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PEI Premier Dennis King On Growing The Province's Population And Economy – Huddle Today

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David Campbell is a Moncton-based economic development consultant and co-host of the Huddle podcast, Insights. The following piece was originally published on his blog, It’s the Economy, Stupid!, on Substack.

It’s been a treat for Don Mills and me to interview the Atlantic Premiers on our Huddle “Insights” podcast.

Someone asked me why we threw so many softballs at Premier Dennis King, who we interviewed last week in the first of a four-part series. I think that’s unfair, although I would say we certainly were not playing “gotcha” with the premiers. Our goal was to ask them what they are doing to strengthen their economies, grow the population and address some of the big other challenges such as health care and education.

I hadn’t met Premier King before and I was impressed. He has an ambitious agenda for the province and wants to continue the positive trends in immigration and the growth of key sectors such as biosciences. And, he has very ambitious plans for the cleantech sector – seeing it as potentially another biosciences-like success story. We recommended he clone Rory Francis if the technology allows.

RELATED: Rory Francis Talks About How Bioscience Will Become A Billion-Dollar Sector In P.E.I.

You will see that ambition is a consistent theme across the Atlantic premiers. They have a vision of where the provinces should go and what seem to be pretty good ideas on how to get there.

There also seems to be a desire for greater Atlantic cooperation which is good as the region shares many common challenges. Strengthening regional economic integration doesn’t dilute the character and culture of the four provinces; it is just a recognition that for many things we are better together.

I still can’t get the words of one senior bureaucrat out of my head from 2015 saying we are just going to have to get used to 0.5 per cent economic growth. When I pushed he said immigrants won’t stay here. Natural resources will wane and we will be left with primarily a local services-focused economy even more reliant on federal transfers.

Premier King has a different idea in mind. P.E.I. has been among the fastest-growing provinces by population growth. Depending on the timeframe, they are either first or second in the growth of the value of exports. Yes, they have struggled to retain some of their immigrants but enough have stayed to add 8 per cent to the population between 2016-2021 – the most added to the provincial population in a Census period ever.

I hope you enjoy the conversation.

You can listen to the podcast in the player above, or download it on podcast platforms like Apple and Spotify.

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Economy

Opinion: Tokenization, not crypto, is the future for Canada's digital economy – The Globe and Mail

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Mining rigs on display at the Thailand Crypto Expo in Bangkok, Thailand, on May 14.Lauren DeCicca/Getty Images AsiaPac

Mark Wiseman is a Canadian investment manager and business executive serving as a senior adviser to Lazard Ltd., Boston Consulting Group and Hillhouse Capital, and the chair of Alberta Investment Management Corp.

The dual threats of inflation and further financial downturns are real and require immediate action from policy makers – and they arise at a time when a litany of disruptive global events have darkened the economic outlook.

In order to be effective, both monetary and fiscal policy must be surgical, centralized, based on data and implemented with accountability. We must also be cautious when the likes of Conservative leadership candidate Pierre Poilievre advocate to “opt out” of inflation and create economic value with bitcoin or other cryptocurrencies. The political appeal of such voices ignores both economic reality and the larger opportunity in this digital space: tokenization.

Having been an investor for more than two decades, including many years spent managing the pension investments of millions of Canadians, I care about the principle of intrinsic value: pricing assets based on their underlying attributes and, in turn, generating a reasonable risk-adjusted return from those assets.

Unlike traditional investment alternatives, cryptocurrencies have been – and are – extremely volatile, with their value tied to speculative activity as opposed to intrinsic worth.

While one can envision how central-bank digital currencies or stablecoins could change our financial system and create significant efficiency value down the road, the real benefit that exists today is in the blockchain and distributed-ledger technology behind cryptocurrencies.

Tokenization is a tool created by such technology and has the potential to immediately create and redistribute value for everyday Canadians. It allows owners of assets with intrinsic value – ranging from real estate, to securities, to commodities, to fine art (or the digital equivalent) – to tokenize their assets into a form that is usable on a blockchain application. In practical terms, it enables asset owners to sell fractional ownership of their asset akin to a publicly traded company issuing equity, but in a much more accessible way.

Tokenization leverages smart contract functionality (the same technology that supports many cryptocurrencies) that has the potential to unlock immense value and liquidity for many investors, big and small. This is the aspect of the blockchain and distributed ledgers that our political leaders and regulators should be focused on.

The tool is incredibly attractive because it can provide investors with easier ways to purchase, hold and trade assets that have real underlying value, including digital assets such as the NBA’s incredibly successful TopShot – a platform that allows fans to trade collectible NFTs of past plays (think of them as digital trading cards).

Cryptocurrencies, which have no clear intrinsic value, are an impressive demonstration of the power of blockchain. But like the early BlackBerry products, it turns out that the software that underlies many cryptocurrencies, such as bitcoin, is far more valuable than the initial application.

Tokenizing and selling part ownership of one’s assets can improve liquidity and increase the transparency of the value of their assets, allowing them to borrow against them more easily. Valuing an artwork is notoriously difficult, but if a sculpture is tokenized and a liquid market in those tokens develops, price discovery for the object as a whole becomes far easier. After the tokenization of a skyscraper, a token holder would be able to secure financing against their tokenized portion of the building, as opposed to having to mortgage the entire structure to gain funding.

Were Canada to become a leader in tokenization, retail investors would be able to access assets beyond the public equities and bonds to which they are now mostly limited. Institutional investors – many of whom have already begun to significantly increase their investments in private companies, real estate, infrastructure and other alternative investments – are desperate to find havens for their capital, particularly given the recent fluctuations in equity markets.

Tokenization would allow them to invest in assets that would otherwise be unavailable, creating potential value for both buyers and sellers. With fewer barriers to selling fractional ownership of large infrastructure projects, this class of investor can drastically expand the type of large projects into which they can invest.

Undoubtedly, regulation will be an important consideration. Publicly traded companies have a significant amount of disclosure regulations they must adhere to, which may cause many asset owners to shy away from listing their assets on public exchanges. Regulation will have to ensure adequate information is available about the underlying asset, so that investors purchasing tokens can understand what they’re buying, without being overly burdensome to the point that it dissuades asset owners from participating.

If we want to lead as a country in the blockchain and distributed-ledger technology sector, it is tokenization toward which we should be focusing our efforts – not on the misguided idea that bitcoin can solve the inflationary pressures brought about by an excess of demand over supply in the economy.

In fact, the support for cryptocurrencies by such voices as Mr. Poilievre, driven by criticism of our central bank, shows exactly why we need such independent institutions. Politicians are kept at arm’s length from them for good reason – just look at what happened to the Turkish economy when President Recep Tayyip Erdogan ignored and eroded the authority of the country’s central bank in favour of a misguided, politicized monetary strategy.

Instead of political theatre on the steps of a venerable institution, Mr. Poilievre and other cryptocurrency supporters ought to be more responsible and advocate to make Canada the leader in tokenization. That requires investing in the necessary training, technology and governance structures for this revolutionary technology, and building a system of laws and regulations to support it.

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Sri Lanka's Shattered Economy Awaits New Finance Head, Rate Hike – BNN

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(Bloomberg) — Authorities in Sri Lanka this week are expected to name a new finance minister and raise interest rates as they struggle to stabilize an economy spiraling into chaos by a lack of dollars and surging inflation. 

Prime Minister Ranil Wickremesinghe, appointed last week, is expected to soon choose a finance minister, who will help lead talks with the International Monetary Fund over badly needed aid. 

Click here for the latest on developments in Sri Lanka

Meanwhile, the Central Bank of Sri Lanka is expected to raise its benchmark standing lending rate by 75 basis points on Thursday from 14.5%, the median in a Bloomberg survey shows as of Tuesday, as it tries to battle Asia’s fastest inflation. 

The decisions come as the South Asian country barrels toward its first official default, with the 30-day grace period for missed interest payments on dollar bonds ending Wednesday.

Read more: Sri Lanka Stumbles Toward Its First Default on Foreign Debt

The prime minister on Monday warned that the country was down to its last day of gasoline supplies, as it doesn’t have the dollars to pay for shipments aboard tankers anchored just offshore. He also said it would need to print money to pay government salaries, a move that will certainly worsen inflation already running near 30%. 

What Bloomberg Economics Says…

“Facing a cratering currency and the risk of hyperinflation, the Central Bank of Sri Lanka is sure to hike rates further — crushing growth. But we think the worst of the inflation storm will pass fairly quickly. The prospect of consumer price gains cooling into 2023 should allow the central bank to limit its remaining rate increases to 400 basis points.”

— Ankur Shukla, Economist

For the full note, click here

Sri Lanka is suffering a shortage of food, medicine and energy while its currency has been in a free fall, fueling protests and violence that pushed Prime Minister Mahinda Rajapaksa to resign last week. His brother Gotabaya, the president, appointed long-time opponent Wickremesinghe in a bid to calm the situation and restore order. Central bank Governor Nandalal Weerasinghe had earlier threatened to resign if political stability wasn’t established.  

The country’s monetary authority has raised interest rates by 850 basis points so far this year. Meanwhile, the currency has lost more than 40% against the dollar since the end of February, while its foreign exchange reserves dipped 4.7% in April to $1.8 billion. Officials, however, warned earlier this month that the country has about $50 million in usable reserves. 

©2022 Bloomberg L.P.

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Fuel prices, labour challenges point to recessionary economy: CargoJet CEO – Financial Post

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Watch: Ajay Virmani, CEO of Cargojet, speaks about the state of supply chains and Cargojet’s business two years into the pandemic

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