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Invisible Hand

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The invisible hand, a concept coined by Adam Smith in his seminal work “The Wealth of Nations,” describes the unseen market forces that drive a free economy through self-interest and voluntary trades.

This metaphor illustrates how individuals, in pursuing their own goals, inadvertently contribute to societal welfare. The dynamics of supply and demand naturally adjust prices and trade flows without centralized control, highlighting how personal motives can lead to broader economic benefits and fulfillment of society’s needs.

The Mercenary Economy: How War Became a Business

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Once the stuff of medieval battlefields and Renaissance city-states, the mercenary economy has reinvented itself for the modern era. What used to be roaming bands of sword-for-hire warriors are now sleekly branded Private Military Companies (PMCs) that win multimillion-dollar contracts, manage logistics for wars, and, in some cases, decide the fate of governments.

But beneath the corporate logos and diplomatic cover, the essence is unchanged: war as a commodity, violence for sale. And today, the mercenary economy is not only thriving, it’s reshaping how conflicts are fought from Africa to the Middle East to Eastern Europe.

In history books, mercenaries conjure images of Swiss pikemen or Italian condottieri. They were feared, hired, and often despised for their loyalty to gold rather than flag. But in the late 20th century, the business model evolved. The post-Cold War world left thousands of unemployed soldiers and a boom in civil wars. Out of that chaos came the modern privatization of war.

One of the earliest and most infamous examples was Executive Outcomes, a South African company that, in the 1990s, helped governments in Sierra Leone and Angola push back insurgents in exchange for mineral concessions. Their contracts blurred the line between corporate security and outright mercenary intervention.

Fast forward to Iraq and Afghanistan in the 2000s, where Blackwater (later rebranded Academi) became a household name. Hired by the U.S. government for billions of dollars in security contracts, the company provided convoy protection, base defense, and tactical support. Its notoriety peaked after the 2007 Nisour Square massacre in Baghdad, where Blackwater contractors killed 17 civilians, sparking international outrage and congressional hearings.

There are several Case Studies in today’s Mercenary marketplace. No discussion of today’s mercenary economy is complete without the Wagner Group. More than just a security contractor, Wagner has become a tool of Russian foreign policy. Active in Ukraine, Syria, and across Africa, Wagner’s model is straightforward: provide military muscle in exchange for resource rights and political influence.

In Central African Republic, Wagner guards mines and government officials in exchange for concessions in gold and diamonds. In Mali, Wagner filled the vacuum after French troops withdrew, reportedly earning lucrative contracts tied to resource extraction. In Ukraine, Wagner acted as shock troops in battles like Bakhmut, leveraging tens of thousands of fighters, including prison recruits.

Wagner’s operations expose how modern mercenary firms straddle the line between private business and state proxy.

The Middle East remains one of the largest markets for Private Military Companies. During the Iraq War, an estimated one contractor was deployed for every U.S. soldier, making it one of the most privatized wars in history. These contractors weren’t just hauling supplies, they carried rifles, operated checkpoints, and conducted intelligence operations.

In the Gulf States, wealthy governments outsource military manpower. The United Arab Emirates famously contracted foreign soldiers, including Colombians and Sudanese, to bolster its ranks in Yemen. Here, mercenary labor looks less like Hollywood-style gun-for-hire and more like a globalized job market, where ex-soldiers from developing nations work for a fraction of Western contractor salaries.

Africa remains fertile ground for mercenary economies. Weak states with rich natural resources often rely on foreign fighters when national armies falter. In Mozambique, the government hired the South African Private Military Companies Dyck Advisory Group to fight insurgents linked to ISIS in the gas-rich Cabo Delgado region. In Sudan and Libya, overlapping networks of mercenaries – from local militias to global contractors – turn wars into lucrative businesses for those supplying manpower and arms.

The Business Model of War is very important point. The modern mercenary economy functions less like a band of soldiers-for-hire and more like a globalized service industry. Here’s how it works: Clients: Governments, corporations, or even rebel groups. Payment: Cash contracts, resource concessions (oil, diamonds, gold), or long-term partnerships. Labor Force: Retired soldiers, special forces veterans, or low-cost recruits from developing countries. Services: Security, training, logistics, intelligence, and sometimes frontline combat.

In practice, this means oil companies in Nigeria may hire PMCs to protect pipelines, while governments in fragile states sign deals exchanging mines for military survival.

The Dark Side of a Mercenary Market worth mentioning. Critics argue that the mercenary economy perpetuates conflict instead of resolving it. If war becomes profitable, peace becomes bad for business. Accountability is another glaring issue: while national soldiers face military law, contractors often operate in legal grey zones. The Blackwater massacre in Iraq highlighted the gap—initially, contractors were immune from Iraqi law, and prosecutions took years of political pressure.

The United Nations attempted to ban mercenaries through the 1989 Mercenary Convention, but few major powers signed it. For countries like the U.S. or Russia, outsourcing war offers plausible deniability and reduced political costs.

To conclude, the mercenary economy has never been more relevant. From Wagner’s battlefields in Ukraine to contractors guarding oil fields in Africa, the business of war is a thriving global industry. It’s dressed up in corporate suits and PowerPoint presentations, but the core is the same: violence for hire.

What makes today different is scale and sophistication. With billion-dollar contracts, political cover, and a global labor market, mercenaries are no longer ragtag soldiers chasing coin. They are organized, profitable, and deeply embedded in the geopolitics of the 21st century. The question for governments, corporations, and civilians is simple: if war has become a business, who really profits from peace?

Tokenizing the Titans: How US Debt is Entering the Digital Era 

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The United States moves to digitize its Treasury securities, promising unmatched liquidity, transparency, and global access; however, risks and geopolitical challenges loom large. 

The Financial World on the Brink 

The global financial system is on the verge of a major change. Tokenization, the technology that transforms traditional financial instruments into digital assets, is set to change how sovereign debt works, especially for the United States. Using this technology for the country’s IOUs presents a unique chance for modernizing the market, while also bringing a complex mix of technical, financial, and geopolitical risks. As experts look into the possibilities of blockchain-based US Treasury securities, one thing is clear: the stakes couldn’t be higher. 

“For the first time, retail investors and small businesses worldwide could join a market that was once dominated by institutions and governments.” — Dr. Rachel Morgan, Senior Financial Analyst 

Understanding the Core Concepts 

At the center of this change is the IOU, or “I Owe You,” which signifies formal debt the US government owes to its creditors. These obligations mainly come in the form of Treasury Bills, Notes, and Bonds, building the foundation of the largest sovereign debt market globally. As of late 2025, the US gross federal debt exceeds $36 trillion, a result of decades of borrowing. Tokenization turns these assets into digital tokens on a blockchain, each one representing part or full ownership of the underlying Treasury security. 

Digital currency is crucial in this setup. Unlike traditional money, digital currencies exist only online, including cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). Stablecoins are particularly important because they keep a stable value compared to fiat currency or other assets, often backed by reserves like Treasuries, fiat, or gold. Blockchain technology supports tokenization by recording transactions on multiple computers, ensuring transparency and security. Smart contracts, which are self-executing code built into the blockchain, automatically enforce ownership terms, interest payments, and redemption, reducing reliance on middlemen. 

Modernizing the Treasury Market 

Turning Treasury securities into blockchain-based tokens is more than just a tech upgrade; it’s a strategic improvement of financial infrastructure. Legal structuring and compliance are key, as issuers work closely with legal experts to make sure they follow US securities laws. Tokens are designed to represent either direct or indirect claims on the underlying Treasuries. 

Once compliance is determined, smart contracts take over essential tasks. These include breaking down large securities into smaller token units, automating interest payments, and allowing redemption of principal at maturity. Regulated custodians hold the underlying Treasuries, with cryptographic evidence recorded on-chain to confirm the backing of each token. Tokens are then distributed through regulated digital exchanges, enabling immediate secondary market trading and global participation. 

“Tokenization connects the efficiency of digital ledgers with the stability of US Treasuries, creating a new model for investors worldwide.” 

Why Tokenization Matters 

The main goal of tokenization is to combine blockchain technology’s efficiency with the world’s most liquid and low-risk asset. Current Treasury settlement and clearing processes are slow and heavily dependent on intermediaries, leading to counterparty risks. Tokenization can significantly cut these risks and shorten settlement times from days to almost instant. 

Breaking down securities into smaller pieces opens access to high-value securities for retail investors and small-to-medium enterprises (SMEs), allowing them to enter a market typically reserved for institutions and governments. Moreover, tokenized Treasuries can act as reliable, yield-generating reserves for stablecoins and decentralized finance (DeFi) protocols, anchoring digital financial systems in trusted assets and providing market stability. 

Benefits for the US and Global Markets 

Tokenizing US debt brings many advantages. In domestic markets, continuous 24/7 trading boosts liquidity, expanding the pool of buyers and sellers and possibly lowering borrowing costs. Automation cuts operational costs by reducing much of the manual back-office work involved in issuing, managing, and transferring securities. Fractional ownership diversifies the creditor base by welcoming a global pool of retail investors into Treasury markets. 

Tokenization also strengthens market advantages. Liquidity increases through nonstop trading, transparency improves with unchangeable transaction records, and auditability rises because of automated, verifiable histories on the blockchain. These features together create a degree of financial oversight and clarity that traditional methods can’t match. 

Navigating Risks and Challenges 

Despite its benefits, tokenization brings considerable risks. While it doesn’t directly cause inflation, widespread use as a global digital reserve currency could speed up money flow and allow for higher government spending, potentially pushing inflation higher. High-frequency trading in around-the-clock markets could trigger liquidity crises during stressful times, leading to rapid sell-offs that even top-tier infrastructure may struggle to handle. New technology always carries some risk, and tokenized IOUs might trade at a discount until confidence in their security and compliance is fully established. Regulatory uncertainty adds an extra layer of risk, since sudden government actions could freeze or invalidate tokenized assets, leading to panic and fragmentation in the market. 

Technological weaknesses also present dangers. Smart contracts, digital wallets, and issuance platforms might be at risk of cyberattacks. Poor management or fraud related to token reserves could lead to a loss of trust and serious market issues. The success of tokenization relies heavily on widespread trust and acceptance from institutional investors and the public. Without it, the advantages of digital US Treasuries may remain largely theoretical. 

“The success of tokenized US debt depends not just on technology but also on trust, compliance, and careful coordination globally.” 

Global and Geopolitical Implications 

The tokenization of US IOUs isn’t only a domestic development; it has significant geopolitical consequences. In Europe, the Digital Euro and the EU bond market may speed up efforts to stay competitive against a digitized US Treasury system, protecting the significance of Euro-denominated assets. China, a major holder of US debt and a leader in digital currency, might seek alternative financial networks not anchored to the dollar to balance a digitally strengthened US currency. In Russia, the potential for cross-border transfers and reduced intermediary oversight with tokenized US debt could complicate sanction enforcement and encourage the creation of alternative digital financial systems. 

For developing nations, tokenized Treasuries provide unprecedented access to secure financial assets. Fractionalized securities let investors, pension funds, and individuals in emerging markets participate with low costs. Yield-generating digital assets can stabilize local economies, offer safer options than volatile currencies, and aid long-term wealth creation. Local financial institutions and central banks might also use tokenized assets to lower portfolio risks and trade digitally more effectively without relying heavily on traditional correspondent banking. 

The Bottom Line 

The tokenization of US IOUs marks a significant blend of traditional finance and blockchain technology. By increasing liquidity, transparency, and operational efficiency, it could strengthen US financial markets and broaden global capital access. Yet, success hinges on carefully managing technological, regulatory, and trust-related risks. 

If done right, tokenization could reinforce the United States’ leadership in the digital financial landscape. However, mistakes could lead to global instability, making this effort one of the most important financial experiments of the 21st century. The path of tokenized sovereign debt could reshape the US market and redefine global finance for years to come. 

“Tokenized US debt might shape the next phase of global finance, balancing huge opportunities with significant responsibility.” 

Cherenet Daba is a Principal Auditor at Zemen Bank with over 10 years of experience in auditing, financial analysis, and risk management. He has also advised various business entities—including manufacturing, retail, and construction firms—on strategic financial planning and operational efficiency. The writer can be reached via cherinetdaba4@gmail.com or cherenet.Daba@zemenbank.com

Finance Ministry halts tax decision affecting juice manufacturers

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The Ministry of Finance (MoF) has suspended a tax authority decision that would have required fruit drink manufacturers to settle years of unpaid excise tax, stemming from a regulation enacted six years ago.

This issue emerged two years ago when the Ethiopian Food and Drug Authority clarified to the Ministry of Revenue (MoR) that a packaged beverage must contain at least 30 percent fruit concentrate or pulp to qualify as fruit juice. As a result, the MoR mandated that manufacturers register for excise tax and pay the amounts that had not been collected from consumers over the previous four years, dating back to the 1186/2020 excise proclamation. The directive also required manufacturers to pay penalties and interest on these outstanding tax amounts.

In a letter issued last week, the MoF expressed concern that the MoR’s decision had severely impacted manufacturers, creating significant financial strain. The letter stated, “It forced several producers to close their businesses, while similar imported products are not subject to the same tax, harming the competitiveness of local manufacturers.” This action followed a formal complaint from the Ministry of Industry (MoI) received by the MoF in April.

Dated September 22 and signed by former State Minister Eyob Tekalign (now Governor of the National Bank of Ethiopia), the MoF letter emphasized that it was unfair to burden manufacturers with accrued taxes that had not been collected from consumers due to ambiguous legal language. The letter indicated, “Pending a permanent solution by the relevant authorized body, the enforcement of this decision has been temporarily halted.”

This new decision follows a year of negotiations. Initially, the MoF insisted that manufacturers settle the tax, albeit without penalties or interest, but manufacturers cited their inability to pay. The government also provided an option for installment payments.

With support from the MoI, the regulatory body’s latest decision has pleased manufacturers. The MoF clarified that manufacturers are now only required to pay excise tax on products sold after the MoR’s implementation letter was released in November 2023.

Ashenafi Merid, General Manager of the Ethiopian Beverages Manufacturing Industries Association, expressed gratitude for the understanding and support from the Industry and Finance ministers in making this significant decision. He reflected on the nearly two-year struggle, stating, “It is a big relief for the sector.”

Ashenafi noted that the demand for payment of the accrued tax had severely impacted domestic juice producers, forcing nearly all to halt production. He pointed out that only a few foreign-based investors managed to continue operations.

Reports indicated that manufacturers were, on average, being asked to pay approximately 70 million birr in back taxes.

“We hope that the manufacturers will rehire their employees and resume operations soon,” the association head added with optimism.