Distilled Spirits Industry Adopts New Internet Advertising/Marketing Guidelines

Industry update!

The Distilled Spirits Industry elects to adopt a new Internet Advertising standard. Check out the details below on this policy that goes into effect January 1, 2008.



Distilled Spirits Industry Adopts New Internet Advertising/Marketing Guideline

For Immediate Release - 12/18/2007

Contact: Public AffairsTelephone: 202-682-8840

-Marks First Trade Group to Issue Industry-Wide Internet Buying Rules-


WASHINGTON, DC – The Distilled Spirits Council (DISCUS) today announced a new industry-wide buying guideline for placing online advertising and marketing materials on third party websites to meet the industry’s 70% 21 years of age and older demographic standard.
“With online communication channels becoming increasingly present in today’s media landscape, this new Internet guideline will further assist beverage alcohol companies in meeting the Code’s standard when using this rapidly evolving marketing tool,” said Distilled Spirits Council President Peter Cressy. “Over the decades, the spirits industry’s advertising Code has evolved to meet the challenges of new media technology.”
The guideline, which goes into effect Jan. 1, 2008, provides standards for the appropriate use of different Internet demographic measurement tools including syndicated data sources; independent demographic surveys; and website “register user” databases. As is the case for other media, the guideline also requires the use of post audits and corrective measures for future placements if an audit indicates the placement did not meet the 70% 21 years of age and older demographic standard.
The new guideline will apply to all paid and unpaid placements under the control of the advertiser including ads on third-party websites, video advertisements, audio mentions, internet banners, pop-ups, sponsorships, user-generated content (including blogs) and “limited edition” websites.

Clinton Global Initiative 2007 - Poverty Alleviation

Poverty alleviation and job creation is crucial for developing nations. The distilled wine/spirits/beverage industry has played a role around the globe in helping create jobs in rich and poor countries alike.


Transcript
Poverty Alleviation: Jobs, Jobs, Jobs - From Poverty Alleviation to Wealth Creation
September 26, 2007



GAYLE SMITH:Hi, folks. Could I have your attention? And thank you, and please keep eating. And to those who will be sharing their stories, you will be hearing some forks and knives moving. But it’s just because people are hungry, not because they’re not paying attention.
A couple of the things that are really great about the Clinton Global Initiative is that we receive a lot of support from a lot of really smart people. Another thing that is really tremendous is that our members are able to come together to do really creative things that make a real difference.
So, what we’d like to do over the next little bit of time, and as we move towards the end of the lunch, is hear from some of those. And first we’re going to hear from a woman, Judith Rodin, who is the president of the Rockefeller Foundation, also a member of our advisory board, has been an ardent and effective supporter of CGI, and not only or even most meaningfully as a sponsor, but as someone who in her own right is an expert and a groundbreaker in what she has been able to do and is doing about poverty around the world. So, it’s with pleasure that I invite Judith up to speak to us briefly, Judith Rodin.
[Applause]
JUDITH RODIN: Thanks so much, Gail. It’s great to be here. This is my third Clinton Global Initiative. Next year I get the steak knives, I think. [Laughter]
Seriously, though, I’m honored to be at this forum, and I’m inspired and so energized by your investment and enthusiasm to actually do something to remediate the underlying conditions that perpetuate poverty. I think it’s revealing and very noteworthy that CGI brings us together every fall, not just to talk about our interdependent world, but actually to tackle challenges that can only be solved in an interconnected way: education, global health, patterns of energy use and climate change just among a few. I feel gratified to be part of this larger conversation, because we can only meet and master the insoluble, intractable challenges really through our collective efforts.
As we bring this very important discussion down from 30,000 feet, I’ve been tasked with just putting a little rubber on the runway and helping to frame our discussion of poverty alleviation. I think it is the most important issue of our time, because the plight of poor and vulnerable people drives so many of the economic and security challenges that we all face as global citizens, not to mention the moral challenges that we face as human beings.
Perhaps the best place to start here is by recognizing poverty alleviation is not charity. It is about building capacity among the world’s poorest people to support themselves and their families so that they can participate more fully in both local and global economies. Indeed, before people can realize the higher aspirations of political participation or increasing labor and land productivity, the economic growth that benefits us all, they have to meet their basic needs first. We all have an interest in empowering people with a sense of connection and obligation, not only to themselves but to one another and to us collectively, to our shared future. And because of globalization, it is incontrovertibly clear that we all share a very interconnected future.
At the Rockefeller Foundation, we believe that the script of globalization isn’t fully written. And so we are working to harness its forces to enhance opportunities and to expand access to the benefits of globalization for more people in more places, and insure that the negative consequences of globalization are more clearly understood and more definitively managed. Think for a moment about what’s at stake. We all have an interest in making sure that slums are not breeding grounds for diseases, for pandemics, and yet UN Habitat predicts that within three decades, one of every three human beings will live in slums. We all have an interest in making sure that political and religious fanaticism don’t fester in dark places, and yet these feelings are being fueled around the world. We all have an interest in making sure that everybody has the opportunity to help build our shared future. And yet the number of people living on one dollar a day has grown.
That said, what is so powerful about the Clinton Global Initiative is that it is geared around two very clear objectives: both translating innovation into action, and galvanizing public will. Each is as important as the other. So, simply put, we need less conversation and more action. We also need to summon the political will of governments, and NGOs, the public and private sectors through partnerships and collaborations, encouraging and engaging large-scale responses that have the greatest potential to enable sustainable, robust development.
Over the coming days, we’re going to have the privilege of hearing from policymakers and leaders and scholars and donors from the worlds of business and government, community activism, all of whom in their own way are quite literally changing the world. We will shape an agenda that is focused on fighting poverty with job creating, illuminating the key connection between growing jobs and fostering hope. We will focus on forging partnerships, as I said, that will support more effective interventions. We will focus on filling the financing gap, building on the success of microfinance to tap the entrepreneurial potential of the developing world, but to expand access to other levels of capital that people will need to lift themselves out of poverty, kick-starting local economies suppressed by conflict or natural disasters, and furnishing new tools for women who comprise 70-percent of the people living on less than a dollar a day, to help them build, to equip them to build better lives for themselves and their families.
In closing, let me say this: the risk is that we get either too enamored by all of these ideas or we become overwhelmed by how much there is to do at the expense of taking action. We already know that there are approaches that could be taken to scale, approaches that are successful. And we need to see them and understand them over the next three days, and invest in them. That old Margaret Mead quote may have really been overused, but it is something of a truism even today. She said, “Never doubt what a small, committed group of people can do to change the world. Indeed, it is the only thing that ever has.” But in this room, that sentiment is real, and it frames our shared responsibility. So I urge you to listen to one another, ask questions, get involved, get invested. Open your minds to new ideas and partnerships, and open your wallets for new projects.
But most of all, don’t doubt that you can make a difference. I know that you are precisely here because you think you can. Thank you.
[Applause]
GAYLE E. SMITH:That was beautiful, Judith. Thank you very much.
As you all know, President Clinton has this thing about CGI, where he says you really can’t come unless you make a commitment. And in the first year, we had some great commitments. We did as well last year. And the idea has really caught on. What often hits the headlines is what the value of the commitments are, or whether there’s a big name involved. The real story, we think, about commitments is the partnerships that are struck, and what CGI affords all of us who come from diverse backgrounds in terms of coming together, and as Judith suggests, weaving together ideas, resources, access and actions to really come up with some innovative ideas that can change people’s lives.
So, we’re going to hear from three people who have made really remarkable commitments. We’ve asked them to tell their stories to you. They will be scattered around the room, and they will have mics. I think they’re all set up. And first we’d like to hear from Craig DeRoy, who’s the president of the First American Corporation, to tell his story. And Craig, if you want to move in a little bit, if people can’t see you.
CRAIG DEROY: Great. Thank you all very much. Thank you. It’s a pleasure to be here, and an honor to be here. And thanks at the outset to CGI for the opportunity to speak today, but really, most importantly, for the opportunity to present our commitment last year and year and help us see it to a successful conclusion.
So, let me give you a little bit of background. For those of you in the room who are just thinking about your commitment and what it might be, I don’t have any secrets for you. I think the call to action is very clear, and being practical was sort of our objective. Mine started with a very practical airplane ride next to my wife, who was reading former Secretary of State Albright’s book. And in the middle of that book, as I was struggling to think about what we were going to be doing as a commitment to CGI, was a passage that talked about her belief, a premise that is the lifelong work of Dr. Hernando de Soto, her belief that property rights and securing formal property rights was at the heart of poverty alleviation.
So, my wife nudges me and says, “Look at this.” And, of course, an idea was born. And from that, on behalf of First American, we provided a commitment to build a land record system template that we thought could be cost-effectively deployed in developing countries to assist the process of formalizing property rights. Too much of the impoverished world holds property informally, not recognized by any legal of financial system. They can’t leverage it. And if you can formalize it, you can get some simple things—a mailing address—as well as some more esoteric things—use that property for collateral for loans and have real asset accumulation and wealth building.
So, we started from really a base of very little knowledge in this area. Our businesses dovetailed with the commitment, but we really didn’t know what we were doing. We got into it, just sort of dove in. And thanks again to CGI and the staff and their guidance, we really sort of found our way to some wonderful partners. Using the CGI calling card—and believe me, it is a very effective calling card—we found three world-class partners to help us in this initiative.
But we got to a point very quickly—it was a multi-year commitment—and our build-out of this template occurred much quicker than we thought. We were really completed with the first draft in about nine months. Having done that, we also learned in the process that others had attempted similar initiatives in the past, but governments were very slow to adopt these systems and actually put them in action. So, a new idea dawned, and we self-expanded our commitment to include the development of not just the land records system template but the practical use of it, to actually team up with a microfinance lender and have them issue loans based on that land records system.
And I’m really delighted to say that CGI did provide the means by which we could attract such wonderful partners. So we have three partners: ILS International Land Systems. Peter Rabley, their CEO, has taken personal interest. They are a leading provider of land record system development and administration. And it’s wonderful to see the commitment from that company to help us in this project.
Second is ESRI, E-S-R-I. They are the premier provider of GIS and mapping technology around the world. Most of the cars you drive that have mapping system all were founded on the software from this company. Jack Dangermond, their CEO, again taking personal interest and leads his team in this project. They’re providing a very cost-effective technology-driven mapping of these properties in developing countries.
And most importantly, our financial lending partner, Opportunity International: Chris Crane, CEO, who is seated over here—Chris, could you raise your hand? Opportunity has been a tremendous partner. They’re a premier microfinance lender in their own right. They have almost a million borrowers in Africa today. They have a savings and loan. They have insurance programs. They’re non-profit in a very responsible organization. And he was captured by the idea of trying to do something practical with this result and actually issue loans.
So we have now committed to—we’ve extended our commitment—to a demonstration pilot. We’ve targeted Ghana. It will be our first country. We’ve been working with the Minster of Lands in Ghana. And there’s a public/private partnership element of this that has already emerged, because we will be actually, early next year, having Opportunity International will be issuing the first loans, microfinance mortgage loans, really in the form of equity loans, based on property descriptions generated through this process. We’re delighted with the team. We’re delighted with the progress and the prospects for this, and we believe that this holds the future. If we can show through this demonstration pilot, we can go back to the government and accelerate a process that seems to be stuck and has been stuck for many years.
And again, CGI has afforded the forum for this, sort of the spark to get us going, the forum to have the discussion, and the resources really to help us over the hurdle. Additional public/private support has come because of the introductions by CGI to Secretary of State Albright, to Dr. Hernando de Soto, who we met with several times, including one meeting yesterday. They co-chair the UN Commission on Legal Empowerment of the Poor, and they’ve adopted this really as a personal project of their own. They really have supported us, given us guidance, and we appreciate all of that. And again, that’s thanks to CGI and all of its resources.
So, I would just like to say that technology is sort of at the heart of all this. And all of our partners are using it, leveraging it. One thing I’d like to show as a demonstrable evidence of that is this card. Opportunity International has sort of pioneered the use of a card that’s very much like every ATM or credit card we have. It’s embedded with fingerprint identification of the borrower, so there can be no use of the card or misuse of the card. It holds all of their personal information today. It holds their current savings account and their current micro-loan information. Soon it will hold their property information, and it will hold the balance of their loan secured by that property.
So, we’re thrilled by this progress. We’re thrilled by our partners. As we move into Phases 3 and 4, which is to take this demonstration pilot, which we believe will be about 100 loans and will be able to showcase this process, as we move it out into the marketplace and create a more sustainable model, we’re looking for new partners as well. So, if you have an interest in this, I’d like to make one brief solicitation, and please find me throughout the conference. We would love to work with you and at least hear what you might have by way of an idea.
So, thanks for the opportunity to talk to the group.
[Applause]
GAYLE E. SMITH:And one of the great things about this is it was an idea, it took shape, and now it’s being applied. And we wish you the best of luck in Ghana.
And I’m thankful to you for mentioning technology. Last year, one of our panelists was a woman named Kristin Peterson, who’s the chair and co-founder of Inveneo. And we talked to her about speaking, and she was quite excited, and she was a great speaker, and she got to work on a commitment. And we asked her to tell her story about how a commitment was realized and has grown over the last year. So, Kristin, the floor is yours.
KRISTIN PETERSON: Hello, everybody. I’m Kristin Peterson. And I’m with an organization called Inveneo. When I spoke last year on the panel, I talked about how access to technology in remote and rural areas can have a profound effect in very simple ways that we in the developed world take for granted every day. Access to technology can mean better health care in rural areas. It can mean access to market information, or communications for a farmer to make additional income. And it can mean access to a brighter future through education for children and adults in the developing world.
Inveneo is a non-profit social enterprise whose mission is to get the tools of technology out to organizations and people who need it most, primarily in remote and rural areas in the developing world. Our work now is primarily in Africa. How we do that, just to give you background on our commitment, is that we create technology solutions: ultra-low power computers that can be powered by solar, long distance wireless that can be used to reach access to the Internet. We create these solutions all for organizations who operate in remote and rural areas, providing vital services: education, health care, relief and economic development, and communication through telecenters. And we’re very honored, as a young organization, as a startup organization, to participate in the dialogue about how technology can change lives in the developing world.
And through our experience with several installations that we had worked on to date, what we had found was that technology is not enough to make a difference. Infrastructure is not enough. We could create the infrastructure, the technological infrastructure, but we needed to build the human infrastructure, local human infrastructure, to deliver, install and support technology for these organizations in rural areas. And so we, I would say, made a stretch goal, as a smaller organization, to put a three-year program in place, to build a core of IT engineers, ICT engineers, and entrepreneurs and essentially small businesses into place, by recruiting, training existing professionals that typically operate in urban areas, enabling them to have the skills and the tools necessary to build out access to ICTs—computers, the Internet, telephony—in rural areas.
And through CGI specifically, the day I was able to speak, we were able to meet Cisco Systems, who committed to help build out this program. And, as well, we met AMD. I see Dan Shine over there. And we had actually been working with both Cisco and AMD on separate projects. But we were able to meet and make that breakthrough about how we can scale local, scale education to really create the scale of access that can make a huge difference.
And so we were able to raise almost half a million dollars to build this program, and we launched it this year. We now are on track this year to have 17 local IT partners in Rwanda, Uganda, Kenya, South Africa, Guinea-Bissau and a couple of other countries that we’re working on, most likely Cameroon and a few others. And together with Inveneo and our local partners, we’re reaching over 70 communities and over 200,000 people with life-impacting technologies. And we hope to deliver these solutions with our local partners to reach thousands of communities and millions of people with access to these technologies.
I’d like to bring it down to a very specific example of how technology and how this partner program can alleviate poverty. We just kicked off our first education program. We recruited technologists in Rwanda, and we took them out on a site where we were taking an existing computer center in a very rural school. And this school had had this computer center for two years, thanks to Cisco and the NEPAD Initiative. And we were taking it and turning it into a solar-powered school with ultra-low power computers so that it could be more sustainable and extendable for the community.
What happened was that our team met Alex, a young gentleman who had just graduated. He had access to these computers for two years. He showed so much promise that we invited him to join our training session with our local partners. So, the technology in and of itself, access to computers, really opened up his eyes to new opportunities, just to begin with. And then, working with the local partners, he met someone from one of the two leading technology universities in Rwanda. And they’re now working to get him a scholarship so that he can pursue his dream of helping bring ICTs out to places like his.
That’s not the only impact. They’re considering hiring him now to open up this computer center to the local community. And until he’s ready to go to college in a year—it’s his gap year—we’re hoping that they will fund him to make this center available at night and on weekends so that the community can get trained on computers and can get access to the same kind of impacting technology he has.
So, all of these efforts have been thanks to creating this program through CGI and through the organizations that we’ve met through CGI, AMD and Cisco. In fact, I’d like to share that already this year, as of Friday, both Cisco Systems and Laudomatica [misspelled?] have come forward and offered to help us scale this program through next year. And so we can start to take it throughout Africa and continue to bring these vital technologies to people so they can use them to change their lives.
Thank you.
[Applause]
GAYLE E. SMITH:Thank you. And it’s very nice of people to thank CGI. But I think what we really do is provide a platform, and then people do amazing things.
Now, by the end of CGI typically— and I can say this, having done this since the beginning— there’s a real momentum that builds, and extraordinary commitments have been announced and great people have spoken, and people have connected. Those of us who work on it are kind of at the point where we wonder if we’re hallucinating or really hearing what we’re hearing because we haven’t slept in several days. And there is a really terrific final plenary, which you’ll see again this year, where President Clinton at his best sums it all up.
And last year, this one gentleman who’s a very famous man in his own right, a leader in business, gets written up all the time—he’s as smart as they come—stepped up to the plate and put the icing on the cake. We thought we were done. We thought we’d heard all the commitments. And this gentleman got seized by the moment and put together something that is having a huge impact in transforming a country that’s been through more than its share of hardship. So, I would like to invite up to tell his story Robert Johnson.
[Applause]
ROBERT JOHNSON: Thanks, Gail, for that kind introduction, and good afternoon.
Gail is absolutely correct. Last year, as those of you who were here know, President Johnson-Sirleaf, the first female president elected in Africa, spoke at the Global Initiative. And I was moved, not only by the clarity of her message and the force of her convictions, but by the unique relationship that exists between the United States and Liberia, and particularly African-Americans. And it was evident to me that President Sirleaf wanted our help in rebuilding her nation. As you know, Liberia had emerged from anywhere between 12 to 15 years of civil war, had lost up to 10-percent of its population of three million— if you can imagine the parallel if there had been that type of loss in a country like the United States, the magnitude of the number— complete devastation of the infrastructure, loss of momentum in education for young people, health care, all the necessary ingredients of an orderly society.
And so, given that President Sirleaf wanted to revitalize Liberia’s private sector— because she is an accountant by training, she understands the role of the private sector in generating jobs and income, attracting investment and stimulating sustained economic growth of a nation that desperately needed it— what happened, again, as Gail pointed out, at the spur of the moment, a group of African-Americans who were at the Initiative, two of whom are here today with me, and I want to introduce them and have them stand up, were moved by that momentum. And the two people I’m referring to are here, are best known obviously for their tremendous credentials and talent in the film industry. But they’re also equally as engaged and involved in humanitarian efforts. The first is the terrific actor, Jeffrey Wright [Applause], and the wonderful and beautiful Miss Cicely Tyson. [Applause]
What we, along with the others, did was to make a commitment to mobilize $30 million in support of Liberia’s private sector, to take a business delegation to that country and put in place an ongoing advocacy effort to insure that Liberia receives all the support possible from the United States. My colleagues and I took that commitment seriously. And it’s because of this special relationship, if you think about Liberia— when I went over there and met US Ambassador Booth, he said, “Bob, I’ve been posted to at least nine foreign countries, and there’s no country that I’ve been in that I feel more comfortable and more proud when I stick that US flag on the bumper of my car and travel around than the welcome that I’ve received from the people of Liberia.”
The Liberians, in short, love America. And part of it is because of this unique relationship. The parallels are all over the place. They have a House and a Senate. Their flag is red, white and blue with a star in it. And even the capital, Monrovia, is named after President James Monroe. So, if they could, they’d love to be annexed as a state. And so it was that kind of commitment that we felt in supporting Liberia. And we want to model this advocacy commitment on the same kind of commitment that we feel that the American Jewish community has for Israel, and other nationalities have for their homeland. And so we take this matter seriously.
So it was really great for me that on February 15th in Washington, DC at a donors’ conference, we announced the creation of the $30 million RLJ Liberia Enterprise Development Fund. This fund is a partnership between my company, the RLJ Companies, the Overseas Private Investment Corporation, the American NGO/CHF International, and the US African Development Fund. Within the next several weeks from today, the Fund will start making loans of $25,000 to half a million dollars to Liberian businesses, and will offer technical assistance to those businesses who need help to get credit-worthy. And believe me, $25,000, $30,000 is a lot of money in Liberia in its current state.
In April of last year, we took a 25-person trade and cultural mission to Liberia, whose participants included some of the leading African-Americans in fields of business, aviation, entertainment, health and education. And interestingly enough, that trade mission was the first by a group of Americans of any stripe to Liberia in over 25 years. And the one thing that I came back struck from that trip, and part of it was it showed me the urgency of the problem that President Sirleaf faced. If you remember, 15 years of civil war, a whole generation of young men not working, engaged in horrible fighting. And her challenge is to find a way to make these young men productive before some way they find to become destructive.
And it’s vitally important that we help her in this mission. It’s a country where perhaps less than 10-percent of Monrovia is electrified. It’s a country that still requires 2,000 UN peacekeepers. But at the same time, it’s a country with tremendous hope and a desire to never, ever descend into the darkness of civil war. And it’s vitally important that we, particularly those here in the United States, help make sure that never happens.
So, what we did on our advocacy effort: we got back, we wrote opinion articles to national newspapers that were reprinted, talking about our experience in Liberia. We met with senior government officials, both in the Congress and the administration, to press the point that Liberia deserves our support. And our work generated results. For example, many Liberians who had been here, escaped from civil war, were due to be deported, to return home. Well, the country in many cases is not ready to receive the people who are going to be asked to return home. In addition, the country would lose the millions of dollars in remittances that go back home from these individuals here in the States. So we were able to get an extension for 3,500 Liberians from being expelled from the United States for 18 months.
We also got Liberia on the short list of African nations that are being considered by the Defense Department and the US government for something called the Africa Command. President Sirleaf believes that this Command will not only help stabilize Liberia politically but will also add significant economic investment to Liberia from the creation of that command. In addition, we’ve insured that financial assistance flows to the training of a new security force. Our fear is that if another hot spot pops up in Africa or some other part of the world, and the UN, strapped for peacekeepers, decides they’re going to pull 2,000 peacekeepers out of Liberia, Liberia’s police and military is not trained sufficiently to protect their country in case there’s some minor—whether it’s a civil uprising of some kind or some other kind of political upheaval. And so it’s vitally important that the United States commit the funds to train the police force and the Liberian army.
The other thing we were successful in doing: for a long time, because Liberia was in civil war under the Charles Taylor regime, Liberia was on the watch list by the State Department, by the Congress, before aid could flow. Aid would flow, but it had to be vetted each time by the various committees of the senate before it would flow. This delay in getting aid to a country that desperately needed it was a particular problem that President Sirleaf wanted to have relieved. And I’m proud to say that we now have it so that Liberia is no longer on the same list as countries like Sudan and Zimbabwe in terms of the flow of aid. And it’s vitally important.
So, while we made progress in fulfilling our commitments, we realize there’s much to do. What sustains us is the challenge of making a positive contribution to as many Liberians as possible, and contributing to the deepening and strengthening of the relationship between our two countries. And I encourage you to be bold in your commitments and invite you to join us in our work of support for President Sirleaf and the reconstruction of Liberia. Thank you very much.
[Applause]
GAYLE E. SMITH:Thank you, Bob. And I will tell you, when I got back to my real job after CGI last year, my assistant and right arm, whose family is from Liberia, said, “Did you see what Bob Johnson and those people did? That was so cool, and it makes me feel proud.” So, thank you for that.
Our last speaker here today is a special guest, and I think a man who has shown a lot of us across this country and around the world that poverty is something much bigger than all of us, that it doesn’t matter what we think about Social Security, it doesn’t matter what we think about the war in Iraq, that ultimately what matters is that we’re all committed to bringing economic justice to people around the world. He’s a man I had the pleasure of meeting a year ago, and a man who has taken the notion of commitment and translated it for real people, both at home and abroad. So, it’s my pleasure to introduce as our last speaker Pastor Rick Warren from Saddleback Church.
[Applause]
RICK WARREN: Well, thank you for caring. You know, it always starts in the heart. Nothing happens until you get moved. And thank you for your commitments. Nothing happens without commitment. I look around this room, and I see so many friends, like Miss Crane and Bill Hybels and others who have built enormous outreaches to the needy because of commitment.
And really, most of all I want to thank you for your willingness to partner, because there are some problems in the world that are so big you have to triple tackle them. You cannot do it on your own. When one drop of rain falls, it makes no difference at all. If you get a million drops of rain falling, you can turn a desert into a forest. And the willingness to partner is I believe at the root of why we haven’t solved these problems already, people willing to put aside the things that they differ on and work together on the things that they agree on.
Last year, I spoke at Davos, the World Economic Forum, and I kept hearing people talking about we need public and private partnerships. And that’s true. But if all there was that was needed was government and business, then we would have already done it by now. It actually takes a three-legged stool for there to be stability. A one-legged stool will fall over. A two-legged stool will fall over. You have to have three legs. And if we are going to team tackle these big issues like poverty, disease, illiteracy, trafficking, corruption and so many other issues, we’re going to somehow have to tap into the largest pool of volunteer manpower in the world. It’s two thirds of the world.
It’s called the people of faiths, plural. There are 600 million Buddhists in the world. That’s a large number. There are 800 million Hindus in the world. There are a billion Muslims in the world. There are 2.3 billion Christian members of churches. Now, as a pastor, of course I’m interested in the last one. But they all matter. They all matter. When I think about 2.3 billion people who say they’re a member of a church somewhere, that makes the church bigger than China. That makes the church bigger than India. In fact, it makes the church bigger than China and India put together.
Now, if you want to say, “Well, we can’t have anybody of any faith doing humanitarian effort,” you just ruled out most of the world, because really, outside of Manhattan and Europe, there aren’t really that many secularists. [Laughter] The fact is most people have some kind of faith. It doesn’t matter to me what it is at that point, but if they’re willing to work on the issues, that’s what matters.
And so I believe that there is a government role and there is a business role, and there is a faith role. Governments have things that only they can do, as was pointed out earlier: property rights, protections of freedoms, providing opportunities for economic growth, paving roads, infrastructure. There are so many things that only government can do. Businesses have roles that only business can do: the expertise that they bring to health care, the expertise that they bring in agriculture and management—since most businesses, most governments, and most churches are poorly managed—bringing cash and capital. There is a role.
But you maybe have never thought about this. There are things that churches can provide in dealing with poverty, disease, illiteracy that nobody else will ever have. Some of the biggest problems have to do with issues like distribution, manpower, credibility at the local level, and boots on the ground. When it comes to distribution, I could take you to 10 million villages round the world, the only thing in it is a church. It is the most widespread network in the world. Nothing else comes close. You could put all the Wal-marts and Starbucks and McDonalds together. They don’t come close to the millions and millions and millions of churches or other houses of worship.
I have traveled around the world a lot. Last year, I did a 46 day tour to 45,000 miles around the world, which means around more than once. And in every country I went in, I would meet with the president and the government leaders, I’d meet with the business leaders, I’d meet with the church leaders and say, “Can we follow that great theologian, Rodney King, and just get along? Can we not work together on the things that matter and make a difference?” And, as I said, once you get outside of the capital of most countries around the world, there is no government. And the only civil service structure is faith in many parts of the world, whether it’s a church or a mosque or a temple or something.
And so they have the largest distribution. The boots are already on the ground. We proved that in the last year or so in both the Katrina hurricane and the tsunami. The churches were first on the scene and they were the last out. My own church gave well over $3 million to those two issues, and sending teams by the large numbers.
The second thing people of faith have— they’re not just universal distribution— they have the largest manpower of volunteers. Nobody comes close to the hundreds of millions of people who volunteer through their Jewish congregation, Muslim congregation, Christian congregation, or whatever around the world, on a weekly basis.
The third thing they have is that they have local credibility. Because in that village, the people trust that pastor, that priest, that minister, that [inaudible], that rabbi, far more than they do anybody else. Because he is there, in the marrying, and the burying, and the stages of life. One of the countries we are working in, Rwanda, when the genocide came in, all the NGOs left, but the church stayed. Why? It is the people. You can’t talk about community development without talking about people who are apart of faith communities.
So, my commitment is about four years ago, I said, how could we mobilize? What if we mobilized a billion of those two billion, in just my faith, in Christianity, to make a difference. And we decided, we would do a pilot project, that we called the PEACE Program. And, PEACE is an acronym. P-E-A-C-E. It stands for promote reconciliation, equip leaders, assist the poor, care for the sick, and educate the next generation. We have been quietly behind the scenes testing this prototype for four years now, trying to build a plane as we rode it. I, in my own church, I have had over 7,500 of my members; have been overseas in the last three years working in 68 countries.
Poverty alleviation, by the way, the only way you get rid of poverty is spelled j-o-b-s. Its jobs. I do believe when you simply subsidize people, you rob them of their dignity. You make them dependent. People don’t need a hand-out; they need a hand-up. They need trade, not aid. They need skills. Because they are smart, they just need the opportunities the rest of us have. It’s not really a charity issue, it is a justice issue. So, these people have been going out, 7,500 people, all around the world, testing in 68 countries. And now, we have just come back, and we have been studying all the data. And, we learned everything that doesn’t work. So, if you would like to know what doesn’t work, at the local level, see me, I am a pro at what doesn’t work. Because we have tested, and tested, and tested, and two weeks ago, we just launched, what we call PEACE 2.0. One of the things, we learned is that other people, groups beside churches, said hey we would like to do that, we would like to partner, we would like to promote reconciliation and equip leaders and assist the poor, and care for the sick, and educate the next generation. And I said, well, there is an idea here, a three-legged stool, where business has a role, profits have a role, and faith has a role. You see, honestly, I don’t care what your motivation is for helping people, as long as you do it. It doesn’t have to be my motivation, as long as you do it.
I’m a member of the Council on Foreign Relations, and I happen to know when we help other nations, that’s good foreign policy. I’ve learned when you help people get well, if they got AIDS, and they get well, they like your country. So, there’s good political motivation. Not my motivation, but there’s no problem with that. It’s just a good motivation. There are businesses who do it for profit motivation. We say we want to provide pharmaceuticals, make a profit, and help people. Nothing wrong with that, in fact, I wish more organizations did it. I wish more people would make a profit and do good at the same time. It is not my motivation, but it is a good one. Some people do what they do because of a personal motivation. I do it because I have a savior called Jesus Christ who said love your neighbor as yourself. Now, that doesn’t have to be your motivation for me to work with you. It’s just my motivation. I am told to love my neighbor as myself. And, so I have found that faith organizations are far more willing to partner with NGOs and governments than vice versa and I am say it is not going to get done unless you get all three legs of the stool. Thank you. [Applause]
GAYLE E. SMITH:Okay, so you’ve got the experience and the messages. Let’s just go out and do it. And, I mean that literally, go out. We need to clear this room fairly quickly. So, we can get setup for the first panel, which starts in half an hour. You will also find the people to help you on the signups for breakfast discussions. So, with many thanks and particular thanks to all of our speakers who have caught it absolutely perfectly. It is about partnership and doing what we can together. Please together leave the room and come back in a half an hour. Thank you very much.
[END RECORDING]

[START RECORDING]
MALE SPEAKER: Albina Ruiz. Zaher Al Munajjed. Our moderator, Kemal Dervis. Ladies and gentlemen, our working group chair, Gayle Smith.
GAYLE SMITH: I’m going to sing, it’s like, okay, I’m going to be very brief, our lunch went over. I just want to let those of you who are new here know how this works. This is an interactive discussion, so we’re going to hear from our panel, and then you see these people and table facilitators and computers at all of your tables. We have this magical thing that happens that the discussion reverts to your tables. It is all fed into some great system, and smart people in the back of the room, who work it and translate it back to us, and then we’ll have a reaction from our panel.
Meanwhile, while the panel is running during this first 30 minutes, if you have questions that come up, pass them to the person with the computer, and we will try to address some of that in the second round. But again, we’re going to want to hear from you in this.
Very briefly, for those of you who were at lunch, our last speaker said that ending poverty can be spelled one way, J-O-B-S, that’s what this panel is about. We have a fantastic panel, and a tremendous moderator, a man who has worked on poverty and economics his whole life in many ways, a great personal friend, so it’s my honor and my pleasure to turn it over to our moderator, Kemal Dervis.
KEMAL DERVIS: Thank you very much, Gayle, thank you so much. It’s a great pleasure to be here, to sense all this friendship and energy, positive energy, and we have a fantastic panel, and I’m going to introduce them very briefly in a minute. Let me just start by saying at the United Nations Development Program, and many other places, at the World Bank where I worked many years, fighting poverty is the first priority. But it’s very clear what Gayle just said, fighting poverty, above all, is creating jobs, because if you want to fight poverty in a sustainable way, in a way that lasts, you know, handing out payments, food, whatever, to sustain people, sometimes you have to do it in war after war, in conflict, and you know, during a terrible humanitarian disaster, earthquakes or whatever. And that’s essential, humanitarian action to help people stay alive. But in the long run, what counts is productive jobs, jobs that actually produce things, good services that are consumed and are in demand in the market, and that’s the only way in the long run to fight poverty in a way that lasts. So that’s why I fully agree, jobs, jobs, jobs, that’s what it’s all about.
And we have people who have done very specific things; I want to share that with you. We’ve been successful, very successful, we’re scaling up, but I think you need our support, and we need their ideas, we need to, in what we do we need to share these ideas. So let me again welcome William Bissell, Chief Executive Officer of Fabindia, founded in 1960 to market the vast and diverse craft traditions of India. Its products are a source from villages all over India, thereby helping to provide and sustain rural employment, and lengthening the rural economy to the urban economy and to the world economy. Fabindia seeks to bring a steady and affordable products to today’s consumers. Fabindia has also a very important partnership with the Big Indian Bank, the ICIC Bank, and William will tell us more about that.
Thanks for that partnership, there are now community owned companies with a target of 100,000 artisans and shareholders throughout India.
We have Albina Ruiz, Executive Director of Ciudad Saludable of Peru. Twenty years ago, Albina came up with the idea for developing efficient solid waste management system that generated employment and contributed to better quality of life, and cleaner cities. In addition to taking care of that problem, Albina’s micro enterprise model provides self employment opportunities to local residents in the most difficult neighborhoods. Working in partnership with municipalities since 2002, Ciudad Saludable has created 320 direct jobs and 5,000, indirectly reaching the poor and rural communities. Of course, the target is much larger. Albina’s simple idea has become a successful business and community organization model, and she will share her experience with us.
Zaher Al Munajjed is Chairman of the Grameen-Jameel Micro Finance Ltd. in Saudi Arabia, as well as the advisor to Mohammad Abdul Latif Jameel, President of ALJ Company in Saudi Arabia. In these positions, Zaher is at the forefront of implementing Mohammad Jameel’s vision of job creation through both micro finance and vocational training. One of the, and I think he really is showing one of the most effective ways of fighting poverty in the Arab world. There is a special emphasis here also on woman, on employment of woman, through micro finance, and the program in Saudi Arabia today serves over 10,000 women across the country. He will tell us more about that.
So let us start with Zaher. Can you tell us how you combine micro finance with vocational training? Particularly the difficulties with women, but maybe first telling us about the scale of the problem you’re facing in the region.
ZAHER AL MUNAJJED: Hello. I represent a multibillion company from the Arab world. And having your back yard in the Arab world is a major problem. Around you, the environment is not, in general, very healthy. We are talking about the population of around 300 million people, where more than 60-percent are young, below 20. We are talking about unemployment, the need for jobs is approximately, from some statistics I saw, over 30 million jobs over the next 20 years. We are talking about poverty, where approximately 70 to 80 million people live on below, or less than, $2 a day.
So for anybody from the area who cares about its society, who cares about its community, who cares about basically passing on a business to his kids, one has to look at what’s happening around you. So the Jameel Group started some years back, looking at that, started training people to hire them within the company. Then found that, yes, training is good, but we can’t hire all the people in the marketplace. So we have to train people and try to match them with jobs somewhere else. So we started to match jobs and skills. We’d go to a restaurant and say, you need cooks, Saudi cooks? Good, we’ll send them, we’ll train them at our expense, you take them. That was a first step. We went, we then went and said, okay, we have a lot of unemployed Saudi’s, let’s give them cars, we were in the car business. Let’s give them taxis at good rates, we won’t make a profit. We put an ad in the paper. The first ad requested 25 applicants, we got 2,000. That program today is very successful and we’ve given out more than 600 loans of cars and small trucks.
We started creating training centers, training centers, vocational training, for technicians. Car distributors in Saudi today require approximately have, approximately 10,000 positions for mechanics. These positions are all filled with expatriates. There’s not, there are very few Saudi’s that want to do the job. We got together all the car distributors, got the Japanese manufacturers, got the Saudi government, got the Japanese government, put the money in, created a center managed by the private sector that today trains 200 young technicians a year and they are taken on the spot because they have jobs waiting for them.
That was very interesting because it could be replicated. We were then went to the hospitals because all health staff in Saudi are foreign. We started doing the hospital school, and got all the hospitals together with the same thing. We did the same thing for electronics, and we did the same thing for building contractors.
But still, there was a lot to be done. We had not approached women, we had not approached the poorest women in Saudi, I’m still talking about Saudi, maybe I’ll expand beyond that. In Saudi, basically because of social restriction, traditional restrictions, not legal restrictions, there’s a lot of women that were left on the sides. We started a program with women. This program today provides micro finance and we’ve reached over 10,000 women.
That program was the base to start a pan Arab program that at the end of this year will reach 200,000 women through our partners. We have 11 partners across the Arab world, we provide capacity building, and we provide financing. We have a fund, a guaranteed fund, of $50 million for that sake, and we hope to reach by 2011, a million borrowers.
KEMAL DERVIS: Thank you very much, Zaher, and you know, we have to remember something that it’s hard to believe sometimes, but in many big cities in developing countries, about half of the young people have no prospects for jobs at all. Not everywhere, that’s not the average, but in the big cities among the biggest neighborhoods, among the poorest neighborhoods, you have about half the young people with absolutely no job prospects. And you know, what that is in terms of challenge for security, for stability, is just huge. So what you’re doing is absolutely critical.
Now Albina, you, you have focused on one particular problem, and then you’ve gone from there to develop social entrepreneurship to try to make these things sustainable in your country, and also looking towards the whole of Latin America. So tell us more about it.
ALBINA RUIZ: In the first time, I want to say I’m a social entrepreneur’s fellow from Ashoca. See that Ciudad Saludable in Spanish, in English, working in Peru in the first time, but now we working in six countries in Latin America. [Inaudible] waste management in poor cities in Peru, in 50 cities now, in agreement with the local municipalities. And we generate employment for [inaudible], then the creation of micro enterprises for the collection, the recycling, treatment, and final disposal of waste. Up until the year 2000, recycling activities done by waste scavengers were illegal. We promote the National Solid Waste Law. Today, all municipalities in Peru must formalize the waste scavengers as a part of their solid waste program.
Ciudad Saludable measures its impact through a methodology called social reform or investment analyzes SROA, help us to modernize our impact at different levels, environmental, economic, and social. This tool has become very important for our expansion in water flooding American countries.
I tell you a history. Ten years ago, I met a woman, Sonya Kispa and her mother, who made a living off collecting waste from a dam to feed her pigs. Sonya created a micro enterprise collection, and today she employed 12 other women who manufacture bags from recycling materials. She is very successful that she is now exporting this product to Mexico.
For our work, of course, we need to work with many state colors, the local government, the regional government, the national government, because we need to promote in the new law, in the new relation. But we need the private sector, too. They have a social responsibility problem, many companies, but now they are good strategic partners for us. Of course, for us it’s very important working in environmental location, our strategy is door to door. We are mobilizing more than 300 job hunters, they help us talk door to door and explain to please separate your garbage because if you separate it, it’s better for the recycling families; of course, for you because after that you pay less tax. We’re training the teachers in the school after that, they teach the children, the children teach the parents at home, the recycling. For us, it’s not possible our work if we don’t work with the social leaders. For us, this is an important partnership. I say all the time, probably we can get a lot of money, best technology, but if the community don’t participate, this is not sustainable.
KEMAL DERVIS: Thank you very much. Now we know India is a giant, and it used to be when I was in graduate school it was this huge economy growing very slowly. Not it’s growing by leaps and bounds, and indeed, is, I think part of the reason, in terms of looking at the world economy, that we’re not as worried by the various financial problems that appear here and there, is that there are now in the world economy, many drivers of growth, not just the US, or not just Japan, but you know, even if there’s a slowdown in the US, China and India are now big enough, not to carry it all by themselves, but to contribute tremendously to the growth of the world economy and to the stability of the world economy. At the same time, there’s still tremendous poverty in India. There is a big divide between the cities and the rural areas, I think. and you are addressing precisely that divide, working to get rural area products to the cities, you are working with the financial institutions, you’re scaling up that approach, and I think what you’re doing there is so needed in so many other countries. I have seen it in many emerging, many dynamic emerging market economies, that while there are the dynamically growing sectors, there are other parts of the country, including in my own, for example, in turkey, where employment is absolutely stagnant, where nothing is happening. So you have a tremendous duality. Very dynamic parts of the economy and then other parts not moving. And I think, William, you are linking these, you are trying to use the dynamic part to help the rural side. So tell us about your experiences.
WILLIAM BISSELL: Thank you, Kemal. I think you put it very eloquently and when you said that like turkey, India has two parts to it, there is this dynamic growth engine, which is pulling about 120 million people at an extraordinary speed. If you take away the rest of the country, the 120 million, the economy that surrounds them is probably going at something around 20-percent. the economy that surrounds the balance billion people is not in such good shape, and if you get a sense of a country which has got 120 million people going at an extraordinary speed, consuming, investing, that’s what’s appearing on the global radar screen as rapid growth.
Unfortunately, it’s like since independence, if you view India as a train, the first two carriages took off with the engine, leaving the rest of the train just sort of outside the railway station. And I use this analogy because it, the rest of the world today, I mean, there’s a lot of hype in New York about India at 60 and India shining, and the rest of the world is focused on that engine and the two cars right behind it.
The problem that will happen if the rest of the engine, or the rest of the train, doesn’t get hitched back on to that engine, is the very forces that India has unleashed by embracing free market, is in danger of being lost as the rest of the country looks at capitalism, and says, this is a terrible idea. What’s being called into question across villages in India, the company I run works in 285 of India’s 611 administrative regions. Most businesses run here is about in India urban centric. They work in Bangalor, which is where the IT hub of India is, or in Bombay, which is the financial hub of the country.
The rest of the country, in large part, is a sort of a black hole, where the rule of law is rapidly deteriorating as communities question the whole premise of the government. In the days of socialism, we had a two percent growth rate, but it was, there was also a very, very small increase in people’s aspirations. So there was general social stability, even though we had incredibly low economic growth. What’s happened now is with rising aspirations, if the economy is not able to translate those aspirations into something resembling a change in people’s lives, and that’s the percent, that’s the one billion who are not in the fast growing group, the fast growing country is going to rapidly lose its initiative and momentum.
Just as I was leaving to come here, one of the largest retail efforts in this country has been blocked. Every store that Reliance, which is India’s sort of flag ship industry’s opening, has been picketed, closed, people are angry because they feel that capitalism hasn’t delivered to them.
What we have seen, and what we have tried to do over the last four years, has been to show people in rural India, the benefit of capitalism. India has been the home of many great missionary movements. People have come to India to spread very different kinds of words, but I think one of the things we need today is a movement to bring capitalism. And that is corporations in which the artisans, in our case, and other rural communities, are stakeholders. There is a need to do this because without that, that engine, which is really an extraordinary engine, be it the engine of what we call capitalism, the benefits of that engine are going to be lost to a majority of the population.
So in our personal example, what we have tried to do is, we have tried a rapidly growing retail business in urban India. As Kemal has said, we’ve tried to make a bridge with that engine and source all our sourcing is done from these rural communities. So wherever we have been traditionally sourcing, and we have deep roots in rural India, we have been collecting our artisans, not into cooperatives, which was the original socialist model that was followed, by into profit making companies. We have had to fight government in this, because the government has made it very, very difficult to a series of laws to actually make small shareholders members of unlisted companies. They have forced everybody to go the listed route. So we’ve had a series of meetings with government, which have been pretty unsuccessful, but in spite of that, we’ve managed to create a model whereby we have asked people to invest. The minimum investment is $2.50, to buy a share in your local community owned company. We have guaranteed that community owned company space in each of our retail stores by giving them a certain amount of rack space. So they have, as Kemal said, they have now a bridge to take their product to retail markets, not only in India, but also in other parts of the world where we have stores.
In doing so, we are hoping that as their products sell in t hose stores, we will continue to purchase their goods, and those goods will be marketed by those community owned companies, some of whom have a share holding of around, the average shareholding is about 1,200; 1,000 to 1,200 shareholders per community owned company. We have had trouble convincing the regulatory authorities of how we will conduct evaluations of these companies because they are not listed. And then once we’ve done that, how we will actually provide for exits to the shareholders in the event that they actually want to sell their share.
And the whole experiment has hinged on actually one small detail, which is that having created evaluation methodology, and we’ve got some very smart chartered accountants, India is full of very smart chartered accountants, to work out evaluation methodology. We then had to figure out how to give rural artisans, because by the end of 2009, we should have 100,000 rural artisans. We had to figure out a way of how to give those guys exits when they are ready to cash in their equity. Remember, these companies are not doubly traded. The cost, our original plan, sorry, I’ll be very short, so in short, it took three years working with one of the most innovative financial institutions in the country, the ICIC Bank, to work out a method by which we could actually provide liquidity when each of those people needed it. And the result of it has been that every community we’ve been doing in to, has welcomed the community owned companies, and has voted by often 10 to one, our subscription rates in some cases are between eight and 10 to one, so each of these companies is over subscribed to that extent. And if any of you are coming to India, and would like, since we’re in the spirit of making commitments, and would like to see some of these communities, I can give you my email address, and we can make sure that you get to visit one of these community owned companies to see what’s actually happening on the ground, and hopefully you would feel inspired by that.
The email address you need is w.bissell@fabindia.com. So if any of you are traveling to India, I would extend the community owned companies are there, we will organize for you to visit one of them that’s closest to where you’re going, they are all over the country, and you’ll see first hand what I’ve been talking about. Thank you.
KEMAL DERVIS: Thank you very much. Well, here’s a challenge and an invitation. And, of course, as you all know, you’re encouraged now to enter your questions into the computers, and we’ll come back, I think we’ve run out of time for, we were planning a kind of second round, but we’ll come back after to face the questions and to try to get the answers. I think the analogy to the train with the two wagons and the rest of the train, you know, is very, is a very good one. I think in the Middle East, one could also say, you know, the huge oil well from the one side taking off and oil prices going through the roof, and yet, in Cairo, in Sunnai, and many other cities, you know, lots, millions of poor young people without any job prospects. So that real vision of some part of the train moving fast, and the other one not moving at all, is the challenge we all face. I think we’re now going back to our round table here. Thank you very much.
GAYLE SMITH: thank you. And as we move around, as Kemal says, now it turns over to you, and I think again, keeping this analogy of the train in mind, what we want to focus on is those other cars. And on the issue of jobs, we’d like to ask you at your tables to consider two very simple, but important questions. The first is, if job creation is our goal, what are the two or three actions that governments, industry, and NGOs should take. And I would encourage you to be a little bit out of the box. I mean, we all know they need to create the right environment, invest in people, support entrepreneurs. But thinking about CGI and the kinds of stories we told at lunch, or the kinds of stories you and others have done, what can those sectors do?
The second is a little bit harder though, it sounds simple, and that is what can an individual do? What is possible for an individual to do if you want to help create jobs if you do believe, as I think our panelists have demonstrated that that is in fact the key to alleviating poverty?
So we’re going to turn you loose with our table facilitators who are good folks, they know what they’re doing, they know the issues, please feel free to voice your opinions and, as I say, we’ll have this magical process where it’s all translated, and then we’ll bring the panel back up.
The floor is now yours.
[END RECORDING]

[START RECORDING]
MALE SPEAKER: Our Moderator, Kemal Dervis.
KEMAL DERVIS: Well, I thank you all for your engagement and for all of the questions. We don’t have time of course to take all of them but I will try to take some of the most direct ones and also there are some that are actually similar and I would like to first ask Zaher.
In terms of the woman and the kind of cultural political factors; how difficult is it to really reach women in the Arab world in your programs?
ZAHER AL MUNAJJED: Women are key in any society. In places like [inaudible] in the world in general there are traditional handicaps; nevertheless from a legal point of view and from a governmental support point of view, this does not lack at all.
Most of the programs that we have done in Saudi or through local NGOs with govern and support providing a lot of vocational training to help provide self employment for these women. The objective was to provide new jobs, self employment, so these women could navigate within the cultural and traditional difficulties of the society.
KEMAL DERVIS: Thank you. Earlier you talked about social entrepreneurship and the importance of social entrepreneurship; but what about social entrepreneurs people are asking. You know what makes a social entrepreneur? What is the secret there? What makes them different?
ALBINA RUIZ: I think that very important used to change in the parliament and authorities and all the people. For example, sometimes when I talk with the mayor’s with the worker problems, I asked why the waste put in the pool areas; and they say the pool people like dirty and they don’t pay for the service and I said no, I live in this area. I want different. I can pay. We are not poor. We have creative and we have other possibilities.
We need changing in the man and in all people in the private sector and in the leaders too because sometimes the leaders say; I am not poor, people please give me; and I say no, you can have other possibilities that can change your life.
KEMAL DERVIS: Endearing. Thanks a lot. And William, one question addressed to you. The link between the actual participation in equity financing, you know in these community companies and the jobs; what creates the additional job? Is it the additional capital of these areas or is it also a question of what kind of technology do you use? You know how that structure of capital influences, the choice of the production methods?
WILLIAM BISSELL: There are two reasons for the community owned companies. One reason is that it turns out that when you want to upgrade people’s skills, you need to make some Capital Investments and machinery which will upgrade the quality of product which is one of the issues that came up in the questions.
In order to do that, you need to raise funds. And the model that we have come up with is that you raise the money in the form of equity from the Artisan [misspelled?] community; then in turn get shares, which is actually just a the visible piece of a larger asset pie and we provide them the market and that is pretty much how it works.
KEMAL DERVIS: Thank you very much. Well, I think this was a first round and now if I am correct; we will go for a couple of more minutes. We’re too much on time.
We’ll let me ask one more difficult question and I think you know that it reflects a much wider debate in the world because job creation somewhere is sometimes perceived as job destruction somewhere else, you know.
Preach up here for the maybe is that a threat to the job elsewhere; whereas of course the idea is to create jobs and worldwide. Even as you know in the rich companies, there are job worries and unemployment problems particularly in Europe.
So any thought on that in particular. You mentioned something about national jobs and I know you know as the population in Saudi increased a lot what was not a problem in the past 15 to 20 years ago because the population was so small and there was in fact a tremendous labor shortage.
Okay, but now the situation is changing and Saudi has gotten a much bigger population so now is important to find jobs for the young Saudis which was not the case 20 years ago.
But that then and may mean the some of the immigrants some of you said lose their jobs. How do you see; I mean this is a net job creation. It is not just a substitution; but there is also an element of substitution I guess.
WILLIAM BISSELL: Well, there must be an element of substitution because you can’t have these young Saudis sitting without any jobs at home.
Nevertheless what we have seen lately is for example a lot of ex patriots from India have been leaving Saudi for better paying jobs in India; so there’s job creation in India. It is true.
KEMAL DERVIS: William is creating a job in India.
WILLIAM BISSELL: All of the educated are leaving. We have problems finding educate its staff. So the young Saudis are taking the place of these Indians, for example; whereas but nevertheless there are other jobs that are new editions.
We are doing franchises. We are getting franchises abroad and giving them to young men funding them. The taxi driver thing is not a substitution. Other examples relate to that—
KEMAL DERVIS: Women or Men.
WILLIAM BISSELL: Women mostly; but these are new jobs.
KERMAL DERVIS: Well, let me; you know I think it’s one thing that is important when we think of employment and jobs always to remember; that yes there will be created discussion in a sense; there will be jobs that leave a certain area and other jobs that come in, that is part of growth, that is part of expansion; but in the end, when you have people with jobs, better jobs, higher incomes thanks to these jobs, they demand product and services that somebody else has to produce.
I mean it is a very basic economics but we often stand the political debate is forgotten. The union workers that have higher incomes thanks to William weld them and product and some of these products will come from the U.S. or from Turkey, I hope; or indeed from Saudi Arabia.
And I think that one has to keep remembering that that happens. Now, of course, to help the transitions and to make it easier for the system to work, it’s not automatic. And I think when we say jobs, jobs, jobs, we have to be careful also to protect those who lose their jobs, not just the new jobs, but we have to find retraining, relocation, help to more mobility and all that, new skills so that the dynamic process that creates jobs in the world economy, while it’s happening, is not too disruptive of some of those who will lose their jobs.
Okay, now Gayle is here. I think we’re on time more or less. We’re trying to be so efficient and focused.
GAYLE SMITH: One of the things I like about Kemal, he goes with the flow. And I like to keep going, keep going, keep going.
Okay, now we have the feedback from you all, we’re going to share it without panelists, and I’m going to go over it quickly, and it, I believe, will show up on the slide. And the first one is: What actions by sectors can be taken to create more jobs? I think everyone got through on a very important point, which you all concur with, which is vocational training for women and those on the low end and the high end of the economy, encouraging governments and businesses to work together to build new markets and improved connectivity of supplies and consumers, economic incentives, tax-free zones and tax credits, bring in formal economies into a structured and regulated economic system. It’s a great thing to do. It’s not an easy thing to do, but it’s a big thing to do when you look at how big the informal sector is. Build a pro poor constituency of government and NGOs and ensure early engagement with government to design pro poor regulatory frameworks. That’s a really good idea because often these regulatory frameworks are developed by governments absent the perspectives of our panelists and the people they represent and often with more input from those of us on the outside than those on the ground.
A couple of gems about leveraging pools of micro savings to create economies of scale. And another one, which to found a capital equipment donation program, another really interesting idea that could also be applied to technology, where multinationals and large companies could donate equipment to foster local industries and thus reduce the costs.
We’ll move quickly to the actions by individuals. The first is to volunteer. And I think one of the things that is important to tease out of this, and it’s important that you raised it, is that we can be much more creative with how and where we volunteer. Think about giving our time but also our particular skills. We’ve got a lot of people in this room that know a lot about business, a lot about jobs and a lot about how these things work on the ground. How do we donate our time to really translate that? Focus on local communities and take action where you see a need. I think we’ve heard examples in all three cases of how people started at the ground level and are building up and, I think, are and ultimately will bring profound change to a much larger area than those small communities, just by demonstrating what can be done. Start with your own spending and behavior, such as buying Fair Trade. That’s really important. It’s also really important to find these bags made out of recycled goods that Albina talked about, now being exported in Mexico. We’ll get them up here, and also buy things that are made by local entrepreneurs and artisans.
Leaders are everywhere. They need to be identified and supported. We heard over lunch about one of the commitments, where a young man in Rwanda connected with a group working on a commitment and how, just by making those connections, they have invested in somebody who is going to be a leader, as all of you are.
The gem is create policies and companies that employees and executives donate time for charitable giving. I want to say something about this, because again, this volunteering time is critical, but also donate your expertise. And bear in mind that there are different kinds of expertise in this room. We have got expertise of people who are on the ground, who, quite frankly, could donate some time to a business to say if you really want to create jobs in my community, here are some ways you can do it. Do it in the other direction. NGOs can donate time to each other as a way to exchange ideas. So it’s time but it’s also substance.
I’m now going to turn back to our panel for the last round and their final comments and responses to your findings. And thank you very much.
KEMAL DERVIS: Thanks, Gayle. So final telegraphic comments. But I want to point out one to you. You are creating these companies. The informal sector is becoming more formal, thanks to you. What about taxes, Social Security contribution, health and all that? I found it a huge problem in the informal sector in Turkey. You don’t want too much formality, but some taxes need to be paid, some books have to be kept, some accounts have to be there, and yet the informal sector often doesn’t like that.
MALE SPEAKER 1: That’s a real problem, but it’s one I think that has to be addressed at a governmental level, so it has to be addressed by policy makers, and I’m hoping that they will see the wisdom of it in a few years.
Should I make the closing remark now in connection to what you’ve said or should I wait?
KEMAL DERVIS: Oh, just anything.
MALE SPEAKER 1: I think the way I came to this idea of community-owned companies is that I was at a game reserve in India, and I was quite amazed to see that the tiger population is being wiped out by the very people who live at the edge of the game sanctuary, and this is around Timbal [misspelled?] National Reserve, one the world’s really last refuges of the tiger. And the local people were doing things, and one was they were cutting the trees, and secondly, they were allowing people in and showing them how to shoot the tigers because tiger bone has a very high price in China. I couldn’t understand this behavior because here were people who were working in a sanctuary, and they were forest guards and working in the hotels ringing the sanctuary. And we had some work with the crafts community, which was also on the edge of the sanctuary. And when I spoke to them about why they were doing this, they said that, look, these hotels are coming up. They’re charging $600 a night. Tourists are coming in from all over the world. And our children, our sons and daughters, are getting jobs as janitors, waiters. If they are really lucky, they might get a job as a local driver. But everybody else in these hotels is being trucked in from the outside. And when I looked around, it was true. Some of the staff in these hotels had been coming in. The manager was Australian. And I sensed that what the people wanted is they wanted a piece of that pie. And they were saying, since we’re not going to get a piece of this pie, we have not interest in actually protecting this resource. They were not interested in jobs for their children as janitors and waiters. And that’s actually where the idea of the community-owned company came from. And I realized that I needed to personalize this and make it work for the industry that I was in, which was a retail business. And so with this idea, I personalized it for the business that we had some influence over. And each of you are from different businesses, and maybe this creative thought can trigger thoughts in your own businesses or your own spheres of influence.
KEMAL DERVIS: Thanks a lot. Albina, some final comment in light of —
ALBINA RUIZ: Yes. I am thinking of the 20,000 people making a living of recycling waste. Now, we are working with little, 2,000 people, but we believe if all work together to create jobs, the social problem is less, in prostitution, in delinquents, because when the people have a job, there is dignity. They have access to food, to health services, educational services. They can say citizenship, because many people, now, they don’t have citizenship.
KEMAL DERVIS: Yes.
ALBINA RUIZ: They don’t have civility. In Peru, in other countries too, families are living in dumps. Maybe for many people, this does not exist; they don’t see. But they are working so hard. If they don’t work on this issue — now, many cities have a moratorium on waste, but they have recovered in many ways because in the waste, there is money. We say for many people the garbage is a problem; for us, it is an opportunity.
KEMAL DERVIS: An opportunity. Thank you so much.
[Applause]
KEMAL DERVIS: Zaher, a last word?
Zaher al Munajjed: My comment would be on the gem regarding creating a policy and company that employee and executives donate time. Our view on this is that for most companies and most corporations, CSR is an intrinsic part of business. It’s an intrinsic part of the mission. It is not a side show. It is not something that should be given to CSR, VP, floating on the side of the company. It is something that should be followed by the CEO himself. He should care and follow it like he looks at his profit every quarter. CSR is very important. It requires the leadership and commitment of the top man, and if it’s not there it will not work. Thank you.
Zaher al Munajjed: Thank you so much.
[Applause]
Zaher al Munajjed: Thank you. Thank you all very much, and thank you for bringing this experience. It is very concrete experience of a big problem here today. I think sharing experiences but then taking action and participating in the effort is, I think, what the CGI is all about. And lots can be done. It doesn’t happen automatically, and it doesn’t happen fast enough, so I think actions and rapid actions in a network sharing the information can make a huge difference.
So I’m going to turn it over to Gayle, now. I have to run to a meeting back at the U.N., but it was a real joy and pleasure to be here. And thank you so much.
[Applause]
GAYLE SMITH: As our panel moves, let me extend my sincere thanks. And you are welcome to stay up here for the next round or move over and have a seat. Because I think all of you brought really important points to the fore and all of you really hit the nail on the head with your final comments. If I may Albina, I would like to give a special congratulation to you. When we first spoke to you, you said, I want to speak, I want to tell my story, I am a little nervous. You did a beautiful job. [Applause]
Now, we get to another fun part of CGI where we are able to present certificates to members who have made commitments for this year. I am very proud to introduce our commitment presenter for this session; he’s a man I have worked for and worked with and will always work for, and is a real friend of CGI. He has been an advisor since the beginning. He’s been a leader in public service and a leader in the business community. My friend and CGI’s advisor Sandy Berwood [Misspelled?] [Applause]
SANDY BERWOOD: Thank you, Gayle, very much for those words and for a great day so far. It has been fascinating. It is my real privilege to present three certificates for threeterrific commitments. If I could get Jonathan Tourtellot from the National Geographic Center for Sustainable Development and Bill Drayton, the CEO and Founder of Ashoka; one of the truly great NGOs of the world to come forward. [Applause]
Jonathan is the National Geographic Center for Sustainable Development Director and Bill; I think all of you know. The National Geographic Society will form a Global Geo-Tourism Network. This is a whole new way of looking at tourism and development context. They will audit best practices, direct a global marketing campaign, oversee six pilot programs, and create an investment fund to support entrepreneurs in the Geo-Tourism industry. Geo-Tourism sustains and enhances the geographic character of a place; its environment, its culture, its aesthetics, its heritage, and the residents all benefit from that. This commitment will directly bolster the economic welfare of millions of people; creating employment opportunities around the production of indigenous crafts, local cuisines, guide services, hospitality products─ This is truly a creative initiative and I congratulate both of you. [Applause]
If I could get Roger Hamilton from XL Results Foundation and John Holmes from the Hunger Project to come up. This is an empowerment commitment, which I love. You are working your way up. We are going to wait for you. Time is going to freeze, all eyes are on you. The Hunger Project with the aid of 500 million dollars from the XL Results will build the capacity in India of 5,000 elected women, women leaders, through local action campaigns, advocacy alliances, and media strategy. The partnership will boost of women elected to local government in rural areas throughout India and directly enhance access to health, nutrition, education, and better incomes for 15 million rural Indians. I am particularly proud of the fact that this commitment was inspired by the visit of President Clinton I was on to [inaudible] leaders in [inaudible] who are now in substantial in their community on the government level. Congratulations. [Applause] Thank you very much.
If I could get [inaudible] and [inaudible] to join me on the stage from the Haschu[misspelled?] Foundation. Very nice to see you. This really is a commitment that has some sting. Haschu Foundation is committed to empower woman in Northern Pakistan through the Women’s Honeybee Production Project. We are training micro finance and facilitating access to markets. The project will have a strong focus on developing the production of byproducts and creating linkages to markets and, as a result, will increase participants’ income and allow them to become more integrated in a decision-making process within their own communities. This commitment is expect to improve the incomes of 40 women and create at least two Honeybee associations in northern Pakistan.
Thank you very, very much.
[Applause]
Thank you all. This is what CGI is really about. It’s about the commitments, and I think those three were really representative of the great work you’re doing. Thank you.
GAYLE SMITH: And Sandy?
SANDY: A sample of the honey for you.
FEMALE SPEAKER: A sample thank you. My God.
SANDY: Well, we already started. We started a project. Alright, I’m going to eat my honey right now.
[Laughter]
MALE SPEAKER 2: I’m going to see my honey.
[Laughter]
GAYLE SMITH: Thank you all very much, and our next session will start fairly soon, but please enjoy the break, and thank you very much for attending and for your contributions.
[END RECORDING]

2007 Clinton Global Initiative - Poverty Alleviation

Here are the transcripts to more discussion involving theories and action plans to help nations coming out of crisis create opportunities for its citizens to break free from poverty.


Transcript
Poverty Alleviation: Emerging from Crisis and Investing in the Future
September 27, 2007

[THIS IS A RUSH TRANSCRIPT]

GAYLE SMITH: Friends, could I ask you to please take your seats because we are going to begin. Oh, that was good because you see the panelists are all ready to go. They very kindly pay attention to me for which I am very thankful. So let’s get started. And again we have got some seats up here. We may take some of you around to fill these up.
This is going to be a great panel where we are going to talk about crisis. And let me just say a word about why this is so important. When I cut my teeth on these issues I was transiting from being a BBC reporter to an NGO worker during the big famine in Ethiopia in 1984 and ’85. People kept telling me that all that wasn’t possible because this country was in crisis. And the fact of the matter is that people were still pursuing development. The international community wasn’t. But people never stopped trying to improve their lives.
What we have this morning is a terrific panel with a great moderator to talk about how we need to understand the connections between crisis and conflict and poverty alleviation. Now as you know we will move after the panel to table discussions and what we are going to be asking you is to think there are solutions. So as you are listening, think about solutions and creative ideas that can be brought to the fore to impact the kind of challenges our panelists are going to talk about.
You also have cards on your tables. If you have questions, as they are speaking, write them out, pass them to your table facilitators who are the brilliant people at the computers. And with that I would like to turn over to a very skilled moderator. A woman who herself knows the issues and a good friend of mine, Tara Sonenshine, to get us started.
TARA SONENSHINE: Thank you very much Gayle. Let me begin by having all of us, I think, thank President Clinton and CGI staff, Dale Smith, Dave Alback on these panels. I think they all deserve a round of applause. Thank you. [Applause]
Okay, let’s get to work. This session is a think-and-do session. We are not going to have endless intellectual arguments over strategies and how to intervene in failed states, and exactly when; I think we know some of the intellectual arguments. What we want to do here are solutions. The real let’s get down to fixing, not just roads, but fixing futures, not just turning on light, but turning on minds, turning on knowledge, information. We are not about to simply bandage band-aids. I think we are looking for what will systematically change fragile states, states that have been in conflict and people that are suffering everywhere. So, I’m going to begin with a macro-view and what better person to turn to than an economist, when you want a good macro-view. I don’t know if we have introduced all of our panelists but let me do that first. Paul Collier, how many of you have heard of The Bottom Billion? [Applause] How many books have you sold Paul?
PAUL COLLIER: Thirty thousand.
TARA SONENSHINE: Okay and that will be 30,300; I’m sure by the end of today. Paul teaches, as you know, at Oxford University and he has been a great expert for the British government on Africa and he has been at The World Bank. I’m going to start by asking Paul who this Bottom Billion is and how we are going to bring about some security for them. Paul.
PAUL COLLIER: Well, the Bottom Billion is a great spectrum of about 58 countries that are being essentially stagnate over the last three or four decades. And there is no one reason why they are stagnating. There are a few systematic traps, I think. But one of the most severe is the conflict trap. And the conflict trap works like this. The poverty and stagnation greatly increase the risk of conflict. Then, once you get into conflict that destroys the economy, it’s kind of development in reverse. And when you come out of conflict, which takes many years, the risks of going back into conflict are very much heightened.
On average, 40—percent of the countries that come out of conflict go back into it within a decade. Now the challenge is to change that number radically. And it’s feasible. And let me coin your phrase in what the real solution is. It just came to my mind, this wonderful new phrase, “It’s the economy, stupid”. [Laughter]
Now in a moment I will discuss how you fix these post-conflict economies. And it’s a matter of breaking the fuse for achieving bottlenecks. And that’s where we move from the general to what can people actually do.
TARA SONENSHINE: It’s a terrific start. I’m going to move now over to Ashraf Ghani who is Founder and Chairman of the Institute for State Effectiveness, a relatively new organization, 2005, I think, that is rethinking the relations between citizens, the state, and the market in a globalizing world. You know he was Afghanistan’s finance minister and earned the Emerging Market Best Finance Minister Asia award in 2003.
You know he was nominated for UN Secretary General, is that correct, in 2006?
You have, I have read, have been a critic of economics, at least of traditional textbook economics. So I’m going to give you a chance to be friendly but take on your colleague to the left who just said it is economics.
ASHRAF GHANI: On the contrary, I think it is economics. So on that we have no dispute. But the question is what Lord King said, can economists be as good as dentists? [Laughter] Then they offer practical solutions. This is the problem. The question is not what, the question is how. And, on the question of how economics has failed us rather radically.
There has been a double failure. It’s a failure of economic thinking in major developmental institutions because they have taken passion rather than fights. And it’s been the failure of a developing country that if they have not developed their own distinctness. Let’s take a country we don’t associate with conflict today. That [inaudible] was arguing in 1950s, that Singapore was going to explode. Of course Singapore exploded to growth, not to conflict. But how did Singapore do it? By ignoring all the conventional economics of the day. By counting its neighborhood instead of developing across national the economy it connected.
So, the issue here is need for novelty. We need to think in the novel ways and also fundamentally answer the question of how. Economics at the level of the textbook makes a series of assumptions that no CEO will run his business on the basis of.
Let’s explore the connection of economics and business. Harvard Business School is not run on the basis of economic thinking nor Stanford Business School. No CEO will operate from a textbook but developing country ministers are asked to operate on the basis of recommendations that are literally drawn from textbooks. Last are the patient numbers, the greatest difficulty I had. Practically, when I was in charge of an economy, is that our economic colleagues are very weak on the market. That they think the point is emphasizing but it is the economists who do because they take the market for granted. But the market is an institution that needs to be carefully nurtured and particularly the market in post conflict countries.
It is highly incrementalized. It’s an unlevel playing field and unless we focus on the building of creditable markets with creditable states we are not going to make move.
TARA SONENSHINE: Before I let Paul respond to some of that, I want to come to Betty Bigombe who is really an on the ground expert and peace negotiator who understands this at the very human level. Betty has been involved for many years, as you know, in peace negotiations in Uganda. She was a Cabinet Minister. Her initiatives brought together the Lord’s Resistance Army and government ministers. And in 1994, she was named Uganda’s Woman of the Year, and is now with the United States Institute of Peace as a Senior Fellow.
Betty brings this from the altitude, the big forest, the macro view to ordinary people. What are the problems you see in the countries in which you travel and work and how does economics and some of what we have begun to hear about set on the solution? What are the real issues on the ground?
BETTY OYELLA BIGOMBE: Thank you. Let me start by saying this, that when I was invited to be on this panel, my immediate reaction, I just bought Paul Collier’s book The Bottom Billion. So I was reading it with a lot of excitement and the next thing I was told he was going to be on the same panel as myself and I thought oh, my god, I can’t quote him all the time. [Laughter] So, I lost that. [Laughter]
Having said that, I’ve been dealing with children affected by war. That, maybe let me put it this way, in Africa’s population [inaudible] most countries and I do not have statistics with me, children or youth under 15. In my country, Uganda, 50—percent of the population are youth under 15. And—
TARA SONENSHINE: Fifty?
BETTY OYELLA BIGOMBE: Fifty percent.
TARA SONENSHINE: One out of two—
BETTY OYELLA BIGOMBE: Right.
TARA SONENSHINE: —Citizens are under the age of 15.
BETTY OYELLA BIGOMBE: Right. In the whole of East Africa it is 44—percent. but in most cases, interventions from the international community do not tackle youth and I think in particular in most conflict situations in particular, I think a lot of emphasis should be put on youth because indeed these are people that are going to take over, who are going to the productive, the most productive members of the community, and if not enough is invested in them then the country is lost.
Now I haven’t, I’ve seen some of interventions by the international community. Very well intention interventions. Let me bring you closer to what I have been dealing with. That there are children that have been affected by war. And with very good intentions some [inaudible] community come in with scholarship so that it is free education. In my country, Uganda has free education but when you look at the areas that have been affected by war, a lot of the children are still not benefiting from that free education. The reasons are they are so improvised that they can’t afford uniforms, textbooks, even pens. But more importantly, when you look at the adult education, which we are talking about all the time in the Millennium Development goals in my findings, and it really shocked me that even with full scholarship, a lot of girls were dropping out of school, or they were repeating classes. One of the main reasons is they don’t go to school three or four days in a month, when they are having their menstruation. So should we include sanitary towels be in the package for education? There is also sex abuse by the male teachers. Should we probably consider increasing the number of female teachers to provide this kind of protection?
Furthermore, I have seen how children that have participated in war, these are children who are deeply scarred. They are being brutalized but in turn they also been very brutal to their own community. And 99.9—percent of them when they come out and you ask them what they want to do in life, the first thing is, they all want to go to school. And again, in here some interventions have taken them to school. But without realizing that their needs are very different from the ordinary child that has not gone to school, that has not participated in war or affected by war. And the teachers themselves are also not prepared to deal with — they just simply do not know how to deal with such children.
So what I’m trying to say is that the package needs to see that counseling, I’ll give an example in one case where a teacher gave a bad grade to a child and she walked up to her and said you know how many people I have killed, why did you give me bad grade. And she screamed, the next thing is this child is expelled, instead of trying to find out what are their real needs are. How can we better address this situation? But—
TARA SONENSHINE: Yeah. Let’s pause there. I think you have given us a tremendous amount to build. Ashraf, do you want to talk from the Afghanistan point of view as to what issues, similar I’m sure, but also there are issues that have come up.
ASHRAF GHANI: Certainly, let me first take the question of the role of the private capital. And here is a success story. Eight hundred million dollars of private sector investment in telecom, two and a half million phones have been created within the next two years; another two and a half million phones are going to be created. Seventy percent of Afghanistan is covered now by mobile phones.
What did we do to get this and what we claim count to? First we overcame greed. Yet 100 mobile phones in 2002 and two major corporations, one European, one American, came and asked to be subsidized instead play on a level playing field. Second, we had to overcome our own corruption, because people wanted to make deals under the table. And that had to be prevented. Third, one had to get two essentials, risk guarantees from the United States that President Bush had to order the administration because they said Afghanistan is too risky. Why should we even go there? Second, Prime Minister Blair and Development Minister Claire Short made six of the best telecom exports in the world available to us for six months.
On that basis, a level playing field was created. Now the largest taxpayer in Afghanistan is the telecom sector. So the entire environment need not be ready the way we say, and all the institutions need not be in place to create meaningful investment.
Second, 23,000 Afghan villages today have elected leaders that have been elected on the basis of secret ballot. They spend $240 million in the course of last five years. Every single village in Afghanistan is entitled on the basis of very clear criteria. And here the key was to get the question of citizenship right. We think the poor have no use and cannot run their affairs. By contrast, they are the most adapt at making choices because on a daily basis they have to decided whether to eat or how to eat or who eats: is it the woman or is the man? Those decisions so what we did in Afghanistan, and I’m proud that Minister Abamar who was very instrumental implementing this program is with us, to design a program that empowered the citizens of Afghanistan to make decisions.
So a state building project today needs to think at bottom up approach for community empowerment. And the key here is we have been used because of 19th century science, an optimistic view of individuals. We need to rediscover social networks in communities and empower them to make decisions. Now the elected bodies are federated. And they have become the most significant lobbying group in the country for positive change. And here again the World Bank and a number of other organizations partnered with us to be able to make it possible.
That was phase one which was redistributed. Phase two is to ensure that they get power, electricity because that is going to be a very significant driver. Phase three is that at least 80—percent of them should be coming into prices. One has to think about new mechanisms that start from redistribution to create the institutional and social capital then to go to generate the financial capital but this requires working with very different building blocks. Then the system is operating because that view is struck down.
And we need to rearrange all the stakeholders, like Jules, and Jules is part of this program, of playing a very vital role in facilitating. But we should not substitute the relation between the state and citizen to a relation either between donors and citizens or [inaudible] and citizens.
They have different cults.
TARA SONENSHINE: Paul, pick up on that. You say in the book we don’t have a world government to set priorities and to bring all the stakeholders. Who should set priorities? We want to do so many things. We want to do everything. Who makes those tough choices?
PAUL COLLIER: Well I think the priorities have to partly come from a reflection of what are the realities on the ground. I agree with you Ashraf, the textbooks are basically written about developed economies and the characteristics of post conflict economies are highly distinctive. I’ll give you one example of a bottleneck that’s usually encountered post conflict, and that’s the construction sector. Post conflict, a lot of it is about reconstruction.
The sector which provides the reconstruction is the construction sector. Now during conflict what are people engaged in? They are not engaged in construction, they are engaged in destruction. And so the construction sector withers away. And so, after the peace settlement, you get a tidal wave of money trying to rebuild infrastructure which needs the services of construction sector which has withered away. And the construction sector is withered away but together with all the skills that that sector needs. The organizations aren’t there. The firms aren’t there. The mundane skills that construction needs aren’t all there.
Now not only can construction deliver infrastructure, fix the ports, fix the roads, and so on. It can also deliver the jobs for the young men. That’s a vital thing in getting us back to a secure peace.
TARA SONENSHINE: Betty, do you want to pick up on that because I know you have talked a lot about training and skill building.
BETTY OYELLA BIGOMBE: Yes, again to pick up on what Paul said is that emphasis is usually on infrastructure which is perfectly all right. But it needs to be balanced. And youth that have been affected by war, that also been some kind of offers in skills training. I’ll give examples in a few countries. The girls usually, the offerings in skills training is, for example, tailoring. But everybody: NGO, the World Bank, other donor communities, is offering training in tailoring. So you end up with thousands of tailors without a client. So it turns training of even the young people. That is which is fantastic because it gives them self [inaudible]. It gives them hope to start to pick up the pieces of their lives and do something.
But this is usually done without assessing whether, what the demands are, whether they will be able to get job or can get clients, or start their own small scale enterprises. So after this training, when there are no job opportunities or they can not set up their own small enterprises, they are just as frustrated like nothing has happened before.
If we look at Middle East, I was reading somewhere you find that one of the reasons that you know that feeling in the war, are young people who are not employed and they have no hope of you know, there is no hope in life. And so that is the easiest thing to do. Guns give you a status symbol. It gives you the power. You can free yourself on that.
So stability needs to focus on what in the next generation to be able to bring sustainable peace.
TARA SONENSHINE: Let me ask Paul and Ashraf both of you, I mean one could get confused here between whether we are alleviating poverty or growing economies and are we trying to do both at the same time and can they be done together? Paul and then—
PAUL COLLIER: Yes, to be honest, I think poverty alleviation has not been a good criteria by which to navigate. Poverty alleviation is an outcome of getting a gross strategy right but really you got to navigate on what are the bottlenecks and how you break them. If you can break the bottlenecks, you will bring poverty down.
So that sometimes means not directly targeting the poor. It means targeting the bottlenecks. Right? So, Betty gave a great example as it were unfocused, untargeted, unstratergic training, tailors. Tailors in a post conflict environment. What we need in post conflict environment is brick layers, plumbers, people who can build. Every time you create some mundane skills there, you can also employ a lot of totally unskilled people. But the unskilled people on their own are useless unless they are matched with some skilled people.
So a very simple thing to do, all right, sponsor a technical college that trains up the really mundane construction skills as a first step in reconstruction. Some African countries, they fail to do that. Libya: the costs of building a school in the last year have doubled because they just marched straight in to the bottleneck. There is no cement, there is no furns, and there are no skills, and this huge need and huge money. So the money is being dissipated in high costs instead of breaking the bottlenecks that have pushed those costs up.
ASHRAF GHANI: I mean to build on Paul. The first thing in the post conflict situation is conflict. You have to balance security, politics, and both simultaneously —
PAUL COLLIER: Yes.
ASHRAF GHANI: Because without that you really cannot create the environment for creating an economy. And in a post conflict situation I would not have dinner with my Cabinet colleagues prior to September 11th. I looked at them all like criminals. But politics requires, peace requires, making the use of those kinds. And it has to be recognized that there are real constraints and second, the global interest that make [inaudible] our colleagues. And if that is not recognized you are not going to get fraction. Second is that the current modality of global procurement of goods and services is anti-developmental because—
TARA SONENSHINE: You are saying its anti- —
ASHRAF GHANI: Anti-developmental of the local economies. I think Paul is mentioning the construction sector is given for company to bidding. But who comes to bid in a post conflict environment but the most corrupt firms. So formally you combine with criteria but none of these developmental institutions is focused on a really cohesive agenda. It takes maximum of six months to train all the brick layers, electricians, etc. It’s not rocket science.
That has not been done in a single post conflict action. You need supply chain management. Singapore did this to excellence and because of that 96—percent of housing in Singapore is provided by the public sector. You need insurance. You need operating, leasing operations. The building blocks of building an economy practically are what textbook economics; in general the developmental practices of these institutions fail to focus on.
So if we can focus on those things, we can get the fraction. And here comes the question of you. I did a very large survey in Afghanistan again. You know conflict is looming again. And I asked the people who carried out the survey what is the definition of mortality. And they said unemployed loot. For safety dollars, people have been blowing up bridges that have cost $500,000.
And we need to focus on the youth. They don’t want out. They want into the globalization process but unless we have an agenda of creating middle classes in these places and opening up the prospect of upward social mobility we really cannot rank peace. And that requires a double prospective, both the politics of hope and economics of growth. [Applause]
TARA SONENSHINE: Paul and then Betty.
PAUL COLLIER: I just look statistically at the, at what makes a country prone to large scale violence and the proportion of youth is the hardest significant factor. The more, the higher the proportion of youth, when you get to 50—percent under 15, you are living dangerously. And that’s because you just got to deliver jobs for ordinary young people. And that does take a distinctive approach. It’s not just the construction sector. There is lots more.
TARA SONENSHINE: Let me let Betty have a closing thought and then we are going to move into table discussions where we will ask you to stimulate discussion and really probe with some questions that we can take up after the break. So Betty, a closing thought and then we will go to table questions and Gayle will explain how that will work.
BETTY OYELLA BIGOMBE: Well just, thinking on what I should have tell Paul, I have not said, in what you know, what the perception in post conflict reconstruction. I think one million again that the international community go in with good intentions but and emphasis on infrastructures as we have said before but very little thought is given to the underlying causes of the conflict. It’s very, very easy and I think there are concrete examples of countries that have been at war and have very easily drift back in war situations. So a lot of times we are dealing with the results of the war. But not how the underlying causes of the war, which should integrate reconciliation between the communities, between the different groups of people in a country.
I just thought I would put a spill on that.
PAUL COLLIER: Thanks.
TARA SONENSHINE: We turn it back over to Gayle for some instructions on how the question period will work.
GAYLE SMITH: Let me just say ‘wow that was terrific’. [Applause] I think — I love it when economists talk about economies as though there are people in them. [Laughter] And thank you for that.
I think what we have heard is that after the chaos of crisis we unfortunately have the chaos of the international community promoting what we may think is rehabilitation and reconstruction but what is indeed complexity on top of complexity. But we have also heard a number of things from our panelists about what could be done and what should be done and what the solutions are. And what we would like to ask you to do is help build on this. And again you have all got a facilitator at your table and think about what two or three solutions based on what you have heard but also importantly on your own experience and whether it’s with conflict and crisis or not, could or should be developed by different sectors, whether it’s government, business, NGOs or individual citizens.
Think about it this way, you know, President Clinton at the conclusion of CGI in the big plenary does the presentations for commitments as we do here. Imagine it’s the last plenary and Bill Clinton is up there, and like me he has to wear these glasses to read his point, but he announces a commitment that hits it out of the park to talk about taking what our speakers have talked about, about investing in the solutions after crisis rather than making it more complicated. What would that look like? It is all to you and we will rejoin you in about 30 minutes. Thank you.
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[BEGIN RECORDING]
TARA SONENSHINE: Okay, we have some wonderful questions. I wish we could get to all of them, but I picked the hardest one for the panel, I think they were hoping to get the soft balls, but we’re going to take the first question, which was posed to everyone. What is your opinion of providing aid that is tied to government performance measures, i.e. transparency, and I certainly want to start with Ashraf, because he has looked at these issues of having you measure a states effectiveness, and let’s see whether we would all agree on some index indices, or some way to hold governments accountable on the aid question.
ASHRAF GHANI: Thank you. Claire Lockhart, my colleague, and I have just finished a book, Let’s Deal With State Effectiveness, and the core idea is that the modern state performs certain function in the political, economic, and social arenas. We have tested an approach [inaudible] two weeks ago, in villagers with incredible ease grading the performance of the government and the [inaudible]. We have to understanding state is actually not [inaudible], provided one begins with a certain perspective, because they are the people who make the ultimate judgment as to whether things are going right or things are going wrong. So we have to begin with that fundamental point.
Then on the question of what we are doing is to replace the double failure of the aid and any effective corrupt government with a double contact, a contact between citizens and their states, and a compact between the states and the international community. And this has to be right of obligations on both sides.
Designing systems of accountability is called to this. Public money has to be used for public purpose and when 80-percent of a country’s budget is stolen in the process of being transferred, that is not something that should be told. So I think we need to come. The issue, however, is, you know, this will shock you, none of the developmental organizations, has a manual for how to run the Ministry of Finance, right? You invent it, I invent it. But they should have assisted with the lessons, and I asked them at the World Bank two questions. What should the ministry of Finance do? What should it not do? All they brought me after six months were other cases of failure. But when one looks at the last four years, I think there has been enormous advance, whether it’s been Singapore, whether it’s been Ireland, whether it’s been the American South, where severe problems of governments have been overcome. We need to learn from this.
TARA SONENSHINE: Paul, do you want performance measures?
PAUL COLLIER: Governments should be accountable to their citizens, not to their donors. So that water should not be muddied. However, donors have got an important role in ensuring, insisting that governments are accountable to their citizens. And so I agree with Ashraf that if that donor should not be telling governments what policies to do or how they should spend money, on what they should spend money. But they should be conditioning on the basic processes of accountability, and goes there to be reported to the citizens at what the Ministry of Finance was passing to Governor’s of the state in Nigeria. And I think you had two responses to that, one was death threats, and the other was newspaper circulation in Nigeria spiked the day you published the numbers, because people wanted to know. So that’s the sort of thing that goes to reasonably insist on a transparent budget.
[Inaudible] who was at the practical coal face of doing this sort of thing in post conflict environment said what I need is not [inaudible], it’s accounting.
TARA SONENSHINE: Betty, one of the questions that came up for you, and it was a question that others, reverend Jackson raised when he came up, infrastructure in post conflict environments is critical. But then what happens to the issues, and the question for you was justice and reconciliation, as one example. Can you be going down multiple tracks of rebuilding roads, but also repairing relations between communities that have now become enemies of sorts?
BETTY OYELLA BIGOMBE: I would say that it’s not either or. All are very important, but since the issue of justice and reconciliation has come up, let me focus on that. And that conflicts situation, typical post conflicts situation, people are deeply scarred, deep distress in one another, and therefore reconciliation is extremely important, and sometimes I even say that before you prepare people for the development, take them to the development path, they need to be reconciled to be talking to one another, to have shared views and be able to prioritize their needs, instead of, you know, immediately packing their bags and giving them checks.
At the same time I would say that justice is equally important, because how do victims, victims in a post conflict situation, how do they perceive justice? If you have butchered my entire family, like the case what we’ve seen in Sierra Leone, Liberia, and northern Uganda, and Sudan, as well, you know that in the name of reconciliation, or in the name of amnesty, that the perpetrator is let loose on the street and, in some cases like I’ve seen in rehabilitation that the development partners go in and are trying to rehabilitate children who have participated in war, are generally all their rehabilitation, and totally neglecting victims or people who have not participated in war, so that it appears like the very people who are responsible for the death and destruction, are being rewarded. And so some people would ask a question like, oh, because we didn’t participate in war, we didn’t kill, so nobody is caring for us.
So I’m saying this because there is need to balance these things. So if you butcher my family and I see you being rewarded because you are former combatants, that has now come out, you are being rehabilitated, and nothing is, you know, I don’t have a family anymore, I don’t have property anymore. Certainly it’s going to hurt my feelings even more, and probably will turn into use my own means of, how people say, how victims say, well, I still have young sons growing up, they will one day revenge.
So for the sake of sustainable peace, you need to put emphasis in this, in that people have to learn to live together with one another while rebuilding the economy. Thank you.
TARA SONENSHINE: One of the other tough questions for all three of you are about investment guarantees. What are the best ways to provide investment guarantees for foreign investing to be stimulated in post conflict context?
ASHRAF GHANI: First I’ll pick. In the United States, it’s a very good instrument. To begin with, $50 million and that we ordered. Now the floor is one billion, and there’s no interest. Europeans they will not come to the table, I fail completely to get release, it’s a series of instruments, and mega was the worst. I had to pay $5 million of our own hard earned cash to secure mega and it took him three years.
They need to really change in terms of one has to shift the attitude from aid to creation of the market instruments. One dollar from some of the donors is worth ten cents on the ground to me because 90 cents of it gets to be captured back. So the first thing we need to do on aid is to inform the citizens of the United States and other countries as to how much of their aid is actually going to their intended countries, and how much is being captured by the [inaudible]. Unless the aid complex in some of the developed countries is broken, we’re not going to get a peace and security.
Prior to 9/11, you could say support, subsidize the private sector, it’s the most ineffective face of the private sector.
Second is technical assistance. Technical assistance today is the most unregulated industry next to [inaudible] industry. And unlike the industry, there is not even an initiative, a prosperity initiative. Five billion a year in technical assistance is going to Africa. No investment, four years of that investment could change the face of African education fundamentally. And we need to shift towards the positive. In terms of guarantees, foreign guarantees are essential for foreign business. But the most significant guarantee is for national interest.
In Lebanon, for instance, all foreign investment is guaranteed. Not a single guarantee for local Lebanese investments. So what is up, $80 billion was on deposit in Lebanese banking system last year when I did the stock taking after the war. No investment, we have to be able to create a system of guarantees to venture capital funds and others that allows the money to be used.
And my last observation, the world is a war treatment. There is so much money in Afghanistan or Sudan or other places, it’s really striking. But it’s not becoming capital. And the key to transforming it into capital is to create these instruments that then can be used to create meaningful jobs.
TARA SONENSHINE: Thank you. I’ll turn it over to Gayle to summarize all the findings from the tables.
GAYLE SMITH: And the findings from this side table is that we should put this panel in charge of organizing the international community’s response to post crisis situations. I think our table really did come up with a lot that is in the space of solutions, so let me go through this quickly, and it will also be on the screens behind me.
We have established a Training Without Borders program that could respond quickly and flexibly to crisis situations, to develop the skills necessary, especially among youth, to kick start the economy and reconstruction. That’s where you can put the accountants without borders.
MALE SPEAKER: [Inaudible]
GAYLE SMITH: Yes, employ the military and reconstruction efforts, swords to plowshares, institute leap-frogging technologies that rapidly reach a broad set of constituencies, wireless internets, cell phones, we’ve heard examples of these, they can be deployed very quickly, as we’ve heard. You don’t have to wait.
Continuing community empowerment initiatives that focus on youth employment, apprenticeships, and education. And again, tie this to what Betty and others talked about. thinking down the road, what is country X going to need, and use these initiatives to support that.
Support and improve the capacity of financial institutions everywhere, oh, excuse me, financial institutions tailored to post conflict challenges. And streamline access to investment capital, provide risk insurance, and other tools.
This is really strategically important. If there were packages of flexible, financial tools available post-conflict, a lot more could happen, a lot more quickly. Build a digital post conflict knowledge base that shows best practices in case studies, engaging local citizens and worldwide journalists and academics.
A real interesting point here is to engage some other than the usual suspects, not just the professional analysts, but reporters who look at this, academics who study this, and also local people who are at the other end, quite frankly, of our good will, but as we described earlier, chaotic good will.
Finally, a couple of gems. The first is to create a Nobel type of award with money for exceptional individuals who make a difference in post conflict situations. This is a great idea, we’ve got the Nobel Peace Prize, which gets the people recognized for getting the agreement done, but this is about recognizing the people who consolidate and move into the future. It would be a great way to give visibility to the importance of this phase.
The other is sponsor national and local sports teams with resources for equipment and travel, sports inspire community building for reconciliation. I was in Liberia recently and one of the greatest things I saw was the soccer teams that were from all different factions in Liberia, and it was, as I think you all know from your work, the one thing that pulls people together, even if I today still don’t even understand football. So with that, I’m going to turn it back over to you, and thanks, these are really, really great solutions from all of you.
TARA SONENSHINE: Thank you, Gayle. We’ll get some reactions, starting with Paul to some of these, and we’ll go around. And as we react, also your closing thoughts, which I think we’re probably moving towards. So, Paul.
PAUL COLLIER: I was really impressed by these ideas. Let me say one of the first recipients of the JAMA award would be Betty. I was just in Uganda two weeks ago, and I turned on the local radio and they were discussing the dangers of further conflict in the north. They’ve just discovered oil in Uganda in the most disastrous place on earth, underneath Lake Albert, in between northern Uganda, and the Democratic Republic of Congo. All right, and the border isn’t adjudicated.
And it was a phone in broadcast, this radio broadcast. Somebody called in and said, what we need is Betty Bigombe. I particularly liked the Training Without Borders program, I think that fits to the heart of a lot of issues, because one of the questions to me was about one of the other constraints, and there’s a broader capacity constraint. There’s a skill constraint across the border in these societies, a capacity constraint within government, it’s very severe, indeed. And a skills shortage within the society, because the skilled people have left, all right, they hemorrhage of immigration of skilled people during conflict.
So part of the established Trading Without Borders is to pull in the skilled [inaudible] to both to return home to use its skills and to be part of that training process. I think I’m kind of stunned you actually tried that, but usually it’s not tried.
So I’d like to congratulate you on some really innovative thinking. It’s tragic that in a few moments you can come up with things that are really innovative. If you think about it, it shows how feeble the intellectual effort has been on this topic.
TARA SONENSHINE: Are you going to field some of these ideas? If you wanted to comment briefly and then I’ll let Betty close and have some final thoughts.
ASHRAF GHANI: I think again, compliments to everybody. It shows the wisdom of a group. This is precisely what I was talking about, a network approach, rather than an individualized approach, because we have to shift from a charismatic view of change to system building. You know, the Japanese have built fantastic systems, but the inheritors weren’t religions and other traditions still believe in the profit to deliver. We cannot count on charisma, we have to build up systems, and it’s part of that that this Training Without Borders becomes so fundamentally important. Let me mention one neglected community that could play an incredible role. Lawyers who would negotiate with and on behalf of some of the poorest countries in the world. We literally lose our shirts in negotiations because the legal playing field is totally uneven. But Afghanistan, when I was away from the country briefly, for a dollar, 60 years of concessions, for oil have been granted. Violating our constitution, et cetera. We stopped it. But what kind of corruption takes place in this.
And the second issue that I really want to highlight, that's been highlighted here is the question of design of infrastructure. Leapfrogging in design is absolutely essential because a lot of the infrastructure that is being designed for the poorest countries of the world is design of six years ago. Those standards need to be revisited and leapfrogging technologies become essential. Concluding point in this, without power, without electricity, you are not going to get empowerment of women, you're not going to get children to learn, and you're not going to facilitate access of the most rural communities to the market. So, it becomes really important to think through about rethinking the grid and alternative sources of energy. Nepal Indus River is really a great example. 35-percent of Nepal's villages now have micro hydro based power. And what is really important to use carbon trading fund as a mechanism to get to the communities directly. So, we need a global and a local linkage that bypasses a lot of the complexities of development institutions that have created such huge bureaucracies that then decision makings are allocated rather than shared.
TARA SONESHINE: Thank you. Betty, some closing thoughts?
BETTY OYELLA BIGOMBE: Yes. First of all, I'd like to congratulate all of you for these proposals that you've given to us. I think you've all become experts in post conflict interventions. I want to just underscore what Paul touched on, and that is on capacity, and specifically capacity in government, in a typical post conflict situation. And I would give my own example that I remember after all the wars Uganda had gone through and we came into government. And when we came into government the appointments were not based on merits. Appointments are usually based on who fought most, which faction has a leader, which rebel group, the leader of the armed groups have to be included in the government or in cabinet so that they feel important and do not go out to start war again. So, in a typical post conflict situation capacity of the government is extremely weak. And so I remember UN delegations coming, World Bank, NGOs, and we were just giving out shopping lists, shopping lists. We didn't even know the difference between NGOs and the UN.
And so, immediately you're taxed with dealing with a very complex situation of rehabilitation without being prepared, adequately prepared to know how to deal with that situation. And this is sometimes where we do not achieve our objectives.
Just a little mention of what is come in here. I think it is about the empowerment of the community. I just want to emphasize that that is certain empower of community to, community initiatives that focus on youth employment, apprenticeships, and education— I think that's one very important way of building sustainable peace. Thank you. [Applause]
TARA SONENSHINE: Thank you. I just want to close by thanking our panelists. I'm reminded, sitting here, of the parable of the man who's lost in the forest for three days, wandering, wandering. And finally sees another man—and maybe you all know this— and he says, thank goodness, you'll lead me out. And the other man says; I've been wandering in this forest for three days myself. And there's a long pause. And then it dawns on them, well if we pair up together, we know the roads we've already tried. Perhaps together we'll find the path forward. And I hope with all your help, and yours, we will find a path forward. So, thank you to all three of you. [Applause]
I now have the pleasure of introducing and saying a few words about this session's commitment certificate presenter. And I am honored, really, to say a few words about Antonio Guterres, our United Nations High Commissioner for Refugees. As you know, he's the former Prime Minister of Portugal from 1996 to 2002. He spearheaded efforts to resolve the crisis in East Timor, he was President of the European Council during which time he chaired the first EU-Africa Summit. Would you join me in welcoming United Nations High Commissioner for Refugees, Antonio Guterres. [Applause]
ANTONIO GUTERRES: Well, first of all, I want to thank you very, very much for these debates and for the commitments that are very central to what I do now. The most rewarding activity of the United Nations High Commission for Refugees is to help people come home. To help people come home voluntarily in safety and dignity. In 2007, in the first half, we have helped half a million people go back to Afghanistan, to Burundi, to Southern Sudan. But it causes us an enormous dilemma because we have lost ourselves, even if they do it voluntarily—and refugees want to go back home. What is going to happen to them? And many of the refugees of yesterdays will become the migrants of tomorrow because there is nothing they can do to rebuild their lives in the countries where they go back home. These are a big challenge for the countries themselves and, of course, capacities are necessarily not yet there in the post conflict situation, but it is an enormous challenge for the international community. And I'm speaking now mainly of the community of donor countries, of the international financial organizations and the UN system because, let's be honest, this group does not know how to address these situations. They tend to do business as usual as if it was a normal development process. It is not the case. And so the interventions massively fail. And that is why these commitments are very important because they help to build the knowledge base for a different way for the international community to address these situations and to effectively help these countries to rebuild their futures.
And the first commitment comes from Ashraf Ghani, Chairman of the Institute for State Effectiveness and Clare Lockhart, Executive Director of the same Institute—a commitment of $40,000,000 to building mechanisms to create wealth and prosperity for the world's poor while promoting approaches that will tackle climate change. And the Institute is creating and implementing national frameworks and programs for public financial management, which unlock hidden sources of wealth and revenue for the world's poor. These mechanisms will link the imperative to address global warming and the increasing vestment available to governments to reduce poverty. Resources will be mobilized to create sustainable jobs around the implementation of energy, transportation, hot water, and housing programs in the poorest countries. And this program will directly impact the cities in the five of the poorest countries in the world. [Applause]
The second commitment comes from a Swiss company, Swiss Reinsurance company, for me working in Geneva today is a particularly happy thing to do. And a commitment of developing, structuring, pricing, and implementing financial risk transfer solutions, providing protection for low income people in developing countries from drastic events related to climate change and other unexpected external forces. It's a commitment of $20,000,000 over 14 months and I call Mister Christian Mumenthaler, yes, the Chief Risk Officer. [Applause] Now the company will develop new financial risk transfer instruments with the aim of providing up to 18 million of weather risk protection for small farmers in developing worlds. And as a pioneer in risk insurance, the company will offer its expertise and dedicated team of specialists to develop, structure, price, and implement these innovative financial solutions that support adaptation to the consequences of climate reliability in low income countries. As a result 600,000 people will get additional protection. [Applause]
Now the last commitment, I would call Richard C. Blum, Chairman of the Blum Capital Partners, George Schafenberger, Executive Director of Blum Center for Developing Economies of the University of California, and Erica Stone. Are you around? Yes. Well, this commitment of the Blum Center for Developing Economies and the Center for Information Technology Research in the Interest of Society—CITRIS—of University of California is to increase access to tools of communication by lowering costs for the underserved and extending the service reach of existing telephone operators. $5,000,000 over five years and aiming to alleviate the burden of poverty and to increase access to information by lowering the costs of communications for the underserved and expanding the service reach of existing telephone operators. And by developing a new generation of cell phones and the implementation of new services working to empower and help lift 1 billion underserved, illiterate, and remote rural residents up from poverty. [Applause]
All the best. Thank you very much. This was a wonderful session. [Applause]
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