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EL ESPECTADOR

Why Latin America Should Go All In On The Sharing Economy

The collaborative approach to trade, production and services could help countries like Colombia end their dependence on raw materials.

Time to share
Time to share
Felipe Jánica

-Analysis-

BOGOTÁ — While we tend to think of the so-called sharing economy as a new concept — a product of the fourth industrial revolution — its origins are far older, as old as the economy itself. What's happening now, rather, is that due to the rise of e-trading and disruptive models that are ending certain logistical chains, the concept is developing and permeating popular speech.

For Latin America, there are both benefits and challenges involved with these economic shifts. But they also offer a real possibility to redevelop our battered economies. In Colombia's case, like with most Latin American economies, dependence on the sale of primary goods has caused considerable instability. Dependence on a good, especially commodities or natural resources, destabilizes economic growth in the two other types of goods: secondary and tertiary.

With primary goods (raw materials or renewable and non-renewable resources), prices are usually free-floating and depend on international rates set in this case in U.S. dollars. The greater our dependence on these goods, the less chance we have of pursuing real economic development, of diversifying, in other words, into industrial production (secondary goods) and providing world-class services (tertiary goods).

Dependence on the sale of primary goods has caused considerable instability.

The dollar's current price volatility makes diversification even more urgent — so as to avoid its negative effects on an already shaken economy. This is why Latin American economies should do all they can to seek alternatives. In our case, as I've written before, the state needs structural reform. That reform must envisage changes in education, justice, security, infrastructure, and cargo and passenger mobility inside the country.

In Bogota, Colombia — Photo: Random Institute

Colombia also needs to root out corruption and do away with inefficient bureaucracy in both the private and public sectors. And on the financial side, we need to overhaul the system of taxation. If this overhaul were fully implemented, the country's risk ratings would improve substantially, and that, in turn, would help make the country more competitive.

What we need to drive this scale of economic transformation are more and better jobs. This could be done by promoting private and public initiatives that involve the sharing economy concept. Its essence is fairly simple and based on the integration of producers and consumers in a community. Both sides have a common objective, so creating a collaborative framework between them facilitates their connection and, ultimately, the exchange of products and services.

The task of institutions should be to pave the way for revolutionary ideas like these.

Creating collaborative eco-systems to aid the mechanization of farming, say, may help yield a high-tech, industrialized farming sector. This industrialization would allow us to move on from the production of primary goods, with benefits for both producers and consumers, locally and abroad.

Exploiting the fourth industrial revolution and using its enablers (digital elements, the internet of things) will be fundamental for creating collaborative eco-systems. The task of institutions should be to pave the way for revolutionary ideas like these.

That they're still focused, for the most part, on traditional businesses rather than the collaborative model isn't surprising. But that's all the more reason why deep structural reforms are now a matter of urgency.

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FOCUS: Russia-Ukraine War

How Vulnerable Are The Russians In Crimea?

Ukraine has stepped up attacks on the occupied Crimean peninsula, and Russia is doing all within its power to deny how vulnerable it has become.

Photograph of the Russian Black Sea Fleet headquarters with smoke rising above it after a Ukrainian missile strike.

September 22, 2023, Sevastopol, Crimea, Russia: Smoke rises over the Russian Black Sea Fleet headquarters after a Ukrainian missile strike.

TASS/ZUMA
Kyrylo Danylchenko

This article was updated Sept. 26, 2023 at 6:00 p.m.

Russian authorities are making a concerted effort to downplay and even deny the recent missile strikes in Russia-occupied Crimea.

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Media coverage in Russia of these events has been intentionally subdued, with top military spokesperson Igor Konashenkov offering no response to an attack on Russian Black Sea Fleet headquarters in the Crimean city of Sevastopol, or the alleged downing last week of Russian Su-24 aircraft by Ukrainian Air Defense.

The response from this and other strikes on the Crimean peninsula and surrounding waters of the Black Sea has alternated between complete silence and propagating falsehoods. One notable example of the latter was the claim that the Russian headquarters building of the Black Sea fleet that was hit Friday was empty and that the multiple explosions were mere routine training exercises.

Ukraine claimed on Monday that the attack killed Admiral Viktor Sokolov, the commander of Russia's Black Sea Fleet. "After the strike on the headquarters of the Russian Black Sea Fleet, 34 officers died, including the commander of the Russian Black Sea Fleet. Another 105 occupiers were wounded. The headquarters building cannot be restored," the Ukrainian special forces said via Telegram.

But Sokolov was seen on state television on Tuesday, just one day after Ukraine claimed he'd been killed. The Russian Defense Ministry released footage of the admiral partaking in a video conference with top admirals and chiefs, including Defense Minister Sergei Shoigu, though there was no verification of the date of the event.

Moscow has been similarly obtuse following other reports of missiles strikes this month on Crimea. Russian authorities have declared that all missiles have been intercepted by a submarine and a structure called "VDK Minsk", which itself was severely damaged following a Ukrainian airstrike on Sept. 13. The Russians likewise dismissed reports of a fire at the headquarters of the Black Sea Fleet, attributing it to a mundane explosion caused by swamp gas.

Kremlin spokesman Dmitry Peskov has refrained from commenting on the military situation in Crimea and elsewhere, continuing to repeat that everything is “proceeding as planned.”

Why is Crimea such a touchy topic? And why is it proving to be so hard to defend?

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