Year: 2025

The new geopolitical battleground

Posted on by itsupport

If money is politics in an era of shifting geopolitical sands, central bank digital currencies (CBDCs) and the underlying infrastructure will be a crucial chip in the competition between China and the West, claims Brunello Rosa, head of consultancy firm Roubini & Rosa Associates, in his book Smart Money: How Digital Currencies Will Shape the New World Order. A former Bank of England economist who teaches at the LSE and Bocconi University and advises a UK parliamentary committee on CBDCs, the Italian thinker has an inside view of how technology shapes the emerging monetary order. In an exclusive interview with World Finance’s Alex Katsomitros, Rosa argues that China’s digital renminbi is part of a ploy to undermine the western monetary system in tandem with its Belt and Road Initiative, whereas President Trump’s digital dollar ban and culture wars over privacy and ‘programmability,’ the ability of CBDC issuers to automatically set conditions for their use, may set the US back.

Why has a technical topic such as CBDCs become so politicised?
They are indeed a technical adjustment to the liability side of central banks’ balance sheets. But there is also a geopolitical dimension, because this is how China can internationalise the renminbi. There are also concerns over privacy, an inherently political issue. Finally, flags, national anthems and currencies are symbols of sovereignty. Once you start altering them, politicians want to have a say.

Are concerns over privacy and programmability warranted?
The ability to track transactions raises concerns, but banks and credit card issuers already do that. Central banks provide stronger privacy guarantees. An authoritarian government could use this information against you. But the problem is the authoritarian state, not the instrument. They could abuse any technology. So this concern is not entirely warranted. Plus, there are ways to minimise the problem, although not completely eliminate it. It is different with programmability. People believe that governments and central banks will control how they spend money.

You want to buy cigarettes and the state forbids that. But the probability is low. Programmability allows money to do things it couldn’t do before due to embedded smart contracts. This feature could be used for good or bad purposes. Think of nuclear energy: you can have unlimited energy or a nuclear bomb. It is not the technology that matters, it is the way it is used.

The new US administration supports cryptocurrencies, but President Trump has banned the digital dollar. What is your take on US policy?
The US has a different tradition from China’s, so instead of a state-backed CBDC, they chose a private-sector solution: stablecoins. They will just regulate stablecoins and other cryptos. Eventually they will realise, possibly after a crisis, that the system only works well with a CBDC as the foundation of trust. Without it, the digital asset environment is inherently unstable.

Some think that stablecoins could help the dollar remain the global reserve currency in the digital era. Do you agree?
I do. China has made its move with a state-backed solution that will facilitate the international use of the renminbi. The US decided to go the other way with stablecoins. Even with the narrower definition of stablecoins, issuers will need to keep a large amount of liquid assets to guarantee the one-to-one peg with the dollar. Those dollar-denominated assets are almost certainly US Treasuries, which helps sustain demand for them despite reduced confidence in US assets amidst a trade war. The US response is a smart move, but their success depends on how acceptable these stablecoins will be worldwide.

Would a retail CBDC pose a threat to commercial banks?
People fear it could lead to disintermediation and ask: Why should I keep my money in a commercial bank deposit account, when I can keep it in a safer central bank account? There is only limited risk, because in a two-tier system, the central bank would have liabilities, but commercial banks would maintain the customer relationship, issuing the wallets.

You can introduce – and Europeans want to do that – holding limits on the amount of CBDC held by individuals. Eventually banks will continue to extend credit, not central banks. If you want a loan, you will still have to go to the bank. But banks will need to adapt to the new reality. Making money out of payments to people and companies may not be possible. They need to find new revenue streams. For example, they can issue their own stablecoins or tokenise their deposits and add functionalities to their liabilities.

What is the link between smart money and the global race for resources?
It is the same geopolitical dimension at play when we talk about rare earths, tariffs, seizing territory, say Greenland or Taiwan. China has launched the Belt and Road Initiative, its sister project called Digital Silk Road, its CBDC and also agenda 2025. So there is a continuum of projects bringing China to the next level of technological development. Once you start building infrastructure for bridges and ports, you also build digital infrastructure: payment centres, data centres, 5G, telecommunication satellites, e-government in various countries. Part of this is the payment system where the digital renminbi will run. All these things are closely related.

Is de-dollarisation their endgame?
After WWII, to turn the dollar into the global reserve currency the US decided to run a current account deficit, which is what the current administration is worried about. Well, they wanted it in the first place! They also accepted having an open capital account, meaning that they had to send dollars overseas to pay for imported goods, but also to be converted into other currencies. China does not want to do that. China wants to remain an export-led economy, not a consumption-led economy like the US, and therefore it has a current account surplus, meaning that more renminbi comes in the country than goes out. They do not want to open their capital account. That would cause a massive outflow of money because people fear that the government can seize their money. So how can the renminbi become a reserve currency? Well, technology is the answer. If China builds the rails on which digital payments are run, it wouldn’t matter whether it has a current account surplus. What matters is who builds and controls that infrastructure, and it’s China. That is the way for China to establish a reserve currency in its sphere of influence.

Are there any risks for China?
If China does not achieve these goals peacefully, it may become more aggressive geopolitically. Instead of focusing on economic prosperity, it may get into foreign adventures, something it has avoided over the last 100, if not 1,000 years. China has never been expansionist. They might be tempted to do so, but I don’t see this as the most likely scenario.

Can the West catch up, given China’s 10-year head start?
It is difficult. If you are 10 years behind, you can’t catch up in 10 months. But the EU has shown that if you put your mind to it, you can achieve remarkable results relatively quickly. They started working on it around 2018. They are now finishing their investigation and preparation phase and implementation starts in October, which could lead to a 2027 launch. You cannot catch up, because meanwhile China will have progressed. But you can partly recover the lost ground, if you are consistent. For the US, the problem is the presidential ban. It will be difficult to catch up, because they will waste four more years. They bet that private solutions will do the job, and a public safe asset won’t be needed. That is not a safe bet. The US should adopt a public safe asset for its citizens’ digital wallets.

What will be the differences between liberal and authoritarian CBDCs?
The technology offers the issuer plenty of control. Potentially, you can track or at least reconstruct ex post every transaction, which could be a significant control tool. The challenge is having good governance that makes the system less pervasive.

You can’t provide full anonymity; only cash guarantees that. But you can make sure that people’s identity cannot be discovered without a judicial warrant and they can spend money without government interference. Programmability will only be used when you receive money so that governments can implement targeted fiscal policies focusing on specific groups or even individuals, but there will be no control of how money is spent. Authoritarian CBDCs could be used as instruments of surveillance to prevent people from doing what they want. But it is the country’s leadership, not the technology, that matters. Authoritarian regimes will choose authoritarian solutions.

Doesn’t that lead to a fragmented global monetary system?
The system needs to be interoperable, meaning that solutions adopted by individual countries should be integrated internationally. If not, instead of having a homogeneous monetary system whereby money can flow instantaneously, we will have a more balkanised system where money meets more obstacles. Countries need to cooperate and find common protocols, but in the current fragmented geopolitical environment, this might be a challenge.

Is a global CBDC, like a digital version of Keynes’s Bancor, a viable solution?
Keynes proposed Bancor in Bretton Woods, knowing that history could repeat itself with protectionism, trade wars, authoritarian regimes and eventually war. He thought that reducing trade imbalances was important to avoid a repeat of history. The IMF was established to do that and make sure that no country could exploit the exorbitant privilege a reserve currency offers – first to Britain, then the US. But he lost the argument to Harry Dexter White, the US envoy, on the grounds that the dollar could serve as a reserve currency. Could we see a digital Bancor? As it was not accepted back then, it is unlikely to be accepted now. Which central bank will issue and manage that currency? Theoretically speaking, perhaps the IMF. But there is no consensus for making them an international currency issuer. Bretton Woods institutions are under attack, even from the US where they are based. So I do not see a digital Bancor emerging anytime soon. If anything, we are moving in the opposite direction: a plethora of private-issued stablecoins that may mark the return of ‘free banking’: institutions issuing their own liabilities. This is the risk the Bank for International Settlements has identified and why they do not like stablecoins.

The rise of eco-commerce

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The climate crisis has rightly or wrongly become a multi-billion-dollar marketing opportunity, but for individual consumers, the simple decision to ‘buy green’ can in fact be fraught with challenges. What use is buying an item marketed as eco-friendly but purchasing it from well-known polluters like Temu, which mass-produce thousands of tons of plastic per day, wrap it in more plastic, and ship to your door from thousands of miles away? And can we expect the everyday consumer to know and understand the implications of every single purchase in order to arrive at a decision that feels good but actually does good too?

For decades, small-scale, profitable eco-initiatives that blended environmental messaging with commercial success have launched, grown, become darlings of the market, and been snapped up by multinationals or, worse, had a crash down to earth after initial success. Big names that seemed to get this right for a long time were Tesla (at the vanguard of the EV sector until the recent catastrophic market consequences of Musk’s entry into politics), the Body Shop (independent for decades, bought by L’Oréal in 2006, and barely survived administration in 2024), Innocent Smoothies (famously now owned by Coca-Cola) and Wild plastic-free deodorant (recently acquired by Unilever).

Buying green and feeling seen
Ethical start-ups capture the hearts and minds of consumers who want to ease their conscience, but is it ‘selling out’ when those brands are acquired by big players, even if they are offering the capacity and resources to make the large-scale impact founders dream of? With every small start-up product that gets snapped up, fans of the original complain vehemently, but it also speaks to the willingness of corporates to pay attention and respond to consumer demand.

Certainly, big companies are buying the disruptors’ reputations that they could not generate organically, but it also speaks to an awareness of market trends towards that which is sustainable, low-carbon, and scalable as well as lucrative. It is a tricky route to navigate; maintaining the authenticity of these brands after acquisitions is crucial, as that often serves as their key differentiator. The moment that unique appeal fades, the brand risks becoming just another product, leading to disillusioned customers going elsewhere. But the reality is that customers who buy these products are often prepared to pay a premium, and big brands know this. They can market the product as a way for consumers to ‘do their bit’ and charge more accordingly, often because higher-quality, low-carbon emissions products genuinely do cost more to make and distribute, but also because there is a healthy profit margin that can be built in when such production happens at the scale that the big brands can access.

The cost of overconsumption
Anything and everything we purchase takes some sort of resource from somewhere, and that can feel difficult to grapple with for large, research-heavy purchases like cars, let alone dozens of times per week in your average supermarket shop.

Customers who buy these products are often prepared to pay a premium, and big brands know this

No one can claim ignorance of the crisis at hand: buying any item in 2025 means stewardship and responsibility of that item, including its packaging, carbon footprint, air miles, and disposal at the end of its useful life. That should be considered when making the decision to buy.

It is easy to simply say ‘buy less,’ but even that requires a level of diligence and determination to beat the algorithms slickly designed to sell, sell, sell, no matter the environmental cost. We can, and should, take a moment before spending our money anywhere to think – do I really need this? Where is my money going? Can I afford it, and what is the impact?

However, from making the items that are available in the first place, to considering options for environmentally friendly disposal at the end of their life, every consumer is operating within an imperfect system. Those of us privileged enough to be able to choose can do so in a way that strikes a balance between ethical and convenient. But the poorest in society, those who cannot access high-quality organic foods, plastic-free household items, electric vehicles and so on, must also operate within such a system, and with less privilege and bandwidth to allocate to such decisions. It is how the system supports itself, and us, to do better, that makes a bigger difference. While green consumerism is a step forward, vigilance is needed to ensure real impact, not just profit or empty promises.

Africa’s missed opportunity?

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Historically, Africa has been consistent in creating a pattern of pursuing integration through grand masterplans. Many have remained just plans on paper due to mediocre implementation. A similar trend is shaping up with the African Continental Free Trade Area (AfCFTA), an agreement that was touted as the holy grail in revolutionising trade, investments and economic development.

On May 30, the continent marked the sixth anniversary of the signing of the AfCFTA agreement. Like many other grandeur treaties, AfCFTA is at the risk of losing its allure. Granted, only Eritrea has openly called the agreement pointless and opted to keep away. Burkina Faso, Niger and Mali have been suspended after military juntas instigated coups. In essence, 45 countries of a total of 48 that have ratified the agreement believe in the principles of AfCFTA. In reality, this is as far it goes – belief in the ideals of the agreement.

Africa Kiiza, PhD Fellow at Germany’s Universität Hamburg, captures the picture. “The aspirations and ambitions of AfCFTA are brilliant. The problem was in putting the cart before the horse,” he says. He explains that, in desperation, African leaders rushed in signing a ‘shell’ of an agreement hoping to resolve a mountain of obstacles along the way. Evidently, tackling the hurdles amid shifting internal and external geopolitical and economic landscapes is proving herculean.

On aspirations, the continent did paint a rosy picture. First was the elevation of AfCFTA to the pinnacle of Agenda 2063, putting the agreement as one of the flagship projects. The expectation was that the agreement would be the ultimate solution in resolving fundamental economic problems bedeviling the continent, namely low levels of integration, overreliance on commodity exports and limited market access for African businesses. By creating a single market for goods and services, the agreement would solidly lay the foundations for the establishment of a continental customs union. Notably, these are key preconditions for the establishment of the African Economic Community.

Boosting intra-Africa trade
For AfCFTA, the goals are clear-cut, at least on paper. The overriding goal is the creation of a single market of 1.3 billion consumers with a combined gross domestic product of $3.4trn. It has other vast benefits. Most prominent is boosting intra-Africa trade by 53 percent, growing the manufacturing sector by $1trn, generating income worth $470bn, creating 14 million jobs and lifting 50 million Africans – or 1.5 percent of the continent’s population – out of poverty.

The fact is that Africa’s future is being imagined through frameworks imported from elsewhere

Six years down the line, the realities of putting the cart before the horse are glaring, with some bordering on absurdity. A case in point is the fact the AfCFTA Secretariat, which was established in 2020, continues to be financed by the German development agency GIZ, which also finances negotiations besides offering technical assistance. Thanks to GIZ, progress has been achieved on the legal construct of the agreement cutting across rules of origin for some sectors, dispute settlement mechanism and digital trade, among others.

GIZ’s support cannot be underestimated. However, it has exposed Africa on two fronts, one being administrative inefficiency and the other being the tendency to cling to the dependence of the ‘economy of borrowed institutions.’ “The fact is that Africa’s future is being imagined through frameworks imported from elsewhere,” observes Prof Dunia Zongwe, Associate Professor of Law at the University of Namibia. He adds that the situation is complicated by deep-running historical ideological tensions between Africa’s neoliberal and Pan-Africanist doctrines that have catalysed the continent’s integration curse for decades.

Slower than expected trading levels
The impact has been a slow implementation of AfCFTA. Prior to the signing of the agreement, total formal trade within the continent totaled between 12 and 18 percent. In 2022, the Guided Trade Initiative was launched to kick start actual trading under AfCFTA. Yet, intra-Africa trade remains at below 20 percent. Last year, trade between African countries rose by 7.7 percent to hit $208bn, according to the African Export-Import Bank. The level of value addition remains lacklustre, with total value of exports standing at $682bn and imports $719bn.

By the end of 2024, 31 countries out of the 45 had initiated some form of trade, albeit quite negligible. The growing number, a significant increase from seven in 2023, coupled by the adoption of three new protocols on investments, intellectual property and competition, are a demonstration that Africa is committed to building momentum in deepening the goals of the framework. The ultimate hope is to increase intra-African trade to 53 percent, putting it on par with other continents where intra-trade is booming. In Europe, it stands at 68 percent, Asia at 59 percent and North America at 51 percent.

“The fruits of the trading bloc are low-hanging, but they will ripen incrementally depending on the implementation of the agreement,” observes Prof Zongwe. He adds that, so far, the continent is performing dismally, with a low policy implementation rate of only seven percent. Even the Africa Union (AU), the highest governing body, has admitted that so far, it has been a case of misses rather than hits on AfCFTA.

A number of obstacles to overcome
The reality is emerging that to make AfCFTA work and for Africa to realise the full benefits, the difficult task lies in tackling the myriad structural, logistical, political, economic and other obstacles facing the agreement.

Addressing these challenges is proving to be slippery mainly because most countries, particularly the least developed, peg their development on inward looking as opposed to outward integration. Most aver that AfCFTA is ultimately designed to benefit the big economies that are in desperate need of new markets for their goods and services. For them (small economies), the agreement is a pursuit of profits as opposed to equality.

Kiiza gives practical examples. A US citizen has the luxury of traveling to 24 African countries without a visa. For a Uganda national, the same applies to only nine countries. This sorry state of affairs has come about by the deliberate refusal by countries to ratify the AU’s protocol on free movement of persons. Only four countries have ratified the protocol.

It gets worse. Despite being a major producer of cocoa, only second to Côte d’Ivoire and accounting for a quarter of global production, chocolate exports from Ghana to South Africa attract 30 percent in tariffs. For Switzerland, chocolate exports to South Africa attract zero tariffs.

If that is not preposterous enough for a continent craving integration, the economic disparity gives context. Burundi, whose economy is worth $3bn, is expected to open 97 percent of its market. The same applies to Nigeria, with a $487bn economy.

“The idea that liberalisation and tariff removal before building the capacity of small nations will automatically increase trade is flawed,” notes Kiiza. He adds that the continent must apply brakes on political expediency and focus on the fundamental blocks that will make AfCFTA work.

In fact, the inability of the various regional economic community blocs to flourish, despite being the foundations on which AfCFTA stands, offers vital lessons. The East Africa Community (EAC), for instance, is disintegrating due to political and economic rivalry.

Expensive barriers in the way
Top on the list of enablers that need fixing is the infrastructure conundrum. Undoubtedly, poor transportation networks, inadequate logistics systems, and inefficient border procedures are huge obstacles to trade. The physical barriers make it more expensive for businesses in Africa to trade with each other than with partners outside the continent. It is not hard to see why. In sea trade, for instance, 98 percent of shipping lines are foreign owned. For them, it makes economic sense to flood Africa with foreign-made goods that struggle to fill a container with goods produced in the continent. The challenge extends to rail transportation, where low investments have bred insignificant connectivity at a mere 0.1 percent.

While poor connectivity is a major factor in the high costs of goods produced in Africa, non-tariff barriers (NTBs) have become the toys of trade in pursuing political interests and entrenching protectionism. Subsidies, import bans, complex customs procedures, regulatory inconsistencies, corruption and other administrative hurdles continue to impede cross-border trade. In EAC, for instance, the direct cost of NTBs was estimated at $17m in 2023. Considering that AfCFTA lacks any prohibition on subsidies, which together with dumping cases count among the most litigated issues before the World Trade Organisation, it means Africa can expect NTBs to continue being used to undermine fair competition.

On tariffs, the continent has structured a progressive reduction over a 15-year period, with the ultimate goal being to liberalise 97 percent of goods by 2034. This is already proving problematic, with many of the scheduled tariff reductions yet to take effect, yet the deadline is less than a decade away. “Some countries balk at fully opening their markets because they fear losing revenue from tariff reductions or the adverse effects of stiffer competition on domestic industries,” says Prof Zongwe. He adds the fear emanates from the fact that, for most countries, the production structures are largely similar.

As a pain-reducing mitigation on the effects of tariff reduction, the continent has a $10bn Trade Adjustment Fund in place. Apart from mitigating potential negative impacts, such as tariff revenue losses and market disruptions, the fund will also be utilised in addressing the infrastructure deficits and supply chain bottlenecks. This is critical because Africa understands that for AfCFTA to have any semblance of success, the continent must break from the colonial yoke of exporting raw materials and commodities and importing finished goods. Essentially, value addition must become the new mantra.

India rising: the world’s newest growth giant

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With the US doubling down on economic nationalism during President Trump’s second term, multinational corporations are accelerating their ‘China-plus-one’ strategies – and increasingly, that ‘plus-one’ is India. With its tech-savvy workforce, swelling middle class, and pro-business policy incentives, India is fast becoming more than a hedge against China: it is emerging as a standalone growth story. The shifting geopolitical winds, coupled with India’s demographic advantage, are redirecting global capital – and few relationships matter more in this transition than the one between Washington and New Delhi.

According to research by the German financial services multinational Allianz, India’s talent pool and demographic advantages, coupled with lower unit labour costs relative to its Asian neighbours, make it an attractive choice for re-shoring operations. Moreover, economic reforms and initiatives by the government to revitalise the manufacturing sector such as the Production Linked Incentive – a scheme that incentivises firms to increase domestic production – will be contributing factors for multinational firms to choose India to be China’s plus one. The share of high and medium skill-intensive manufacturing sectors out of the total was 64 percent in India in 2022, and grew by five percent from 2016, outpacing China, Malaysia, Indonesia, Thailand and Vietnam in terms of growth. Through knowledge spillovers, efficiency gains and innovation, high and medium skill-intensive manufacturers can further accelerate the manufacturing sector in India.

“India offers what investors seek in the post-globalisation world: scale, stability and strategic alignment with the West,” says Fei Chen, CEO of Intellectia AI, an AI-native investment platform based in Hong Kong. “The macro story is increasingly hard to ignore.”

The making of a strategic economic axis
The evolving bromance between President Trump and Indian Prime Minister Narendra Modi is reshaping economic flows and recalibrating alliances. In February 2025, Modi’s high-profile visit to Washington culminated in an ambitious joint target: to increase bilateral trade from $129bn in 2024 to $500bn by 2030. While recent US tariffs on Indian goods – most notably a proposed 26 percent levy – sparked brief tensions, the measure has been suspended until July, and both sides are actively negotiating a broader trade pact.

If China was once the ‘factory of the world,’ India is now vying to be the world’s innovation lab

“Modi and Trump are politically aligned in ways that make their economic partnership more durable,” says Robert King, CEO of the UK-based Acuity Knowledge Partners. “They are both strong leaders with nationalist platforms, and both recognise the value of deepening commercial ties.”

This alignment has opened the floodgates for foreign direct investment (FDI). In just the first nine months of FY2024, India attracted $41bn in FDI, a 27 percent year-over-year increase. US firms are at the forefront of this shift – part of a larger move to derisk supply chains and diversify manufacturing bases beyond China. Moreover, Indian companies are increasingly becoming exporters of capital themselves. In 2023, India invested $4.7bn in the US – about three percent of all US inbound FDI – with expectations of rapid growth ahead.

India’s tech-driven investment boom
If China was once the ‘factory of the world,’ India is now vying to be the world’s innovation lab and assembly line for the next era of global growth. The sectors attracting capital reflect not only India’s strategic ambitions but also investors’ desire for long-term scalability and resilience. Semiconductors sit at the heart of this ambition. India’s $10bn semiconductor mission is luring global chipmakers like Micron, AMD and Tower Semiconductor to set up shop with generous subsidies, land grants, and infrastructure support. Electric vehicles (EVs) and renewables are another fast-rising pillar. Tesla’s ongoing talks with the Indian government, including proposals for a local gigafactory and supply chain localisation, reflect the sector’s momentum. The Production-Linked Incentive (PLI) schemes are helping India compete with China in batteries, solar components, and other clean-tech hardware.

“India is becoming a magnet for clean energy hardware, and the PLI incentives are game-changers,” says Michael Ashley Schulman, Partner and Chief Investment Officer at a Southern California-based wealth management firm. “From EVs to solar, global firms are following policy tailwinds into the Indian market.” Pharmaceuticals and biotech are also rebounding, as companies seek alternatives to China’s dominance in active pharmaceutical ingredients. India, once known as the ‘pharmacy of the world,’ is seeing renewed investment in healthcare R&D and production.

Meanwhile, digital infrastructure and tech services remain a perennial draw. Global hyperscalers – Google, Amazon and Microsoft – are expanding data centres, AI labs and cloud investments. India’s robust SaaS ecosystem and deep engineering talent pool are helping position it as a global hub for next-generation technology services. Acuity Knowledge Partners, for example, has doubled its workforce in India over the past five years and recently added a new delivery centre. “We are not just investing in facilities – we are investing in India’s future as a knowledge economy,” says King.

According to McKinsey Global Institute, the business and economics research arm of McKinsey, India is the fastest-growing e-commerce market in the world, with its size going from $3.9bn in 2009 to $200bn in 2024, driven by smartphone penetration and the use of digital payments. Online retail represents around 25 percent of India’s total retail market. This is expected to grow to 37 percent by 2030. India also has a strong cohort of local players such as Flipkart (acquired by Walmart) and Meesho, as well as global companies like Amazon and Rakuten.

India’s information technology (IT) industry, valued at around $250bn, already serves many of the world’s leading companies, and its market for AI services is growing rapidly. Moreover, India has an abundance of IT talent, and given the shortage of AI talent globally, this wealth of expertise could be a significant competitive advantage in a market for AI services that could reach $4.6trn globally by 2040.

Further, major Indian companies are diving in. For example, Reliance Industries has launched AI initiatives in high-potential sectors such as energy and telecommunications, and Tata Consultancy Services has announced a $1.5bn investment in its Generative AI project pipeline.

Can India sustain the hype?
While the macro story is compelling, the micro often frustrates. India’s bureaucratic hurdles, regulatory unpredictability, and fragmented federal system can slow even the best-laid business plans. Despite years of reforms, state-by-state inconsistencies in labour laws, tax policy and infrastructure quality persist.

Once seen as just a backup to China, India is now becoming the market others must hedge against

“There is a tendency to weaponise regulations retroactively,” warns Schulman. “Global tech firms have had to navigate everything from sudden data localisation mandates to retrospective tax disputes. That unpredictability adds friction.”

India’s geopolitical positioning, while generally favourable, is also complex. Its strategic alignment with the US coexists uneasily with longstanding relationships with Russia and Iran – and a tense, if economically intertwined, relationship with China.

That said, the broader economic indicators are actually quite promising. Inflation is cooling (projected at four percent in FY2026), the fiscal deficit is narrowing (down to 4.4 percent), and the current account deficit remains modest at 1.1 percent. India’s exports hit a record $820bn in FY2025, and its dependence on exports (only 22 percent of GDP) makes it relatively resilient to global trade shocks. “The fundamentals are solid,” says King. “What investors need is patience and precision – it’s a long game.”

Fei Chen argues that the India pivot is no longer just about derisking from China – it is about embracing India as a standalone growth story. “Investors aren’t expecting frictionless returns,” he says. “They are betting that India’s digital momentum, demographic edge, and policy frameworks will pay off over the next decade.”

Indeed, with a median age of 28, an expanding digital consumer base, and deepening capital markets, India is one of the few large economies with long-term, endogenous growth drivers. Initiatives like ‘Make in India,’ coupled with newer schemes like the Design-Linked Incentive (DLI) for innovation, are helping create a more compelling and beneficial ecosystem for start-ups and multinationals alike. Still, challenges remain. Infrastructure development, while improving, lags behind China’s in scale and execution speed. Inter-state coordination on industrial policy can be clunky. And the lingering perception of ‘policy risk’ continues to spook some long-term investors. Yet, optimism endures. Goldman Sachs forecasts that India will become the world’s second-largest economy by 2075, with a projected GDP of $52.5trn (see Fig 1). That may feel distant, but it is a signal of just how expansive the India bet really is.

India’s investment moment has arrived
Once seen as just a backup to China, India is now becoming the market others must hedge against. The world isn’t just betting big – it is betting forward. The convergence of geopolitical realignment, structural reforms, and digital dynamism has created a moment of genuine opportunity. Whether India can fully seize that moment depends on its ability to translate promise into execution – and maintain the investor goodwill it has worked so hard to earn.

However, Schulman highlights that “corruption is not as endemic as it once was, but navigating bureaucracy still requires local savvy and strong partnerships…and while geopolitical alignment with the US is strengthening, India’s relationships with Russia and Iran, plus its balancing act with China, complicate the narrative,” he said.

In short, India isn’t just a plug-and-play growth story – but rather it is a strategic allocation that requires patience, persistence, precision and a bit of luck.

Exploring AI’s influence on market dynamics

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Artificial Intelligence (AI) exploded into the mainstream in 2023, and its adoption is showing absolutely no signs of slowing down. From technology, health, and manufacturing to customer services, marketing, and even retail, AI is everywhere. And let’s face it, who hasn’t used Chat GPT (other LLMs are available) for a bit of inspiration or help sometimes.

But, AI itself is nothing new. It has been around since the 1950s, and the financial sector was an early adopter back in the early 1980s when James Simons founded quantitative investment firm Renaissance Technologies. Early financial use of AI included power trading and expert programmes, and as computing power has improved over the intervening years, so too has AI’s capabilities, shifting how markets operate from trading algorithms that execute within milliseconds to predictive analytics anticipating market shifts.

The role of AI in financial markets
From machine learning algorithms to natural language processing, AI technology is designed to mimic how the human brain thinks, understands, learns, and remembers, but with one valuable difference, which is especially useful when it comes to finance: it removes emotion. Analysing huge amounts of complex, unstructured datasets and real-time data in a fraction of the time it takes a human agent, AI can spot patterns that the human analyst may overlook, due to various biases, conscious or otherwise, detect data outliers and anomalies, and forecast market trends with pinpoint accuracy. Obviously, this means that this efficiency, speed and accuracy are a few of the key advantages of using AI in market analysis.

However, one of the standout features of AI is in its scalability to work equally as well with large datasets as it does with small, niche ones, making it suitable for both large-scale data analysis and the management of diverse investment portfolios. AI can also help to provide continuous monitoring of market movements, observing trading trends, and anomalies in trades, and flagging suspicious behaviour in real time, making it an efficient way to minimise risk and mitigate fraudulent activity.

As AI’s capabilities have improved over recent years, it has become a significant tool in asset management, specifically generative AI (GenAI). AEIQ, launched in 2017, was the first public AI-driven fund, and many more funds have since also added AI tools and big data into their strategies. PwC’s 2023 ‘Global Asset and Wealth Management Survey’ predicted that the amount of assets managed by algorithm-driven, AI-enabled platforms will double to almost $6trn by 2027 (see Fig 1), while their 2024 survey revealed that 80 percent of asset and wealth management organisations say AI will fuel revenue growth, and those organisations adopting ‘tech-as-a-service’ could potentially see a 12 percent revenue boost by 2028. As an example, hedge fund start-up, Minotaur Capital, has replaced traditional analysts with AI and, since its launch in May 2024, has seen a 13.6 percent FYTD increase against a 2.03 percent 12-month increase of the global stock market (MSCI All-Country World Equity Index).

The power of automation
Traditional algorithmic, rule-based trading systems rely on static conditions and predefined rules, whereas algorithmic strategies underpinned by AI and machine learning can help institutional and retail traders adapt, refine, and improve their decision-making process in real-time in an effort to outwit the market. While they can help generate ideas, develop strategies, and even execute trades, they are, however, just tools, and should never be used to replace human judgment, but rather complement it to enhance performance. In general, trading models are built following a structured four-stage process: collecting and analysing market data to recognise patterns, identifying factors that filter out unnecessary noise, training the model with historical data so it learns how different market conditions impact trade volumes, and then testing in the live market and continually monitoring performance.

There is the ethical dilemma of whether AI should make high-stakes financial decisions without human oversight

High-frequency trading (HFT) is one trading method that takes algorithmic execution to the extreme. It uses complex algorithms for lightning-fast analysis of multiple markets and trades are executed in microseconds. And because speed is of the essence, AI and machine learning are vital to HFT success. The algorithms need to process enormous streams of real-time data, order books, price ticks, news feeds, and decide, in fractions of a second, whether to enter or exit positions. Reinforcement learning (RL) and neural networks are often used to optimise execution, manage risk exposure, and identify fleeting market inefficiencies faster than any human could.

Predictive analytics and sentiment
Using statistical and data analysis techniques, predictive analytics is used to forecast future market trends based on historical and current data. AI-driven models are still trained using historical data to identify patterns, relationships, and trends, but the big difference is that while traditional models required manual adjustments and pre-defined assumptions, the AI model continuously refines itself. Machine learning algorithms, deep learning networks, and natural language processing (NLP) work together to analyse and transform vast amounts of data into actionable insights, allowing investors to make better choices, limit risks, and optimise their portfolio.

Additionally, using real-time data sources from social media, news articles and internet sources, AI can measure the sentiment towards a stock, sector, or general market, and detect any movement; positive, negative, or neutral, signalling a potential movement in price, before others flag it. Using this ‘sentiment analysis,’ investors can take better advantage of market unpredictability and make smarter, more data-driven decisions, though it does have its drawbacks. AI-based sentiment analysis is volatile and unreliable for long-term investments: just look at what happened to the share price of GameStop in January 2021, after Reddit investors fuelled the fire. The share price doubled over two days from $4.99 on January 12 to $9.98 on January 14, before shooting up to a high of $120 on January 28 and crashing back down to $10 by February 19. Further fluctuations followed, but on average, the share price has been bumbling along around $20 since then. The other challenge AI-based sentiment analysis has is that it can’t distinguish whether online information is true or false. According to Forbes, 48 percent of all business-related messages contain false or irrelevant information; just because social media is buzzing about something, good or bad, this doesn’t always translate to movement in the stock price.

The uncharted territory of AI in trading
There is no doubt that AI is improving the ability to forecast market movements more accurately and trade quicker, but as systems become more advanced, is there a risk of AI being able to anticipate and reshape market behaviour, simulate entire economies, or even generate trading strategies with minimal human input?

As AI’s capabilities have improved over recent years, it has become a significant tool in asset management

Currently, technologies like RL and GenAI are increasingly being used in financial markets. Through RL, algorithms learn optimal behaviour through trial and error, adjusting strategy according to results, thus improving performance over time, while the possibility of using GenAI for risk assessment and strategic planning is also being investigated. Quantum computing has the potential to supercharge current AI capabilities and solve optimisation problems in seconds, opening new windows for predictive modelling and portfolio management. However, it is still at least a decade away from mainstream adoption. This all sounds wonderful, but by automating more and more of the financial decision-making process, will this create smarter markets, or make them more fragile?

With similar AI models trained on overlapping, or even the same, data, there is a distinct possibility that algorithms could amplify price swings, causing more ‘flash crashes’ than any government spending announcements or mini-budgets could make if the algorithms misinterpret signals or react at the same time. Not to mention, the complexity and speed of these systems also make it hard to predict how they will behave under stress.

Additionally, there is the ethical dilemma of whether AI should make high-stakes financial decisions without human oversight. When billions of trades are at stake, how do you audit a neural network’s decision path? These are the questions that need answering before travelling past the point of no return as they affect regulatory frameworks, risk management strategies, and even the very definition of understanding the market.

For retail and institutional investors, staying informed and adaptable is more important than ever. Moving forward, it may not be enough to understand technical analysis alone; there will probably be a need to understand algorithm ethics, data bias, and AI governance.

At the end of the day, as much as AI is shaping the financial markets, like every other sector, it is how we choose to use it that will shape the outcomes. But the million-dollar question is: will it ever guarantee to beat the market 100 percent of the time?

How leadership can create a culture of success

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Long before I became a CEO I took a temp to perm job as a receptionist at Computacenter in 2006. Fast forward 19 years and I am often asked about my journey from reception to the boardroom, which is still a ‘pinch-me’ moment. I have been lucky enough to work with some incredible leaders in the tech industry, seeing firsthand the styles that lead to success, and, as importantly, those that don’t. My journey has taught me one crucial thing: it is all about the people.

Leadership isn’t static; it is fluid, and how your style is perceived can be a challenge, especially with the diverse personalities around you. But the beauty of it is that by refreshing your approach, you can evolve to become the kind of leader you want to be.

The best leaders make everyone smarter
A tactic that resonates with me is the multiplier effect, a leadership approach that focuses on unleashing the full potential of your team. The idea comes from Liz Wiseman’s book, Multipliers: How the Best Leaders Make Everyone Smarter, and it is one that has had a profound impact on my own leadership style.

Multipliers get people to think for themselves and unlock their potential. They create an environment where people feel empowered to learn and grow, making a huge contribution not only to the business but also to their own personal development. In my leadership journey, I have learned that when I lead like a multiplier, I don’t just give answers, I ask questions, trigger lightbulb moments and encourage those around me to be bigger and bolder. It is critical to encourage growth and continual learning, not just for your team, but for yourself too. I am not afraid to ask for help, and I have my own mentors who will call me out and help me grow. I read, listen to podcasts, and actively seek out new ways to improve because, as any leader will tell you, if you are not growing, you are falling behind.

Working towards a shared vision
When it comes to leadership at Agilitas, creating a culture where everyone can thrive is at the top of my list. We follow a ‘total experience’ approach, which means we believe everything is connected. The way our employees feel impacts the way they interact with our customers, and ultimately, that impacts overall business performance. It is a 360-degree approach to growth and success.

When people feel valued and empowered, they go above and beyond

Part of that culture-building is about creating a team of A-players. But as anyone who has worked in a high-performing team knows, the secret to success isn’t just about having a group of rockstars. It is about ensuring everyone is working towards a shared vision. Setting clear goals and strategies is key to making sure that alignment happens.

Each quarter, the leadership team at Agilitas heads to a farm in the New Forest for an offsite strategy session. It is a great chance to step away from distractions and really focus on setting the direction for the next quarter. These sessions help ensure that everyone understands the goals, the strategy, and how their roles contribute to the bigger picture.

Building a culture of inclusion
When I reflect on my previous role as chair of the diversity and inclusion board, where I helped establish seven employee-led groups, I see how powerful diverse perspectives are in shaping a thriving workplace.

Beyond gender and ethnicity, diversity includes cognitive diversity, championing different ways of thinking, problem-solving, and approaching challenges. This diversity of thought sparks creativity, promotes resilience, and encourages more innovative solutions. Building a culture of inclusion strengthens psychological safety, allowing employees to feel confident in sharing their ideas and taking risks.

I am a firm believer that when people feel valued and empowered, they go above and beyond. When employees feel invested in their work and in the company they are more likely to contribute their best ideas, go the extra mile for customers, and feel part of something bigger. It is the multiplier effect in action: engaged employees lead to satisfied customers, which drives business performance.

Looking ahead, I am excited about the future at Agilitas and the broader tech industry. By focusing on growth, development, and creating an environment where people feel empowered, we can foster a cycle of growth that creates long-term success and makes an impact. As leaders, we have the power to multiply greatness. Let’s make the most of that.

Indonesia’s long-serving finance minister is still standing firm

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Indonesian finance minister Dr. Mulyani Indrawati is the woman the country can’t do without. Regardless of the party in power, she has overseen the nation’s finances for 16 years and it is unlikely that her long-running reign will come to an end anytime soon.

As the Singapore Straits Times wrote recently, she has “long been regarded as one of Asia’s finest finance ministers.” And she is certainly the longest-serving female finance minister. But there is no doubt that the 62-year-old occupies a hot seat. When she first took office 20 years ago, her desk was piled high with much-needed reforms – and it still is. When she was first appointed in 2005, the country’s economy was in tatters. Indonesia had not fully recovered from the Asia-wide financial crisis and had just been battered by a tsunami and earthquakes that required a heavy injection of capital. The cost of reconstruction of the hardest-hit region, Aceh, alone was $4.5bn, albeit some of that amount was funded through grants.

Attracting foreign investment
Natural disasters aside, Dr. Indrawati had plenty on her plate. The biggest bank, state-owned Mandiri, was mired in corruption and the banking sector in general was inefficient. Poverty and unemployment were high. The sprawling finance ministry and Bank of Indonesia was overdue a spring clean. And as the International Monetary Fund reported at the time, one of her top priorities was to implement reforms rapidly and attract foreign investors back to pay for new infrastructure.

Then in 2008 Indonesia was particularly hard-hit by the global financial crisis leading indirectly to the bail-out of an important institution, Bank Century. This turned into one of the longest-running cases in Indonesian financial history. In this highly political event the details are that the privately owned bank was rescued with state funds in a bid to prevent a run on the entire banking sector. It was not until late 2010 that a corruption commission began investigating the rescue amid arguments that, in summary, it may not have been necessary. It was also alleged that some of the $675m rescue funds may have got into the wrong hands. Ultimately, the ruckus led to her departure from office in 2010 for a six-year stint at the World Bank, where she served as chief operating officer and deputy managing director. It was the World Bank’s gain and Indonesia’s loss.

Productivity-driven, private sector-led growth is the cornerstone of job creation in all countries

By then though, Dr. Indrawati had already made a big impression on the economy. In her first five years as finance minister she was fortunate to take office under the reform-minded president Susilo Bambang Yudhoyono, who supported the new broom. As the IMF reported, “the new president has continued and deepened these policies, notably by maintaining a restrained budget stance, replacing managements in state banks in a bid to improve governance, and taking steps to enhance the investment environment.”

Most importantly, Dr. Indrawati knew that the potential of her country of about 285 million people, making it the fourth-highest populated country in the world located in the heart of the fast-growing ASEAN region, was high. It just had to be funded and harnessed.

Nearly 20 years later, she has been back in the job for a decade and the proof is there for all to see. Indonesia’s economy has been thoroughly overhauled. Debt has been slashed and borrowing costs have consequently declined. Meanwhile, the nation’s wealth as measured by gross domestic product has increased six-fold, jumping from $286bn in 2005 and is heading to nearly $1.5trn by the end of 2025. Though still one of Indonesia’s biggest government departments, the finance ministry has been streamlined. And as corruption has declined and opportunities increased, foreign investors have returned.

Challenging landscape
It has been a long and sometimes uphill battle. In 2017, just after Dr. Indrawati returned to the job after her six-year period of service at the World Bank, a research paper from the OECD concluded Indonesia still had some way to go: “The quality of public governance, as measured by the World Bank estimate of government effectiveness, puts Indonesia well behind countries like the Philippines, Thailand, Malaysia, Vietnam and Singapore.”

She ensured that women were at the forefront of dragging a nation out of economic mediocrity

To put things into perspective, Indonesia faced unique challenges. With the population growing by about three million a year, the strain on public finances was considerable – and remains so. Also, people were pouring into the cities at one of the highest rates in the region, which required huge expenditure on infrastructure. Simultaneously, in a far-flung nation, money had to be found for remote poorer communities that needed “basic public services such as sanitation, water, education and health,” the OECD explained.

The dearth of infrastructure was particularly damaging. “Indonesia’s competitiveness (ranked 41st out of 140 countries) is dragged down by the poor quality of its infrastructure (60th),” pointed out a 2016 report by the World Economic Forum, citing shortages of electricity for industry, inadequate transport, insufficient number of airports and sea ports, and congested road and rail networks.

Reach for the stars
An economist with a humane view, Dr. Indrawati identifies with these poorer communities. She hails from relatively humble origins. Born in the Lampung region on the southern tip of the mountainous island of Sumatra to a large family, she attended a mixed public school where, she said in an interview several years ago, the girls never suffered discrimination and were encouraged to ‘reach for the stars.’ And they did; one of her school friends, Retno Marsudi, served for 10 years as Indonesia’s first female foreign minister.

“If one school can produce the first female finance minister and the first female foreign minister in this republic, then our alma mater and its educators must be doing something right,” recalled Indrawati some 40 years later. A diligent student, she went on to obtain a Bachelor of Economics in the University of Indonesia before embarking for the US, where she picked up a master’s degree in policy economics and a PhD from the University of Illinois. She has never forgotten the value of the good start in life that her school gave her – today about 20 percent of the national budget is allocated to education.

A firm believer in private enterprise, Indrawati has done all she can to encourage it in a country that had long suffered from a heavy-handed bureaucracy and state-run companies. And from the outset she ensured that women were at the forefront of dragging a nation out of economic mediocrity. In just one example, when she first took office, she established a simple formula in all new appointments at the ministry: at least one woman must be included in every 10 promotions.

“So they were forced to look for female candidates,” she recalled just before leaving the World Bank and returning to her old job. “Good jobs are the surest pathway out of poverty.” That is partly why nearly half of all Indonesia’s small and medium-sized enterprises were jump-started by women.

“Although women’s participation in the formal sector only reaches 32 percent, their contribution in job creation through SMEs is very significant,” she pointed out. Indonesia likely has more female entrepreneurs than any other country in the world. This is surely a model for other rising nations. As numerous studies show, as much as 30–50 percent of the fall in poverty in the decade to 2025 is attributable to rising wages. However much needs to be done. More than 200 million people worldwide are unemployed and looking for work – and many of them are young and/or female. Echoing Indrawati’s view, one study argued: “Therefore to end poverty and promote shared prosperity we will need not just more jobs, but better jobs that employ workers from all walks of society. Where to start? Productivity-driven, private sector-led growth is the cornerstone of job creation in all countries.”

To make this happen, good infrastructure such as roads, telecommunications and electricity are seen as fundamental. In India, for example, a study showed that “building roads to villages increased the number of people moving from agricultural work to higher-paying jobs by 10 percent.” Indonesia is in much the same position.

Ambitious and expensive plans
Meanwhile there is still a lot to do for Dr. Indrawati and the Indonesian government under new president Prabowo Subianto, the third under whom she has served. And there appears to be tension between the long-serving finance minister and the retired army general. Subianto is in a hurry. He wants the economy to grow at eight percent a year towards the end of his five-year term and has ambitious – and hugely expensive – plans that include free food for 83 million school pupils and pregnant women as soon as the end of 2025 as well as the creation of vast rice and sugar cane farms that would enable Indonesia to be more self-sufficient.

The markets have taken fright at the cost of these programmes and, reportedly, his finance minister is resisting. “Speculation grew that Dr Indrawati could resign, with whispers suggesting that she could be replaced by one of three people, including her deputy at the Finance Ministry – Prabowo’s nephew, Thomas Djiwandono,” wrote the Singapore Straits Times. So far Dr. Indrawati is standing firm. “I am not resigning and will continue my role in safeguarding state finances,” she told a news conference recently. “We are here, we are responsible.”

The president’s office hastily denied any talk she would be replaced. But if it does come to a battle, one of the region’s most able finance ministers surely holds all the cards.

Putin’s Arctic ambitions

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When a thunderous Russian voice announces Vladimir Putin’s entrance, the setting is typically expected to be imposing – carefully staged to project power and dominance. But this time was different. As the familiar voice echoed through the hall, the Russian president stepped onto an unexpectedly modest stage. The occasion was an international Arctic forum in Russia’s far northern Murmansk region. Held on March 26–27, 2025, the forum ran under the slogan ‘Live in the North!’ In a lengthy speech, Putin reaffirmed the strategic importance of the Arctic for Russia and emphasised its rising global relevance.

“Unfortunately, geopolitical competition and the struggle for influence in this region are also intensifying,” he said. Putin added that Russia is closely monitoring developments and responding by boosting its military capabilities and modernising infrastructure across the Arctic. The Arctic has ranked high on the Kremlin’s strategic agenda for more than two decades. Following the collapse of the Soviet Union, state support for the region dwindled, and in the 1990s, the Russian Arctic was largely seen as a socio-economic liability. Substantial reinvestment resumed only in the 21st century. As climate change accelerates the retreat of Arctic ice, new shipping routes and untapped resource opportunities are enhancing the region’s strategic value. Rich in rare-earth elements and home to vast oil and gas reserves – much of which remains under-explored – the Arctic has become central to Moscow’s long-term ambitions. In the wake of Western sanctions over the war in Ukraine, it holds even greater economic and geopolitical significance.

“The Arctic is economically important,” Pavel Devyatkin of the Arctic Institute tells World Finance. “A large share of Russia’s oil, gas and natural resource exports originate from the Arctic.” Around 10 percent of the country’s GDP can be traced to the region. But its significance goes beyond economics. “From a security perspective, the Arctic constitutes Russia’s entire northern border,” Devyatkin adds. “Given the growing competition with Western Arctic states, it is critical for Russia to maintain control over the area and protect those economic projects there.”

According to Russian sources, while other nations pursued maritime expeditions to discover new lands, Russian pioneers advanced steadily overland toward the continent’s northern and eastern edges. Today, the Kremlin portrays itself as a global leader in Arctic exploration. But with the Arctic now a frontier of intense competition, a critical question emerges: does Russia possess a technological edge – and if so, can it sustain it?

Sergey Sukhankin, a Senior Fellow at the Jamestown Foundation, believes that – for now – Russia maintains a technological edge over the West in the Arctic. However, he points out that this advantage is mostly limited to one area: icebreakers. “Russia’s main strength lies in its superiority across various classes of icebreakers,” he says. “This includes both civilian vessels, like the Sibir, and so-called military icebreakers – smaller ships that can be equipped with a range of weapons systems, including Zircon and other types of missiles.”

Moscow’s real Arctic superpower
Russia currently operates 42 icebreakers, including eight nuclear-powered vessels, according to Russian media. Prime Minister Mikhail Mishustin recently announced that the fleet will soon be bolstered by five additional nuclear-powered icebreakers. Among them is the Rossiya, a vessel from the ‘leader project,’ boasting a displacement of 71,380 tons and a power output of 163,150 horsepower – capable of escorting ships through ice as thick as four metres.

New shipping routes and untapped resource opportunities are enhancing the region’s strategic value

Speaking at the International Arctic Forum, Putin reaffirmed Russia’s dominance in this field, stating that the country already possesses the largest icebreaker fleet in the world. “No other country has such a fleet,” he declared, adding that Russia must continue to build next-generation vessels, particularly nuclear-powered ones, to consolidate its leadership. While the scale of Russia’s icebreaker fleet is often framed in geopolitical terms, experts emphasise its primarily commercial role. “Icebreakers are one of the greatest technological capabilities that Russia has in the Arctic,” says Devyatkin. “But they have very limited military applications. Even though sea ice is melting, icebreakers are still important for moving through the Arctic because there is still a lot of ice.”

Beyond logistics, Russia has also sought to monetise its icebreaking fleet through tourism. Nuclear-powered icebreakers now ferry travellers to the North Pole, with cruise operators marketing the experience as a unique journey through ancient ice floes. Promotional materials on Russian websites proclaim: “You will be travelling on one of the most powerful nuclear-powered icebreakers in the world, capable of overcoming centuries-old ice up to three metres thick.”

Still, beyond their commercial and even tourism uses, the Kremlin views these vessels as central to its strategic goals in the Arctic. By enabling year-round navigation through Arctic waters, icebreakers support Russia’s ambition to transform the Northern Sea Route (NSR) into a major global trade artery – one that could ultimately rival traditional shipping lanes such as the Suez Canal.

Strategic asset or symbolic display?
Russia’s ambitions in the Arctic are not limited to its formidable icebreaker fleet. During a recent ceremony, Putin hailed the launch of the Perm nuclear submarine – armed with Zircon hypersonic cruise missiles – as a significant milestone in the advancement of the Russian Navy.

“Yasen-M-class submarines are equipped with modern navigation, communication and hydroacoustic systems. They carry high-precision weapons and are fitted with robotic equipment,” the Russian supreme commander-in-chief said. However, some experts remain sceptical about the strategic utility of such weaponry in the Arctic context. Sukhankin argues that, while dangerous under specific conditions, these systems are unlikely to be deployed without triggering full-scale conflict. “In most scenarios, this type of weaponry is more dangerous than it is useful,” he explains. “Its deployment would likely mean an all-out war between Russia and NATO.”

Even within Russian military discourse, the likelihood of conventional warfare in the Arctic remains low. “When Russian strategists talk about potential conflict in the region, they usually refer to hybrid tactics rather than open confrontation,” Sukhankin notes.

The Kremlin also boasts of developing extreme cold-resistant drones capable of operating in harsh Arctic conditions. In parallel, Russia started working on robotic systems to mine the Arctic Ocean floor. In a surprising and ambitious development, Russian media reports that the country is now exploring the use of nuclear submarines to transport liquefied natural gas (LNG). According to these reports, Russia has begun designing nuclear-powered submarines to export LNG from the Arctic to Asia, aiming to significantly reduce shipping time along the NSR.

Sukhankin notes that this idea dates back to the early 2000s, when elements within the Russian business and political elite sought to impress Putin. “The concept was eventually shelved because it could not withstand basic scrutiny from a security standpoint,” he says. “How can you store the necessary volume of LNG on a submarine in the first place?” Sukhankin asks. “If you run the numbers on break-even costs, it simply does not make sense. What kind of submarine would you build? Russia does not have the capacity to build such vessels – and no one would build them for Russia either.”

He adds that it remains unclear whether this initiative is a genuine project or merely another attempt by Russian elites to curry favour with Putin. “At this point, it’s difficult to tell whether this is aimed at a domestic audience or designed to impress internationally,” he concludes.

Putin’s call for Arctic cooperation
In a modest hall in Russia’s Murmansk region, Putin opened his speech not by celebrating Russia’s achievements, but by stressing the urgent need for renewed collaboration with various countries.

“Russia is the largest Arctic power. We have advocated and continue to advocate for equal cooperation in the region,” Putin said. “Moreover, we are ready to work not only with Arctic states, but with all those who, like us, share responsibility for the planet’s stable, sustainable future and are capable of making balanced, long-term decisions,” he added.

Devyatkin points out that Russia has a centuries-long history of operating in the Arctic and possesses deep expertise in resource extraction and navigating the region’s harsh environment. However, he emphasises that cooperation with other Arctic states remains valuable, as these partnerships bring in capital, advanced technologies, and access to export markets.

Some analysts argue that there may be a strategic calculation behind the Kremlin’s cooperative rhetoric. While Russia has demonstrated an edge in certain technologies and weaponry, doubts remain over its ability to sustain systemic production and long-term growth. “Russia’s own internal domestic capabilities to modernise are quite questionable,” says Sukhankin. Accordingly, Russia is seeking greater collaboration to advance its technological ambitions in the Arctic region.

Each time Russia announces the production of new drones, nuclear submarines, or other vessels, alarm grows over Moscow’s apparent lead in this strategic competition. Yet, according to Sukhankin, this perception is deliberately cultivated. “This is exactly what Russians want. If you read the basics of what Russians are writing about information psychological warfare, this is exactly what they mean,” he says.

15 years later

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I wrote my first Econoclast column for this magazine 15 years ago, in the spring of 2010. The economy at the time was recovering from the deepest recession since the 1930s. As I argued in the column, the recession had been blamed on many things, but the real reasons could be traced back to a set of economic myths which have been cultivated and maintained over the last century and a half, ever since economics was invented. These myths include the ideas that markets are stable, self-regulating and efficient; the idea of rational economic man; and even the idea that the economy can be described in terms of mathematical laws.

Today of course things have moved on. For one thing, I see that the number one song in March 2010 (by Kesha) was called ‘Tik Tok’ but it had nothing to do with an app! In the world of economics, though, we still seem to be stuck in the past. Nobel laureate economist Paul Krugman wrote in 2018 that “Neither the financial crisis nor the Great Recession that followed required a rethinking of basic ideas” and most economists seem to agree.

For an update from the front line, I contacted Cahal Moran, who was a co-founder of the Post-Crash Economics Society, a student group set up in 2012. He now runs the YouTube channel Unlearning Economics and is a Visiting Fellow at the London School of Economics. In his opinion, “equilibrium approaches still dominate modelling” although organisations such as the Bank of England “supplement their approaches with some more heterodox or historical analysis.”

And while there is more interest today in areas such as behavioural economics or data-driven approaches, an economics education – the famous Econ 101 – is still biased towards the core concepts, or economyths as I called them, of rationality, equilibrium and efficiency. Perhaps though we shouldn’t expect things to change so quickly.

After all, while the field of neoclassical economics has only been around since the late 19th century, the underlying myths go back much further.

Finding the level
The focus of that first 2010 column was the myth of equilibrium, as acted out by ye olde ‘law of supply and demand.’ This imagines markets as consisting of suppliers on one side, and consumers on the other. The propensity of the former to supply the good is represented as a function of price by a line going up, so the dearer the good, the more is produced. The propensity of the consumer to buy the good is represented by a line going down.

The point where these two curves intersect represents the optimal price which gives a stable equilibrium between buyer and seller, and in theory optimises the utility of both buyer and seller. Or, as the neoclassical economist William Stanley Jevons put it in 1871, both parties then “rest in satisfaction and equilibrium, and the degrees of utility have come to their level, as it were.”

The picture is therefore of an economy in a state of happy equilibrium where everything finds its proper level. It was later formalised by Eugene Fama’s efficient market hypothesis – variously described as ‘the best established fact in all social sciences’ and ‘probably the best-tested proposition in all the social sciences’ – which claimed that prices effectively adjust instantaneously to new information.

This view of the markets as stable and optimal would be familiar to any first-year student studying economics in 2010 or equally 2025. But the idea that everything finds its level would have been equally acceptable two millennia earlier.

According to Aristotle, whose word was considered sacrosanct well into the Middle Ages, the universe was made up of the four elements earth, water, air and fire, plus the fifth element, ether, which was reserved for the heavens. Each element had its place, so earth would tend to sink and air would rise.

In a vacuum, each element would find its level instantaneously, which was why ‘nature abhors a vacuum’ (Medieval philosopher: ‘probably the best established fact in natural philosophy’). In neoclassical economics, the perfect vacuum exists, and it is the market. Prices always find their proper level, and dynamics don’t really matter, although they are sometimes included as a kind of friction to slow adjustment, just as in Aristotelian physics.

New information
Now, one would think that an event like the 2007–08 financial crisis would be enough information to shake economics out of its own Aristotelian state of happy equilibrium. As I pointed out in 2010, other fields – such as computational biology – don’t try to model a complex, organic, dynamic, living system by using an equilibrium model. In biology, if a system is at equilibrium, it is dead.

And speaking as an applied mathematician who has worked in diverse areas including engineering, weather forecasting, and drug development, I can report that the approach of modelling such a system as the intersection of two lines, as in the law of supply and demand, is …unusual.

But if there is one other thing that we can learn from the endurance of Aristotelian philosophy, it is that once ideas become established, they can be very hard to get rid of. Let’s just hope this equilibrium doesn’t last another 15 years, let alone 2,000.

What is eating Europe’s food system?

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Food prices have surged in recent years across the European Union. In March 2023, food-price inflation hit a record high of 15 percent. In Germany, consumers are paying nearly 30 percent more for food than they did in 2021, even though energy and production costs have declined. Some economists have attributed this to food processors and retailers reaping windfall profits at the expense of low-income households. Meanwhile, the share of retail food prices reaching farmers keeps shrinking. German producers, for example, received just 21.7 percent of retail prices in 2021, and this figure continues to decline. The fall in farmers’ share of bread prices is a striking example: in 1970, farmers earned 19.2 percent of the shelf price; by 2022, that share had plummeted to five percent.

Milk producers face similar challenges. Between 2014 and 2024, milk prices consistently failed to cover rising production costs. As a result, many farms operate at a loss and depend on subsidies to survive. Farmers are expected to produce high-quality food while also providing – often under burdensome bureaucratic requirements – environmental, climate and animal protection. But as value creation shifts away from producers, profits are increasingly concentrated among a few powerful processors and retailers.

The widespread farmers’ protests of early 2024 revealed deep-rooted frustration across the EU’s agriculture sector. The political response was underwhelming. Meanwhile, the core issue – ensuring fair prices along the value chain – has not been sufficiently addressed.

Four key reforms
Fixing Europe’s broken food supply chain will require more than cosmetic changes. Prices must be set from the bottom up, which implies four key reforms, starting with the enforcement of contractual obligations. Dairy farmers, in particular, often deliver their products without knowing the price – an arrangement that would be unthinkable in most other sectors. EU law already provides leeway for reform, as seen in France and Spain, where binding written contracts are mandatory. Spain even prohibits sales below production costs. In Germany, however, attempts to introduce similar measures have been blocked by the agricultural lobby and its conservative and liberal allies.

Second, contractual obligations must extend to farming co-operatives. Although founded on progressive principles, many of these co-operatives now operate like conventional large corporations, prioritising the lowest possible purchase prices over the interests of milk producers. Yet in countries like Germany – where co-operatives account for 70 percent of milk processing – they remain exempt from such requirements.

Fixing Europe’s broken food supply chain will require more than cosmetic changes

Third, the rights of producer organisations must be strengthened. While dairy giants like Arla and DMK would control up to 13 percent of the EU’s milk volume following their planned merger, current EU rules cap the market share of farmer-led producer organisations at just four percent. Despite years of intensive discussions, this imbalance persists, hindering fair negotiations.

Lastly, EU policymakers must curb market concentration in food retail. In Germany, just four retailers control 85 percent of the food market. The food processing sector is also highly concentrated. A 2024 report by the German Monopolies Commission warned that rising market concentration is harming both producers and consumers.

Amid these challenges, promising models are beginning to emerge. One example is Germany’s recently piloted three-party contract, which is based on the French model. Instead of producers blindly delivering products to processors, who then sign separate contracts with retailers, all three parties agree in advance on suitable partners and enter into long-term agreements – typically lasting three to five years – with clearly defined pricing structures.

Such three-party contracts contain clauses mandating quarterly reviews to adjust for market and cost fluctuations. Beyond pricing, they address product layout, marketing strategies, and standards for animal welfare and environmental sustainability. By fostering a sense of shared responsibility, these agreements promote quality improvements and fair compensation. They also help shield producers and consumers from market volatility, create added value throughout the supply chain, and offer a foundation for best practices that can be scaled both nationally and regionally.

Given that European agriculture can remain viable only if farmers are able to cover their costs, the European Milk Board sees three-party contracts as an important step toward a fairer and more sustainable market structure. These agreements could provide income stability and planning security, benefiting all stakeholders: farmers, processors, and consumers, who currently overpay for low-cost, mass-produced food.

Fair pricing would also enhance Europe’s resilience to crises, war, and climate change. Today’s artificially low prices are made possible by the overexploitation of natural resources – both in Europe and globally – alongside poor animal welfare, precarious migrant labour, and the relentless financial pressure placed on farmers. With many EU farmers facing crushing debt and rising input costs, it is no surprise that under 12 percent are under the age of 40. If Europe wants to feed itself in the future, it must make farming economically and ecologically sustainable – not by increasing subsidies, but by establishing fair market conditions and introducing robust sustainability standards. Market-based solutions like three-party contracts show that positive change is possible, so long as Europe stays the course.

Gaming the market

Posted on by itsupport

Xbox and Playstation to the rise of mobile games and e-sports, gaming has become a significant part of people’s lives. The gaming industry, which includes the development of software, hardware, game development, e-sports and game streaming platforms, is evolving rapidly like any other mainstream industry in the world. Valued at around $300bn, the gaming industry has become a multi-billion-dollar industry, surpassing both the music and movie industry. The year 2024 was tough for many industries, mainly for two reasons: one is global economic instability and the other is the emergence of AI. However, the gaming industry proved resilient. It appears the owners of gaming studios know how to stay in the game. According to Deloitte’s 2024 Report, the gaming industry will reach a value of $485bn by the year 2028.

Financial strategy is playing a critical role in the success and growth of top gaming companies. Investors now understand that games are not just made for entertainment but it is a serious business that requires effective investment forecasts, well-planned business strategies and market adaptability. Therefore, game developers and producers across the globe are focusing on financial strategies that boost revenues without disrupting users’ gaming experience. These strategies are changing the canvas of conventional financial strategies and re-shaping business ideas about investment and long-term planning.

From entertainment to enterprise
Today, gaming companies place emphasis more on operating as a tech company rather than focusing merely on entertainment. Many are either investing in games development or launching their own games. They recognise that the gaming industry is now based on data, engagement and diversified revenue streams. Even Netflix, a well-known entertainment platform, has introduced a separate section for games, while Meta, which owns Facebook, Instagram and WhatsApp, has also launched different VR headset games.

Modern games earn money through in-app purchases, virtual rewards and optional ad-skipping

The primary aim of gaming companies has traditionally been to produce games that will stand the test of time and keep gamers coming back again and again, driving a continuous revenue stream over the years. Their monetisation strategies are now considered some of the most innovative in the digital world, as they continue to evolve and explore different revenue channels.

As a result, a conventional one-time purchase by gamers is now an old tale. Modern games earn money through in-app purchases, virtual rewards and optional ad-skipping. Subscription services and in-game video ads have also increased the revenues of video game producers.

Where play meets profit
Many of today’s games come with vibrant in-game virtual economies. Unlike other companies that follow traditional financial models, gaming companies emphasise diversified revenue streams. Diversification has enabled the gaming companies to shift their risks effectively.

Introduction of virtual assets and virtual currency is a part of that financial strategy. Gamers use virtual currencies to buy virtual items like tools, costumes and power-ups. This motivates players to purchase and sell in-game assets to improve their gaming experience and upgrade their gaming profile.

In many cases gamers spend real money to purchase virtual assets. While these virtual assets hold no real-world value, they can significantly enhance the gaming experience. Some games allow the players to sell their virtual assets, enabling gamers to earn profit from their in-game investments. This shift has removed the difference between digital and physical economies, creating a new economic model now being observed closely by many financial institutions and researchers.

In addition to that, earning from virtual purchases has become a major part of gaming companies’ revenues. This is a marked changed from traditional financial transactions that usually require formal agreements. So on one hand players are playing, socialising and engaging, but also using virtual currency to upgrade their gaming experience. Furthermore, virtual currency in games has also enabled gaming companies to enhance their CSR strategies.

A new economy
Apart from the birth and exploration of this digital economy, a parallel economy has taken investors by storm. NFTs and the Metaverse are the latest technological developments that are boosting the spread of virtual economies. NFTs allow gamers to own unique virtual assets, enabling them to develop new value chains in games. Moreover, the Metaverse is changing the gaming industry by implementing Virtual Reality (VR) and Augmented Reality (AR) and thus offering players a unique and therefore valuable gaming experience. According to a Statista report, the Metaverse market alone is expected to reach a market volume of $490bn by 2030 (see Fig 1).

There are many companies that are involved in the Metaverse and NFTs, and these NFT-based platforms are created to grab the attention of gamers. A few of the prominent ones include: Axie Infinity, Gods Unchained, The Sandbox, Meta(Facebook), Epic Games and Decentraland. These platforms allow players to invest in virtual assets, trade assets and characters that hold value in the real economy. This creates opportunities for both players and investors.

The rise of ETFs and gamification
As the gaming industry turns into a proper economic force, investors and entrepreneurs alike are responding by creating financial instruments like ETFs and experience-driven processes like gamification. However, developing new games and related technologies requires heavy investment and naturally comes with a degree of risk. The success of a new game hinges on its reception upon launch.

Gaming ETFs are quite similar to mutual funds and are spread across a variety of different companies. Some of the famous gaming ETFs are VanEck Video Gaming and eSports ETF (ESPO). When it comes to making financial decisions, ETFs are also easy to invest in because, unlike individual stocks, even a casual investor can evaluate which ETFs are better to invest in.

Additionally, gamification strategy is being adopted by various companies across the globe. Game mechanics are being included in some form within nearly every company’s app. Even the banks and trading apps now include game-like engagement features. The reason behind introducing these features is that it makes the whole process, that which was previously considered tedious, more fun and interesting. Gamification also helps new investors to understand stocks and investments. Apps like Robinhood offer simple features and rewards to assist users trading stocks, which is again quite similar to games rewarding gamers for levelling up.

Beyond finance, this strategy is adopted by food delivery services, online shopping apps and fitness apps. These apps offer a certain level of gaming experience. Even Temu, the popularity of which has skyrocketed, now offers in-app games to improve engagement and spending. The aim of this strategy is to engage their consumers to stick to their apps for a longer time because the longer the stay, the more likely they are to spend.

Apart from the gaming industry’s monetisation strategies, their social media strategy is also different from other industries. For gaming studios, this shift has changed the conventional gaming formats and given rise to social gaming platforms. Social platforms such as Discord and Steam have provided gaming companies a path to showcase their social media presence in a whole different way. It has transformed gaming into more of a social experience. Many online games like PUBG, Call of Duty and DOTA are not just focusing on games but also on building a gamer community. So for gamers, the game becomes not the only attraction; they also go to the platform to interact, share experiences and connect.

Now this is a paradigm shift for gaming studios because it enables them to not only promote their games but also increase players’ engagement, something previously unheard of in the first days of games consoles.

Today, some gamers do not see games as purely a hobby. For them it can also be a business opportunity and a potential way to earn a living. Developers are earning money by selling their games and in-game items, while players are monetising their skills by live streaming their video games on platforms like Twitch and YouTube. Both platforms allow a wide range of monetisation options, including subscriptions, Bits, live stream ad revenue and affiliate marketing. Through these avenues, the gaming industry is influencing individuals to act as digital entrepreneurs. It teaches players how to invest, save, exchange and develop items that can earn them money.

The future is playable
Gaming isn’t just changing entertainment; it is transforming mindsets about finance, investment and digital economies. The gaming industry has in fact helped to reshape financial strategy by incorporating a perfect combination of user engagement, innovation and technology.

From virtual currencies and NFTs to ETFs, and to the gamification of finance, the impact of the gaming industry has branched out to both players and investors. It has allowed players to become digital pioneers, investors and entrepreneurs, all while indulging in their favourite hobby.

Because of these developments, the financial strategies pioneered by the gaming industry are likely to become a blueprint for the next generation’s business models. As gaming continues to influence each and every industry, one thing is certain. The future of business will be more interactive, engaging and play-driven.

Europe can’t rearm its way to security

Posted on by itsupport

As Russia’s war on Ukraine rages on Europe’s eastern frontier, the continent’s leaders are finally willing to admit they have the power to revive their ailing economies. After decades of austerity, they are ready to spend again – but not to end poverty, accelerate decarbonisation, or reverse the collapse of essential public services. Instead, Europe’s fiscal firepower is being directed toward tanks, missiles and fighter jets. Reorganising the economy around state-supported defence spending is known as military Keynesianism, though John Maynard Keynes – who rose to prominence by condemning the punitive post-World War I peace treaty that was imposed on Weimar Germany, which ultimately helped set the stage for Hitler’s rise and another war – would probably not have endorsed the term.

The reasoning behind the resurgence of military Keynesianism is not entirely without merit, as the pursuit of austerity policies has left many European economies punching below their weight. European productivity, which has grown at half the pace of the US over the past decade, declined by one percent in 2023. Real wages fell by 4.3 percent in 2022 and 0.7 percent in 2023, following a decade of stagnation. Meanwhile, investment is nowhere near where it needs to be to tackle the twin crises of inequality and climate breakdown. Europe’s self-defeating commitment to austerity is epitomised by the German doctrine of ‘schwarze Null’ (black zero).

Even when Germany’s economic miracle was in full swing, politicians refused to invest in long-term growth. As a result, Germany – like most of the continent – has suffered from chronic underinvestment in physical and social infrastructure, constraining productivity.

The arms industry
Against this backdrop, rearmament may look like an easy fix. Unlike social expenditure, defence spending faces little political resistance. It enables politicians to appear tough – a valuable asset in an age of strongman politics – and keeps the arms industry, a powerful lobby with deep ties to political elites, flush with public money.

Modern militaries are among the planet’s largest institutional fossil-fuel consumers

But military Keynesianism is a dead end – both economically and politically. For starters, it is a weak engine of long-term growth. Modern weapons production relies on advanced manufacturing processes that use relatively little labour, so the industry has low multipliers compared to investments in health, education or green energy. It creates fewer jobs per euro spent and contributes little to the broader economy’s productive capacity. Military Keynesianism also deepens Europe’s dependence on fossil fuels, given that modern militaries are among the planet’s largest institutional fossil-fuel consumers.

Expanding defence capabilities means locking in demand for carbon-intensive technologies at a time when Europe should be phasing them out. Worse still, prioritising defence over decarbonisation sustains the very system of petropolitics that gives regimes like Russian President Vladimir Putin’s the resources to wage war in the first place.

As the Guardian reported earlier this year, the European Union has spent more on Russian fossil-fuel imports over the past three years than it has on financial aid to Ukraine. If the EU is serious about defeating Russia – not just on the battlefield, but geopolitically – then the bloc must confront the real source of the Kremlin’s power: oil and gas exports. Russia, after all, is a petrostate, and its war machine is financed by the revenues that flow from Europe’s addiction to fossil fuels. Oil and gas revenues have accounted for 30–50 percent of Russia’s federal budget over the past decade and still represent roughly 60 percent of its export revenues. These industries provide the vital dollars that enable Russia to import military technologies and other critical inputs. Without that income, the Russian economy would quickly collapse under the weight of hyperinflation.

A green transition
The most effective long-term strategy for countering Russian aggression, then, is not to ramp up military spending but to accelerate the green transition. What Europe needs is a real Green New Deal: a democratic, continent-wide mobilisation to decarbonise the economy, ensure energy security and create millions of well-paying green jobs. To be sure, this would require massive investment in renewable energy, public transit, retrofitting, and industrial electrification. It would also mean reshaping supply chains, restoring public ownership of key infrastructure, and breaking the stranglehold of fossil-fuel capital on European politics. But a Green New Deal would do more to strengthen the EU’s geopolitical standing than any number of new tanks and artillery shells. A Europe that produces its own clean energy, builds resilient green industries, and reduces its dependence on volatile global commodity markets is a Europe that cannot be held hostage by petro-tyrants.

Europe’s political elite faces a stark choice: continue propping up a broken growth model by funnelling public money into the military-industrial complex, or invest in a liveable future rooted in solidarity, sustainability and democratic control. In the long run, building an inclusive green economy is the only way to counter the rage and alienation fuelling the rise of far-right forces – the greatest and most immediate threat to Europe’s democracies.

EBC Financial Group expands family of firms to Australia and Mauritius

Posted on by World Finance

In the final video of this three part series, David Barrett, CEO of EBC Financial Group (UK), discusses the group’s astounding international growth and latest regions of activity; the different clients that EBC is serving and how it meets their many and diverse needs; and why whatever the future holds for the group, serving the community will be at the heart of it.

World Finance: David, catch us up on the latest news for EBC Financial Group – how has your growth across the world been going?

David Barrett: Very good! I’m always astounded – we started five years ago, there’s nearly 500 people globally now. That’s across all different aspects of the business, so growth of the business is very good, and clearly that’s driven by customer growth as well.

We’ve spent a lot of time in the last 12 months in newer regions: South Africa, and in the African nations as well. There’s a lot of activity going on in LatAm, where there’s been a lot of interest in the product.

We’ve set up an asset management company in Australia, which has been regulated by the Australian regulator. We’ve set up a brokerage in Mauritius which is regulated by the local authority there as well.

And I think all of these things are about building out the scope and the breadth of the platform. So, EBC Financial Group is a family of different firms. Different firms do different things for different people in different ways. And the different jurisdictions allow different kinds of access and different rules. And we’re very keen to continue to grow our regulatory footprint so that the client feels that it’s a good environment and a safe environment for them to be in.

World Finance: Tell me about the different clients that you’re working with in these different jurisdictions – do they require different support, or a different offering?

David Barrett: Yeah absolutely, very much so.

So if I take the UK, we don’t deal with retail in the UK, we deal with what we call professional clients and eligible clients, which tend to be larger and more sophisticated but fewer.

Those kind of people, you have a completely different relationship to them, as you would do with a retail trader from Asia or from Latin America.

I think the most vulnerable end is the younger retail people. Client services is very important. Being in contact, having the ability to help when they reach out is very important. And I think also you need the education. It’s very important. So we’re doing a lot more in terms of market briefs, interpreting different market events, economic events as well as political events.

And the idea is to try and encompass an information flow that allows them to understand that it didn’t go from here to here just because it went. There was stuff going on, and it does influence how markets move. And I think it’s our obligation – we want these people to be our clients, we’ve got to look after them.

Best clients are clients that stay. Best clients that stay are clients that make money, so it’s important for us to help them.

World Finance: So what is next for EBC Financial Group?

David Barrett: I think we continue to do the growth that we’ve seen. We want to be more established in the newer regions. We want to develop those out.

It’s pretty clear the ethos of the group – this is led from the UBO down, he’s very keen on the community aspect of what we do. We do try very hard to be interactive with the local communities. We have offices all over the place, and the local staff are very keen to be involved in local community projects.

I spoke to you before about what we do with the UN, with Beat Malaria. The political change in the US administration has made that more difficult, and it requires our support to keep going.

And in terms of the business, it’s about growing a business that’s sustainable for us, but is relevant to the client as well.

This is the final video from this interview with David Barrett; watch the first video here: Trading in extreme volatility? Smaller positions, less leverage, and take your time

And don’t miss the second video: EBC UK CEO: Broader instruments like ETFs helping clients better reflect their risk

EBC UK CEO: Broader instruments like ETFs helping clients better reflect their risk

Posted on by World Finance

EBC Financial Group is a globally regulated family of brokerage firms, offering a host of trading services: for professional and eligible clients in the UK, and for retail traders in Asia and Latin America. In the second video of our three part series with David Barrett, CEO of EBC Financial Group UK, he reflects on how the group’s clients have embraced index and commodity ETFs, and the forces behind some of the unusual trends in those commodities.

World Finance: David, are there any standout shifts or client interests that you’ve seen in recent months?

David Barrett: Where they’ve changed their trading style because of the volatility that we’ve seen – we’ve seen people being a little broader in the way that they’re looking at markets.

So we recently introduced ETFs: we have index offerings, and we also have a full suite of commodity offerings as well. But whereas before I think people were tending to granulate their exposure into single pairs or particular sectors, things like the ETFs allow them to take a step back. They don’t have to choose the individual stock, they don’t have to choose the particular pair. They can reflect a view across a broader instrument.

And I think if we look at what they’re doing, I do believe that the volatility that we saw in early April has tempered people’s appetite to be all in all the time. And I think clients’ changing opinion of how they should reflect their risk means that they’re using a broader array of products.

World Finance: Commodities have shown unusual patterns this year — how are retail and institutional traders responding?

David Barrett: Commodities have been a bit of a strange one. I mean we see a tremendous amount of gold flow. I think that’s because it’s been moving, it’s been trending, and it’s been a very popular hedge to all of the noise that we’ve seen going on.

But I do believe that gold is a little different. The central banks have been massive buyers of gold – and that continuous demand over the last five to 10 years has started to really become part of the input of people’s rationale of what they’re doing. They understand that there’s an underlying demand.

But we’ve seen it in other markets as well. Oil’s been a really tricky one. Geopolitically, you would have thought oil would be trading up in the stratospheres, but actually it’s a very offered commodity, because the fundamentals show that there is a huge amount of oversupply.

OPEC have been trying to tighten unsuccessfully; countries like Brazil and the US have come online, they’re producing a huge amount more oil and gas. So as soon as you saw any kind of relief in the geopolitical situation, oil fell back very, very quickly. And the reason it fell back is because there are very clear supply and demand issues within those markets.

And I think those kind of conversations are much more active with our clients these days.

World Finance: Looking at your CFD offerings overall, how does EBC make sure that your clients have breadth and depth across global themes, sectors, and risk appetites?

David Barrett: Most of it’s driven by client demand. So, if you look at the way that we’ve developed the product suite that we’ve got, we started off with the basics, and we built that out.

The reason we brought in ETFs, for example, and the reason we brought in single stocks was because clients were asking.

And you put it there, you educate, you try and get the message out. The marketing team do a very good job of explaining why we do these things, how it’s relevant. They’re doing more updates on specific economic events in other countries so if there’s something going on in Chile or Colombia, that’s relevant to copper or other mineral imports and exports.

So what we tend to do is, we tend to add these things because the client wants them, and then introduce them to the broader client remit, because we can explain to them why people are looking at them and why it’s relevant to what’s going on.

And that kind of, being able to offer those different products, means that you stay relevant rather than just being a singular sort of offering.

Watch the final part of this interview with David Barrett: EBC Financial Group expands family of firms to Australia and Mauritius

And if you started here, don’t miss the first video from this shoot: Trading in extreme volatility? Smaller positions, less leverage, and take your time

Trading in extreme volatility? Smaller positions, less leverage, and take your time

Posted on by World Finance

It’s been a tumultuous year so far, leading to extremely rapidly changing markets. In the first video of our three part series with David Barrett from forex services provider EBC Financial Group, he reflects on the “extraordinary” first six months of 2025, and how EBC’s global clients have been responding to the extreme volatility.

World Finance: Now with ongoing geopolitical tensions and policy shifts across major economies, how is EBC helping clients manage risk in such a fragmented global landscape?

David Barrett: Fragmented – good word. Chaos, another word! The volatility that we’ve seen this year, even just the first six months, has been extraordinary.

Everybody likes moving markets, but I think some of the stuff that we saw, particularly in April and May, was very, very extreme.

I mean I’ve been doing this for an awful long while. There are periods of, you know, extreme volatility that happen. But to have it happen in such a random way that we’ve seen has been very difficult.

There’s a lot of clients that just are not used to that. And are not set up to deal with it. A lot of clients that deal in the markets these days tend to trade in a fairly systematic way – so they’ll have trading algorithms or models that help them trade. Many people have got used to mean reverting markets – so, they sell rallies, wait for it to come, buy dips, wait for it to come back. And clearly we saw such huge moves that actually that kind of trading pattern in the short term particularly at the beginning suffered a lot.

And I think clients have had to adapt to that. We’ve seen change in the way that the flow’s coming through, we’ve seen change in the way that different sectors of client base are reacting to it. And I think it’s our responsibility to give them the tools to be able to do that; but I don’t think anybody should ever look back on the last six months and think that’s normal and acceptable, because it was just off the scale, it really was.

World Finance: So how are traders rethinking risk, and what tools or strategies does EBC advocate for navigating this environment?

David Barrett: I think they do adjust, and I think people do need to take a step back and understand that what we’re seeing isn’t normal and they need to adjust for it.

So, our advice to clients has been: take it back a bit, smaller positions, less leverage, and take your time. Because if you look at the volatility, you look at the extreme moves we’ve had, it’s created a huge amount of opportunity to enter and exit positions at levels and at timing that you never would have thought would be there in ordinary markets.

So our advice has consistently been that you need to be careful, you need to preserve your capital as well as try to increase it. And we believe that the opportunities given by the volatility mean that you can take your time, take a step back, and do it in a more methodical manner than just jumping in with both feet.

World Finance: Have traders been changing their behaviour accordingly?

David Barrett: Yeah I think they have! As we said earlier, I think the obtuse volatility we’ve seen was quite startling for some people. There are people trading the markets that haven’t seen that.

We have clients from a full spectrum. Some of our entities will deal with retail; in the UK we only deal with professional. We have brokers, we have high net worth individuals as well as the retail guys and family offices and so on. So there’s a full breadth.

I think the more professional end understand that this stuff can happen. But there’ll be a lot of young retail traders that wouldn’t have seen this. And hopefully it’s been a good education and a lesson for them, but I do suspect that some of them have kind of had a baptism of fire. April in particular was pretty nasty.

Watch the second part of this interview with David Barrett: EBC UK CEO: Broader instruments like ETFs helping clients better reflect their risk

And the third and final video from this shoot: EBC Financial Group expands family of firms to Australia and Mauritius