Category: Economics

shutterstock_2112385907-1000×800

The BRICS Group and the Scenario of Issuing a New Currency

The BRICS Group and the Scenario of Issuing a New Currency

Since the establishment of the BRICS organization in 2009, the idea of creating a common currency for the BRICS group (Brazil, Russia, India, China, and South Africa) has been considered as a means to compete with the U.S. dollar on the agenda of emerging markets. This idea also aims to enhance economic cooperation, encourage trade, and promote growth among the member countries. The motivation behind this proposal is the U.S. administration’s use of the U.S. dollar as a geopolitical weapon, engaging in a form of financial warfare by imposing sanctions on adversarial countries and depriving them of access to the U.S. dollar-dominated capital market. This also includes restricting their access to the international payment system centered around the U.S. dollar.

Dr. Ali Faqeeh

Research Associate

Read More
shutterstock_1633125442-1000×800

Why do some countries excel over others in science and technology?

Why do some countries excel over others in science and technology?

Progress in science and technology is essential for the advancement of economies and markets worldwide. This research question is considered one of the most important for policymakers today, yet it is also one of the least understood. It involves understanding what makes some countries excel over others in science and technology. Could the answer be related to a specific political policy adopted by the governing authority? Or does it have to do with the presence of skilled human capital and financial resources in a particular country? Perhaps it is linked to the size of the market, the diversity of sectors and industries, or the quality of education and societal culture.

To answer this complex question, we will explore the scientific perspectives presented by Mark Taylor in his book “The Policy of Innovation,” where he contributed to solving this puzzle by addressing three crucial questions: First, what encourages a state to innovate? Second, how can countries innovate? Third, why do some countries innovate better than others in science and technology over the long term?

Dr. Ali Faqeeh

Research Associate

Read More
shutterstock_1318349732-1000×800

Toward the successful implementation of national policies and strategies… Determination is essential!

Toward the successful implementation of national policies and strategies… Determination is essential!

The success of any policy is contingent upon its strategic planning and design to achieve its desired objectives. This is not unfamiliar to many countries, where their policies and strategies undergo thorough study and design, utilizing comprehensive plans, optimal methods, ideal tools, and clear procedures to address specific problems. The government determines the suitable tool and assesses its impact.

Policy design can be contradictory and confusing for governments aiming to satisfy various stakeholders and adapt to evolving citizen demands, while attempting to implement policies consistently over time.

There are numerous current design tools available for governments to use for specific political goals. Often, the challenge lies in the fact that once governments transition from the design phase to the implementation phase, the design phase is closed permanently, leading to potential problems during implementation.

To address this issue, future governments can benefit from aligning design and implementation, rather than treating them as entirely separate elements. Policymakers can achieve this by integrating specific mechanisms (stakeholder feedback) during the implementation phase, making policy design flexible enough for continuous adjustment if the current implementation indicates the need for modification.

The Smart Policy Design and Implementation Center at the Kennedy School of Government at Harvard University theoretically focuses on policy design, involving six crucial steps. This approach combines many strategic elements that mutually support each other. Improving policy design is integrated into each of the following five steps:

Problem Definition: Identifying the problem that the policy aims to solve through communication with all relevant stakeholders, recognizing opportunities for collaborative problem-solving.

Diagnosis: Understanding the cause of the problem and distinguishing between the causes and symptoms.

Policy Design: Identifying options to address the problem, considering context, capacity, leveraging technology, expert opinions, stakeholder views, and available resources.

Execution: Implementing solutions designed to address the problem, not necessarily on a broad scale from the outset but through step-by-step execution.

Testing Policy Application Results: Testing the results of policy implementation outlined in the previous steps is a crucial step that naturally leads to improving policy application by correcting one or a set of steps if necessary.

The policy-making process is complex but continuous, requiring governments to be flexible in accepting stakeholder feedback, taking risks to reap benefits, avoiding catastrophic losses, being open to making mistakes and learning from them, and adjusting the course taken during the process.

Strategists in the public sector can apply this process to many national strategies, such as achieving the Kingdom’s 2030 Vision and beyond, Bahrain’s strategies for industry, environment, energy, food security, tourism, and other policies focusing on diversifying and sustaining non-oil sectors.

Dr. Ali Faqeeh

Research Associate

Read More
shutterstock_598167608-1000×800

Economic diversification and industrial development

Economic diversification and industrial development

Many advanced countries, which mostly lack natural resources, excel in both technological and non-technological manufacturing across various sectors. For example, Japan is renowned for its automobile manufacturing, Germany for machinery, and Korea for technological goods. Each country excels in its leading industries within certain sectors. However, these countries do not confine themselves to manufacturing specific types of goods; rather, they open up to other industries that can drive economic growth, create more job opportunities, and increase innovation and leadership in the industrial sector.

As mentioned above, countries like Germany, the United States, Japan, Korea, and France have various industries such as pharmaceuticals, weapons, technological goods, automobiles, computer and electronics manufacturing, and more.

However, these countries have developed these industries over decades. So how can countries like Bahrain begin to catch up with the industrial diversification in these nations, which in turn boosts exports and gross domestic product (GDP) in the industrial sector, aiming for the economic diversification sought by Bahrain as part of the Vision 2030 economic agenda?

One of the most important key steps that can be designed with the participation of all stakeholders is to formulate a comprehensive strategy for the industrial sector. A detailed study of the industrial sectors in Bahrain and how they can be developed should be conducted. Kenichi Ohno, a Japanese expert in development economics and international finance, mentions in his book “A History of Economic Development in Japan” that Japan was a backward country and needed to align with technological advancements in advanced European and American countries to achieve technological development goals. Ohno emphasizes that Japan’s economic vision must be based on a thorough analysis of global trends and that “there is a real need to design and implement a comprehensive and precise plan for reconstruction.” He suggests that “each important industrial sector should be analyzed accurately, and precise and realistic promotional programs should be proposed.” Ohno further states that “Japan should focus on industries that rely on skilled labor intensification.”

Therefore, Ohno points out that Japan has taken two important steps: first, developing a comprehensive plan and conducting an in-depth study of the industrial sectors that Japan aims to develop.

Secondly, Japan began sending missions to study these industries abroad, in addition to attracting foreign investments for these industries from abroad to transfer experience and knowledge to the domestic sector and develop these industries domestically.

Due to the significant progress of many industries in advanced countries, it is challenging for Gulf Arab countries to start from scratch to keep up with industrial development in these countries. Therefore, the relative advantage or relative progress of these countries poses a significant obstacle to Gulf Arab countries. However, there are some solutions proposed by Ohno in his book on how to develop local industrial sectors. The author suggests that one of the solutions to follow is to draw up a comprehensive strategic plan for the industrial sector through detailed studies on how to transform the industrial sector in Bahrain and how to open up new industries locally that can drive economic growth, create more job opportunities, and intensify skilled labor. This strategy must be clear and comprehensive in achieving its goals, and cooperation among stakeholders is essential in drawing up these plans and taking into account their different opinions on how to achieve these proposed goals.

The second step comes from the perspective of attracting technological industries from foreign countries that excel in these industries. This contributes to transferring expertise and knowledge and further developing this sector in the future. However, before that, we must know what challenges and obstacles stand in the way of attracting these industries domestically. Are there any laws or regulations hindering? Are investors and businessmen lacking clear guiding principles on how to open such industries? For example, are there specific laws and regulations related to the automotive industry in Bahrain? And how much time does it take to open a car manufacturing company, pharmaceutical factory, or others? These questions, despite their simplicity, are crucial for businessmen and investors. Plans related to the industry must ensure a clear methodology in dealing with and addressing these problems and continuously testing them to ensure the achievement of the goals set by the state.

Dr. Abdulla AlAbbasi

Abdulla AlAbbasi

Read More
١-1-1000×800

Insights into the Singaporean Experience in Waste Management

Insights into the Singaporean Experience in Waste Management

The world generates approximately 2.1 billion tons of waste, and it is expected that this number will reach 3.4 billion tons within 30 years, representing an increase of about 70 percent. Many countries are striving to address the waste crisis, particularly because it is economically costly and causes numerous damages to ecological systems. The prevailing waste management system worldwide involves collecting waste from areas and disposing of it in designated landfill sites by municipal authorities.

In support of international efforts to combat climate change and protect the environment, and within its steadfast commitment to environmental and climate issues, as well as creating sustainable opportunities aimed at achieving net-zero emissions by 2060, the Kingdom of Bahrain faces a prominent challenge in managing waste sustainably in the long term. The kingdom seeks to establish numerous waste management projects, such as waste-to-energy conversion, aiming to preserve the environment and ecological systems.

As mentioned earlier, most countries have their own waste collection systems. When waste accumulates in residential areas and elsewhere, vehicles pass through all neighborhoods in the provinces to collect and then transport the waste. In Bahrain, waste collection and disposal are managed by two private sector companies responsible for collecting solid waste in the provinces and disposing of it at the municipal landfill site in Askar.

Many countries have implemented pneumatic waste conveyance systems, also known as the Pneumatic Waste Conveyance System. This method involves connecting internal or external units to throw waste into underground pneumatic tube containers. This technology has been in existence since 1960 and is used in many major cities such as London, Stockholm, Barcelona, and Amsterdam, with trials being conducted in residential neighborhoods in Singapore. However, each city employs this system according to its suitability. The same system used in London may not be suitable for a small city like Singapore and vice versa.

Singapore has implemented a sustainable waste collection system through pneumatic waste conveyance systems after making technology mandatory in residential areas with no fewer than 500 residents. The Singaporean government believes that as the population increases, particularly in urban areas like Singapore, it becomes clear that traditional waste bins and the old infrastructure required to serve them are no longer suitable. Therefore, pneumatic waste conveyance systems address many problems that traditional waste collection methods, which are costly economically and environmentally, cannot. The government sees this technology as sustainable and more operationally cost-effective. We have taken Singapore as an example because it resembles Bahrain in terms of area and challenges.

How does the pneumatic waste system work? In Singapore’s system, when residents dispose of their waste in internal or external waste disposal units, an underground vacuum pipe network transports this waste to a closed container. Once operators ensure that the container is full through an automated sensor, a truck passes to collect (or vacuum) the waste for disposal. The entire waste collection process is fully automated, reducing labor requirements and increasing productivity.

Through this system, Singapore aims to reduce above-ground waste accumulation by 100 percent, in addition to reducing economic and environmental expenses associated with traditional methods because it requires fewer operational staff and cleaners compared to traditional methods. Therefore, there is significant savings in labor costs, and vehicle expenses such as fuel, maintenance, and passing through residential areas and neighborhoods at the national level, which are very costly in the long term. It also provides a healthy way to dispose of waste and reduces carbon emissions from vehicle use. This means a healthy environment for residents and greater aesthetic satisfaction without waste bins along sidewalks. Overall, the pneumatic waste disposal system is considered safer, cheaper, and better for the environment in the long term.

Although the pneumatic waste system has many advantages, it also comes with recurring challenges along the way that can be addressed. For example, when residents throw large or sharp waste into garbage disposal units and trucks vacuum the waste underground quickly at speeds of 30-60 miles per hour, it can cause fractures or tears in the pipes, necessitating engineers to repair tears and remove blockages, which can lead to system downtime for a period of time. Other challenges include how to introduce infrastructure into urban areas and design it, as well as developers or municipalities needing to determine the true cost of this project and balance the benefits and returns on investment in the future.

Dr. Abdulla AlAbbasi

Abdulla AlAbbasi

Read More
shutterstock_2270550899-scaled-e1709465133153-1000×800

Does artificial intelligence technology replace human jobs?

Energy Studies

Does artificial intelligence technology replace human jobs?

The relationship between humans and machines is a historical one, crafted by humans to meet their specific needs according to the technology available at the time. Changes in this relationship are evident through successive industrial revolutions and changes in various manufacturing models. After the third industrial revolution, driven by fossil fuels, the fourth industrial revolution emerged equipped with advanced technological capabilities such as artificial intelligence, machine learning, automation, and other advanced technologies in the twenty-first century.

The economist Ludwig von Mises, born during the second industrial revolution (1870-1918), mentioned that machines are necessary to increase productivity. In his book “Anti-Capitalistic Mentality,” he states that “the increase in what is called labor productivity is due to the employment of better tools and machines.” Indeed, machines and advanced technology have contributed to human prosperity and improved productivity at work. Today, artificial intelligence solutions have contributed to increasing productivity and profitability in many sectors of the economy in various fields such as space, agriculture, the military sector, health, education, e-commerce, and many others.

At the same time, many experts and business owners warn that the extensive reliance on artificial intelligence solutions may pose an existential threat to humanity because these technologies may replace human jobs, especially since they can enhance productivity and accuracy to a greater extent than human labor. The question here is: Can artificial intelligence indeed pose a functional existential threat to humans?

Throughout history, there has been fear of machines replacing humans due to the increased productivity they possess compared to humans, which has been a major concern for farmers, factory workers, and others. Regarding artificial intelligence technologies, they have a significant impact on productivity at work and may replace many jobs in the future, but this time not only in factories and farms but in all sectors and industries like industry and services. It is believed that these technologies will pose a threat by displacing jobs because they will perform roles better than the tasks performed by humans but with greater efficiency and accuracy. In the near term, this may lead to economic disruption, unemployment, and widening income inequality. However, the situation differs in the medium and long term, especially in our rapidly evolving digital world.

In the medium and long term, especially in our rapidly evolving digital world, artificial intelligence is revolutionizing the job market by creating new job opportunities and specialties that were previously unimaginable. As artificial intelligence technologies continue to advance, new jobs emerge, such as artificial intelligence ethicists, data scientists, specialists in automation, machine learning, and deep learning, among many other opportunities that have emerged with these technologies. This expansion not only contributes to diversifying the workforce and increasing its productivity and efficiency but also contributes to economic growth by leveraging the potential of artificial intelligence-based innovations. Companies benefit from artificial intelligence technologies to streamline operations, enhance productivity, and provide personalized customer experiences, ultimately leading to increased profitability and sustainable growth.

The integration of artificial intelligence technologies across various industries reshapes market dynamics, providing companies with a competitive advantage and driving expansion into markets. As artificial intelligence becomes more entrenched in business operations, organizations experience improvements in efficiency, cost reduction, and increased competitiveness in the market. The symbiotic relationship between artificial intelligence and human expertise paves the way for a new era of innovation, collaboration, and growth in the global market. Therefore, despite the risks associated with these technologies that must be addressed in the present, adopting these technologies will contribute to increasing innovation, industry growth, promoting future job creation, and sustainable economic growth.

Dr. Ali Faqeeh

Research Associate

Read More