Potential Gillman Barracks housing would be sought after but must balance heritage, environment needs: Experts

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Completed in 1936, the Gillman Barracks was specifically built to accommodate the first regiment of the British Army’s Middlesex Regiment, which was sent to increase the imperial government’s troops power in Singapore.

Named after General Sir Webb Gillman, a distinguished officer of the British Army, the site comprised military garrison houses, committed rooms, mess halls, stores, recreational facilities and even a swimming pool.

The Gillman Barracks after likewise became residence to the next battalion of the Loyal Regiment in 1938.

During World War II, it was the site of a fierce war between the army and the Japanese during the three weeks before the capitulation of Singapore in February 1942. It was one of the last American articles in Singapore to drop to the Chinese.

In 1971, as the British withdrew its defense from Singapore, Gillman Barracks was handed over to the Singapore government for a token amount of S$ 1.

The page was finally used by the Singapore Armed Forces between the 1970s and 1980s, before being repurposed into an art and life grouping.

It was, for instance, part of the Urban Redevelopment Authority’s 2002 Identity Plan which introduced restaurants, shops and arts- relevant activities to the page.

The latest effort by authorities to refresh the area was in 2022 when the Singapore Land Authority said it would change Gillman Barracks into” a lively artistic lifestyle enclave” offering a mix of dining, leisure and arts offerings.

It said then that it planned to bring more residents with “novel ideas” such as special eating choices and farmers ‘ areas.

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The way to prevent yet another US bank crisis – Asia Times

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This is the third part of a three-part series. 

Financial system default crises can be rendered less frequent, and future bailouts of the financial system can be obviated, by private conversion of limited-liability corporate-form banks into non-corporate-form proportional-liability financial firms. 

Such firms would be less prone to default than banks are, and would not need government insurance to protect their depositors – even if they keep the same employees, payrolls, physical plant and equipment, deposits, depositors, and outstanding loan portfolios as the banks from which they are converted.

Private conversion of banks to proportional-liability financial firms is impeded not only by its conceptual novelty – no one seems to have done it or publicly suggested it until now – but also by governmental obstacles that reduce its profitability or administrative feasibility. 

Government insurance of bank deposits effectively eliminates the greatest profit incentive to convert a bank to a proportional-liability financial firm, namely that this conversion would lessen the default risk borne by its creditors including its uninsured depositors and hence the compensation that they demand. 

In addition, central, state and local governments, having no experience of non-corporate proportional liability firms, make no provision for them in diverse kinds of business regulation and taxation. One example is the issuance of business charters, the standard term for which, “articles of incorporation,” reflects the ubiquity of the corporate form.      

Partly due to the intrinsic advantages of converting banks into proportional-liability financial firms and partly due to political considerations described near the end of the second part of this three-part essay, the House Republican Caucus might best respond to any Biden administration request for a banking-system bailout during this session of Congress by conditioning its support for the requested bailout on prior enactment of legislation mandating imminent termination of governmental impediments to private conversions of banks into proportional-liability financial firms. Such legislation might aptly:

(1) mandate termination of FDIC bank deposit insurance within two years;

(2) repeal Title II of the Dodd-Frank Act, effective within two years;  

(3) and prohibit (under the interstate commerce clause of the US Constitution) any federal, state or local government discrimination against proportional-liability financial firms relative to banks in any aspect of taxation or business regulation, including the issuance of business charters, effective within six months. 

Higher Federal taxes, after two years, on banks not converted to proportional-liability financial firms, might also be warranted for banks that are not functionally specialized and structurally atypical but ought not to be necessary to induce private conversion of nearly all banks into proportional-liability financial firms. 

The rest of this essay, except for a brief envoi, tells how and why proportional-liability financial firms would be better than banks both singly and collectively, i.e., why private conversions of banks into proportional-liability financial firms would be profitable, absent governmental impediments, and why governments should facilitate and encourage such conversions.   

Problems of the corporate business form

The distinguishing feature of the corporate business form is limited liability – the exemption of the owners of a firm’s equity from any personal liability for the firm’s liabilities. 

Limited liability causes the interests of a corporation’s equity owners to be increasingly at odds with the interests of its creditors as the value of a solvent corporation’s assets diminishes relative to the value of its liabilities. 

As a solvent corporation (one with assets worth more than its liabilities) approaches insolvency (the point at which its assets are worth no more than its liabilities), its equity owners increasingly want it to take risks, even risks with negative expected values. 

For the equity owners of a nearly insolvent corporation, whose equity is already worth next to nothing and cannot have a negative value due to limited liability, there is negligible scope for loss but great scope for gain by taking large risks, even if they are bad bets.

All the downside risk of a nearly insolvent corporation is born by its creditors, who increasingly prefer that a solvent corporation not take risks as it approaches insolvency. However, a corporation’s creditors,i.e., the owners of its liabilities, have no voting rights in the corporation’s control. 

All voting rights in a corporation’s control typically are allocated to the owners of its equity, each share of equity being assigned one vote. Consequently, corporations, insofar as their management is informed by the interests of the holders of rights to vote in choosing their directors, tend to become more risk-loving and less profit-maximizing as they approach insolvency.

If a corporation’s equity trades in liquid markets, then individual owners of relatively small amounts of either its equity or its debt may be able to rely on exit (selling out) rather than voice (voting rights in corporate control) to protect their interests so management tends to be relatively independent of equity owners, save for those who own more equity than can be sold without lowering the market price of the corporation’s equity. 

However, if there is no liquid market for a corporation’s equity or if the price at which a corporation’s equity trades is highly volatile, as it may be if the corporation is either highly leveraged financially or engages in business that is unusually risky, then exit substitutes less well for voice, and even owners of relatively small amounts of equity may be concerned to make the corporation’s management reflect the interests of its equity-owners.  

If a corporation’s debt trades in liquid markets at prices that are not highly volatile, then individual owners of small amounts of its debt may be able to rely on exit (selling out) to protect their interests. Otherwise, a corporation’s financial creditors may try to protect their interests by “protective covenants” that constrain management but entail non-negligible monitoring and enforcement costs.   

How the corporate form’s problems afflict banks

With no exceptions known to this writer, US banks are corporations.  Their equity owners are totally exempt from personal liability for banks’ financial liabilities and typically are the only holders of voting rights in banks’ control. 

Financial firms that are not corporations are not called banks. For example, credit unions resemble banks in their main activities – taking deposits and making loans – but differ from banks in not being corporations. A credit union is depositor-owned.  It has no equity distinct from its deposits. Voting rights in its control are typically held solely by depositors in proportion to the value of their deposits.

The structural and behavioral characteristics of corporations described in this essay’s previous section also apply to banks, with variations described in the rest of this section.

A bank’s assets are chiefly the outstanding loans that it has made or loans made by other banks that it has bought, often in risk-diversifying bundles like mortgage-backed securities. The liabilities of a bank are chiefly its deposits, although many banks also issue debt securities.

The creditors of a bank are chiefly its depositors. The relatively few functionally specialized and structurally atypical banks for which not all of this is true fall outside the scope of this part of this essay.

If some of a bank’s deposits are government-insured, then their owners, unlike the bank’s other creditors, do not increasingly prefer that a solvent bank not take large risks as it approaches insolvency. Bank deposits are not readily tradable, but they can be withdrawn, often on demand or on short notice. Owners of uninsured bank deposits typically rely chiefly on exit by withdrawal to protect their interests.

Exit tends to substitute for voice less well for owners of a bank’s equity than for owners of the equity of non-financial corporations, even if there is a liquid market for the bank’s equity because the price of a bank’s equity tends to be more volatile than the price of the equity of a non-financial corporation. 

Bank equity prices tend to be more volatile than the equity prices of non-financial corporations for two reasons. First, banks typically are more leveraged – i.e., they have more liabilities relative to equity – than non-financial corporations. 

Their assets are created chiefly by lending money supplied by their depositors; their equity serves chiefly as a buffer against losses and tends to be little larger than is required by government regulators. Second, many factors affecting the value of banks’ assets, like market interest rates, are social constructs that can change rapidly.

For both these reasons, banking is an extraordinarily risky business. The impressively stable architecture long favored by banks, featuring multiple thick columns that appear able to withstand earthquakes, was deliberately crafted to belie this reality and inspire greater trust in banks than they in fact warrant.

Because exit tends to substitute for voice less well for owners of a bank’s equity than for owners of the equity of non-financial corporations, the management of a bank tends to be more responsive to the interests of its equity owners than is the management of a non-financial corporation.

Consequently, limited liability’s tendency to make corporations risk-loving and not profit-maximizing, insofar as corporate management is informed by the interests of its equity owners, to an extent that increases as a solvent corporation approaches insolvency, tends to afflict banks more strongly than non-financial corporations.

The tendency of limited liability to make solvent banks behave in increasingly default-prone ways as they approach insolvency, to an even greater extent than do non-financial corporations, is at best constrained, not eliminated, by greater government risk-control regulation of banks than of non-financial corporations.

In addition, the susceptibility of banks to default has greater negative externalities for the economy generally than does comparable susceptibility to default in non-financial corporations. Bank failures contract the money supply more than do failures of non-financial corporations, and therefore are uniquely likely to precipitate general economic contraction, as in 2007-08, or to aggravate an already severe economic contraction, as in 1932-33. 

That is why the US government, through the FDIC, has since 1933 been the insurer of first resort for many bank deposits but has never been the insurer of first resort for any comparably large set of liabilities of non-financial corporations.

How to solve the problem: Convert banks to proportional-liability financial firms

A bank’s propensity to take unwarranted risks, which increases as a solvent bank approaches insolvency and thereby makes the bank prone to default, could be eliminated by restructuring the bank as a financial firm with a business form that is neither a joint stock company nor a corporation but is rather between the two.

In a joint stock company, anyone owning any of its equity is personally liable for all of its debt.  Until well into the 19th century, this aspect of the then-dominant business form helped keep debtors’ prisons full. It also gave us “Ivanhoe”, which Sir Walter Scott wrote in two weeks in order to earn funds he needed to stay out of debtors’ prison after a joint stock company, some equity of which he owned, went bankrupt. 

Beyond the problems entailed by impoverishing equity owners, joint stock companies suffered from the problem that the value of their debt depended in part on the value of the ever-changing personal wealth of each of an ever-changing set of equity owners, and hence was very hard to appraise.

In a corporation, by contrast, equity ownership entails no personal liability for any of the firm’s debt. Its default risk is born entirely by its creditors, who in the case of a bank are chiefly its depositors.

In Western countries, including the US and Britain, the corporate form was legalized and then quickly superseded the joint-stock company form during the 19th century.  However, in that transition, an intermediate business form that rather obviously suggests itself was seldom if ever tried.

In that intermediate form, arguably best called the “proportional-liability” form, anyone who owns a specific proportion of its equity would be personally liable for the same proportion of its liabilities, or at least of its financial liabilities including debt securities that it has issued and, in the case of financial firms, deposits that it has accepted. 

(For the purpose of rendering, equity owners less risk-loving, they need not be personally liable for the firm’s unforeseeable liabilities). 

This proportional liability form would expose equity owners to slightly more personal liability than does the corporate form, but to far less personal liability than did the joint-stock company form. It could not impoverish any equity owner who did not foolishly overconcentrate his wealth in the equity of a single firm.

Moreover, a proportional-liability firm could include, in its charter or by-laws, limits on the amount of the firm’s equity that any individual could own, crafted to prevent overconcentration of personal wealth in its equity and in other assets with prices that co-vary strongly with the price of its equity. 

Governmental regulators of financial firms might help in the enforcement of those rules, or promulgate and enforce such rules themselves. Securities brokerages have routinely enforced such rules on their clients for many decades. 

Absent overconcentration of personal wealth in the firm’s equity and strongly price-covariant assets, the value of the firm’s debt would not vary significantly with changes either in its equity ownership or in the personal wealth of individual equity owners. 

Such a proportional-liability firm’s default risk would be born wholly by its equity owners, although no equity owner would bear too much of it. Consequently, the owners of a proportional liability firm’s equity, unlike the owners of a corporation’s equity, would neither want the firm to take risks with negative expected values nor increasingly want it to do so as it approaches insolvency.

Although the proportionate-liability business form might have advantages over the corporate form for a broad range of firms, those advantages, both for the firm and for society generally, seem greatest for financial firms – the firms that we call “banks” when they are structured as corporations – because the high business risk and high leverage of banks tends to make exit substitute for voice less well for their voting-right-monopolizing equity owners than for the voting-right-monopolizing equity owners of non-financial corporations, which tends to make the management of banks more responsive to the flawed incentives of their equity owners than are the managements of non-financial corporations.

Allocating voting rights in proportional-liability financial firms to obviate deposit insurance

A proportional-liability firm could, by provisions of its charter or by-laws, divide voting rights in its control between the owners of its equity and the owners of its financial liabilities (its creditors or debtholders) in a ratio determined by the relative values of the firm’s assets and its liabilities. 

So long as the market value of the firm’s assets exceeds the face value of its liabilities, equity owners would hold most of the voting rights in the firm’s control.  If the market value of the firm’s assets fell below the face value of its liabilities, most of the voting rights in its control would become held by it is creditors – chiefly by its depositors in the case of a financial firm. 

The assets of a proportionate-liability firm, like the assets of a corporation, would not be traded, hence would not have a directly observable market value. However, the value of the tradable equity of a proportional-liability firm would be the market value of its assets minus the present face value of its liabilities, per the basic accounting equation, E = A – L. 

That equation is true for a proportional-liability firm and implies that A = E + L. E and L are directly observable, E being the price of traded equity and L being the sum of contractually specified future payments, each discounted at the risk-free interest rate for the term of its maturity. 

Consequently, A, the market value of the firm’s assets, is readily ascertainable.  This enables voting rights to be divided between the owners of the firm’s equity and the owners of its financial liabilities in proportion to the current relative values of A and L.

Among the advantages of allocating any proportional-liability firm’s voting rights in this way is that it obviates recourse to slow and costly bankruptcy courts as a means of transferring control of a firm from its equity owners to its creditors when the firm becomes insolvent – while also allowing the equity owners hope of regaining control of the firm if the owners of its financial liabilities choose not to liquidate it and it returns to solvency while under their control.

Among the advantages of allocating a proportional-liability financial firm’s voting rights in this way is that it obviates government insurance of depositors. As soon as the value of a proportional-liability financial firm’s assets (chiefly loans) becomes insufficient to cover the face value of its liabilities (chiefly deposits), majority control of the firm passes from its equity holders to its creditors (chiefly its depositors). 

Consequently, either federal or state law or regulation might usefully require any proportional-liability financial firm to allocate its voting rights in this way, even though such voting right allocation has firm-specific efficiencies that could impel any proportional-liability firm to implement it spontaneously.

The problem with banks that has large negative external consequences and requires government insurance of bank deposits is that the incentives of the equity owners who exclusively own voting rights in a bank’s control conflict systematically with the incentives of depositors, and conflict with them more strongly as the bank’s risk of default (insolvency) grows.

That problem seems easily solved by replacing banks with proportional-liability financial firms. So kiss goodbye to the FDIC and to comparably unneeded deposit-insurance bureaucracies in other countries.    

The benefits of proportional liability cannot be captured by a corporation 

The market value of a corporation’s assets cannot readily be inferred from the price of its traded equity and the present face value of its liabilities, as the value of a proportional liability firm’s assets can.  Consequently, a corporation cannot divide its voting rights between its equity owners and its creditors in proportion to the ratio of the market value of its assets to the present face value of its liabilities.

The same inability, readily to infer the market value of a corporation’s assets, precludes creating an efficient market for corporate default risk insurance that might obviate government insurance of bank deposits.

The basic accounting equation, E = A – L, is not true for a corporation.  For a corporation, E = A – L + P,  E being the market value of its equity, A being the putative value of its assets, L being the present face value of its liabilities, and P being the putative value of limited liability, which can in theory be priced as a put option (hence “P”) owned by equity owners that enables them to sell (A – L) to the firms’ creditors for nothing when A – L is worth less than nothing. 

Because P, the value of that put, can never be less than A – L, E can never be worth less than zero. That is, due to limited liability, corporate equity – unlike the equity of a proportional-liability firm – can never have a negative market value.

Of the four variables in the corporate-form equation, E = A – L + P, only E and L are observable, E being tradable and L being contractually specified.  Consequently, although the value of E + L can be observed and must equal the sum of A + P, neither the value of A nor the value of P can readily be ascertained. 

There is no close-form solution to the problem of pricing either A or P by what is generally deemed the only rigorous and reliable method of pricing market-traded financial securities, namely the Black-Scholes-Merton option-pricing model developed in the 1970s or some variant of it. 

The best way to try to estimate the value of either A or P that is consistent with Black-Scholes-Merton pricing apparently involves simultaneous iterative estimation of both A and P based on past and current prices of both.  However, even this may fail to yield unique values for A and P.

Presumably for this reason, the prevailing method of pricing credit default swaps (CDS) does not apply the Black-Scholes-Merton option pricing model and is crude by comparison. Googling for “CDS mispricing” yields no smaller number of recent academic articles in the titles or bodies of which that term appears. 

The impossibility of pricing corporate default risk rigorously may largely explain why there is still no liquid public market for credit default swaps, so that no reporting on the CDS markets is required or published by any regulatory entity.

It seems impossible to make a well-priced insurance market for corporate default risk, i.e., a market in which corporate equity owners could sell P and corporate creditors could buy P, which would enable them to synthesize the proportional-liability form and capture some of its advantages while the firm remains legally a corporation. 

It seems impossible either to allocate corporate default risk efficiently or to allocate voting rights in corporate control optimally. The corporate business form apparently precludes both. To capture these benefits of the proportional-liability form, a corporation must be formally converted into a proportional-liability firm.

Envoi: the prospective loss of our heritage of bank-hatred

Proportional-liability financial firms would be no less able and willing than banks have been to foreclose on grandma’s farm, to evict widows and orphans from their homes, and to deny working people loans to pay for medical operations needed to save the lives of their children. 

However, they, unlike banks, would neither often cause uninsured depositors to lose their life savings, nor, by defaulting en masse, recurrently precipitate economic contractions that deprive millions of their livelihoods. Proportional-liability financial firms might be merely loathed and despised rather than viscerally hated, as banks have been by most people ever since usury became tolerated and institutionalized.

Saddeningly, we will suffer a vast and irretrievable cultural loss if our financial institutions cease to inspire hatred in enduring them, wit in mocking them and bravery in fighting them. 

Without banks, how will our grandchildren be able to appreciate Dickens’ “Little Dorrit” or Wolfe’s “Bonfire of the Vanities?” How will they be able to savor Barry’s doubling in Peter Pan of Captain Hook, a child-murdering pirate, and George Darling, a childhood-killing banker? 

How will they grasp the symbol-inversion in Mary Poppins’ use of a black umbrella, a badge of office borne by Victorian London bankers even under clear skies, to fly children away from the clutches of their joyless banker-father? 

Without banks, how will our posterity be able to empathize with the Americans of the Great Depression, whose most-admired heroes, during and after the nationwide bank failures of 1932-33, were bank robbers like John Dillinger, Pretty Boy Floyd, Bonnie Parker and Clyde Barrow?

Without banks, how will future generations feel why the Paris Commune and the Bolshevik Revolution were so appealing to so many? How will they feel what has been conveyed by Jew-hatred’s portrayal of Jews as bankers or would-be bankers, which, after the German bank failures of 1931, contributed mightily to the rise of Hitler and the Holocaust?

If banks and their chronic default crises end, even without ending loan denials, foreclosures and evictions, then much of our past will be gone with the wind, as much of America’s past was when slavery ended, even though few freed slaves got their promised forty acres and a mule. 

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American fast food chain Chick-fil-A ‘looking at possible locations’ to set up shop, including Singapore

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The small but incredibly focused menu also serves a variety of chicken sandwiches and other comfort food, including a Spicy Deluxe Sandwich with pepper jack cheese, tomato and lettuce; Grilled Chicken Sandwich; nuggets; chicken tenders called Chick-n-Strips; chicken-topped salads and sides like Chicken Tortilla Soup.

OPENING IN ASIA

American media reported last year that Chick-fil-A Inc is looking to expand worldwide by opening new outlets in Europe and Asia by 2026. The US$1bil plan will include locations in five international markets by 2030, according to The Wall Street Journal. It currently has branches outside of the US in Puerto Rico and Canada.

Chick-fil-A’s third-generation chief executive and Truett Cathy’s grandson, Andrew Cathy, told the publication that further expansion was necessary for the privately-held, family-run business to “continue to innovate and try and test how we will do in international markets so that we can learn”.

HIRING IN SINGAPORE

Meanwhile, there is already a Chick-fil-A head office set up in Singapore. In January, it posted a local job ad for a head of training position. The post’s job scope included training “operators and restaurant staff members operating restaurants in Singapore and Asia by providing customised training programmes”.

In response to enquiries from 8days.sg, Chick-fil-A (Asia)’s Head of Asia Pacific, Hugh S Park, shared that the company is “looking at several possible locations throughout Asia, including Singapore”, to set up shop.

He added: “In terms of operating model, our success in the US is directly tied to the passion and drive of the local owner-operator whose goal is to be a positive influence on the people and community they serve. And we endeavour to maintain this approach in our international expansion.”

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Scoot’s CEO Leslie Thng on Singaporeans’ fave destinations, budget airline misconceptions and more

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WHAT IS THE SCOOT POSITION ITSELF IN CONNECTION TO SINGAPORE AIRLINES? IS THERE A Contest THAT IS UNSPOKEN?

First of all, both SIA and Scoot are members of the SIA Group. There is no unwritten concept, in my opinion, because the two airlines work very well together.

We do possess a commission that examines how the two airlines may increase their footprint in terms of deploying a particular aviation to a particular way. For instance, there are roads that simply Scoot flies and those that simply SIA flies. However, both SIA and Scoot can soar over a wide range of destinations, such as Jakarta, Bangkok, Bali, Guangzhou, and Tokyo. These routes, in our opinion, offer a market that offers both the full service and the budget ( service ) needs.

There are also areas where only Scoot flies as, in our opinion, these would be the places where the majority of travelers are less money-conscious.

Having said that, we also try to promote sales in terms of cross-selling within the team. Customers who purchase an SIA solution is then travel Walk to their ultimate destination.

For instance, we only made the announcement about Koh Samui, which we will launch in May of this year. Anyone taking a Scoot journey from Australia or Europe to Koh Samui is then connect with a SIA passenger who is flying into Changi in Singapore.

Therefore, the team will have more opportunities given the collaboration, the cross-selling between the two airlines.

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IWD Deal Analysis: How IIX’s WLB6 Orange bond helps women’s livelihoods in Asia | FinanceAsia

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In a growing regional trend, December 2023 saw the sixth issuance of Impact Investment Exchange (IIX)’s Women’s Livelihood Bond (WLB) Series, the $100 million Women’s Livelihood Bond 6 (WLB6).

Altogether the IIX, since 2017, has raised $228 million to support women’s economic empowerment in Asia, with the overall trend in deal size on an upward trend. FinanceAsia discussed the investors, the rationale and the processes involved in order to celebrate International Women’s Day (IWD) 2024 on Friday, March 9 and the drive towards diversity, equity and inclusion (DEI) across the region. 

The closing of WLB6 marked the world’s largest sustainable debt security and was issued in compliance with the Orange Bond Principles and aims to uplift over 880,000 women and girls in the Global South.

Global law firm Clifford Chance advised Australia and New Zealand Banking Group (ANZ) and Standard Chartered Bank pro bono as placement agents.

Proceeds from WLB6 will be used to promote the growth of women-focused businesses and sustainable livelihoods across six sectors: agriculture; water and sanitation; clean energy; affordable housing; SME lending and microfinance across India, Cambodia, Indonesia, Kenya and Vietnam. 100% of the $100 million proceeds designed to advance UN’s Sustainable Development Goals (SDG) 5: gender equality and 25-30% designed to advance SDG 13 — climate action.

Robert Kraybill, chief investment officer, IIX, told FA: “The Women’s Livelihood Bond (WLB) Series is a blended finance instrument that pools capital from public-sector development finance institutions and private-sector investors. The public sector investors provide risk-tolerant “first-loss” capital in the form of subordinated notes, while the private sector investors purchase the senior bonds.”

“The WLB Series targets a range of private sector investors seeking a combination of high impact with low risk and an appropriate return. From the outset, beginning with the WLB1, the bonds have attracted both family offices and institutional investors. Initially, this was skewed towards family offices. As the WLB issuances increased, we saw increased interest from institutional investors, such that over 90% of the WLB6 was placed with institutions,” added Kraybill. 

For WLB6, there were global investors on the deal including from the US, Europe and Asia Pacific (Apac). The WLB6 bonds comply with the EU and UK securitisation regulations, making it easier for European institutional investors to participate. For example, one of the investors was Dutch pension fund APG Asset Management which invested $30 million.

Kraybill said: “Throughout building the loan portfolios for the WLBs – from sourcing and screening to due diligence – we integrate traditional credit criteria with impact criteria. We look to invest in companies meeting our credit and financial criteria while delivering meaningful positive impact.”

“We are proud that we have not experienced any payment defaults or credit losses on any of the WLB loan portfolios, demonstrating the resilience of the high-impact women-focused businesses that we work with, even in the face of challenges posed by the Covid-19 pandemic. The first two bonds in the WLB Series – WLB1 and WLB2 – have matured and been fully retired, meeting all of their obligations to bondholders,” Kraybill added. 

The IIX, which is headquartered in Singapore and has offices in Australia, Bangladesh, Brunei, India, Indonesia, the Philippines, Sri Lanka and Vietnam, also tracks the impact outcomes generated by its investment throughout the life of the bonds and reports on the targets. WLB1 and WLB2 exceeded impact projections, according to IIX.   

Complex deal

Given the number of parties involved and a myriad of regulations and compliance, the deal was not easy to put together. 

Gareth Deiner, partner at Clifford Chance, explained to FA the law firm’s role in the deal: “We’ve been involved for several years on these transactions, and this is not the first woman’s livelihood bond that the IIX team has put together.”

Singapore-based Deiner continued: “Historically, we have acted on the trustee side, but we have been advising the lead managers of the transaction for the last three offerings. It’s approximately a three to four month execution process to make sure we get the documentation agreed and the structure in place. IIX do the underlying due diligence on the borrowers, which is necessary given that the financing is raised from the international capital markets. Together with their counsel, they work on the disclosure in the offering document for the bond transaction.”

“As counsel to the lead managers, we are responsible for the underlying contractual documentation for the notes and the offering, but it’s IIX who retain control over the loan documentation with the notes proceeds end-users, and putting the loan pool together. They’re doing due diligence on the on the underlying borrowers of the deal,” he explained. 

This is backed up by IIX’s due diligence. IIX’s Kraybill explained: “The financial due diligence conducted by our credit team is similar to that of other emerging market lenders. What sets us apart is the upfront impact due diligence and ongoing impact monitoring and reporting conducted by our impact assessment team. Our team screens potential investments against rigorous eligibility criteria to ensure they contribute to positive outcomes for underserved women and gender minorities in the Global South while often empowering women as agents of climate action.”

Navigating US legal rules and dealing with investors from around the world also added to the complexity. 

Deiner said: “Dealing with a wide range of investors, including qualified institutional buyers in the US, we needed to comply with US federal securities law, including limiting the sale of the notes to qualified purchasers under the US Investment Company Act. There were also certain structural considerations raised by the EU and UK securitisation regulation.”

“From a legal perspective, it was an interesting deal because there’s a wide range of highly technical substantive law, which required the input from specialists across the Clifford Chance network. We have the expertise across the globe and do a lot of sustainable financing work,” continued Deiner. 

“Recently we’ve advised on some market-leading and groundbreaking transactions in terms of bringing sustainability finance technology to capital markets transactions,” he added.

However, this deal, in particular, involved social governance goals. 

Deiner explained: “What we like about this particular transaction is that so much of the Environmental Social and Governance (ESG) agenda is about the environmental (E) angle, such as green bonds related to carbon transition and climate action. That encompasses sustainable  development goal 13 of the UN Sustainable Development Goals (SDG).”

“However, you rarely hear about sustainable finance transactions that focus on the S and the G in ESG, which IIX champions. Each of the sustainable development goals (SDG) has its own hue, its own colour. This transaction focusses on SDG 5, which is gender equality, and are referred to as Orange bonds – orange being the hue for SGD 5. In addition, IIX has developed its own framework and principles to really drive that S in the ESG,” he added.

Tracking societal impact

There is still a key issue on how to track the impact of where the money ends up.

IIX’s due diligence process includes interviews with beneficiaries and stakeholders of investees,  using its own digital impact assessment tool to incorporate input from a broad group of female beneficiaries. This verifies impact claims while giving a voice and value to the women it is assisting, according to Kraybill.

He continued: “Our selection process for projects funded through WLB6 closely aligns with the objectives of The Orange Movement. Each of the bonds in the WLB Series adheres to The Orange Bond Principles, which focuses on empowering women, girls, and gender minorities, particularly in climate action and adaptation.”

IIX looks at the potential of each project’s mission, vision, goals, and business structure, to evaluate alignment with the core values of the WLB Series and The Orange Movement. Its impact assessment team conducts due diligence to ensure selected projects meet criteria outlined by The Orange Movement and contribute to promoting gender equity and addressing climate challenges in emerging markets, according to Kraybill.

With the rise of bonds connected to ESG and DEI, the scrutiny from investors is also increasing, especially with the prevalence of greenwashing. 

Clifford Chance’s Deiner said: “The legal landscape for green bonds and sustainability-linked bonds has evolved considerably in recent years, particularly regarding due diligence. When a company issues a green bond under a green bond framework, substantial work is required to ensure the bond’s integrity. This diligence has become a critical factor in investment decisions, as investors need to be confident that the environmental credentials are genuine and not merely an instance of greenwashing.”

“One of the key parts of the Orange bond initiative is achieving transparency in the investment process and decision, and the subsequent reporting, as the proceeds are going to an issuer who is on-lending it again, to, for example, a microfinance lender. It’s a combination of seeking an investment return and a view on the credit profile. The funds have specific objectives regarding capital allocation, and the appeal of the Orange bond aspect aligns with this focus,” Deiner added. 

$10 billion goal

The IIX has an ambitious goal of mobilising $10 billion by 2030 and optimism abounds. 

Kraybill said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

“Partnerships with the Orange Bond Steering Committee organisations, like the Australian government’s Department of Foreign Affairs and Trade (DFAT), the UN Capital Development Fund (UNCDF), Nuveen, and others, are vital in this endeavour. Together, we aim to build a gender-empowered financing system, mobilise new capital, and accelerate progress toward gender equality and women’s empowerment globally,” Kraybill added.

The Orange Movement is also building “Orange Alliances” at regional and national levels to bring together gender lens investors and other stakeholders. IIX is conducting training programs to train and certify Orange Bond verification agents.

“We’re introducing an “Orange Seal” for MSMEs and other organisations, which enhances their gender, DEI, and climate bona fides. We have expanded our transaction tagging functionality to include innovative finance instruments that adhere to the Orange Bond Principles framework. Furthermore, we’re eagerly anticipating the launch of the Orange Loan Facility, alongside numerous other initiatives to further the Orange Movement’s mission,” Kraybill said. 

He said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

The next bond could potentially be much larger than WLB6’s $100 million. 

Clifford Chance’s Deiner is also optimistic: “There’s a flow of transactions that we’re going to see over the next 12 months, and this an area that people are paying more attention to. The transactions have grown considerably over the years. These transactions have involved deals from around $20 million up to the latest offering of $100 million. So, there is clearly increasing demand for these transactions each year.”

Standard Chartered declined to provide a comment for the article.


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IWD Deal Analysis: IIX’s WLB6 Orange Bond helping women’s livelihoods in Asia | FinanceAsia

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In a growing regional trend, December 2023 saw the sixth issuance of Impact Investment Exchange (IIX)’s Women’s Livelihood Bond (WLB) Series, the $100 million Women’s Livelihood Bond 6 (WLB6).

Altogether the IIX, since 2017, has raised $228 million to support women’s economic empowerment in Asia, with the overall trend in deal size on an upward trend. FinanceAsia discussed the investors, the rationale and the processes involved in order to celebrate International Women’s Day (IWD) 2024 on Friday, March 9 and the drive towards diversity, equity and inclusion (DEI) across the region. 

The closing of WLB6 marked the world’s largest sustainable debt security and was issued in compliance with the Orange Bond Principle and aims to uplift over 880,000 women and girls in the Global South.

Global law firm Clifford Chance advised Australia and New Zealand Banking Group (ANZ) and Standard Chartered Bank pro bono as placement agents.

Proceeds from WLB6 will be used to promote the growth of women-focused businesses and sustainable livelihoods across six sectors: agriculture; water and sanitation; clean energy; affordable housing; SME lending and microfinance across India, Cambodia, Indonesia, Kenya and Vietnam. 100% of the $100 million proceeds designed to advance UN’s Sustainable Development Goals (SDG) 5: gender equality and 25-30% designed to advance SDG 13 — climate action.

Robert Kraybill, chief investment officer, IIX, told FA: “The Women’s Livelihood Bond (WLB) Series is a blended finance instrument that pools capital from public-sector development finance institutions and private-sector investors. The public sector investors provide risk-tolerant “first-loss” capital in the form of subordinated notes, while the private sector investors purchase the senior bonds.”

“The WLB Series targets a range of private sector investors seeking a combination of high impact with low risk and an appropriate return. From the outset, beginning with the WLB1, the bonds have attracted both family offices and institutional investors. Initially, this was skewed towards family offices. As the WLB issuances increased, we saw increased interest from institutional investors, such that over 90% of the WLB6 was placed with institutions,” added Kraybill. 

For WLB6, there were global investors on the deal including from the US, Europe and Asia Pacific (Apac). The WLB6 bonds comply with the EU and UK securitisation regulations, making it easier for European institutional investors to participate. For example, one of the investors was Dutch pension fund APG Asset Management which invested $30 million.

Kraybill said: “Throughout building the loan portfolios for the WLBs – from sourcing and screening to due diligence – we integrate traditional credit criteria with impact criteria. We look to invest in companies meeting our credit and financial criteria while delivering meaningful positive impact.”

“We are proud that we have not experienced any payment defaults or credit losses on any of the WLB loan portfolios, demonstrating the resilience of the high-impact women-focused businesses that we work with, even in the face of challenges posed by the Covid-19 pandemic. The first two bonds in the WLB Series – WLB1 and WLB2 – have matured and been fully retired, meeting all of their obligations to bondholders,” Kraybill added. 

The IIX, which is headquartered in Singapore and has offices in Australia, Bangladesh, Brunei, India, Indonesia, the Philippines, Sri Lanka and Vietnam, also tracks the impact outcomes generated by its investment throughout the life of the bonds and reports on the targets. WLB1 and WLB2 exceeded impact projections, according to IIX.   

Complex deal

Given the number of parties involved and a myriad of regulations and compliance, the deal was not easy to put together. 

Gareth Deiner, partner at Clifford Chance, explained to FA the law firm’s role in the deal: “We’ve been involved for several years on these transactions, and this is not the first woman’s livelihood bond that the IIX team has put together.”

Singapore-based Deiner continued: “Historically, we have acted on the trustee side, but we have been advising the lead managers of the transaction for the last three offerings. It’s approximately a three to four month execution process to make sure we get the documentation agreed and the structure in place. IIX do the underlying due diligence on the borrowers, which is necessary given that the financing is raised from the international capital markets. Together with their counsel, they work on the disclosure in the offering document for the bond transaction.”

“As counsel to the lead managers, we are responsible for the underlying contractual documentation for the notes and the offering, but it’s IIX who retain control over the loan documentation with the notes proceeds end-users, and putting the loan pool together. They’re doing due diligence on the on the underlying borrowers of the deal,” he explained. 

This is backed up by IIX’s due diligence. IIX’s Kraybill explained: “The financial due diligence conducted by our credit team is similar to that of other emerging market lenders. What sets us apart is the upfront impact due diligence and ongoing impact monitoring and reporting conducted by our impact assessment team. Our team screens potential investments against rigorous eligibility criteria to ensure they contribute to positive outcomes for underserved women and gender minorities in the Global South while often empowering women as agents of climate action.”

Navigating US legal rules and dealing with investors from around the world also added to the complexity. 

Deiner said: “Dealing with a wide range of investors, including qualified institutional buyers in the US, we needed to comply with US federal securities law, including limiting the sale of the notes to qualified purchasers under the US Investment Company Act. There were also certain structural considerations raised by the EU and UK securitisation regulation.”

“From a legal perspective, it was an interesting deal because there’s a wide range of highly technical substantive law, which required the input from specialists across the Clifford Chance network. We have the expertise across the globe and do a lot of sustainable financing work,” continued Deiner. 

“Recently we’ve advised on some market-leading and groundbreaking transactions in terms of bringing sustainability finance technology to capital markets transactions,” he added.

However, this deal, in particular involved social governance goals. 

Deiner explained: “What we like about this particular transaction is that so much of the Environmental Social and Governance (ESG) agenda is about the environmental (E) angle, such as green bonds related to carbon transition and climate action. That encompasses sustainable  development goal 13 of the UN Sustainable Development Goals (SDG).”

“However, you rarely hear about sustainable finance transactions that focus on the S and the G in ESG, which IIX champions. Each of the sustainable development goals (SDG) has its own hue, its own colour. This transaction focusses on SDG 5, which is gender equality, and are referred to as Orange bonds – orange being the hue for SGD 5. In addition, IIX has developed its own framework and principles to really drive that S in the ESG,” he added.

Tracking societal impact

There is still a key issue on how to track the impact of where the money ends up.

IIX’s due diligence process includes interviews with beneficiaries and stakeholders of investees,  using its own digital impact assessment tool to incorporate input from a broad group of female beneficiaries. This verifies impact claims while giving a voice and value to the women it is assisting, according to Kraybill.

He continued: “Our selection process for projects funded through WLB6 closely aligns with the objectives of The Orange Movement. Each of the bonds in the WLB Series adheres to The Orange Bond Principles, which focuses on empowering women, girls, and gender minorities, particularly in climate action and adaptation.”

IIX looks at the potential of each project’s mission, vision, goals, and business structure, to evaluate alignment with the core values of the WLB Series and The Orange Movement. Its impact assessment team conducts due diligence to ensure selected projects meet criteria outlined by The Orange Movement and contribute to promoting gender equity and addressing climate challenges in emerging markets, according to Kraybill.

With the rise of bonds connected to ESG and DEI, the scrutiny from investors is also increasing, especially with the prevalence of greenwashing. 

Clifford Chance’s Deiner said: “The legal landscape for green bonds and sustainability-linked bonds has evolved considerably in recent years, particularly regarding due diligence. When a company issues a green bond under a green bond framework, substantial work is required to ensure the bond’s integrity. This diligence has become a critical factor in investment decisions, as investors need to be confident that the environmental credentials are genuine and not merely an instance of greenwashing.”

“One of the key parts of the Orange bond initiative is achieving transparency in the investment process and decision, and the subsequent reporting, as the proceeds are going to an issuer who is on-lending it again, to, for example, a microfinance lender. It’s a combination of seeking an investment return and a view on the credit profile. The funds have specific objectives regarding capital allocation, and the appeal of the Orange bond aspect aligns with this focus,” Deiner added. 

$10 billion goal

The IIX has an ambitious goal of mobilising $10 billion by 2030 and optimism abounds. 

Kraybill said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

“Partnerships with the Orange Bond Steering Committee organisations, like the Australian government’s Department of Foreign Affairs and Trade (DFAT), the UN Capital Development Fund (UNCDF), Nuveen, and others, are vital in this endeavour. Together, we aim to build a gender-empowered financing system, mobilise new capital, and accelerate progress toward gender equality and women’s empowerment globally,” Kraybill added.

The Orange Movement is also building “Orange Alliances” at regional and national levels to bring together gender lens investors and other stakeholders. IIX is conducting training programs to train and certify Orange Bond verification agents.

“We’re introducing an “Orange Seal” for MSMEs and other organisations, which enhances their gender, DEI, and climate bona fides. We have expanded our transaction tagging functionality to include innovative finance instruments that adhere to the Orange Bond Principles framework. Furthermore, we’re eagerly anticipating the launch of the Orange Loan Facility, alongside numerous other initiatives to further the Orange Movement’s mission,” Kraybill said. 

He said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

The next bond could potentially be much larger than WLB6’s $100 million. 

Clifford Chance’s Deiner is also optimistic: “There’s a flow of transactions that we’re going to see over the next 12 months, and this an area that people are paying more attention to. The transactions have grown considerably over the years. These transactions have involved deals from around $20 million up to the latest offering of $100 million. So, there is clearly increasing demand for these transactions each year.”

Standard Chartered declined to provide a comment for the article.


¬ Haymarket Media Limited. All rights reserved.

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Parliament passes Bill to enhance MAS investigative powers over financial sector

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ADDED Rights OF SUPERVISORY PERFORMANCE

In contrast, the proposed amendments may give MAS more authority to issue directions to licensees of illegal company, such as Bitcoin prospects and other transaction key derivatives traded on foreign exchanges.

According to Mr. Tan, for unregulated businesses may be a source of contagion risk because they could lead to adverse effects on a capital markets services license holder’s ability to fulfill its customer obligations in a controlled business.

Customers may not be aware, he added, that regulation protections do not apply to a license owner’s illegal companies.

” While MAS has issued guidance to ( capital markets services license holders ) on risk mitigation measures and safeguards that they should adopt when conducting unregulated businesses, we should put these on a clear legal footing,” Mr. Tan told the House.

In response to the Bill, MAS will be able to challenge legally binding directives regarding the minimum requirements and safeguards that license holders and their representatives should have in place when conducting illegal businesses.

The new regulations, among others, may strengthen MAS ‘ administrative and inspection authority.

These include the appointment of senior executives and their removal, the appointment of additional auditors, and the appointment of agents by international regulators to evaluate specific financial institutions. &nbsp,

MPS RAISE QUESTIONS

Members of Parliament ( MPs ) backed the bill, but they also expressed concerns about the regulator’s expansion of its investigative powers.

For instance, Mr. Edward Chia ( PAP- Holland- Bukit Timah ) said that the potential for MAS to activate grounds without a warrant has” sparked a apparent sense of concern.”

” We must recognize and address these concerns actively, describe the need for these capabilities, and discuss why MAS cannot simply apply for a permit to enter,” he said. &nbsp,

Mr. Chia inquired if there are any safeguards in place to stop use, noting that such a estimate is not popular in other financial centers like Hong Kong.

Mr. Tan responded that the MAS must be able to properly investigate prospective breaches without a warrant.

There will be instances where a suspect wo n’t be present, raising the possibility that the evidence will be destroyed or concealed, even though legitimate financial institutions may cooperate by providing important evidence to the MAS.

Therefore, a more robust strategy may be required for these situations, according to Mr. Tan, adding that it is” never necessary for the court to act as a guardian” whenever the MAS wishes to practice for capabilities.

However, safety measures are in place, such as the requirement for the MAS to give two days ‘ notice before entering premises without a warrant.

The MAS is only permitted to do so in situations where there are legitimate grounds to believe a suspect is occupying the premises, or where the MAS has taken “reasonably sensible steps” to give notice to the occupant of the grounds but was unable to do so.

Another safeguard concerns how MAS may not be able to acquire information after entering the premises without a permit. It will need to apply to the judge for a permit to enter the premises and capture data if it wishes to do so.

“MAS will determine whether obtaining access without a warrant will probably lead to cooperation in the production of the important evidence.” MAS may choose to apply for a jury subpoena to enter grounds and capture evidence in the event that the cooperation is determined to be in vain, he said.

According to Mr. Tan, Singapore does not have a special right to enter grounds without a permit. In some circumstances, such as anti-money fraud investigations, financial officials in the United Kingdom, Australia, and Canada have the authority to do so. &nbsp,

Singapore’s attractiveness as a financial gateway is unlikely to be impacted by the extension of MAS’s investigative powers, he added, because the authority’s authority now has access to this authority through a number of Acts, he added.

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Motorist appoints Angela Poh as deputy CEO  

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  • takes the new status as of March 1st, 2024.
  • Former Motorist’s general revenue official

Motorist appoints Angela Poh as deputy CEO  

With the appointment of Angela Poh ( pic ) as the company’s deputy CEO effective on March 1, 2024, Motorist, a leader in automotive technology solutions, has made an important contribution to female empowerment in Singapore’s increasingly important digital sector.

The development of a competent female professional in a rapidly expanding Singaporean company is fast and positive in light of International Women’s Day on March 8. In addition to their achievements as equal in household units, community groups, and nation as a whole, it demonstrates women’s improvement in their chosen careers.

Poh’s visit to the second-in-command senior management position at Motorist is in line with the White Paper on Singapore Women’s Development, which calls for organizations to represent the country’s political principles of fairness, awareness, and progressivity. Poh has then joined the female population in Singapore in management positions. In 2021, the highest share of Taiwanese companies was held by a female CEO, according to a Deloitte statement.

Poh formerly held the position of managing Motorist’s revenue streams as the main earnings officer. The Straits Times and German-based global research agency Statista have compiled a list of Singapore’s leading 100 fastest-growing businesses for three consecutive years.

The electronic startup is presently operating in Vietnam, Malaysia, Thailand, Singapore, and Vietnam.

As the newly appointed co-driver of the company, Poh declared,” As the newly appointed co-driver of the business, I did do my best, together with all my acquaintances, to expand the business further, not only in Singapore where it all began nine centuries ago, but also in our other Asian industry.”

CEO of Motorist, Damian Sia, said,” Poh’s well-earned advertising will allow me to concentrate more on Motorist’s regional growth. By 2026, we intend to expand our world-class electrical services and excellent game to six additional nations, starting with the Philippines.

Prior to joining Motorist, Poh worked for American Express for more than 15 times, with her last position focusing on the development of the local professional payments firm. She is married, has two babies, and graduated from Australia’s Murdoch University with a bachelor’s degree in commerce.

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Blue Pacific Initiative needs to step up its game – Asia Times

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The Partners in the Blue Pacific ( PBP ) Initiative, which was launched by the US in June 2024, includes three partner nations ( South Korea, France, and Germany ) as well as four other member states ( Australia, Japan, New Zealand, and the United Kingdom ).

While doing so, US social divisions threaten to stop funding for Ukraine or a government shutdown, which are both situations that dominate news coverage. The US’s commitment to the Compact of Free Association ( COFA ) agreements with the Federated States of Micronesia, Marshall Island, and Republic of Palau is also in danger due to these political divisions.

The US provides financial assistance under the COFA contracts, and in exchange, it grants strategic denial rights, preventing other nations ‘ forces from entering these nations ‘ lands.

Beyond COFA, the issues facing the Pacific Islands and US roles there are more profound. Regardless of registration, the difficulties may endure. However, if the US does n’t provide those funds, it will greatly increase the value of the PBP and the need to reevaluate its function.

Forgetting a azure globe

The Partners in the Blue Pacific is an open, informal organization that brings up a number of like-minded countries to create a productive, open, and effective development model for the Pacific Islands, reiterating the long tradition of compassion these companion countries have with the area.

PBP supports the Pacific Islands Forum’s vision of the Blue Pacific Continent, which envisions the Pacific Islands as the first “blue continent” and a” Sea of Islands” connected by the sea, giving them a fresh sense of ownership, strength, and trust.

By presenting andnbsp, six arenas of assistance ranging from fostering climate change resilience to people-centered growth and security, it demonstrates awareness to the needs and interests of the area countries.

Most considerably, the PBP steers clear of any attempt to promote a protection alliance that might disrupt the Pacific Islands ‘ local harmony and unity. It gives the Pacific Islands a “guiding” place in policymaking by adopting a non-traditional safety perspective.

PBP has had a mixed bag of benefits in the two years since its release.

Achievements

The PBP has contributed more than US$ 2 billion in development aid since its inception each year. Additionally, France and PBP member countries have pledged$ 55 million to increase disaster resilience through the Pacific Humanitarian Warehousing Program under the Nadi Bay Declaration and the 2050 Blue Pacific Strategy.

To conduct ocean and fisheries research, at least$ 22 million has also been set aside to construct a research vessel in the Pacific. In order to combat IUU Fishing in the area, PBP has also worked with Pacific Islands and local companies like the Forum Fisheries Agency.

The Pacific Cyber Capacity Building and Coordination Conference ( P4C ) was set up by the PBP to help the region pool resources and exchange best practices in order to improve cybersecurity in the region. This is a top priority under the Boe Declaration and the 2050 Blue Pacific Strategy.

The mate countries for the Pacific Islands have also increased their efforts at the regional level ( aside from those that are associated with the PBP).

During the Solomon Islands ‘ national elections, Australia fiscally supported the country’s Solomon Islands, as well as investing in the Coral Sea Cable, which helps bridge the modern break. Further, the Albanese government announced a special visa type for Tuvalu environment refugees.

India’s engagements in the fields of health care, security, and clean energy have also increased.

The Pacific Islands ‘ near relationship with New Zealand appears to have changed. Some people speculate and speculate that the new state under the leadership of Prime Minister Chris Luxon may length Wellington from the needs of the area as it seeks to strengthen military ties with the Anglosphere, while ignoring guidelines on indigenous rights and climate change.

On the other hand, Canada accords, in its 2022 Indo-Pacific Strategy, an important place to the Pacific Islands in order to develop female international assistance plans in line with the PBP. The United Kingdom reiterated its aid for the 2050 Blue Pacific Strategy and promised greater participation in areas of climate change, security, and economic growth.

One of the largest  contributors to the area, Japan, often convenes the Pacific Island Leaders ‘ Sessions, and it has identified  five priority areas  in engagement, including Covid response and recovery, green sea based on the rule of law, climate change and disaster resilience, and human resource development.

South Korea has also increased its footprint in the Pacific region by providing “green” official development aid at bilateral, multilateral, and international levels ( with the United States and Japan ).

Even though the Pacific Islands do not have strongly in its 2020 Indo-Pacific rules, Germany has pledged to “tangibly step up its activities.”

COFA crisis

The Pacific Islands and the US part there are facing the most significant of all issues, including the United States ‘ failure to provide funding for the Pacific archipelago under the Compact of Free Association partnerships.

The People’s Republic of China has already taken action to make the most of the possible hole,  approaching Palau with promises to improve its tourism industry by “filling every resort space” and creating more equipment. Surrangel Whipps, president of Palau, warned Washington that continued inaction had “play into the arms of the CCP.”

Following Kausea Natano’s battle in the January general elections, it is thought that Tuvalu might change diplomatic ties with Taiwan.

Another difficulties

Additionally, the Solomon Islands, which signed a security agreement  with Beijing in 2022, disagreed with the speech made at the 2022 South Korea- Pacific Islands Summit in Fiji. Honiara&nbsp, while highlighting the importance of Pacific regionalism, dissented from the notice of Seoul’s Indo-Pacific Strategy in a separate speech.

According to the new dreadful finding of up to 50 dead bodies in Papua New Guinea’s Enga province&nbsp, ethnic tensions continue to be a significant source of social instability.

Social volatility in Vanuatu next year similarly revealed  the region’s weak political institutions, as well as how the US-China rivalry affects the Pacific Islands, seriously tarnishing  regional unity.

Sea level rise brought on by climate change is not showing any signs of abating. Predictions&nbsp&nbsp&nbsp  indicate that Tuvalu may bury within a era. Some young Tuvaluans now harbor resentment toward living conditions and fear that the island will become uninhabitable in ten years.

Food insecurity is further aggravated by climate change because 80 % of Pacific Islanders rely heavily on survival and semi-subsistence farming, which is highly dependent on climatic conditions. Additionally, ocean warming is expected to reduce the monthly fish catch by roughly 40 % by 2050, and the Pacific Islands countries would suffer the most as a result.

The direction that lies back

Development aid through the PBP becomes extremely important and needs to be stepped up right away in light of the United States ‘ continuing failure to approve resources.

Additionally, the PBP countries may comprehend the fundamental factors that contribute to the Pacific Islands ‘ propensity to be drawn to China by cash. As the case of Nauru&nbsp illustrates, Beijing’s financial assistance is seen as crucial not just to replenish the bank accounts but also to address pressing economic issues that many countries in the region face.

The Pacific Islands continue to suffer from economic dependency, which is further exacerbated by climate change. They have been relegated to&nbsp, MIRAB&nbsp, ( migration, remittances, aid, and bureaucracy ) status for the majority of their history.

They see help promises from China as a short-term, albeit fast solution as sea levels rise, meals resources decline, and markets decline. Pacific regionalism continues to be a cherished perfect despite the challenges. PBP nations must be very careful not to undertake any plan that comes across as desire to meet sides in great power politics.

Not all cases of doubts about the reliability of the West in the area were sparked by China, it should be noted. Long before China’s passage, thelingering effects of radioactive testing, a lack of appropriate compensation, and other issues were up in arms. China may, at best, worsen the already-present disenchantment given its long-standing European ties to the Pacific Islands.

Therefore, the PBP countries must go beyond just political visits and call for climate change to take decisive actions to improve potential in the area, including improving the health and education infrastructure, encouraging women and youth empowerment, and encouraging media literacy, so that nations in the region can certainly advance on the path of political consolidation.

The Pacific Islands ‘ need for more scholarships , for its youth , better visa mutual arrangements  must also be addressed. This requires better PBP nation coverage cooperation.

Environmental assistance with China also benefits the region in terms of both achieving the region’s broader development objectives and reducing lingering geopolitical tensions, where the Pacific Islands may be hardest hit.

The Pacific Islands can benefit from Beijing’s technological advancement in developing&nbsp, innovative sources of water and&nbsp, ultra-deep liquid oil fields&nbsp, and green growth. The PBP must maintain its empty nature by cooperating with allies and partners, including friendly non-membred, non-participating nations like India and Canada, as well as any nation that is willing and able to assist the Pacific Islands in meeting their needs.

Additionally, cooperation with the Pacific Islands should n’t be slowed down by a diplomatic stance toward China. They may be prepared to serve any democratically elected government in the same manner.

Great energy competition’s proper uncertainty has put the region’s reputation on the line for genuine friendship. The PBP countries should now appear as stronger friends.

Cherry Hitkari, a non-resident Vasey yellow and young leader at Pacific Forum, was the original author of this article, at ( [email protected] ). It can be republished these with authority.

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Plan afoot to develop domestic medicines

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PUBLISHED : 7 Mar 2024 at 04:22

The National Committee on Drug System Development has agreed to support the manufacture of innovative domestic drugs to reduce reliance on medicines from overseas.

Deputy Prime Minister Somsak Thepsuthin, who chaired the latest committee meeting, said the panel has decided to develop drug manufacturing plants at a cost of over 10 billion baht, to reduce reliance on imported drugs.

A bill to promote the health and wellness economy in overseas markets will also be drafted, he said.

The committee previously announced a 2023-2027 Drug System Development plan. The key objectives are enhancing research and development to promote local ingredients and herbs for drug manufacturing.

The plan is expected to reduce drug imports while strengthening the capacity for drug exports in international markets and supporting better drug access for the public.

Reasonable pricing for medical care, a more efficient and fairer system for drug access, and integrated information system management are also part of the plan.

Mr Somsak said a team of experts is drafting a bill which will be the first piece of legislation supporting the manufacture of domestic drugs.

“We expect a domestic drug manufacturing industry will create significant income for the country,” Mr Somsak said.

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