Building global governance around the human being

This is a transcrip of speech by Minister for Foreign Affairs of Singapore, George Yeo at the 2008 S.T. Lee Project on Global Governance Conference, 4-6 December in Singapore.

First let me thank Kishore for inviting me here this evening to join you for a discussion on global governance. I feel very honoured to be paired with Strobe Talbott, whose speech I enjoyed very much. A few weeks ago, Ann Florini sent me his book – The Great Experiment - which I dipped into with pleasure. He had a section on gypsies which I really enjoyed reading. It reminded me of a conversation I had with a Roman Cardinal some years ago when I was in Rome attending the canonisation of the Opus Dei founder Josemaría Escrivá. The cardinal said that John Paul II had not too long before, canonised a gypsy saint; and St Peters square was flooded with gypsies. But this time in a role which most Italians were not used to seeing. The Roman Cardinal said to the gypsy leader: “Now that you have your own saint you have got to behave better.” The manner in which he narrated this story to me showed first, recognition of the problem, then a challenge to better behaviour but, most importantly, love, profound love. Reading Strobe Talbott’s account of the gypsies in his book, how he sought them out in order to understand better, I thought that this is a man with a heart. I had not met Strobe before and am very proud to be joining him this evening for this discussion on global governance, which must always put human beings at the heart of what we are trying to do.

There are almost infinite ways in which human beings can be organised. That is the study of history, and gypsies who are unrooted in geography are an example. For the first time, more than any other time in history on this planet, we are all bound together. Yet at the same time, each community, it could be a nation or tribe, has centuries if not thousands of years of legacy transmitted through its cultural DNA, which is very difficult to change. There was a time in Australia when they thought that they could pole-vault the aborigines into the 20th Century by taking the young away from their parents and then educating them in a modern environment. The result was an absolute tragedy. We do not quite know how the cultural DNA is transmitted from mother to child. We know it takes a village to raise a human being. In ways, we do not fully understand, the cultural transmission is tenacious. When we talk about globalisation, we are talking about the way in which we bring different complex operating systems together. It is like the internet. The internet was an ARPA discovery. That by each operating system accepting a certain protocol, TCP/IP, different systems could interconnect even though they have different legacies and different deep programmes. Built upon this, through hyperlinks, we could communicate as if we belonged to a common system. In some ways, this is what globalisation is. Through common rules, such as those of the UN, rules of warfare, rules of human conduct, rules of trade in WTO, rules of financial management in BIS, and so on, different countries and different systems are able to come together resulting in a greater division of labour and greater productivity for humanity as a whole.

The recent financial crisis is a crisis of that hyperlink, or an aspect of that hyperlink. The global imbalance - so much has been written about it, this is not the subject which I am going to talk about tonight. Except that the financial crisis is a problem of the higher system which links us all together. Strobe talked about President Bush convening the G-20 meeting to address the problem, of this hyperlink or the hyper net. But if you look deeper into it, stripped of all the extraneous aspects, the core relationship in the 21st Century is the relationship between the US as the world’s sole superpower today and China as an emergent superpower. I am not discounting the importance of Europe, Russia, Japan, Brazil or India – after all we are talking about the multi-polar reality this century - but the core is the Sino-US relationship. If we get that right, I believe the other poles can be fitted in and the global system can run reasonably effectively. But if that nexus between the US and China is broken, there is no way we can put the global system together. Whether it is a problem of proliferation or climate change or financial stability, without the US-China nexus, it cannot work.

This evening, I would like to talk about this critical relationship in global governance - the Sino-US relationship. These two countries, China and US constitute very different operating systems. Singapore is a point, a city state and we take the world as it is. We do not try to change the world because we cannot change the world. But, we got to adapt to it and live by arbitraging differences in systems, cultures and so on. We are three-quarters Chinese, so we have a certain familiarity with the Chinese system but we were established by the British East India Company. We use English as our common language for communication. Our legal system, our administrative systems, are all Anglo-Saxon in origin. There is a lot of the Anglo-Saxon world in us. When we deal with the Chinese, we switch to our Chinese channel, when we deal with the Americans; we switch to our American channel. We do this almost instinctively because we are taught at a young age to adjust to different groups and different combinations of groups. This is really what defines Singapore - our multi-channel characteristic.

But going back to China, to what it is, and why it is so different from the US. China is China. China is a highly evolved civilisation which is almost impossible for any individual or group of individuals to change rapidly. Mao Zedong in his final days said he achieved very little. This was by his own admission. China has a tradition, what Fairbanks called the Great Tradition, which is persistent and enduring. Some years ago, when I was Minister for Heritage and Information on a visit to China, I asked to see Mao Zedong's hometown Shaoshan in Hunan. I visited the museum which had the usual political presentation. But next to the museum was the Mao ancestral temple which to me was far more interesting. In front of me, on the high altar, tablets of the most important forebears, an urn with incense burning, and Mao was on that altar.

Recently when I had dinner with a cousin from my ancestral village in southern China, we were talking about the Hakkas, you know Lee Kuan Yew is a Hakka, and an important town in Guangdong is Meixian where Ye Jianying, came from. Ye Jianying was the man who protected Deng Xiaoping from the Gang of Four so that after Mao died, he could be resurrected, and his leadership changed China. He told me that if you visit Ye’s ancestral temple, you would find many great men in that family tree. It is a glorious ancestral temple.

A few years ago I went back to my ancestral temple. They were re-opening one branch and I had to do the ceremonies. I could not say no because it would look very bad if I were to deny them that honour, if I were to decline their invitation. After the ceremony I asked to record the names of my children in the ancestral book. When I said “My daughter's name is . . . “, they said "Oh, girls do not have to be recorded, only your sons". My sister who was with me grumbled "You see, when they want money, they contact you, when it comes to recording who you are, they ignore the girls". But the daughters-in-law are a separate matter. I have a nephew whose daughter-in-law is British, and they wanted her name. They said "What's her name?" “Jane Goodall.” “How do you write it?” "J,a, ". They wrote it down letter by letter. Sons and the wombs bearing sons are recorded. Throughout Southern China, despite all the official talk about Communism and so on, an ancient tradition is coming back with amazing force. Every Chinese Minister, every State Councillor, every Vice-Premier, every member of the Standing Committee is being claimed by his ancestral temple because it brings honour to the ancestors, it brings honour to the progeny. Listening to Hu Jintao in recent years, he talks about a harmonious society and you notice they downplay the dictatorship of the proletariat and the class struggle. They have gone back to Confucius now. This Confucian aspect of Chinese society is deep in the cultural DNA and not something which can be willed away. Yes, when you're trying to overthrow the emperor or government, you debunk Confucius but when they re-establish power, they bring it back.

China is a country, indeed it is a civilisation, with a deep sense of itself. Every dynasty considers it a duty to record the history of the previous dynasty, and over the centuries, 24 official histories had been written, astonishing in its accuracy with respect to names, events and geography but always exaggerating triumphs and failures. Today, the history of Southeast Asia, the history of many parts of the world including India and Central Asia, would not be a fraction of what it is without reference to the Chinese records. The last Chinese dynasty was the Qing dynasty which ended in 1911. It is only a few years ago that the PRC decided to write the official history of the Qing dynasty. After close to a hundred years! Li Lanqing, the Vice-Premier, spoke to the scholars and the historians before they embarked on this exercise: “Collect the material - local sources, provincial sources, foreign sources - but do not be too quick to draw conclusions”. This is an instinct or a worldview which no other civilisation has. The Chinese have no desire to convert a non-Chinese into Chinese. They are like the Jews, if you not born one, that is okay, there is no requirement for you to become one. But for precisely this reason the Chinese have a view of the world which sees globalisation in terms of China at the centre, and China's relationships with other countries individually. The idea of a melange, a complex network with multiple nodes, is something not comfortable to the Chinese. This is in stark contrast to the American view of the world.

The first time I was in China to visit my grandparents, I went with my parents. My experience was a deeply emotional one. It was the only time in my life when I kept a daily diary. When last year I read Obama's book Dreams from my Father, going through his last chapter on his visit to Kenya, I felt a strong resonance. Obama felt he had to go back to find out where he came from, the way I felt I had to go back to find out where I came from. It is emotionally entangling because you have all these relatives and obligations, elders who make claims on you which you resented but which you felt you have to oblige to a degree because it is expected of you. Then when you left, you felt a certain relief but also feeling a compulsion to come back from time to time. And a few years later, I brought my wife, after I got married, to see my grandparents.

Obama brought his wife back to see his roots in Kenya. For that reason, he is a very unusual person because of his background. He said when he went back to the US, he felt a certain liberation. And indeed Asians visiting the US breathe fresh air because it is a country which downplays tradition. You can be who you are, you can express your views freely, and you are under not too many obligations. Every time I visit the US, I try to visit heritage sites in New England, Monticello, Mount Vernon and Philadelphia, reading the speeches of the founding fathers, the deliberations that led to the founding of the republic and the writing of the Constitution. They are deeply inspiring, because here were a group of men, people who left Europe, who were persecuted in Europe, arriving on a new continent determined to create human society afresh. In Obama's speeches, you hear echoes of the founding fathers. Because the US was conceived in that manner, it has a different culture; it has a missionary spirit, wanting others to be like them. So unlike the Chinese who do not seek to convert you and make you Chinese, Americans want you to become American because it is such a good thing.

If we look at globalisation today, it is really an American construct, the hyperlink - the HTML language, the XML language - is basically an American language. It is expressed in accounting rules, financial rules, the way armies are organised, industrial standards, financial standards and so on. The problem is when the US becomes excessive in this missionary zeal. Political scientists like Kissinger talk about the dual strain in American foreign policy. There is the national interest which defines the foreign policy of all countries, but there is in American foreign policy always an additional strain, a call to an American ideal, a desire to spread the word, to democratise the world. To a point, that is very attractive and to an extent it enables the world to be globalised. But beyond a point, when you start intruding into the deep operating system of particular countries or tribes, it creates problems.

When America goes into Iraq and tries to democratise Iraqi society as if it has no legacy, you have a problem. When it goes into Afghanistan, and tries to overwrite deep tribal instincts, it runs into problems. I was in Iran a few years ago, in 2004 the year after the US moved into Iraq. It was a very interesting visit; I went to Persepolis and had a sense of how the Iranian saw themselves as being an ancient people with a long history. Someone in my delegation on the last day decided to ask the protocol officer who accompanied me a provocative question. He asked him. “If the Americans were to invade Iran, would you fight the Americans?” His reply shocked me. In a loud voice he said, “Fight them? I would lead them in and show them the way.” I was worried for him. He spoke at such a high volume I thought that they would immediately arrest him and throw him into some dark dungeon. In fact if you meet ordinary Iranians, there is a great affection for American culture. Of course, in the establishment, among the elite, there is a strong nationalism that would not buckle to American pressure. American culture can be very attractive, propagated through Hollywood, through its products and services, its brands or the ideas of its founding fathers. But when the US seeks to go beyond that, it finds resistance and limits.

When we talk about global governance and America leading the way, there is no substitute for American leadership because the software linking the world is fundamentally American. The Chinese cannot do that. The Indians cannot do that. The Europeans cannot do that. The Japanese cannot do that. Look at it another way, if one day planet earth were in danger and the only way to preserve the species was to colonise another planet and we draw people from all over the world for that journey. How will human society be organised in that new world? I believe that society is more likely to be like America rather than China, India or Japan. Recently the Chinese had a man walk in space, and being ethnic Chinese, many of us in Singapore felt proud of the achievement. When you watched the people in the Chinese control room cheering, they were all Chinese faces. But when you watch a space launch in the US and observe the people in the control room, they are individuals drawn from all of humanity. If one day there is a Spaceship Enterprise, the Captain can be white, brown, yellow or black and we would not be surprised.

Coming back to the issue of global governance - America has to lead, but America has to lead in a way which acknowledges the diversity of the human family. Whether you are a gypsy or an Australian aborigine or a Chinese or Indian – in fact there are many kinds of Indians - or Arab or Jew, each is profoundly different. Yes, there are similarities which enable us to intercourse like we do this evening. But when it is time to marry off our young, when it is time to conduct funeral rituals, we are different and we have no wish to be the same. Please do not get me wrong when I talk mostly about Sino-US relations. It is not because I am downplaying the importance of Russia, Europe, Japan, India or Brazil or other countries but because I believe in this century that is the single most important relationship to be concerned with.

I would also like to make a brief comment about Islam because I believe Islam is a big challenge to all of us in this century for a variety of reasons. We need more than a seminar or a speech to talk about why Islam is a challenge in this century. Just yesterday, I had a very interesting discussion with the Aga Khan. I was charmed by him. I was so impressed by his sense of humanity and he is the Imam of the Ismaili Shia community! There are 15 million of them in the world. I thought, this is a very different perspective of Islam which we are not used to seeing. For many of us, in many parts of the world, Islam is associated with terrorism, blood and violence, with men wearing turbans and beards. Yes, there is an aspect of Islam which is Salafi, which enabled Muhammed in the 7th Century to unite the tribes of the deserts and steppelands, which many centuries later, also enabled Abdul Aziz Saud to reunite the tribes of the Arabian Peninsula. But that is only one aspect of Islam. There is also the Islam of Samarkand, Bokhara, Damascus, Baghdad, Cairo and Cordoba which represented a great civilization. We are in the middle of a financial crisis. There is so much written about it. I was reflecting on the Muslim proscription against insurance and interest payment. We used to laugh at these strange proscriptions but there is wisdom in them. The underlying concern is about moral hazards when the interests of claimants diverge. When we look at the problem of the financial world today and what led to the crisis, it is because the interests of claimants are opposed. So there is something in Islamic finance which makes a lot of sense. It is important, even as we fight terrorism, to see the achievements of Islam - to celebrate a civilisation which is so well presented in the Musee d'Orsay in Paris, which you can see today in Doha in the new Islamic Centre designed by I M Pei, in the Aga Khan. They enable us to view Islam in perspective and sow greater respect between Muslims and non Muslims. This is very important because, without respect, we cannot deal and, if we do not deal, we suboptimise on the solutions we find.

An Indonesian Minister told me this a few months ago. It was a story that I could not recount earlier because it would be interfering in American domestic politics. He said that at a reception in Washington, he saw Obama whom he knew from before across the room. Obama shouted at him “Assalamu Alaikum” and he replied “Alaikum As-Salam.” I was afraid that if I were to repeat the story during the campaign, it would give credence to internet reports that Obama was a closet Muslim. He is not a Muslim. He expressed that greeting not because he is a Muslim but because he understood the words, may the peace of God be with you. There cannot be a better greeting than that.

When we talk about global governance, when all is said and done, it has to be built around the human being – respect for human beings, respect for the diversity of human beings. I can never forget what the Roman Cardinal told me. He served the Pope as the secretary of the Synod of Bishops. He has passed away now. He told me how he drafted a speech for Pope John Paul II to bishops from around the world, saying the “even though we are different we are one”. The pope said no, it is because we are different that we are one. In other words, before we can love, before we can respect, we must respect the uniqueness of every individual. If we are all the same, something is very wrong. Countries are different, tribes are different, cultures are different, and in global governance, the basic building block must acknowledge that diversity and that difference. But that which binds us all together, that hyperlink, that for a long time will be American in its essence.

Minister George Yeo's speech on Global Governance, Part I, 4 Dec 08 @ Yahoo! Video

Minister George Yeo's speech on Global Governance, Part II, 4 Dec 08 @ Yahoo! Video

A bless in disguise?

Johannes Linn and Colin Bradford of the Brookings Insitution point out in their latest paper titled "Could the Financial Crisis Push Global Governance Reform?" that the Nov 15 economic summit in Washington DC of the heads of state from the G20 industrailised and developing economies could represent a major step toward a new architecture in global financial and economic relations as a first step in global governance reform more broadly.

The Nov 15 summit will be the first ever meeting of G20 countries at head of state level and gives the next president of the United States an opportunity to demonstrate a commitment to the G20 as a better global steering committee than the G7/8. Read full article.


Colin Bradford will take part in the inaugural launch of the S.T. Lee Project on Global Governance conference - a multidisplinary reseach project of the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy.

Why Asia stays calm in the storm

What does the Asian silence on the financial crisis really mean? Does it mean silent gloating, with a heavy dose of schadenfreude? Does it signify terror that Asian economies will also be blown away? Or does it reflect a sober calculation that calm and steady heads are required in such a storm? Amazingly, in the thousands of words spun in the incestuous western discourse on this crisis, little attention has been paid to Asian views, even though the calm and steady responses of China, India and Japan, the three anchor Asian economies, provide hope that there may be some pillars of stability in the swirling storm.

There is little gloating in Asia, even though some would be justified. In many ways, US and European policymakers are doing the opposite of what they advised Asian policymakers to do in 1997-98: do not rescue failing banks, raise interest rates, balance your budget. Millions of Indonesians and Thais would have been better off if their governments had been permitted to do what western governments are doing now. An apology from the west to Asia would not be inappropriate.

Nor are the Asians terrified. They learnt many valuable lessons from their financial crisis in 1998: do not liberalise the financial sector too quickly, borrow in moderation, save in earnest, take care of the real economy, invest in productivity, focus on education. Hence, while America was busy creating a financial house of cards, Asians focused on their real economies. This explains why the latest International Monetary Fund growth rate estimates for 2008 and 2009 for China are 9.7 and 9.3 per cent; and for India, 7.9 and 6.9 per cent respectively.

Equally importantly, Asian minds have never been captured by the strange ideological belief that markets know best and government should step aside. Most Asian policymakers are puzzled by former US president Ronald Reagan’s statement: “Government is not a solution to our problem, government is the problem.” Alan Greenspan, former US Federal Reserve chairman, only recently admitted the folly of his ways when he acknowledged that lending institutions could not regulate themselves. By contrast, virtually all Asian governments believe that the virtues of the “invisible hand” in the market have to be balanced by the “visible hand” of good governance. This Asian emphasis on good governance may serve as a real asset in the storm.

In the past, Asian governments expected western counterparts to be role models of good governance. One story illustrates how times have changed. This year, a European banker consulted the Reserve Bank of India to learn how to get a banking licence in India. He was briefed on the conditions and told that the Indian authorities would also assess his regulator. The European banker smiled and said: “No problem. We have excellent regulation.” The Indian officer replied: “After subprime, we are not sure of US regulation; after Northern Rock, British regulation; after Société Générale, French regulation and after UBS, Swiss regulation.” In short, the gold standard that the west assumed it had in the field of regulation has vanished. Asians realise that they must forge their own standard. Fortunately, there will be no rush to overregulate. Tony Tan from the Government of Singapore Investment Corporation said: “We should guard against overregulation and protectionism and a retreat from globalisation.”  His comments reflect an Asian concern: that the Americans and Europeans, hitherto the custodians of the liberal international economic order, will retreat into protectionism. Asian societies also know they are becoming the biggest beneficiaries of globalisation and must assume greater responsibility in stabilising the economic system.

As the world’s greatest emerging economic power, China has acted remarkably responsibly in this crisis. It has received with polite dignity the western bankers coming cap in hand to seek money. It did not remind them that barely a year ago many of the same bankers had castigated it for its conservatism in opening its financial sector. That caution has been vindicated. More importantly, China has continued to buy US Treasury bills at a steady pace to reassure the market it has not lost faith in them.

The Asian governments demonstrated their calm at the Asia-Europe meeting in Beijing last weekend. The premiers of China and India, Wen Jiabao and Manmohan Singh, gave thoughtful speeches. Sadly, the western media barely reported them. Mr Wen emphasised the development of the real economy; Mr Singh said: “In this age of globalisation we have a global economy but it is not supported by a global polity to provide effective governance.” Asian leaders have good ad­vice to offer. The west should pay heed.

While the US and European publics are losing faith in free trade, Asian economies continue to work on free trade agreements. Few westerners are aware China and the Association of South East Asian Nations have concluded an agreement that will create the world’s largest FTA, with 1.7bn people. Japan and India have similar FTAs with Asean. This growing interdependence will act as a pillar of stability and growth for the global economy.

The really good news is that few Asians have lost their optimism about the future. They have no illusions about the crisis but are confident that they remain on the right trajectory to deliver the Asian century. This is why the key Asian economies will react calmly in this storm. Confidence in the future is a great asset in such times.

This article was first published in FINANCIAL TIMES.

Kishore Mahbubani is dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. His new book is titled: The New Asian Hemisphere: The Irresistible Shift of Global Power to the East.

Do Chinese lie?

Charles W. Hayford of AsiaMedia surveys three books: Chinese Characteristics; Americans and Chinese: Passages to Difference, and Lies that Bind: Chinese Truth, Other Truths to illustrate how the discussion of Chinese and Western perceptions of honesty has progressed over time. Read full article in AsiaMedia.

Time for an Asian Social Stock Exchange

As I write this article, the storm in the financial markets continues -- stock markets in Asia, Europe and the US all are going through roller coaster rides, people fear bank runs and governments are pulling together trillion dollars worth of rescue packages. In this sadly crazy historic moment, when every current option is looking bleak and governments are busy cleaning up the private sector mess, perhaps it is a good time to look some distance into the future toward a gleam of hope for a kinder and gentler form of capitalism. My suggestion for that is to put together effective regional 'social stock exchanges' in each continent that can spearhead social good through capital markets. I believe Asia is ripe to take the lead in meeting this challenge.

What is a social stock exchange? It is a stock market where investors who care about social and economic returns buy stocks and bonds of companies that have strong economic and social returns. Interestingly, in a social stock exchange both not-for-profit and for-profit companies can participate. For-profit entities can either issue shares representing ownership in their companies or issue bonds. Meanwhile not-for-profit companies can utilise the stock exchange to issue bonds an action in itself that can bring operational accountability to the not-for-profit sector (as opposed to carte blanch donations from foundations).

Although Professor Muhammad Yunus discusses the idea of a social stock exchange in his latest book, Creating a World Without Poverty, and has been promoting it in lecture circles, the concept is not a new one. There are already several Social Stock Exchanges in operation or in the works, albeit each uniquely different from one another.

BOVESPA in Brazil was the first social stock exchange in the world. It was launched in 2003 with the objective of bringing together non-profit organisations and the social investors who are willing to support their programmes and projects. For BOVESPA investors, the return is solely in 'social profit,' where the investment brings about a more just society with opportunities for the poor and neglected. By providing capital for the non-profit organisations that list on this exchange and the providing social value for the investors who participate in this exchange, BOVESPA aims to change the labeling of non-profit organisations to 'Social Profit Organisations'. So far about 43 Social Profit Organisations have raised capital through this exchange. However, trading of stock in this exchange is still a distant goal.

Europe's answer to social investing is the FTSE4Good. Set up by FT Stock Exchange in London, FTSE4Good is an index for socially responsible investment. The definition of 'socially responsible' for this index is very broad and covers topics such as: working towards environmental sustainability, developing positive relationships with stakeholders, and upholding and supporting universal human rights. There are about 25 companies in this index. Given FTSE financial requirements, these companies are large for-profit entities which in many cases have very tangential effects on positive social change. Their 'social mission' often springs from the defensive posture of CSR rather than from a genuine effort to make positive social impact.

In North America, Green Stock Exchange (GREENSX) is attempting to become the Social Stock Exchange for that continent (and Europe). This Canada-based social stock exchange is aiming to launch by end of the year to trade shares in social businesses. GREENSX's definition of social business is a business that makes a profit but benefits society as well delivering a triple bottom line return (economic, social and environmental return). GREENSX's goal is to provide small green issuers access to public equity capital efficiently while ensuring liquidity for the investors. The success of GREENSX remains to be seen.

There is obviously a budding global interest in the notion of social stock exchange. Recently, Rockefeller Foundation donated $500,000 to the UK government to pay for a feasibility study for a social stock exchange. The Foundation picked UK as the site for the feasibility study because of the UK government's support for social enterprises. Existing UK government initiatives include legal reforms for separate incorporation for social businesses and plans for a social investment bank funded with unclaimed assets held by financial institutions.

All this is encouraging in a global perspective; now, how about Asia and, in particular, Bangladesh? Bangladesh is a country that continues to produce remarkable social enterprises, and given the state of the country and the world, it can be expected to keep the pipeline of social innovation flowing. The limiting factor is, of course, capital. Let us move a few degrees east in longitude, and there is a country, which -- though a small dot on the map -- is wealthy, is a player in the financial markets and is itching to make a mark in social business. This country is, of course, Singapore. Singapore is ready, able and perfectly positioned to be the home of Asia's first Social Stock Exchange. Bangladesh is ready, able and perfectly positioned to pepper that exchange with very effective social businesses. This is a match made in financial heaven.

Now, what's the next step? It is very simply for the Bangladesh government to have the vision and desire to initiate a ground-breaking discussion with the Singapore government. Bangladesh is well positioned to make its mark in the next economic revolution of conscious capitalism. It can take its rock star social entrepreneurs Yunus and Abed -- and get them to perform the ground-breaking concert for the social stock exchange for its potential partner Singapore.

Thus, my request to the Bangladesh finance ministry use this opportune moment -- initiate the courtship and get Bangladesh on the global financial map. We are all waiting.


Durreen Shahnaz is the regional managing director of Asia City Publishing Group and adjunct associate professor at Lee Kuan Yew School of Public Policy at National University of Singapore.

Worse than financial crunch

The world is heading for an "ecological credit crunch" far worse than the current financial crisis because humans are over-using the natural resources of the planet, an international study warns today.

The Living Planet report calculates that humans are using 30% more resources than the Earth can replenish each year, which is leading to deforestation, degraded soils, polluted air and water, and dramatic declines in numbers of fish and other species. As a result, we are running up an ecological debt of $4tr (£2.5tr) to $4.5tr every year - double the estimated losses made by the world's financial institutions as a result of the credit crisis - say the report's authors, led by the conservation group WWF, formerly the World Wildlife Fund. The figure is based on a UN report which calculated the economic value of services provided by ecosystems destroyed annually, such as diminished rainfall for crops or reduced flood protection. Read full article in THE GUARDIAN

Find out how you can reduce ecological footprint

Nobel Injustice

Martti Ahtisaari is a great man. He deserves the Nobel Peace Prize for his life work. But it was a mistake for the Norwegian Nobel Committee to cite his work in Aceh as a reason for giving him the prize.

As a recent story by Agence France Presse put it, Ahtisaari’s “most notable achievement was overseeing the 2005 reconciliation of the Indonesian government and the Free Aceh Movement rebels, bringing an end to a three-decade-old conflict that killed some 15,000 people.” But it was Indonesia’s people and leaders who should have received the Nobel Peace Prize for the Aceh political miracle.

More fundamentally, the mentioning of Aceh in this Nobel citation raises serious questions about the mental maps used by the Nobel Prize Committee in making these awards. The committee members increasingly seem to be prisoners of the past. They continue to assume that we live in an era of Western domination of world history.

But that era is over. Increasingly, the rest of the world has gone from being objects of world history to becoming its subjects. By giving the Nobel Peace Prize to the Indonesians instead of a European mediator for Aceh, the Nobel Prize Committee would have recognized that the world has changed.

Three other big benefits would also have resulted from giving the award to an Indonesian. First, the West associates the Islamic world with violence and instability. Few believe that Muslims are capable of solving their political problems by themselves.

But this is precisely what the Aceh story was all about. Two key Indonesian leaders, President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla, showed remarkable political skill and courage in working out the peace deal for Aceh. A Nobel Peace Prize for them would have shown the West that Muslims can be good peacemakers and, equally important, it would have sent a message of hope to the Islamic populations of the world that have seen their self-esteem eroded by stories of failure.

Aceh was essentially a spectacular Muslim success story. Hence, the Nobel Peace Prize Committee has squandered a valuable opportunity to send out a message of hope to the world’s 1.2 billion Muslims, one that would have rid the world of the grand global illusion that peacemaking is a “white man’s burden.”


Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore. His most recent book is The New Asian Hemisphere: The Irresistible Shift of Global Power to the East.

This article was first published in PROJECT SYNDICATE.

Financial Crisis 101

The Eternity of Geo-Politics

By Kishore Mahbubani

When I was a diplomat I used to say that diplomacy was the world’s second oldest profession but I always hastened to add that it bore no relationship to the oldest profession. The reason why it is old is because since human beings began organizing themselves into tribes and societies, there were rivalries, struggles for power which often led to conflict, frequently over territory. Diplomacy was therefore invented to handle the eternal challenge of geopolitics.

In the modern and more civilized world order we live in, where the prospect of any direct war between any two major powers is a remote possibility (partly because of the advent of nuclear weapons), many of us would like to believe that geopolitics has taken a back seat in the face of growing global interdependence. One stark reality about the 21st Century that we should hoist in is that geopolitics will return with a vengeance, even though many of the rivalries and contests will be played out beneath the surface. The naked eye will not catch these new geopolitical contests. We will need a sophisticated vision to understand the new geopolitical terrain that is rapidly emerging. And the terrain could become treacherous.

History teaches us that whenever a dominant power begins to lose power relatively, new opportunities are created for rising powers. We are living in such an era. The United States is slowly beginning to lose the unquestioned dominance it had over the global order. Fortunately, for the world, the United States has been on balance a benevolent power. The 1945 rules-based order it created (with multilateral institutions like the UN, IMF, WB and GATT) were a great gift to the world. This multilateral fabric explains the remarkable explosion we have seen in both global economic growth and global trade. Without the United States acting as the ultimate guarantor of this global system, we would not have had the global stability we have seen.

The American people were happy to see United States act as a custodian of this benign multilateral order because they believed that with global stability and trade liberalization, they would naturally emerge as the biggest winners of the system. Now, in a remarkable reversal, fewer and fewer Americans believe that they will benefit from global openness. Instead, more and more of them believe that they will lose their jobs and prosperity to China and India.

In the next ten years, there will be an intense debate in United States on how much global responsibility it should take on. We cannot tell the outcome. Short term populist pressures could lead to greater protectionism (and we have seen many warning signals from the US Congress). If the United States walks in that direction and stirs all kinds of national retaliations, we should be prepared to see the gradual unraveling of our benign global order.

The big problem that the world faces is that there is no other natural global leader to take on the benign role that the United States has played. The other natural candidate is the European Union (EU). Indeed, it has hitherto played a helpful and constructive role in supporting the benign role of the United States. However, it has no capacity to step into the shoes of the United States as the global leader. The reasons are complex but they have to do with highly divisive decision-making process of the EU. The result of having to reconcile the interests of 27 member-states is that the EU is driven down to the lowest common denominator. The Irish veto of the Lisbon Treaty process destroyed the chance of having a single Foreign Minister to represent the EU’s global voice. To paraphrase Henry Kissinger, we also lost the prospect of having a single telephone number to call in Europe.

To make matters worse, the EU has become geopolitically incompetent. Much to the chagrin of my European friends, I have pointed out the EU’s greatest civilizational achievement of creating zero prospect of war inside the EU has to be balanced against the failure of the EU to create zones of security and prosperity outside their immediate borders. Hence all the long-term threats to the EU are going to come from their immediate neighboring environments: North Africa, Middle East, the Balkans and the Caucasus. The recent unfortunate Georgian episode provides a vivid and powerful case study of the EU’s geopolitical incompetence. However, it must also be emphasized that the new models of rules-based global cooperation will in one way or another be inspired by the EU models of cooperation. Hence we must give the EU the credit it deserves.

By contrast to the EU, the most geopolitically competent great power in the world today is China, which has the prospect of emerging as the world’s greatest power with its economy surpassing that of the United States. History teaches us that relations between the world’s greatest power and the world’s greatest emerging power have always been tense. Hence, if history is a guide, we should be seeing rising geopolitical tensions between United States and China. Instead we are seeing the exact opposite phenomenon. Why?

The reason is simple. China is emerging as the most geopolitically competent rising power. Luck has helped. Both 9/11 and the recent Georgian fiasco, which created new tensions between the West and Russia, were geopolitical gifts to China. But the Chinese also know how to capitalize on their luck. They have been shrewdly helpful to the United States on some of its crucial geopolitical challenges, including Iraq, Iran and North Korea. The United States reciprocated by squeezing President Chen Shui-bian when he was in power. Hence, the Taiwan issue which could have been the flashpoint for the US – Chinese rivalry (as it did when President Bill Clinton almost sent aircraft carriers through the Taiwan Straits in 1996) has become a vivid example of a new US-China cooperation. This is a geopolitical miracle which should go into the Guinness Book of World Records.

China has carefully adopted a low profile, wisely adhering to Deng Xiaoping’s advice not to aspire for global leadership. But this low profile has now become a double-edged sword. It has defused American worries about China. But it also prevents China from aspiring to become the custodian of the global system. India, the other possible candidate, is also not ready to do so. Hence, at a time when rapid globalization is creating a small global village where village leadership is critical, we have a situation where all the major powers – US, EU, China and India – are shunning global leadership. This is a prescription for trouble. If the benign global order deteriorates and we move away from a rules-based regime, we will inevitably see new geopolitical rivalries and contests emerge. When that happens, the need for the world’s second oldest profession to perform well will never be greater.

The only consolation for Singapore is that it does well in geopolitical competence. Now that I am no longer a diplomat, I can create my own index of geopolitical competence. In this index, I give the former Soviet Union a 2 (for losing a great empire without a shot), the EU a 4 (for reasons given above), the USA a 7 (for remaining as the world’s greatest power) and China a 9 (for emerging as a great power with so much skill and deftness. And I would give Singapore a 10 out of 10. This is a result of extraordinary leadership we have enjoyed. Hence, at a time when we may be moving into treacherous geopolitical terrain, the real challenge for Singapore is to maintain this extraordinary leadership.


Kishore Mahbubani is the Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore.

Stinking Rich & We Need You!

Image source: The Economist
On Sept 29, US$1.2 trillion was wiped off the value of the New York Stock Exchange as members of the House of Representatives in the US, under pressure from constituents, voted against the US$700 billon bailout package designed to resuscitate the financial system. The knockback sent reverberations around the world, with markets falling sharply from Europe to East Asia.

What this knockback demonstrates, despite the "we are all capitalists now" proclamations of recent years, is that many Americans feel little affinity with the Wall Street set who had been "managing" their investments and who had extended their mortgages (without worrying about who would extend the cash needed to service them).

Many argue that this is a crisis of regulation, or a crisis of responsibility and ethics, as if these were technical problems to be tweaked. However, the roots of the political (as opposed to the strictly financial) crisis we are currently witnessing run much deeper. A quarter of a century of globalisation has fundamentally transformed not only our economies, but also our states and societies, leaving politicians few options.

While the current crisis has often been compared to the Great Depression of the 1930s, the two periods are distinctly different. The way out of the Great Depression essentially involved the establishing of a political compact between industrial capitalists and organised labour, with the state acting to stimulate demand and mitigate the risk to workers through a variety of compensatory mechanisms. What followed was a period of relatively equitable economic growth in the developed world that, among other things, gave birth to the mass consumer society of our time.

In contrast, the era of globalisation, which was ushered in by declining rates of profit and other crises in the 1970s and '80s, has involved a process of "financialisation", where the relationship between industrial and financial capital, which concerned political economists from Marx to Keynes, has apparently become largely redundant. Financial deregulation has permitted the enormous growth of global markets for a variety of financial products, which act somewhat autonomously from and greatly eclipse the "real" economy of trade in goods and services.

Financialisation has been part of a broader process that has placed the market at the centre of social relations, redistributing wealth and power. This has involved assaults against worker rights in many industrialised countries at a time where capital has been liberated to relocate to sources of cheaper labour.

Furthermore, at the same time many workers in the West have been both voluntarily and forcibly drawn into becoming investors - substituting the socialisation of risk that was embodied in the welfare state with tying pension plans to the market like never before.

And while the massive extension of credit, both in the form of mortgages and credit cards (which are now often tied together), provided palliative care to many, with some workers experiencing declining real wages, it also served to further lock them to a highly volatile system in which they had very little power to advance their interests vis-a-vis highly powerful and well-connected market players.

Meanwhile, the risk to capital has been socialised, with public bailouts a common feature of the past 25 years, regardless of the recent failure of the US government's rescue package. Yet, despite such bailouts, under globalisation arguments have been continuously advanced for less regulation and for the importance of paying CEOs "well".

In this hyper-capitalist environment inequality has been soaring, with the average pay packet of a high-end American CEO being 250 times that of an average wage earner. In short, there has been concentration of capital that still retains an insatiable appetite for profit.

In trying to satisfy this appetite capital has gone in search of returns in dangerous waters (such as that section of the population that aspires to owning homes yet has been so marginalised that it does not have the means to service its borrowings). In the short term, you can disguise this concentration by creating complex financial instruments to on-sell. In the medium-to-longer term, reality hits home when people begin to default.

So the big question seems to be not how to reregulate financial markets, but whether everyday citizens can be convinced that their interests are advanced by a different set of interests to theirs and an ideology that has spent the past quarter of a century eroding the "over-regulation" of the Western welfare state and dispensing with its social safeguards.

While US taxpayers were told by people like US Treasury Secretary Henry Paulson that bailing out capital was necessary to support the system for everyone and that caution had to be exercised in reregulating the financial sector, middle America doesn't appear to have much sympathy for him or the obscenely remunerated "Just Do It" set at the centre of this debacle.

The US government will still be able to put together another bailout package; however, the crisis seems far from over for the very reason that it is hard to see where new sources of real productive output will emerge, especially in an economy such as the United States.
The game of smoke and mirrors no longer holds any attraction for those left with cash to allocate.

Where the fix to the Great Depression came in the form of redistributive measures to workers within the domestic economy - a globalised world makes this process next to impossible for the very reason that capital can so easily relocate to cheaper sources of labour outside of America.

Even if capital can get back on its feet with a public bailout, finding profitable undertakings inside US borders that benefit the broad population seems highly unlikely.


Shahar Hameiri is a doctoral candidate at the Asia Research Centre, Murdoch University. Toby Carroll is a research fellow at the Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore. This article "The Politics of the Financial Crisis" was published in Bangkok Post.


RECOMMENDED READING: Emerging Lessons From The Crisis by Eswar Prasad *

"Whatever the final outcome, one thing is certain– the rest of the world will no longer be enthusiastic about adopting the free-market principles that guided US financial development. While desperate times may call for desperate measures, massive US government intervention will also make it difficult in the future to make the case that the state should stay out of the workings of the financial system."

* Eswar Prasad is professor of economics at Cornell University and a senior fellow at the Brookings Institution. He is the former head of the IMF’s Financial Studies Division.

Contesting Indonesia

Indonesia heads back to the polls in 2009 – a process that some hope will provide solutions to many of the problems that the country faces. Poverty persists, corruption remains endemic, infrastructure is failing and fuel costs have risen.

At the same time, democratisation and decentralisation have fundamentally altered Indonesia’s political process. A great diversity of groups – state and non-state, nationalist, religious, paramilitary and otherwise – are actively jostling for influence and power in determining the future trajectory of the nation. Many are forging new mechanisms and partnerships to further their respective agendas.

CAG’s Indonesia series casts the spotlight on this deeply contested process and examines the implications for state-society relations, accountability and democracy.

(The Series schedule)

In Memory of Gordon Gekko

Just wondering how many Wall Streeters are youtubing Gordon Gekko's "Greed is Good" speech video and reminiscing about the good old days.... (click image to view video)

Here are some of memorable Gordon Gekko quotes from the movie "Wall Street":

● "Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

● " We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."

● "It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another."

● "Lunch is for wimps."

Perspectives on the US Financial Crisis

LKYSPP Professor Charles Adams spoke on the current financial turmoil at a panel dicussion held at the Asian Development Bank on 19 September. Here are his views on the crisis:

The dynamics of the current financial crisis are broadly similar to many other crises. First, there is a period during which too much credit is extended, leverage rises to very high levels (in large measure through derivatives and low margins), and people start to believe that things will be different, based on a “story” of a new era (the Greed period).

This is the boom or bubble period that precedes the eventual collapse, as vividly documented by Kindleberger in his study of financial crises.

Second, there is some event (the “Canary in the coalmine” moment) that triggers a reappraisal of the story and, ultimately, a reversal of the excesses during the boom. The problems in the sub-prime segment of the US real estate market likely served as the wake up call during the current crisis.

In this second phase, positions are unwound, leverage is reduced, and financial firms begin to scramble for capital and liquidity in response to losses and writedowns (the Fear period).

Finally, following a series of ad hoc interventions involving lender of last resort and life-boat rescues, the official sector steps in with bold measure such as guarantees and the purchase of substantial chunks of the financial system and/or distressed assets.

For those with at least some familiarity with financial crises, the time signature of every crisis is uncannily similar. In the unhappy ending to many financial crises, the economy enters a deep and protracted downturn and public debt levels soar to high levels as the official sector bails out the private sector. The current crisis fits this mould. As the crisis is far from over, however, one should be careful in speculating about the end point.

The current crisis is only one of a large number of financial—and, particularly banking-- crises that have occurred in recent decades. The key wrinkles this time around are that the crisis blew up in the core rather than the periphery of the system (recall the large number of recent crises that occurred in emerging markets at the periphery of the system); has been affecting multiple markets, instruments, and institutions (commercial banks, investment banks, Insurance companies); and has spilled over across countries as financial risks were unbundled and sold around the world. Intriguingly, new financial players such as Sovereign Wealth Funds are starting to play a role as sources of new capital while hedge funds, at least thus far, have been in the back seat.

As in other crises, the current episode has involved a breakdown of the multiple lines of defence set up to deal with periods of excessive exuberance.

The first line of defence is the risk management of financial firms. Arguably, risk management across a range of firms has again been subject to massive failures, and their oversight oards have not performed as intended.

The second line of defence includes all the various market and official analysts-- as well as credit rating agencies--that monitored the US financial sector and failed to spot impending problems until too late. A conflict of interest on the part of rating agencies that advised on, and then rated, complex financial products likely played a role here, and will need (somehow) to be addressed. But it is also staggering how many other private and official observers did not predict problems, and did not call for action that could have avoided the excesses.

Finally, in the third line of defence, the very fragmented US regulatory bodies did not play their proper role and were arguably “asleep at the wheel” as the shadow banking system bloomed. Clearly, any one of these lines of defence could have prevented the crisis but each broke down, with serious consequences.

US-led Capitalism: R.I.P?

(Cartoon source: The Economist)

New Century Financial. Sachsen Landesbank. Bear Stearns. IndyMac. Fannie Mae. Freddie Mac. Lehman Brothers. Merrill Lynch. AIG. They were all US companies that went belly up in the last few months.

British bank Barclays bought Lehman Brother's North American business. Japanese firm Normura Holdings has just bought Lehman Brother's Asia-Pacific unit. Morgan Stanley is said to be fighting for survival and China’s Bank Citic is being discussed as a possible rescuer and Singapore's own GIC is eyeing distressed US financial assets. Does this signal the irresistible shift of global power to Asia?

As the US government unveiled what is the largest overhaul of government-led financial regulation since the Great Depression, some opinion makers and stakeholders around the world now argue that the recent events signal the end of US-led capitalism. [Sung]

● “The End Of American Capitalism As We Knew It”
Financial Times

● “The World As We Know It Is Going Down”
Spiegel Online

● “Crisis Exposes Flaws in U.S. Economy, Tarnishes Image”
Bloomberg

● “Is this the end of US Capitalism”
Al Jazeera asks five prominent economists - Does the crisis signal the end of US-style capitalism? And if so, what are the lessons learned?

● “We Are All Capitalist Now? Not Any Longer”
The Times

New CAG Working Papers on Energy, Governance and Regionalism

The CAG Working Paper Series disseminates works-in-progress that reflect the broad range of research activities of the CAG researchers and faculty associates (click title to download) :

Global Governance and Energy
Ann Florini

"Energy has risen to the top of policy agendas around the world. There is now widespread recognition that energy policy has become key to international security,economic development, and the environmental sustainability of modern civilization. Yet this importance is not reflected in the world’s institutional infrastructure for managing global problems. A handful of international organizations work in uncoordinated fashion on various pieces of the energy puzzle. No organizational infrastructure exists to support the global conversation that is now badly needed about how to move the world onto a sustainable path that provides appropriate, reliable, and affordable energy services."


Contested regionalism in Southeast Asia: The politics of the trans-ASEAN Gas Pipeline Project
Toby Carroll & Benjamin Sovacoo

This article analyses the trans-ASEAN gas pipeline project (TAGP) as a wayto reconceptualise regional dynamics in Southeast Asia and the forces shaping them – what we call ‘contested regionalism’. For this task, we propose an analytical framework that delves within and beyond the state, and which places emphasis upon the role of material and ideological factors operating at particular moments in time. The framework reveals that the tensions acting within and upon ASEAN and the TAGP shape the regional approach to energy governance in such a way that the gas pipeline project – much like other ‘regional’ projects – is unlikely to ever come close to fulfilling its brief or that of its masters. What is more probable is that the project’s form will continue to be conditioned by entrenched politico-economic realities and the influence of dominant ideologies – especially during times of crisis – that have the capacity to exacerbate existing regional animosities and disparities.


Regionalism, Governance and the ADB: A Foucauldian Perspective
Teresita Cruz-del Rosario

Discourse analysis is a theoretical perspective primarily concerned with the ideas, beliefs, symbols, images, and categorizations that give meaning to social life. It is likewise concerned with how these meaning systems are produced and reproduced, how they guide action and behaviour, and who are the credible agents of knowledge. Power relations produce a hierarchy of discourses, some more dominant than others. In the field of development policy, multilateral institutions like the Asian Development Bank are purveyors of a dominant discourse on governance which has been conceptualized as economicmanagerialism. This sets the tone for governance practices among its “client” governments. Despite this, there remains the possibility within ADB itself to reinterpret ideas and provide alternative meanings. Two subregional programs, the Greater Mekong Subregion (GMS) and the Central Asia Regional Economic Cooperation (CAREC) are illustrative examples of a patently economic managerialist approach to regional governance with possibilities for discursive shifts.

Tell me what you eat, and I will tell you what it does to climate change

A Cantonese old saying goes “anything that walks, swims, crawls or flies with its back to heaven is edible”. I agree, mostly. I love eating meat. Korean galbi, wagyu beef from Kobe, spicy Portuguese chorizo, roasted lamb shoulder…

I also know that climate change is a real threat that affects all of us and that we can only overcome this challenge by doing something together, shoulder to shoulder. I am prepared to do my part. I just didn’t know that eating less meat is one step humanity can take in order to assist in tackling climate change challenges and threats.

Last week, UN climate change expert, Chairman of IPCC (Intergovernmental Panel on Climate Change) and India’s seventh Nobel laureate Dr Rajendra Pachauri encouraged people to eat meat less and become vegetarians at least once a good to assist in solving global warming. Dr Pachauri argued that diet change was important because of the huge greenhouse gas emissions and other environmental problems - including habitat destruction - associated with rearing cattle and other animals. It was relatively easy to change eating habits compared to changing means of transport.

According to the UN Food and Agriculture Organisation, the meat production accounts for nearly a fifth of global greenhouse gas emissions. These are generated during the production of animal feeds, for example, while ruminants, particularly cows, emit methane, which is 23 times more effective as a global warming agent than carbon dioxide. The agency has also warned that meat consumption is set to double by the middle of the century. Read the full article in The Guardian. [Sung]

Setting up of an Asian Observatory on Health Systems

Professor Phua Kai Hong, Associate Professor of Health Policy and Management at the Lee Kuan Yew School of Public Policy recently attended a workshop organised by WHO Regional Office in Manila to discuss the setting up of an Asian Observatory on Health Systems. According to Dr Phua, the WHO Regional Director, Dr Shigeru Omi who visited the School a few months ago is keen to involve LKYSPP to be part of a regional consortium for comparative health systems studies. Here is the background of the meeting:

Progress in improving health outcomes, achieving the health related Millennium Development Goals, and reaching universal access to health services as expressed by the slogan 'Health for All' from the Declaration of Alma-Ata on Primary Health Care is unacceptably slow in many countries.

Weak health systems have been identified as one of the main obstacles to improving health and scaling up effective health interventions This is so even when the funding situation for health has improved. Although reasons for weak health systems vary from country to country, the common ones include inadequate human and financial resources and their inefficient use; lack of coordination and inefficient management; financial, social and geographical barriers limiting access to essential health care; and inadequate information and evidence for policy- and decision-making.

Health systems are part of the fabric of societal and civic life. The core values and principles of the Declaration of Alma-Ata on Primary Health Care promulgated in 1978 are still relevant, even in today's globalized world. There is increased awareness of health inequities and the damaging effects they have on individuals and society. Evidence suggests that health systems oriented towards primary health care (PHC) are more likely to deliver better health outcomes, more equitable health outcomes, and greater public satisfaction at lower costs.

To guide its work in responding to these global challenges, the WHO Secretariat has produced the document Everybody's Business: Strengthening Health Systems to Improve Health Outcomes-WHO's Framework for Action. Building on Everybody's Business, which was developed in Geneva, the WHO Regional Office in the Western Pacific has developed a Strategic Plan for Strengthening Health Systems in the WHO Western Pacific Region.

The regional strategic plan is aimed at improving the WHO response to the health systems challenges and needs of its Member States. A meeting of experts to obtain perspectives and inputs on how to strengthen health systems in the context of the core values and principles in PHC was convened in Manila from 5 to 6 August 2008.

In addition to dealing with the core issues and activities in the regional Strategic Plan, the meeting also further elaborated the concept of a health systems observatory for the region. The need for better collection, analysis, and use of information on health systems is a recurring theme within the region that the WHO Regional Office for the Western Pacific feels the need to address. [Sung]

It’s Still Obama’s Election

Despite all the buzz over Sarah Palin and the polls showing a dead heat or even a slight McCain advantage, Obama is still well ahead in the only polls that actually matter – so much ahead that it’s hard to see how McCain can pull out a victory.

In the US system, voters don’t directly elect Presidents. Although voters cast their ballots marked for a candidate, in fact they’re voting for a slate of delegates to the Electoral College. (The American system, after all, was set up by men who didn’t trust ordinary voters to know what was good for them, so Presidential and originally Senate elections were designed to be indirect.) These days, those delegates are pledged to a specific candidate.

It’s those Electoral College delegates who actually choose the President, several weeks after the early November national election. The magic number is 270 – if you get the votes of 270 electoral college delegates (a bare majority of the total), you become President.

And Obama still has a big advantage in likely numbers of electoral college delegates, even using the same polls that show him lagging in the popular vote.

How is this possible? Because each of the fifty US states gets to decide how to allocate its electoral college delegation. Each state gets the same number of delegates as it has members of Congress – two Senators plus however many Representatives the state has, which is based on population. (The smallest number of delegates a state can have is thus three, for its two senators and at least one representative. Alaska, Palin’s home state, has three.) 48 of the states have a winner-take-all system, so a candidate who (barely) wins enough states can triumph over one who wins in several states by huge margins but doesn’t carry enough of the states. That’s what happened to Al Gore in 2000, who won the popular vote by a margin of several hundred thousand – and lost the Presidency.

So national polls aren’t very useful. Instead, it’s the state-by-state polls that matter. And adding up the numbers of Electoral College votes in states that are currently tilting noticeably to one candidate or the other shows a strong Obama advantage of about 225 Electoral College votes for Obama, versus 175 for McCain. The rest are in states currently too close to call.

Can McCain still win? Yes, but to do so, he has to carry many more of the currently undecided states than Obama does. Anything is possible in American elections – but the safe money now is on Obama. [Ann]

● Not all the policies proposed by Obama and McCain are sound. Foreign Policy lists 20 terrible policy proposals suggested by McCain and Obama:

Obama's Top 10 worst ideas

McCain's Top 10 worst ideas

● Reminder: Catch Ann tomorrow night (11th September) at 10.30 pm on Channel 8 FOCUS program. Ann will give her take on the upcominig US Presidential Election.

The Goonj Approach...A Voice...An Effort

It is human nature to judge people by their appearances. The clothes we wear convey signals about personality, background, taste, and social status. For some, the situation is a little different. This is what the people working at Goonj, an Indian social enterprise, saw in the village of Gidhdha:

“In the peak of winter days, the children did not have a single piece of cloth covering their bodies - warm clothing was a distant dream. This is a 35-lakh strong community spread across Bihar, where people are forced to eat rats in dire circumstances of poverty & survival. Clothing is the last priority in their lives. Parents often make their naked children sleep in a small hole dug in the ground and cover them with grass (pual), to survive the chilly nights. Women don’t take a bath for many days as they have nothing to change into & often people take loans on heavy interest to buy a single piece of clothing - which lasts them for as long as it does not disintegrate into nothing.”

A typical knee-jerk response to such a situation would be to round up some donations of clothing to give to the villagers in Gidhdha. Clothing donations are not new - and in fact are often abused: spring cleaning of one's closet while easing your conscience - why not? But goods that are passed to those in need in a pitying manner, as hand-outs, or as unwanted trash, end up stripping the recipients of their self esteem and self reliance, ending up as a particularly destructive form of goodwill.

Ashoka Fellow Anshu Gupta (pictured) approaches the poverty challenge with a very different mindset. His organization Goonj is grounded a few simple yet crucial principles: Self help as the starting point. Always uphold and protect a person’s dignity. Seek to empower rather than breed dependency. Goonj takes leftover clothing and turns it into a resource for mobilizing rural communities. The clothes come at the end of a Goonj project, not at the beginning. Goonj organizes village meetings where it asks participants to identify projects that their community would benefit from. Village members are then expected to implement these projects themselves in order to earn the clothing. Clothes (pre-sorted and screened for quality) are given to each villager at the completion of the project - with respect and without making the recipient feel like a charity case. In some cases, the mobilization and impact arising from these projects have created so much positive change that community members have forgotten about the clothing they earned in the process.

There are many different ways to think about social enterprises – e.g. business models for the production of social and environmental goods, or businesses with a triple bottom line - and debates surround the measurements of the output, impact and sustainability of social enterprises. In the case of Goonj, its financial viability has yet to be proven. Since the clothes are donated, the bulk of Goonj's operating costs are in logistics and transportation. Goonj has started some income generation streams through its production of accessories made with recycled material, but revenue from these sales will cover only a fraction of the costs.

However, the social innovation that Goonj has created is so simple and basic, it's lamentable that we even call it an innovation. It is fundamentally about dignity and respect, and 'pricing' the upholding of these principles above other indicators such as numbers of clothing delivered and numbers of households reached. If we were to use the latter numeric measurements, then it would be easy to come up with a more efficient business model. But how does one measure things like empowerment, self-help and dignity, in a social innovation model where the manner in which a piece of clothing is handed over is more important than the speed with which it reaches those in need? How does one grapple with the tradeoffs between empowerment and efficiency in service delivery?

Read more about Goonj’s approach and projects at Goonj homepage. [Yeling]

Florni's Take On Obama vs McCain

Catch CAG Director Ann Florini tomorrow night (11th September) at 10.30 pm on Channel 8 FOCUS program. Ann will give her take on the upcominig US Presidential Election.

Renewable Energy in the Mekong Delta

CAG Research Fellow Benjamin Sovacool has just returned from Laos and Cambodia, where he met with local officials, businesspersons, and activists to discuss electrification and energy development in the Mekong Delta.

Here are a few insights from his trip:

● The people of Laos and Cambodia, while culturally rich, are economically poor. More than half of the population of both countries lives on less than one U.S. dollar per day, and a majority of people in both countries lack any sort of regular access to electricity. Indeed, while Benjamin was in Phnom Penh he experienced two power outages in less than twenty-four hours. (see first photo of rural villagers fishing in the Mekong)

● Because of this striking poverty, Laos and Cambodia have both embarked upon ambitious plans to develop massive hydroelectric projects on the rivers flowing throughout the two countries. The Laos Department of Energy Promotion and Development Ministry of Energy and Mines, for example, reports that Thai, Cambodian, and Laotian developers intend to construct no less than twenty differently sized hydro projects in the region. (See second image of Laotian map of dams)

● Unfortunately, their plans for electrification and development, while they could definitely help local villagers and farmers, could also induce grave consequences on the natural environment. Large-scale dams, such as those that have been proposed in the Mekong Delta, consistently fragment riparian ecosystems, destroy habitats, shift sedimentation flows, and degrade local fisheries. The environmental consequences of continuing to build large dams along the Mekong remind us about the tenuous balance policymakers and regulators must face with pursuing economic growth on the one hand, and preserving the environment on the other. [Ben]

The answer, my friend, is blowing the wind

This ad by Epuron- a German based renewable energy company - won the top honor for best film advertising spot at the International Advertising Festival in Cannes. Titled “Power of Wind”, it shows the benefits of the wind when used intelligently. This is a funny and intelligent take on the wind as an energy source, an excellent promotion for the future of renewable energies. Click image to view. [Sung]

Consensus-Building Asian-Style

A recent conference in Tokyo entitled "Consensus-Building in Asia: Building a Sustainable Society" yielded some surprising insights. For one, culture was a predominant discussion item on the table - a refreshing break from most discussions that often neglect or bypass cultural aspects in tools and technologies that are deemed as “universal” and therefore “context-free.”

Not so during the Tokyo conference. Amidst a variety of scholars and practitioners who grappled with the problem of understanding conflict and building consensus around environmental issues, culture was more than sufficiently mentioned, not as a footnote, but rigorously “unpacked” to award it enough scholarly merit.

Here are a few insights:

● Informal networks are usually operating in parallel with formally-designated consensus-building processes, mostly through intermediaries (go-betweens), an invisible “council of elders” to confer its blessing/benediction, a ritual network of buddies, classmates, soulmates, friends, peers, etc. --- all of whom drive the process in ways that are not so apparent during the formal process;

● Symbolic outcomes as important as the material results of consensus-building, perhaps even more so. Respect and recognition, for example, is a significant currency with which to measure success, and not just the formal, written agreement that may come out of the lengthy consensus-building exercises;

● Technical choices are most often choices that are deeply laden with values, and are also most often unstated. While the language which protagonists use are couched in technical terms, an underlying layer of value(s) oftentimes foregrounds the process which, if left unrecognized, leads to a hardening of positions among all sides, and thus makes consensus building problematic;

● Consensus is most difficult to obtain in cases that involve value conflicts, mostly around identity issues. A good example in environmental cases is the antagonism between traditional uses of a physical space (e.g., a mountain regarded by the locals as “sacred) versus modern uses of the same space (e.g., astronomers who want to use the mountain to build a telescope that will give the best view for gazing into the universe). The identity of belonging/community on one side is pitted against professional/scientific identities on the other, and both are oftentimes locked into positions that cannot be resolved by technical approaches. The “arrogance on both sides” threatens to convert these differences into a long-standing intractable conflict;

● Conflicts that are surrounded by historical baggage need to be seen through the prism of value conflicts. These are built up over time and obtain the status of immutability, especially when historical conflicts have become entrenched in memory that is carried over through generations.

The conference did raise very valuable points for both scholars and practitioners who look at Asia as a site for redefining and refining theory and practice around consensus-building. [Tess]