Walid Hejazi

How Canada can, and must, empower Indigenous communities: UUֱ�� expert

noreen.rasbach — Mon, 01 Oct 2018 19:29:01 +0000

How Canada can, and must, empower Indigenous communities: UUֱ�� expert noreen.rasbach Mon, 10/01/2018 - 15:29

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A dilapidated house in the northern Ontario First Nation of Attawapiskat. The parliamentary budget officer says it will cost more than $3 billion to bring First Nations water infrastructure up to standards (Nathan Denette/The Canadian Press)

Walid Hejazi

Topic

City & Culture

Global

Indigenous

Infrastructure

Rotman School of Management

The Conversation

The federal government recently spent $4.5 billion to purchase the Trans Mountain pipeline, a move that highlights the significant political risk underlying the project’s expansion.

The government purchase was required as a last resort because there’s no private sector appetite to bear the risks. It’s culminated in a Federal Court of Appeal ruling that halts, at least temporarily, the expansion project.

That court ruling made reference to inadequate consultations with Indigenous Peoples as a major factor in its decision.

This isn’t surprising. Many of Canada’s major infrastructure projects that have an impact on Canada’s Indigenous communities have resulted in protests, legal challenges and political roadblocks.

It’s now time for federal and provincial governments to treat Indigenous communities with more respect and engage them as collaborators in infrastructure projects that impact their communities, rather than a simple obstacle to be dealt with after the deal is made. There are sufficient benefits to satisfy all stakeholders.

Effective engagement will result in a more timely and certain path to completion for critical infrastructure projects, thus advancing Canada’s best interests.

Closing the income gap

But there is another important outcome that frankly must be elevated in importance.

Canada’s Indigenous population numbers about two million, or five per cent of Canada’s population. The average income across this community is half that of the rest of Canadians.

Engaging these communities meaningfully would close this income gap, adding $50 billion to Canada’s annual GDP. This would empower Indigenous communities, promote economic reconciliation and correct a national tragedy that has impacted these Canadian communities.

In a powerful op-ed in the Globe and Mail, Sharleen Gale, head of the First Nations Major Projects Coalition, wrote: “For generations, First Nations communities have been constrained by the Indian Act and decades of government paternalism and over-regulation. We did not have the chance to break into the modern economy, and lacked the basic business tools available to other Canadians. We could not borrow money to buy and build our homes, let alone get the funds needed to make major investments.”

Improvements to financial and economic structures have been advanced that would now enable sustainable Indigenous economic participation in large infrastructure projects.

This would allow the establishment of a timely and certain path to consultation, approval and completion of projects, while providing Indigenous communities access to the financial resources needed to develop their local economies.

Municipal bonds

Consider the following systematic barrier.

Municipalities have predictable recurring revenues from their tax base, and can borrow money by issuing municipal bonds at low interest rates because those bonds are guaranteed by provincial governments.

In contrast, Indigenous communities do not have a predictable recurring revenue source that would enable planning and budgeting for local infrastructure, and federal legislation explicitly states that Ottawa will not guarantee Indigenous bond issues.

Unlike other municipalities, Indigenous communities are unable to fund infrastructure and other needed investments.

In a recent infrastructure competition, we proposed an innovative solution to this problem.

The CanInfra Summit and Ideas Conference/CanInfra

The Indigenous Infrastructure Investment Trust, or 3IT financial framework, puts Indigenous communities on an equal footing with municipalities.

This structure allows for the mobilization of capital into Indigenous communities in a way that allows for the development of both critical infrastructure projects like Trans Mountain as well as local infrastructure within Indigenous communities.

A recent World Bank report on mobilizing global capital for participatory investment in infrastructure projects illustrates how this approach has proliferated across the developing world. As the 3IT framework demonstrates, it can easily work in Canada.

But bold leadership is required. Without it, critical infrastructure projects will continue to be delayed, natural resources will remain stuck in the ground and Indigenous communities will remain shut out of the modern economy.

Walid Hejazi is an associate professor of international business at the Rotman School of Management at UUֱ��. David Robinson is executive director of The Techknowledgey Group.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Lessons in Chinese history as America shuts off from the world: UUֱ�� expert

Christopher.Sorensen — Fri, 06 Jul 2018 04:00:00 +0000

Lessons in Chinese history as America shuts off from the world: UUֱ�� expert Christopher.Sorensen Fri, 07/06/2018 - 00:00

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There are parallels in Chinese history to U.S. President Donald Trump’s isolationism (Photo by Mark Wilson/Getty Images)

Topic

Rotman School of Management

The Conversation

Trade

Those who have studied history understand the importance of being engaged in the global economy.

Two thousand years ago, China represented nearly 25 per cent of the global economy. In 1600, it was 30 per cent, and a third in 1820. The country was a global powerhouse, to say the least.

There is a famous story from 1792 when King George III’s ambassador led a trade mission to China with a cargo of the latest European technologies to present to the Chinese emperor – telescopes, globes, barometers, lenses, clocks, carriages, and other such things.

Historians report the Chinese emperor said: “There is nothing we lack – we have never set much store on strange or ingenious objects, nor do we want any more of your country’s manufactures,” thus reflecting his insular view.

A complicated set of factors, including weak Chinese leadership, internal conflict and a rejection of Western technology led to China turning inward and missing out on the Industrial Revolution. This left China significantly weakened, and subject to invasion and Western humiliation.

China down and out for more than a century

China’s demise in the 1800s lasted for more than 100 years. It was not until the 1978 Chinese Communist Party reforms under Deng Xiaoping that China re-emerged, allowing it access to Western markets and technology, thus providing economic growth and prosperity for the Chinese people.

Today, on a PPP (purchasing power parity) basis, China is the largest economy in the world – as it was 200 years ago.

People monitor stock prices in Beijing in June 2018. China is back as a global economic powerhouse after an insular era spent in the shadows (AP Photo/Andy Wong)

Interestingly, China’s growth was driven by exports in industries that saw the most significant liberalization. Going forward, China’s growth will likely slow as it will need to increasingly compete in industries in which there is much more protection.

This experience provides clear lessons for the United States.

The U.S. has been the world’s largest economy for the past 150 years. As journalist and author Fareed Zakaria noted in his 2008 book The Post-American World and the Rise of the Rest, it’s now a post-American era, where the U.S. is not falling, but other countries are closing the gap.

But Zakaria’s book was published before the rise of Trump and the insular and protectionist sentiment sweeping America.

Trump rejects access to global economy

The first tangible action of the Trump administration that pushed the U.S. towards an isolationist stance was his rejection of the Trans-Pacific Partnership, a trade agreement that would give the U.S. access to an enormous share of the global economy.

Donald Trump would be wise to heed the lessons of Chinese history as he shuts off the United States from the rest of the world (AP Photo/Manuel Balce Ceneta)

Trump has also ordered a renegotiation of NAFTA, and has imposed tariffs on steel and aluminum imports into the U.S., prompting swift retaliatory action from the Europeans and Canadians. And now there is a very real possibility of a further round of tariffs. An all-out trade war seems increasingly likely, with dangerous economic and political ramifications for the United States and the world economy.

Also, and remarkably amid tensions with North Korea, Trump has also forced more protectionist dimensions into the U.S.’s free-trade agreement with South Korea.

Trump’s views that such agreements allow the rest of the world to benefit at the expense of the U.S. is so very wrong – these are not zero sum agreements. His moves to limit immigration are another dimension in his insular and protectionist vision for the U.S.

Reminiscent of China

Closing the U.S. off to the rest of the world is reminiscent of China more than 200 years ago. Of course, the circumstances are very different and it’s a different age. Nevertheless, leading economies of the world must be fully engaged in the global economy, both economically and politically.

It’s time for Trump and his supporters to understand that it is inconsistent to be a global power and protectionist.

The United States must remain open to trade, investment, immigration and the free flow of ideas. It must remain fully engaged in international institutions such as the United Nations, the International Monetary Fund and the World Bank – being a superpower is about both hard and soft power.

There is a clear contradiction between “make America great again” and closing off from the world. If the U.S. closes itself to the world, its future as a world leader in every way is at significant risk.

Walid Hejazi is an associate professor of international business at the UUֱ��'s Rotman School of Management.

This article was originally published on The Conversation. Read the original article.

UUֱ�� expert on looking beyond NAFTA: Why Canada must find new global markets

noreen.rasbach — Tue, 19 Jun 2018 18:22:52 +0000

UUֱ�� expert on looking beyond NAFTA: Why Canada must find new global markets noreen.rasbach Tue, 06/19/2018 - 14:22

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Plans for a new bridge between Detroit and Windsor will increase the flow of goods between Canada and the U.S. But Canada’s current trade war with the U.S. means the country should diversify its economy (photo by David Chidley/The Canadian Press)

Walid Hejazi

Topic

Global Lens

Rotman School of Management

The Conversation

Trade

United States

Canada’s Senate committee on banking, trade and commerce is undertaking yet another study on Canadian trade, this time looking at the potential impact of the NAFTA renegotiation on the Canadian economy.

In testifying before the committee recently, I argued it’s truly a sad state of affairs that the prosperity of millions of Canadians can be impacted by the decision of one man – U.S. President Donald Trump.

As many have argued for the past 20 years, the Canadian government and businesses must deploy strategies to globalize the Canadian footprint beyond the United States. It’s time to move beyond simple rhetoric and move to action.

Theory and experience tell us that such change is very difficult without a sense of urgency. More importantly, however, implementing the needed change gets more difficult the longer it is delayed.

Preparing for an end to NAFTA

There is now a very real possibility NAFTA could end. While there is tremendous uncertainty on what the economic impact would be, one thing is clear: It’s not good. In contrast, the importance of having a more diversified global footprint is crystal clear.

Had Canada deployed and effectively pursued strategies to deepen its trade and investment relationships with fast-growing emerging markets over the past few decades – instead of its stubborn fixation on the U.S. market – the risk to the prosperity of Canadians would be mitigated.

Both a smaller share of Canada’s trade would be with the United States and, more importantly, the networks would be in place to buffer trade disruptions with the U.S. market. Instead, we have neither.

It’s incumbent upon the Canadian government to focus its efforts on emerging markets, including China, India and elsewhere. At the same time, policies must be created to help Canadian firms access those markets. This involves improving the innovative capacity and productivity of Canadian companies.

Ottawa doesn’t get it

Even in the midst of perhaps the most significant threat to Canadian prosperity in the post-war era, the Canadian government still doesn’t get it. Ottawa’s refusal to allow a deal that would see construction firm Aecon Group Inc. be taken over by a Chinese state-owned company on national security grounds has not helped the case for a potential free trade agreement with the Chinese. The decision sends all the wrong signals.

Prime Minister Justin Trudeau and Chinese President Xi Jinping greet each other at a meeting in Beijing in 2017. The Trudeau government has sent China mixed messages about its willingness to build stronger economic ties (photo by Sean Kilpatrick/The Canadian Press)

The Aecon ruling comes at a time when Canada must deepen its trade and investment ties with China to diversify trade away from the United States. Instead of embracing this opportunity, the Canadian government decided essentially to tell the Chinese that Canada doesn’t trust them. How is Canada going to seriously develop a trade and investment agreement with China with this attitude?

Harper limited Chinese investment

This, of course, is not new. The previous government of Stephen Harper had similar concerns about China – after approving the takeover of Calgary-based Nexen Inc. by China’s CNOOC Ltd. in 2013, it simultaneously announced it would rule out further investments into the energy sector by state-owned enterprises. That policy essentially focused on excluding Chinese investment.

We are well beyond the point where diversifying Canada’s global footprint can be considered urgent. What may be most surprising to Canadians is that in the years to come, this is exactly what will happen – but no longer by choice.

As NAFTA collapses, there will be no choice but to find new markets. Change will be forced upon Canadians with far worse outcomes than had a strategy been deployed well in advance.

The sooner Canada truly realizes the global economy has changed and there are tremendous opportunities beyond the United States, the sooner Canada’s over-dependence on just one increasingly protectionist market will fall.

Regardless of the outcome of the current trade tensions, let’s not remain vulnerable going forward.

Walid Hejazi is an associate professor of international business at UUֱ��'s Rotman School of Management.

This article was originally published on The Conversation. Read the original article.