The Circular Economy

ISSUE: 02 WELMUN 2018

Innoventure “We deliver the difference”

THE ECONOMICS

OF PEACE

Discriminatory International Lending

Debate on

Artificial

Intelligence

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2 INNOVENTURE

Greetings Delegates!

This year at the Welham Boys’ School Model United Nations 2018, the Innoventure’s WELMUN Edition would be in contrast with the theme “Pangea La Réunion” which means the Reunion of all the nations to form Pangea which was the supercontinent before the continental drift. Similarly, there is a paradigm shift from competition to the importance of cooperation to develop an Integrated World Economy. One major problem faced by all modern industrial economy is the problem of competing with world markets. The major economies focus on the econometric and theoretical issues such as, “How can we measure the competitiveness of nations?” or “What are the major factors determining a nation’s competitiveness?”. The Survival of the Fittest rule is being practised and promoted everywhere. It states that one must do anything and everything to be the “top-player”. This notion steers the nations towards economic failure. Therefore, at present, economic cooperation is one of the biggest challenges that must be addressed in connection with the “Circular Economy”. Countries across the world are developing strategies for moving to a Circular Economy for achieving sustainable development goals. The United Nations, 2030 Agenda for Sustainable Development, identifies The Circular Economy concept as a priority area to achieve stronger global partnership. “Pangea La Réunion”, this year’s theme for the WELMUN makes “Circular

Economy” the perfect cover story, as, in such a situation we need the reunion of the world to bring about a change in the economic calamity. At the heart of moving towards a sustainable future is Goal 9 of the United Nations 17 Sustainable Development Goals are Innovation and Infrastructure and Technologies Artificial Intelligence will play an essential role in the formation of this virtual Pangea. Delegates, I hope that you have three days of active, invigorating committee sessions with the perfect blend of diplomacy and entertainment. As the Chairperson of The North Atlantic Treaty Organization, I wish you luck. We will be covering from the United Nations cash crunch to the trade wars between China and Sates. Presenting you the Innoventure WELMUN Edition 2018.

Aryaman AhujaEditor-In-Chief

EDITORIAL

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With the world getting smaller and smaller, and economic competition between nations rising every day, economic development has made it to the top of the bucket list of 80% of the countries in the world. This approach of these nations can be justified by taking into consideration the changing mindset of the public which weighs money over everything. From times when people will comfortably reject the idea of ‘money can buy you heaven’, we are now at a diversion where people face the dilemma in deciding whether money can buy the actual heaven or can buy you something close to heaven. All this rapid change in the thought process has taken place specifically in the past few decades, as internationalism rose, concepts such as ‘hire purchase’, digital money and cryptocurrencies hit the market. Along with all this another economic trend that has emerged is ‘The System of Loan/Credit’. This didn’t only increase at the micro levels of economies, instead it also rose at the macro levels.

Due to this two ancient post-war years institution, one which was established with the aim to help nations in their rebuilding process and the other to promote international economic cooperation, turned into the modern world macro-level flagship lending institutions. With time the Bretton Woods Twins, somewhat made it big in the world of finance, with their combined annual lending amount touching trillions. Somewhere in this journey, these twins although remained loyal to their forefathers and godfathers (In this case, the 9 nations which make up 70% of the total budget of these institutions), but deviated from the very principle of any banking institute, which is to balance out the unequal division of wealth by the system of deposits and loans. These twins devised their own lending system which in the most basic terms is that the credit to a nation is directly proportional to its contribution to the institutions.

Moreover, the say of a country in all the decision of the institution is also proportional to its contribution. For instance, United States has 20% say in the decision making process.Suppose, Sudan is in urgent need of funds for tackling an economic setback, but since it hasn’t contributed much, it has the right to get a loan only worth its nominal membership contribution. Furthermore, even these funds rest in the hands of the major contributors, practically leaving Sudan at the mercy of the big western players. In my opinion this simply sums up as, Discriminatory International Lending.

Certainly, these two institutions don’t work in line with the very basic idea of banking which is that of balancing the wealth between those who have extra and those who are in need. Rather, these work on completely the opposite of it, according to which all the credit grants and the say in decision making process is directly proportional to the contributions made. In a nutshell, it indirectly gives the rich an option to make them even richer and the leaves the poor unattended.

Chirag BansalXI-Commerce

Discriminatory International Lending

4 INNOVENTURE

The world is welcoming the fourth industrial revolution. The first and the second revolution which were guided by the spirits of nationalism. And this was the time nationalism was first interpreted as a divisive ideology. This was the time when the colonial powers fed their economies by exploiting their colonies, colonies like us. This revolution took place in the United Kingdom and marked the beginning for the rest of the industrial revolutions. The 1st Industrial Revolution was recognized somewhere between the 1820 and 1840. Many believe that the second industrial took place somewhere between the 19th and the 20th century. However, I beg to differ. I believe that all the revolutions were already happening but mankind ignorant about its omnipresence. Development of the internet is often referred to as the third revolution. This rapid global digitalisation changed how things functioned exponentially and paved way for the fourth revolution. The aforementioned change is happening every moment with entrepreneurs striving to survive in the fierce competition. Every day someone’s death on Dalal Street/Wall Street is motivating entrepreneurs to innovate and improve. Amidst all of this pandemonium was born the fourth industrial revolution introducing a whole new range of opportunities societal revolutions such as the Internet of Things, autonomous vehicles, Block Chain and Artificial Intelligence, and of all these innovations embedded in our daily lives are changing the way we live. While doing all this we forget one important aspect of the society that is the degradation of environment. All forms of economies and revolutions that have been developed may have led to a better lifestyle but have completely ignored the welfare of the environment. With sustainable development as the utmost priority of the various organizations of the world, a new socio-economic system has made its way through with an ideology that may

live up to the ambitions of these organizations and revolutionize the process of utilisation of resources.

Looking beyond the current “ Take, make and dispose” industrial model Circular Economy focuses on using the resources for as long as possible, extracting the minimum value from them while in use, and later redesigning and regenerating them and their variants till they become obsolete. The model has two different cycles to it: technical and biological. In the biological cycle, the products such as wood and food are designed in such a manner that they move back into the system through processes such as composting and anaerobic

digestion whereas in technical cycles products and material are restored and

recovered through processes such as reuse, repair, remanufacture or recycle. The main aim of this circular design is to decouple resource consumption in such a manner that the focus relies on value retention. One limitation of this form of

economy is that it is not about one manufacturer adopting this

mode of economy but it is about all the inter-connecting companies

that form our economy accepting this technique. In other words the success

of this regenerative economy completely relies on changing the entire current socio-economic system. These Circular business models need to have a completely different approach in regards to their functioning. These models have to be closing, narrowing, slowing, intensifying and adopting the circular design that facilitates product reusing, recycling and cascading. Additionally, aspects such as material selection, standardised components and long-lasting elements are also needed to be taken into consideration so that the products developed have the minimum value extraction while in use. Now coming to its potential impacts it would have on the environment and the economy. Adopting such a model would reduce the greenhouse gas emission of a country such as the United Kingdom

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by 7.4 million tonnes per annum. This restorative and regenerative design can lessen the expenditure of USD 40 billion on land degradation annually. Following the biological cycle of this economy can reduce the use of fertilisers by 2.7 times and if this approach is considered by a continent such as Europe the consumption of fertilisers can go down by 80% by 2050. Besides environment enhancement this economy can enormously widen the profit margins, the cost of manufacturing phones can go down by 50% and most of the households would be able to purchase high-end machines if the approach of circular economy (reusing, recycling and redesigning) is followed appropriately. The global food industry would be impacted severely as well, changing the way people perceive agriculture in the current scenario. However, previous research across many regions has found that there are a consistent set of levers that could help advance towards a circular nutrition system that is regenerative, resilient, less wasteful and healthier. The four steps could be: 1)Close loops of nutrients and other materials- returning nutrients to farms, regenerating soils and reducing reliance on artificial fertilisers

2)Cascading value from by products; recovering and reviving valuable elements of

the produce, thus eliminating externalities

3) Diversity of Production- establishing shorter supply chains between different levels, thus reducing wastage occurring at the time of transportation, storage etc.

4) The power of digitalisation- digitalisation allows you to measure, track and locate food and other organic materials with more precision allowing better management and allocation of resources.

Circular Economy has provided us with ample number of examples that it may move inroads and become the future of economies. A huge number of businesses are thriving on it already, and the circularity of things has begun. The policymakers have also started recognising this model as the key to solve problems existing in the society. If the world keeps on harping about environment protection and businesses start realising about the scarcity of resources, then Circular Economy may be inevitable in the near future. - D i v y a n s h M e h t a , A p o o r v G o y a l X I I - C o m m e r c e

Cover Story

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Government of India should actively employ Artificial Intelligence to improve efficiency.

“Every revolution or reform aimed at the advance-ment of humans is met by hardline opposition.” Dear readers before you dive in, a straightforward ques-tion is begging for your attention. Can industries with-out machines produce the same efficacy as industries with machines? The clear answer is no; they cannot. Our notion of industries and factories is almost incom-

plete without big silvery devices. The workers of these factories strongly opposed industrialisation of

their workplaces as they, rightfully felt that it would take away their jobs. They were

right to some extent as a fraction of the population lost its employment to machinery. But it would be unfair to say that robotics, artificial intel-

ligence and machinery lock up jobs for good and do not gener-ate more in return. It is evident as a collective phenomenon that whatever jobs automation gulps down, it also creates many more. Human labour never ac-

tually goes out of the equation, only the enterprise of the work shifts to different modules. For

example, blue collar jobs will be lost to white collar jobs in the future as vocational skill jobs

will no longer be required. Therefore, observing our

motion through this lens, we can conclude that robots and artificial in-telligence won’t take

away our jobs, they will only change the expertise

and make our lives more com-fortable and straightforward.

Artificial intelligence, therefore, is the key to tomorrow. During

the World War II; the world came to realise that a war is not the best of the methods to propel into pros-perity. Countries started to under-

stand they couldn’t judge each other’s prominence through blood, flesh and

steel only. But the realisation was too late. The toll of the World War II was insurmountable. Economies were crumbling to dust, cities after cities were turned into rubble, and most importantly it swallowed millions and millions of lives across the globe. Children were or-phaned, wives widowed and the husbands yanked away to defend the frontiers of the nation, from where they wouldn’t find their way back home. After all the pan-demic bloodshed, one single, concrete question hung over every independent country of earth, “How do you bring about a change without another War?” Econom-

ics, social philosophy and technology didn’t disappoint as the answer. Economics has driven human evolution faster than any other pre-existing ideology. No other mechanisms other than industries and markets have been so efficient in the production and distribution of goods. And comically that was what Lenin was oppos-ing. Now through this particular example, I was success-ful in asserting a straightforward fact: the opposition opposes every revolution or reform aimed at the ad-vancement of the society. This what would presumably be the root of the opposition’s arguments but through my comprehensive, constructive and active argumen-tation, I would dissect the fallacy-ridden stance of the debate, hidden in fancy words and elaborate litera-ture and make you believe as to why the government of India should actively use AI to improve efficiency. When I talk about efficiency, my sectors of effect would solely be healthcare, education and finances. These sec-tors are primordial sectors that require unadulterated precision. To begin with, India is exceptionally schizo-phrenic. While its metropolitan cities are competing with the best in the world, the rural population still def-ecates in the open and to reduce this gap, and it is about time we employed artificial intelligence. Talking about it, let us take on healthcare first. The cutting-edge preci-sion that robots guarantee during surgeries is fascinating surgeons and patients alike. Think about it dear readers, would you like to be operated by an experienced sur-geon who still has significant chances of faltering or by a medically-programmed robot who cannot make a mis-take even if he wants to. And I think the answer is clear. These methodologies should be actively employed by booming medical institutions in India that have the capi-tal as well as the skill set required to operate these in-stallations. Also, it would enhance India’s medical tour-ism had to increase bilateral relations with countries. Secondly, talking about education, India is the youngest country but pathetically uneducated. Knowledge of the youth and the children alike have been on the priority list of many governments preceding the current one. AI can create a curriculum designed specifically for one cognitive ability and thus revolutionise education itself. Thirdly, coming to my final sector that is finances, India’s tradition of painfully slow judicial processes is known by all, since records are complicated to keep. Through AI land records, transactions etc. can easily be main-tained. Therefore curing multiple problems at once. The problems surfacing like unemployment can be solved by the Free Market Theory which states that human la-bour can never be reduced. It just changes the form of ex-pertise. So concluding my debate with a piece of advice for the student body: start taking a little interest in the economic world around you, it is a very engaging sphere. -Aarav Upadhya IX

FOR

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The Government of India, the most prominent gov-ernment there is, accountable to a population of over a billion and an entity whose actions are taken into keen cognisance of the world. Thus it is im-perative that all its activities are prudent and well-informed. Yet it is known for its myopic methods, inefficiency and opaque functioning, it has taken great strides in yesteryears to improve the same under the Modi government and has strived for more but, and that’s one big but, it must continue to have people at its center and not mere numbers that sing paeans of AI. Ushering in AI is without a doubt, instrumental and inevitable but again at what cost and to what end. AI will take away jobs, that is a glaring fact, but it will also usher in new opportunities. However, these jobs shall be highly specialised and will cater to a minority that might even require outsourcing. AI has the capability of making various intermediaries redundant, cutting inefficiency and costs but is that what a govern-ment is, is that our government? We are not talk-ing of the corporates here, who will pioneer the invent advent of AI very soon for all the same rea-sons but of the GoI, who owes it to the people to provide jobs and means of livelihood. For this is the same government that has failed in its duty to provide primary health care and education to the people thus disabling many to even compete for the jobs it creates. Therefore the onus is on the government to first improve the status of its people before it tries to do the same for its image. And let’s be very clear on one thing, AI is not, as of this day, the panacea for all woes that plague the society; it just can’t provide the solution to all our problems by just being plugged in (that is, dis-counting mass, Thanos-styled culling). Therefore, we must proceed by donning a veil of ignorance, with a long-term view of the repercussions when we talk of AI rather than rushing it in as the next big technological makeover like the iPhone. My apprehensions also fail to overlook the poten-tial threats AI poses apart from a despotic apoca-lypse. Considering the lack of advancement in this field in India, many aspects ranging from produc-tion to operation would again require outsourcing. This stands as a threat to the sovereign and confi-dential functioning of the Government. The same extends itself to the correct usage of technology by the operating officials and the Government itself.

Sheer lack of understanding would not only lead to dependence but also the opacity of the processes. Therefore we cannot give in to populist gadflies who harp about the AI as a necessary tool without giving it due consideration.

It is not my conservatism, culpable of trying to re-tard the advancement of technology, for which, in my opinion, there is no place but a well-informed and calculated decision in the interest of the very people the government serves. Its arrival is inevi-table; I only propose to postpone it until we are ready for it. It is only then when we can hope to truly and fully harness AI’s potential.

The gains of using AI may almost invari-ably outweigh the costs, but a paren-tal figure like the government has to be better than a machine working on 1s and 0s to have the essential hu-man worth of a person. After all, it’s not about the power or place but the people. Chaitanya Motani XII-Commerce

AGAINST DEBATE

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Employees are an integral part of any corporate sector or business society in recent times. No company is efficient in its functioning without a good set of employees and it is very important to ensure that these employees work effectively. Only this can lead to a company’s growth and establishment. In many parts of the world today, not many companies provide additional benefits such as maternal or paternal leaves, paid leaves, medical insurance and security of job etc. apart from their regular salaries to their employees who work for long hours for them.

According to one research, it is usually seen that 8 out of every 10 companies all around the world that provide their employees with additional benefits are able to make the most out of them, which not only ensures their financial stability but also guarantee, higher turnovers for the company. ‘Even employees are humans’, but this is something that is not understood by many Heads of companies as they keep on treating their employees equivalent to servants. In countries such as India or South Africa employees have to work for long hours to complete assignments for which they are not paid anything extra. In some business houses, salaries are even cut down because of medical leaves or for any other irrelevant reason. In some other companies, even employees attached to the company for more than 30-40 years are asked to resign or are fired, as the responsibility of paying them pension in the future comes upon that particular firm. This is again something that is not acceptable to the society at large. It also prevents people from getting employed and rather setting up their own businesses.

Now, talking about employed women and their job issues that are prevalent in companies even today in such modern and advanced democracies. The first one is getting low income for equal work as men. The second one is that of not getting maternal leave at the time of pregnancy, this

is actually something that is frequent and also leads to low incomes for them, at a time when they need it the most. The third problem is the lack of good quality sanitary facilities, which is a major issue. These are not all the problems that employees face, but there are many more and some of them are not even known to us.

There should be a uniform plan for all employed people that would guarantee them job security, pensions, maternal or paternal leave, medical and family insurances etc. This would actually increase the employment rate in all countries, leading to higher income and their economic stability. Such issues should be addressed globally and steps and programmes related to the same should be implemented with great fervour. Men and women should treated as equals.

-Aryan GargXI-Commerce

INNOVENTURE 9

The U.S.A has unleashed a volley of sanctions on China and the European Union, worth $ 200 billion. There is a 25% tariff increase on 800 products, 25% on steel and 10 % on aluminium from Mexico, Canada and countries from the European Union. The Trump administration has faced a severe backlash from all these countries. Trump believes that these countries have been imposing tariffs on their products, for example, Donald Trump said this imposition of tariffs was part of an effort for fairness, noting that China imposes a 25% tariff on US cars while the US only has a 2.5% duty on Chinese cars. “They charge us, we charge the same thing,” said Trump. The Trump administration took its aggressive step as it imposed tariffs equivalent to $34 billion on Chinese, including medical devices and aeroplane parts, and threatened billions of dollars more in the coming months. The Chinese immediately responded with tariffs on an equal volume of American soybeans, pork, automobiles and other products. The most affected industries are the agricultural ones. China had been importing food worth millions from the USA, and now these sanctions act as deterrence for imports. All of these countries have given their answers with high tariffs on brands like Jack Daniels and Harley Davidsons’. Even if Trump believes that these steps will do good for the USA, but they come along with risks. Many American companies are moving productions to foreign markets to avoid tariffs imposed by the European Union and other companies, for example, Harley Davidson leading to a loss of jobs. All of the tariffs already imposed or threatened in the U.S.-China dispute would mean 700,000 fewer U.S. jobs. Trump also planned to impose tariffs on foreign steel and aluminium, a move he says will force other countries to lower their

tariffs. However the scheme has backfired, as the European Union, Mexico and Canada respond with their sanctions, many of which are aimed at products from politically important states that supported Mr Trump, like Ohio, Iowa, Pennsylvania and Wisconsin. Donald Trump’s actions have hurt the American production market more than they benefited from it. With companies, outsourcing and the unemployment rate increasing his plans have backfired. Now the world market is bearing the burden of this large trade war. - Viraj Lohia IX

TRADE WARS

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United Nations is as consequential to the peace and security of the world as it probably is to us. Maybe not in any material manner, but surely through the means of a concept which calls upon the powers of our body, mind, and a choice of wardrobe!; namely the Model United Nations(MUN). So if we are to really pretend to solve real-world crises, I consider being aware of the UN’s wallet a necessity.

The United Nations Core Budget is primarily divided into a number of sub-categories of which funds are majorly directed towards the Regular Budget (financing the core bodies and activities of the UN, including political missions in Iraq, Afghanistan, Somalia, Libya, and Burundi that promote stability in key regions of the world) and the Peacekeeping Budget. This is revised once every two years. Voluntary contributions of the members add to the Core Budget and fund peripheral organisations like the WHO, UNICEF et cetera but the major source of funds is the payment structure wherein each member pays its dues determined through thorough assessment of several factors that assesses a country’s ability to make that payment (such as their GDP, external debts, per capita income and various other financial aspects related to the current circumstances).

The UN has a ceiling to the share of the total budget a member nation can be assessed to contribute, which was revised recently (due to negotiations by the United States) and brought down to 22%. As obvious as it sounds, USA was the only member to meet the ceiling though it only is a meagre expenditure for the giant economy when compared to the return it reaps. A ‘floor’ rate is also set to determine the minimum amount a member is assessed to contribute to 0.001% of the budget. As patient as the UN maybe, Article 19 of the UN Charter declares, “If a Member State in arrears in the payment of its dues in an amount that equals or exceeds the contributions due for two preceding years can lose its vote in the General

Assembly. An exception is allowed if the Member State can show that conditions beyond its control contributed to this inability to pay.” Currently, only Libya suffers this consequence of its penury. Talking of penury, the biggest international organization the world has ever seen is facing a dire cash crunch, again. But this time it is the worst it has ever seen in its own history. As of June 30, the Core budget had a deficit of $139 million. The Budget as agreed upon by the General Assembly Budget Committee in December for the 2018-2019 was $5.4 billion.

The Secretary-General, Antonio Guterres, didn’t point any country out in his desperate appeal for funds and payment of dues but urged the members to try “not (to) have to suffer repeated brushes with bankruptcy”, after all “greater pain is felt by those we serve when we cannot, for want of modest funds, answer their call for help”. This presents an outrageous question, is the money worth the payment. Now there are numerous notable instances that have rendered the giant harbinger of peace and security, in particular the Security Council, useless.

Among others whose mere utterance is a shame to the UN are the Rwandan Genocide, the Sudanese crisis and Cold War (that also gave birth to, allegedly, the nation that’s abused the most by the UN; Israel). Forget shrouded atrocities, the UN was outright incapable of stopping its own core members from waging war on a country based on its own perceived notions of possession of WMD, much contrary to the UN reports and that too, if I may, against the collective opposition from the global community.

This displayed a complete disregard for the reverential UN and what it stands for, deliberation before action or even simply put “prevention of war”. What was even more outrageous about the conduct of USA and Britain after the invasion of Iraq was when they argued their ‘right’ to destroy a

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country and rebuild it for its own sake which was severely, as always, condemned by those abiding by the UN ideals with the utmost zeal. If it cannot be trusted to handle itself and its members, how can we even expect the UN to solve crises involving elements that are beyond engagement? Evidently, UN has failed to a great extent in its primary aim of maintaining world peace and security.

Comparing the astronomical costs of the UN and its achievements, even after 70 years, it seems to be trying hard to function and define itself in the ever-changing 21st Century. The ironical reason being, the inefficient governance of the organisation comprising the entire world’s governments. As good as those fool-proof formal procedures seem, they prove to be one of the greatest impediment to the functioning of the UN, as adeptly summed up by the Secretary-General, “Fragmented structures. Byzantine procedures. Endless red tape.”

There are separate IT departments of every UN body causing excessive fragmentation, numerous formalities and hands are needed to be changed before a plan can be put to practice and competition instead of cooperation between different organisations for funding leading to poorer funding that sometimes makes these organisations capable only of running offices (which by the way is the third largest expense of the UN).

The use of outdated business practices and poorly planned execution adds more weight to the already stretched resources. President Trump may be vociferously wrong on a number of issues but being quite right this time, he has the international community worked up when he calls for cost-cutting and increasing efficiency.

I shall not venture into the details of each aspect, for the sheer volume of pointed words might easily be misconstrued as blowing off some steam on my part. In my opinion, the mother of all problems is its sheer idealism in letter and spirit that breeds ineffectiveness and ballyhoo over the bedlam it creates. Perhaps the only realism that survives in the quixotic universe on the United Nations is through its Secretary Generals, the second of whom (Dag Hammarskjöld) dryly (or wryly I don’t know) noted, “The United Nations was created not to lead mankind to heaven but to save humanity from hell.”

Shresth ToshniwalXl-Commerce

Secretary General: Antonio Guterres

EDITORIAL Board EDITOR-IN-CHIEF: Aryaman Ahuja

SENIOR EDITOR: Apoorv Goyal

EDITORS: Chaitanya Motani, Divyansh Mehta

CORRESPONDENTS: Aryan Garg, Shresth Toshniwal

CREATIVE EDITOR: Ujjwal Goenka

TEACHER-IN-CHARGE: Mr. Rajeev Bhatia

SPECIAL THANKS: Mr. Saurav Sinha, Mr. Joy Arora, Mr. Abhik Bhattacherji,

Mr. Prashant Arora, Mr. Girish Prasad

Welham PollDo bilateral relations get impacted when economic sanctions are imposed?

Published By : The Principal, Dr. (Ms.) Gunmeet Bindra Welham Boys’ School, Dehradun