Growing numbers of experienced chief financial officers are abandoning the corporate grind to take freelance roles for multiple clients—whether in parallel or on a serial basis.

“The demand for [freelance] professional CFOs has approximately doubled” in recent years, says Eusebi Llensa, co-founder and CEO of Outvise, a Barcelona-based marketplace for high-end independent contractors.

Indie CFOs come in two flavors. Both enjoy growing popularity. And both differ from old school consultants because they become trusted members of company teams rather than serving as outside advisers.

Fractional CFOs work mostly with start-ups and growing midsize firms that need high-end financial services but cannot afford or don’t yet want a full-time employee. They work for extended periods with a portfolio of clients to provide the full gamut of CFO services, albeit on a part-time basis.

Two years ago, only about 2,000 LinkedIn accounts featured people promoting C-suite fractional services. This number currently stands at approximately 114,000, according to Sara Daw, CEO of The CFO Centre and The Liberti Group, and author of Strategy and Leadership as Service.

Interim CFOs take on short-term project-based assignments that cater to their expertise and interests; for example, an M&A specialist might sign on for a few months to oversee a transaction. When the deal is done, they move on.

People who define themselves as interim were more likely to be engaged in January (73%) than during the same month last year (67%) or two years ago (55%), according to the 2024 European Survey conducted by the International Network of Interim Manager Associations (INIMA).

Interim work is growing for all relevant functions, but C-suite and board services run ahead of the pack: They represent 55% of all gigs, said the INIMA report. Individuals skilled in “change management and process optimizations” are in high demand.

To facilitate the trend, a new global industry of independent management platforms and marketplaces is emerging to match C-suite and other high-end freelancers with potential clients. Some handle contracts, payments, back-office tasks, and other services. Top names include Outvise, Malt, True Bridge, Talmix, and Catalant. The CFO Centre, Fintalent.com and iFinance Director count among a subset that specializes in CFOs and top financial pros.

These companies report impressive rates of growth in revenue, such as: up 180% over the past two years; a threefold jump in monthly recurring revenue over the last 11 months; and an increase of 15% to 20% last year.

Chelsea Williams, founder and fractional CFO at US-based Money Management, a financial coaching company, and Core Solutions Group that works with law firms in the US, says she recently had to “Stop growing” lest things get out of hand.

The grandmother of them all, The CFO Centre, has evolved into a £60 million ($78 million) multinational organization since it was founded in 2001.

The industry has come a long way since Sara Daw co-founded that firm. Descriptive terms had yet to be coined. “Most people didn’t understand what we were talking about,” she recalls.

Despite the recent growth, the phenomenon still flies under the radar of many business screens. “I spent a lot of time having coffee with people to explain the model,” says John Frank, a fractional CFO and founder and CEO at Third Road Management, a business he has gradually grown over the past decade.

Frank echoes fellow industry leaders when he says, “The sky’s the limit” for the future of CFOs as independent contractors. As Dow travels the world, she says, “I get people asking when we are coming to their country.”

Sometimes people don’t wait. Take Rafael Estrela and his partner in São Paulo; seven years ago, they launched what has become BR Experts for the Brazilian market.

The trend is fueled by several developments including supply and demand, as well as from the evolution of the CFO profession in the corporate world.

The first has become obvious. We live in a “take this job and shove it” zeitgeist whereby many individuals embrace the lyrics of that Johnny Paycheck country song to pursue a better work-life balance, more flexibility, and new and more interesting professional challenges.

Take Phil Christmas, for example. As a British fractional CFO based in Spain, Christmas builds his portfolio of clients through platforms such as Outvise.

“I can help out with my two small kids. I can take my 6-year-old to school,” he says. “I am not fully employed as a fractional CFO, but I don’t want to be.”

But it can get complicated. For example, freelancing is often temporary. Nascent entrepreneurs take gigs to stay afloat as they bootstrap their companies.

“They need to fund their lives,” says Matthew Horrocks, head of Private Equity British Isles & North America at Malt, a platform for interims. “It allows them to spend time on what they want to do.”

That’s the sell side. On the buy side, there are two groups: SMEs and startups combine for one; then there are the corporates. For the latter, the use of freelancers is related to the evolving role of CFOs.

When SMEs and startups begin to grow, they increasingly need sophisticated financial services. But they can’t afford to hire a top-notch CFO. What is an entrepreneur to do? Hire a fractional.

For startups, the demand often emerges during early funding rounds. “When they are required to provide financials and data rooms, startups tend to hire fractional CFOs,” says Ömer F. Güven, founder and CEO of Fintalent.com, a platform for M&A and post-acquisition integration experts.

And it’s flexible. “Maybe it’s two days a week, but during the peak fundraising period, it could be 60 hours a week,” says Güven.

For small companies, whether seeking investors or not, a fractional CFO “really serves as a trusted adviser” for the entrepreneur, Frank notes. Says Christmas: “I am 62. My clients are often in their 20s. They are CEOs. They are highly intelligent, but they have no clue” about the financial side of the business world.

If smaller companies fuel the fractional world, corporates dominate the interim one. Sometimes it is something as simple as hiring a temporary replacement for a vacated slot or someone on parental leave.

But corporate leaders are also beginning to understand that they can boost productivity by hiring experts for specific tasks and projects, such as M&A, carve outs and post-acquisition integration. This is related to the growing sophistication of the CFO role, moving from computational to strategic and operational roles; thereby opening up sundry specialist tasks that might be better filled by temporary or part-time workers. Top financial people now need to be “strategic” says Llensa. “They need to ensure that there is a proper ROI.”

As individuals, fractional and interim CFOs might be one and the same, depending on the circumstances. They generally create portfolios of clients, sometimes tapping old contacts, sometimes platforms, and sometimes other networking tools.

Almost everyone agrees on one thing: To be a successful freelance CFO, one needs to be good at self-marketing. In other words, introverts need not apply.

“You have to find clients every day through marketing and networking,” says Christmas. “The type of person who is usually an accountant doesn’t have that kind of expertise.”

To make the roster of The CFO Centre, candidates must pass the barbeque test. Everyone is invited to a cookout. Those who help put sausages on the grill and talk to everyone make the team. Those who “stand in the corner” get cut.

Revenues from the Olympics are generated primarily by two main protagonists: the local organizing committee, this time 2024 Paris, and the IOC. Each also has clearly defined responsibilities.

For the most recent Summer Games in Tokyo, the IOC received a total of $7.6 billion between 2017-2020/2021 (slated for 2020, those games were postponed a year by the Covid pandemic). Media broadcasting rights accounted for 61% of revenues and the The Olympic Partner (TOP) corporate sponsorship program for 30%.

Broadcast fees have jumped by over four-fold since the 1990s, reaching $4.5 billion for Tokyo. TOP revenues increased from less than $300 million to $2.3 billion over the same period.

The TOP program was launched in the 1980s with five partners, and gradually expanded to the current 15. The stable of sponsors reflects changes in recent economic history. The original group included Kodak and Xerox. Current members include Atos, Airbnb, Alibaba and Intel. It also reflects the growing interest in the games. “We sweated bricks” to secure sponsors at the beginning, said Chris Renner, Global Head of Consulting at rEvolution, a Chicago-based sports marketing agency and a founder of TOP. Now, four-year contacts have been replaced with eight-year ones.

The main sources of income for local committees such as the 2024 Paris Games are domestic sponsorships, ticketing, licensing within the host country, hospitality and merchandising. As IOC revenues increase, local organizers also get more of that pot. Paris gets $1.7 billion for this edition, while the 2028 Los Angeles Games  and the 2032 Brisbane Games are earmarked for $1.8 billion each. Christophe Dubi, IOC executive director of the Olympic Games, said, “We make more, everybody makes more.”

Each of the 206 National Olympic Committees (NOCs) around the globe and the dozens of International Federations (IF) for specific sports also generate their own revenues. The best known of the latter are probably FIFA for soccer and FIBA for basketball, but the list includes the World Archery Federation, the World Badminton Federation, and more.

The IOC spends 10% of its revenues on internal operations and distributes the rest through what it calls a solidarity program to local organizing committees, the NOCs, IFs and other relevant sports promotion initiatives. This revenue sharing system is considered essential to the survival of some modalities. “This is very important for smaller sports like rowing, archery and fencing,” said Renner. “I don’t know if they could have sustained themselves through Covid without the solidarity program.”

The local committee is expected to handle venue operations, the workforce, technology and games services. Local public officials control security and other essential public services. Capital expenditures, often but not always in the form of public-private partnerships, may include sporting venues, enhanced or expanded public transportation networks, housing (such as the Olympic Village) and more. Budget-breaking cost overruns tend to fall into the capital expenditures category. “The operations budget usually makes a small profit,” said Renner.

Whether or not they formally make a profit, proponents argue that the games still leave a positive economic legacy. An independent study touted by the IOC concluded that the Paris Games will end up generating between $7.3 billion to $12.1 billion for the city and surrounding Île de France region between 2018-2034. The big gains are coming from tourism, construction and the organization of the games, said the report published by the Centre de droit et d’économie du sport (CDES) of the University of Limoges. The $3.3 billion in public spending will generate a multiplier effect of three, said the study.

Not everyone agrees, of course. In Paris, already one of the world’s top tourist destinations, there is much talk about sports tourists crowding out others who would normally visit. Local press reports have highlighted sectors such as luxury retailers who worry that they will sell fewer handbags than normal. The emblematic bouquinistes, the second-hand book sellers who line the banks of the Seine, successfully fought off efforts by local officials to remove their stalls to make more room for the riverside opening ceremony. Taxi drivers are moaning about traffic restrictions.

“A common feature of the economics of large-scale sporting events is that our expectations of them are more optimistic than what we make of them once they have taken place,” wrote Ivan Savin, associate professor of quantitative analytics at the ICTA-UAB ESCP Business School in Spain and co-author of an article that he outlined on The Conversation, a website that encourages the dissemination of scholarly studies among the general public. Savin and two colleagues did an econometric study of the effects on tourism of large sporting events between 1995-2019. “Typically, expenditure tends to tip over the original budget, while the revenue-side indicators (such as the number of visitors) are rarely achieved.”

Dubi accepts the crowding out concept but argues that the phenomenon is already factored into studies showing wider benefits. He also stressed that the IOC is open to outside scrutiny, saying it “forces everyone to ask the right questions.”

Ultimately, the financial side is only part of the process, everyone agrees. As for the local committee breaking even or making a profit, “I suppose it’s a good result,” said Anaïs Guillemané Mootoosamy, director general for Strategy at the Conran Design Group, a London-based brand and design consultancy that is working with the 2024 Paris Games. “But the Olympics aren’t meant to be a cash machine. It is to push the values.”

— Read Part 1 of 2024 Paris Games: Can The Olympics Finally Claim Financial Victory?

The 2024 Paris Games organizing committee is projected to break even or perhaps slip into the black from the upcoming Summer Games, CEO Étienne Thobois recently announced. With a budget estimated in the $8 billion to $10 billion range, Paris is emphasizing the use of existing facilities and lower-cost temporary venues.

“Everyone has been conscious of every euro that is spent, that it is useful, and we should be careful not to spend any euros on things that are superficial. Frankly, that is a challenge in itself,” Thobois said in a press conference before the opening ceremonies.

The Paris results stand in contrast to the last two Summer Games, when local committees lost $7 billion in the delayed Tokyo Games in 2021 and $2 billion Rio de Janeiro in 2016. Leaving taxpayers holding the bag is nothing new: Montreal famously needed decades to pay off its debt from the 1976 games. Many cities, notably Athens in 2004, wound up with useless sporting venues often built to feature Olympic sports that are not popular at home, like the Velodrome meant only for bicycle racing.

Viewed through this historical lens, cost overruns and white elephants seemed almost inevitable. “Hosting the Olympics is like holding a wedding,” said Hank Boyd, professor of Marketing at the Robert H. Smith School of Business at the University of Maryland. “You’re not going to be frugal.”

Scholars like Boyd have pushed the need for “structural reform.” And influential observers like Andrew Zimbalist, an economist at Smith College in Massachusetts, want to establish a single, permanent venue for the games—an idea that has been floated for years. Community groups have launched high profile opposition movements to their cities’ bids, successfully in Boston in 2012, but not so in Rio.

To address these issues, the Lausanne, Switzerland-based International Olympic Committee (IOC) has encouraged local officials to put the brakes on capital spending and change their bidding processes. After the Athens Games, “they told the organizing committees to not put up White Elephants and use temporary facilities,” said Chris Renner, Global Head of Consulting at rEvolution, a Chicago-based sports marketing agency, who has been working with the IOC since the 1990s. “London was the start of that. You can breakdown the facilities and reuse them elsewhere.”

Traditionally, the IOC evaluated bids just seven years ahead of time and awarded the games based on a process reminiscent of “a beauty contest,” said Christophe Dubi, IOC executive director of the Olympic Games. Now “we now have a very different approach to the awarding of the games” with a focus on long-term partnerships. “We are speaking to cities and regions interested in the games for 2040. And why? Because by having such a long perspective, you can design together the future of what the games would look like in region X, Y, Z. It doesn’t mean they could do it tomorrow, but it means that there is a future together.”

If 2028 host Los Angeles can repeat its showing in 1984 as the only local committee so far to turn a profit, this may begin to look like a trend. “Maybe Paris has cracked the code,” said Boyd, citing the 2012 London Games as a possible precursor. Those games broke even while leaving a valuable legacy of urban renewal and London Stadium, which has hosted multiple big events.

— Read Part 2 of 2024 Paris Games: Can The Olympics Finally Claim Financial Victory?

Due diligence can be especially tricky for firms that use freelancers located in multiple jurisdictions—even within countries, such as the US, that have federal systems. Plus, governments everywhere from Brazil to Serbia to the UK are moving the goalposts.

Governments often couch the new rules as defending exploited workers. But many independent contractors oppose legislation that would restrict their freedom in exchange for traditional work-related benefits. California’s landmark Assembly Bill 5, for instance, passed in 2019, extends employee classification status to most gig workers. It has been the target of lawsuits filed by groups running the gamut from truckers and Uber drivers to freelance journalists.

The debate can be heated, but many impartial observers believe that it mostly comes down to this math: Governments fear the real or potential loss of tax revenue. Argentinean officials estimate that they are losing billions of dollars in tax revenue from citizens who work remotely with clients abroad, says Jon Younger, co-author of “Agile Talent: How to Source and Manage Outside Experts.” Shortfalls may result even in places with efficient tax collection structures and even where most freelancers pay their fair share, as activists say they do.

Collecting from individuals is not as quick and efficient as a simple blanket payroll deduction, points out Steve King, partner at Emergent Research. John Lee, CEO of Work From Anywhere, says, “Many countries around the world are looking at this as a significant risk, particularly those with high social security spending.”

In Serbia, among other places, legislation aims primarily to boost tax collection from independent workers. Following the California model, other governments want to reclassify freelancers to prevent them from working independently. The California law revived a three-pronged, Depression-era standard called the ABC Test. The controversial B factor states that, to be considered independent, a worker must perform work that falls outside the hiring entity’s normal course of operations. Thus, a book publisher can call an electrician to fix the wiring in its office; but it could not temporarily bring on a freelance translator, since the latter role serves the employer’s core function.

The politicians who back such legislation argue that they are combatting the misclassification of people who should be considered employees under the law. And experts agree that misclassification happens. King estimates that 10% to 15% of independent contractors, or some seven million to 10 million individuals in the US, “should be classified as employees, and most of them would want to be.” Not included in this estimate are gray-area sectors such as ride hailing and delivery drivers. Misclassification is concentrated in a handful of industries, including hospitality, warehousing, and some industrial sectors, he adds. Safety and other labor conditions in these places tend to be substandard and the employers often prey on vulnerable groups such as immigrants.

At least in the US, new legislation would not seem to be needed to prosecute such abuse, however. “Enforcement is uneven and underfunded,” says King, “but the laws are clear on misclassification.”

As some jurisdictions attempt to restrict freelancing, others encourage it. Over 50 countries offer so-called digital nomad visas to serve the needs of foreign remote workers, many of them independent. Some municipalities in Argentina and the US, for example, are starting to offer subsidies for incoming remote workers.

“Some countries are clamping down, but others are opening up,” says Andrew Jernigan, CEO of Insured Nomads. “They’re saying, ‘Please come and spend your money here.’”

The surging numbers tell the story. A major hiring shift is transforming how businesses find and utilize talent and how that talent finds and establishes relationships with companies that need its skills. Outsourcing work to freelancers is by no means a new phenomenon, but as the figures indicate, in the past five years it has jumped to an entirely new level.

What once was incidental and supplemental is now routinely baked into companies’ operating model. An astonishing 72 million Americans, or about 45% of the workforce, reaped at least some of their earnings from independent contracting last year. Those classified as full-time freelancers, defined as putting in more than 15 hours per week, reached 26 million. Freelancers overall and full-time freelancers were up by a staggering 89% and 91% respectively, compared to 2020, according to the 2023 State of Independence in America report by MBO Partners, a US-based direct sourcing platform.

While best documented in the US, the trend appears to be global. Registered freelancers in Saudi Arabia, for example, jumped in number by 157% from 2020 to August 2023 and now account for nearly 19% of the kingdom’s labor force, according to press reports. The reported market for digital freelancing in the Middle East stands at $4 billion. In the Middle East and North Africa, 86% of employers planned to hire freelancers in 2023, and about 89% of respondents hoped to do more freelance work, according to a poll last year by Middle Eastern recruiter Bayt.

“There is a shortage of skilled workers,” notes Steve King, partner at Emergent Research, a California-based small-business focused consultancy. “Companies would like to hire them, but they can’t.”

For executives, the new reality might best be captured in the title of a paper recently published in the Harvard Business Review: “Highly Skilled Professionals Want Your Work But Not Your Job.” The paper describes how managers are grappling to establish and oversee blended workforces at employers such as Microsoft, M&C Saatchi, Mars, and others.

As with any revolution, this shift in the nature of work exposes a few rough edges.

“Many companies do not know how to work with freelancers,” says Jon Younger, co-author of “Agile Talent: How to Source and Manage Outside Experts,” who embraces the sobriquet “godfather of the freelance revolution,” given to him by more-youthful peers. “They try to treat them like employees, and they are not employees.” Efforts to herd them in often lead to friction. Younger is one of a handful of consultants who help both companies and hiring platforms smooth things over.

Freelancing covers an astounding range of occupations and ranks. King suggests an umbrella term such as “independent” or “nontraditional” workers. “Under the hood, there are segments based on what they do,” he notes.

A “fractional” professional will work for one or more clients, with fixed duties over an agreed-upon period of time or on a project basis. That period can be either defined or open-ended. Fractionals get paid regularly, often as a monthly retainer, or per project. The highest-profile fractionals would be C-suite-level executives, ranging from part-time, long-term CFOs to M&A specialists who pop in to help close specific deals. The category also includes anyone who receives a retainer, from a foreign correspondent to a training specialist.

“Independent contractor” generally refers to skilled individuals who work project-to-project. They may have portfolios of regular clients. They may also accept one-off assignments. Often, they combine both. They are sometimes referred to as “solopreneurs” when they run their own business singlehandedly.

Gig workers tend to get their work from online platforms, either fully automated—such as Uber—or human-curated ones, whereby platform representatives link up suppliers with clients. The European Training Foundation (ETF), a European Union agency, notes that platform workers are generally divided between the location-independent, such as software developers and graphic artists; and those limited by geography, such as ride-hailing and delivery drivers.

Location-dependent gig workers without high-end skills tend to be the lowest earners of the freelancing family, although studies often show that many of them appreciate the independence and flexibility offered by this kind of work.

A commercial infrastructure for hooking companies up with freelancers—whatever their place on the totem pole—has burgeoned in recent years. With the growth of platforms such as Fiverr, Upwork, and Toptal; and more-specialized resources such as The CFO Centre, Catalant, HashRoot in India, and Outvise in Spain, many high-end independent workers now rely on some form of matchmaking service to find and maintain client relationships.

The freelance trend has also nurtured such newfangled entities as the Rosely Group, a public relations firm that Jonathan Williams, managing director, calls a “remote-first agency” but that might best be described as a virtual company. While Rosely is properly registered in both the UK and the Netherlands, Williams says, “Everybody works remotely”: some in New York, some in New Zealand, and some in Bali.

Rosely operates as a full-service agency, but it also offers clients a smorgasbord of arrangements, says Williams. “If they say they want a different service, we can give them a different service” by bringing in someone with the right expertise for the job. Time zones and company culture offer challenges, but there is no overhead for expensive office space in New York or London.

The emergence of a platform industry has already engendered the world`s first platform association. Called R-evolution, it aims to promote freelancing and independent contracting in Spain, where the concept of freelancing isn’t “as mature” as in some other parts of the world, says Ana Kramarenko, marketing manager at Outvise.

The new freelance workforce includes people who have often been marginalized, such as unpaid family caregivers and people with mobility problems. Many parents struggling to raise children would prefer flexible schedules. That’s how Sara Daw became an industry pioneer two decades ago.

“I was doing well with a big corporation, but I couldn’t have a career and be a mum,” says Daw, CEO of The CFO Centre Group and the Liberti Group, and author of “Strategy and Leadership as Service: How the Access Economy Meets the C-Suite.” Now she runs a firm that matches up part-time corner-office professionals with small and midsize businesses “that can’t afford the C-Suite price tag but absolutely need their skills.”

In Canada, an Indigenous activist established an online freelance platform designed primarily to serve indigenous peoples. “Everyone on our platform has a story,” Bobbie Racette, CEO and founder of The Virtual Gurus, said in April at the Running Remote conference in Lisbon, Portugal.

Wage discrepancies are often highlighted as a key element of the global North-South divide. By applying what he calls “geo-arbitrage,” Emergent Research’s King argues that workers in low-cost jurisdictions can live better while remaining competitive on cost.

“In India pre-Covid, even if heavily underpaid, everybody preferred job security,” says Arjun Narayanan, chief growth officer at HashRoot, an India-based platform for software developers and engineers. During the pandemic, techies secured higher wages through his and other firms. Now almost everyone wants to remain independent, he says. “Freelancing is going to be the new law. Not just in India, but around the world.”

Even before the Covid-19 pandemic, tech freelancers in the Western Balkans were making their marks on international online job platforms, reports the ETF. Of the region’s seven nations, five—all but Croatia and Kosovo—ranked among the global top 10 for the number of freelancers per 1,000 people in 2018.

The new breed of freelancers may yearn to be free, but these aren’t your huddled masses. They run the gamut of occupations, and many offer expertise in some of today’s hottest fields. The leading categories of independent workers include experts in artificial intelligence (AI), supply chains and logistics, data sciences, machine learning, and marketing—including digital marketing and content creation—along with C-suite-level executives.

Nearly three-quarters of European freelancers surveyed say they earn as much as, or more than, they once did on a full-time job, according to Malt, a Paris-based continental freelance management system and marketplace. Over three-quarters of US freelancers said they were “very satisfied” with independent work, according to MBO Partners’ report. Most independent workers in Europe seem content enough as well, reports Malt, 62% having no interest in changing to in-house roles and only 10% saying they are actively searching for full-time jobs.

These individuals, however, want the flexibility, independence, agency, and better work-life balance that freelancing promises in return.

“It goes deep into people’s values,” says John Lee, CEO of Work From Anywhere, a technology platform offering solutions to compliance issues for companies that use remote workers. “People may want to be closer to their kids or care for a sick parent. For any of a multitude of reasons, maybe the independent contractor or freelancer route might suit them better.”

In most parts of the world—even Japan, with its legendary salarymen—many workers have given up on the mid-20th century promise of corporate stability. In the 1980s, most American employees had defined-benefit pension plans; now, the figure for private industry is about 15%. The average time spent in a job in the US is about three-and-a-half years, according to King. If the advantages of traditional work amount to security, a regular paycheck, benefits, and less risk, today “there’s less security,” he suggests. “Covid-19 woke everyone up to insecurity. People start thinking about what they are doing with their lives.”

For many, that means becoming their own boss.

“In the age of Elon Musk, why not make your own pizza?” asks Younger.

Many old-school executives still claim to value loyalty, stability, company culture, and in-house intellectual property. But even they are being dragged along with the freelance revolution. They need that free-thinking talent.

Other executives see ways to use the trend to increase profitability. Whatever the case, they “are finally willing to admit that they can get great labor and not pay as much,” says Andrew Jernigan, CEO of Insured Nomads, an insurance company focused on remote workers.

That might seem counterintuitive, given that independent contractors often earn more by the hour than full-time employees. But freelancers do not receive health or pension benefits, or paid vacation time. The employer pays only for what it needs, not for dead time around the water cooler. Ultimately, companies want flexibility, agility, reduced fixed costs, and access to talent, King agues.

“Over the past hundred years, if a company was doing an M&A deal, they needed a very specific expert for a particular project of maybe 12 weeks; but they would typically have gone and hired a person for a full-time role,” Lee notes. “Which is insane, because I know the deal is typically a short-term project where you need very highly specific niche skills.” Now, companies are bringing in specialists for defined projects.

Some tasks require stable employees, of course, and fortunately for executives many individuals prefer regular jobs. The number of full-time freelancers is growing, but most independent contractors are moonlighting while holding onto something more secure, Younger notes. Many workers will never take the plunge, in his view, for three reasons: fear of income volatility, fear of losing ancillary benefits like health insurance, and fear of loneliness outside a traditional workplace.

“You need to bifurcate the work from a human resources perspective into operational and strategic: who runs the ship as opposed to who changes the course,” says Tim Toterhi, who, as a fractional chief human resources officer, sees both full-time and freelance workers as having their place in the same organization. “You’re going to pay more if you want loyalty for implementation”; but if you want to shift course, bring in the outside experts.

“Companies need some of the people all of the time, and some of the people some of the time,” Younger concludes.

Or, as MBO Partners CEO Miles Everson, puts it, “People who think they need a full-time employee have not gotten the memo yet.”

Tbilisi, Georgia, will host the Asian Development Bank’s (ADB) annual meeting the first week of May. Soon thereafter, the European Bank for Reconstruction and Development’s (EBRD) confab takes place in Yerevan, Armenia. The near-convergence of two heavyweight multilaterals comes as the two countries exhibit strong economic growth accompanied by growing excitement about the middle corridor, an Asian-European supply chain route connecting the Caspian Sea through Azerbaijan with the Black Sea through Georgia.

Despite persistent geopolitical storms, often related to neighbors Russia and Turkey, both Caucasian nations are on the upsurge. Armenia enjoyed GDP growth of 12.6% in 2022 and 7% last year, with International Monetary Fund (IMF) predicting a further 5% jump this year. The respective figures for Georgia are 10.1%, 6.2%, and 4.8%.

Credit goes partly to the post-Covid rebound, notably in tourism, and solid fundamentals, including better control of the public debt in Georgia and a stronger external balance sheet in Armenia.

[UPDATE: May 15 — Less than two weeks after the Asian Development Bank annual meeting in Tbilisi, Georgian lawmakers passed a bill in an 84-30 vote, aimed at limiting the influence of foreign-funded non-governmental organizations (NGOs) and media. The vote came amid massive protests, where the opposition claims that the bill is an authoritarian overreach. Analysts predicted that the move could stifle anti-corruption efforts and jeopardize the country’s candidacy to join the European Union. The legislation would require NGOs and media outlets that receive more than 20% of their funding from abroad to register with the government as “foreign agents.”] 

But a few contributing factors may seem counterintuitive.

Georgia and Armenia “are somewhat unexpected beneficiaries of the fallout of the of the war in Ukraine,” Jan Friederich, head of EMEA Sovereign Ratings at Fitch Ratings, said during a public online event hosted by the agency, “primarily in terms of the large number of migrants and the large amount of capital that they have attracted, which in turn has improved a lot of credit metrics.”

Reliable numbers are hard to track down, but analysts generally agree that a huge influx of migrants from Russia, Ukraine and Belarus have arrived in both countries since Russian President Vladamir Putin escalated attacks on Ukraine in February 2022.

Up to 100,000 Russians have since entered Armenia, according to different estimates cited by the Italian Institute for International Political Studies (ISPI) in Milan. As of October, up to 60,000 Russians remained. Along with them, capital transfers from Russia jumped to 37.4% of GDP in 2022, up from 15.2% in 2021, according to the ADB.

By the end of 2022, about 110,000 Russians had moved to Georgia, according to a press reports citing figures from Georgia’s Interior Ministry. Since then, outflows of returnees or people moving to third countries have outdistanced inflows, with a net decline of 31,000 last year. During the first half of 2023, remittances from Russia to Georgia increased by 50%, totaling $1.1 billion, according to Transparency International Georgia (TIG), an anti-corruption non-governmental organization.

Most of the immigrants “are quite affluent compared to living standards in Georgia,” says Dimitar Bogov, regional lead economist for Eastern Europe and Caucasus at the EBRD. “Their purchasing power is important.” While this has led to overheating in the Tbilisi real estate market and the expected resentment from locals, the economic effect has been positive, by and large.

“Local financial institutions have much benefited from stronger revenue generation and larger business volumes,” says Artem Beketov, director of EMEA bank ratings at Fitch. Banks in the two countries “also earned extra-large revenue and received additional liquidity related to immigration and money flows from Russia.”

While still significant, remittances appear to be dwindling. Meanwhile, many of the predominately upscale and well-educated newcomers shows signs of putting down roots and investing in the local economies: 21,326 companies were registered in Georgia by Russian immigrants between the start of the war and September, according to TIG.

Information technology is the main driver of Armenia’s economic upsurge. The landlocked country emphasized IT and other service industries after the collapse of the Soviet Union, and the influx of foreign—especially Russian—coders and other IT professionals has helped fill a labor shortage in the sector due to brain-drain emigration to the rest of the world.

Russian companies that have expanded operations in Armenia include Miro, an online whiteboard tool valued in the billions, and the tech giant Yandex.

“One of the unexpected consequences of the war was that IT companies and IT experts went to Armenia,” says Bogov. “This was substantial for a small economy.”

New or relocated migrant-owned businesses “represent investment and boost GDP,” says Arvind Ramakrishnan, director of sovereign ratings at Fitch. “It also gives us more confidence that these people are here to stay, at least for the medium term.”

Armenia also received over 100,000 refugees who fled Nagorno-Karabakh when Azerbaijan took full control of that predominately ethnic-Armenian enclave in September, according to the International Crisis Group in Brussels. Most of these individuals were either farmers or public sector bureaucrats, Bogov notes.

Short-term public support for these newcomers has further boosted economic activity, but the jury remains out on their ultimate impact. “Concerning their skills, there may be an issue ahead,” says Bogov. “It depends on how integrated they become in the Armenian economy and society.”

Both Armenia and Georgia have enacted policies to promote sustainable development and green growth, a report by the Organization for Economic Co-operation and Development (OECD) notes. Georgia has adopted  WHEN? a new law on environmental liability, and both countries are working with the European Union to adopt better standards.

Georgia applied for EU membership in 2022, and an accession process is under way, but most close observers expect it to be drawn out. A shorter route to international economic integration, some analysts say, might be the Middle Corridor, known more formally as the Trans-Caspian International Transport Route and less formally as the Silk Road, a multimodal supply-chain route coming together between China and Central Asia and Europe. Given current geopolitics, it also offers an attractive alternative to the Northern Corridor, which runs through Russia and Belarus.

The Middle Corridor needs Georgia for its access to the Black Sea, which offers an end point for goods that travel by rail from Central Asia to the Caspian Sea, then by ship to Azerbaijan, then to Georgia by rail, before the final leg from Georgia to Europe by ship. While complicated logistically and bureaucratically, the Middle Corridor route has the benefit of being currently undisturbed by either war or economic sanctions. 

Despite the bottlenecks, container traffic along the Middle Corridor grew by 33% year-on-year in 2022, according to the International Institute for Strategic Studies (IISS), a London-based global think tank. Companies in Sweden such as Ikea, Tetra Pak, and Volvo need a reliable, lower-cost supply-chain route from Asia, says Jean-Paul Larçon, emeritus professor of Strategy and International Business at HEC Paris business school. Air flight is faster but more expensive; shipping through the Suez Canal takes 40 days and carries security risks, given Houthi attacks on shipping; and traveling around the Horn of Africa takes 50 days. The Northern Corridor is also vulnerable to geopolitical and security risks.

That makes the Middle Corridor “an incredible opportunity” for the countries along the way, including Georgia, Larçon argues.

The EBRD has already invested in Georgia’s transportation infrastructure, and the future of the Middle Corridor looks bright, he adds, with projections that at least 10% of Asian-European trade could be using the route in the near future.

“If you are Georgia, why not invest in that?” he says.

Two recent expert reports supply evidence of Egypt’s unique potential to benefit from a more fully implemented African Continental Free Trade Area (AfCFTA) agreement. They are helping to fuel much needed optimism about the future of an economy battered by short-term geopolitical and other challenges that have led to symptoms such as 38% inflation last September.

“Egypt has what it takes to play a key role,” said Landry Signé, senior fellow at the Brookings Institution, a Washington D.C.-based think tank, and professor at the Thunderbird School of Management, a business school in the United States. “For SMEs (small and medium sized enterprises) and larger companies, there are opportunities everywhere.”

The analytical reports were bookended by last year’s $7 billion World Bank deal (to support private sector jobs, health and education, and climate change adaptation) and a new $5 billion loan program with International Monetary Fund (IMF) announced this month, which in turn came on the heels of a $35 billion accord with the Emirati sovereign wealth fund ADQ. After the IMF deal, the World Bank decided to chip in another $3 billion.

The AfCFTA-Egypt reports come from the Organization for Economic Cooperation and Development (OECD), a Paris-based club of rich countries, and the Trade Law Center (tralac) in Western Cape, South Africa. Both suggest that Egypt is well placed to benefit from and help advance AfCFTA.

AfCFTA became the world’s largest regional free trade agreement when it was formally launched in 2021. The World Bank predicted that it could boost regional trade by 7%, meaning $450 billion, and lift 30 million people out of extreme poverty by 2035. While slow to gain momentum in trade volumes, partially due to the Covid lockdowns, the agreement has made strides on administrative, legislative and diplomatic fronts.

The Egyptian government signed on in 2022 as one of eight countries to do a fast-track test as part of something called the Guided Trade Initiative (GTI). (The others were Cameroon, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia.) Recent reports say that at least 24 other countries are slated to join the GTI soon, though insiders speculate off the record that the number could jump to more than 30.

In November, Cairo hosted the third Intra-African Trade Fair, organized by the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the AfCFTA Secretariat. “The capabilities exist, and the possibilities exist, but there may be some obstacles and problems,” said Egyptian President Abdel Fattah al Sisi at the inaugural ceremony. “We in Egypt should always build, develop, rebuild and cooperate in these fields, and nothing less.”

The private sector seems to take the politicians at their word. “Egypt is trying to really make this happen,” says Usama Elsayed, chief operation officer for BPC Banking Technologies, an Egyptian financial software firm. “The official position of the government is to do whatever it takes to make the implementation run seamlessly.”

Intra-regional trade in Africa still stands at 15%, much lower than for Europe (61%) and Asia (59%), according to the OECD report titled Production Transformation Policy Review of Egypt: Spotlight on the AfCFTA and Industrialization published in November.

The apparent lack of progress can be attributed to several factors beyond the lockdowns, according to a section of the Foresight Africa 2024 report by the Africa Growth Initiative, a program of the Brookings Institute, released in January, and authored by  Andrew Mold, chief of the Regional Integration Office for Eastern Africa, at the United Nations Economic Commission for Africa, and Francis Mangeni of the AfCFTA Secretariat and senior fellow at the Nelson Mandela School of Public Governance, University of Cape Town. These would be: that it is normal, e.g., the European Union took years to solidify; AfCFTA’s tariff reductions are meant to be gradual, running through 2035; and because non-tariff barriers also need to be addressed.

Add to that just plain logistical problems. “The whole issue with Egypt and Sub-Saharan Africa is the Saharan Desert,” says John Stuart, an economist and policy analyst with tralac, and author of the above-mentioned report.

Egypt, along with Nigeria and South Africa, ranks among Africa’s most advanced industrial centers. It also represents a major trade hub, albeit so far directed mostly towards Europe, the Middle East North Africa (MENA) region, and even Asia. The strength of that triumvirate may translate to an opportunity. “The three largest economies on the continent—Nigeria, South Africa, and Egypt—all enjoy large positive trade balances with their continental partners, so in principle, they can afford to adopt a liberal import regime for intra-African imports,” according to Brookings.

The OECD and tralac reports, plus a few others, have culled out a handful of sectors that jive as priorities both for the trade group and Egyptian industrial policy. They include: renewable energy; pharmaceuticals; logistics and transportation; clothing, textiles and apparel (CLT); and agribusiness and processed foods.

There is anecdotal evidence of progress in certain areas, according to another report, this one published last year by the World Economic Forum with Signé as the main author. Titled AfCFTA: A New Era for Global Business and Investment in Africa, it noted that “several global automotive companies… have expanded operations” on the continent, working with governments in Egypt, Ghana and South Africa, among others, and the AfCFTA Secretariat. It cited Egypt, along with Rwanda and South Africa, as a leader for e-mobility start-ups that are developing sustainable vehicles.

Egypt already plays important roles in several global value chains, including those for CLT, oil and gas, automobile manufacturing and renewable energy, among others, as described in tralac’s trade brief Egypt’s Potential Trade Development Under the AfCFTA.

Egypt has been a leading cotton producer for thousands of years, but “Manufacturing clothing is not their strong point,” said Stuart. Perhaps they can use AfCFTA to hook up with lower cost clothing manufacturers on the continent. “They might be happy to import made textiles,” he adds.

By extending their supply chain experience into other parts of Africa, Egypt can help itself by helping others on the continent. “AfCFTA offers a unique opportunity to Egypt to expand its value chain participation into African countries,” concluded the tralac document.

Puerto Rico’s Governor Pedro Pierluisi signed into law in January the Act to Facilitate the Implementation of Remote Work in Private Enterprise, to encourage outside investment. Thus, the US territory joined 22 sovereign nations and territories in Latin America and the Caribbean that have enacted legislation to officially welcome remote workers.

Last year, Nomad List, an online community of self-identified location-independent workers, named Buenos Aires the best destination in the Americas for digital nomads. The city’s government claims it received 72,450 digital nomads in 2022 compared to 9,600 in 2021, based on incentives to attract remote workers.

Many high-earning, highly educated individuals from wealthy countries are able to and prefer to work remotely, not always from their homes. Companies that need the skills or knowledge these people possess need to accept employees working outside the office or offer it as a perk.

“Entities that engage with digital nomads have more satisfied workers,” says Nicole Cieslicki, senior director of International Services at labor-sourcing provider MBO Partners.

For sundry lifestyle and economic reasons, increasing numbers of people want to spend all or most of their time outside their native countries. More and more are choosing Latin America.

Three of the world’s top 10 global digital nomad hotspots are in Latin America: Mexico, Costa Rica and Colombia, according to the authors of the Digital Nomad Visa Whitepaper, published last December by consultancy Remote Commons. Meanwhile, according to Nomad List data, Buenos Aires, Mexico City and Medellín are among the top 10 cities in the region. Panama and Uruguay are getting special attention from his clients, says Mikkel Thorup, CEO of consultancy Expat Money. Women nomads rank Costa Rica, Mexico, Chile and Peru among their 10 favorite countries, according to the online “knowledge hub” on team-collaboration platform provider Pumble.

Studies and anecdotes show that people flock to cities such as Medellín; Rio de Janeiro; Mexico City, Playa del Carmen and Oaxaca in Mexico; and Buenos Aires. The fastest-growing hubs in the Americas in 2023 were Montevideo, Uruguay; Santiago, Chile; and Florianópolis, Brazil, according to another Nomad List study.

Finding reliable numbers for remote workers globally is challenging. The Global Digital Nomad Study reported by the blog A Brother Abroad estimates that as many as 35 million might be floating around the world. For the US, where the best numbers seem to be available,17.3 million American workers now describe themselves as digital nomads, up by 131% between 2019 and 2022 and now up another 2% from 2022, according to data from MBO Partners.

The only readily available official figures seem to come from the US State Department’s Bureau of Consular Affairs’ 2022 Overseas Citizen Population Analysis, which estimated nine million US citizens living overseas in 2019.

Working outside of the employer’s place of business has a long history. Still, the digital nomad story begins in the 1990s with the rise of the internet and mobile computing, according to the authors of the Remote Commons white paper.

Before the advent of “teleworking,” the highest-profile remote workers were foreign correspondents. Outside the news media, typical expatriates were sent on assignment by a multinational company for an extended stay at a subsidiary, according to MPO Partners’ Cieslicki. Benefits included housing and private schools for the kids. “Many of those packages don’t make sense [financially for the firms, anymore],” she adds.

In the 1990s, high-end tech professionals, notably computer engineers, found nothing to stop them from working from wherever. This was facilitated by advances in communications technology, notably the advent of Skype in 2003, which slashed phone costs, observed Bobby Casey, a managing director at consultancy Global Wealth Protection (GWP).

Around the same time, most major urban areas worldwide had decent access to the internet. The new class of workers took their name from Carl Malamud’s 1992 travelouge, in which he described a “digital nomad.”

The next wave of nomads consisted of so-called influencers who bragged and blogged about how to do it. Then came the Covid-19 lockdowns. Remote work in the US jumped from 4% to 45% in March 2020, according to Liam Martin, co-founder and chief marketing officer of productivity-software vendor Staff.com. “That was the biggest change since the Industrial Revolution, which took 80 years to happen.”

“I wrote that Covid-19 was the best thing to happen to humanity,” says GWP’s Casey. “I got death threats. But it exposed the reality that remote work is where it’s at.”

After the pandemic came the Great Resignation. Now, even many high-level executives balk at returning to the office grind.

The term “digital nomad” has become a catch-all category for remote workers who spend some time away from home. They include conventional expatriates, people with a base who travel frequently, and snowbirds who escape frozen winter climes. They also include freelancers, independent contractors, entrepreneurs, business owners, and part-time and full-time employees. Some move around a lot, while some stay put forever or for extended periods.

Author and travel writer Tim Leffel says only 5% of the more than 10,000 subscribers to his Nomadico newsletter are purely location independent.

According to the Remote Commons authors, there are five main reasons why people opt for a seminomadic lifestyle: flexibility and autonomy, cost of living, adventure and travel, career development, and personal growth.

“The main reason is money,” says Milly Arceo of consultancy Legally in Mexico, based in Playa del Carmen, on the Yucatán Peninsula. “Their money has more value here. Properties are cheaper, and they can live a better life.”

The Baltic state of Estonia pioneered an e-residency program in 2014 and became the first European country to offer a digital nomad visa, in August 2020. Barbados created a watershed moment in June 2020 with its “welcome stamp” 12-month work visa, which exempts the nomad from Barbadian income tax. Dozens of countries soon followed suit.

Despite all the hubbub about nomad visas, experience shows they don’t matter much. Ecuador’s government reported that they had issued only 113 of them in the 16 months prior to July 2023. Yet just five minutes in the Mariscal neighborhood of Quito provides sufficient signs of a much greater “gringo” presence.

Rules vary by country; but generally, three fast-track ways exist to obtain a medium- or long-stay visa. Would-be nomads need to prove a certain level of annual earnings from outside the country, ranging from $12,240 in Colombia to $100,000 in the Cayman Islands. They may need to prove sufficient passive income from a pension or interest, dividends, rents, payments or royalties. Or, in some places, they can directly invest in real estate or a local business.

“While digital nomad visas supposedly abound, few offer enough simplicity and flexibility to compete with tourist visas,” write the Remote Commons authors. “Working on tourist visas may be technically illegal, but enforcement is practically nonexistent. Most digital nomads come from wealthy countries with strong passports like the US, UK or Germany. So tourist visas remain the most attractive option unless they plan longer stays.”

A cottage industry of consulting firms for nomads, their employers, and their clients is emerging. For recipient countries, it is hard to pin down the economic effects. Since nomads receive their income from abroad, there is no threat to domestic jobs. Instead, the effect would seem like that of remittances—a diffuse boost to businesses that run the gamut from homebuilders and furniture makers to bars and restaurants.

The average digital nomad makes nearly $125,000 annually, according to data on Pumble. When the minimum wage in a relatively developed country like Brazil comes to less than $300 a month, it is easy to understand why local policymakers might want that injection of nomad spending power.

Luiz Inácio Lula da Silva seems to log more time on his souped-up Airbus than he does at the Alvarado Palace, the presidential mansion in Brasília.

His jet-setting started in November with the COP27 climate summit in Sharm El-Sheik, where the then president-elect was “welcomed like a rock star,” according to the French newspaper Le Monde. He promised to clean up after his predecessor, climate skeptic Jair Bolsonaro, who oversaw a notable uptick in deforestation in the Amazon.

Since his inauguration in January for a second stint (on top of two terms from 2003-2011), Lula has visited over a dozen countries, outpacing even his American counterpart Joe Biden for his presence on the global arena.

Yet “Brazil remains closed,” states veteran Brazilian businessman Roberto Teixeira da Costa in a new book, “Is Brazil Afraid of the World? Discussing Brazilian Foreign Affairs and Challenges.” Of the world’s 15 largest economies, Brazil has ranked “among the lowest” when it comes to the importance of international trade to its economy, he said in the book. This even before Bolsonaro turned Brazil into a “pariah,” says the author, who founded and served as the first president of the Brazilian Security and Exchage Commission (CVM) and is currently chairman of the Arbitrage Chamber of the São Paulo Stock Market (Bovespa).

Relative to its size, Brazil scores lower than one would expect on international participation in all realms, including trade and historic incoming and outgoing FDI. Teixeira da Costa doesn’t blame foreign bullies for blocking Brazil. Instead, he quotes former President Fernando Henrique Cardoso: “Nothing makes Brazilians happier than isolation.”

Part diagnosis, part prescription, Teixeira da Costa’s book may serve as a primer for those who wonder why a continent-size nation of 215 million is often marked down as absent during important international roll calls. For Brazilians, it poses a series of Socratic questions designed to fuel debate, concluded reviewer Marcelo Consentino in the daily Estado de São Paulo.

“The thesis of the book is that Brazil fails to recognize the role it should play in international relations, and instead accepts a secondary role,” Teixeira da Costa says. “Brazil should become a protagonist.”

Many well-informed, well-meaning, and experienced Brazilians remain unconvinced, at least when it comes to the “just do it” modus operandi. “Brazil’s capacity is modest,” says Paulo Roberto de Almeida, a diplomat and director of international relations at the Institute of History and Geography of the Federal District University in Brasília. “First, because of its level of economic development, the average strength of its military force, and the limited resources devoted to international cooperation.”

National pride matters, as it does everywhere, but practical considerations loom large—including a longing to put to rest an old joke. Granted a permanent visa by President Getúlio Vargas during World War II, exiled Austrian writer Stefan Zweig published a book titled, “Brazil, Land of the Future.” Cynical Brazilians began to quip, “Land of the future, and always will be.”

Teixeira da Costa believes that greater international integration can help Brazil address sticky domestic problems, notably poverty and inequality, and help muffle that ostensibly antiquated joke. Brazil perennially ranks near the bottom on the Gini Coefficient, which measures economic inequality. At 12.4% in December 2022 (CEIC Data), Brazil’s low domestic savings rate means that it cannot go it alone. “We have to attract [foreign] investment,” said Teixeira da Costa.

Based on historical data, one would expect inflows from the United States and Europe. These traditional partners must shore up supply chains, given weaknesses revealed by Covid-19 restrictions and fallout from the Russian war in Ukraine. Brazil shores might seem to offer safe ports.

Reticence could be traced in part to the now infamous Custo Brasil (Brazil Cost), which Teixeira da Costa defined in the book as: excessive bureaucracy; high and complicated taxes; high labor costs; high social security costs; frequent regulatory changes; excessive legislation; and conflicts among federal, state and local governments. One example: As a technologically advanced, post-lockdown world adopts more flexible and creative working relationships, Brazilian labor laws remain mired in a model designed for early-20th century factories. “All of this insecurity messes things up,” says Lika Takahashi, head of equity strategy at Fator Asset Management in São Paulo, while referring to a few recent debates over big issues in Congress.

Abrupt alterations and intergovernmental conflicts create uncertainty. This inconsistency is particularly evident in the foreign policy realm.

Of the post-dictatorship presidents since 1985, Teixeira da Costa points to Cardoso and Lula as “particularly active abroad.” (He could have included Fernando Collor de Mello. Before his impeachment on corruption charges, Collor cut tariffs, facilitated foreign investment, hosted the 1992 Earth Summit in Rio de Janeiro, and signed the Mercosur regional pact with Argentina, Paraguay and Uruguay.)

Look at the contrasts between the Cardoso and Lula administrations. Cardoso proved “more balanced,” as Teixeira da Costa said in our interview, whereas Lula focused on South-South relations and what some would call “Third World-ist” policies. Now consider what the book calls the “Bolsonaro administration’s blind march toward Donald Trump’s America.” Add to that the lack of reliable foreign policy interlocutors in Congress or the business community. You can understand why outsiders might get weirded out.

One external actor appears willing to wade through the weirdness: China. As with the United States, Teixeira da Costa devoted an entire chapter to Brazilian-Chinese relations. Even under the watch of Trumpista Bolsonaro, “In the first half of 2020, for every dollar Brazil exported to the United States, US$3.4 went to China,” states the book.

Given his South-South proclivity and enthusiasm for the BRICS+, Lula might be expected to lean more firmly into China for FDI. With 11 members, the new BRICS+ accounts for over one-third of global GDP and nearly half of world population, though it is top-heavy with China on both accounts.

When it comes to prescriptions, Teixeira da Costa can seem exceedingly nitpicky and refreshingly specific. Do problems exist at all levels of government and business? Yes. And they can all be addressed. Poor language skills and understanding of the world? More and better education in those realms. If your company is big enough, the board should be required to examine opportunities abroad. Navel-gazing industrial associations should lift their heads and look around.

The 20th century Brazilian composer and poet (and career diplomat) Vinicius de Moraes, perhaps best known for his collaborations with Tom Jobim and other Bossa Nova personages, wrote the song “Medo de Amar (Afraid to Love).” A quarter of a century after de Moraes was expelled from the foreign service by the military dictatorship, it might be time for Brazil to overcome its fear of the global stage.

Or maybe it is time for Brazil to just get down and dirty. In the book, Teixeira da Costa recalls a comment he made in the 1990s to Bill Clinton’s special envoy to the Americas, Mack McLarty: “He who does not make dust, eats dust!” According to the Brazilian, they still get a laugh out of that one.

Three Middle Eastern countries have recently pledged to reach net-zero carbon emissions: the United Arab Emirates (UAE) by 2050, and both Saudi Arabia and Bahrain by 2060. “That’s important, because a lot of financial institutions must align with the government,” says Jessica Robinson, founder and managing director of Dubai-based sustainable-finance advisory Moxie Future.

Companies are beginning to integrate environmental, social and governance (ESG) criteria into their business plans. Not so long ago, when questioned about their ESG strategies, executives would “say that they didn’t know what we were talking about,” says Tarek Shahin, chief investment officer at Misr Capital, the Cairo-based asset management arm of Banque Misr. “Not that they rejected it, they just didn’t know. Now they know. They either make their case or say that they are on the way to doing better. You see that across the board.”

Last October, representatives of more than 25 countries from four continents gathered in Riyadh for the official launch of the Middle East Green Initiative (MGI), a Saudi Arabia-backed scheme that, among other things, aims to plant 50 billion trees in the Middle East and restore an area equivalent to 200 million hectares (just over 772,000 square miles) of degraded land, an area slightly larger than Mexico.

At the MGI gathering, regional leaders all said the right things. Mohammed bin Salman bin Abdulaziz Al Saud, crown prince of Saudi Arabia, delivered opening and closing remarks. “We are ushering in a new green era in the region,” he said. “The effects of climate change are not limited to the natural environment only, but also to the economy and security of our nations.” He further stated, “Climate change is an economic opportunity for our citizens and the private sector [that] will create quality jobs and encourage innovation in the region.”

Yet, at COP 26 in Glasgow, which opened just a week later, Ireland`s former President Mary Robinson joined a chorus of global critics, emotionally accusing Saudi delegates of “playing dirty games” to water down the agreement by removing language regarding human rights issues and the phasing out of fossil fuels. Saudi representatives denied those charges.

The clash calls attention to the challenges of transforming petroleum-dependent economies. But many experts believe in the shift. “In both Saudi Arabia and the UAE, it is the official policy to switch to a new export commodity,” says Rinaldo Brutoco, CEO and founder of H2 Clipper, an aerospace firm with expertise in renewable energy. “They understand.”

In November, Egypt will host the next annual climate summit, COP 27.

A Dearth Of Standards

Measuring progress on sustainability is hampered by the lack of a clear, universal definition. As a result, some people fall back on ESG, customarily used by companies, analysts and investors. Others prefer to focus on climate change. Still others point to the UN’s Sustainable Development Goals (SDGs) that aim “to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.”

However one measures it, there seems to be a consensus among businesspeople that sustainable practices lead to greater profits. “There is hard evidence from the market that companies that care about sustainability—governance, the environment, their standing in the community, and labor—tend to do better financially,” says Misr’s Shahin. “Especially when it comes to industrial companies that aren`t careful about the environment, because of the risk of litigation.”

Given that backdrop, it shouldn’t be surprising to find plenty of newly launched or accelerated high-profile sustainability initiatives by companies and financial institutions.

The National Bank of Kuwait (NBK) recently appointed two new independent board members, “one with an extensive background in ESG,” says Hisham Abouali, sustainability manager at the bank. “That will ensure that the board focuses on ESG.”

The NBK board will soon feature its very own sustainability committee. In parallel, the bank is writing a sustainability charter.

At the end of June, Commercial International Bank (CIB) issued Egypt’s first corporate green bond, with the entire total of $100 million snapped up by the International Finance Corporation, the private sector development arm of the World Bank. The proceeds will fund a portfolio of green loans.

They “will also be aligned with several SDGs that are relevant to CIB’s strategy, namely: SDG 6, Clean Water and Sanitation; SDG 7, Affordable and Clean Energy; SDG 9, Industry, Innovation, and Infrastructure; SDG 11, Sustainable Cities and Communities and SDG 13, Climate Action,” says Hussein Abaza, the institution’s CEO and managing director.

Also last year, there was a “flurry of activity in the hydrogen space” in the UAE, according to a report authored by Julio Friedmann, a senior research scholar at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs; and Robin Mills, CEO of Qamar Energy, a Dubai-based energy consultancy. The report cited the 2020 announcement of “an ambitious five-year $122 billion capital investment program, including plans for transitioning to a low-carbon future” by the Abu Dhabi National Oil Company (ADNOC). Abu Dhabi officials “mandated ADNOC to become a ‘hydrogen leader.’” Hydrogen is touted as an attractive form of low-carbon energy.

In addition to policymakers and business executives, many other players drive sustainability efforts, including sovereign wealth funds, family offices, ratings agencies and international institutions.

Six sovereign wealth funds, including four from the Gulf Cooperation Council, founded the One Planet Sovereign Wealth Fund Framework in 2017 to help “factor climate change–related risks and opportunities into how they invest and improve the resilience of their portfolios,” according to The Evolution of ESG in the Middle East, a 2021 report by Husain Fekri of GIB Asset Management. Nine more funds subsequently signed on. As a result, the framework is “mobilizing trillions of USD [US dollar] assets towards the integration and consideration of climate-related risks.” In addition, individual funds, including Saudi Arabia’s Public Investment Fund, have taken further moves to align investments with ESG and SDG criteria.

Family offices are influential in the region. Many are experiencing a “generational shift,” and the younger people often care more about sustainability, says Moxie Future’s Robinson.

Anthony Ritossa, chairman of the Ritossa Family Office, organizes high-level, closed-door family office gatherings in Dubai, Riyadh and elsewhere. “We see many companies at our family office summits presenting exciting new opportunities in areas such as water safety, food security, clean energy, net-zero emissions, elimination of single-use plastic and more,” he says.

There is a growing emphasis on ESG by ratings agencies, and it has caught the eye of many in the region. New reports were issued by Sustainable Fitch, a branch of the ratings agency, in the March edition of its ESG Monthly email newsletter, highlighting bank climate stress tests and risk management, the impact of ESG on ratings and the growing importance of ESG on sovereign ratings. The newsletter writers note, “Investors are increasingly placing emphasis on customer-related issues when considering investments in the corporate, financial institution and structured-finance sectors, driven by regulatory and ESG disclosure frameworks.”

“The ratings agencies are looking at certain indicators, and we develop these reports and try to meet the requirements,” says NBK’s Abouali. “We recently did a maturity gap assessment versus three major ratings agencies. We have noticed where the gaps lie. We are doing our utmost to cover them to meet the agencies’ requirements.”

As the recommendations of the Task Force on Climate-Related Financial Disclosures gain traction globally, so are they garnering attention in the region. “Climate risk has risen on the agenda,” says Robinson. Interest by businesspeople in sustainability is also “about positioning with their international peers. They want to tap into investment internationally and adopt best practices.”