In a parliamentary election likely to test President Mohamed Muizzu’s tilt toward China and away from India, the luxury tourism hotspot’s traditional benefactor, the voting started on Sunday ( Apr 21 ). Muizzu, 45, who cast his vote at the Tajuddin class in Male, one of the first to castContinue Reading
The rectangular balance of power between China, India, and the US may change after two elections this time.
After the American elections, which are scheduled for April 19 to June 1, Prime Minister Narenda Modi is expected to be reelected. Donald Trump, who is vying for re-election as US senator in November, and Modi have a close connection.
During his first term as president, Modi established a close connection with Trump. Both men have powerful political credentials, own larger- than- living personas and concentrate on immigration policies. If Trump and Modi are elected, India-US relationships are most likely to be stronger than ever.
However, the China- US connection is not doing well. Trump’s taxes, which remained in place throughout Biden’s president, may be increased if Trump re-enters the White House. Trump stated in an interview with Fox News ‘ Sunday Morning Futures that tariffs on Chinese products may rise to 60 % if he is re-elected.
But that’s not all. Trump wants to increase US dependence on the Chinese business by doing so.
Additionally, it is likely that Trump will do the same under his second administration because he prohibited US companies from funding Chinese companies that may compromise US stability during his first presidency.
China needs foreign aid to strengthen its ailing business and boost exports as the country’s children poverty rate is still high at 14.9 % and the economy’s is weakening. However for Beijing, Trump’s plan would not only harm China’s economic treatment, but US restrictions on American tech companies from investing in China may also harm Beijing’s efforts to become a world leader in synthetic knowledge by 2030.
The high tariffs imposed on Chinese goods offer enormous trading options for India, despite Trump’s intentions to impose a baseline tax of 10 % on all imports. US businesses will look to expand their supply chains by sourcing products from abroad as the US economy becomes more disconnected from the Chinese market.
India is poised to become China’s solution for three factors:
Given how Beijing’s influence in southern Asia has increased as a result of the Belt and Road Initiative, China’s effort to build a global business networking, advancing ties with the US would be well received by Delhi.
The US has always been interested in supporting India as a” counter to China,” and it works with the security organization the Quad, which has four people: the US, India, Japan, and Australia, to halt China’s effect.
Trump imposed a 25 % tariff on Chinese imports in January 2018, starting an unprecedented trade war with China. Beijing retaliated by imposing its personal taxes on US products, and Sino-US relationships deteriorated culminating in the 2019 recalls of Chinese giant panda from the San Diego zoo in California ( a highly symbolic sign by the Chinese government ).
The taxes, which duty Chinese imports, were supposed to protect American interests. However, US consumers and businesses have had to spend more for items because the US economy depends heavily on Chinese exports. By 2019, Trump’s taxes cost the US an estimated 300, 000 tasks. The US business shrank, and in 2020 the taxes cost the US a staggering US$ 316 billion.
Beijing is worried about a second Trump presidency. Since 2018, China has sought to minimize the effects of Trump’s trade conflict by adopting a plan of self- reliance. This resulted in a decrease in China’s imports of production inputs into the high tech, electric, and automotive sectors.
However, China’s ability to minimize its dependence on the international community is highly limited. According to experts, the Chinese leadership is aware of this, and Xi’s main motivation for attending the Asia-Pacific Economic Cooperation meeting in San Francisco was to rekindle ties with the West and entice much-needed foreign investment.
The phrase” The Supreme Art of War is subdue the enemy without fighting” was a well-known line from the Chinese classic Sun Tzu’s Art of War in 2012. But if he had read the rest of Sun Tzu’s work, he would be aware of the following:” When you surround an army, leave an outlet free. Avoid pressing a desperate opponent too hard.
Trump should realize that Washington’s increased aggression towards China may only undermine Taiwan’s security. Beijing’s desire to unite with Taiwan was largely a nationalistic exercise meant to legitimize the “one China policy.” Given the island state’s advancement in semiconductor technology and China’s current economic problems, the need to acquire Taiwan has transcended historical fervor to economic desire.
Artificial intelligence is important because it will confer major economic, technological, and military benefits to China. China needs to acquire semiconductor chips if it wants to be the world’s AI leader by 2030. China may forcefully occupy Taiwan if it ca n’t access that through trade.
Chee Meng Tan is a visiting assistant professor of business economics at the University of Nottingham in Malaysia.
The Conversation has republished this article under a Creative Commons license. Read the original article.
The Maldives ‘ , current turn toward China and apart from India , has boosted Beijing’s lengthy- term push for local control and disrupted New Delhi’s ambition to match Chinese proper competitiveness in the Indo- Pacific.
On , March , 12,  , the Island began setting in motion the expulsion of American forces on the island, ordered by President Mohamed Muizzu.
China’s diplomatic ties with the Maldives and China’s strengthening also mean that Beijing is well on its way to become local supervisor.
China’s broad Belt and Road Initiative, launched in 2013, presents Beijing as the Indo- Pacific’s strong power, with the Maldives having been one of the primary countries to visit.
The , Digital Silk Road, a premier task of Belt and Road, epitomizes Beijing’s purpose to lead the development of international communication, led by Chinese technology companies and telecommunications networks.
The Maldives are a key component of the online strategy. The islands ‘ geostrategic site is , essential to China’s plan , to create a maritime route linking China’s maritime areas to Southeast Asia, the Indo- Pacific, Africa and above. The International Community is exposed to a significant security and espionage risk from the Digital Silk Road, which could allow China to sing king of the castle in one of the world’s most proper locations.
China’s new stirring of discussion, over its usage of , maritime patrols near Taiwan as well as a , continued standoff , with the Philippines, has generated local security issues. Against this backdrop of confrontation, the Maldives remains an ambitious partner of Beijing.
Over a decade ago, when Belt and Road was announced, a subsidiary of Huawei , signed an agreement with the Maldives , to build technological infrastructure in the archipelago, in a project called” SMART Maldives”.
This enormous initiative is slated for completion on the island of Hulhumalé, a region of the North Malé Atoll. With investment from the , China Development Bank, the , Maldivian Housing Development Corporation – a state- owned enterprise – is set to bring the smart city to life.
Without massive investment from China’s state banks, in the billions of dollars, the SMART Maldives project would not be possible. While there is little mention of China’s involvement by the Housing Development Corporation, China’s heavy influence in the project cannot be masqueraded. Despite being , advertised by the Maldivian government , as an eco- friendly and fully sustainable city, Hulhumalé is in its essence another means for China to extend its network of influence across the region and the greater world.
In February, a Chinese research vessel , made a stop at a Malé port,  , raising concerns about China’s potential future use of the Maldives as a waypoint for conducting intelligence- gathering missions in the region. The ship,  , Xiang Yang Hong 03, spent weeks  , patrolling waters near India and Sri Lanka as well as the Maldives.
In 2021, during a previous voyage,  , Indonesian authorities claimed , the same ship turned its tracking system off multiple times.
On X ( previously Twitter ), the independent, open-source intelligence analyst known as “WLVN” on X ( formerly Twitter ) made a warning on March 6 that China planned to provide the Maldives with maritime surveillance systems. A defense pact signed by Beijing and Malé on March 4 approved sending non-lethal military equipment to the Maldives, despite its difficult to verify this claim.
Collaboration in military exercises and the sharing of bilateral maritime intelligence may be a result of the Maldives ‘ continued use as a Chinese maritime hub along the Digital Silk Road.
For China, the Digital Silk Road offers multifaceted benefits. Through extensive market capture, it is a means of expanding Beijing’s national tech corporations in terms of both influence and revenue.
Companies like Alibaba and Huawei, which already have significant footholds in Southeast and West Asia, have agreements with their host countries for servicing and operation, bringing money into China. With this money, Beijing is able to increase its domestic technological potential.
China will also gain a foothold in an increasingly strategic geopolitical area thanks to its increased connectivity in the Indo-Pacific. Chinese companies are investing in and financing the development of Indo-Pacific information and communications technology, which consists of various types of physical infrastructure, in the name of the Digital Silk Road.
Beijing has participated in the development of artificial intelligence and facial recognition technology, as well as the installation of fiber optic cables and the export of 5G technology to the region.
The , Maldives- Sri Lanka Cable, built by , HMN Technologies , ( formerly Huawei Marine Networks ) cost$ 22 million and , uses Hulhumalé , as a landing station. HMN has, since 2020,  , completed 16 undersea cable projects , across 27 countries in the Indo- Pacific, valued at$ 1.6 billion total.
Thus, the Maldives is a growing main market for China for fiber-optic communications in the Indian Ocean region. Beijing’s looming presence as overman in the Indo-Pacific is evidenced by China’s dominance in the regional information and communications tech sector.
Meanwhile, the international community has grown wary of China’s potential exploitation, for malicious use, of the data transmitted across the infrastructure it develops. Such a concern has  , been raised , by the United States.
China’s” smart cities” concept, which Beijing has offered to partner countries under Belt and Road, includes the deployment of thousands of CCTV cameras, developed by companies Dahua and Hikvision, both Chinese. According to the , Observer Research Foundation, 861 cameras have already been erected in the Maldives.
According to reports that Dahua-produced cameras used in European countries to analyze skin color, there are concerns about cybersecurity and espionage related to China’s use of surveillance cameras. Products from both , Dahua , and Hikvision have been deployed in China’s Xinjiang region and have been linked to , human rights violations. These concerns were exacerbated by China’s capacity to deal with the Maldives ‘ nefarious use.
China’s buildup of technological power across the Indo- Pacific region underscores the pace at which Beijing is participating in a , global techno- nationalist race , for control over the , emerging technology industry.
China wants to supplant Western influence in the world’s information and communication technology market by competing with the United States and aiming to do so as much as possible. Beijing’s” Made in 2025” initiative is emblematic of this desire. China is adamant about having a hand in every region of the world, gaining a foothold in physical ICT infrastructure, and promoting the sale of emerging technologies, which it consider to be of great value in terms of geopolitical influence.
There is no better way for Beijing to accomplish this than to invest in Belt and Road flagship projects while also strengthening diplomatic ties with partner governments and moving ahead in the global competition.
There is no reason to reject China’s ambitious projects for small nations like the Maldives, which are dependent on international economic agreements. One of the many nations that China wants to collaborate with is the Maldives. China’s Belt and Road interest, which has risen in intensity over the past few years and will undoubtedly increase, is the emerging Indo-Pacific market.
The Maldives has emerged as a stronghold for Beijing’s expansion as the world’s leading techno-nationalist power, and Chinese technology is a cornerstone of digital authoritarianism. Even if Beijing is ultimately promoted as a hegemonic leader of the Indian Ocean region, Malé is prepared to engage with China to diversify its economic and political agenda.
Joshua Bowes ( [email protected] ) is a research associate at the Millennium Project’s South Asia Foresight Network ( www. southasiaforesight. org ) in Washington, DC, focusing on South Asian security challenges, political conflict and the confluence of extremism and technology.
This article was first published by Pacific Forum. It is republished with permission.
Auqib JaveedIn India’s higher- level Ladakh region, roughly 1, 500 Monks are protesting in thread- zero temperatures. The government made a long-standing requirement for a region split from Indian-administrated Kashmir in 2019 in line with their long-term commitment. But since 2020, they have usually taken to roads, accusing the government of “betrayal” and unkept guarantees. Auqib Javeed reports on what’s changed.
Ladakh, India’s northeastern- most area, is a plain inhabited by 300, 000 persons from the Muslim and Buddhist areas. Buddhists are the main religion in the Leh area, while Shia Muslims live there in the Kargil area.
The Buddhist area has long pleaded for a split place for its citizens, while those in Kargil have long desired to be integrated with the Muslim-majority region of India-administrated Kashmir.
The previous state of Jammu and Kashmir received special status and considerable autonomy under Article 370 of the constitution in the government of Prime Minister Narendra Modi’s administration in 2019.
Ladakh and Jammu and Kashmir, which are both officially administered lands, were then divided into two parts.
” We were demanding a separate place with a legislature”, says Chhering Dorjey Lakrook, a former Buddhist president from Leh. ” But we were granted simply a federally controlled country”.
The move also sparked fears that it would have an impact on the country’s culture and identity because it made it simpler for those from outside the area to purchase land in the area. People in Ladakh, who rely mostly on agriculture, were affected by the move.
According to India’s house government, as of 5 April 2023, no American firm had invested in Ladakh in the past three years, nor had everyone from outdoors purchased any property.
However, occupants are still concerned about an flow, as is the case in Jammu and Kashmir, where, according to data, 185 outsiders have purchased land between 2020 and 2020.
In 2020, Kargil and Leh districts joined hands and formed the Leh Apex Body ( LAB) and Kargil Democratic Alliance ( KDA ), aimed at addressing people’s concerns. Numerous civil society organizations have staged huge demonstrations against the federal government.
Their needs include independence for Ladakh, work, security of their land and resources, and a political couch each for Leh and Kargil regions.
Additionally, they want the Sixth Schedule to be implemented, a constitutional clause that allows cultural people to form independent organizations that create laws governing area, heath, and agriculture. Nearly 97 % of Ladakh’s community is cultural.
Chhering Dorjey Lakrook, who served as president of India’s ruling Bharatiya Janata Party ( BJP) until 2020, claims that” The Sixth Schedule was intended to protect the rights of indigenous and tribal groups.” This, he adds, may save them from abuse by businessmen.
Locals claim that no progress has been made despite the national home ministry’s establishment of a committee to examine these demands.
Young people in the area are also concerned about the lack of state employment.
Since 2019, there has n’t been a single person hired in a senior government position, according to Padma Stanzin, the head of the Ladakh Students ‘ Environmental Action Forum ( Leaf ). ” We fear our work will be taken over by newcomers”, she adds.
Ladakh’s BJP MP Jamyang Tsering Namgyal did not respond to BBC’s ask for opinions.
Ladakh, which borders both China and Pakistan, two nations that have strongly opposed India’s choice to withdraw Article 370, holds a significant geostrategic significance for the country.
While an ongoing armed rebellion against Delhi’s concept started in the late 1980s in the Indian-controlled Kashmir, the militancy never reached Ladakh.
Residents of Ladakh volunteered their help by providing American soldiers with food and other necessities during the Kargil War with Pakistan in 1999.
People are now unsure if they are willing to pay the price for being “loyal.”
” The nature of that voluntarism will not be if the state hurts the sentiments of the people”, says Sonam Wangchuk, an expert, entrepreneur and environment activist, who has worked for years to solve local community needs.
Mr. Wangchuk, who gained notoriety after Bollywood star Aamir Khan starred in a character based on him in the blockbuster Three Idiots in 2009, is fasting for 21 days to remind the government of its commitments to protect Ladakh’s environment and tribal indigenous culture.
People of Ladakh, he says, have offered support to Indian soldiers, including to personnel from the plains who have struggled to adapt to high altitude. ” Any kind of disturbance will impact this spirit”, he adds.
Experts say China and Pakistan would watch for any sign of “weakness” in the region.
” Unrest and discontent, especially if sustained, is something that Beijing and Islamabad could try to exploit”, says Michael Kugelman, director of Washington- based think- tank South Asia Institute at the Wilson Centre.
Beijing refused to acknowledge the declaration of Ladakh as a federally administered territory in 2019. The region lies along the disputed 3, 440km (2, 100 mile )- long de facto border along the Himalayas- called the Line of Actual Control, or LAC- which is poorly demarcated.
After their forces clashed in the Galwan river valley in Ladakh, which left at least 20 Indian soldiers dead, tensions between India and China have been high since then.
Both Delhi and Beijing increased troop movement following the clashes and constructed extensive military installations along the LAC. China launched incursions in Ladakh, claiming over 1, 000 sq km of India- claimed territory. India has repeatedly denied China’s claim.
Local grievances have grown worse as a result of Chinese soldiers ‘ incidents en route to Ladakh and preventing residents from grazing their herds.
A group of neighborhood herders were prevented from transporting their cattle to traditional grazing lands close to the LAC in January, sparking a fight between local Chinese People’s Liberation Army ( PLA ) soldiers.
Mr. Kugelman contends that while India cannot afford an unstable Ladakh, it is also impossible to change the things that were changed in 2019.
Delhi has always believed that any disputes and instability in the affected regions would be resolved with the repeal of Article 370 and any related actions.
” Changing the status of Ladakh and granting it statehood would undermine that position and raise questions about the merits of making those moves back in 2019,” he says.” That’s not the impression Delhi would like to convey,” he says.
This is most likely the reason India refuses to grant local government in Ladakh, according to Praveen Donthi, a senior analyst for the International Crisis Group, a Delhi think-tank.
Since the Galwan clash, the LAC has become unstable, he claims, and the government would probably prefer to tread cautiously.
Residents of Ladakh hope that the strength of their unity, which is the collective action by the Muslim and Buddhist communities, will eventually force the authorities to address their grievances.
” Our unity will compel the government to hear us and address our demands”, says Jigmat Paljor, a student- activist in Leh. ” They ca n’t ignore us for too long”.
In recent years, global food security has suffered from overlapping problems caused by problems, political tensions, climate change, and the Covid- 19 pandemic, resulting in severe foods provide problems.
These problems have been made worse by a number of “food causeways,” such as those that Yemen-based Houthi soldiers have attacked merchant boats and have hampered food shipments through the Suez Canal.
The transport visitors through the Panama Canal has decreased expected to , drought , which likewise hit river transport systems like as the , Mississippi River , and the , Rhine River.
The emphasis on particular transport routes makes the pressure on global food security even more pressing because the global food system is already becoming increasingly dependent on the movement of meals from a few key “breadbasket” exporting areas to food-deficit locations around the world – frequently through these “food chokepoints”
It furthermore impacts agricultural goods profitability, shipping schedules, as well as food supply and prices. Longer delivery periods even put perishable foods at hazard, while , shipping disruptions , such as changes to shipping schedules stress cargo management and street transport sectors, causing major delays.
For both food- exporting and importing countries, challenges loom. Exporting nations may experience profit margin pressures, which lower the cost of production while importing nations may have to deal with potential increases in transportation costs, which could lead to higher food prices, increased price volatility, and altered consumption patterns.
Due to their reliance on European and Black Sea markets for important agricultural products and fertilizers, Southeast Asia, East Asia, and South Asia are more vulnerable. Import disruptions pose inflation risks, contributing to a cost- of- living crisis.
In countries already grappling with crises like extreme weather ( Pakistan ), conflict ( Bangladesh and Myanmar ), economic turmoil ( Sri Lanka ) and political uncertainties ( Thailand ),  , food price inflation , exacerbates poverty, stalling socioeconomic growth.
The most under- and middle-income households, which are most likely to be affected, may also be at increased risk of malnutrition, which could turn back decades of development progress in Asia.
The US announced plans for a task force  in late December 2023 to combat the Houthi attacks in the Red Sea, but it is unlikely that immediate redress for trade turbulence and food price inflation will occur.
Concerns about food and fertilizer supplies being manipulated are raised by ongoing supply chain disruptions, as demonstrated by the Ukraine-Russian war, combined with the escalating geopolitical tensions.
Amid recurrent crises, urgent reforms to food systems are essential. Governments and policymakers must prioritize , preparedness and resilience- building , at national and regional levels to address food security issues and mitigate future impacts.
Governments and policymakers should diversify their sources of supply chain disruptions in addition to the increasing national stockpiles that the numerous net food importing nations in Asia have.
A good example is Singapore, which, while importing over 90 % of its food, has reduced vulnerability to food price and supply fluctuations through contact with , more than 180 countries and regions.
This strategy has been largely successful, resulting in Singapore enjoying the world ‘s , second most affordable food, behind Australia.  , The average , Singaporean household , spends less than 10 % of monthly expenses on food, in contrast with the Philippines ‘ 38 %.
Additionally, the Philippines, which has a large food deficit, ranks low in affordability, importing , nearly 80 % , of its agricultural imports. Food inflation in the Philippines reached , 8 %  , in 2023.
Governments across the country must develop early action plans and strengthen social safety nets to lessen the strain of the cost-of-living crisis. For lower-income households with lower incomes, initiatives like food relief, cash support, and food voucher programs can help ease the strain. Subsidies and tax measures, which can provide temporary relief, may also be considered.
With average households spending over a third of their income on food in countries like , the Philippines, and lower- income households in countries like , Indonesia , spending up to 64 % on food monthly, addressing food price inflation is crucial to safeguard average and lower- income households from undernutrition.
To address the interconnected issues of food availability, access, and affordability, Asian governments reliant on food imports could sign agreements with agricultural exporting countries in the region such as , grain and oilseed powerhouses , Australia and New Zealand. Doing so can avoid risks posed by chokepoints.
Greater focus on intra- regional trading could also be encouraged, such as in Southeast Asia, which has large exporters of key agricultural products including , rice , ( Vietnam and Thailand ) and , palm oil , ( Malaysia and Indonesia ).
Increased intra- regional trade could reduce , regional food import dependency , while also increasing regional food accessibility, market stability, and economic development. This could be aided by initiatives to encourage investments in agricultural research and development in the area to increase production of other staple grains ( such as wheat ) and reduce reliance on imports.
The Middle East’s ongoing supply chain disruptions serve as a reminder of how crucial it is to have resilient national and regional food supplies and agrifood systems, according to Asian governments and policymakers. Countries must try to address these interlinked issues at national and regional levels in both the short and long term in the face of persistent food price inflation and malnutrition.
The region has a better chance of preparing itself for the challenges that lie ahead in terms of food security by implementing policy measures like diversifying food imports and strengthening social safety nets.
Genevieve Donnellon- May is a Research Associate at the Asia Society Policy Institute, Melbourne, Australia. Paul Teng is a Senior Adjunct Fellow at Nanyang Technological University (NTU), Singapore’s Nanyang Technological University (NTS Center ), S. Rajaratnam School of International Studies ( RSIS), and the Centre for Non-Traditional Security Studies (NTS Centre ).
This article first appeared on RSIS Commentary, and it has since been republished with kind permission.  ,
Asian listed technology stocks outperformed world indices in 2023. While lingering geopolitical worries and supply chain constraints muffled the industry’s early year outlook, the sector was buoyed by the near overnight mass adoption of generative artificial intelligence (AI).
The release of user-friendly chatbots found an immediate audience. Within two months of its official launch, ChatGPT reached 100 million monthly active users, making it the fastest-growing consumer application in history, according to Similarweb data. The popularity of the OpenAI-designed chatbot spurred other notable rivals, including Google’s Bard and graphic designer Midjourney. AI systems are now capable of producing digital art designs, college-level essays and software coding – all in just a matter of seconds.
Unsure which generative AI platform will ultimately reign supreme, investors have been adopting a “picks and shovels” approach, a mining analogy favouring equipment makers. The Philadelphia Semiconductor Index returned almost 50% in 2023. Asian tech companies followed, with the MSCI AC Asia Pacific Information Technology Index rallying more than a fifth, compared to a 10% gain for the MSCI World Index.
Looking into 2024, there is little to believe tech’s outperformance will reverse, said Mazen Salhab, chief market strategist, MENA for BDSwiss, speaking to FinanceAsia. Salhab foresees the trend continuing beyond the next 12 months, considering the urgency for corporations to leverage innovative technologies capable of addressing headwinds such as tightening labour dynamics and higher costs.
Given its technological reach, experts see generative AI’s transformative properties creating significant economic value across a spectrum of industries. Bloomberg Intelligence predicts generative AI sales to reach $1.3 trillion over the next decade from a market size of $40 billion in 2022, representing a compounded annual growth rate (CAGR) of 42%, with rising demand for AI products adding $280 billion in new software revenues.
These numbers are hard to ignore, explained Hong Kong-based Robert Zhan, director of financial risk management for KPMG China, to FA. He added that companies harnessing AI would not only establish a competitive advantage for themselves, but would also unlock substantial client and shareholder values, enriching the entire business ecosystem.
Concentrated gains
Yet, despite the broad-based optimism, generative AI value creation has been narrowly focussed with select names. The market cap of US-listed Nvidia, the graphic processing unit (GPU) chipmaker behind chatbots like ChatGPT, tripled in 2023, breaching the trillion-dollar level and quickly becoming the industry’s benchmark for AI sentiment.
The excitement surrounding AI pushed Nvidia’s current price-to-earnings (P/E) multiple to 120 times, compared to Nasdaq’s market multiple of just 25 times, with analysts justifying AI premiums due to the sector’s rising income profile and robust sales outlook. While historical productivity cycles have often inflated speculative prices, even at the current trading multiples, Salhab doesn’t believe an asset bubble exists, arguing that visible efficiency gains are set to materialise in the near future.
Timing when those AI-related gains appear is riddled with obstacles for asset allocators. Chip designer Arm Holdings, which listed on the Nasdaq in September 2023, has been trading with a P/E as much of 200 times, nearly double that of Nvidia’s, reflecting the widening gap investors are assigning to companies with AI linked revenues.
Despite the elevated valuations, fund managers see generative AI investments as just one catalyst for the tech sector.
The outlook is particularly promising for semiconductors, said Matthew Cioppa, co-portfolio manager of Franklin Templeton’s technology fund, in a conversation with FA. Cioppa highlights ongoing drivers such as proliferating demand for electric vehicles, internet of things (IoT), and cloud computing, noting that these technologies are at the early growth stages of their innovation, offering catalysts for semiconductor stocks.
The politics of chips
There are also many political considerations for AI investors.
As semiconductors serve as the underlying hardware for AI, experts say the technology will inevitably always be related to political decisions that can quickly rattle markets. In October 2023, the US tightened export controls on advanced chip sales to China, hampering Beijing’s AI ambitions and fuelling US-Sino tensions ahead of the US 2024 presidential election.
The US-China trade dispute has diminished the Chinese semiconductor market for US suppliers, acknowledged Cioppa. Although he argues that export restrictions are already priced into the market, Cioppa believes that the political fallout linked to semiconductor chips and AI technology remains a volatile factor that can never be ignored, especially when the world’s two largest economies are directly involved.
Nvidia’s share price has bucked the trend. While the company has thus far overcome trading hurdles by offering alternative chips, that balancing act appears vulnerable following the group’s third-quarter earnings announcement which mentioned a more challenging operating environment ahead. That caution is now being echoed by Nvidia’s Chinese customers who are also concerned about their own generative AI aspirations.
In late November 2023, e-commerce giant Alibaba reversed its decision to spin off its Cloud Intelligence Group, citing the US export controls of advanced Nvidia chips, while China’s Tencent said it would look to domestic semiconductor manufacturers to meet its demand. Even as Nvidia coordinates with the US government on developing approved chip designs compliant with the existing rules, the outcome and timing of decisions remains unclear.
This matters for any technical development, said KPMG’s Zhan. “[Because] geopolitics impacts which AI vendor is selected, companies will be cautious to ensure they meet local regulatory requirements, particularly across data privacy and security.”
Rapid development of Chinese-produced semiconductors may test market sentiment if incumbents like Nvidia underestimate those capabilities. While supply may meet chip demand in the current market, Nvidia believes those alternatives may not provide sufficient computing power to train the next generation of AI systems, as stated in the earnings report.
Technological challenges are also occurring alongside policymaker efforts to incubate a regulatory landscape that supports AI platforms without derailing its potential. In October 2023, London initiated a summit aimed at establishing an AI oversight committee, but soon discovered that Washington had similar intentions, reflecting a lost coordination opportunity.
What regulations are ultimately introduced is uncertain, but it’s anticipated that numerous discussions and obstacles will arise in the years ahead, said Zhan. When asked what type of regulation works best, he shared: “I would like to compare AI to a human. Right now, AI technology is still in its infancy, so it makes sense that it should get more supervision and more controls to help it learn and grow. But as AI matures and learns, such controls should adjust proportionately according to the risk.”
It is a sentiment underscored by Franklin Templeton’s Cioppa, who said that “over time a combination of sovereign regulatory frameworks and private market solutions would effectively provide AI guardrails as not to stifle innovation or make it too difficult for smaller companies to compete with the mega cap companies on any advancements.”
2024 outlook
The uncertainties facing AI investors for the year ahead are magnified by higher capital costs such as elevated interest expenses as central bankers grapple with inflation, and also the increasing need for expensive data centres.
It will be interesting to see how AI stocks’ performance compare to non-tech companies in an overall weaker investment environment. Any company looking to bring AI into their businesses will have an expensive journey which could weigh on their earnings’ outlook.
As the market undergoes tapering, venture capital and private equity firms are adjusting their expectations. Hong Kong-based Alex Wong, head of M&A advisory at FTI Capital Advisors, told FA:
“Our clients, particularly those considering Hong Kong initial public offerings (IPOs), have recalibrated their expectations. Impacted by the weaker local market, some are exploring various alternatives at reduced exit valuations. Others are studying different listing venues, or altogether, deferring IPO plans and choosing direct exit strategies like trade sales.”
For fund managers preparing for the year ahead, these factors may bode well again for Asia’s technology stocks over non-tech names, particularly innovative companies backed by reliable cash flows and visible dividend payouts to shareholders. For investors that may mean holding onto 2023’s winner in 2024.
Peter Choi, a senior analyst at Vontobel, favours firms such as Taiwan Semiconductor Manufacturing Company (TSMC), the largest constituent for MSCI AC Asia Pacific Information Technology Index which returned more than a third to investors last year, highlighting that TMSC powers AI businesses not only for Nvidia, but also for tech giants such as Google and Microsoft.
Yet, no matter which AI-related companies lead stock market returns, the generative AI attention will unlikely fade, explained Andrew Pearson, managing director of Intellligencia, an AI and analytics company in Hong Kong and Macau.
“Fundamentally, generative AI is anything that can be imagined even if it doesn’t currently exist, making it good marketing material inside a PowerPoint presentation or even a book,” said Pearson, who recently published The Dead Chip Syndicate. Ominously, he added: “There will always be an audience for something that carries a 10% chance of destroying the human race. It is too big to disregard at this point.”
For investors, there may be a sense of irony by sticking to the same investment strategy in 2024, as arguably the most prudent approach to capture the market upside for a constantly evolving technology, is to repeat what has worked before. Will this trade work again? We will find out over the next 12 months.
This article first appeared in the print publication Volume One 2024 of Finance Asia.
¬ Haymarket Media Limited. All rights reserved.
With Multiple Independently Targetable Re-entry Vehicle ( MIRV ), India’s most recent Agni- 5 test cements its position in the elite group of world powers, a significant step forward in improving nuclear deterrence in relation to China and Pakistan.
Many media outlets reported this month that India had safely completed the initial flight test of its Agni- 5 MIRV weapon. This step propels India into the elite class of nuclear power with MIRV technologies, including the US, UK, France, China, Russia and Pakistan.  ,
The test was conducted on Abdul Kalam Island in the Bay of Bengal, off India’s north beach. Although India did not specify how many MIRVs were involved in the Agni- 5 check, it is believed to have carried between two and ten missiles.
The start of the Agni line, which is named after the Sanskrit word for “fire,” was hailed by Prime Minister Narendra Modi as a happy moment for the country. Home Minister Amit Shah and defence secretary Rajnath Singh praised the study’s commitment to Modi’s eyesight of a self-sufficient India.
The good energy, canister- launched Agni- 5 has a range of over 5, 000 kilometers, allowing it to pin regions deeply within the territories of possible adversaries like China and Pakistan.
Given the ongoing borders tensions with China and India’s geopolitical rivalry and tensions with Pakistan, which underscore the rocket’s role in national surveillance and deterrence, the capability is especially important.
By enhancing the resilience of its nuclear forces, complicating adversaries ‘ missile defence calculations, and highlighting India’s no-first-use nuclear plan with a credible second- hit capability, the integration of MIRV technology into India’s missile arsenal will affect the region’s proper balance.
India needs to move its MIRV missile program quickly because of Pakistan’s pursuit of MIRV technology and China’s evolving missile defenses.
Rajesh Basrur and Jaganath Sankaran mention in a May 2016 Stimson Center report that India’s MIRV program has been influenced by both perceived external threats from China and internal imperatives.
Basrur and Sankaran note that India’s MIRV program aims to ensure its security against China’s improving military capabilities, including China’s own MIRV and ballistic missile defense ( BMD) advancements.
In a region already rife with nuclear rivalries, skeptics question the escalation risks and the implications for crisis stability, claim claim those who support MIRVs ‘ ability to penetrate Chinese BMD systems.
MIRV missiles are “use it or lose it,” because putting numerous nuclear warheads on one missile makes it more vulnerable to a first strike that destroys a lot of a country’s ability to launch a second strike.
Basrur and Sankaran add that India’s MIRV capabilities are complicated by its long-standing nuclear policy, which is characterized by restraint and a formally no-first-use stance.
In addition, they discuss the relationship between civilian oversight of India’s nuclear weapons program and counterarguments to a minimalist nuclear deterrence posture.
They do, however, warn that technological advancement frequently outweighs strategic doctrinal clarity, which could prevent developments like MIRVs that do not fully conform to India’s minimalist nuclear doctrine.
India still faces strategic challenges in enhancing its nuclear disarmament strategy against China. Those constraints include the two sides ‘ economic interdependence, India’s desire to be a leader in the so- called” Global South” and China’s relative political and economic advantages.
India’s close economic ties with China, participation in multilateral initiatives led by China, such as the Shanghai Cooperation Organization (SCO ), and participation in China-led military exercises may restrain India’s flexibility and nuclear posturing, according to Asia Times in December 2022.
In October 2022, Asia Times reported that China is confident that its authoritarian system of government is capable of outperforming India’s democracy and that its technological prowess will continue to be a decade ahead of India.
Asia Times reported that Pakistan launched its second test of the Ababeel MRBM in October of that year at the Sakhi Sarwar range in Punjab province in November 2023. Like the Agni- 5, the Ababeel MRBM is also designed to carry MIRVs.
Pakistan’s ability to penetrate India’s new missile defense system was reportedly enhanced by the test launch, which was conducted to confirm a number of design and technical parameters and evaluate the performance of various subsystems.
India’s Agni- 5 may still have to overcome reliability concerns before it is fielded. Regarding India’s nuclear weapons ‘ effectiveness and its capacity to produce enough fissile material for a MIRV nuclear arsenal, it may be questioned due to its MIRV capability.
In a 2014 article in the peer-reviewed Asian Survey Journal, Frank O’Donnell and Harsh Pant point out that India’s MIRV-capable Agni-5 and Agni-6 will spark demand for more sophisticated and smaller warheads. According to O’Donnell and Pant, Indian scientists ‘ claims of hyperbolic capability may have undermined India’s commitment to developing missiles and a more extensive nuclear arsenal.
While the recent Agni- 5 test may have at least partially dispelled those doubts, Hans Kristensen and Matt Korda note in a July 2022 Bulletin of Atomic Scientists article that while the Agni- 5 has been tested eight times before, additional testing may be required before the missile reaches operational capability.
In her book Striking Asymmetries: Nuclear Transitions in South Asia, Ashley Tellis points out that India’s nuclear weapons’ small yields are the most important constraint on its arsenal. According to Tellis, adding more low-yield warheads to India’s stock would not help the country’s shortage.
India’s slow fissile material production, despite having an extensive nuclear infrastructure, owes to the fact that its nuclear capabilities are focused more on power generation than nuclear weapons production.
Tellis asserts that India has the ability to increase the production of weapons-grade plutonium in its civilian nuclear power plants and has done so in the past. In the event of a global fissile material cutoff treaty, she claims that India will keep producing a surge of materials.
Local and foreign producers have been asked to reevaluate their supply chain methods by rising costs and rising costs. Some businesses have relocated some of their activities to different areas, such as South Asia and Southeast Asia.
Chinese electronic vehicle manufacturers, for instance, have just received government support to establish export-oriented supply chains in response to US and European trade restrictions.
Wang Weizhong, government of Guangdong, noted that despite the challenges still present, the region has also improved the law-based, market-oriented setting to draw significant foreign-funded projects.
He claimed that more than 1, 900 of these companies opened stores in Guangdong in January this year, an increase of 106 % over the previous month.
” We does actively promote the high-end, intelligent, and efficient business. According to Mr. Wang,” we will diligently apply the government’s new round of large-scale equipment regeneration and deployment, as well as major policy measures like reducing logistics costs and trade-in of consumer goods,” he told CNA.
He added that Guangdong’s local technology potential has been in the top spot for the past seven times.
” We will view the creation of new quality productivity as a strategic move and a long-term move,” he said,” and this shows ) strong confidence in the development of Guangdong’s manufacturing industry.”  ,  ,
The place has been a key force behind China’s financial reform and expansion. It is located at the intersection of China’s Greater Bay Area ( GBA ), a hub for rapid high-tech advancements that attracts significant foreign investment.
” The GBA will enable the agility of a lot of skills, including those from mainland China, Hong Kong, Macao, and even those from other parts of the world,” said one analyst. Therefore, it is difficult for Guangdong to maintain its current talent while attracting more talent from other regions, according to political scientist Professor Sonny Lo.
He thinks Guangdong continues to be a hotbed for foreign buyers as a result of increasing investments in technical knowledge and better communication to Hong Kong and Macao.
It was less than two days into 2024 when Song Tao, the director of China’s Taiwan Affairs Office, called on all Taiwanese to promote “peaceful reunification” with the mainland.
But down in the text, the New Year’s message posted to the office’s website had not-so-subtle wording, as Song warned “the motherland will eventually be reunified, and it will inevitably be reunified.”
The message came less than two weeks before Taiwan held its presidential and parliamentary elections and coincided with Chinese President Xi Jinping’s message that reunification was an all but foregone conclusion.
The thin rhetorical veneer of peaceful reunification has been gradually but significantly replaced with language that is more crisp in “advancing the cause of reunification.”
This week, upon releasing budget figures at the opening of the National People’s Congress, Premier Li Qiang dropped mention of “peaceful reunification” in his government report, according to a Reuters analysis of his speech.
Li reiterated China’s call for “reunification” with Taiwan but added emphasis that it wants to “be firm” in doing so and dropped the descriptor “peaceful”, which had been used in previous reports, Reuters noted.
To be sure, it was not the first time a top Chinese official had omitted the word “peaceful” when referring to Taiwan “reunification.” The firmer language has been repeatedly used by Chinese state officials and has been a mainstay in Chinese Communist Party (CCP) speeches, including in Xi’s speech before the 20th Party Congress in October 2022.
In the president’s words then, he and his countrymen “firmly” grasp “the leading position and initiative in cross-Strait relations, and unswervingly promote the great cause of the reunification of the motherland, which is the goal of work on Taiwan.”
In Xi’s China, the master historical narrative is much more important than the veneer of a peaceful transition. This makes the removal of the language a reflection of current realities and an affirmation that “rejuvenation” through peaceful or more violent methods is the primary focus of the state.
In this effort, China has been consistent dating back Xi’s speech at a 2012 “Road To Renewal” exhibition, where the restoration of China takes precedence over all other objectives. Taiwan is seen as a critical element, as Beijing has called its separation a “result of weakness and chaos in our nation” as noted in a 2022 White Paper, “The Taiwan Question and China’s Reunification in the New Era.”
Reunification is also extension of the “Chinese Dream,” which is a collection of national myths and collective traumas manufactured by the state to extend beyond memory, back to the ancient Sui Dynasty of the 6th Century and the glories of the Ming Dynasty, which lasted until 1644. Failure to hold Taiwan is a part of China’s trauma-based nationalism.
So injurious to the Chinese Dream is the threat of failure that “compatriots” in Taiwan who were delicately described as “brothers and sisters” in 1978 are more commonly associated with conspiring to commit the most serious crimes of secession and treason.
Dead now are the remnants of Jiang Zemin’s diplomacy aimed at peaceful Cross-Strait relations, echoed in his report to the 16th Party Congress in 2002, in which the word “peaceful” was used in the Taiwan context nearly a dozen times.
The election outcome in Taiwan was a setback for China, as Democratic Progressive Party (DPP) candidate William Lai won more than 40% of the vote – even though China’s Taiwan Affairs Office had warned on the Thursday before the January weekend election that he represented Taiwan slipping “ever further away from peace and prosperity, and ever closer to war and decline.”
Now, despite economic deflation, there are steep increases in China’s defense spending, up 7.2% for 2024 at US$230.6 billion. The surge in spending comes amid stern warnings about “external interference” and opposition to separatist activities aimed at promoting Taiwanese independence.
Long gone is a much milder approach, evidenced also in Hong Kong well prior to June 2020, when the promise of “one country, two systems” was that of a “high degree of autonomy.”
The decling rhetorical use of “peaceful reunification” also marks the broader realization that Taiwan has moved farther and farther from the control of mainland China. Taiwan’s investment in South Asia and Southeast Asia in 2022 was greater than investments the self-governing island made in mainland China.
Former Taiwanese President Tsai Ing-wen has not only moved Taiwanese companies back from China, but has worked to engineer trade away from the mainland into the broader Indo-Pacific.
Taiwan’s New Southbound Policy, which targets 18 countries, almost doubled between 2016 and 2022. And the breadth of Taipei’s defense-related procurement and related military aid from the United States and other aligned countries makes the island a much more potent foe than it was 20 years ago.
With this reality, Beijing has set its sights on a reunion along the coercive terms it sets. As Taiwan becomes less interconnected and dependent on the mainland, more threats and less diplomacy are likely from Beijing.
Instead, contingency planning will continue to increase, evidenced by the recent weighing of options to blunt the effect of US sanctions in the case of a Taiwan conflict or recent mock drills simulating an island invasion by the military. While the language might simply be the removal of old rhetoric from an old, abandoned foreign policy, it also is symbolic of this new, more dangerous and volatile era.
Mark S Cogan is an associate professor of peace and conflict studies at Kansai Gaidai University in Osaka, Japan. His research interests include Southeast Asia and the broader Indo-Pacific region, as well as security studies, peacebuilding, counter-terrorism and human rights. He is a former communications specialist with the United Nations, serving in Southeast Asia, Sub-Saharan Africa and the Middle East.
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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