Speech by Ngozi Okonjo-Iweala
Managing Director, The World Bank Group
“Opportunity in Crisis”
Introduction His Excellency Mr. Abdullah Gül, President of Turkey, UN Secretary General Mr. Ban Ki-moon, Secretary General of the Fourth UN Conference on LDCs Mr. Cheik Sidi Diarra, Excellencies, Heads of States, Heads of Government, Ministers, delegates, colleagues, ladies and gentlemen it is a great pleasure to be with you today. First of all I would like to thank the Turkish PM, HE Mr. Recep Tayyip Erdoğan and his Government and the people of Turkey for their warm hospitality in hosting this important conference.
On behalf of the World Bank Group and of President Robert Zoellick, I want to thank the UN for organizing this event. We are here at a very important time in history.
The world economy is going through a very difficult transition. Three years after the worst financial crisis since the great depression, global growth is finally recovering – albeit very slowly. World GDP has increased from a 2.5 percent average in 2008-2009 to 5.5 percent in 2011. Developed country GDP has grown from 0 percent to 3.5 percent while emerging country GDP has grown from 5.7 percent average in 2008-2009 to 7.8 percent in 2011.
But the least developed countries (LDCs) have performed well. LDC’s (excluding four outlier countries) have grown from an average of 8.5 percent during 2000-2007 to 10.3 percent in 2008-09. That’s a significant increase in this difficult post financial crisis environment.
However this growth is fragile. Millions of people in the world’s poorest countries are today living on a knife’s edge – the victims of high and volatile food prices. People’s lives too are under threat by the impact of climate change and civil unrest. The devastation wrought by climate change, volatile and high food prices and conflicts pose threats not only to the poor people within countries, but can also spill over borders and threaten global security.
Rising food prices have pushed about 44 million more people into poverty since June last year. The 2008 food crisis led to over 40 riots in many poor countries serving as a strong warning about the importance of food security for social stability and people’s own security. 1.5 billion people now live in countries affected by repeated cycles of political and criminal violence.
And the entire development agenda is threatened by climate change. We know recent natural disasters – and the crises in the Middle East – are further straining resources and creating added uncertainties.
The world’s least developed countries also face the challenge of dealing with a youth bulge – as more than 50 percent of the population in the Least Development Countries is below 25 years of age. And there are also challenges in dealing with the private sector; today nineteen of LDC countries are in the bottom 25 countries of the Doing Business survey.
In sum, despite the good growth rates experienced by the LDCs, the favorable economic conditions of pre-crisis period no longer exist.
So what does this mean for the 48 LDC countries represented here if the next decade is to be a decade of growth for LDCs? How can we together manage the transition back to accelerated growth? What should policy makers in LDCs focus on over the medium term and how can development partners assist? These are the issues I would like to focus my talk on.
I believe we need to focus on three critical issues: fiscal stability; building on the comparative advantage of countries and attracting foreign direct investment to support manufacturing and scaling up what we know works – designing safety net programs to protect the poor and vulnerable. These are areas where the international community can help – and also where the least development countries must now look within to create favorable growth conditions.
Let me begin by mentioning some interesting statistics about LDCs which are helpful to set the scene.
- In the eight years prior to the crisis GDP growth for the LDCs averaged 8.5% (With the exception of Equatorial Guinea, Angola, Chad and Afghanistan);
- GDP per capita increased from $US 271 million in 2000 to $US 686 million in 2008;
- Average debt to GDP ratio of all the LDCs was 32 percent in 2008;
- LDCs substantially increased FDI – seven fold- from $US 3,5bln in 2000 to $US 17.3 bln in 2008 and
- LDC share in world trade increased rapidly from 0.61 percent in 2000 to 1.0 in 2008.•
In sum, the LDCs as a group have been doing their part to contribute to global growth. With the return to growth in most countries, ensuring a new decade of sustained and inclusive growth means seizing the opportunities, building on what works and meeting the challenges of today and preparing for the risks of tomorrow. Clearly the international community is helping and can continue to help. It’s also about the least developed countries innovating from within and seizing the momentum to create favorable conditions for another decade of growth and a decade in which at least half of the LDCs double their GDP per capita as they did in the last ten.
So how do we achieve this?
First protect existing growth. LDCs must continue to watch inflation. Many countries today are confronting the challenges posed by new inflationary pressures resulting from renewed increases in oil and food prices. Inflation in the LDCs now averages 5.4 percent in 2011 compared to 8.2 percent in 2007. LDCs have managed this well and cannot be complacent.
On the fiscal front, over the last three years many countries including LDCs put in place fiscal stimulus measures to cushion the impact of the crisis. Our analysis shows, for example, that countries like Tanzania, St Lucia, and Cambodia created labor intensive public works programs and Bolivia, and Senegal strengthened or introduced cash transfer programs. These countercyclical measures served countries well. But as we emerge from the crisis, many of LDCs will no longer have the fiscal space needed to restore growth to pre-crisis levels or accelerate growth if these policies are not scaled back or rationalized further.
The challenge, therefore, is for LDCs to focus on rebuilding fiscal space. This means strengthening domestic revenue. LDCs should increase the efficiency of the tax and customs administration offices to collect more from those registered to pay and also broaden the base by reviewing policy choices.
On the expenditure front, the crisis forced many countries to adopt legislation to improve the efficiency of public expenditure. In countries like Ethiopia improved subsidy programs have been designed to better target the poor and vulnerable at least cost.
Preparing for crises
Part of the new normal in many countries is the need to protect against the next crisis by building macroeconomic and fiscal buffers. A recent World Bank study shows that in the 1980s, the world had 150 crises every year. Now studies suggest the number of crisis has increased to 370 per year. This means increased uncertainty and volatility in the global environment. Countries need to be prepared for this. Increasing fiscal space and maintaining sustainable debt to GDP levels will be crucial for this.
In this regard there are lessons we could learn from our host country Turkey. Turkey rose from the crisis of 2001 — and seized the opportunity of that crisis – to build a better future and drive poverty rates dramatically down. A strong program of comprehensive reform produced growth of nearly 7 percent annually from 2003-2007. This progress helped to minimize the crushing impact of the global crisis of 2008.
Policies for Private Investment and Trade
The lesson from Turkey is that a strong reform program can deliver rapid and job creating growth as well as cushion countries from future crisis. As small open economies LDCs will rely on trade for growth and as such reforms should focus on opening up the economy and building skills that allow for increased competition and take advantage of FDI inflows to innovate.
But first LDCs must build and consolidate markets in the sectors where they have a comparative advantage.
Opportunity with agriculture
Agriculture production must grow by 70 percent worldwide by 2050 to feed an expected population of more than 9 billion people. In an era where unemployment is a big problem, an food prices continue to increase because of low stocks and other demand and supply pressures, the agriculture sector provides a big opportunity for many of the LDCs. The added bonus is that increasing agricultural production can help tackle the inflation problem in many countries
A recent study by the Bank showed that in many LDCs the agriculture sector was still characterized by low yields and high proportions of idle arable agriculture land. That idle land should be put to use as part of a bid for the least developed countries to take advantage of the growing demand for more and better agriculture products. This will create jobs while help feeding the planet.
How can this be done? The first thing is to move away from the concept of treating the agriculture sector as safety net and instead treat it as an engine for growth. The agriculture sector is also the very basis of the development of the private sector.
Essentially agriculture is a private sector activity. But in many countries, persistent state intervention in pricing policy, the imposition of export bans and the lack of adequate property rights, especially for land and for women, has impeded improvements in production and productivity. These constraints have also stifled the development of value adding agri-business. Vietnam has shown what good agriculture sector policies can do to grow the private sector. The growth in exports of mangoes in Mali – six-fold in the period 1993-2008 – is an outstanding case of export success for an LDC. Mali now has to begin exporting mango juice.
Beyond economic growth, agriculture development and increased food security can also be a tool for achieving political stability especially in the fragile and conflict affected states. The good news is that we have learnt some lessons from the 2008 crisis but we again must not be complacent. .
We must work to improve the agriculture value chain, improve agriculture markets, and increase transparency of the trading system. According to the World Development Report, for the poorest people, GDP growth originating in agriculture is about four times more effective in reducing poverty than GDP growth originating outside the sector.
Opportunity in Trade and Manufacturing
As countries improve agriculture productivity and production they would have to address the issue of non-farm employment. Moving people off the farms and into manufacturing or service sector jobs must be part of the long term strategy of all LDCs.
It is my firm belief that a “Decade of Growth” for LDCs must be anchored in more and better trade and trade openness. LDCs do not want aid they want trade. In fact recent rapid LDC growth has coincided with a period of increased trade.
Export growth in LDCs has turned from a negative -3.4 percent average in the 1990s to a spectacular rate of 18.5 percent in the 2000s. LDC exports to BRICs in 2005 was 19.0 percent and by 2009 increased to 24.2 percent.
A privilege LDCs enjoy which makes least developed countries the envy of many non-LDCs is the access to “Everything but Arms” and Africa Growth Opportunity Act (AGOA). These two agreements grant access to both European and North American markets other countries are struggling to enter. But for this access to be meaningful countries must exploit it. Lesotho for example in the first two years of AGOA access experienced a 36 percent increase in employment from 29,000 to 45,000 due to the establishment of new companies seeking to take advantage of the AGOA preferences. Other countries are also negotiating trade agreements and countries must be ready and prepared to compete with more countries over time. So how can LDCs seize the opportunity provided by this access?
As China moves up the value chain to produce more value added goods and phases out of labor intensive manufacturing LDCs should look to attract these investments.
In addition, rising labor costs in China as Chinese workers become more educated and demand better jobs will result in Chinese and foreign firms relocating their manufacturing plants to cheaper labor markets. A recent Credit Suisse report predicted labor costs in China for its over 150 million migrant workers could rise by over 20 to 30 percent in the next three to five years. Net FDI inflows into China increased from $30 billion in 2000 to a record $147.7 billion in 2008. With the increasing pressure on the Yuan, and rising labor costs companies will begin to look elsewhere to locate their businesses and their manufacturing. Net foreign direct investment inflows to China 7
increased from $30 billion in 2000 to a record $147.7 billion in 2008, it’s worth the least developed countries taking note as they stand to benefit from FDI relocation.
Recently for example, a large company, the world’s biggest contract electronics manufacturer– announced that it was looking to move some of its manufacturing operations – over $400,000 jobs- out of China. Imagine what attracting a company with 100,000 jobs could do for your economies. In many of these cases firms are looking to move their production to other Asian economies such as Bangladesh, Nepal and Cambodia where labor is abundant and cheap. But also some firms are relocating from Asia into Africa. The race is on to attract these firms.
If only 10 percent of Chinese FDI was available for investment in the LDCs, this would be the equivalent of over US$ 9-14 billion additional FDI into the LDCs. This means LDCs have to prepare their economies for this massive economic transition by building the infrastructure and creating the right environment for private sector to foster.
LDCs will have to compete with in-land China and other non-LDC countries for these new investments. China and India for example are all facing the pressure of rising labor costs in their manufacturing cities so they are investing heavily in infrastructure to link the inland states and provinces to markets at cheaper and faster rates.
LDCs need to export more and more to new markets. This means that the LDCs must find new ways of working and trading with emerging market economies. They need to take action to lower trade costs. Trade costs tend to be highest in those countries at the bottom of the development ladder. There are real gains to lower trade costs. For example, a recent Bank study shows that improving the business environment in Bangladesh halfway to the level of India could increase its trade by about 38 percent. Policy makers must put in place laws that encourage private sector investment. LDCs must make it easier to open businesses, settle disputes and hire skilled labor.
A key ingredient in the decision of firms to invest in LDCs in addition to the cost of inputs and infrastructure is the skills base of the economy.
Seizing the opportunity offered by youth is vital for the future, given that over half of all people in the least developed countries are under 25 years of age. Education is critical. While enrollments rates for primary school in many LDCs have increased over the last decade, they are still low compared to other emerging market economies. Girls’ enrolment continues to lag in many LDC countries.
It’s not just about numbers in the classroom but also what is being taught. In many countries the curricula has not changed to reflect the changing needs of the market place. But there is evidence of change. In sub-Saharan Africa for example despite the huge dependence of many countries on natural resource exploitation there are not that many specialized mining schools and colleges. Today the government of Mali is working with the private sector to build one such specialized school to supply the sub-continent with high quality mining engineers.
LDCs can also learn from the experience of countries such as South Korea and Malaysia. In 1997 faced with changing labor market demands, South Korea reformed its education sector including the curriculum to emphasis the need to prepare secondary school level students for the workforce. Protecting the Poor and Vulnerable; Natural disasters and Fragile and conflict Affected States:
“It is not where you start but how high you aim that matters for success.” Nelson Mandela In many countries close to half the population still lives below the $2 a day mark. Excluding four countries, the GDP per capita of the other 44 countries averaged US$560 in 2009, up from US$269 in 2000. The challenge of addressing poverty has been compounded for many countries with issues of recurring crisis.
Climate change for example will continue to pose significant dangers to economic growth, with more droughts, floods, storms, and heat waves. Over the period 1960-2007, actual reported losses in the worst disaster year reached 86% of GDP in Vanuatu and 100% in Samoa, with respectively 16% and 42% of population affected. We all witnessed the magnitude and size of the disaster in Haiti and the cost of rebuilding.
For the Pacific Island countries and for the Sahel countries for example, reducing the risk of disasters and adapting to the impact of climate change is a social and economic development imperative.
Today, four years to 2015, no low income fragile or conflict-affected country has yet achieved a single Millennium Development Goal (MDGs). Poverty rates are 20 percent higher in countries affected by repeated cycles of violence. Evidence from the 2011 World Development Report on Fragile and Conflict affected States shows that violence is the main constraint to meeting the MDGs. The 1.5 billion people who live in countries affected by organized violence are twice as likely to be undernourished, 1.5 times as likely to be impoverished, and their children are three times as likely to be out of school and jobless.
Fragility and conflict in most cases is the result of a weak social contract between people and their governments. Most often as in natural disasters and other crisis, the poor and the vulnerable are the most affected by these crises and most likely to fall deeper into poverty.
This is one area where we cannot stand-by as observers. On the disaster front and in the case of conflict and other crises the poor and vulnerable suffer the most.
To break these cycles, we must strengthen national institutions and governance processes to provide citizens with security, justice, and jobs. Countries with accountable institutions, where citizen participation in the decision making processes is facilitated and where there is room for social accountability mechanisms to be deployed usually do better in containing conflict and managing crisis including natural disasters.
In addition our experience shows that countries with real time risk monitoring systems to identify and understand the levels of vulnerability of their population are those most able to respond in times of crisis. During the 2008 food crisis, we also found out that countries with the basic administrative structures needed to develop needs- based safety nets were best able to respond to the crisis. These are some lessons LDCs must take from other developing countries and begin to implement in order to protect their medium term growth ambitions. Clearly the international community is and can play a role to support LDCs.
It’s about providing more access to resources, facilitating trade and investment especially south-south exchanges and finally through our knowledge and advocacy.
The good news is that despite the recent financial crisis, Official Development Assistance (ODA) has continued to rise and it is expected to reach $126 billion in 2010. The World Bank just concluded the 16th replenishment of the International Development Association (IDA16) and thanks to your help the World Bank raised a record $49.3 billion, an 18 percent increase from three years ago. With these resources, we’ll have the ability to help build 80,000 kilometers of roads; train and recruit over two million teachers; and give access to improved water sources to 80 million more people.
Going forward in agriculture, the World Bank’s Agriculture Action Plan projects an increase in World Bank Group lending from US$4.1 billion annually in FY06-08 to between US$6.2 billion and US$8.3 billion annually over FY10-12. Actual lending in FY10 was US$6.1 billion to over 51 countries over half of whom are LDCs.
The World Bank Group is also strengthening its agriculture partnerships such through support to the reformed Consultative Group on International Agricultural Research (CGIAR) and the establishment of the Global Agriculture and Food Security Program, which has already approved US$321 million in grants for eight countries — all to LDCs. The Bank is also working closely with United Nations High Level Task Force on the Global Food Security chaired by UN Secretary General Mr. Ban Ki-moon.
On helping countries improve their investment climate to attract and retain FDI, we work with countries to support reforms aimed at easing the business environment and improving infrastructure quality. We also work with WTO and UNCTAD to support the aid for trade agenda. We’re also strong supporters and help in south–south business knowledge sharing.
The Bank has also moved to help poor people hard hit by disasters. Following the 2009 tsunami, IDA was able to provide significant additional resources to both Samoa and Tonga. The Bank committed a total of $250 million to support Haiti’s recovery and development after its earthquake. The Bank hosts the Global Facility for Disaster Recovery and Reconstruction (GFDRR) and has established a Disaster Risk Financing and Insurance program to boost capacity building and knowledge sharing on disaster risk financing.
Since 2000, IDA has provided over US$5.9 billion in post-conflict reconstruction assistance to fragile and conflict-affected countries. Our latest World Development Report is also helping re-shape the way countries and development agencies approach the issue. The report shows that institutions matter, citizens’ matter and strong citizen participation and social accountability can improve development outcomes.
The World Bank Group, along with other development partners is keen to continue to support.
In conclusion, as we meet here in Istanbul to craft a new Action Plan for the LDCs, we must learn the lessons from the past celebrate our successes and use this to chart a course which can deliver a decade of growth while halving the number of poor in LDCs.
As Mandela said “It always seems impossible until it’s done.”
Investing into a more sustainable future: changing businesses from the inside out
By Shawn Welch, Vice President and General Manager of Hi-Cone Worldwide
As industries across the world are facing unprecedented uncertainty and anticipating the economic implications of the current health crisis, business leaders have the unique opportunity to seize the chance to make lasting, positive changes and re-interpret the business challenges in a positive way – without forgetting or minimising the toll the pandemic has taken. When trying to identify a way forward, the future must be sustainable. We must take this opportunity to find a more sustainable way for businesses and manufacturers to survive.
Environmental and economic concern have only increased the gap on what consumers want – more sustainability – and how much progress businesses can make without risking their viability. However, rather than giving up on ambitious goals, maybe we need to reframe the way we look at sustainability. So far, businesses have tended to react to consumer demands, often without looking into the long-term implications and research-based due diligence one would expect. Therefore, now is the right time to be more deliberate: to continue on the path towards a truly sustainable ‘new normal’, businesses need to consider the bottom line impact more than ever before and truly invest in changing their business models to become more sustainable.
To meet the UN’s ambitious 2030 Sustainable Development Goals, businesses ultimately must thrive – working towards establishing a circular economy remains crucial. Instead of a linear ‘extract, use, dispose’ approach, materials need to be respected and re-used as many times as possible, which is only possible if products are designed for re-use, re-manufacturing, repair or restarting. After all, any and all consumption comes at a price. In manufacturing, processes draw on resources to produce items that, once they have served their purpose, become surplus to requirements. Yet, to ignore this is to take an incomplete view of sustainability: instead, materials are extracted from waste to re-enter production processes. Reuse and recycling initiatives are central to this and great strides have been made in raising awareness of this need. The full environmental cost of production and consumption includes the choice of materials themselves but also the level of carbon emissions generated, and energy consumed.
Once products and processes have redesigned for a circular approach, this initial investment will often easily be recouped, especially if we start with looking at the facts when starting this crucial process. To make the Circular Economy a focus for any business very often means changing the business model. Here, investing in research and development is vital. In the packaging industry, for example, we are seeing that customers and consumers are increasingly more focused on sustainability, and that surprising changes can unlock societal and business value. Through minimising a product’s carbon footprint or making recycling easier for consumers, lifecycle-assessment-based product redesigns or using recycled plastics instead of larger quantities of cardboard, companies are identifying these more creative options and enjoying the long-lasting benefits that come with implementing them. In any case, leadership is key. A research-driven approach gets everyone on-board and seeing management committing to these goals as part of business plans helps cement these. At a recent Reuters Responsible Business Summit virtual panel, I was part of an interesting conversation. Here, Yolanda Malone, Vice President Global R&D Snacks PKG, PepsiCo, discussed how leaders have to drive the behaviours within the organisation and the tone for the culture. She explained that her sustainable plastics vision is a world where plastics never become waste. Only through putting the mantra of “reduce, recycle, rethink and reinvent” can we bring circular products to consumer. She stressed that, if we don’t reinvent, we will fall back into old habits.
Of course, consumer behaviours play a part and the easier the solution, the more likely consumers will get behind it. End consumers are becoming increasingly conscious of packaging. So, to be truly circular, we need to take into account the entire lifecycle. Mindset change needs to continue to happen. Consumers need to be clear about what their choices are. To achieve this, we must change our businesses from the inside out, allowing for close collaboration inside and outside of our organisations. Other organisations – such as governments and recycling organisations – will need to be involved in businesses’ efforts, multiplying the impact our investments will have. We must address all aspects of sustainability and, for example, have better recycling, a focus on infrastructure and emphasis on consumer education. To recover, reuse and recycle, the R&D must be in place and dedicated to sustainability. Partnerships are important as we, as other leading global companies realise, cannot do this alone. Collaboration is key when investing in a more sustainable, more Circular, future.
Securing Information Throughout the Supply Chain – Preventing Supplier Vulnerabilities
By Adam Strange, Data Classification Specialist, HelpSystems
The financial services sector is experiencing extreme disruption coupled with rapid innovation as established institutions strive to become more agile and meet evolving customer demand. At the same time, new market entrants compete fiercely for customers. Increasing operational flexibility, through the deployment of cloud infrastructure or via digital transformation initiatives, is critical for future competitiveness but it has also driven regulatory and security challenges, particularly around working with suppliers.
That said, the benefits of a diverse, interconnected supply chain are compelling: agility, speed, and cost reduction all weigh on the positive side of the equation, prompting financial institutions to pursue close, collaborative relationships with suppliers, often numbering in the hundreds or thousands.
Weakness in the supply chain
On the negative side is the increased cyber threat when enterprises expose their networks to their supply chain. In our modern interconnected digital ecosystems, most financial organisations have many supply chain dependencies and it only takes one of these to have cybersecurity vulnerabilities to bring a business to its knees.
As a result, breaches originating in third parties are common and costly – a Ponemon Institute/IBM study found that breaches being caused by a third party was the top factor that amplified the cost of a breach, adding an average of $370,000 to the breach cost.
Concern around the supply chain was also evidenced in a recent report we have just issued, whereby we interviewed 250 CISOs and CIOs from financial institutions about the cybersecurity challenges they face and nearly half (46%) said that cybersecurity weaknesses in the supply chain had the biggest potential to cause the most damage in the next 12 months.
But sharing information with suppliers is essential for the supply chain to function. Most financial services organisations go to great lengths to secure intellectual property, personally identifiable information (PII) and other sensitive data internally, yet when this information is shared across the supply chain, does it get the same robust attention?
Further amplified by COVID-19
Financial service organisations have always been a key target for cyber attacks. Our research showed that since COVID-19 hit, the risk has elevated further, with 45% of the respondents seeing increased cybersecurity attacks during this period. Likewise, hackers are rejecting frontal assaults on well-defended walls in favour of infiltrating networks via vulnerabilities in suppliers.
But financial services organisations must maintain reputations and ensure customer trust. Firms are keen to demonstrate that they are protecting customer assets, providing an ultra-reliable service and working with trustworthy partners. So, what can they do to better protect their supplier ecosystem?
At the very least, they need to ensure basic controls are implemented around their suppliers’ IT infrastructure. For example, they must ensure suppliers maintain a secure infrastructure with a minimum of Cyber Essentials or the equivalent US CIS certification controls. Cyber Essentials defines a set of controls which, when implemented, provide organisations with basic protection from the most prevalent forms of threats, focusing on threats which require low levels of attacker skill, and which are widely available online.
Likewise, they need to ensure good information management controls are in place and this begins with accurate information/data classification. After all, how can you apply appropriate controls to your information unless you know what it is and where it is?
How ISO27001 helps organisations put in place a data classification process
The international standard on information security, ISO27001, describes the basic ingredients for data classification to ensure the data receives the appropriate level of protection in accordance with its importance to the organisation. It comprises three basic elements:
- Classification of data – in terms of legal requirements, value, criticality and sensitivity to unauthorised disclosure or modification.
- Labelling of data – an appropriate set of procedures for information labelling should be developed and implemented in accordance with the organisation’s information classification scheme.
- Handling of assets – procedures for the handling of assets developed and implemented in accordance with the organisation’s information classification scheme.
Adoption of this methodology will help financial services organisations and their supply chain take a more data-centric information security approach. However, there are essentially four key stages for implementing a data risk assurance supply chain approach and these are:
1. Approval – in organisations with complex supply chains senior management, vendor management, procurement and information security will all need to support a robust risk-based information management approach. Details of previous incidents and their impact alongside the business benefits will be essential to gain stakeholder buy in.
2. Preparation – Organisations should start with Tier 1 suppliers and initially identify the contracts with the highest business impact/risk. They should identify and record information repositories and the data that they contain together with the responsible business owners. Define a business taxonomy based on information categories of that data and include supply chain factors such as what information categories are shared.
For example, they need to understand the business impact of compromise against each of the information categories. Have any suppliers suffered security incidents? What assurance mechanisms are in place? Once all this information is collated the organisation can create a data classification policy and define a set of controls for each data category.
3. Discovery – Select each data category and identify the associated contracts. Then prioritise the data category based on the risk assessment and verify that the data security controls and arrangements for each data category and contract meet the overall requirements. Once complete, hand over the contract for inclusion in the vendor management cycle.
4. Embed process – the overall objective is to embed information risk management into the procurement lifecycle from start to finish. Therefore, whenever a new contract is created there are a number of actions required which embed data risk at each stage of the bid, tender, procurement, evaluation, implementation and termination phases of the contract.
To summarise, organisations should start by researching the information risk and security frameworks such as ISO27001 and others. They should then focus on defining their business taxonomy and data categories together with the business impact of compromise to help develop a data classification scheme. Finally, they should implement the data classification scheme and embed data risk management into the procurement lifecycle processes from start to finish. By effectively embedding data risk management and categorisation into their procurement and vendor management processes, they are preventing their suppliers’ vulnerabilities becoming their own and are more effectively securing data in the supply chain.
Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19
Organizations in the Middle East have had to take immediate actions in reaction to the COVID-19 pandemic, such as shifting to remote and virtual work, implementing new ways of working and redirecting the workforce on critical activities. According to Deloitte’s 10th annual 2020 Middle East Human Capital Trends report, “The social enterprise at work: Paradox as a path forward,” organizations now need to think about how to sustain these actions by embedding them into their organizational culture.
“COVID-19 has created a clarifying moment for work and the workforce. Organizations that expand their focus on worker well-being, from programs adjacent to work to designing well-being into the work itself, will help their workers not only feel their best but perform at their best. Doing so will strengthen the tie between well-being and organizational outcomes, drive meaningful work, and foster a greater sense of belonging overall,” said Ghassan Turqieh, Consulting Partner, Human Capital, Deloitte Middle East.
According to the Deloitte report, many organizations in the Middle East made quick arrangements to engage with employees in the wake of the pandemic through frequent communications, multiple webinars where senior leaders addressed employee concerns, virtual employee events, manager check-ins, periodic calls and other targeted interactions with the workforce.
The report also discussed how UAE and KSA governments have reexamined work policies and practices, amended regulations and introduced COVID-19 initiatives to support companies and the workforce in the public and private sectors. Flexible and remote working, team-building and engagement activities, well-ness programs, recognition awards and modern workspaces are among the many things that are now adding to the employee experience.
Key findings from the Deloitte global report include:
- Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
- 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
- Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
- Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.
“Worker well-being is a top priority today, and similarly to the rest of the world, companies in the Middle East are focusing their efforts to redesign work around well-being by understanding workforce well-being needs,” said Rania Abu Shukur, Director, Human Capital, Consulting, Deloitte Middle East.
Beyond Transactions: The Payment Revolution
By Marwan Forzley, CEO of Veem The uninterrupted disruption brought on by the pandemic accelerated the need for robust, digital-first...
The UK’s hidden payments crisis: why businesses should rethink their payments strategy
By Edwin Abl, Chief Marketing Officer at Modulr. As the economic conditions imposed by the Coronavirus endure, businesses are facing a...
Investing into a more sustainable future: changing businesses from the inside out
By Shawn Welch, Vice President and General Manager of Hi-Cone Worldwide As industries across the world are facing unprecedented uncertainty...
Securing Information Throughout the Supply Chain – Preventing Supplier Vulnerabilities
By Adam Strange, Data Classification Specialist, HelpSystems The financial services sector is experiencing extreme disruption coupled with rapid innovation as...
RegTech 2020: The rise of Open Banking
This month on the RegTech 20:20 podcast, host Alex Ford is joined by industry experts Gavin Littlejohn, Chairman of The...
The case for AI technology adoption in financial back-office roles to improve efficiency
By Tomas Gogar, AI CEO, Rossum In this era, digital transformation isn’t anything new. Nonetheless, it can still cause a...
Gain financial regulation qualification online
Gain financial regulation qualification online Warwick Business School in partnership with the Bank of England are delighted to offer...
COVID-19: Dealing with fraudulent applications for the Bounce Back Loan Scheme
By Ed Lloyd, EVP Global Head of Sales, Encompass The COVID-19 pandemic is still having a devastating impact on businesses...
EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection
By Andrew White, Partner and UK & European patent attorney at intellectual property firm, Mathys & Squire The EU Commission...
InsurTech is helping to drive the digital evolution of the UK motor retail industry
By Alan Inskip, Tempcover CEO & Founder If the last nine months have made anything clear, it is that the...