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World tomorrow


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Future World
Global Military State
Superpower, Hyperpower
Global Technological Leader

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World tomorrow

  1. 1. The World of Tomorrow: “Smart Green Superpower” Pilots Dr. Azamat Sh. Abdoullaev Vision, Innovation and Technology shape the World to come “Unresponsive, unaccountable, inefficient, and ineffective bureaucracies seem impossible to change with the current tools in place, requiring a new approach, called citizen-centered reform model”. The World Bank RESUME We are finally realizing that many life-critical things are at critical points when radical political decisions must be made and crucial economic actions must be performed. We are finally recognizing that many significant things are never will be the same. We finally understand that there is no close end for the current global crisis without creatively disruptive changes. The worldwide crisis might continue concurrently with the regional wars and sweeping social unrest, ultimately ending up with: I. the Ubiquitous Global Chaos (of a “multipolar world” style) II. the Military World State (of an IGIL style) III. the Intelligent World Order, a Smart World of Intelligence, Innovation, Integration and Prosperity To show a possibility of the best of all possible worlds, the Smart Superpower Global Initiative has been launched considering as the potential superpowers of the 21st century Europe (intellectual and socio-political capital), China (human and economic capital), Russia (ecological capital), America (technological and military capital) and India (human resources and cultural capital). As a transnational intelligent community pilot and demonstration project, the “Smart Green Europe” has been proposed to the President-elect Jean-Claude JUNCKER and the President of the Central Bank of Europe as a Pan-European Investment Platform under the European Fund of Strategic Investments. (The correspondence is supplemented). The “Smart Green Russia” has been welcomed by the Russian Government for seeking funding from the National Well-Being Fund and Pension Fund. Europe, China, Russia and India are possible candidates for growing Smart Green Superpower and Technological Leader of the 21st century, depending on several key factors, having the least “unresponsive, unaccountable, inefficient, and ineffective bureaucracies…”, real direct democracy and socio-political dominance of intellectual elites and smart people over political, technical, managerial or business elites. Currently, this might be the European Union where new top decision makers look inclined towards a smart, sustainable and inclusive growth, intelligent governance, social changes and global industrial leadership. THE WORLD’S STATE OF AFFAIRS, OR WHY WE NEED AN INTELLIGENT ORDER We see that the world at large is lacking any good sense, intelligence and efficiency, being led by intolerably stupid politics and poor commercial ideology. As such, it is abundant of global imbalances, social disorder and exclusion, political disintegration and environmental neglect, injustice, dishonesties and corruption and many other social evils and immoralities. As a result, the present world is abundant of dangerous situations and threats and risks, affecting individuals and persons, families and businesses, groups and communities, cities and regions, nations and countries, societies and international communities. To make things ever worse, that wildly chaotic and highly volatile world is plagued by the poor global government, corrupted national leadership and incompetent local administration. Nowadays, that disordered, uncontrolled world is living through a crucial stage, when decisive changes are impending, when the whole planet is looking for a radical transformation in all the key spheres, sectors, parts and systems, which is no longer be kept and managed in the standard ways. The scope of global crisis, its threats and risks, is becoming overwhelming running from the global and local stock markets to safety and security to the school systems and family values, to the whole countries and international communities. Going across all aspects of human being, it continually infects all parts of human life, all kinds of economic schemes and political systems, all types of communities, all sectors of human activities. The signs of such a broadly unsustainable world are all around us, their markings as sweeping and multifarious as: 1. Economic Crisis (mass unemployment, recession, depression, bubbles, boom/bust patterns, economic globalization, world poverty) 2. Financial Crisis (the state budget crises, banking crisis, currency crisis, liquidity crises, mass insolvency, credit crunch) 3. Societal Crisis (social disunity, social unrest, low safety and security, social disorder) 4. Political Crisis (political disunity, political misgovernment, regional wars, political corruption) 1 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  2. 2. 5. Cultural Crisis (cultural disunity, commercial culture expansion and human isolation, religious wars and social hatred) 6. Ecological Crisis (wholesale ecosystems destruction, environmental disasters) 7. Information Crisis (information propaganda, digital divide, mass advertising) 8. S&T Crisis (knowledge fragmentation, disunity of science, arts and technology, education, research and innovation fragmentation, R&D neglect) 9. Ideological Crises (the crisis of basic values, the standard mindsets, mass consumerism, moral corruption) 10. Personal Crisis (personal situations, jobs, household finances, alcoholism and drugs addiction) The key demand of any healthy crisis is the need for change, which is the only constant thing in the world. For the planetary crisis, it is a comprehensive radical change of worldwide scale and scope. It’s now clear that the dominant economic scheme is doomed to extinction, and should be replaced by a self- sustaining dynamic world, which is smarter and more sustainable, that is, intelligent, innovative, healthy, secure, liveable, efficient, moral, fair, open, ecological, and interconnected. The current scheme of production and distribution and consumption causes poverty, inequality, speculation, corruption, and ecological destruction, thus systematically resulting in the world crises and political collapse, social chaos and civil revolt. Accordingly, its fiscal extension, financial capitalism, breeds market speculation and economic corruption, thus resulting in financial crises and economic collapse, inequality and poverty. The former world’s leading economy, the USA, generated the ever worst financial crisis, accompanied with the international wars and extreme regional and worldwide poverty, while its Fortune corporations not legally paying any income tax. Again, the rising world’s largest economy, the European Union, is already on the verge of collapse and disintegration, to be succeeded with the transnational community breakdown and political demise, so affecting all the international and regional unions of nations. There could follow the complete collapse of the unsustainable world of the financial capitalism, where the puny minority, 1%, rules the overwhelming majority. It’s plain that the current world is failing to sustain the human life causing degradation of all sorts and kinds: mental, social, political, cultural, and environmental. The existing world: "meets the needs of the present … compromising the ability of future generations to meet their own needs." We need all to recognize the current world as an Unsustainable World, the Inferior World liable to social threats and political risks, technological threats and ecological risks, economic risks and military threats, cultural risks and demographic threats. This world is deeply indebted, being at the brink of sever and prolonged depression. Global debt has increased by $57 trillion since 2007, outpacing world GDP growth, last year coming to an unprecedented figure of $ 199 trillion, where governments and corporations make most contributions. Led by Japan (517% GDP), Spain (401% GDP), and the USA (269% GDP), governments in advanced economies have been borrowing heavily to fund bailouts in the crisis and offset falling domestic demand in the recession, while corporate and household debt continues to grow rapidly. Debt remains an essential tool for the global economy, funding needed investments in infrastructure, business expansion, and urbanization. High debt levels, whether in the public or private sector, have historically placed a drag on growth and raised the risk of financial crises that spark deep economic recessions. (Debt and (Not Much) Deleveraging, McKinsey Global Institute, 2015). The rich is richer, the poor is poorer, it is a permanent destructive “rule” of the current world system: the total population has reached seven billion, while only 15% makes ends meet. The climate is warming. Ubiquitous pollution, of air, water, food, soil,… and our souls. Bio species are being systematically eliminated. Mass pandemics. Civil wars. Global and local terrorism, in the most peaceful places of the world. And all is accompanied, or caused, by the most ineffective global governance and corrupted political leadership and outdated regional and local administration operations. Thanks to a good human reason, crisis has two key meanings: “an unstable situation of extreme danger and difficulty”, or “a crucial stage and turning point in the course of things”. In other words, the world is in a transitional critical stage either to go for a resource-efficient, inclusive and smarter world prioritizing knowledge, innovation and innovative technologies, when many former ideas, strategies, policies and practices must be revised or just rejected, or to suffer a “permanent loss in wealth and potential for future growth” (Communication from the Commission, Europe 2020, a Strategy for Smart, Sustainable and Inclusive Growth). Since we rather well know how to create the unintelligent dumb world, let’s see how to shape its opposite, the intelligent smart world. 2 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  3. 3. HOW TO CREATE an INTELLIGENT WORLD Nowadays, the global strategy, initiatives, and actions for new world are coming not from international political structures and organizations, like G 20 or UN, but rather from smart businesses, modelling the Future World as a Smarter Planet (IBM), Smart + Connected Communities (Cisco), or as a Smart World (SEC “X” Consortium). The IBM’s Smarter Planet is projected as the world with digitally smarter cities, buildings, infrastructure, government, intelligence, education, healthcare, public safety, telecom, banking, retail, stimulus, work, traffic, transport, computing, products, food, energy, oil, water. In turn, the Cisco's Intelligent Urbanization, a.k.a. Smart + Connected Communities, aims to convert physical communities into connected (intelligent) communities, targeting at such significant areas of human life as: Smart Connected Buildings, Smart Grid, Smart Connected Real Estate, Safety and Security, Connected Transportation, Environment, Education, Healthcare, Sports and Entertainment, and Government. The Smart World’s holistic global strategy is integrating the future world scenarios, like the Smarter World or the World’s Intelligent Urbanization, in the single I-World Development Framework, as specified in the Smart World Manifesto. The optimistic scenario, building the Smart World, as a Future World of Intelligent Communities, calls for integrative development models, initiatives, principles, strategies, standards, solutions, and innovative converging technologies ( And it requires merging all the key domains, physical, natural, digital and knowledge worlds, assets, and resources, to develop more sustainable and liveable world with intelligent eco-communities and integrated infrastructures, such as the Internet of Things/Web of Entities, or globally distributed RES Networks, as replacing centralized fossil fuel infrastructures. The IBM’s Smarter Planet, Cisco’s Intelligent Urbanization, or Smart + Connected Communities, Huawei’s Smart City, Microsoft’s 2.0 World, are successive contributions into structuring the urbanized world, its key sectors and regions, by using intelligent development strategies and strategic computing technologies. The mentioned two big IT companies have been promoting two big ideas, for the same global audience: the Smarter World and the Smart + Connected Communities. The latter is focusing on five applications, transportation, energy and utilities, real estate, safety and security, and citizen services (education, government, healthcare, sport and entertainment), to achieve the network-based sustainable communities. The former one is now about 3i World, instrumented, interconnected and intelligent, covering whatever we like to have as more efficient, sustainable, or intelligent, from Analytics to Work, now including Smarter City as well. A viable way to real sustainability is the integrated holistic approach of the Smart Sustainable World X.0, merging the IBM’s Smarter Planet & Cisco’s Smart+Connected Communities, as well the UN’s Agenda 21, the EU’ Charter on Sustainable Cities and Towns, and the Smart Europe Strategy 2020. Connecting the Natural, Social and Digital Worlds (as the Virtual World of information resources on the WWW), the World X.0 makes the largest heterogeneous natural-economic-social-technological system (see the Smart World keynote). In such an integrated conception of the urbanized world, a hierarchy of smart communities is emerging as socio-territorial entities, guided by full sustainability and innovation in research, knowledge and technology, public policy, organization, business, finance, and governance. The X.0 World is defined by intelligent digital infrastructures, emerging as a smart global community of full sustainability (Environmental or Ecological, Political, Social, Cultural, Economic, Technological Informational, Regulatory or Legal), at all levels, local, urban, national, international, continental, and global. THE SMART INTELLIGENT WORLD DEVELOPMENT ROADMAP The Smart World strategy is becoming a roadmap and guidelines for global ICT industry, like it has been highlighted by the Europe’s Electrical Engineering and Electronics Industry, see the Electra II Report, the Smart World: It re-examines the challenges that Europe faces, presenting proposals to support European policies in its Smart Growth Strategy EU 2020, outlining the steps that need to be taken to make Europe a “smart world”. As the key measures there considered Smart Society, Smart Infrastructures for Smart Living, Smart Cities, Smart Mobility, Smart Financing, Smart Industry, Smart Skills and Education, Smart Life, Smart People, Smart Grids, Smart Buildings, Smart Lighting, Smart Safety and Security, Smart Health, and Smart SMEs. Schematically, the X.0 World as the Future World as the Sustainable World of Smart Communities could be organized as a complex hierarchy of intelligent communities, innovative technologies, knowledge industries and smart infrastructures, as below: 3 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  4. 4. WORLD 0.0 (Ancient World/Natural/Agricultural) :: Global Community 0.1 > Local Community 0.1 > Nation 0.1 > City 0.1 > Science 0.1 > Technology 0.1 > Industry 0.1 > Infrastructure 0.1 > Network 0.0 > Telecom 0.0 > Internet 0.0 > Web 0.0 > Service 0.1 > Government 0.1 > Medicine 0.1 >…Human 0.1 WORLD 1.0 (Industrial World/Unintelligent/Dumb) :: Global Community 0.0 > Society 1.0> Nation 1.0 > City 1.0 > Science 1.0 > Technology 1.0 > Industry 1.0 > Infrastructure 1.0 > Network 1.0 > Telecom 1.0 > Internet 1.0 > Web 1.0 > Service 1.0 > Government 1.0 > Medicine 1.0 >…Human 1.0 WORLD 2.0 (Information World) :: Global Community 2.0 > Society 2.0 > Nation 2.0> City 2.0 > Science &Technology 2.0 > Industry 2.0 > Infrastructure 2.0 > Network 2.0 > Telecom 2.0 > Internet 2.0 > Web 2.0 > Service 2.0 > Government 2.0 > Medicine 2.0 >…Human 2.0 WORLD 3.0 (Smart World/Intelligent/Sustainable) :: Global Community 3.0 > Society 3.0 > Nation 3.0> City 3.0 > Science 3.0 > Technology 3.0 > Industry 3.0 > Infrastructure 3.0 > Network 3.0 > Telecom 3.0 > Internet 3.0 > Web 3.0 > Service 3.0 > Government 3.0 > Medicine 3.0 >…Human 3.0 ……………………………………………………………………………………………………………………… WORLD X.0 :: Global Community X.0 > Society X.0 > Nation X.0> City X.0 > Science &Technology X.0 > Industry X.0 > Infrastructure X.0 > Network X.0 > Telecom X.0 > Internet X.0 > Web X.0 > Service X.0 > Government X.0 > Medicine X.0 >…Human X.0 WORLD 3.0: EMERGING TECHNOLOGIES AND WHO IS TO RULE THE WORLD Technology is said the greatest factor of change in the modern world. Its breakthroughs and disruptive innovations promise solutions to most global challenges of our age, while improving lives, transforming industries and protecting our planet. The World Economic Forum’s Meta-Council on Emerging Technologies relying on the collective wisdom of the Forum’s communities identifies the most important technological trends as consisting of: 1. Zero-emission “fuel cell” vehicles running on hydrogen 2. Next-generation robotics benefiting from the cloud-computing revolution 3. Recyclable thermoset plastics cutting landfill waste to advance a circular economy and cleaner world 4. Precise genetic engineering techniques to advance agricultural sustainability and greener world 5. Additive manufacturing making things, from printable organs and circuit boards to intelligent clothes using a digital template to advance a digitally smart world 6. Emergent artificial intelligence learning automatically while interacting with the changing environment to become super-intelligent machines to advance an intelligent world 7. Distributed manufacturing replacing the material supply chain with digital information to advance a smart world 8. ‘Sense and avoid’ drones, unmanned aerial vehicles, able to sense and respond to their local environment to advance a smart world 9. Neuromorphic technology simulating the brain’s architecture, its many neuronal connections, to deliver a critical increase in a computer’s thinking and responding power to advance a smart digital world of intelligent small-scale machines, intelligent cameras and smartphones, or smart data-crunching machines for financial markets or climate forecasting 10. Digital genome delivering your genetic code on a USB stick for more personalized and effective healthcare to advance an intelligent and healthy world. Regardless regional wars and social conflicts, we all witness an emerging digital world of supercomputing as combining natural language processing with Big Data systems in the cloud accessible from anywhere; massively online services, games, courses, politics, etc.; consumer-driven native original content; no-touch interfaces; and the web of things or internet of everything, where anything becoming a computable entity. The power of innovation and emerging technologies is so enormous that the tech giants have pursuing their plan for global domination by building the “next big thing”, “smart killer application”, IBM, Watson, the super-intelligent computer system; Google, autonomous cars at its secret Google X lab; Microsoft, the cloud operating system with Azure; Apple, smarter personal communicating devices’; or Cisco, Smart + Connected Communities. And most prospects stay with the IBM, “Corporate America’s Secret Weapon”, promoting a technological ideology of the Smarter Planet, an extension of the Intelligent World. It is plain, the “best world” is to be led not by some tech giant, but rather by some technological green hyperpower, which might be Smart Eco China, Smart Green Europe, Intelligent Eco Russia, or Smart Green America. 4 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  5. 5. CONCLUSION The Smart World Evolution Roadmap is life critical for the future world scenarios, for it holistically combines technological breakthroughs with political, economic, social and organizational innovations. It shows how to avoid the negative scenarios of the Ubiquitous Global Political Disorder and/or Military World State for the Smart Sustainable World of Intelligence, Innovation, Interconnection and Prosperity. SUPPLEMENT “Smart Green EUROPE”: A Pan-European Investment Platform SUMMARY The general objective of “Smart Green Europe” is to build a smart inclusive society and a world-leading economy based on knowledge, innovation and future technologies and integrated sustainable urban and rural development. The “Smart Green Europe” will directly support the implementation of the Europe 2020 strategy by creating and consolidating the future Union policies, regulations, plans, programs, schemes and services for the Post-Europe 2020. The “Smart Green Europe” is designed as a Strategic Investment of European Significance in Urban and Natural Environment, Energy, Transport, Broadband, Education, Research and Innovation, Economy and Business. The Project is to combine all the key investment areas such as mobility, SME-support, green energy, resource and energy efficiency, digital infrastructure and Information and Communication Technology in a systematic, sustainable and inclusive way. The “Smart Green Europe” implies the highest economic and societal and environmental return, promising stable economic recovery, long-term growth, quality jobs and sustainable competitiveness, and involving the smart nation government bonds and municipal revenue bonds, as under the European Central Bank’s Assets Purchase Program of EUR 1 trillion. The “Smart Eco Union” envisions its Communities of tomorrow as the places of holistic conception, integrated investment strategies and innovative action plans, of advanced social progress; of green, ecological or environmental regeneration; of attraction of talents and engines of economic growth, as well as the platforms for smart governance, democracy, cultural dialogue, diversity and social unity. It is to contribute into building the Future Union as the Integrated Territories of the Future: Sustainable States, Intelligent Eco Cities, Green Communities, Sustainable Future-Proof Infrastructures, Intelligent Industrial Base and Eco-Smart Natural and Built Environment. EIP SCC IP Project: “SMART ECO EUROPE” STRATEGY AND ITS IMPLEMENTATION PLAN The Project Promoter: Smart Eco Community “X” Consortium/ EIS Ltd (Policy and Regulations and Integrated Planning AC) The Project Prospective Stakeholders: Junker Commission, EC Digital Single Market, DG for Communications Networks, Content and Technology; DG for Mobility and Transport; DG For Energy; DG For Environment, DG for Regional Policy; 6 Action Clusters, European Innovation Partnership on Smart Cities and Communities The Project Strategies: The Europe 2020 Strategy; the Post-2015 United Nations Development Agenda, “Realizing the Future We Want for All”; the Smart Eco Life Strategy The Smart Nations Links: The Financial Instruments and Funding Sources: The European Projects of Common Interest; the Connecting Europe Facility, the EC Horizon 2020, the EIB, the European Fund for Strategic Investments, the European Structural and Investment Funds, European Central Bank (EUR 1 trillion assets purchase program); Private Eco-Wise Economic Investments The Initiative Schema: the EU Smart Cities and Communities Initiative; the Sustainable Nation Global Initiative; the Smart Superpower Global Initiative: ABOUT: The SEC “X” Consortium is committed to transform the nations and states, metropolises, cities and communities according to the Smart Eco Life Strategy into integrated sustainable territories of the future. CORRESPONDENCES Mr Jean-Claude Juncker The President of the European Commission Mr Andrus Ansip, Vice-President of the Commission responsible for Digital Single Market c/o Mr Martin Selmar, Head of Cabinet, EC, Office of the President of Mr Jean-Claude Junker European Commission - Office: BERL13/069 -1049 Brussels - Belgium 5 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  6. 6. Address: rue de la Loi / Wetstraat 200, 1040 Bruxelles / Brussel Tel.: +32-2-2981230; Ref. Ares (2015)960654 - 04/03/2015 Ref. Ares (2015)1096497 - 12/03/2015 Subject: “Smart Eco Europe” Investment Platform 03/25/2015 Dear President, The Smart Green EUROPE as a Pan-European Investment Platform is prepared under our EIP SCC Action Cluster Commitment on a voluntary basis, see as attached. It is aimed to facilitate the Investment Plan in Europe and its REGULATION … on the European Fund for Strategic Investments, covering the following sustainable EU development points: 1. Why Europe in need of Unified “Smart Green Europe” 2. TOWARDS THE POST-EUROPE 2020: an Innovation-Driven Intelligent Europe 3. EUROPE 2020 Strategy: A Smart, Sustainable and Inclusive Union 4. I-EUROPE PLATFORM: Smart circulation of knowledge, ideas, people, goods, services, and capital 5. The “Smart Eco Europe” Cities and Communities 6. The “Smart Eco Europe” Member States 7. The “Smart Green EUROPE” Infrastructure 8. The “Smart Sustainable EUROPE” Industry 9. The “Smart Eco Union” Funding 2014-2020 10. The Smart Euro Area: Smartly Investing One Terra Euros 11. The Smart Funding Practice from China 12. SUPPLEMENT. An Investment Plan for Europe To secure the Smart Eco Power Investment Plan in Europe, we recommend formalizing implementation activities under your office and/or the EC (Digital Single Market or Jobs, Growth, Investment and Competitiveness and Energy Union) organizing a “Smart Green Europe” Task Force. The “Smart Eco Union” Investment Program is in line with most demands of such key stakeholders as the European Engineering Industries Association or the Institutional Investors Group on Climate Change, having collectively about €10 trillion of assets under management. “SMART ECO EUROPE” INTEGRATED INVESTMENT PLATFORM [Smart transnational circulation of knowledge, ideas, people, goods, services, and capital] EUROPE as the intelligent and innovative, healthy and wealthy, livable and efficient, moral and fair, smart and sustainable UNION ======================================================================================================= Mario Draghi, President of the ECB Vítor Constâncio, Vice-President of the ECB Members of the Governing Council The European Central Bank & Eurosystem Sonnemannstrasse 20 60314 Frankfurt am Main, Germany;; tel.: +49 69 1344 1300 Subject: “Smart Eco Europe”: Smart Assets Bonds and Intelligent Liquidity Operations Pilots 03/26/2015 Dear President, Vice-President and Members of the Governing Council, Considering that the disruptively creative innovative ideas have the most added values for a sustainable future, the “Smart Green Europe” has been presented to the President of the European Commission as a Pan-European Investment Platform. The “Smart Eco Union” Investment Program is in line with the mission of the European Central Bank, of creating a sustainable euro area, with the credit flows to the green and smart economy, avoiding a “bad bank”, price instability and high inflation scenario. As smart euro solutions, it proposes the ECB’s Bond buying programme as the Smart Assets Purchase Programme, as well as the intelligent liquidity operations pilots, attached: A) 1.1tn Smart Union Bonds Program brief; B) 10b Smart Assets Pilot in Europe; C) 1b Smart Assets Pilot in Cyprus. Besides, the Investment Program is meeting sustainable investment demands of such key stakeholders as the European Engineering Industries Association and the IIGCC of pension funds, insurance companies, asset managers and specialist infrastructure funds, having collectively about €10 trillion of assets under management. We are looking for a partnership with the ECB and the Eurosystem to advance the “Smart Green Europe” as a strategic project of European significance under the European Fund of Strategic Investments and/or the European Projects of Common Interest. The Project is planning to develop i-Europe Governance Platform which might have as its core element the Smart Eurosystem Digital System facilitating the “organisational principles for the Eurosystem and the Single Supervisory Mechanism”. In all, the Smart EU Investment Program is to support the EC’s Political Guidelines and the strategic guidelines for the Union presented by the European Council of 27 June 2014. ========================================================================================= 6 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  7. 7. The Smart Euro Area: Smartly Investing One Terra Euros Indicating a sustainable way for a deeply indebted world, the “Smart Green Europe” is mainly about creating in Europe a smart and green “real economy” of households, non‑financial corporations, and governments. Instead of deleveraging, global debt has increased by $57 trillion since 2007, outpacing world GDP growth, last year coming to an unprecedented figure of $ 199 trillion, where governments and corporations make most contributions. Led by Japan (517% GDP), Spain (401% GDP), and the USA (269% GDP), governments in advanced economies have been borrowing heavily to fund bailouts in the crisis and offset falling domestic demand in the recession, while corporate and household debt continues to grow rapidly. Debt remains an essential tool for the global economy, funding needed investments in infrastructure, business expansion, and urbanization. But high debt levels, whether in the public or private sector, have historically placed a drag on growth and raised the risk of financial crises that spark deep economic recessions. And “the current solutions for sparking growth or cutting fiscal deficits alone will not be sufficient. New approaches are needed to start deleveraging and to manage and monitor debt, including innovations in mortgages and other debt contracts to better share risk” (Debt and (Not Much) Deleveraging, McKinsey Global Institute, 2015). A broader range of innovative tools to avoid unsustainable borrowing and efficiently restructure debt should be considered, putting needed investments in future-proof infrastructure, smart business expansion, and intelligent urbanization. The European Central Bank and the Eurosystem are entrusted with formulating the monetary policy for euro area, involving standard instruments in regulating the money supply: open-market formulations, the discount rate and reserve requirements. By selling and buying the government securities, the ECB influences the supply of money and credit and rates of interest and the supply of reserves. It is believed that monetary policy measures together with fiscal policy might help achieve and maintain economic growth and better employment and stabilize prices and wages and inflation. Since “policy interest rate could not be reduced any further”, the ECB is starting implementing its “non-standard monetary policy measures” as the open-market operations. It begins purchasing euro-denominated public sector securities in the secondary market, sovereign bonds and private sector assets, while continuing purchasing asset-backed securities and covered bonds. The assets purchase scheme is meant paying with a check drawn on itself, thus creating virtual money as additional deposits by the security sellers in commercial banks, meaning to increase their cash reserves and lending capacity. The combined monthly purchases of public and private sector securities will amount to €60 billion to be carried out until the end of September 2016, making a total amount of EUR 1 trillion. The ECB’s devaluation policy aims to achieve and maintain a high rate of economic growth and better employment, balancing trade and payments, increasing exports with capital inflows and decreasing imports with capital outflows, stabilizing prices and wages. Given a high structural unemployment and low potential output growth in the euro area, a “cyclical recovery needs to increase investment, boost job creation and raise productivity, product and labour market reforms and actions to improve the business environment”. However, it is well-known that if the balance-of-payments deficit and government debt coming from basic structural faults of a nation’s economy, the monetary policy is not making it more competitive and productive. In order to secure “the future sustainable growth of the euro area but also raise expectations of higher incomes and encourage firms to increase investment today, bringing forward the economic recovery”, most funding should go to sustainable productive investment: future-proof infrastructures, intelligent industrialization, sustainable urban-rural development, smart and green urbanization and smart city and communities developments. Considering that most Member States are among the most highly indebted countries, having a worrying real economy debt-to- GDP ratio and heavy debt of the financial sector, the “Smart Green Europe” suggests that the ECB’s assets purchase program is wise to focus on three classes of “real economy”, as smart investment-grade bonds: 1. Smart nation bonds, general bonds or limited obligation bonds, issued by a Member State to build (acquire or improve) a revenue-creating public property, as intelligent national transportation networks (fast-speed railroads and port authorities or intelligent tall roads), or optical trunk networks). They are thus backed either by taxation capacity or by the revenue generated by the advanced physical and digital infrastructures, facilities or social infrastructure services for which the bonds issued. The “Smart Nation” Investment Strategy is to deliver the social and economic growth by advancing sustainable construction, green roads, intelligent energy, business innovation, smart commerce, intelligent industry and sustainable tourism infrastructures and cutting-edge facilities, initiating the Innovation Mega Regions of sustainable states, smart agglomerations, innovation clusters, green communities and eco developments. Its strategic business model is a multi-level partnership of the government, innovative business groups, state utilities, municipalities and communities, academia and research institutions, with active citizen engagement and involvement. As the smart nation bonds pilots and demonstrators, there are proposed two largest European economies, as “Smart Germany” and “Smart Britain”, as well as the smallest economy as “Smart Eco Cyprus”. 2. Smart municipal bonds, general bonds or limited obligation revenue bonds. The first is backed by a city’s tax collection for advanced utilities and social services, or extensive renovation of existing urban infrastructures in utilities, ICT, water, waste, buildings, energy, and transport systems. The revenue bonds are issued by a municipality to build (acquire or improve) a revenue-creating property, as intelligent transportation networks (fast-speed railroads 7 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  8. 8. and port authorities or intelligent tall roads), renewable power plants, smart waterworks, waste-to-energy plants, or optical trunk networks). They are thus backed by the revenue generated by the advanced facility or social infrastructure services for which the bond issued. As the smart and sustainable city bonds pilots and demonstrators, there are proposed the largest European city capitals, as “Smart London”, “Smart Paris”, “Smart Berlin”, “Smart Rome”, “Smart Madrid”, and “Smart Brussels”. It’s worth to mention here the recent Egyptian government initiative to extend Cairo as a smart and sustainable capital city at a cost of $US45 billion. 3. Smart corporate bonds, secured by a lien against private sector assets, such as high-quality real estate (mortgage bonds, as far as most loans linked to real estate) or other valuable property, as advanced plant equipment. They are thus to be backed by the revenue generated by the sustainable property developments or smart industry facilities. As the smart corporate bonds pilots, there are proposed eco-innovative intelligent real estate developments, digital manufacturing plants and eco-smart energy plants in the selected smart Member States. The Smart Bonds and Assets Purchase Program is well in line with the REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Fund for Strategic Investments,…Council of the EU, 2015/0009 (COD), see the SUPPLEMENT. The Smart Funding Practice from China As a good lesson of smart bonds investment, it could serve a fast developing competitive economy of China. As a matter of fact, China’s debt is quadrupled since 2007, making 282% GDP, or $28 trillion by mid-2014. Its half of loans divided by real estate and shadow banking, but the debt of many local governments linked to smart cities development, thus becoming more future-proof and sustainable strategic investment. As far as debt remains a key tool for funding economic growth, its government debt is wisely made against future eco- sustainable urbanization, with 600 cities allocated about $ 322 billion for embracing smart and green cities development strategies (for more, see “Comparative Study of Smart Cities in Europe and China”). In China, to become smart and green is the matter of government policy, involving the State Council and the key government departments, such as Ministry of Industry and Information Technology (MIIT), National Development and Reform Commission (NDRC), Ministry of Science and Technology (“MOST”), the Ministry of Housing and Urban-Rural Development (“MOHURD”), the National Administration of Surveying, Mapping and Geoinformation, the National Tourism Administration and other relevant departments. China's State Council issued “Several Opinions on Promoting Consumer Spending on Information Technology and Expanding Domestic Demand” proposing to develop pilot and demonstrative smart cities. It required all pilot cities to issue policies to encourage market-based investment and financing, supporting intelligent upgrading of public utilities and fast implementation of smart grids, smart transport, smart water supplies, smart land administration and smart logistics. The market players and industries are encouraged to jointly participate in smart city development. Within the amount of local treasury bonds approved by the State Council, the people’s government of all provinces, autonomous regions and municipalities consider arranging some funds for construction of smart cities. Also, it encourages eligible enterprises to issue corporate bonds to raise funds for smart city development. Reminding the Europe’s Digital Agenda, the State Council issued the “Broadband China” Strategy and Its Implementation Plan to provide network infrastructure support for smart cities. To implement the smart city policy, NDRC and MIIT, together with the MOST, the Ministry of Public Security, the Ministry of Finance, the Ministry of Land and Resources, MOHURD and the Ministry of Transport, worked up Guiding Opinions on Promoting the Healthy Development of Smart Cities. To provide enterprises and residents with more convenient, efficient and low-cost social services, it proposed to start smart transport, smart grids, smart water supplies, smart environmental protection, smart medical care, smart old age security, smart communities, smart homes, smart education, smart land administration, smart logistics and smart credit systems. It also proposed to select 100 cities of different sizes at different stages of development in the eastern, central and western regions as pilot and demonstrative cities for smart city development. As some experience has been acquired from the pilot and demonstrative cities, China gradually encourages and supports eligible regions to promote smart city development according to local conditions. As of September 2013, a total of 311 cities involved with smart city development, including all cities above the sub-provincial- level, 89% cities at the prefectural-level and above, and 47% cities at the county-level and above, considering that the structural hierarchy of the administrative divisions consists of five levels: Provincial, Prefecture, County, Township and Village. In all, during the “Twelfth Five-year Plan” period, the plan investment in Chinese smart cities is expected to be more than 1.6 trillion Yuan. [Report on Study of the Progress and Problems of Smart City Development in China, CATR, 2013]. To support smart city development in China, a number of the 12th Five-year Plan had been formulated for the development of: Information Security Industry; Internet of Things; E-commerce, as well as fast rail networks, with a planned investment exceeding 2.5 trillion Yuan. This all has been enhanced with the Chinese president’s geopolitical move for the $40bn Silk Road Mega Project: the 21st Century Silk Road Economic Belt and the Maritime Silk Road. Besides, China Development Bank should provide an investment and financing no less than 80 billion Yuan in 3 years after the 12th Five-year Plan Period. 8 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015
  9. 9. As the things stand now, Europe is risking losing its global smart and green superpower leadership to Smart Eco China. The “Smart Eco Union” is to unify all the funding and economic investments towards building a sustainable intelligent Europe, thus securing a competitive advantage to emerging Smart China. ================================================================================== For more on the Future World visions, strategies, challenges and projects, visit the links as below: BUILDING INTELLIGENT WORLD ============================================================================ EIS ENCYCLOPEDIC INTELLIGENCE DIGITAL PARADIGM: GLOBAL INNOVATION AND DISRUPTIVE TECHNOLOGY PLATFORM Future Technologies Platform Future Infrastructure Platform Future Industry Platform Future Government Platform Future Cities Platform Future Nations Platform FUTURE WORLD PLATFORM ============================================================================= ENCYCLOPEDIC INTELLIGENCE I: ENCYCLOPEDIC INTELLIGENCE II: ENCYCLOPEDIC INTELLIGENCE III: ENCYCLOPEDIC INTELLIGENCE IV: ENCYCLOPEDIC INTELLIGENCE V: ============================================================================== THE FUTURE WORLD ACTIONS Smart Cities Global Initiative Smart Nations Global Initiative Smart Superpower Global Initiative CHINA-EUROPE SMART SILK ROAD THE FUTURE EUROPE ACTIONS European Innovation Partnership on Smart Cities and Communities Smart Urban Europe Agenda Smart Green Europe Investment Project (Under Study by the President of the EC) THE FUTURE RUSSIA ACTIONS Smart Green Russia (welcomed by the Russian Government to submit for funding from the National Well-Being Fund and Pension Fund): THE FUTURE WORLD ECONOMY ABOUT US EIS Encyclopedic Intelligent Systems Ltd (EU) ООО "Энциклопедические Интеллектуальные Системы“ (Moscow, Russia) The Smart Eco Community “X” Consortium is committed to transform the communities of various geo- political scales (global community, transnational communities, nations and regions, metropolises, urban and local communities) into intelligent communities according to the Smart Eco Life Strategy to re- emerge as smart and sustainable territorial ecosystems. CONTACT: 9 Intelligent World Azamat Abdoullaev All Rights Reserved April 2015