 |
 |
May 30, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Flying from Barcelona to London I was able to glance at the Jersey Islands from the window seat of a low-cost airline. A two-hour flight that goes over the north of Spain and France before entering the Atlantic and further north England. Between France and England there are a few islands that form the well-known Jersey Islands. Jersey is one more fiscal haven in a world where tiny islands lost in the middle of the ocean usually maintain a regrettable condition that escapes from today’s understanding of fairness in a globalized world.
Jersey is from the sky far from being a haven, far from being a paradise. Jersey, as well as many other fiscal havens, has to justify its existence and plays an unfair role of facilitator of money laundering. Fiscal havens are sometimes tourist havens. Think of Bermuda. Think of the Virgin Islands. Those islands have an alternative industry to which its townspeople can devote their time and skills in order to earn a living. But think of Jersey, in the middle of the ocean, surrounded by water, with no easy access to mainland England and France. Think of Jersey’s citizens, their occupation. It is not touristic. It is barely agricultural. Oh well, for god’s sake there are fiscal havens in this world, that are job creators and wealth generators for tiny islands lost in the middle of the ocean, surrounded by water.
Fiscal paradises might enable the creation of jobs and wealth in tiny islands, but in exchange for what? In exchange for serious and severe collateral damage to countries in the first and third world. Serious and severe collateral damage because the first world loses taxation revenues because fiscal havens channel out funds from the better off of the society. Serious and severe collateral damange because third world’s leaders have oftentimes laundered their country’s money to secret bank accounts in fiscal havens.
Think of a professional killer that earns his or her living getting rid of undesired individuals. He or she might earn a living. Oh well, for god’s sake there are still professions in this world for everyone. The professional killer might only know how to kill. Thanks to his killings he is able to bring money home and raise his kids. But then think of the proud parents of children he or she gets rid of. What about them? What about their kids that will not be able to be raised appropriately?
Today’s world is justifying a financial architecture that only makes sense for a few better off. For a few inhabitants of tiny islands that might otherwise have to do something else, that might otherwise have to move to mainland and get to work in a tougher industry. But that’s the case for a majority of the population. And we should not sustain a few when it does so much harm to so many.
Let’s not only look at the maximization of economic profit. Let’s look at the maximization of social capital. The world’s financial architecture may then have potential for change.
May 29, 2007
Dr. Javier Carrillo Hermosilla, Executive Director of the Centre for Eco-Intelligent Management
A lo largo de los últimos años se ha consolidado el consenso entre los científicos, los políticos, los empresarios, y la sociedad en su conjunto, con respecto al hecho de que la actividad industrial ha contribuido significativamente al principal de los problemas medioambientales en nuestro planeta, el calentamiento global. Como es bien sabido, este fenómeno amenaza con aumentar la intensidad y variabilidad de los patrones climáticos a los que estamos acostumbrados, incrementando la frecuencia de los potenciales desastres naturales. De acuerdo con el segundo informe del IPPC (Panel Intergubernamental de Cambio Climático de Naciones Unidas), en América Latina se extremarán las sequías en las zonas con menos lluvias así como las precipitaciones en las zonas más húmedas. Los glaciares desaparecerán y los recursos hídricos disminuirán entre el 10% y el 30% en regiones de latitudes medias y en el trópico húmedo. Como consecuencia, se estima que entre 60 y 150 millones de personas tendrán un difícil acceso al agua potable y que las condiciones higiénicas empeorarán, favoreciendo el desarrollo de enfermedades como el dengue o la malaria. Del mismo modo, se encuentran amenazadas numerosas especies animales y vegetales, incluyendo la propia supervivencia del Amazonas. En cuanto a las consecuencias estrictamente económicas (aunque es fácil entender que los anteriores desastres naturales y humanos también pasarán su factura), la disminución en la disponibilidad de agua afectará seriamente a la generación eléctrica, conducirá a la salinización y desertificación de las tierras agrícolas, y reducirá la productividad del ganado. Evidentemente, todo lo anterior tendrá consecuencias adversas en la seguridad alimentaria de la región. Además del sector agrícola, también se verán afectadas otras actividades económicas basadas en un clima estable y predecible, como es el caso del turismo o los seguros.
Las naciones industrializadas, en las que habita el 20% de la población mundial, son responsables del 60% de las actuales emisiones globales de CO2. Según un informe de la oficina regional de América Latina y el Caribe del PNUMA (Programa de Naciones Unidas para el Medio Ambiente), la contribución de América Latina a las emisiones globales fue tan sólo del 7% en el año 2000 y se espera que para el 2050 genere el 9%. Si bien la responsabilidad directa de la región a través de su actividad industrial y económica no parece muy alta, sí está en sus manos frenar la acelerada destrucción de sus extensos bosques y selvas, que actúan como sumideros globales de CO2 cuando permanecen vivos y liberan grandes cantidades cuando son destruidos. El último informe sobre la situación de los bosques en el mundo divulgado por la FAO (Organización de Naciones Unidas para la Agricultura y la Alimentación) constata que entre 1999 y 2005 se perdieron 64 millones de hectáreas boscosas en América Latina y el Caribe, principalmente como resultado de la conversión de los bosques en tierras agrícolas. Evidentemente, resulta necesario invertir esta tendencia.
Continue reading 'América Latina: cambio climático y convergencia real'
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
A world in which over half of its population faces a daily threat to their lives, is a world of nightmare. A world in which over half of its population would risk its life for a better opportunity is a world of hell.
A world of nightmare, unbound nightmare. A world of hell, unbound hell.
Ours is a world of bound nightmare, of bound hell. Ours is a world in which we can control, in which we have control of pain and despair, of hunger and thirst. Ours is a society of rule and law, in which bad conduct is prosecuted and punished.
Put yourself in a situation of extreme pain or despair, at least momentarily. Experience what an instant of unbound nightmare and hell might be. And then try to imagine what it may be like to live in such situation every single moment of your entire life. Approach a noisy train, get in a crowded underground carriage, spend an hour outside under a freezing cold or an extreme heat. After all you can put a limit to your pain, to your despair. Others simply cannot. Others simply cannot choose and have to withstand situations we would see as irrational, unbearable and completely ruled out in a society we claim to be modern.
Put yourself in a situation of extreme pain or despair, at least momentarily. Stop eating, stop drinking, stop loving for a single day. Stop smoking, stop drinking coffee, suffer your own despair for a day. Learn to feel like less fortunate others do. And then find an incentive to fight for the worse off of the society, and then find an incentive to believe everyone deserves an opportunity. Do not take what we have for granted. Do not take the society we live in for granted. Do not think everyone has the opportunity to improve their living.
We are at war. We are at war against hunger at poverty. It is a different war. It is a world war fought with different weapons, weapons of mass persuasion. A constructive debate that needs to be necessarily brought to society in which unheard of mechanisms should definitively be taken into account. We cannot afford to stay aside a regrettable reality that has a definite solution. We cannot remain eyewitnesses of an international conflict that causes more deaths than any other conflict of our time. The world deserves better.
Demand that your political leaders incorporate international hunger and poverty into their agendas. Mobilize locally. Be heard globally.
May 28, 2007
Max Oliva, Director Asociado, Social Impact Management
El talento y la responsabilidad corporativa ha sido el tema de la V Tribuna de PwC & IE, la cual ha tenido lugar el día de hoy (28 de Mayo) y en la cual han participado como invitados:
• Carlos Viladrich; Director Recursos Humanos ADECCO España; Adecco Human Capital Solutions Director
• Fernando Muñoz Berzosa, Subdirector General de Gestión de RR.HH BANESTO
• Miguel García Mosquera; Director de Compensación, Selección y Formación INDITEX
• Coral González; Directora de Recursos Humanos. SANITAS
• Alberto Durán; Presidente de la Fundación ONCE
• Mario Lara; Socio Responsable de Human Capital PwC
Y como Moderadores:
• Profesor Joaquín Garralda; Director del Centro PwC – IE de Responsabilidad Corporativa
• D. Enrique Fernández Miranda; Director de la Fundación PwC
Algunas de las intervenciones se resumen en las siguientes líneas, mismas que serán publicadas en Expansión en breve.
La retención tiene que ser con compromiso para que sea productivo. Lo que buscamos es no solo un compromiso racional, sino emocional que muchas veces es la clave en la retención de las personas.
Coral González de Sanitas, mencionó que la Responsabilidad Corporativa es una ventaja competitiva a la hora de atraer talento. El tener la capacidad de atraer y retener talento en mercados tan competidos como Madrid y Barcelona es vital. El primer paso está relacionado con la imagen de la compañía; posteriormente, los elementos de conciliación juegan un papel muy a favor.
Para incrementar la retención, contamos con programas de voluntarios y de diversidad, mismos que hacen que el empleado descubra que su empresa tiene un compromiso que va más allá de generar beneficios.
Miguel García de Inditex por su parte comentó: “en nuestro caso, atraemos al talento por el orgullo de pertenecer a una empresa multinacional española. El grado de reconocimiento de Inditex fuera de España es apabullante. Es aquí que el talento con alto potencial pone atención en nuestra responsabilidad corporativa, prestando por ejemplo, especial atención a como tratamos a nuestros proveedores y usando ésta como razón fundamental para ir a nuestras convocatorias, y no por nuestros resultados financieros, beneficios, o nuestras más de 3,000 tiendas en el mundo.”
Continue reading 'Talento y Responsabilidad Corporativa'
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Noorena Hertz does it again. In a book written before she wrote The Silent Takeover she exposes how developing countries have become heavily indebted over the past few decades, particularly since many of them earned a deserved independence from their former colonies.
Dr Hertz starts with a superb opening first chapter in which she details how Bono was able to persuade the political class of the G8 countries and particular that of the United States, that the debt burden on the poorest countries of the world was not only unfair and unethical, but had been accumulated thanks to the lax lending of western banks.
The book continues to give additional facts on how some of the debt has been used by despots and dictators in developing countries to undertake their personal vision.
The book also gives a relatively unprecise explanation of the role of the credit rating agencies, that usually are much more quantitative than qualitative and do not necessarily take capricious decisions seeking to increase the negative impact of a financial crisis in the developing world.
There is in the end more to blame on the current financial architecture of the world, allowed by industralized nations, and the imposed neoliberal economic policies on behalf of the World Bank and the International Monetary Fund, than on the side of the Rating Agencies.
Dr Hertz finalizes her piece providing further thinking as to how the debt burden ought to be forgiven, and how to incentivate developing countries to use the so-liberated funds appropriately, far away from using them for other reasons different than those of reducing poverty through the promotion of free access to education and better healthcare provision.
May 24, 2007
Waya Quiviger, Director of Special Projects, Social Impact Management
IE Business School
John Forgach has been coming to IE for the past four years and every year his session is the most popular Global Affairs lecture. This is partly because the urgency of addressing climate change and the incredible opportunity this represents for business make front page news almost daily. The other reason is John Forgach himself. His thought-provoking and inspiring talk will compel even the most indifferent audience.
The International MBA students were absorbed by Mr. Forgach’s presentation: mixing a cautionary tale about the dire state of our planet and the red-hot business opportunity this actually represents. According to Forgach the Internet 2.0 wave is tapering off while the “green revolution” is only beginning. Indeed, in his words : “the environment represents the largest business opportunity in the years to come given that all the “green commodities” are currently massively undervalued”. Mr. Forgach recommended carbon trading, wind farms, solar farms, renewable energies, timber, carbon sequestration, biodiversity conservation, water quality as business opportunities. The only one he seemed to oppose was ethanol as an alternate source of energy.
Mr. Forgach is currently chairman of ForestRe, a large re-insurer in the timber business and Equator Environmental a carbon and green commodities trading company. His pet project as he calls it is a $300 million venture with the Panama Canal where his company will 1) plant and sell timber around the canal; 2) sell the clean water in the canal; 3) sell the carbon credits he earns through the timber plantation. In his opinion, this is the best way the Panama Canal has to be profitable until it becomes obsolete once large companies start using the polar routes between Asia and Europe in 15 years. These routes will be open only because of climate change and the fact that the polar ice caps are now melting at an alarming rate.
Students had many questions for John, including whether he truly believed the environment was the most profitable business and what prospects for our planet were. He answered candidly that there may be more profitable businesses but none that combined feeling good about yourself, helping the planet AND making money. Regarding prospects for successfully combating climate change, his answer was rather bleak: at this point it was more a question of slowing down the irreversible. Mr. Forgach concluded his talk with a list of business tips for aspiring entrepreneurs in the green business, the most important ones being: “Good management is more important than good ideas; don’t fall in love with your project; show the bad apples in your business plan; show the value proposition; don’t think you will save the planet!”
May 23, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Extreme, External, Eternal
Published at elPeriódico.cat (In Catalan).
The three words that the debt and the poverty of the developing world have in common.
Extreme because debt and poverty have reached levels that are so regretful, so inhumane, and so beyond the normal levels, that need to lead to serious thinking in the industrialized world as to when and why this has happened.
External because the current levels of debt and poverty have been fostered by external causes. Their root might be in the developing world itself, but oftentimes not in its citizens, but in its corrupt leaders that once upon a time where given a wildcard to borrow as much money as they felt they needed to undertake their personal vision, far away from being backed and supported by their own citizens.
Eternal because debt and poverty risk to be long-time companions of a world that heads off in the wrong direction. An unequal world that operates according to the rules of a minority that is powerful and wealthy. An unequal world that operates according to the rules of a select club of nation-states unable to move forward and face the real challenges of the XXI century.
The Triple E. A challenging trilemma. One wonders who in this world of ours is responsible and can be accountable for a change. We are reaching a point in which the developing world will cry out loud and say it is enough. It is enough. We need public administrators ready to deliver. We need public administrators eager and willing to deliver. A huge responsibility lies on our shoulders as citizens of a democratic world whose leaders are not being consecuent and coherent.
The Triple E. Let's get to work.
May 22, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
We are used to eternal concepts. Some talk about eternal life. Others deserve life in prison which is equivalent to eternal cautivery. Eternity is, after all, an abstract concept very hard to imagine because the human being is finite and oftentimes incapable of grasping the idea of infinite.
Unless it has a positive connotation, eternity is an idea nobody likes. Imagine an eternity in hell next to the devil and surrounded by burning flames that bother you constantly. Think of your mother in law, think of a small elevator, imagine eternity with your mother in law in a small elevator. Definitely nobody likes eternity when it does not have a positive connotation.
Eternal poverty and misery is what most of the Human Kind can only dream of when they are born. In this scenario it may not be worth to be born. Eternal poverty and misery is a condition most of the Human Kind simply cannot escape because even if today’s society were able to turn the current situation around, it simply seems that the first world is too scared to make substantial changes that allow for a massive redistribution matching the Marshall Plan of the post war world of the late 1940s.
Nobody deserves to be born and immediately condemned to eternal poverty. It is not fair, and fairness is a concept that is very well liked in the western world. We like fairness. We encourage fairness. We promote fairness. Think of fair play in football. Think of antitrust in economics. Think of good manners in politics. Think of the international criminal court to judge international outlaws. You name it. The western world loves fairness.
Fairness at a global scale is only possible today. Fairness at a global scale should and would lead to global justice. And only global justice will let the thousands of young men and women born each day escape eternal poverty and misery, eternal hunger and thirst. And when I think of eternal hunger and thirst, I can only think of hell on Earth, and that, ladies and gentleman, cannot co-exist with the modern world of the XXI century.
May 21, 2007
El Club de Venezolanos del IE y el Net Impact Club les invita a participar en la presentación que ofrecerá el empresario y emprendedor social Alberto Vollmer, Presidente de la empresa Ron Santa Teresa, acerca de uno de los proyectos de responsabilidad social más exitosos de Venezuela: El Proyecto Alcatraz.
Que es Alcatraz? Es una ONG que se encarga de reclutar a jóvenes con serios problemas de conducta, impartiéndoles educación en valores, trabajo comunitario y asistencia psicológica para luego reinsertarlos en la sociedad y de esta forma contribuir a solventar dos grandes problemas: delincuencia y desempleo.
Entre los logros de este proyecto a nivel mundial se encuentran:
• Ser seleccionado como caso modelo por la Red de Conocimiento para el Emprendimiento Social (Social Enterprise Knowledge Network) liderado por el profesor James Austin de la Universidad de Harvard
• Segundo lugar a nivel mundial en la Conferencia sobre Juventud, Paz y Desarrollo en Sarajevo, Bosnia, organizada por el Banco Mundial. (Septiembre 2004)
• Contribuir con la drástica disminución de hasta un 40% de los índices delictivos en la zona de alcance del proyecto
• Haber participado por dos años consecutivos como equipo en el Campeonato Internacional de Rugby "7 A-Side"
Si deseas conocer más acerca del Proyecto Alcatraz y acerca de la buena gestión de la empresa privada en Venezuela asiste a la presentación que tendrá lugar el martes 29 de mayo desde las 4:30 hasta a las 6:30 pm en el Aula Magna. La charla será impartida en español.
Para reservar tu lugar, haz click aqui.
May 17, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
The universe of outcomes is an unexplored series of potential future scenarios, some of which are more likely to materialize than others. More likely than others because in the minds of the everyday people, some futures are more readily imaginable than others. More likely than others because a majority of citizens are unaware of thinking beyond the usual, unable to think beyond what is standard and understood by default.
Tomorrow is oftentimes a projection of today. Tomorrow is oftentimes a continuation of what we live, experience and are witnesses of today. But even though there are expectations about what tomorrow will bring, even though there are forecasts about what tomorrow will be, no one, not even the more accurate weather forecaster, not even the better stock analyst, is able to guarantee what tomorrow will bring.
The universe of outcomes is an unexplored series of potential future scenarios. Future scenarios that may or may not involve imagination, creativity, the ability to think beyond the ordinary, the ability to suggest alternatives to today's problems. The universe of outcomes must not be controlled by the better off.
Imagine a tomorrow in which everything is possible. Forget about today, forget about what history has brought. Believe in a tomorrow in which everything is possible. Think beyond the ordinary. Include the universe of outcomes and assume each of them is equally likely to happen.
Another world is possible. Another word is possible. It is never late to dream with a better world. It is never late to think that the fate of the Human Kind is not predetermined. The ability of the Human Kind to reverse all the harm caused by centuries of exploitation and abuse, caused by a growing gap between the rich and the poor, the ability of the Human Kind stands out as the centrepiece of a theatre play that started long ago and has, still, not reached the end of civilization.
McKinsey Quarterly has just published an interview with Al gore and David Blood, from Generation Investment Management, which explores reconciling sustainability and socially responsible investing with the creation of long-term shareholder value.
It's an interview worth while reading. Through Generation Investment, they're changing the approach of investing to a long-term approach; that is gaining superior returns for investors while integrating sustainability into an investment model. They base this on the conviction that the context of business is clearly changing. "We are now confronting the limits of our ecological system, and at the same time societal expectations of business are widening. People realize that there are reputation issues related to sustainability, but they also recognize that, in the end, this is about driving profitability and competitive position."
Read the Interview by following this link (Requires subscription).
* Three years ago, former US Vice President Al Gore joined with David Blood, the former head of Goldman Sachs Asset Management, to form an investment-management firm dedicated to investing for sustainability—that is, assessing the way social, economic, environmental, and ethical factors affect the strategy and valuation of businesses.
May 14, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
There are two financial centers in the world. There is Manhattan in New York. There is the City in London. Then there is the rest. Nothing measures with New York and London in terms of finances. Nothing messes up with Manhattan and the City, not even Tokyo, Shanghai, Hong Kong or Dubai, not even.
Finance and the financial markets are the lungs of a breathing industrialized world. Finance and the financial markets only make possible that this current version of the world based on capitalism 1.0 work. Finance and the financial markets make the whole idea of credit work. A whole idea only a few are able to grasp because without finance and the financial markets the current world such as we know it and are familiar with would simply not exist.
The current developing world has been incapable of accessing the financial markets as the first world has. The current developing world is far from reaching the financial markets because of a lack of rule of law, because of a lack of property rights and basic rights for long term investors to be confident their investments are secure and in good hands. Put microcredits and the work of Hernando de Soto to work together and a different picture might emerge.
London is the emerging financial capital of the XXI century, a global city in the social Europe of the second globalisation era, a social Europe that must for its own sake and that of its member countries, depart from the demode neoliberalism that Thatcher and Reagan once made popular. A social Europe that is in the difficult position to reconcile the more neoliberal understanding of the economy of the United Kingdom, with more social models rooted in Germany and France.
Finance and the financial markets only make our life easier. But finance must turn more social as well. In a globalized world where information is diseminated at the speed of light not one single firm can remain unaccountable for its lack of ethics, not one single firm. Credit is the key. Everybody loves credit, everybody needs credit. Those who are in charge of allocating credit are in a key position to determine the fate of capitalism. Those who are in charge of allocating credit need to enforce systematic and rigorous underwriting rules and give up the lax lending to either unethical or otherwise corrupt firms and institutions.
And the marketplace needs to penalize those firms that grant credit according to relaxed criteria. And perhaps we might then contemplate the beginning of capitalism 2.0. The world deserves better. The world awaits challenging times that will definitely set the path of a new set of rules in this game that only favors a few in expense of many worse off.
May 09, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Hedge funds: the economic power nobody sees
The globalized world of the XXIst century is a world of increasing complexity, in which the freedom of movement of goods and services, of human capital, and of monetary flows, in a phenomenon known as liberalization, has accelerated, to an even larger extent, the interconnection among the different pieces of that puzzle known as globalization.
The experts say that the globalization phenomenon is not recent. The fact of the matter is that the world experienced a first episode of globalization between 1870 and 1914. A globalization intrinsicly related to a considerable increase of international trade, a phenomenon that in the aforementioned first episode took place among the European powers and their colonial empires and ex-colonies (as it was the case of North America)
spread out across the globe. A first episode of a series that continues today.
There is a key difference between the first stage of globalization and the second we live nowadays that started in 1971 when the United States decided unilaterally to abandon the fixed exchange rate system. In both episodes international trade has increased notably. However in the first there were important migratory flows between Europe and its (ex) colonies, whereas in the second migration has been substituted for monetary flows.
The rich societies of the north have closed their borders to the migrants from the south, simultaneously imposing the elimination of tariffs to the developing economies, utilizing their voting power, instead of their persuasion, in the International Economic Institutions (International Monetary Fund, World Bank and World Trade Organization). Consequently an artificially natural sensation is created, a sensation that every country plays the same game based upon the same rules of transparency, a set of rules established thanks to the consensus and the savoir faire of our political representatives.
Who sustained the economic power in the first episode of globalization? Who sustains the economic power during the current stage of globalization? We have moved from a scenario in which the European powers determined the economic fate of the world, to a complex scenario characterized by the ever-growing sophistication of the financial industry. A growing sophistication that seems to escape from the understanding of a majority of the population, incapable of taking advantage of a new trend that grows in importance as time passes by.
Continue reading Decem 04
About Decem: Series of articles fundamentally innovative that aim at the proposal of alternative financial mechanisms to considerably raise the amount of funds available for development in the third world. Throughout the series of 10 articles, J.Pozuelo-Monfort will stress the implementation aspects of the suggested ideas and will propose arguments for and against.
May 08, 2007
Max Oliva, Associate Director, Social Impact Management
Africa - Which areas of innovation hold the best promise for enabling economic development?
This first-ever public ThinkPlace Challenge is a three-week online event designed to foster global collaboration on innovations that can fuel economic growth and improve the standard of living on the African continent. The ideas developed in this on-line challenge will immediately shape the agenda for the IBM Global Innovation Outlook/Africa deep dive sessions which will be conducted in person in locations around the world beginning in June. The input will also inform IBM's World Development Initiative, a new long-term effort to identify commercial opportunities addressing the needs of the vast population currently living on less than $5 a day.
Rob Katz has contributed with filling the Mesofinance Gap. "Small and medium enterprises need financing to scale up. However, most SMEs in the base of the pyramid can only access microfinance (loans up to $10,000) or formal finance (loans of more than $1 million). We need to fill that "mesofinance" gap."
Other ideas range from mobile to mobile platforms, microfranchising, microfinance, infrastructure and electricity. And this is just the beginning! Share your own ideas and/or contribute to ones already posted and be part of a program aimed at helping improve the quality of life for many people in Africa.
submit your ideas and collaborate with others on this topic by May 25, 2007.
May 07, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE
Corporations are oftentimes like families. Corporations are oftentimes structures governed on a one-vote per share basis where some parties have many more votes than others, and therefore much more control. Corporations are therefore non-democratic in essence in what can be considered a plutocracy where only the powerful determine the direction of corporate strategy. Today's capitalism is conceived as a top-down approach. Capitalism is built from the roof to the floor. The rules of the game need to be reversed. Today the universe of consumers follow the directions dictated by corporations. Today the consumer arena renders to the persuasion of advertisement. Today marketing is a weapon of mass persuasion, capable of driving trends and enforcing likes.
Once upon a time, in the middle of the XIXth century, corporations were more democratic. However today academics have decided to describe purely undemocratic behavior within corporations with such terms as agency problem.
In this scenario corporations have created its own code of conduct they have decided to denominate corporate governance. The architects of capitalism once built a basis unable to prevail over time, the same architects who now attempt to reinforce that same basis. The architects that once failed to construct properly should not be given a second opportunity under the likely event of failure. Third-parties with no stake in the game ought to take responsibility for what has become a matter of serious consideration. Corporations need to fulfill a set of ethical principles and be judged by consumers for its ability or inability to comply with the regulation. The consumer will then have real purchasing power. A consumer's purchasing power will then have an impact on corporations. The marketplace will then be democratic in essence and corporations will not be ruled by the better off, but by individuals who make thousands of purchasing decisions every year.
A new capitalism will then arise. A more democratic capitalism.
May 04, 2007
Max Oliva, Director Asociado, Social Impact Management
The Intergovernmental Panel on Climate Change (IPCC) , established by WMO and UNEP to assess scientific, technical and socio- economic information relevant for the understanding of climate change, its potential impacts and options for adaptation and mitigation, has just released hours ago their 6 year report on Climate Change 2007. This report represents a comprehensive and rigorous picture of the global present state of knowledge of climate change.
2500+ Expert reviewers, 800+ contributing authors and 450+ lead authors from 130+ countries, 6+ years work, 4 volumes, 1 Report
Some highlights of the report include:
• Global greenhouse gas (GHG) emissions have grown since pre-industrial times, with an increase of 70% between 1970-2004
• With current climate change mitigation policies and related sustainable development practices, global GHG emissions will continue to grow over the next five decades
• Both bottom-up and top-down studies indicate that there is substantial economic potential for the mitigation of GHG emissions over the coming decades, that could offset the projected growth of global emissions or reduce emissions below current levels
• In 2030 macro-economic costs for multi-gas mitigation, consistent with emissions trajectories towards stabilization between 445 and 710 ppm CO2-eq, are estimated at between 3% decrease of global GDP and a small increase, compared to the baseline
• Changes in lifestyle and behaviour patterns can contribute to climate change mitigation across all sectors. Management practices can also have a positive role
• In all analyzed world regions near-term health co-benefits from reduced air pollution as a result of actions to reduce GHG emissions can be substantial and may offset a substantial fraction of mitigation
According to FT, "The world has only eight years in which to reverse the trend of rising greenhouse gas emissions to avoid the most dangerous effects of climate change, the world’s top climate scientists warned on Friday. Taking action to reverse by the amount needed the rise in emissions of the past 150 years would cost only 0.12 per cent of annual gross domestic product, according to the most authoritative assessment yet of climate change."
Read the Summary for Policy Makers
Read the Full IPCC Report
Julio Gómez-Pomar, Director del Centro PwC & IE del Sector Público
Las relaciones entre la administración y, en general, los poderes públicos y los ciudadanos han experimentado una profunda transformación en los últimos años. Hoy día, los ciudadanos no perciben a las administraciones públicas como instituciones que les son extrañas y cuya existencia y forma de actuar es plenamente independiente de su voluntad. Bien al contrario, éstos quieren y exigen que las administraciones y los empleados que las sirven sean eficaces y que su comportamiento sea transparente y responda a unos principios éticos. Ello ha motivado que más allá de las normas que establecen los derechos y deberes de los empleados públicos, muchos países hayan elaborado “códigos de conducta” o “códigos éticos” que constituyen un conjunto ordenado de reglas y principios de comportamiento o deontología especialmente adecuada para el desempeño de la función pública. Hablar de ética pública no es novedoso; lo que es más reciente es la preocupación por regularla, por establecer un catálogo de principios que les sea exigible a los empleados públicos y que traslade a la ciudadanía la forma en la que hoy los poderes públicos entienden el desempeño de sus cometidos. Indisolublemente unido a la idea de comportamiento o conducta ética está la idea de responsabilidad. Si al empleado público le son exigibles una serie de deberes y un comportamiento respetuoso con unos principios éticos, unos y otro solo cobran pleno sentido ante la sociedad cuando encuentran un nivel correspondiente y proporcionado de responsabilidad.
La forma en la que los países han abordado esta cuestión ha sido muy diversa. El nuevo Estatuto Básico del Empleado Público, aprobado el pasado 12 de abril, adopta una posición intermedia entre los países que recogen, como era nuestra tradición, los derechos y deberes de los funcionarios en una ley y los que más allá de la norma disponen de un código de conducta que no tiene un rango normativo. El nuevo Estatuto da un tratamiento a los principios éticos de actuación y comportamiento de los empleados públicos se sitúa entre lo “dispositivo” y lo “orientativo”. Los artículos 53 y 54 del nuevo Estatuto contienen, respectivamente, el catálogo de principios éticos y principios de conducta de los empleados públicos. Previamente, el artículo 52 enumera la relación de principios que deben guiar la actuación de los empleados: Objetividad, integridad, neutralidad, responsabilidad, imparcialidad, confidencialidad, dedicación al servicio público, transparencia, ejemplaridad, austeridad, accesibilidad, eficacia, honradez, promoción del entorno cultural y medioambiental y respeto a la igualdad entre mujeres y hombres.
Continue reading 'Ética Pública y el Nuevo Estatuto del Empleado Público'
J.Pozuelo-Monfort, MSc candidate in economic development at LSE
Democracy can learn from capitalism. Capitalism can learn from democracy. Both are necessarily benefitial and desired. However whereas the former follows naturally, the latter encounters fierce opposition. Fierce opposition coming from large shareholders, who do not wish to give up their control on public firms. Fierce opposition from hedge funds and private equity players, that refuse to give up secrecy in exchange for some sort of regulation. Fierce opposition from the current international financial architecture, that refuses to eliminate unfair jurisdictions such as tax havens and the like. Fierce opposition from high net worth individuals, who flee to low-tax regimes and refuse to be fairly taxed based on the principle of redistribtioin. Fierce opposition from multinational firms, that refuse to be transparent and report their environmental and social damage. Fierce opposition from governments, that refuse to eliminate tariffs on agricultural produce afraid of losing support of the farmers.
Democracy is willing to become more efficient and adopts financing mechanisms from capitalism. Democracy is willing to become more efficient and adopts private public partnerships as a way to build infrastructure. Democracy incorporates the economic activity into its own operation. Capitalism is not willing to become more efficient. Capitalism is not willing to become more sustainable, more ethical, more fair and more social. Capitalism is not willing, in the end, to become more democratic.
Here is the crucial difference between democracy and capitalism. And the same actors that encourage democracy to spread out across the developing world, are refusing to turn capitalism more intrinsically fair. And the same actors that encourage democracy to prevail, are refusing to make capitalism more sustainable. Here is the crucial difference between democracy and capitalism.
Willingness versus unwillingness defined as the inability to realize a necessary change. Willingness versus unwillingness defined as the refusal to wake up from an unreal truth.
May 03, 2007
Max Oliva, Director Asociado, Social Impact Management
Dirigido por Joaquín Garralda, Director del Centro PwC & IE en Responsabilidad Corporativa y organizado por la Fundación Santander, el foro de economía y sostenibilidad tendrá lugar en el Instituto de Empresa entre los días 7 y 8 de mayo, comprendiendo conferencias y debates de varios expertos en la sostenibilidad de las empresas.
Qué facetas y retos tiene el proceso de alcanzar el reconocimiento de ser un líder responsable? Con la pretensión de aportar criterios fundamentales para este nuevo paradigma y, al tiempo, exponer ejemplos prácticos de cómo las empresas ayudan – y se benefician – en este proceso. Durante dos sesiones en días consecutivos, destacados expertos, tanto en el mundo académico como empresarial, expondrán sus opiniones y experiencias sobre los factores dinámicos del contexto en el que se desarrolla la condición de líder responsable.
El primer día hará énfasis en aspectos conceptuales, destacándose la visión económica y de la comunicación, piezas claves del proceso. En el segundo día las intervenciones se centrarán sobre experiencias de las empresas desde distintas perspectivas, partiendo de la visión de una red supranacional de empresas preocupadas por la sostenibilidad, ejemplos de empresas grandes que aportan experiencias relevantes en la atracción y retención del talento, así como ejemplos de PYME, en las que los valores del empresario y la motivación emprendedora por proyectos sociales son la base de su comportamiento.
La gestión de los intangibles, y en especial la reputación, es una de las preocupaciones prioritarias de los gestores empresariales. Lograr las ventajas esperadas, no sólo depende de la racionalidad del motivo y de la eficacia de comunicarlo, sino que se debe tener en cuenta a las personas – en su multiplicidad de papeles – para dar coherencia y consistencia a las medidas de reputación.
Programa
Lugar: Instituto de Empresa (Aula Magna), María de Molina 11, 28006 Madrid.
Fecha: 7 y 8 de Mayo
Información y Reserva: ancir.salazar@ie.edu
J.Pozuelo-Monfort, MSc candidate in economic development at LSE
In an ideal world capitalism and democracy would be meant to coexist. Theoretically the only economic model able to survive the carnage of the first half of the XX century that left behind socialism, stands out paradoxically as the single alternative to both democratic and non democratic governments across the world, with a few populist exceptions arising in Latin America.
An economic model, that of capitalism, with different reencarnations, with different implementations. An economic model that has become purely mathematical arising from the recently decesed economist from the University of Chicago and Nobel Prize winner Milton Friedmann. An economic model based on the so-called neoliberal principles of the Washington consensus, led by center-right governments and architected by the International Economic Institution across the world, that impose elimination of tariffs and austere fiscal policies that only work on paper, on the paper of the economists of the University of Chicago.
Capitalism is not a steady concept, capitalism does not operate according to predetermined underlying assumptions. There is in actuality a universe of capitalisms covering a wide spectrum of varieties, from more liberal to more social, from less state intervention to more, from a purely economic focus to a broader social intent. Capitalism is in the end like any other species in constant evolution, like any other species, which strongest specimen will survive. Only when the economic actors that determine capitalism’s fate take action, will we become witnesses of a redefined capitalism, able to sustain society over time based on ethics, sustainability and global justice.
