Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. Dependent upon programmes created to face efficiently past challenges, prisoners of entrenched political groupings, the major parties campaign to come back to the order ante. Meanwhile, the polarisation and rise of a new opposition that took place during the election is temporarily frozen by the last hope thus created. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to bring back the expected result, to boost growth through consumption and thus to restart the engine.
(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)
As the first measure fails to boost growth, then the income of Everstate remains in the pitiful state into which it was before the elections. It even continues degrading as pressures and related costs do not relent. Meanwhile, as the need for liquidity does not stop, power remains in the hand of the lenders’ nexus. Yet, the failure of the government is only about the first measure. Two longer term policies are meant to address those very problems that have contributed to derail the whole system: the pressures related to the increasing complexity of resources, including looming scarcity, relative and absolute, through ISSIGE, and the problem of liquidity through the new international meeting group for the resilience of the financial system (IRESFIS).
Those two policies show that, even if they are included under a label, “restoring economic growth,” that is still part of the outmoded worldview, some awareness of the real problems besetting Everstate has started to take place.
ISSIGE will convene its first high level meeting in Everstate’s capital, six months after the elections, to allow for the organisation, for the presentation of first recommendations and to make sure that it will be able to announce the amount of the overall fund. It is imperative that firm and consensually accepted recommendations follow from this conference, considering the urgency of the situation. Heads of governments of the various member-states will be present to show the high level commitment given to the project. Several hundreds delegates of all the countries involved will be present. They will constitute the ISSIGE network, backbone of the effort.
Each delegation prepares a draft determining the criteria for the framework projects they will have to propose in the years to come, the process according to which those framework projects will be selected and, finally, how those projects will be implemented, by whom, with which supervision, etc. Those drafts are, of course, widely shared, read, and amended among delegates over the six months preceding the conference. In this way, no surprise and no intractable dispute will occur during the conference. Considering the administrative work load those exchanges require, and considering the high level profile of the delegates, substantial emoluments are paid to those delegates who are not civil servants, while those civil servants who are now working full-time for ISSIGE within their mother administration are promoted to the rank of Director with corresponding salary increase.
In a wish to promote transparency and show Everstatan citizens the real and genuine efforts and progress of the new government, drafts, exchanges and discussions are precisely documented and uploaded on a dedicated ISSIGE website. Furthermore, a special platform opened to citizens is created, where Everstatans can give their input. This effort is quickly followed by other countries.
More difficult, ISSIGE must also find a way to fund the projects themselves, and decide upon a global amount. Considering the public deficit existing in most countries, the ISSIGE network, the governments and administrations behind them decide that the various members and the Regional Union will issue bonds to fund the projects, which should also, hopefully, promote private investment. The overall amount for the first year is set at EVC (Everstate Currency) 250 millions. ISSIGE hopes that a lever effect will apply and that the overall value of the projects thus funded will be much higher.*
This is a very small amount considering the global current needs existing in terms of investments. According to the Global Green Growth Forum using 2010 IEA estimates, “by 2050 US$ 1.2 billion additional annual investments just in energy supply and use are needed to avoid a temperature increase beyond 2°C.” Meanwhile, the economy needs in terms of investments “for transport, energy and information and communication technologies (ICT) infrastructure projects in Europe are estimated at €1.5 trillion for 2010-2020” (Euractiv.com, 23 May 2012). According to the European Commission, “infrastructure investment needs” “are estimated to be of EUR 1.5 trillion to EUR 2 trillion to meet the policy goals of the Europe 2020 Strategy for smart, sustainable and inclusive growth.” However, this first ISSIGE funding is a start.
Meanwhile, the IRESFIS meets a couple of times, but each player camps on its position, and no progress is made. Those, which include Everstate’s government, who want more regulation, are immediately countered by most financial actors, who oppose it, as well as by some governments, who believe that more regulations will hamper financial transactions and thus diminish the power of their countries as financial centres.
For real life discussions on green growth investment & financing, as well as on investment deficit:
3GF, Global Green Growth Forum, FINANCING Preparatory Strategy Meeting, 26-27 March 2012;
Caranci, Beata & Chris Jones, “Milking America’s Cash Cow: The Case For Stronger Investment Growth,” Special Report, TD Economics, May 25, 2012.
Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance, October 2011.
Euractiv.com, “‘Project bonds’ launched as an experiment,” 23 May 2012,
European Commission, Europe 2020 Project Bond Initiative, Investment needs, last updated 19/10/2011.
Hutton, Will Companies must stop hoarding cash and start investing instead, The Observer The Guardian, 19 February 2012.
Klein, Ezra, America’s capital investment deficit, Washington Post, December 31, 2010.
OECD, Infrastructure to 2030, Vol.2, 2007.
Pan European Networks, “‘Project bond’ plan approved by diplomats,” 22 May 2012;
World Economic Forum, Financing Green Growth in a Resource-constrained World Partnerships for Triggering Private Finance at Scale, 2012;
Zarroli, Jim, Companies Sit On Cash; Reluctant To Invest, Hire, August 17, 2011, NPR.
Zenghelis, Dimitri, “Restoring growth and confidence through green innovation,” E!Sharp, June 2012.