The severe drought gripping the Western states looks set to reach into all lives in the nation and into every pocket.

The unbearable heat for those living in the West, with record-high temperatures stretching from Wyoming to the Mexican border and from the Pacific to the Mississippi, will impact the rest of the country as well.

Scientists have classified this monstrous baking as a megadrought. There hasn’t been regular rain or mountain snow in the West for more than 20 years.

To call it a scorcher is to underestimate a catastrophe that has the possibility of reaching near-biblical proportions. This is big and there is no quick fix. None.

The drought means epic disruptions, merciless rearrangement.

First, of course, there is no water, which means much economic activity may slow or cease. Farmers won’t be able to grow crops or raise livestock. Food prices that are already high from the pandemic’s disruptions will go even higher.

The electricity supply will be strained and may be curtailed because of reduced hydroelectric production. The 13 Western states get more than 22 percent of their electricity from hydropower dams, located mostly in Washington, according to the National Hydropower Association.

In today’s world, farmers depend on electricity to water crops and livestock, milk cows, dry grain, and freeze produce.

The first measurable disruption of the summer will be from breakdowns in the California food supply chain. Prices in supermarkets will reflect the impact of the drought on California, which acts as the nation’s truck farm. If you eat it, it grows in California, but only when there is water for irrigation.

The rivers of the West are running dry. The reserves of water in the great dams on the major rivers, especially the Columbia and the Colorado, which act as the lifelines of much of the West, are way below normal.

Manufactured goods from Western states will be affected if power shortages are extended and widespread. Wildfires will abound and have already started their annual scourge.

In quality-of-life terms, electricity shortages will be particularly brutal for the people living in areas served by the grid in the West, known as the Western Interconnection. Without air conditioning, many people will feel like they have taken up residence in hell. Lives will be lost.

The historical move of Americans from the Northeast to the South and Southwest will be in question, if not reversed.

Droughts aren’t ended because it rains. It takes years of sustained precipitation, ideally falling gently, to restore that which the heat has taken away.

According to those who keep track of these things, the West isn’t the only part of the country suffering drought. Most states are reporting reduced rainfall, including the traditional soggy regions of New England.

No one can predict when the Great Western Drought will break, but political fights breaking out over the distribution of what water remains, followed by litigation, are foreseeable.

Living through drought is a uniquely joyless experience as clear blue skies change from being emblematic of nature’s bounty to being the cruelest of deceptions, the smiling face of betrayal.

Science can come to the rescue, as it did in the record speed with which COVID-19 vaccines were developed. But usually, it takes a long time, as with fracking which changed energy shortage to energy abundance. That took decades.

Finally, beware of brave talk about desalination. That takes a lot of energy and, if it is to be done at a meaningful scale, a giant new environmental problem results: What to do with millions of tons of salt?

We used to worry about climate change in Africa, an electrical engineer in San Francisco told me, but now we have to worry about it in California. Actually, everywhere.

After the long, dark night of the pandemic, many are predicting a rosy dawn followed by a bright summer day. The feeling is that we, the people, have borne the battle and can now celebrate the victory.

But recoveries are tricky, and this recovery will be trickier than most because we are coming out of hibernation into a place changed radically from the one where we began our COVID-19-avoidance slumber. We isolated in one world and are reconnecting in another.

Enthusiasm flows from a sense of accumulated demand and already evident brisk economic activity.

There is a labor shortage despite unemployment at 5.8 percent. I have been following job offerings across the country (I review dozens at a time) and this would appear to be a good time to get a new job or change up. Employers are sounding desperate; they are paying more and being accommodating.

Unfortunately, tight labor markets and rising house prices are often a harbinger of inflation to come.

Yet there are some wondrous possibilities. On the plus side, we are awakening into a new world of technology-driven change.

In transportation, the surge in electric vehicles is here to stay. Ford’s announcement that next year it will offer an all-electric F-150 pickup truck is significant. It breaks down technical barriers and, significantly, it also breaks down social ones.

Working men and farmers who have been dubious about electric vehicles, regarding them as being only for effete liberals, now can embrace the electric vehicle revolution. The electric F-150 will be a milepost in the electrification of transportation and socially changing attitudes.

New materials, like graphene nanotubes and new ways of production using additive manufacturing, known commonly as 3D printing, will change the factory floor as well as add to the possibility of on-site production and the deployment of new, small factories.

Interconnectivity, sped by 5G, and the massive deployment of sensors will have its impact from the checkout at the grocery store to medical diagnosis, much of it done remotely as part of the swing to telemedicine.

Already, Domino’s Pizza is testing autonomous delivery vehicles in Houston. Like those ubiquitous scooters in cities, this will spread on the ground — and in the air, as drones get into the game.

COVID-19 has stimulated not just medical research but also a general interest in research which will in turn promote more public funding. The vaccine successes reestablished a certain level of confidence in medical science.

But there are old-economy realities ahead.

Real estate is in boom and bust simultaneously. The future of office towers is uncertain, and the future of shopping centers is precarious. The possibility of home buyers finding affordable houses is remote. Want to start married life living in a tent pitched in an abandoned department store?

A surge of homelessness is expected to follow the ending of the moratorium on evictions. Tens of thousands may be evicted as they haven’t paid rent for a year and won’t be able to do so. An equal number will be sitting in the dark as utilities finally start disconnecting for unpaid bills. One utility, CPS Energy in San Antonio, Texas, has $105 million in uncollected bills. Multiply that across the country.

The federal government has, as it were, shot its wad, in stimulus and can’t be expected to step in and help renters with their back rent or electricity customers with their accumulated bills.

There is another disrupter on the horizon. It is drought, the worst recorded, which is drying up California and much of the West.

Expect reduced food production, affecting the whole country with higher prices, a terrible wildfire season, and even a shortage of electricity as dams across the West (including Grand Coulee on the Columbia River and Hoover on the Colorado River) will cut electricity output due to low water.

The mighty Colorado — the life force for so much in the West, including farming and electricity production — is running seriously low and will continue to decline as summer progresses. Hardship in the West will be felt in the North, South and East.

A new Dust Bowl? Technology hasn’t yet learned to make rain.

Normally, a trial involving a nuclear power plant would garner national attention.

But there has been a significant struggle underway over an unfinished nuclear power plant in Hollywood, Ala., and nary a word of it has caught national media attention. Even in the area affected by this trial, served by the giant Tennessee Valley Authority (TVA), coverage has been modest. The importance of new green energy hasn’t been raised, which is the back story here.

The bench trial (before a single judge) which opened in Huntsville, Ala. on May 16 and concluded three days later involves the two units of TVA’s Bellefonte nuclear plant.

TVA started construction on the plant in 1975, then suspended it. Later TVA revived construction, and finally mothballed the plant in 2o15.

A year later, TVA declared the plant surplus to its needs and put it up for sale. This attracted just three bidders and a purpose-specific company, Nuclear Development LLC, won. It was the high bidder at just $111 million. Two lower bidders both planned to cannibalize the plant and ship parts to other plants, some abroad.

TVA accepted the Nuclear Development bid without reservation, or none was expressed. According to Nuclear Development, the company went ahead inventorying the plant and doing customary due diligence prior to the deal closing after two years.

When the deal was to close in November 2018, TVA asked first for a two-week extension and then scrapped the deal, claiming the purchaser had failed to get the necessary licenses transferred from the Nuclear Regulatory Commission, as required by the Atomic Energy Act. The judge has already affirmed this much in a pre-trial opinion.

TVA told me in a statement, “Nuclear Development had two years to obtain the necessary Nuclear Regulatory Commission approval to transfer Bellefonte’s NRC-issued construction permits. Nuclear Development failed to obtain NRC approval before closing, making it illegal for TVA to close the sale.”

Bill McCollum, president of Nuclear Development, told me that the license issue wasn’t raised in the time from the sale in 2016 to the abrupt change of heart on the verge of signing in November 2018. NRC hasn’t been a party to the trial and neither has any other federal agency. After the cancellation, Nuclear Development immediately sued for breach of contract.

The dispute is important in the national context with the Biden administration straining to end carbon emissions from electricity generation and the two units of Bellefonte representing between them 2,700 megawatts of clean green power.

There is some controversy over the state of completion of the plant, but Unit 1 is put at 88 percent by the purchaser and Unit 2 at around 58 percent.

McCollum knows the plant: A career nuclear engineer, he was the chief operating officer at TVA until he retired in 2011. Previously, he served for 33 years in the highly respected Duke Energy nuclear program.

Nuclear Development is owned by Franklin Haney of Chattanooga and his family, who have amassed a fortune in real estate development in Tennessee and around Washington, D.C.

Creative financing has been Haney’s specialty, and he had devised a plan to finish the Bellefonte plant using private funding and federal tax credits and loan guarantees. He first shared this possible plan with TVA in 2013 — so it has been long-germinating.

Haney had worked with TVA on creative financing for another nuclear project. He was a known quantity to TVA.

Purchaser sources believe that TVA pulled back when it realized that Nuclear Development wanted to sell its electricity output from Bellefonte to the City of Memphis, TVA’s largest customer, at a discount. Otherwise, it could have made the sale contingent on the license transfers.

At a time when clean air is a national priority, it seems the litigation in Alabama is more than a commercial dispute. It is an environmental one. After all, TVA is a federal independent agency, and the NRC is a federal independent commission. Couldn’t they have worked out the licensing problem before it came to legal fisticuffs?

In my years of writing about TVA, it has always been a nuclear champion and keenly aware of its social responsibility, having been born in the New Deal.

“This is not your father’s Oldsmobile,” said the car ad tag line. Well, this is not your father’s electric utility.

The traditional electric utility is a simple ABC construct: The electricity is generated in one place (A) and sent down a wire (B) to the customer (C). In today’s electric world, power is generated from many sources and wires carry the current to and from diverse points, switching in fractions of seconds.

Renewables — wind and solar — are driving the changes in the electric utility industry, but so are new and different demands on the utilities from customers, and new operating environments which include aberrant weather, wildfires, and cyberattacks.

To cope with this more difficult environment utilities are digitizing: They are rapidly becoming connected. “The future utility will be driven by data analytics plus communications,” says Joe Weiss, a leading electric industry consultant in cybersecurity, particularly relating to programmable controllers and transformers.

This future depends on broadband, which can carry vast amounts of data almost instantly, allowing the data to be analyzed and acted on in something close to real-time.

Anterix, a Woodland Park, N.J.-based company, has just announced the formation of an extraordinary collaborative grouping — which it calls an “ecosystem” — of 37 high-tech companies to help the utilities with their broadband transition. This ecosystem includes ABB, Cisco, GE, Ericsson, and Motorola, and is a de facto brain trust which will assist the utilities’ move into the digital future — turning them into what some are already calling “virtual utilities.”

That, to my mind, is an exaggeration. But the value of data and data management is not.

Data is being called the new oil and not without cause. It contains a treasure chest of information which, when unlocked, can reform utility practices, and can help prepare for emergencies.

Arshad Mansoor, president of the Electric Power Research Institute, says data can help the utilities “wring more” out of the existing infrastructure. That is more power from everywhere — from big central stations to dams to wind turbines and solar arrays. Also, data will be the cornerstone of smart city planning.

Anterix, a relatively small but visionary firm, has licenses for a substantial amount of critical 900-megahertz spectrum. It is offering this to the utilities as the platform for private broadband networks. Already two important utilities, Ameren and San Diego Gas & Electric, have signed up. Separately, experimental licenses have been issued for 11 test sites, ranging from the giant and influential New York Power Authority to Texas State University.

The companies in this ecosystem will advise, competitively design, and build out these networks, which will use the current standard LTE (4G) technology.

Every utility CEO I have questioned tells me that what keeps them awake nights is cybersecurity. That worry is heightened after the attacks on SolarWinds and the Colonial Pipeline. Private networks offer secure communications, totally free of other networks and the internet, which is appealing to the utilities as they continue to bolster against cyberattacks.

As for physical protection, Rob Schwartz, president and CEO of Anterix, says with a private network and a full deployment of sensors throughout the utility’s system, if a line breaks, the utility’s control center will know about it before the broken line hits the ground and it can be instantly de-energized, avoiding fires and danger to the public.

Around utilities these days “resilience” is a watchword. Private communications networks can be an important part of resilience, says Schwartz.

It isn’t like it was in dad’s day. We didn’t use the word ecosystem then, let alone apply it to strengthening utilities.

The restaurants are back. Bravo! Across the country, restaurants are open or beginning to open. Cheers!

But there is something amiss. Something unexpected and as-yet-unexplained is going on: There is a national shortage of restaurant workers.

During the lockdown, I was among many who lamented the fate of those who prepped, cooked, served, and cleaned up, enduring bad hours, difficult conditions, and uncertain earnings.

However, there have always been those who want to work in restaurants. For some, like college students, it is a way of earning on the journey to somewhere else. For others, and there are many, it is because they love the ethos of restaurant life: its people intensity, and its real-time energy and urgency.

And for those who link ambition with acumen, restaurant work has always fostered the possibility of, as I have heard waiters say, “a place of my own.” Chez Moi beckons to those who would sell foie gras, as well as those who would sell hot dogs.

For unabashed entrepreneurs, it is probably impossible to beat restaurateurs. The chance of self-employment, to my mind, is the great motivation of the free-spirited. A food truck is a start and may be enough.

We knew the pandemic would change things. But to change employment in the restaurant industry, even a reduced one? That isn’t only a puzzle, but also a hint of how the pandemic has altered things.

There are those in Congress and the statehouses who hold that restaurant workers are lolling at home because they would rather collect unemployment benefits. I doubt that there are hundreds of thousands of Americans who are so lazy, so work-averse that they would rather stay home — after more than a year of staying home — than returning to their restaurant jobs.

Something else is happening.

Horizons have changed, new jobs have been found, and the grueling but satisfying work of restaurants has given over to something else. After the plague, a new dawn.

The country is resetting, and lives are being reset, too. A waitress I know of in Florida found work in a print shop. She prefers the regular pay there to the uncertain income from waitressing. That is a reset in her life.

As we go forward, as the pandemic is less dominant in our lives, we are going to experience changes — some anticipated, some surprising like the restaurant labor shortage.

We don’t know whether the full complement of workers will go back to their offices; we don’t know how schools will deal with the lost year, and we don’t know whether the mini migration from town to country that has been a feature of the last year is a trend to stay or a product of panic.

What we do know and rejoice in is that we can go back to being restaurant patrons. In brief travels around New England, Washington, D.C., and Ft. Lauderdale, Fla., I found people are eating out with joy.

Restaurants are milestones of life. It is in them we celebrate birthdays and anniversaries, advance romance, or simply eat something that we wouldn’t get at home.

But that isn’t all. Restaurants, however modest, are destinations. During this long pandemic, we have missed having a destination.

Restaurants in all societies are part of the fabric of how we live. Eating out is woven into our lives, whether it is a humble hamburger or a great ethnic food feast. The first step in the American Dream for many immigrant families is to start a restaurant, to employ the social capital that they brought with them: their cuisine.

Bon appétit! We need restaurants because, in their great variety, they add spice to our lives, especially after the long lockdown.

In case you don’t know, it is, the White House has announced, Older Americans Month.

They say, in the newspaper game, “Write what you know.” I find I know about being “older.” That sounds just a bit kinder than the bald “old.”

Chalmers M. Roberts wrote a wonderful book, “How Did I Get Here So Fast?: Rhetorical Questions and Available Answers from a Long and Happy Life.” Quite so.

I was the youngest at everything for a long time. I didn’t go to college, so I got a head start in journalism. Leaving school at 16 wasn’t then considered a life sentence of being second-rate. In those days and that place, Southern Rhodesia, a college education was a rarity; and people who had one were regarded as wise, even if they were stupid, as they frequently were.

There was a different social dynamic in London, where I launched myself on the legendary Fleet Street four years later. Few had been to college and those who had were regarded in the popular press not with reverence, as they had been in Africa, but with hostility. I was even hired at the BBC.

When a very nice man, Roger Wood, became editor of The Daily Express, there was consternation. He was a university graduate and, to make matters worse, from Oxford. The end of our hallowed way of life (phony expenses claims, heavy drinking, and bad food) was at hand. En masse, the denizens of the newspaper world went to the pubs to mutter darkly about the imminent collapse of civilization. Change often is greeted with the sense that civilization is over.

Years later, I told Wood about the near insurrection his appointment to the popular London newspaper’s editorship had caused. He was surprised. The discontent had never reached the editor’s office.

In my next stop, New York, I was told, “No degree, no work.” At least not in television, and not at The New York Times. All three television networks wouldn’t grant me an interview even though I had been a scriptwriter at the BBC.

Perplexingly, The New York Times told me I could be an editor, but I could never hope to write in the newspaper because of my lack of a college degree. Go figure! You can’t write here, but you can fiddle with what others have written.

Despite this gaping hole in my past, I’ve managed and even pocketed an honorary degree along the way. I’ve lectured at a trove of universities, from Harvard and MIT to the University of Southern Mississippi. While, I think, for science there is no substitute for college, for the rest I’m less convinced.

These days, a heavy burden is put on people who don’t get at least two years of a college education, and an even heavier one on those who leave high school. Here, the language is indicative of the social stigma: You don’t “leave high school,” you “drop out.” That implies at a young age, a life going south, headed for repetitive failure.

The social pressure for an orthodox education is immense. The Biden administration, in its endless good intent, may be adding to the pressure on those who, for many reasons, took a different route in their lives. The role of the universities isn’t blameless. They have a predatory streak. They are as money-hungry as any corporation, shaking down the alumni and justifying it with moral superiority.

Treating formal education as the foundation of a social class is pernicious and destructive at all levels.

I used to fly light aircraft with a brilliant pilot — the best I have ever known. But despite skills and knowledge far above average, he was precluded from getting hired by the airlines: He didn’t finish college. Instead, he went off to fly airplanes.

A scientist of real ability, a friend of mine, who climbed high in Big Pharma was sidelined not because she was a woman, but because she didn’t have a doctorate, only a masters. So she became an administrator.

Governments are right to emphasize learning. However, they need to demand thoroughness and excellence in primary and secondary schools. Our public schools are a disgrace and damage children long before they decide whether they want to continue to college.

Now that I am an “older American,” I wouldn’t deprive anyone of a joyful life, as I have had, by limiting their opportunities with rigid orthodoxy about college. The university mission should be learning not class branding. I was lucky. I dodged the branding industry, known as college.

When we look back on the convulsion that is going to reset America — the great technology-driven revolution that will extend to nearly every corner of American life — it may be named for President Joe Biden, but it won’t be his revolution. It is innovation’s revolution. He will help finance it and smooth it out, but it is already happening and is accelerating.

Biden’s typically soft speech to Congress (no stemwinder he) was a wish list of things dear to him, but also an acknowledgment of what already is in motion.

Technology is rampant and government’s role should be to provide partnership and, above all, standards, according to two savants of the tech world, Jeffrey DeCoux, chairman of the Autonomy Institute, and Morgan O’Brien, a visionary in U.S. wireless telecommunications, now executive chairman of Anterix, a company providing private broadband wireless networks to utilities. Above all, they said in an interview with me for the PBS program “White House Chronicle,” standards for the new technology are essential.

Partial interconnection with different appliances, from road sweepers to drone delivery vehicles speaking only to identical devices, will be self-defeating. The internet without international standards would have failed.

Biden is set to preside over the greatest industrial leap forward since steam provided shaft horsepower to make factories a reality. If Congress allows, the Biden administration will finance much of the upgrading of the old infrastructure. It also will be called upon to be part of the new infrastructure, the technological one. That will be expensive; both DeCoux and O’Brien warned that it will take huge sums of money to build out complete 5G broadband networks, which will carry the load of interconnectivity.

For the nation to leap forward, these networks need to bring 5G broadband to every corner of it, O’Brien said. It can’t be allowed to serve only those places where population density makes it profitable, like cities.

In his speech to Congress, Biden laid out a revolutionary abstract for the future of the nation. The human side of the Biden infrastructure plan — things like daycare, free community college, better health care, prescription drug pricing — is the true Biden agenda.

The technology revolution is seen by the president not for what it is, a resetting of everything in America, but rather as a way to job creation. It will create jobs, but that isn’t the driving force. The driver is and has been innovation: science helping people. That, in turn, will bring about a surge of productivity and prosperity, and with that, new jobs, quality jobs – robots will soon be flipping hamburgers and painting houses.

This other agenda, the one that will make the fundamental difference between the nation of today and the nation of tomorrow, is the technological revolution. The evolutionary forces for this upheaval have been gathering since the microprocessor started things moving in the 1970s.

At the core of the coming changes is interconnectivity. That is what will craft the future. Cars on highways will be connected with each other through thousands of sensors, and these will speed traffic and enhance safety both for those with drivers and new autonomous ones. Likewise, drones will deliver many goods and they will need to be interconnected and have superior flight management. Every aspect of endeavor will be involved, from managing railroads to increasing electricity resilience and the productivity of the electric infrastructure.

In an interview on the Digital Roundtable, a webinar from Texas State University, this week, Arshad Mansoor, president of the Electric Power Research Institute, said improved interconnectivity could increase available electricity from dams and power plants often without new construction. He explained that interconnectivity wouldn’t only be essential to managing diverse generating sources, like wind and solar, but also in wringing more out of the whole system.

Technology has gotten us through the pandemic. Most obviously in the huge speed at which vaccines were developed, but also in our ability to meet virtually and the effectiveness of online ordering and delivery.

By nature, and by record, Biden is a get-along-go-along politician, a zephyr, as we heard in his address to Congress. But history looks as though it will cast him as a transformative president, a notable leader presiding over great winds of change.

“Why not?” Those words make up one of the most powerful rhetorical questions in the English language.

Ersel Evans, the late nuclear visionary and my great friend, was famous for tackling difficult problems by saying, “Why not?” When he retired, his staff at the Department of Energy’s Hanford Site presented him with a video of many circumstances where he dealt with a challenge and a new course of action with his signature phrase.

Why not is often the necessary question to overhaul orthodoxy when orthodoxy has become rigid and exclusionary. Dr. Ronald Pinkel, the first medical director and CEO of St. Jude Children’s Research Hospital in Memphis, confronted childhood leukemia in 1962, then considered a painful end to a short life. At that time five drugs were given sequentially to children with leukemia, and they sometimes prolonged life.

Pinkel’s solution: Why not administer all five drugs at the same time? Orthodoxy said each of these drugs was a powerful poison and might kill the child. His answer was that doctors knew the child would die anyway, so why not try something radical? It worked and using a drug “cocktail” is the basis of treating many diseases nowadays, from AIDS to childhood cancers.

Medicine is often the victim of its orthodoxies. Once procedures and approaches are established, it is hard to divert practitioners from these courses of action.

Take COVID-19. It is now treated with antiviral drugs and steroids. Patients with severe pneumonia — for that is what develops — are put on ventilators and given oxygen. That is a long and expensive procedure that leaves a trail of damage to the lungs, heart, and possibly to the immune system.

But there is a wondrous way of treating the inflammation, which is the killer with COVID-19 pneumonia. It is low-dose radiation therapy (LDRT) — about one-eightieth of the dose for cancer, according to Dr. James S. Welsh, a radiation oncologist at Loyola University Medical Center and the Edward Hines, Jr. Veterans Affairs Hospital, and a former president of the American College of Radiation Oncology. A devout proponent of LDRT, Welsh thinks it is only preconceived concerns about radiation and a fear of it that keeps this valuable therapy from saving lives.

He, along with Jerry Cuttler, a veteran Canadian nuclear scientist, point to a time 70 years ago when viral pneumonia was routinely cured with LDRT. There is a trove of cohort information about the effectiveness of this treatment. It can be accessed on the web. Go look it up.

India is currently facing one of the greatest health crises any country has seen in modern times. COVID-19 may yet rival the plagues of old in its lethality in India.

So why not try low-dose radiation to save the lives of those lucky enough to make it to an Indian hospital? If administered in time, research shows it arrests the cytokine storm, which is the inflammation that kills COVID-19 patients.

The treatment is known in India. I have read a study on the use of low-dose radiation to treat COVID-19 patients in India, conducted last year by Dr. Kanika Sood Sharma of Dharamshila Narayana Superspecialty Hospital in Delhi and her research team. The study involved 10 patients with moderate-to-severe COVID-19 who were treated with low-dose radiation. “All patients completed the prescribed treatment. Nine patients had a complete clinical recovery, mostly within 3-7 days. One patient, who was a known hypertensive, showed clinical deterioration and died 24 days after LDRT,” Dr. Sharma said in the study, which was released last August.

The results of this small study are incredibly encouraging, especially if considered with other studies and with the history of using low-dose radiation to treat pneumonia before antibiotics supplanted it.

If India would just grasp this technology (most hospitals can use their existing radiation equipment), they might save hundreds to many thousands of lives.

Cuttler and others believe that using low-dose radiation to treat COVID-19 could lead the way to its use as a treatment for arthritis and Alzheimer’s. Why not? It works, Cuttler says.

One of the great challenges for countries seeking global investment is to be able to assure that their legal systems are transparent, reliable, and free from political influence.

Kazakhstan, an ambitious Central Asian country, has risen to this challenge with the Astana International Financial Center (AIFC).

Established in July 2018, the AIFC, based in Kazakhstan’s capital Nur-Sultan, imported a gold-plated, civil legal system for litigation and dispute resolution. It installed English law, which is the preferred governing law for business transactions worldwide.

These courts may sit in the capital Nur-Sultan, previously named Astana, but they were established entirely under the administration of Lord Harry Woolf, the retired chief justice of England and Wales. The courts are now directed by its Chief Justice Lord Jonathan Mance, former deputy president of the Supreme Court in the United Kingdom, and 10 other English judges. This is a big step forward for an ex-Soviet republic where the USSR used to send millions of political prisoners to some of the more notorious Gulag camps.

Kazakhstan has embraced English law as a source of reliable and reputable jurisprudence for its financial center and enshrined its applicability in a constitutional amendment. The court has also embraced English as the only language to be used by it. Elsewhere in Kazakhstan, Kazakh and Russian are the official languages.

In conceiving the idea of a financial center, the country wanted to make it user-friendly and to attract investment from neighbors China, Russia, the Caucasus, Uzbekistan, Iran, Turkey, and further afield from Europe, the Middle East, Singapore, and the United States. It wants the neighborhood business and that of the world.

The strategy is working. AIFC has attracted 750 firms from 53 countries, and its recently established stock exchange has had 61 issues.

Kazakh officials tell me that they wish to play on the country’s unique location as a traditional crossroads of Europe and Asia. Kazakhstan is the ninth-largest country in the world but has a population of about 18 million. It is landlocked, lying right on the path of the ancient Silk Road and the modern Chinese Belt and Road initiative.

The AIFC is a building block in Kazakhstan’s aspiration to be one of the world’s leading nations by 2050. It offers investors a tax holiday – from corporate taxes for the income received from providing financial and other services, as well as from capital gains — until 2066.

Kazakhstan is located in a potentially turbulent area bordering Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan, and lying close to Turkey and Iran. But that also is an asset when seeking to build a financial center. These are the very neighbors who seek financial services.

An additional strength for the AIFC is it has a substantial stake in the world of Muslim finance. This requires a separate set of skills and practices and the AIFC has them. Trillions of dollars are involved.

Kazakhstan is constitutionally secular. Islam is the majority religion of Kazakhstan and practiced in moderation. Other religions are experiencing freedom of worship. I know this from having interviewed both the chief rabbi and the Roman Catholic archbishop a few years ago.

Financial centers appeal to global money managers for various reasons. That may be because of currency advantages, tax favorability, low political risk, sanctions avoidance, and new direct investment opportunities.

Transparent, predictable, and effective dispute resolution is one of the main points of attraction as Hong Kong (in the past), Singapore, and, of course, London and The Hague have demonstrated.

The AIFC is also playing a key role in promoting foreign investment in Kazakhstan, according to Kairat Kelimbetov, AIFC governor and chairman of the Agency for Strategic Planning and Reforms. He is a veteran senior economic policymaker in the country.

Kazakhstan’s thrust to be a major player in international finance comes at a time of realignment, with the traditional financial centers of New York, London, Frankfurt, and Hong Kong surrendering to new international realities, like Brexit and Western sanctions on Russia and Iran.

Since independence in 1991, Kazakhstan has relied on its extensive oil and gas fields in the Caspian Sea region for its prominence and wealth. However, like many fossil fuel-rich countries, it is hedging against a declining role for hydrocarbons in the future and is pushing financing, green energy, and new technologies. Kazakhstan, sitting astride the Eurasian Steppe, has one of the world’s greatest wind resources.

And English law is bringing the winds of fortune to Kazakhstan.