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.
[END RECORDING]
[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]
[END RECORDING]
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