Thursday, May 14, 2009

Global health's quest for governance




The Lancet, a leading medical journal published out of New York and London, recently ran an editorial which highlights an ongoing concern with governance within The Gates Foundation – one of the most active and generous philanthropic foundations in the world (US$ 3 billion annually).

The editorial starts out by, deservedly praising the invaluable contributions made by the Gates Foundation, particularly for its deep commitment to global health. The Lancet credits the Foundation for adding “renewed dynamism, credibility and attractiveness to global health” as well as “inaugurating an important new era of scientific commitment to global health predicaments”.

Much of the criticisms on the Foundation consist on two areas: the Foundation’s choice of investments; and its alleged lack of transparency in governing process.

On the choice of investment, the article points out following issues:

• “The Foundation gave most of its grants to organizations in high-income countries”

• “The grants made by the Foundation do not reflect the burden of disease endured by those in deepest poverty”

• “Important health programmes are being distorted by large grants from the Gates Foundation. In some countries, the valuable resources of the Foundation are being wasted and diverted from more urgent needs”

On the lack of transparency, the article argues that for such an influential investor in global health like the Gates Foundation should not just be governed by the Foundation’s guiding principle #1 - “This is a family foundation driven by the interests and passions of the Gates family.”

The article then proposes five recommendations for the Gates Foundation: Improve governance, increase transparency and accountability, allocate grants to better reflect disease burdens, invest in health systems and research capacity in low income countries and listen and be prepared to engage with others.

The following is a statement released by the Gates Foundation in response:

“We welcome this article and its finding. We try to be very thoughtful about how to target our resources and we constantly seek out feedback from outside experts and stakeholders. In the end, we use our best judgment to determine where our finding can achieve the greatest reductions in health inequity around the world. We are committed to communicating information about our strategy, grants, and results, and are using our website to make it easier to find this information.”

Read The Gates Foundation's Guiding Principles
Read The Gates Foundation's Approach to Giving

Tuesday, May 5, 2009

What If Women Ran the Wall Street?

Would the world be a better place today if there were not less bankers but rather more bankers with heart; and even a better place with more women bankers with a heart and a soul?  


Indie is one of my good friends in Singapore with whom I can sit and have those wonderful "Bengali adda" moments. Every few months, over a cup of "deshi cha" we philosophise about life, the world, and -- in true Bengali fashion -- criticise almost everything under the sun.



It was on one of those evenings, after a lazy dinner, while having cha, of course, we were trying to "talk" our way into fixing most of the world problems.  All of a sudden, Indie blurted out that she had told her daughter that one profession never to even think about is investment banking -- "those evil bankers." 



Having spent a portion of my career as an investment banker, my defenses came into gear. Yes, some bankers are to be blamed for today's problems, but the world does still needs bankers, just as it needs doctors and lawyers. Maybe the world would be a better place today if there were not less bankers but rather more bankers with heart; and even a better place with more women bankers with a heart and a soul. Remember, I was one. I can attest to it.

It was exactly 20 years ago that I was woken up from a late morning sleep by a telephone call from Morgan Stanley. A senior banker called to congratulate me and to offer me a job as a financial analyst in their corporate finance department in New York. I was ecstatic. In those days, getting an offer from Morgan Stanley truly marked one as a "chosen one." Goldman Sachs and Morgan Stanley were two of the most prestigious investment banks in the Street. They interviewed tens of thousands of students from around the globe and selected only 60 to join their Financial Analyst Program (a two year program to get into the management track of the company.) I was one of those 60. 



Thus, my career as an investment banker began. I was a 21-year old, armed with an undergraduate degree from a prestigious liberal arts college in New England and a passion to change the world. How would Morgan Stanley help me change the world? I did not know, but what I did know was that as a Bangladeshi woman (the first one in the bank's history I was told), I was getting an incredible opportunity to work with some of the smartest people in the world who were shaping the global financial markets (or making a mess out of them -- whichever you prefer.) 

Working in a prestigious white-shoe bank, I hoped I would learn the Midas touch of efficient financial markets that I could bring back to my country. Of course in the process, I could also save a little money to go to graduate school -- that was the added bonus.



That summer between graduation and the start of my new job, I was filled with anticipation. 
Liar's Poker (by a former bond salesman about his experience working on Wall Street) had just come out and was a bestseller. While driving around California with my dear friend Sunita, I read it and everything else I could get my hands on about the new world I would be entering. After all, I had to be prepared -- I would be working with the creme de la creme of the academic institutions. I knew a lot of them would be difficult (jerks, to put it bluntly), but I would survive and thrive. I would be representing my country, my race, and my gender. I had the weight of many people's expectations on my shoulders. Well, if nothing else, I was naïve. 



The first day of work was a day-long orientation session. I, of course, overslept. I got up in a panic, could not get a taxi, missed my turn getting in the crowded subways, and eventually walked into the big orientation hall half an hour late, while Dick Fisher, president of Morgan Stanley, was touting the virtues and discipline of banking. Thus, my fist day got started with some rude stares and shaking of heads. The only redeeming factor of the day was that, in the process of being late -- all sweaty and stressed out -- I met my future husband in the elevator, all calm and collected. It was not really love at first sight, but more shared misery at first glance. Anyway, given that this is supposed to be an article about my professional life, I will skip the romance for now. 



Looking back on that first day, I don't remember much else except the advice one of the directors gave in his speech. He told us that Morgan Stanley was an intense place, and that a lot will be demanded from us. Consequently, he continued, there will be many moments when we will want to burst into tears. And, when that happens, "go to the toilet, flush it and cry; because frankly nobody wants to deal with a crybaby." I thought the man was insane. Well, sadly, that turned out to be one of the sanest suggestions I took away from that day, as I put it to good use more times than I would like to remember over the course of the next two years.



Despite the tears, in general, my time at Morgan Stanley was intellectually stimulating, and it taught me what I had hoped to learn -- how to be a banker. I learned accounting, finance, and the intricacies of capital markets. I also learned what terrible management styles and awful personal lives most bankers had, and how I never wanted to be one of them when I grew up. It was a badge of honour within the Financial Analyst team to work 100-hour weeks and to count how many all-nighters one pulled. The small handful of women in the bank were told that we had to keep up with the "machismo" of the environment if we wanted to "make it." 



It was eye opening to see what the top bankers could get away with if they brought in lucrative deals. I recall one banker who had his phone replaced virtually every week because -- out of rage -- he would regularly throw them against the wall. I also remember brilliant minds like Vikram Pandit (yes, the same one now running Citibank) who could be rude and condescending but who could also solve any problem I might have regarding even the most complicated equity issuance. 



I could write volumes about my time at Morgan Stanley, and maybe one day I should. For now, I have to borrow Dickens' words and sum it up as: "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity."



Investment banking truly brings out the best and worst in people. One is pushed to the limit of intelligence, creativity, endurance, and at the same time raw competitiveness. Sports metaphors were a part of nearly every conversation. It was basically a testosterone-driven environment where "sink or swim" was practiced and honoured as a law of the jungle. All this was exacerbated because there were so few women around to bring a different sensibility in the picture. 



A recent survey found that nearly two-thirds of women employed in London's financial markets believe their gender makes it harder for them to succeed. The machismo of the environment makes it difficult for women to climb the banking ladder, and even if they do, there is definitely a glass ceiling that they cannot go beyond. 



Perhaps if more women would stay in this industry, change the macho politics and bring a different sensibility to it, we would not be in the financial mess we are in today. In recent World Economic Forum meeting in Davos, there was a pretty broad consensus among the participants that if Wall Street had been run by women they would have saved the world from the corrosive gambling culture that dominated many a trading room. 



While I did not stay on in Wall Street and fulfill my duty of making the Street a kinder and gentler place (I will leave that to the next generation of women bankers), I did use my banking skills to the fullest in my subsequent careers. I used my financial modeling skills to create growth models at Grameen Bank, my business forecasting acumen at the publishing companies I ran, and my deep financial know-how in starting my own company.



Now my career is coming full circle as I am putting in place the first Social Stock Exchange of Asia. I am making use of what I have learned in the last 20 years of a career that has spanned the social sector, media, academia, and most importantly, banking to create perhaps one of the most important financial platforms for Asia (or the world, for that matter.)



I could not have done this if I had not started my career on Wall Street. Those tears shed in the toilet stall will now help raise money to build toilets for hundreds and thousands of people without proper sanitation in Asia. As a woman, it feels especially good because I not only survived the Street but I am using it to help me change the world. Hats off to all the women bankers -- the world needs us. [Durreen]



This article was first published in The Daily Star. Durreen Shahnaz is the Founder and Chairman of Social Stock Exchange Asia and Head, Program on Social Innovation and Change at the Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, NUS.

Monday, May 4, 2009

Centralised vs. Decentralised

Tikki Pang, a member of the S.T. Lee Project's Global Health Governance study group and Director, Research Policy & Cooperation at the World Health Organisation (WHO), emailed in few days ago a thought-provoking piece written by David Brooks of The New York Times. The Brooks' article addresses global health governance in the current context of the potential swine flue epidemic and the relative merits of a "top-down" centralised response versus a much more "bottom-up", decentralised approach in the context of responding to transnational threats like pandemic.


Swine flu isn’t only a health emergency. It’s a test for how we’re going to organize the 21st century.

In these post-cold war days, we don’t face a single concentrated threat. We face a series of decentralized, transnational threats: jihadi terrorism, a global financial crisis, global warming, energy scarcity, nuclear proliferation and, as we’re reminded today, possible health pandemics like swine flu.

These decentralized threats grow out of the widening spread and quickening pace of globalization and are magnified by it. Instant global communication and rapid international travel can sometimes lead to universal, systemic shocks. A bank meltdown or a virus will not stay isolated. They have the potential to hit nearly everywhere at once. They can wreck the key nodes of complex international systems.

So how do we deal with these situations? Do we build centralized global institutions that are strong enough to respond to transnational threats? Or do we rely on diverse and decentralized communities and nation-states?

A couple of years ago, G. John Ikenberry of Princeton wrote a superb paper making the case for the centralized response. He argued that America should help build a series of multinational institutions to address global problems. The great powers should construct an “infrastructure of international cooperation ... creating shared capacities to respond to a wide variety of contingencies.”

If you apply that logic to the swine flu, you could say that the world should beef up the World Health Organization to give it the power to analyze the spread of the disease, decide when and where quarantines are necessary and organize a single global response.

If we had a body like that, we wouldn’t be seeing the sort of frictions that are emerging from today’s decentralized approach. Europe has offended the U.S. by warning its citizens not to travel across the Atlantic. Ukraine is restricting pork imports. Europe could hoard flu vaccines, leaving the U.S., which has only one manufacturing plant, high and dry. Fear of a pandemic could lead to a restrictionist race, as nations compete to curtail movement and build walls.

Those dangers are all real. Yet, so far, that’s not the lesson of this crisis. The response to swine flu suggests that a decentralized approach is best. This crisis is only days old, yet we’ve already seen a bottom-up, highly aggressive response.

In the first place, the decentralized approach is much faster. Mexico responded unilaterally and aggressively to close schools and cancel events. The U.S. has responded with astonishing speed, considering there are still few illnesses and just one hospitalization.

The Times published a photo on Monday of the New York City health commissioner, Dr. Thomas R. Frieden, leading a crisis response meeting. The photo is the very image of a focused, local response. People are wearing polo shirts and casual wear — intensely concentrating on the concrete incidents in their own backyard.

If the response were coordinated by a global agency, those local officials would not be so empowered. Power would be wielded by officials from nations that are far away and emotionally aloof from ground zero. The institution would have to poll its members, negotiate internal differences and proceed, as all multinationals do, at the pace of the most recalcitrant stragglers.

Second, the decentralized approach is more credible. It is a fact of human nature that in times of crisis, people like to feel protected by one of their own. They will only trust people who share their historical experience, who understand their cultural assumptions about disease and the threat of outsiders and who have the legitimacy to make brutal choices. If some authority is going to restrict freedom, it should be somebody elected by the people, not a stranger.

Finally, the decentralized approach has coped reasonably well with uncertainty. It is clear from the response, so far, that there is an informal network of scientists who have met over the years and come to certain shared understandings about things like quarantining and rates of infection. It is also clear that there is a ton they don’t understand.

A single global response would produce a uniform approach. A decentralized response fosters experimentation.

The bottom line is that the swine flu crisis is two emergent problems piled on top of one another. At bottom, there is the dynamic network of the outbreak. It is fueled by complex feedback loops consisting of the virus itself, human mobility to spread it and environmental factors to make it potent. On top, there is the psychology of fear caused by the disease. It emerges from rumors, news reports, Tweets and expert warnings.

The correct response to these dynamic, decentralized, emergent problems is to create dynamic, decentralized, emergent authorities: chains of local officials, state agencies, national governments and international bodies that are as flexible as the problem itself.

Swine flu isn’t only a health emergency. It’s a test for how we’re going to organize the 21st century. Subsidiarity works best.


This article "Globalism Goes Viral" by David Brooks was published in The New York Times on 28 April 2009.