Tag: geopolitical

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WEF 2022: Recent geopolitical events have led to profound changes, says Deloitte boss Punit Renjen

Business Today

The past two years of the Covid-19 pandemic and the war in Ukraine had profoundly changed the world, something that could be compared to what happened towards the end of World War II, fall of the Berlin Wall or the coming of the Internet, CEO of the global consulting firm Deloitte, Punit Renjen has said.

“What do I mean by that? The way that we work, the way we interact with each other – I am carrying a mask around – it has profoundly impacted the way business is conducted. For instance, there was more digitisation in the last two years than there was in the last ten years,” observed Renjen.

Renjen shared these insights during an exclusive interaction with Business Today’s managing editor Siddharth Zarabi on the sidelines of the World Economic Forum in Davos.

This turn of events had also changed the relationship between companies and their employees with hybrid work model here to stay, he added. He felt that the transformation had created opportunities particularly for India and that the country must leverage this inflection point.

Speaking on India Inc.’s efforts at acquiring manufacturing competitiveness, Renjen said that the realigning of global supply chains from a ‘just in time’ to ‘just in case’ scenario presented an opportunity that was up for grabs.

“It is important for India, both the central and state governments as well as businesses, to step up and seize the moment. By the way, China is going to be a potent competitor. I am not going to downplay that. But I think, India can compete,” the Deloitte chief said.

Renjen pointed out that Deloitte would be adding another 75,000 individuals to its existing pool of 90,000 professionals based in India as part of their global expansion plans. Although the new hires would be serving multinationals from India, the large Indian companies also presented a huge business opportunity for the consulting major.

Talking about the pressing issue of climate change, Renjen was of the view that India must take the lead on this by coming up with nature-based outcomes for the world.

Elaborating on Deloitte’s own engagement in this area, he informed, “We are working with the government of Haryana on stubble burning. What we are trying to do is come up with an ecosystem of players with an answer to incent the farmer to not take a one cent match and light the paddy stubble but to reuse that stubble.”
 
As part of another programme with the Haryana government — called ‘Climate Sakhi’ — Deloitte was incentivising rural women to help with increasing the state’s forest cover, he added.

Also read: Change in the air as the well-heeled WEF veterans make it to spring-time Davos

Also read: Net-zero emissions by 2050 not possible without industries’ contribution: WEF 2022 report   

Also read: India’s wheat export ban is to ensure food security for citizens, says Piyush Goyal

Also read: WEF summit: Pandemic creates new billionaire every 30 hours, says Oxfam

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Powell says a U.S. soft landing may depend on ‘geopolitical events’ Fed can’t control

Powell says a U.S. soft landing may depend on 'geopolitical events' Fed can't control


Powell: U.S. soft landing may depend on ‘geopolitical events’ Fed can’t control | Fortune



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The pandemic, geopolitical events have rebalanced global supply chains, creating opportunities for India: N Chandrasekaran

The pandemic, geopolitical events have rebalanced global supply chains, creating opportunities for India: N Chandrasekaran
The global supply chains are rebalancing, and it is a megatrend of the future that India must leverage to its benefit to become a global leader in manufacturing, N Chandrasekaran, the chairperson of Tata Sons said Wednesday.

He was noting the five megatrends that, according to him, will be shaping the future of business and society while speaking at the CII ‘Being Future Ready’ Business Summit 2022.

The other key trends that business and government leaders must take note of include the adoption of digital, sustainability, importance of healthcare and the changing realities of the global talent pool, according to Chandrasekaran.

“Already proprietary AI and data are separating top-performing companies from the rest. Soon all businesses will have to become AI and data businesses. No industry can escape this trend,” he said.

India can leverage the adoption of digital technologies to not just prepare the domestic industry for the future but also play a role in shaping industries globally, he said.

Meanwhile, the pandemic and geopolitical events have rebalanced global supply chains. The focus is no longer on creating the most efficient supply chains but the most resilient ones, according to Chandrasekaran.

“India has an important role to fill the void that is getting created in the global supply chain by taking a leadership position. I call it the India-plus opportunity because we will need partnerships,” he said.

TV Narendran, the managing director of

said that with the recalibration of global supply chains the world over, Indian Industry has a unique opportunity to expand its global footprint. Industry should move away from the risk averse culture, he said. The industry should also step up expenditure on research and development (R&D), he said

Sustainability was creating a dual trend globally where climate change concerns are putting pressure on traditional companies while at the same time promoting newer, more sustainable businesses. India should participate in this new ecosystem and play a pivotal role in leveraging green technologies, Chandrasekaran said.

Companies will also have to increase their focus on health going forward, even in sectors that seemingly have no connection to health. “A focus on health and wellness as well as safety and convenience at workplaces should play a significant role within companies to stay ahead,” he said.

The global talent pool will move to newer models. There will be new technology platforms to engage with talent, like a talent cloud where there is uninterrupted access talent from any part of the world.

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Has China Won? Jarringly dispassionate take on geopolitical events

Has China Won? Jarringly dispassionate take on geopolitical events
 

Book Title:
Has China Won?: The Chinese Challenge to American Primacy

ISBN-13:
978-1541758674

Author:
Kishore Mahbubani

Publisher:
Public Affairs

Guideline Price:
£14.99

Real-time history can be cruel to books about international relations and one sentence in Kishore Mahbubani’s Has China Won? jumps from the page: “The prospect [for Europe] of a direct war with Russia is practically zero, although proxy wars may take place in territories like the former Yugoslavia and Ukraine.” Mahbubani got one thing right there but you’d need to be particularly dispassionate to see the war in Ukraine as a proxy one. But, on China, in particular, this is a jarringly dispassionate book.

Mahbubani, a former Singaporean ambassador to the UN, sets out to chart China’s coming challenge to the United States’s global supremacy. The initial chapter, where he recounts Beijing’s surprise that it found few defenders among US business leaders against Trump’s trade war, is promising. But the book soon gets muddled, far too often seeing China’s impending rise as a geopolitical given divorced from real-world contingencies. A big problem is the disparity between the author’s treatment of China and the US.

Mahbubani is lucid about the US, correctly identifying its rampant inequality, high incarceration rates, its foolish forays into overseas conflicts, its self-destructive domestic politics, and its à la carte attitude towards international commitments. When it comes to China, though, he is content to uncritically regurgitate Chinese government talking points: China has never been expansionist (news to the indigenous peoples of Tibet, Xinjiang, Mongolia and Taiwan); the 2019 Hong Kong protests were caused by income disparity and inadequate housing provision; the emphasis is on the 5,000-year history of China rather than the 73-year rule of the Communist Party.

This is because Mahbubani is clearly more at ease talking about the US. He cites extensive sources and statistics to back up his pertinent assertions about American society; sources about China, on the other hand, are much fewer, entirely in English and overwhelmingly Western in origin.

For a man well connected in China and convinced of its coming preeminence, Mahbubani is oddly incurious about the sociopolitical fabric of the country. There is little consideration given to China’s looming demographic clouds as it grapples with an ageing population or to its titanic property bubble, nor is there much said about China’s increasingly aggressive diplomacy that is prone to alienate a lot more countries than the US.

Has China Won? is a snappy title that might catch eyes in airport bookshops but anyone with a serious interest in China or its geopolitical future would be advised to look elsewhere.

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Why being too reactionary to geopolitical events is risky

Why being too reactionary to geopolitical events is risky

Have you made any positional changes responding to the rising geopolitical tensions in Europe?

Geopolitical events tend to result in sharp sell-offs, but also rebound quite quickly if economic growth is largely unaffected. This suggests being too reactionary and making sudden portfolio moves may, in hindsight, not necessarily be the right thing to do.

That said, we were already very overweight in energy and have had a reasonable commodity exposure given our view around inflation, investment required to decarbonise and increasing trade protectionism, and have some gold insurance.

The bigger issue is whether the tensions spill over resulting in lower global growth and other unintended consequences. The introduction of any meaningful sanctions by the West increases this risk.

The other consideration is how will Russia respond? While it has little incentive to curtail major commodities like oil and gas, the disruption of industrial metals like nickel or palladium could cause problems for international supply chains, and add to inflation risks.

How are you managing your exposure to the oil and gas sector amid the transition to a lower carbon world?

In some respects, we see the energy sector like the telecommunications sector a few years ago when it was plagued with concerns by investors around competition and regulation before COVID-19 found a renewed appreciation for the strategic value of the underlying assets.

We see Woodside Petroleum as the best placed domestic beneficiary of any tightness in regional energy. Woodside’s exposure to spot cargoes of LNG is around 20 per cent, but its valuation starting point is cheaper owing to the complex merger of equals with BHP expected to be finalised mid-year. The deal – if approved – will position Woodside with twice the levels of production and a balance sheet with low levels of gearing and sufficient flexibility to fund various growth options, including Scarborough in Western Australia.

How have you managed your exposure to BHP since the unification?

BHP remains our preferred large diversified commodities play. It brings back memories of the 2000s when News Corp similarly dominated the index, and I can remember similar concerns when CSL became the largest stock in index a few years. We have sympathy with the view Australian investors bore a cost in the process, but it doesn’t really change our view.

There is no question BHP is a quality business and its recent result highlighted at current commodity prices it is having its time in the sun. It’s important to remember though, it’s a cyclical industry, and things can change, as we have seen with News Corp and CSL over the years.

Which stocks do you hold with exposure to the reopening theme?

We continue to favour selective reopening trades and higher cyclical exposure which not only stand to benefit as demand recovers from the pandemic but also as rates tighten.

Aristocrat Leisure and Corporate Travel which have experienced COVID-19 headwinds, but been able to emerge stronger through taking market share and actively participating in industry consolidation.

Cleanaway and Qube Logistics are two other quality companies with market leadership, a strong competitive advantage, assets that hard to replicate and should benefit as borders open and volumes in their respective sectors recovery.

Any good TV series or podcasts you’re streaming?

I’m more of a documentary person and enjoy reading and listening to talking books. I’ve just finished Bad Blood by John Carreyrou, the story about the rise and fall of celebrity CEO Elizabeth Holmes and Theranos the health biotech that soared to a market cap of $US9 billion and partnered with the likes of Walgreens before being divulged as a fraud. It’s an entertaining read with some serious ethical questions and insights into the workings of Silicon Valley finance.

Do you have a local pub you enjoy going to?

Our local on the weekends is the Royal Mail Hotel in Birregurra. This has recently undergone a change of management and refurbishment, and has all the hospitality of a country pub, where you’re greeted by the owners and wonderful menu. I can highly recommend The Royal Marinara, and a bottle of local pinot.

What are your interests outside of work?

Having married a farmer, we have a block in the Otways. There’s always something to be done, but it’s great therapy and an outlet from the intense routine of funds management. I have also recently fallen victim to the joy and frustration of real tennis.