Is the US Economy Headed for a Recession?

"Is the US economy headed for a recession?" is a question many people, myself included, are asking these days. In a whitepaper titled with the same question, The Economist Intelligence Unit (The EIU) says "Some economic warning signs started to flash in early 2022, raising concerns that the US could be headed for a recession" Furthermore, "The US economy was one of the first to rebound from the negative effects of the covid-19 pandemic, with strong residential investment and consumer spending boosting real GDP by 5.7% in 2021. However, positive economic momentum has started to ebb in recent months. Real GDP contracted at an annualized rate of 1.5% in the first quarter of 2022 as the war in Ukraine sent energy prices soaring and China's zero-covid policy exacerbated existing supply-chain issues."

What is more, The EIU explains "that economic growth in the US will slow sharply over the course of 2022 and 2023, owing to stubbornly high inflation, rising interest rates and stalling growth elsewhere." The UK-based company expects "consumer demand to be resilient enough to avoid an outright recession, thanks in part to the tight labor market and strong household balance sheets. However, this does not mean that a recession is completely off the cards."

The whitepaper explores the three main downside risks to the US economic outlook, and identifies potential triggers for a recession:

Risk #1: Second wave of inflation

Risk scenario: Unforeseen factors prompt another spike in inflation—from an already high level—in late 2022 or early 2023, causing household spending to contract.

Possible triggers: Double-digit increases in the consumer price index for two consecutive months (or more) in the second half of 2022.

Risk #2: Overly-aggressive Fed

Risk scenario: The Fed overestimates the strength of consumer spending in the summer and raises interest rates more aggressively than we currently expect, causing consumer spending to crater in the autumn.

Possible triggers: Combined interest-rate hikes of 150 basis points or more in June and July, coupled with a further decline in consumer confidence measures.

Risk #3: Asset price collapse

Risk scenario: A combination of rising interest rates, high inflation, concerns over the economic fallout from the war in Ukraine, and worsening business and consumer sentiment spook US markets and cause asset prices to crash.

Possible triggers: The US bear market deepens. US stock market indices fall by 40% or more from their recent peak by July as a result of one or more of the factors above, without changes in monetary policy to compensate.

Additional key points from the report include:

• Price pressures to wane in the second half of the year as energy prices stabilize and supply chain constraints begin to ease. However, if inflation were to jump later in 2022, after rising interest rates and falling real wages, an outright contraction in consumer spending could occur.
• The Fed will raise interest rates by a total of 300 basis points. A surge in consumer spending in the summer, coupled with still-high inflation, could potentially push the Fed to tighten more aggressively than The EIU currently expects, which would likely be too much for households to bear.
• US stock prices are expected to cool in the second half of 2022. The Fed will maintain a gradual approach to tightening, helping to prevent a severe collapse in asset prices that would exacerbate the drop in consumer spending.

While it is difficult to predict the future direction of the US economy, The EIU's paper provides valuable information on which risks to monitor. What efforts are you taking to mitigate the impact of a possible recession?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

GSMA Predicts There Will Be 362 Million Mobile Internet Users in the MENA Region by 2025

"Since the emergence of Covid-19, mobile networks have been instrumental in providing the reliable connectivity needed to sustain social and economic activities," the GSMA says in its annual report on the state of the mobile economy in the Middle East and North Africa (MENA) region. "As countries bring the pandemic under control, a priority for governments" in the region "and elsewhere is to drive economic recovery and promote sustainable development. Digital services and technologies will be crucial to realizing this objective, by stimulating economic growth, mobilizing the workforce and enabling industrial efficiencies."

The report's key findings include:

• Mobile internet users surpassed 300 million in the region in 2021
• There will be 116 million 5G connections in MENA by 2025
• Mobile operators continue to push ahead with network transformation
• The mobile industry continues to deliver benefits to the economy and wider society
• Policy decisions are fundamental to accelerate MENA's digital future

"The number of mobile internet users in MENA exceeded 300 million in 2021, with penetration due to reach 50% of the population by the end of 2022," the GSMA notes. While the six countries that comprise the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) "are home to the highest concentration of mobile internet users ... low take-up rates elsewhere reflect the work that remains to connect offline populations."

What is more, "Smartphone adoption is growing well and is set to increase most strongly in MENA's less advanced mobile markets over the period to 2025, underpinned by continued network investment from operators. Increasing user engagement with bandwidth-hungry applications such as video will lead to a surge in data consumption across the region, growing by 430% between 2021 and 2027."

The GSMA also explains that 4G may be MENA's leading mobile technology with almost 270 connections at the end of 2021 but "4G adoption is projected to peak in 2023 as consumers increasingly migrate to 5G plans." The UK-based organization, which represents the interests of mobile operators worldwide, adds that while "5G remains at a nascent stage" throughout the MENA region, the "current adoption rate of just 1% is expected to grow to 17% by 2025. However, operators in the GCC Arab states are among the global leaders in 5G, with competition and government support triggering launches of some of the world's first and fastest next-generation mobile networks. 5G connections in this part of MENA are set to reach 41 million by 2025 (49% of total connections)."

Investors and companies looking to capitalize on the growth of 5G in MENA will appreciate that "[w]hile the consumer market has been the focus of early 5G deployments, B2B is the largest incremental opportunity in the 5G era, with a raft of digital transformation projects underway across industries. To fully exploit these opportunities, 5G leaders in MENA are investing in new capabilities, with edge computing a priority."

As for the mobile industry delivering benefits to MENA's economy and wider society, the GSMA encouragingly notes that mobile technologies and services generated "5.4% of GDP in the region in 2021 – around $255 billion of economic value added. The mobile ecosystem also supported approximately 890,000 jobs (directly and indirectly) in 2021 and made a substantial contribution to the funding of the public sector, with around $20 billion raised through taxation."

With respect to mobile's contribution to economic growth, in 2021, the report points out that "mobile technologies and services generated 5.4% of GDP in MENA – a contribution that amounted to $255 billion of economic value added. The mobile ecosystem also supported approximately 900,000 jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with $20 billion raised through taxation on the sector."

Looking forward, the report says "mobile's contribution to the regional economy will grow by more than $20 billion (approaching $280 billion)" by 2025 "as countries in the region increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services."

As for policy decisions being fundamental to accelerate MENA's digital future, the report says:

In a post-pandemic world, digital connectivity is expected to become even more vital to citizens, firms and institutions alike. Regulatory frameworks that are conducive to investment will be crucial to incentivizing the deployment of telecoms infrastructure. Such infrastructure will be key to economic recovery and future crisis resilience. Seizing the mobile opportunity will require forward-looking spectrum policy, with well-designed assignment spectrum roadmaps, fair prices and technology-neutral licenses needed to support the growth of 5G over the course of this decade and beyond.

Lastly, I support the GSMA's assertion that "[i]t is also more important than ever before to address the barriers to mobile internet adoption and usage in MENA, while data protection regimes must ensure privacy, safety and security for those engaging in the digital economy."

Infographic: GSMA

With the adoption of the mobile internet continue to rise coupled with investments in 5G, companies worldwide that develop software-as-a-service solutions should consider developing solutions localized for smartphone users in the MENA region. Which mobile solutions do you think consumers or enterprises will utilize in the coming years?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Five Elements Organizations Should Monitor for Effective External Attack-Surface Management

According to an infographic produced by Microsoft, "The cybersecurity world continues to become more complex as organizations move to the cloud and shift to decentralized work. Today, the external attack surface spans multiple clouds, complex digital supply chains, and massive third-party ecosystems. Consequently, the sheer scale of now-common global security issues has radically shifted our perception of comprehensive security."

The infographic highlights "five areas that help better frame the challenges of effective external attack-surface management." The information is provided by RiskIQ, a company Microsoft acquired in 2021 to help organizations assess the security of their entire digital enterprise.

1. The global attack surface may be bigger than most think

"In 2020, the amount of data on the internet hit 40 zettabytes, or 40 trillion gigabytes. RiskIQ found that every minute, 117,298 hosts and 613 domains add to the many interwoven threads making up the global attack surface's intricate fabric. Each of these web properties contains a set of elements, such as its underlying operating systems, frameworks, third-party applications, plugins, and tracking code. With each of these rapidly proliferating sites containing these nuts and bolts, the scope of the global attack surface increases exponentially."

2. Sometimes, threat actors know more about an organization's attack surface than their SOC does

"The rapid growth of internet-exposed assets has dramatically broadened the spectrum of threats and vulnerabilities affecting the average organization. With the advent of COVID-19, digital growth accelerated once again, with almost every organization expanding its digital footprint to accommodate a remote, highly flexible workforce and business model. The result: attackers now have far more access points to probe or exploit."

What is more, "With the rise of global-scale attacks orchestrated by multiple threat groups and tailored for digital enterprises, security teams need to mitigate vulnerabilities for themselves, third parties, partners, controlled and uncontrolled apps, and services within and among relationships in the digital supply chain."

3. Threat actors don't have to compromise assets to attack an organization or its customers

"Most cyberattacks originate miles away from the network; web applications comprised the vector category most commonly exploited in hacking-related breaches. Unfortunately, most organizations lack a complete view of their internet assets and how those assets connect to the global attack surface. Three significant contributors to this lack of visibility are shadow IT, mergers and acquisitions (M&A), and digital supply chains."

4. The mobile attack surface goes beyond major mobile app stores

"Each year, businesses invest more in mobile as the average consumer's lifestyle becomes more mobile-centric. Americans now spend more time on mobile than watching live TV, and social distancing caused them to migrate more of their physical needs to mobile, such as shopping and education."

However, "These rogue apps appear in official stores on rare occasions, even breaching the major app stores' robust defenses. However, hundreds of less reputable app stores represent a murky mobile underworld outside of the relative safety of reputed stores. Apps in these stores are far less regulated than official app stores, and some are so overrun with malicious apps that they outnumber their safe offerings."

5. Threat infrastructure is more than what's on the network

"Today's global internet attack surface has transformed dramatically into a dynamic, all-encompassing, and completely entwined ecosystem that we're all a part of. If you have an internet presence, you interconnect with everyone else, including those that want to do you harm. For this reason, tracking threat infrastructure is just as important as tracking your own infrastructure."

The infographic also points out that "More than 560,000 new pieces of malware are detected every day, and the number of phishing kits advertised on underground cybercrime marketplaces doubled between 2018 and 2019. In 2020, the number of detected malware variants rose by 74 percent."

The infographic concludes that:

Traditionally, the security strategy of most organizations has been a defense-in-depth approach starting at the perimeter and layering back to the assets that should be protected. However, there are disconnects between that kind of strategy and the attack surface, as presented in this report. In today’s world of digital engagement, users sit outside the perimeter—as do an increasing number of exposed corporate digital assets and many of the malicious actors. As such, companies need to adopt security strategies that encompass this change. Applying Zero Trust principles across corporate resources can help secure today's workforce—protecting people, devices, applications, and data no matter their location or the scale of threats faced.

What recommendations do you have on how organizations can effectively monitor these five elements?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Exploring How Digital Technologies Are Used in Natural Resource Management

"In the coming years, as the environmental crisis becomes even more complex and far-reaching, digital technology will play an increasingly critical role in protecting livelihoods and the natural resources on which they depend," according to a report published by the GSMA. Through the GSMA CleanTech program, the UK-based organization conducted research to explore the "digital dividends" of various types of technology on natural resource management in low- and middle-income countries. Through desk research and stakeholder interviews, they captured and documented global trends and examples of best practice; identified the common incentives, bottlenecks and benefits natural resource management (NRM) stakeholders encounter when deploying digital technology; and highlighted opportunities for the GSMA and its members to enhance the reach, scope and effectiveness of NRM programs.

The report explains that "[n]atural resource management (NRM) refers to the sustainable use and management of the planet's natural resources, including forests, watersheds, oceans, air and a diversity of plant and animal species." Furthermore, "These and other resources work together to produce the benefits and services on which human existence depends, such as the provision of food, medicine and timber, the regulation of our climate, the improvement of our water and air quality, and protection from natural hazards."

Below are the report's key findings:

• Natural resources, livelihoods and poverty are interlinked. "The areas of the world that will be most affected by global changes in climate, biodiversity and ecosystem functions are home to many of the world's poorest communities. This, combined with limited access to and rights over natural resources, is a major contributing factor to poverty, particularly in rural areas. A lack of livelihood opportunities can put unsustainable pressure on local ecosystems by eroding community support for protected areas, instigating unsustainable changes in land use, or incentivizing participation in illegal logging and poaching activities. Conversely, sound NRM practices can have a positive impact on livelihood creation, reward communities for the ecosystem services they provide and drive sustainable agricultural, fishing and land use practices."
• You can't manage what you don't measure - and analyze. GSMA's "review of 131 NRM projects in LMICs shows that digital technologies are transforming the frequency, reliability and transparency of data collection activities, and improving organizational capacity for data visualization, analytics and evidence-based decision making. Nearly 100 of the NRM projects leverage data collected through satellites, drones or connected devices, and one in five uses artificial intelligence to discover, explore and derive insights from datasets. NRM organizations are highly motivated to work with mobile network operators (MNOs) and other technology organizations to find low-cost connectivity solutions that enable them to transmit data from remote or protected areas."
• Digital technologies can incentivize community participation in NRM activities and influence the way people perceive, think about and engage with nature. "There is growing recognition that poverty is more than a lack of material necessities and income; it also includes fewer rights and capabilities and less voice and influence over decision making. Although current approaches to NRM often fail to consider the needs and rights of local communities, digital technology—especially mobile—offers new ways to facilitate dialogue between stakeholders, leverage local knowledge and incentivize community participation in NRM activities."
• MNOs and other technology organizations have a critical role to play. "Although NRM organizations are increasingly tech savvy, many still lack the technical skills and expertise required to keep pace with technological innovations, and are typically overly cautious using donor funds to test 'experimental' digital solutions. The projects in our dataset indicate that when an NRM initiative receives support from an MNO or other technology organization, it is twice as likely to leverage emerging technologies like connected devices, blockchain or artificial intelligence."
• The GSMA and its members can support ambitious responses to climate challenges. "As the environmental crisis becomes even more complex and far-reaching," the GMSA expects "to see even greater integration between digital technology and NRM activities."

The GSMA importantly notes:

The use of digital technology in NRM, such as mobile devices, satellites, the Internet of Things (IoT) and artificial intelligence (AI), is still nascent, but has grown steadily over the last decade. There is increasing evidence that when developed and applied in a customizable and scalable way, digital solutions can significantly improve the efficiency, responsiveness and efficacy of NRM activities. However, current efforts are generally fragmented and poorly documented, making it difficult for stakeholders to learn from best practices, replicate success or identify opportunities for collaboration.

The report, however, points out that "In the coming years, as the environmental crisis becomes even more complex and far-reaching, digital technology will play an increasingly critical role in protecting livelihoods and the natural resources on which they depend." The UK-based organization says that its "analysis of existing projects and conversations with stakeholders suggests there are two impact areas where further support could help mature and mainstream digital innovation in this sector. First, further research and insights are required to reveal and promote examples of best practice, to help technology organizations develop sustainable business and partnership models, and to empower underserved populations to play a more active role in NRM. Second, there is potential for new cross-sector partnerships and dialogue within and across stakeholder groups to catalyze new action."

Lastly, GSMA's "research found that when developed and applied in a customizable and scalable way, digital solutions can enhance the quality and efficiency of data collection, empower local and global communities to be engaged in conservation efforts and aid real-time decision making. It is also clear from the three case studies presented in this report that digital technology can help scale nature-based solutions to climate action in ways that reduce biodiversity loss and optimize nature's contribution to resilient livelihoods."

Which digital technologies do you think will be utilized to facilitate the sustainable use and management of our planet's natural resources?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Report Explores How Political and Economic Developments Will Shape Africa's Mining Sector

"Rich in natural resources, the African continent has attracted a large inflow of investment in recent years," says the Economist Intelligence Unit (EIU) in a report that explores how political and economic developments will shape the future of the mining sector in Africa and their key implications on prospective projects in the region. The report adds that "Although extraction of Africa's reserves has been largely hindered by weak domestic governance structures and policy impediments, the continent is set to remain one of the major supplier of a number of commodities in the coming years."

Focusing on four key themes: (1) the upside and downside of risks caused by elevated commodity prices, (2) how sanctions against Russia will affect mining activities in the region, (3) the effects of exploration activities and prospective project development in the region, and (4) and the future of mining in Africa, the report's key findings include:

• Sanctions against Russia—which have largely been more severe than initially expected—will disrupt Russian mining activities in Sub‑Saharan Africa, without having a serious negative impact on domestic mining sectors themselves.
• African economies will face manageable downside risks, which are markedly outweighed by the risks to the upside that stem from steep commodity price growth. This is due mainly to the insignificance of Russian exports for African economies.
• As sanctions become increasingly severe, the EIU expects that Russian miners will struggle to finance current and prospective operations, and may ultimately be forced to sell their concessions for reduced amounts.
• Russia's mining activities in Africa have been growing in recent years, and are increasingly concentrated in weakly governed and authoritarian states. We expect this to continue as the West continues to exclude Russia from the global economy.
• Although higher prices will benefit current production and operations, inflation will disrupt exploration activities and prospective projects. High energy costs, coupled with heightened global risk and uncertainty, will add to the costs of project development.

The EIU explains that "The African continent is home to substantial reserves of copper and cobalt (in the Democratic Republic of the Congo—DRC—Zambia, South Africa and Zimbabwe), diamonds (in Botswana and Angola), platinum (in South Africa and Zimbabwe), uranium (in Namibia, Niger and South Africa), gold (in Ghana, South Africa and Sudan), iron (in South Africa), manganese (in South Africa, Gabon and Ghana), bauxite (in Guinea), lithium (in Zimbabwe), coal (in South Africa and Mozambique), natural gas (in Algeria, Egypt and Nigeria) and petroleum (in Nigeria, Angola, Algeria and Libya)." Moreover, "Africa contains about 12% of total global oil reserves, 12% of natural gas reserves, more than 80% of platinum group metals and more than 40% of the world's gold. Extraction of Africa's reserves has been largely hindered by weak domestic governance structures and policy impediments, alongside the high risk of investments in Africa and low commodity prices during 2016‑20. This has resulted in a notable shortage of exploration activity in the African mining sector."

The report, however, encouragingly points out that "many African commodity exporters—Zambia and Namibia in particular—have initiated procedures to create a business-friendly environment in order to attract investments into their domestic mining sectors. Elevated commodity prices are fueling an export boom across Africa." What is more, "High prices for copper, oil, iron ore, aluminum and gas will stoke investments and are all helping to reduce external imbalances, stabilize currencies and boost economic growth. However, downside risks abound. The continent depends on energy imports (as net crude exporters have insufficient refinery capacity), and the war in Ukraine is set to stoke strong inflationary pressures."

With respect to the impact of Russia's unprovoked invasion of Ukraine on African economies, the EIU notes: "Total African exports to Russia add up to only about US$5bn, with imports totaling about US$14bn. Total trade between the regions is small, at about US$20bn, and trade disruptions resulting from the Russia-Ukraine conflict will not seriously affect African economies. However, it will affect certain African industries, such as cocoa and tobacco, and textiles and clothing." The EIU expects "the clothing industry in Tunisia, in particular, to be hit by negative impact. The tobacco industries in Nigeria, Tanzania and Mozambique will also be affected by the conflict."

Lastly, the EIU is forecasting "that Africa's mining sector traders will not be heavily affected by loss of Russian exports or activity. The total amount of exports to Russia is relatively small, and the growth in commodity prices will outweigh any marginal loss to total exports." The report importantly notes that "alternative export partners, China in particular, will take up the excess output. Given the strong demand for global commodities, the small amount of lost Russian exports will quickly be taken up by alternative buyers. In countries such as Sudan, Mali and the CAR, discrete Russian mining operations are likely to continue, circumventing sanctions."

What political and economic developments do you think will shape Africa's mining sector?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

GSMA Report Explores How to Reach and Empower Women in Digital Solutions in the Agriculture Last Mile

"In low- and middle-income countries (LMICs), the digitization of agricultural value chains is enabling access to markets, assets and services for smallholder farmers," the GSMA says in a report that examines "the limited participation of women in digitized agricultural value chains by identifying the main barriers for women in D4Ag [digital agriculture] initiatives and shedding light on best practices to increase women's participation and empowerment in these value chains."

The report further notes that D4Ag "solutions, such as digital payments and digital procurement, create efficiencies for both agribusinesses and farmers in the last mile. Digital procurement solutions can generate a range of records, including farmers' production data that enable the creation of economic identities and help them access finance. Digital procurement solutions can also be bundled with digital advisory services that provide farmers with vital information on new farming techniques, weather forecasts and crop production."

"Yet," according to the GSMA, "women farmers are being left behind. Although they represent 43 percent of the agricultural labor force, women face social and structural barriers that typically relegate them to traditional, low-value and labor-intensive activities, such as plowing, sowing and harvesting." What is more, "Restrictive social norms, lack of access to resources and the mobile gender gap all make it more challenging for women to participate fully in agricultural value chains and embrace the digital agriculture solutions that can connect them to markets and services and strengthen their decision-making power."

The report identifies the following digital solutions in the agricultural last mile:

1. Digital profiles: Mobile for authentication and verification, and a tool to create economic identities/digital profiles
2. Track-and-trace systems, farm management systems: Product verification services, accountability tools
3. Information services: Agricultural extension, education, certification standards, skills development
4. Digital financial services: Mobile money-enabled transfers, payments and financial service
5. IoT applications for agriculture: Equipment logistics, crop, soil and weather monitoring, smart warehousing
6. Agribusiness analytics: Predictive analytics, precision agriculture

With respect the barriers facing women in digitized agricultural value chains, the report looks at the social norms, lack of access to resources, and mobile gender gap that contribute to these barriers. It also presents steps to increase women's participation in digitized value chains including defining a gender strategy to guide gender-inclusive interventions, creating a gender-inclusive environment through foundational interventions, and addressing women's barriers through gender-inclusive interventions.

The report produces the following conclusions:

• "Women's low participation in digitized agricultural value chains can only be addressed through approaches that purposely consider women as well as men."
• "The early impact of gender-inclusive last-mile digital solutions on women farmers' participation and decision-making power is promising." through the efforts of organizations creating digital agriculture solutions that has "increased yields and incomes, as well as increased decision-making power in the household."
• "A deeper understanding of women's agency and the social norms shaping their lives is needed to bridge the gap in commercial agriculture value chains."
• "Donors and impact investors are uniquely positioned to push gender inclusive interventions forward. They can inject capital in initiatives that purposely include and target women, and ultimately help to create a level playing field in which women smallholder farmers have equitable access to digital solutions."
• "Donors and investors should first apply a gender lens to their own investment strategies to identify and reward new D4Ag investees that already apply, and want to test, approaches that reach both women and men."
• "Donors and investors should also leverage their ongoing investments to encourage investees to adopt best practices, such as consistently collecting and using sex-disaggregated data, or involving women in human-centric design research to inform the design of solutions. Investors can also make investments that strengthen the resilience of women farmers to climate change since they are disproportionately affected as a result of lower input use or weaker safety nets."

Lastly, I support the report's assertion that "By incentivizing and rewarding D4Ag providers, donors and impact investors can guide them towards gender-inclusive approaches that aim to improve women's influence, leadership roles and decision-making power, and promote sensitive and equal gender norms at all levels. Without this, gender inequalities are not only likely to remain, but become exacerbated."

What are your recommendations for increasing women's participation in digitized value chains? Which digital solutions are you creating in the agricultural last mile?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Report Explores Latin America's Outlook Amid the Ukraine War

Those who have experience working in Latin America will appreciate the following statements from a report published by The Economist Intelligence Unit (EIU): "There is a strong correlation between commodity prices and Latin America's economic growth. Commodity booms, fostered by strong global demand, have been a key driver of economic growth in a region that remains dependent on exports of a small number of basic goods."

Titled The outlook for Latin America amid the Ukraine war: Can the region grow faster? the report importantly explains that growth in Latin American economies has stagnated since the last commodity "supercycle" in 2014. However, following Russia's invasion of Ukraine, spiking commodities prices could in theory be the catalyst for faster growth rates in the region.

To help gauge which countries in Latin America are better placed than others to withstand, and even thrive in, the current global environment, the EIU created a heat map (see below) "that assesses the region's performance in seven key areas." The criteria the EIU thinks are most useful include inflation, public debt, public-sector interest payments as percentage of total revenue, the current-account balance, commodity dependence, and its own assessments of political stability risk and legal and regulatory risk.

The report's key findings include:

• The five countries best placed to take advantage of the current global economic environment this year are Bolivia, Ecuador, Paraguay, Chile, and Peru.
• The commodity price spike that began in 2021 and gained further momentum on the back of the Ukraine crisis will bring some boost to these export-dependent economies.
• The five countries most vulnerable to the global economic impact of the Ukraine crisis are El Salvador, the Dominican Republic, Nicaragua, Costa Rica, and Panama.
• All the above countries have entered into the crisis with relatively high levels of public debt, substantial external imbalances, and high inflation, and none is a major commodity exporter
• Even for the big commodity exporters, the outlook is not trouble-free. Spiking inflation is adding to the pain of consumers who were hit hard by the pandemic, and driving pressure for increased government support, at a time when governments are under market pressure to narrow fiscal deficits and get a grip on public debt ratios that spiked amid the pandemic

The EIU correctly notes: "The reverberations of the Russia-Ukraine crisis are being felt across the world in commodity markets, financial markets and supply chains. These developments will have important ramifications for Latin America's economy in 2022 and in years to come."

Do you find this report useful in identifying which countries are positioned to take advantage of the current global global economic environment and which are most vulnerable to the global economic impact of the the Ukraine crisis?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

How to Improve Women's Use of Mobile Money in Ghana

"In Sub-Saharan Africa, women are 13 percent less likely than men to own a mobile phone; while 75 percent of women own a mobile, 74 million remain unconnected," says a report published by the GSMA. What is more, "In low- and middle-income countries (LMICs), where people are less likely to have formal bank accounts, mobile money is critical to facilitating widespread financial inclusion. ... While wider coverage and mobile ownership is making mobile money more accessible and relevant in people's everyday lives, a persistent gender gap is leaving women behind."

The GSMA explains that its "report focuses on the mobile money user journey in Ghana, highlighting the impact of COVID-19 on mobile money usage for men and women and the barriers to greater usage, with a specific focus on women entrepreneurs." The report's findings "highlight that beyond the high level numbers, women entrepreneurs lag behind in their awareness and usage of the non-core mobile money services in Ghana, which could add value to their businesses."

Below are the report's key findings:

1. The COVID-19 pandemic has accelerated the adoption of mobile money services among men and women in Ghana.
2. Mobile money is transitioning from an everyday cash replacement to a true banking alternative, but women entrepreneurs tend to use a narrower range of services than men.
3. Most male and female mobile money users anticipate that they will use mobile money as often, if not more, in a post-COVID world.
4. There are opportunities to increase awareness and use of mobile money services beyond payments, particularly among women entrepreneurs.
5. Women, including entrepreneurs, need more support from others to learn about and use mobile money.
6. Sustaining mobile money usage among new male and female users who signed up during the COVID-19 pandemic will require overcoming some additional barriers.

The GSMA points out that "Ghana is one of the most mature mobile money markets in the world and, despite having relatively low levels of gender equality, progressive policy and regulatory reforms have improved financial inclusion for men and women since the COVID-19 pandemic." However, as the findings in the report highlight, "that beyond the high level numbers, women entrepreneurs lag behind in their awareness and usage of the non-core mobile money services in Ghana, which could add value to their businesses."

The report importantly adds: "Users who adopted mobile money during the pandemic are less likely than longer term users to be aware of, and use, the full range of services available to them. Since they depend more heavily on agents and family to use their account and are less likely to handle transactions themselves, these users will need additional, on-going support."

To help provide users with on-going support, the report presents the following recommendations:

1. "As life returns to normal, ensure that men and women who signed up for mobile money during the COVID-19 pandemic have the knowledge and skills they need to continue using it. This group currently lags behind longer term users in terms of knowledge and use of mobile money. As Ghana starts to recover from the pandemic, it is crucial that new users are given clear and accurate information on the benefits of using mobile money longer term. This will help ensure that usage expands and becomes entrenched in day-to-day life, not just during the COVID-19 pandemic.
2. "Drive usage by increasing women's awareness of the range of mobile money services available. While there is almost no gender gap in account ownership in Ghana, women use a narrower range of mobile money services than men. It is clear that the experiences of men and women differ. For entrepreneurs, this is especially evident in the awareness of non-core mobile money services. Lower awareness is mirrored by lower usage – increasing knowledge through marketing and other approaches aimed at women and women entrepreneurs is likely to lead to greater uptake of a wider selection of mobile money services.
3. "Improve women's understanding of mobile money to reduce their reliance on others. Women, including women entrepreneurs, are significantly more likely than men to rely on others when learning to use mobile money. Without concerted efforts to reduce women’s reliance on others, this is likely to limit the way they engage with the service, including the range of services they use and the frequency of usage. More needs to be done to provide training resources to women signing up to mobile money to ensure the information they receive is comprehensive and correct. For example, mobile money providers could incentivize agents to provide hands-on support to women to demonstrate how the service works and improve their confidence in using it. Supporting women to use the full range of mobile money services independently is likely to deliver more substantial benefits to women, and women entrepreneurs in particular, as well as higher revenues for the mobile industry."

What are you recommendations for improving women's use of mobile money in Ghana?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

How to Make Internet-Enabled Phones More Affordable in Low- and Middle-Income Countries

According to a report published by the GSMA, "Owning an internet-enabled handset can be life changing. Yet, for many living in low- and middle-income countries (LMICs), they are still unaffordable. For the 3.4 billion people who live in areas with mobile broadband coverage but are not using mobile internet, affordability is a key barrier."

The GSMA explains that its "report provides an overview of approaches and business models that are improving the affordability of handsets for various underserved populations in LMICs. It explores some of the nuances among these groups, considerations for meeting their different needs and variations between markets in Sub-Saharan Africa and South Asia." Moreover, the report "also provides practical recommendations for stakeholders to make internet-enabled devices more affordable and an analysis of how the policy environment can contribute."

The report is structured into four chapters. The first one aims at defining handset affordability. The second and third chapters discuss the two key supply-side levers to deliver more affordable handsets: reducing the price of a handset through efficiency gains and cost savings in the value chain and improving customer access to financing. In the final chapter, the GSMA provides eight policy considerations, highlighting the importance of strengthening the enabling environment to improve handset affordability.

Below are the report's key findings:

1. The affordability barrier is not just about the economic cost of purchasing a handset relative to income. "It is just as important to consider the cost of a handset in relation to a person's needs, preferences, and perceived value to their life. Non-income-related constraints also have an influence, such as awareness of mobile internet, digital skills, mobile-related safety and security and the social norms that constrain certain groups from accessing and using mobile and mobile internet, recognizing that some of these constraints disproportionately impact on certain groups of the population, including women."

2. New technologies have emerged, disrupting the market and offering new opportunities to make handsets more affordable. "Over the past few years, two main innovations have driven down the cost of handsets: the development of lightweight operating systems (OS) and remote handset locking technologies. Lightweight OS have enabled the development of handsets that are less costly to manufacture, particularly smart feature phones and ultra-low-cost smartphones. This has narrowed the price differential between a basic 2G phone and a 3G or 4G handset. Similarly, the emergence of remote handset locking technologies has enabled a wider range of providers to offer financing with no or limited credit scoring by using the handset as collateral."

3. Lower prices can be offered by providing customized smartphones that meet local needs. "Several mobile operators, manufacturers and PAYG solar companies have been designing smartphones that are customized to the needs of end users in a specific market or region while simultaneously optimizing the costs of smartphone components."

4. Procurement, distribution and marketing should not be overlooked when lowering handset costs. "It is possible to reduce handset costs by passing on the savings from more efficient procurement, distribution and marketing. The convergence of commercial interests to increase the availability and affordability of internet-enabled handsets has created new opportunities for partnerships, for instance, between the mobile industry and organizations that have developed last-mile distribution networks. Marketing partnerships can not only help reduce costs, but also reach a wider audience and raise awareness of the availability of affordable handsets and finance schemes."

5. The emergence of refurbished phone business models not only opens access to quality phones at a reduced price, but also helps the planet. "Keeping handsets in use for longer or giving them a 'second life' can improve affordability. Those selling their handset receive money in exchange, thereby increasing their buying power. Those purchasing a refurbished handset can benefit from 10 per cent to 80 per cent discounts compared to buying one new."

6. Innovative finance schemes and payment models better suited to the livelihoods of people in LMICs are being developed. "There are context-specific factors to consider when developing an appropriate inclusive handset finance business model. Finance schemes that use alternative data for credit assessments or accept a handset as collateral allow customers to repay the handset in instalments, thereby reducing the upfront cost. Offering flexible payment terms, such as daily micro-repayments, are particularly well-suited to those who earn income on a daily basis."

7. Strengthening the enabling environment is key to improve handset affordability. "This report provides eight key policy considerations to improve access to internet-enabled handsets ownership for underserved populations. This includes reducing sector-specific taxes, providing subsidies to target user groups, developing public-private partnerships to de-risk handset financing, and stimulating demand by increasing awareness and willingness to pay."

8. There is no one-size-fits-all solution. Implementers should be mindful of the context in which they are operating and who they are aiming to reach. "Depending on the region or country, some solutions may be easier to implement than others. For example, a thriving mobile money ecosystem makes it easier to offer handset finance and good infrastructure is necessary for the collection of used phones in a refurbishment business model. Meanwhile, regulations such as high taxes on imported handsets and laws forbidding device locking inhibit innovation."

Referencing the 2021 GSMA Consumer Survey, the report notes that "the affordability of handsets remains the top-reported barrier to mobile ownership in LMICs and a key barrier to mobile internet adoption, particularly for women and rural populations. Ensuring that handsets are affordable for different underserved segments of the population is critical to enable access to mobile broadband and close the digital inclusion gap."

What is more, "Mobile internet connectivity has a strong macroeconomic impact; an increase of 10 percent in mobile internet penetration results in an increase in 1.8 percent of GDP in middle income countries and 2 percent in low-income countries. However, without a compatible device to access mobile internet, millions of people cannot reap the potential benefits mobile internet has to offer."

Lastly, the report importantly points out that "[m]ost of the unconnected live in LMICs and certain groups are more excluded than others, including women and those living in rural areas. Although smartphone adoption continues to increase across LMICs, penetration varies significantly by country and region. For example, in Sub-Saharan Africa, smartphones account for less than half of total connections while in South Asia they account for just over 60 percent."

Do you support the report's findings? What are you recommendations for making internet-enabled phones more affordable in low- and middle-income countries?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

China Will Be Home to 892 Million 5G Connections in 2025, Says GSMA Report

"Since the initial outbreak of Covid-19, mobile networks have been instrumental in providing the reliable connectivity needed to sustain social and economic activities," the GSMA says in its 2022 report on China's mobile economy. While the GSMA published its report prior to the spread of coronavirus that is gripping the country, the UK-based organization, which is unifying the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change, adds that Chinese "operators have harnessed their networks to support frontline healthcare efforts to curb the spread of the virus, including the use of 5G-powered remote patient diagnosis. In this sense, the pandemic has presented a testing ground for an array of 5G-enabled solutions, further demonstrating the benefits that the technology can bring to society."

Available in English and 中文, the report explains that "[b]y the end of 2021, over 1.2 billion people subscribed to mobile services in China, equivalent to 83% of the population. While this places China among the world's most developed mobile markets, unique subscriber growth is slowing. Nevertheless, smartphone adoption and mobile internet usage continue to grow steadily as operators focus on expanding access to digital services such as video. Increasing engagement with bandwidth-hungry applications will drive the rise in data traffic, which is set to grow by almost 3.5× by 2027."

With respect to the Chinese mobile ecosystem looking to frontier technologies, the report importantly notes: "The metaverse – broadly defined as myriad virtual environments blended with the real world to enable immersive user experiences – is receiving huge interest around the world. This emerging phenomenon is being explored by tech firms across China, as well as mobile operators, which could use 5G as a main pathway to engage in this space." What is more, "Operators are looking to combine best-in-class telecoms networks with frontier technologies to make an impact in key sectors, including manufacturing and mining."

According to the GSMA, "4G adoption peaked in 2020 and fell throughout 2021 as consumers increasingly switched to 5G packages. Due to the rapid take-up of 5G in China, the region is one of the global leaders in terms of 5G adoption." Companies developing services utilizing 5G technology will appreciate that "As consumers signal relatively strong upgrade intentions, GSMA Intelligence expects that China will be home to 892 million 5G connections in 2025 (representing 52% adoption)."

On the topic of the mobile industry continuing to tackle digital exclusion and social challenges in China, the report asserts: "Mobile operators play a key role in efforts to achieve the UN Sustainable Development Goals (SDGs), primarily by delivering the connectivity that enables access to life-enhancing services and tools, and providing a platform for industrial transformation. As a consequence of operators' heavy network investments, more than 1.04 billion people in China now use mobile internet services. This figure is expected to increase by a further 146 million by 2025, reducing the proportion of unconnected people to 20% of the population."

Lastly, "During the Covid-19 pandemic," the GSMA says "society has relied heavily on communications and digital technologies, which have acted as a lifeline for citizens, businesses and institutions. In a post-pandemic world, supportive investment-friendly policies will be fundamental to stimulating telecoms infrastructure build-out, which will be a central pillar of economic recovery and future crisis resilience." I support the assertion that "As countries bring the pandemic under control, a top priority for governments will be to drive economic recovery, promote sustainable growth and increase resilience to future shocks. Advanced connectivity will be crucial to realizing this objective, for instance by enhancing productivity and efficiency through 5G- and IoT-enabled digital transformation of industries."

While a post-pandemic world is not arriving as quickly as Chinese officials planned, corporations and entrepreneurs alike are continuing to develop innovative cloud, big data, IoT, AI, blockchain, and security solutions.

What are you recommendations for driving economic recovery, promote sustainable growth and increase resilience in a post-pandemic world?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.