities. The documents contained personal financial information about famous, wealthy individuals and public officials.

The documents were created by a law firm in Panama, with some dating back to the 1970s.

 

Iran nuclear deal: lifting of sanctions

Although the framework of this agreement was announced in 2015, economic sanctions started to lift only in January 2016. The year saw the beginning of Iran’s return to international markets and more is expected for 2017 as the country has not yet made a full comeback.

 

Samsung Galaxy Note 7

Samsung Galaxy Note 7 phones, released this year, started to heat up and explode, causing some injuries in different markets around the world and killing the model altogether. This created massive chaos for the South-Korean manufacturer, which withdrew all units from the markets and started a gruelling investigation into the rootcause of the issue.

 

King Salman bin Abdel Aziz Bridge

Last April, Saudi Arabia and Egypt agreed to build a bridge over the Red Sea, linking the two countries together. This was seen as a historic move highlighting the excellent relationship between the allies. The bridge would be called “King Salman bin Abdel Aziz Bridge”.

 

OPEC deal

Members of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members as well, reached their first deal since 2001, to curb levels of oil output to ease a global glut after oversupply pressured prices for more than two years. Long-term market reactions to the deal are yet to be felt and will probably be seen throughout 2017.

 

Pokémon Go

The new augmented reality game, developed by Niantic, quickly became a global phenomenon and was one of the most profitable apps of 2016, with more than 500 million downloads worldwide.

 

Italy referendum

Italy’s government, led by then-Prime Minister Matteo Renzi, held a nation-wide referendum proposing reforms and amendments to the country’s constitution. The referendum failed, leading to the resignation of Renzi, tipping the country into potential political turmoil and the rise of the populist, right-wing movement in the country.

Renzi’s resignation and the country’s instability also brought up concerns over a looming banking crisis in Italy, the third-largest national economy in the euro zone.

(Italy referendum: Step 1 to another Brexit?)

 

Fed raises interest rates

The US Federal Reserve raised interest rates, signalling a faster pace of increases in 2017, with central banks adapting to the incoming of a Donald Trump administration, which has promised to cut tax. The year 2017 will probably see the repercussion of that decision.

 

Turkey’s coup

A coup d’état was attempted in Turkey in July against state organisations including the government of President Recep Tayyip Erdogan. The failed coup was carried out by a faction of Turkey’s armed forces, who attempted to seize control of several areas in the capital of Ankara, Istanbul and elsewhere.

The coup, and other terrorist attacks, disturbed Turkey’s peace and stability and harmed its tourism industry, among others.