Archive for February/2007

J.Pozuelo-Monfort, MSc candidate in economic development at LSE

World, where are you? World, where do you head off? World, how are you treated?
It is a tough life. It is a tough world. It is a tough world, particularly if you happen to be born on the developing side of the border, a developing side where four fifths of the world’s population live, a majority of which suffer from extreme poverty and inequality.
It is a tough life. It is a tough world. It is a tough world, particularly if you happen to live on the developing side of the border, a developing side with no opportunities whatsoever, no opportunities to develop, no opportunities to dream of a better future, no opportunities to wake up in the morning and think it is worth to make an effort because effort will lead to reward, reward will lead to welfare, and welfare will in the end lead to a better life and a better future.
It is a tough life. It is a tough world.
It could be a better life. It could be a better world. Another world is possible. Another word is possible.
The developed side of the border usually happens to be just a few miles north of the developing side of the border. That side that seems to only be concerned with its own daily routine, its own daily troubles, its own daily worries that maintain its own population away from the real problems the world faces, that maintain its own population away from the real worries the world faces, that stops its own population from realizing the world is on the verge of disaster.
A world that faces a challenging paradox. A world that has never seen so many opportunities to eliminate poverty and inequality. A world that needs a new social leader able and willing to set the pace of change.
Old Europe, where are you? Old Europe, who leads you? Old Europe, shall you react?

Read more…

J.Pozuelo-Monfort, MSc candidate in economic development at LSE

In a superb paper commissioned by the Norwegian Ministry of Foreign Affairs, John Christensen et al from the Tax Justice Network expose a number of arguments for the collection of taxes for development.
The text starts with a self-explanatory introduction quoted from the Tax Justice Focus:
“..Wealth held in tax havens in costing governments around the world US$ 255 billion annually in lost tax revenues according to research published in March 2005. This sum is over three and a half times greater than the highest estimate of the additional financial resources to meet the United Nations’ Millennium Development Goals.”
Some further pieces of evidence show how the developed world is too much focused on blaming corruption and corrupted leaders in third-world countries for the money-laundering taking place in their nations. The text also points out that studies such as those of Transparency International focus again too much on how corrupted some of the third-world countries are, and how transparent most developed economies are.
However the first world and its mechanisms account for as much as 65% of the total amount of illegal money flows in the world, through its complex net of tax havens and the like.
There are many more things we can do in order to raise the amount the first world devotes to development. However it is our obligation to demand our political class to correct the apparent imperfections of a tax system that fails to address why there are still such things as tax havens and why countries compete in the basis of lower corporate taxes and taxes on royalties.
A world that does not tax its individuals correctly and proportionately is not a fair word. Only in a fair world shall we be able to compensate the lack of resources of a majority of the human kind.
Indeed an interesting piece.

Max Oliva, Associate Director, Social Impact Management

You’ve got things to do. People to meet. Ideas to realise. Events to host. A business to run. So what’s the deal? You need the flexibility to scale up, wind down, change gear, move on. You need a space you can call your own. You need a safe space, professional space, dynamic space. That is, A Space for Social Innovation.
Next week I’ll be at The Hub in London and Briston, attending “The Art of Hosting Spaces for Social Innovation”. What? An international seminar and inquiry exploring the art of crafting and hosting spaces that incubate imaginative initiatives for a radically better world. Why? A new model and pattern is emerging in physical and virtual spaces that support pioneering social initiatives. These habitats create the conditions for collaboration, serendipity and emergence such that value is created far in excess of the sum of their parts.

The objective is to build a network of inspirational habitats in major world cities for social innovators to work, meet, learn, connect and realise progressive ideas. The Hub is a place for making things happen. All the tools and trimmings needed to cultivate an idea, launch a project, host a meeting and run a business.
Over time, social innovators need access to a range of just-in-time resources and market-facing opportunities to thrive: knowledge, capital and networks. The Hub provides channels to such resources and opportunities, without crushing the innovators initial spark and ingenuity.
Well, these and many other conversations will take place next week. Hope to be able to post on a daly basis, in order to start the conversation of The Hub Madrid. Up to now The Hub in Madrid is what I have in mind as providing this social innovation stretch, a space where MBA alumni and others can start their social enterprises, meet, interact and learn from practitioners in the community and abroad. At the same time, these practitioners certainly will be enriched by the business perspective of value creation that IE MBAs can offer. Bluntly speaking, it is a great model which makes perfect sense on my mind. I’m certain that my perception will still change 180 or 360 degrees next week, hopefully bringing it closer to the right direction.

Max Oliva, Associate Director, Social Impact Management

Are you aged 35 years or younger? Do you have an interest in the banking and related financial industries? Don’t miss the opportunity then to take part on The Robin Cosgrove Prize.
The Prize is intended to reach out to young people familiar with the banking, finance and investment sectors, with special attention to emerging markets, and to attract innovative ideas, proposals and projects which could be promoted to major players in the business community. The aim is to strengthen the sustainability of ethics in banking and finance and to reinforce its implementation.
Carol Cosgrove, Robin’s mother was at IE Business School this past November at the Find Your Impact Day and presented the competition to MBA students, on a moving and inspiring speech. An international jury will designate one or more prize winners and allocate the sum of USD 20,000 between them. The deadline is February 28th.
The Robin Cosgrove Prize honours the vision of Robin, who was a bright young investment banker who died at age 31. He believed passionately that a major barrier to economic development was the absence of integrity and often the lack of ethical practice in banking and financial systems. “How can a country prosper”, he would ask, “if people cannot trust their banks or financial institutions?”
If you need more information send an e-mail here.
El Premio Robin Cosgrove, que promueve la ética en el mundo de las finazas y del sector bancario, puede también ser presentado en Español. Si quieres más información baja el archivo pdf. Download file

Max Oliva, Associate Director, Social Impact Management

The Economist has just written an article which states that climate change may drive food prices higher. They are as always good in challenging the given views in order to strengthen the conversations. This impact has already been felt at economies such as the Mexican one, where the rise in the prize of corn (main ingredient in Tortillas) by more than 80 per cent has had political implications much larger than one would imagine.
Corn prices have started to move together with global oil markets, having a rising demand for ethanol and farmers turning fields over to filling US fuel tanks instead of Mexican tables.
Other agricultural products like wheat, which price has also risen by more than 40 per cent, is in part due to the drought in Australia. Soybean production may also be reduced by the incentive on farmers to rotate their crops to corn, given the high demand of the product, thus also increasing the prices of soybeans. It is this argument which the economist points out as increasing meat prices, for cattle and pigs which are fed on these products.
Arguments on not having enough land in the US to grow the required amounts of corn, and putting into question the environmental benefits of ethanol are discussed. As pointed out, it is very valuable to enrich the conversation, for global warming has no easy answer.

Max Oliva, Associate Director, Social Impact Management

This has been a hectic week in regards to climate change and action. Most importantly, delegates from the G8 (Britain, France, Germany, Italy, Russia, the United States, Canada and Japan) plus 5 countries (China, India, Mexico, Brazil and South Africa), which together produce 75 percent of the world’s greenhouse gases just brought the climate change debate to Capitol Hill on February 14th.
They agreed that both developed and developing countries will have to face targets for cutting greenhouse gas emissions. A global market being formed to cap and trade carbon dioxide emissions was also part of that conversation.
“I am convinced that we have reached the tipping point and that the Congress of the United States will act, with the agreement of the administration,” John McCain, US Presidential Candidate
This just a couple of days after Richard Branson announced the $25 million dollar prize on Climate Change to anyone who can come up with a way to “blunt global climate change by removing at least a billion tons of carbon dioxide a year from the Earth’s atmosphere”.
Just today Al Gore made an announcement where groups like Red Hot Chili Peppers, Black Eyed Peas and others will be taking part in the Live Earth Concerts on July 7. “The climate crisis will only be stopped by an unprecedented and sustained global movement.”
The conversatioin is gaining momentum. I just came accross this Personal CO2 Calculator which is very easy to use and comes with simple ideas which might help you first assess your CO2 impact and then think of ways of reducing it.

Max Oliva, Associate Director, Social Impact Management

A €1.16 billion program is being funded in order to encourage drug companies to come up with vaccines to help prevent pneumonia and meningitis, intended to save the lives of more than 5 million children by 2030, in the world’s poorest countries.
The idea of the fund, which is to begin with the pilot program in pneumococcal disease, is to act as a bridge between poorer countries and drug firms. Italy, Canada, Norway, Russia and Britain are the first countries to back up the fund. The plan is to subsidise the future purchase of vaccines, hoping to serve as an incentive in order to bring drug firms into action.
If a developing country agrees it needs a drug which industry can develop, the fund provides a commitment to purchase the vaccines once they are produced.
“The key aim is to ensure there is secure funding for the vaccines urgently needed in the poorest countries, where thousands of children die every day from diseases that can be prevented,” Paul Wolfowitz, World Bank President
Companies must agree to sell the new vaccine at a price that developing countries in Africa, Asia and South America can afford. After a period of 7-10 years, vaccine producers are to continue supplying their products, at a discounted price.

On another note, the first large-scale trial of an HIV vaccine is set to begin in South Africa. Three thousand HIV negative men and women who are sexually active will be immunised in a 4 year study.
This is a highly needed element in Public Private Partnerships. Pharmaceutical companies have their very important and fundamental role to play, but so do governments from developed and developing economies, NGO’s, other agencies and philanthropists, in order to generate incentives which increase R&D of neglected diseases, which still is in a low 10% of the whole R&D expenditure.
Learn more about The Global Fund and their January 2007 Africa Update.
The Bill & Melinda Gates Foundation on vaccine preventable diesases.
Learn about the International Aids Vaccine Initiative.

Max Oliva, Associate Director, Social Impact Management

HBS Working Knowledge has just interviewed Professor Kasturi (Kash) Rangan on his latest book, Business Solutions for the Global Poor, which includes the conclusions of the December 2005 Conference on Global Poverty: Business Solutions and Approaches.
“To the degree that these ventures empower the poor—either by improving their quality of life (clean water, for example), providing them with productivity tools and services (cell phones, for example), or creating jobs—that’s where the goals of poverty reduction and economic profit can align.”
According to Kash Rangan, there are three major challenges when considering the BoP:
• Cultural distance between corporate decision makers and the poor
• Lack of infrastructure in poor markets that can make operating at the base of the pyramid difficult, and potentially costly.
• Companies are challenged to find ways to bring BOP initiatives to scale and sustainability within the time frames dictated by traditional corporate targets. In many BOP ventures, the true profit driver lies in volume rather than in profit margins
Read the whole Q&A session here.
Interested in Improving Health for the Poor?, read the Q&A session with HBS Professor Michael Chu.
Last but not least, the Q&A session in regards to The Corporate Value Shift with Professor Lynn Paine, who argues that companies can’t consider themselves amoral or apart from society anymore—that the relationship between companies and society at large necessitates bringing a moral dimension to decision making.

Max Oliva, Associate Director, Social Impact Management
I have been this morning at the EMCG’s conference given by Al Gore in Madrid, Spain. His now “usual” Inconvenient Truth presentation was well addressed, loosing a bit of the impact he has gotten us used to (it ca perhaps be blamed on the jetlag). But it is actually nice to say this; the conversation on global warming has gotten almost everywhere and on a daily basis. People at the conference came up to me with comments such as “it was just like his move” or “his movie was better than the speech”, proving his contribution to global awareness on this issue. If still possible, his presentation content keeps improving but it is still only designed to raise awareness.

The debate has been in a very theoretical area, which was certainly fundamental, but it has lastly moved on. Recent news like the EU unveiling tough emissions curbs for cars, or that of Martin Wolf stating on today’s FT column, that “in spite of sceptics, it is worth reducing climate risk”, this when considering that the problem of climate change should not be viewed as just another investment decision, are moving further into action.
Raising awareness in the general public (at a grass root level and on a daily basis) and further increasing political pressure is still an ongoing and necessary area to address, but perhaps a second presentation scheme on practical actions to reduce global warming is needed in order to maintain the momentum on the conversation. This however is not his sole responsibility, so what’s our role on this second phase of the conversation?
You can read reviews of the event at El Pais & El Mundo.
Learn on CNN about Al Gore’s recent 2007 Nobel Peace Prize Nomination.

Max Oliva, Associate Director, Social Impact Management

It is interesting to see today’s FT main story, which relates to Mars pulling out child adverts. They are to stop marketing confectionery to children younger than 12 by the end of the year, which relflects mounting concerns about the links in advertising and childhood obesity.
Masterfoods’ move is according to FT “the biggest shift in marketing policy by a large food group since European officials threatened companies with regulation two years ago”. Soft drink companies have done a similar move, agreeing to stop advertising to children under 12, although only in Europe (Coca Cola does it globally).
Is this a move which is to be followed by other competitors? Is it to take place only in Europe or on a world wide scale? Is corporate responsibility a stronger driver than legal “incentives” in order to make companies act?
Take a look at Responsible Advertising and Children.
Take a look at Mars’ 1983 TV ad “A Mars a day helps you work, rest, and play”.