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Expanded BRICS Set To De-Dollarize The World, Control Global Energy Supply

Expanded BRICS Set To De-Dollarize The World, Control Global Energy Supply

Authored by Darren Taylor via The Epoch Times (emphasis ours),

“The…

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Expanded BRICS Set To De-Dollarize The World, Control Global Energy Supply

Authored by Darren Taylor via The Epoch Times (emphasis ours),

The expansion of BRICS has made it clear that the de-dollarization of the international finance system is inevitable.” 

This view, from economist William Gumede—who’s also executive chairperson of the Democracy Works Foundation in South Africa—has been echoed around the world since BRICS leaders announced the expansion of the bloc on Aug. 24 at a summit in Johannesburg.  

A large screen shows a news programme featuring Chinese leader Xi Jinping speaking via video at the opening of the virtual BRICS Summit being hosted by India, on a street in Beijing on Sept. 10, 2021. (Greg Baker/AFP via Getty Images)

Current BRICS members are Brazil, Russia, India, China and South Africa.

In January, BRICS—originally established in 2009 to represent the world’s strongest emerging market economies—will add Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) to its ranks.  

Mr. Gumede, one of South Africa’s leading academics and thought-leaders, has been researching the potential impacts of de-dollarization since 2014. 

He told The Epoch Times the average per capita GDP of the G7 economies was currently six times that of BRICS economies. But, the unexpectedly swift expansion of BRICS would increase the trade bloc’s share of the global economy much faster than earlier predictions. 

These forecasts did not take into account that BRICS would expand its membership very quickly. A larger BRICS will mean the world will increasingly use U.S. dollars less,” he said. 

Mr. Gumede said the bigger BRICS alliance would eventually rival the Group of Seven (G7) large industrial economies of the United States, European Union, United Kingdom, France, Japan, Italy, and Canada, which together are home to 16 percent of the world’s population and account for 62 percent of the global economy. 

Welcoming the new members in Johannesburg last week, Brazil’s President Lula da Silva said their addition would mean BRICS would represent 46 percent of the global population and 37 percent of the world GDP. 

The expansion means BRICS now consists of some of the globe’s largest oil producers: Russia, Saudi Arabia, UAE, and Egypt. Nigeria, another major oil exporter, is set to join when the bloc gets even bigger, probably at its next summit in Russia in 2024.  

BRICS is going to dominate the world’s energy supply,” said Mr. Gumede. “The strength of the U.S. dollar is also partially based on the currency as underpinning oil trade—the so-called petrodollar—and members of OPEC (Organisation of the Petroleum Exporting Countries) settle their accounts in U.S. dollars.

"Therefore, enlarging BRICS to also include the oil producers and persuading them to use a new BRICS currency, rather than the U.S. dollar, to settle their accounts, will be a game-changer. It is likely to accelerate the de-dollarization of the world.”

Jakkie Cilliers, Head of the African Futures and Innovation program at the Institute for Security Studies in Pretoria, attributed the unexpectedly rapid expansion of BRICS, and its moves towards de-dollarization, to Russia’s invasion of Ukraine and its consequences.  

“BRICS has seen the West hit Russia with all kinds of financial sanctions, and threaten sanctions against South Africa for supposedly supporting Russia, and as a result it wants to end, or at least ease, its dependence on the dollar,” he told The Epoch Times. 

“De-dollarization, first mooted by [Russian President Vladimir] Putin, is a potent symbol of a shift away from a Western-led global order towards a new era of more uncertain and fluid multipolar connections. Change is in the air, and the next three decades will see the steady unfolding of this trend.” 

Mr. Cilliers said BRICS was “cloaking itself in resentment” against the West. 

“It’s quite easy for Russia and China to take advantage of the ill-feeling that still exists across much of the developing world because of colonialism, imperialism and sanctions by leading Western countries.

"Never mind the fact that Russia and China show similar imperialistic tendencies,” he commented. 

He said the Global South was “particularly unhappy” with international finance institutions, and with the U.S. Federal Reserve Bank. 

“When the Fed hikes interest rates, it sometimes sends smaller economies into turmoil. They’re subjected to shocks for no domestic reason. So they see the dollar as providing the United States with a very powerful weapon to use in its interests,” said Mr. Cilliers. 

“This is what unites BRICS in its desire to move away from the dollar-backed international financial system.” 

But, he added, de-dollarization was going to be a slow process. 

“Trade among BRICS countries is too small to sustain a common currency, and it only makes sense to trade in national currencies if the trade balance between the countries is more or less equal, which it most definitely is not likely to be in the near future,” said Mr. Cilliers. 

Mr. Gumede pointed to a recent example of Russia selling a lot of oil to India. 

“They dealt in rupees. But because India exports much less to Russia than it imports, Moscow now sits with rupees it cannot spend or convert, except to buy goods from India.” 

Mr. Cilliers said China’s renminbi also wasn’t sufficiently convertible and lacked deep capital markets, market transparency, independent central banks and supporting financial institutions of Western banks. 

He said there were also “perceptions of risk” associated with China’s future. 

“It is, after all, a repressive autocracy. It’ll battle to maintain stability in the face of slower economic growth. I’d also be very surprised if India supported a common BRICS currency, given its concerns about China as a regional and potential global competitor.” 

Mr. Gumede added: “The euro, a common currency, is stable because it’s underpinned by stable political regimes in a stable part of the world. Wherever you look in BRICS, there’s instability, like in Russia because of the Ukraine war. What would happen to the BRICS currency if China invades Taiwan?” 

Mr. Cilliers predicted that rather than a single alternative to the dollar, “new currency blocs” would emerge. 

“These will be based on bilateral and multilateral trade among the Middle East and China, South America, West Africa and elsewhere. And so we’ll see the power of the dollar slowly wane,” he said. 

Mr. Cilliers said the most important shift in the power of the greenback would happen once oil and gas prices were no longer set in U.S. dollars. 

“This is probably the motivation behind the inclusion of Saudi Arabia and the UAE in the expanded BRICS,” he postulated. 

Mr. Gumede said demand for U.S. dollars would remain high as long as U.S. GDP was close to 25 percent of the global economy.

He said President Putin—supported by China’s leader Xi Jinping—was pushing so hard for de-dollarization “because it’s key to the economic survival of Russia” following Western sanctions. 

The West froze $300 billion of Russia’s foreign trade reserves after it invaded Ukraine in February 2022 and its foreign trade transactions, including those with some emerging markets, have been blocked. 

Seven of Russia’s banks have been excluded from the world’s leading international payment messaging system, SWIFT. The ban means Russian banks cannot do digital cross-border transactions.

However, Russian banks doing transactions connected to oil and gas are exempt from the SWIFT ban, and this is preventing the Russian economy from collapsing, said Mr. Gumede. 

Russia is the world’s third-largest oil producer, but its the largest exporter of oil.

“BRICS countries have been buying oil and gas from Moscow, insulating Russia against isolation by the United States and the EU,” Mr. Gumede explained. 

For example, Indian imports of Russian oil in May 2023 reached record levels of about 1.95 million barrels per day.

According to the International Energy Agency, China and India bought 80 percent of Russia’s oil in May 2023, with China buying 2.2 million barrels per day.

Leslie Maasdorp, Chief Financial Officer of the BRICS financial mechanism, the New Development Bank, told The Epoch Times BRICS countries were prepared to conduct business with one another in domestic currencies. 

But, he added, they were not yet ready to issue a common currency that could challenge the dollar. 

“The creation of a global alternative currency to the dollar is a medium-to-long-term ambition, rather than an immediate possibility,” said Maasdorp.

“Even the Chinese renminbi is very far from becoming a global reserve currency.” 

Mr. Cilliers said it was also likely that intensifying rivalry between China and India would slow de-dollarization. 

“India has already said it wants to focus on strengthening its own currency ahead of anything else,” he said.  

Mr. Cilliers suggested that the expansion of BRICS, now and in the future, should not be seen as an “automatic sign” that developing countries were uniting behind a “simplistic, common vision” of overthrowing the West. 

“Many people have this view that if Russia and China, in particular, snap their fingers and say, ‘de-dollarize now,’ that other BRICS countries are just going to listen to the master’s voice.

"Believe me, there is deep resentment within BRICS and within the wider Global South about Russia’s invasion of Ukraine and the harm it continues to sow in developing countries, causing inflation spikes, for example, and even grain shortages. 

“Countries’ motivations for wanting to join BRICS differ but what stays the same is that few, if any, Global South nations will exchange one hegemon with another.” 

Tyler Durden Thu, 08/31/2023 - 02:00

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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Another country is getting ready to launch a visa for digital nomads

Early reports are saying Japan will soon have a digital nomad visa for high-earning foreigners.

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Over the last decade, the explosion of remote work that came as a result of improved technology and the pandemic has allowed an increasing number of people to become digital nomads. 

When looked at more broadly as anyone not required to come into a fixed office but instead moves between different locations such as the home and the coffee shop, the latest estimate shows that there were more than 35 million such workers in the world by the end of 2023 while over half of those come from the United States.

Related: There is a new list of cities that are best for digital nomads

While remote work has also allowed many to move to cheaper places and travel around the world while still bringing in income, working outside of one's home country requires either dual citizenship or work authorization — the global shift toward remote work has pushed many countries to launch specific digital nomad visas to boost their economies and bring in new residents.

Japan is a very popular destination for U.S. tourists. 

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This popular vacation destination will soon have a nomad visa

Spain, Portugal, Indonesia, Malaysia, Costa Rica, Brazil, Latvia and Malta are some of the countries currently offering specific visas for foreigners who want to live there while bringing in income from abroad.

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With the exception of a few, Asian countries generally have stricter immigration laws and were much slower to launch these types of visas that some of the countries with weaker economies had as far back as 2015. As first reported by the Japan Times, the country's Immigration Services Agency ended up making the leap toward a visa for those who can earn more than ¥10 million ($68,300 USD) with income from another country.

The Japanese government has not yet worked out the specifics of how long the visa will be valid for or how much it will cost — public comment on the proposal is being accepted throughout next week. 

That said, early reports say the visa will be shorter than the typical digital nomad option that allows foreigners to live in a country for several years. The visa will reportedly be valid for six months or slightly longer but still no more than a year — along with the ability to work, this allows some to stay beyond the 90-day tourist period typically afforded to those from countries with visa-free agreements.

'Not be given a residence card of residence certificate'

While one will be able to reapply for the visa after the time runs out, this can only be done by exiting the country and being away for six months before coming back again — becoming a permanent resident on the pathway to citizenship is an entirely different process with much more strict requirements.

"Those living in Japan with the digital nomad visa will not be given a residence card or a residence certificate, which provide access to certain government benefits," reports the news outlet. "The visa cannot be renewed and must be reapplied for, with this only possible six months after leaving the countr

The visa will reportedly start in March and also allow holders to bring their spouses and families with them. To start using the visa, holders will also need to purchase private health insurance from their home country while taxes on any money one earns will also need to be paid through one's home country.

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