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Voice and Noise questions donated to Dropping Knowledge

Someone urged me to donate questions included in my Voice and Noise to http://www.droppingknowledge.org/ and after I saw what they were up to I went fishing and came up with the following 64! that I sent them, and there are even many more in the pond where these came from.

Comments or answers, please!

Local strawberries in season

Although I appreciate being able to eat strawberries-in-winter I still miss those very special strawberries that you could only get only once a year, early summer, in strawberry season. As an economist I would have to say they had that very special taste of scarcity—and scarcity allowed them to provide their growers a quite decent return. Their disappearance happened when such strawberries were forced to compete, marginal cost against marginal cost, with other brutally efficient quasi-strawberries that could be transported overnight, into your local supermarkets, at anytime and in any quantities.

As the world allowed those coming from anywhere at anytime to count as the same as your neighbor’s at-their-right-time strawberries, we—if I may mix a metaphor—mixed apples with pears, created confusion, and destroyed important economic value. This mess in the strawberry patches of the world can still be corrected though. Currently as a result of World Trade Organization’s negotiations only champagne from Champagne can be called champagne and the rest has to be labeled as produced by the Méthode Champenoise. If we were to broaden these criteria there is nothing that stops us from marketing any local-strawberries-in-season as strawberries, while requiring all others to label themselves as close-to-being-strawberries berries—and this way all strawberries would survive.

It is quite clear from the awakening of protectionism that something dramatic has to be done, and perhaps a much clearer market segmentation could be the key to keep borders from closing up, and having to wave good-bye to all those ersatz strawberries that even while never the same as their summer cousins, are still quite nice to have in winter. But if the worst happens, let’s find some consolation in the fact that strawberries-in-winter could turn out to be a new and profitable smuggling alternative for some of the uglier cartels, while being much less harmful to us all.

The World Bank needs to go truly Global

Many seem to opine that if only the votes and the composition of the Executive Boards of the World Bank (and the IMF) reflected better current economic size, then global imbalances had a better chance to disappear, like magic. It might not be as easy as that, and just for a starter why would GDP or the market share of the world trade be more important than market capitalizations for assigning voting power. Also if we are at it, why should we not then go for a full Monty on democratic reform and use population as the basis?

If and when a possible reshuffling of the current 24 Executive Directors should happen, I hope it will be to give representation, perhaps not to Civil Society, which is sort of intangible, but to that very tangible piece of land, water, and air that we all know as earth.

Although we proudly name ourselves the World Bank, the fact is that we are more of a “Pieces of the World Bank”, with 24 Executive Director representing parochial interests. As a consequence I sadly had to conclude in that the World itself, call it Mother earth if you want, in these times of globalization, is in fact the Bank’s most underrepresented constituency.

This needs to be fixed, urgently, as we need to be able to stimulate a profoundly shared ownership for the long-term needs of our planet, if we want to survive as a truly civilized society, worthy of the name civilization. As I see it, adding a couple of truly independent seven-year-term Executive Directors, whose role would be to think about the world of our grandchildren, way beyond the 2015 of the Millennium Development Goals—could be what the World Bank most needs now.

And, while at it, we should perhaps also ask one of the current Directors to give up his Chair for a new constituency—call it, if you will, the Constituency of the International Rovers, by which I mean all those workers, skilled or unskilled, legal or illegal, who nowadays represent jointly one of the largest economies of the world. By the way, the first thing that the Rovers’ ED would need to do is to make clear the enormous difference that exists between an immigrant with a long-term plan to emigrate from motherland and forever assume a new nationality, and, on the other hand, a temporary worker who just wants to make a buck in order to help his family to a better life, and who wishes with all his heart and soul to return home as soon as possible. Forcing temporary workers to swear allegiances to foreign flags, just so that they can have the right to a better income, cleaning toilets, seems only like a new generation of artificial trade barriers.

Currently we are too stuck in the geography of the non-globalized world to be able to see what is truly happening around us. For instance, El Salvador has about 2 million of its people working abroad, more than a third of its total workforce and so if to the current GDP figures of El Salvador we add what these workers are earning, gross, well then perhaps El Salvador’s growth rate could actually be higher than China’s. And you tell me, why should we not do it this way? Is not an El Salvadoran still a real El Salvadoran just because he or she is working abroad? The internal emigration in China from west to east might take a Chinese from 50 to 150 dollars per month, but the El Salvadorans going south to north go from 120 to 1.200, and no one is heard complaining about an over or undervalued currency.

(Extract from a presentation of Voice and Noise at InfoShop on May 16, 2006)

On the World Bank’s fight against corruption

A global world that requires so many sacrifices to solve its global problems will not be able to do so if it must swim in too dirty corrupt waters. Therefore, fighting against corruption must be at the top of the World Bank’s agenda. But for that fight to signify more than another flavor of the month, it needs to be completely internalized into a deeply felt organizational modus vivendi. In this respect, the World Bank, while fighting corruption, needs to keep the following in mind:

To invest more scarce resources into anticorruption efforts than what the corruption could itself potentially cost is managerial corruption.

To fight corruption among third parties without fighting it first and foremost among your own is hypocritical corruption.

To create the impression that certain risks of corruption are effectively taken care of is collaborating with and camouflaging for corruption.

To focus the attention on the small fish while letting the big fish free, even though the small can grow to be big, is plain cowardly corruption.

To believe it is only when money is involved that it really matters creates the space for self-righteous corruption.

And finally, to believe that corruption can be contained to some pockets and not contaminate the rest of the world, and that some nations are by nature more immune to it, has nothing to do with corruption; it is just plain stupidity.

And so what shall it do? Well, as Dori in the Finding Nemo movie would have said, “Just keep fighting . . . just keep fighting!” I would start by recommending that all projects, urgently, include in their documentation, a very simple one-page Public Notice that lays out the most important risks of corruption in the operation, making clear what World Bank is doing to diminish them but, much more importantly, what it is not in their hands to do. That page should then transparently surf the Web in order to enlist the civil civilians in the fight.

(Extract from a presentation of Voice and Noise at the InfoShop on May 16, 2006)

To write or not to write … by hand

My father always thought good handwriting to be one of the foremost proofs of a good education and he was most certainly right, in his own time and way. Unfortunately, nowadays, you do not have that many opportunities to show off your good education by handwriting. Every year that goes by, the less I write and the more cramps I get in my arm when I try.

As an economist, concerned about input/output productivity, I have to question whether there still is a valid reason for including learning to write by hand in the general school curricula. Just think of the number of hours you put into that effort and then calculate the estimated number of letters you are expected to handwrite in the future where even your signature is perhaps about to be supplanted by a scanned image of your right eye pupil.

“Dear God, another economist gone mad believing life is just about efficiency!” I can hear the purist cry out. No, friends, I am among the first to acknowledge a real human need for inefficiencies but perhaps even from this perspective, we should be able to find more enjoyable and useful inefficiencies than writing—and also with much less potential for creating conflicts with our perfectionist fathers.

Many write-defenders will put forward the argument that it promotes coordination of mind and muscle. However, if this were the whole purpose of the exercise and if we look at what seems to be future needs for coordination, derived from the many hours children invest playing handheld games, then I would argue that what we have to do away with is single-hand writing. Forget about right handed or left handed, let Darwin work, and have children learn to write with both their hands.

“But writing helps you to understand the language!” Nonsense! That you do by reading, listening, speaking, and nowadays by typing. If you really must cling to writing because of contractual clauses carefully crafted by your writing teachers association, then, at a minimum, you should convince them to use those sessions to teach writing in Chinese.

Want your children truly to stand out and be able to master future technologies with the same flair as Cirque du Soleil acrobats? Let them then practice to write with both hands in Chinese and Arabic, simultaneously, while humming Bob Dylan’s “The Times They Are A-Changin'.” That should do it!

But my purpose is not to eliminate writing as an art form but to recapture it as a true art form. You know how much I worry about how the world seems incapable of creating new good-paying jobs. Well, limiting the teaching of writing now allows us to visualize in a couple of years the resurrection of the profession of writing clerks. May I offer you my services then?
What on earth has this to do with the World Bank? If you can’t figure it out, you should not be in the business of development!

A quite interesting spin on this same issue is made by Willam Easterly in his book The Elusive Quest for Growth, since when he argues that “the productivity gains of the computer are slow to be realized . . . because there are still too many traditional people out there with ink and paper,” he is actually making the point that perhaps we should prohibit handwriting as such, so that the world can move forward. [Jim, my editor: “Plato suggested—I suspect jokingly—that the invention of writing was a bad thing that ruined human powers of memory.”]

In the WBG cafeteria, we read that by using its napkins made with 100%-recycled paper, the WBG Food Services was proudly saving 268 trees annually, 110,000 gallons of water, 47 cubic yards of landfill space, 65,000 Kwh of electricity, and 945 pounds of greenhouse gas emissions. As the WB Board’s 100% paper-intensive proceedings alone might consume several times these “savings,” not being able to write by hand could presumably also have some favorable environmental implications.

Thou shall not PowerPoint

• Dear Colleagues,

• When we were small, our fathers taught us never to FingerPoint anyone, and today we also need to teach kids not to PowerPoint one another.

• Yes, I have seen some splendid use of PowerPoint presentations, but, in general terms, the world is not a better place for it.

• PowerPoint has empowered so many people with so little to say with a deep belief that the world is waiting for them to predicate, for hours.

• PowerPoint is little by little replacing all decent readable issue papers with thick bundles of copies of PowerPoint sheets, each one containing less than 15 words, in beautifully irrelevant colors, except when replaced by thin bundles containing miniature unreadable copies of aforementioned sheets.

• PowerPoint is forcing the world to structure its whole thinking process in terms of bulletpoints.

• NO, thou shall not PowerPoint me and I promise not to PowerPoint you … too
much.

• Happy Holidays

• Per

• December, 2003

Of Mangos and Bananas

For several reasons, the debate about the global economy has recently reminded me of fruit. The wise Henri Pitier wrote his Manual about Common Plants in Venezuela in 1926. In it he wrote the following about the mango:

“It is harvested in abundance, and there are many who, during the season in which they are ripe, dedicate all of their time to the search for this fruit which for some time then becomes their only source of nourishment, very often to the detriment of their health. One can vacillate, then, on deciding whether the introduction of this tree [from Asia] has been a blessing or a curse. The writer of these words is inclined to believe the latter since the mango leads to idleness, to the invasion of another’s property and to vagrancy; additionally, no matter how good or healthy it may be, when ingested in moderation, it sometimes provokes digestive disorders and is far from being wholesome food. It alters, then, both morality as well as public health.”

This interesting quotation shows us that, in addition to oil, the mango should be classified high on the list of culprits that have been the cause of our poor economic development. Most assuredly, in addition to the mango and oil, we must also add to this list the sun, the beaches and all those variables that undoubtedly make it easier to survive an economic recession in a tropical Caracas than in a wintry Moscow.

Since it seems evident that the simplicity of living in the tropics leads to laziness while the hardship of winter promotes the discipline and work ethics that have ultimately inspired today’s global economic development, it behooves us to view global warming with renewed preoccupation and from a totally new angle.

I have made my own empirical observations about the evolution of global warming. Every Carnival weekend, for example, I stroll out to my beach in Margarita, the tropical Venezuelan island in the Caribbean Sea, and take note of the width of the shore from the water line to the roadway. Even when I had terrible difficulty in finding a spot in which to anchor beach umbrella, I never really worried about it. I simply attributed this difficulty to the increased popularity of the island and not to an invasion by the oceans.

Today, however, I harbor serious doubts as to the validity of my method of measurement since wherever I look I find much new and more concrete evidence of a very advanced state of global warming.

How else, other than by assuming a certain displacement toward the north of the parallel of the Banana Republics, can we explain the current enormous fiscal and commercial deficits that currently thrive in the United States.

How else, other than by assuming a certain displacement toward the north of the geographical boundary of the Banana Republics, can we explain the opposite positions recently sustained by superpowers like Europe and the United States on the issue of bananas, as if they were some modern versions of Lilliput and Blefuscu.

How else, other that by assuming the creation of climatic conditions conducive to the cultivation of mangos, can we understand why Japan has not been able to combat idleness and stimulate the reactivation of its economy? We have all read that Japan has reduced interest rates to an annual rate of one per one thousand. Can you imagine how impressed a botanist like Henri Pitier would be upon observing this unique specimen of a mango?

From The Daily Journal, Caracas, March 1999 (Abridged version)

Who ever promised life in the curse lane was easy?

Yes, Chad could not resist messing around with the mechanism of the transparency initiative for managing their oil income, and yes the World Bank could not just let them do so. But why should anyone believe that this first experiment needed to work perfect in order to be useful. For instance, just the fact that Financial Times recently dedicated a full page on the fact that Chad is deviating from their originally intentions on how to use their millions of oil income, is already much more than what is normally written about all those other billions of oil income spillages that happen in the rest of the world. The important part is now to find a way forward, perhaps through some open-minded arbitration, instead of feeding upon the difficulties, just to satisfy the gluttony of all the salivating wetoldyousoes.

60 words per minute

It should be so extremely evident that for a kid to be able to learn and progress in school he needs to be able read sufficiently fluent, but perhaps it is not, and therefore many kids will be laggards forever, and nations will be wasting millions in educational resources.

I just saw a short video produced by the World Bank in Peru where they tried to establish whether the kids at the end of their second grade could read 60 words a minute, which supposedly is a minimum, for Spanish. Some could and they were therefore also able to answer some very easy questions on what they had read, but many could not read even one single word and of course had not the slightest idea of what was going on.

After the video I just concluded that if I had kids their age, I would immediately put them to that one single minute test of reading a normal paragraph and if they passed it well, I would then immediately call up their teacher to give him or her a big hug and thanks for a job well done but, if they did not pass the test, then I would run even faster to kick that same teacher in the butt for not doing his or her job, just to follow up kicking the education Minister in the butt for not supervising as he should and, finally, finding someone to kick me really hard in the butt for being such a irresponsible parent and not finding out earlier that there was such an easy an straightforward way to monitor my kids education, in such an effective way.

The video screams out to us the wisdom of that old saying that perfection is biggest the enemy of the good, and to think that such important initiatives as Education for All are just wasting their scarce resources on kids who have not been taught how to just read sufficiently well, also makes oneself want to scream out in despair.

For the video
http://www.gdln-lac.org/wms/video_con_subtitulos.wmv

About matching impossible results with correct procedures

Since the world was aware that Venezuela is a polarized nation and needs credible elections so as to be able to work out their internal differences peacefully, the Organization of the American States (OAS) and the European Union (EU) sent observers to review their Parliamentary elections held on December 4, 2006.

Had the observers been there to supervise the mixing of a blue and a yellow but instead of the expected shade of green had only found a pure yellow, they would simply have concluded that the colors were not mixed, which in fact is what happened in Venezuela. As the election results in Venezuela yielded a Congress with 167 representatives in favor the government of Hugo Chavez, and none, zero, zilch, of those who differ with him, the only possible conclusion was that no matter what the causes or who is to be blamed, there were simply no elections held.

Unfortunately since the observers were so completely taken off guard by the surprising results, they did issue some preliminary statements which included a lot of criticism but also some acceptance of the results and this when later having to workout a final statements, on an election never held, must have come back to haunt them.

I know that we were supposed to feel much more sympathetic with these international bureaucrats about the challenges they faced when trying to harmonize the no doubts about an election process with a 167 to 0 result but, unfortunately, the elections were just too important for that.

The Big Questions to Einstein

Ask anyone of the older generation whether he liked the cold war and he will answer, gosh NO. But ask him whether things were clearer then and he will most certainly answer, golly YES. Are these answers consistent? Yes. Clarity could exist when no questions are made and therefore no answers are required.

The world has always shown the tendency to cuddle up in the arms of the very comforting but still quite illusory certainty that is provided by a clear divide; them and us; black and white; false and wrong and the ever ruling “this is so because it is so”. Human nirvana could therefore seem to be reached when there are no more questions but, contradictory, we also know that there should be no other way of possibly reaching human nirvana, than by making the right questions.

In this respect, and just as Einstein stated through his E=mc2 that energy and mass are functions of each other, we could perhaps say that A= Qc2. Give an answer and that’s it, a bit of matter, a bit of know-how. Pose a good question instead and it will be multiplied into an answer by c, the speed of light, elevated to the exponent of two. In this new formula c seems also provides the same relativity fundamentals as in Einstein’s this year a one hundred year old formula, since, the better the questions, the further away seem the real answers.

A=Qc2 is indeed a very humbling formula as it forces all those who “know” they have the right A., to ask themselves whether they have the right Q. It is equally a very powerful formula in that it teaches us that the real value of education lies not in the answers we can provide our children, but in the questions we can stimulate them to make.

I am no physicist and I have never really understood, nor do I believe I ever will, the exact significance of Einstein’s formula, and I admit it is a source of extreme frustration not being able to fully understand the greatest genius, and that belongs, on the margin at least, sort of to your own time. That said I have never felt being closer to an A. on Einstein than this year, when helped by those extraordinary Q’s presented by NOVA in their program Einstein’s Big Idea, based on the book by David Bodani, and that I saw on WETA. They all helped remind us that when we celebrate an A. we should never forget to celebrate those who had pose the right Q., and we all sincerely thank them for that.

P.S. If I got it all wrong, please leave me in my blissful ignorance.

Samoa…as far as you can go!

When I visited beautiful Samoa (2003) and had a chance to hear a bit about their tourism strategy, I sensed they were making too many efforts to minimize the cost of their remoteness, when they might benefit more from exploiting the worth of that very isolation. In a world where so much is brought so immediately close, there is a growing need to be able to get really away. For that, nothing is like Samoa … as far as you can go. When I hear of anyone wanting to write, compose, paint, sculpt, or just to regain a balance in life after an upsetting event or a batch of bad luck, I think of this island.

Is there a market in hermits? Of course! If only one of every thousand of the population has an artistic temperament or is in need of isolation-relaxation and Samoa manages to attract only one in every thousand of them, then just from the United States of America, Samoa would welcome about 300 each year. If each stays for an average of three months, that adds up to about 3,600 visitor-weeks. Not a bad thing for an island with a population of 177,714 (2004 estimate).

But wait, that’s not all.

Having attracted 300 bona-fide hermits (hopefully including a couple of modern-day Robert Louis Stevensons), Samoa could exploit the follow-the-hermits market. In this segment, it will find bona-fide hermit-followers, such as publishers with deadlines, girlfriends with broken hearts, and tax collectors with bills—but also those millions of groupies just wanting to rub shoulders with the hermits and let them rub something off on them.

Although I wish Samoa all the success in the world with its tourism industry, I also hope it never goes overboard and ends up finding that the world has gotten too close. Samoans seem to be very aware of these risks. In a round-table conversation with some private-sector representatives, I listened, amazed, as local entrepreneurs voiced their concerns that the 6 percent growth rate of their economy projected for next year was much too high to guarantee the harmonious development of their society—a first for me.

Having no interest whatsoever in space tourism, I knew very well that by going to Samoa I was traveling as far as I ever will. What surprised me, though, was seeing how as-far- you-could-go could grow so under-the-skin-close-to-you.

PS. The Minister got the idea right away: “Been the subject of a hostile takeover? Feeling bad after the divorce? Come to our wisdom island!”

THE CONTENTS OF VOICE AND NOISE

Introduction
The World Bank Group? (WBG)/ The Executive Directors?/ The Nongovernmental Organizations?/ The Millennium Development Goals?/ 205 Development Topics! —listed on the World Bank Web site
My ED trips 1
Airport #1/ Airport #2/ The First Country/ The Second Country/ Airport #3/ The Third Country/ As far as you can go/ The fourth country/ A fifth country—while an ED but not as one/ Small memories from my Central America/ The social contract of Teotihuacan/ Small memories from my transitional hometown
The Debt Sustainability Analysis 23
Why was it such an issue for me?/ A word of caution about Financial Leverage/ An Unsustainable Sustainability/ Odious Debt/ Odious Credit
BASEL—Regulating for what? 37
Puritanism in banking/ A warning/ About the Global Bank Insolvency Initiative/ Some comments at a Risk Management Workshop for Regulators/ Let the Bank Stand Up/ BASEL and microfinance/ The mutual admiration club of firefighters in Basel/ Towards a counter cyclical Basel?/ A new breed of systemic errors
The debate about using Country Systems 55
Why did I spend so much time on this issue?/ Let them bike/ About El Zamorano and the use of country systems/ Lost in the water of globalization
My very private fight for better privatizations 65
Where do I come from?/ Transmission and Distribution—T & D/ Electricity for Brazil—and Isla de Margarita what?/ Pay now and pray for the light/ Hit in the head by the SENECA sale/ The present value and short circuits/ Reform fatigue opportunities/ Fiscal Space—Public or Private
About indexes and their disclosure 83
The Riskiness of Country Risk/ Disclosing the IDA Country-Performance Ratings/ A first round of comments/ About the Panel of Experts/ Some follow up comments/ US GAO Report
A bit on some other indexes 95
The through-the-eye-of-the-needle index/ The index of perceived Corruption/ Today, let us talk about the bribers/ A dangerously failed index/ How good or bad is your municipality?
EIR & Environment 107
My answer to the NGOs/ The Amazon/ Our quixotic windmills/ Earth, the cooperative/ A better alternative than a hybrid
Oil 121
About an Oil Market Update/ It’s an oil boom, stupid!/ Kohlenweiss 1979/ The search for transparency in an oil-consuming world/ We need the world price of gasoline (petrol)/ Sovereignty/ The Oil Referendum/ Why do they point their finger only at us?/ About accountability in energy planning
Trade, agriculture, services, and growth 135
On the road to Cancun…with new proposals/ Place us next to something profitable…/ Time to cover up?/ An encore on nudism and WTO negotiations/ Hosting the spirit of free trade/ Time to scratch each other’s backs/ Of Mangos and Bananas/ Local strawberries in season
About remittances and immigration 147
The nature of remittances/ Remittance fees: The tip of the tip of the tip of the iceberg/ What GDP?/ Family Remittances/ Some notes on the securitization of remittances/ Safeguarding resources/ Scaling up imagination about immigration/ The Skin of the United States/ A de-facto USA enlargement
About cross-border services and emigration 165
The prisoners, the old, and the sick/ A wide spectrum of services for the elderly/ The ethics of solving the shortage of caretakers/ Are we truly a World Bank?/ Get moving!
Intermission…Out of the box tourism 173
Lessons from Florence/ A niche in crookedness?/ Dead and Useful/ Adventure tourism/ Vanity tourism/ Guaranteed boring
On our own governance 181
A real choir of voices/ Voices, Board Effectiveness, and 60 Years/ WB-IMF Collaboration on Public Expenditure issues/ The Normal Distribution Function is missing/ Board Effectiveness and the ticking clock/ WBG’s fight against corruption/ The Annual Meetings Development Committee Communiqué/ Hurrah for the Queen/ Diversity/ About the board and the staff/ A very local World Bank or…the not in my backyard syndrome
Budgets & Costs 193
On the urgency and the inertia of our business/ Medium Term Strategy and Finance Plan/ Unbudgeted costs/ Budget tools/ The remuneration of our President/ About our central travel agency
Reshuffling our development portfolio 201
Let us scale up the IFC/ An encore on the BIG capital increase for IFC/ The Multilateral Investment Guarantee Agency—MIGA
On some varied homespun issues 209
The Poverty Reduction Strategy/ There should be life beyond 2015/ There should be new life beyond HIPC/ We need to make more transparent our harmonization/ Transparently Understandable Debt Management/ The Financial Sector Assessment Handbook —a postscript/ Too sophisticated/ About the addiction of guarantees to Municipalities/ About risks and the opportunities/ Financial Outlook and Risks
Some political incorrect Private-Sector Issues 219
Is the private sector the same private sector everywhere?/ Private vs. local investors/ Some thoughts about financial good governance/ What is lacking in the Sarbanes-Oxley Act./ Too well tuned?/ Alternative Millennium Development Goals
Communications 225
Communications in a polarized world/ Some other global communication issues/ Red and blue, or, red or blue?—a postscript
Some admittedly lite pieces 237
The World Bank Special/ Thou shall not PowerPoint/ Deep pondering on labels/ To write or not to write…by hand/ Three bullets on punctuality
On common goods and some global issues 247
Towards World Laboratories/ Daddy…the original or the copy?/ The rights of intellectual property user/ Who can enforce it better?/ Moisés Naím’s Illicit—a postscript/ Global Tax/ Labor standards and Unions
A mixed bag of stand-alone issues 259
My insecurities about the social security debate/ About the SEC, the human factor, and laughing/ Roping in the herd/ A paradise of customs illegalities/ Human genetics made inhuman/ Justice needs to begin with just prisons/ Real or virtual universities?/ Brief thoughts on Europe/ Some spins on the US economy/ Is inflation really measuring inflation?
My Venezuelan blend 283
A Proposal for a New Way of Congressional Elections/ Let’s all whakapohane!/ We enjoyed/ Hugo, the Revolution, and I/ April 11-13, 2002/ To the opposition/ Synthesizing my current messages to my fellow countrymen/ 167-to-0—a postscript/
What is the financial world to do with Venezuela?/ Massachusetts, please show some dignity!/ Colombia & Venezuela
My Farewell Speech on October 28, 2004 299
Did the Minister do right? 305
And now what? 307
The President’s succession 309
My thoughts on the issue/ The OK Corral and the World Bank/ A letter to an another new American World Bank President
On some current books, a movie, and a future book 315
The World’s Banker by Sebastian Mallaby/ The End of Poverty by Jeffrey Sachs/ The Elusive Quest for Growth by William Russell Easterly/ The World Is Flat by Thomas L. Friedman/ The Pentagon’s New Map by Thomas P. M. Barnett/ And the Money kept Rolling In (and Out) by Paul Blustein/ Confessions of an Economic Hit Man by John Perkins/ The Constant Gardener and the UN/ The future very last book about Harry Potter
My book, Amazon’s profits and the value of its shares 325
The last items in my outgoing tray 329
Pray for us, Karol/ We must aim higher!
List of my fellow passengers who also dined at the captains table 333
A too long C.V. or a too short memoir, and acknowledgements 337
Some more blurring details about the MDGs 349
Shutting down 353
Keep in touch/ The Buck Stops Here

My book at the World Bank's InfoShop

Friends,

What is Voice for, if you’re not willing to risk making some noise with it! Once when someone here said that luckily the demonstrations against the Bank were not as big as they used to be, I told him that, unfortunately, that could also be a sign that the bank’s own voice was not as noisy as it used to be.

For someone who’d like to speak with all of you for days and days on hundreds of issues—which, of course, could drive you nuts—having to pick out what to tell you in fifteen minutes about my book drives me nuts.

Civil Society?: And so I’ll keep the book closed for now and talk a bit about the photo that appears on the back-cover. It is from a visit to the United Nations in New York where among all the nameplates of different countries, I suddenly saw one that read civil society. I asked myself, how on earth does one get to be named to represent civil society?—whatever that now means. The chamber was not in session at the moment, so I sat down and asked a colleague to take that photo of me which you see on the back cover, and I am now anxiously waiting for someone to challenge me as an impostor, I hope on the ground that it is his or her rightful place.

Mother Earth: But seriously, with reference to the issue of Voice and the possible reshuffling of the current 24 Executive Directors, should it happen, I hope it will be to give representation, perhaps not to Civil Society, which is sort of intangible, but to that very tangible piece of land, water, and air that we all know as Mother Earth. Although we proudly name ourselves the World Bank, the fact is that we are more of a “Pieces of The World Bank,” and it is sad to see how the globe, in these times of globalization, is in fact the most underrepresented constituency. This needs to be fixed, urgently, as we need to be able to stimulate a profoundly shared ownership for the long-term needs of our planet, if we want to survive as a truly civilized society, worthy of the name civilization. As I see it, a couple of truly independent seven-year-term Executive Directors, whose role would be to think about the world of our grandchildren, way beyond the 2015 of the Millennium Development Goals—that is what the World Bank most needs now.

The International Rovers: And, while at it, we should perhaps also ask one of the current Directors to give up his Chair for a new constituency—call it, if you will, the Constituency of the International Rovers, by which I mean all those workers, skilled or unskilled, legal or illegal, who nowadays represent jointly one of the largest economies of the world. By the way, the first thing that the Rovers’ ED would need to do is to make clear the enormous difference that exists between an immigrant with a long-term plan to emigrate from motherland and forever assume a new nationality, and, on the other hand, a temporary worker who just wants to make a buck in order to help his family to a better life, and who wishes with all his heart and soul to return home as soon as possible. Forcing temporary workers to swear allegiances to foreign flags, just so that they can have the right to a better income, cleaning toilets, seems only like a new generation of artificial trade barriers.

The Global Geography: Might we also not be too stuck in the geography of the non-globalized world to be able to see what is truly happening around us? For instance, El Salvador has about 2 million of its people working abroad, more than a third of its total workforce and so if to the current GDP figures of El Salvador we add what these workers are earning, gross, well then perhaps El Salvador’s growth rate could actually be higher than China’s. And you tell me, why should we not do it this way? Is not an El Salvadoran still a real El Salvadoran just because he or she is working abroad? The internal emigration in China from west to east might take a Chinese from 50 to 150 dollars per month, but the El Salvadorans going south to north go from 120 to 1.200, and no one is heard complaining about an over or undervalued currency.

Trade negotiations: And migration leads me to the current trade negotiations. These, unfortunately, instead of opening the gates to the greener pastures that we all look for, and because of their total mercantilist approach, seem more like pushing countries into corrals, just to have them branded. This has to be changed. I know that some of your World Bank colleagues are making big efforts to get the most and best future out of trade, especially in services, and you really need to support them.

Research data: But to move forward in this and many new areas, we have to be able to fix some huge knowledge gaps that still exist within our Knowledge Bank, gaps which mostly result from either the fact that there are no data to research or that the data are so old and have been squeezed and resqueezed way beyond the last drop. Coming as I do from the private sector, I cannot think of one single proposal that I would dare to present to the board of a corporation that includes data from a decade ago, and not data of this year, this month, today, last hour, or even perhaps right now. We must refuse being tail-wagged by the lack of data and must find new and innovative ways of getting our hands on some accurate, timely, and juicy research data. We also need to be able to monitor the outcome of our policy recommendations much faster, preferably in real time, and all this indicates to me that the Bank faces some very important information-gathering and information-processing challenges. One thing I would do, right now, is to require that a panel review the data to be used in any research, ex ante, not only to avoid the waste of resources but also to avoid having to live with dubious research that, ex post, is so much harder to criticize on account of professional solidarity.

Better measures: And once we are looking at the timeliness of data, I also believe that the World Bank has the mandate and the capacity to start developing new data scales that could be more significant. For instance, the GNP figures, currently just the result of additions, could perhaps explain more if we also did some subtractions; like subtraction of the cost of consuming more than your world equitable share of energy; the cost of developing an energy addiction; and perhaps even the cost of the time wasted daily answering automated phone calls from computers that want to get more intimate with your family’s finances.

We live in an ocean of global challenges, and I wish to say a couple of words about two that are especially close to my heart.

The environment: The other day in the Financial Times someone suggested that the solution to USA’s energy problems was to import ethanol from Brazil.” Yes, that should do it! Planting the whole Amazon with sugar cane clearly sounds like the mother of all the effective suicidal methods that the world could ever think of. The Bank has a vital and unique role in lending a guiding hand to the world in all environmental issues, and therefore it is more important than ever that it does not fall into the hands of some special interests. It needs to be extremely alert! On its green toes!

Information overload: Knowledge is fine, but sometimes let’s all remember that ignorance has also its bliss. For instance, the current evolution of genetics will allow for a better profiling of particular health risks and though this will indeed help in their prevention, it could also cause the premiums of insurance to increase dramatically for those not fortunate enough to get good results, something that will put much further strain on solidarity. I have for quite some time voiced a concern that one of the most important pieces of health insurance lacking, is insurance against what they could discover in your genes. I believe that the Bank has a much bigger role to play in looking into the future and alerting us to all the what ifs.

That now takes me to some thorny issues

Fighting entitlements: The Bank’s mission is too important to allow those working there a totally smooth ride. We need to be able to evaluate better what is working and what is not, and in the same way as others are ranked, we should also be able to provide our best 10 and our 10 worst lists. In terms of the budget, and most especially when it is ordered to be flat, one must be able to avoid any type of entitlement allocation, and make certain that what is not working either corrects itself or gets cut out, and that what is truly working receives the support it deserves. By the way, out there in the real world, executive boards are normally supposed to maximize their effectiveness by looking into the outliers, instead of just muddling through the muddled middle. Just in case, the need of working at the extremes is not at all incompatible with my strong belief that you gain clarity by allowing yourself to look at issues from that middle that in these days of polarization might in fact be the only real extreme.

Working on continuums: We also often tend to work on issues that lie on never-ending continuums from zero to unreachable divine perfection, and so it is hard to know where you really find yourself. We therefore might benefit from concentrating our work much more on the lower end of the scales, where things are much clearer. For instance, in my book I mention that when trying to advance Justice, we might be much more effective if we just focus on reducing the most concrete injustices. Instead of building marbled supreme courts, we should be building better prisons, since how on earth can you, in the name of justice, sentence anyone to some of these inhuman hells on earth, without being a bit of a criminal yourself?

The World Bank’s anticorruption fight: Finally a global world that requires so many sacrifices to solve its global problems will not be able to do so if it must swim in too dirty corrupt waters. Therefore, fighting against corruption must be at the top of our agenda. But for that fight to signify more than another flavor of the month, it needs to be completely internalized into a deeply felt organizational modus vivendi. In this respect, the World Bank, while fighting corruption, needs to keep the following in mind:

To invest more scarce resources into anticorruption efforts than what the corruption could itself potentially cost is managerial corruption.

To fight corruption among third parties without fighting it first and foremost among your own is hypocritical corruption.

To create the impression that certain risks of corruption are effectively taken care of is collaborating with and camouflaging for corruption.

To focus the attention on the small fish while letting the big fish free, even though the small can grow to be big, is plain cowardly corruption.

To believe it is only when money is involved that it really matters creates the space for self-righteous corruption.

And finally, to believe that corruption can be contained to some pockets and not contaminate the rest of the world, and that some nations are by nature more immune to it, has nothing to do with corruption; it is just plain stupidity.

And so what shall we do? Well, as Dori in the Finding Nemo movie would have said, “Just keep fighting . . . just keep fighting!” I would recommend that all projects include in their documentation, a very simple one-page Public Notice that lays out the most important risks of corruption in the operation, making clear what World Bank is doing to diminish them but, much more importantly, what it is not in their hands to do. That page should then transparently surf the Web in order to enlist the civil civilians in the fight.


Before I now leave room for what I hope are your not too noisy questions and remarks I wish to say some words of appreciation.

First, my father was my most assiduous reader and he always threw himself into my articles with a gusto that sometimes bordered on gluttony. He passed away less than three months after I became an Executive Director, but I had the blessing of having seen the pride in his eyes before that. I must tell you I would have given anything to have him here sharing this moment with me.

Also, Jim, my editor (James T. McDonough, Jr. JTMcDJrPhD@aol.com ). After reviewing on the Web many sample edits, I finally chose Jim because I liked the tone of his voice on the telephone and in e-mails, and I felt that he was the one who knew the least about the specifics of the issues I was writing about, and was therefore best suited to help me reach out to as many nonexperts in the field as possible. Well, not only did he turn out to be a very good editor but also a very opinionated young man in his seventies, and so many of his comments ended up as an integral part of my book. I appreciate very much his taking time out to be here today with me in the company of his wife, Zaida, who is from faraway Georgia on the Black Sea, and who, I suspect, sometimes used Jim to smuggle her own voice and noise into the book.

Let me also express my most sincere and heartfelt thanks to my two companions here at the podium. Luis Marti, my successor, has clearly shown that he possesses those traits of generosity, intelligence, curiosity, and, first and foremost, that Triple-H factor, humility, humanity and humor, that are so needed for an Executive Director to be able to become a pride for his Chair. Luis, thank you so much for all your support.

Now it was mostly after my term as an Executive Director that I got to know better Alan Winters, as I regularly bumped into him at seminars and InfoShop events. For him I have reserved one of my very special compliments, which is that I would gladly allow him to have a chair, well, even a deanship, in that “guaranteed Ph.D.-free University” that I sometimes dream of. As he is one of the world’s leading specialists on the empirical and policy analysis of international trade, we all are counting much on him to show us the way. Thank you, Alan, and I hope this will count for something in your upcoming remarks.

And of course some words to all those who work at the InfoShop. Over the last year I have been a very frequent attendant at your events, and so you must know I think you’re doing a fabulous job. I most specially congratulate you for helping to give a voice to the so many small but extremely important themes that otherwise would completely drown in our quite boisterous development dialogue. Today let me thank you for organizing this event, and I hope it will not blemish your wonderful track record.

Let me now end, by sincerely expressing my appreciation for all of you being here. If this book is not well received, by all of you, and if what I speak about in it does not really echo in your minds and hearts, then most probably this book will go mute . . . it is as simple as that. And so, friends, now my Voice and Noise is in the hands of all the voicy and noisy support you might be willing to give it . . . . Thank you!


Some photos from my ED trips, work in progress

Crossing rivers

Taking to the air


Working in the air


Exhausted host ED napping


On a little side tour to find Nemo

The magnificent (and only) seven ties in town


Tired but well received


Blessed by the community


An ED caravan arriving


A most joyful wellcome
This is the new generation
Remembering, not so long ago.

Yes we learn and learn and learn, and should never stop

Do you recognize this noisy just in time local supply chain?

Is it time for a financial sector assessment? And, if so, will she be able to keep Basel out of her hair?


Flying over future Nam Theum 2. I am no expert but too me it certainly looked liked an as good as it gets location for a hydro dam and my thoughts were more on who will pay for the immense costs all the navel gazing introspection studies must have generated

Why did I get to think of a resettlement resort? Did I see an opportunity of selling expensive timeshare weeks in a developing experience? It seems at least more profitable letting tourists pay for doing what you for centuries have been doing for lousy pay.


Would it have a chance to survive French agricultural subsidies?


Sir, do I have a future here? Or should I go to the city?


Sir, if we were your daughters, do you think we should remain here?

Through my daughter Alexandra's camera lense

In search of a title

I was from November 2002 until October 2004 one of 24 Executive Directors of the World Bank and having written a book that relates to that I was in search of a title.

??????????
By Per Kurowski
An Executive Director of the World Bank Group
November 2002–October 2004

Some respectfully irreverent questions and suggestions about a great multilateral financial public-sector institution that the world needs more than ever to be a lean and mean poverty-fighting machine and that at sixty years of age should perhaps be renewing its vows in order to move up from “knowledge” into wisdom and instead of trying to advance impossible agenda like justice and social responsibility might do better settling for fights much easier to monitor against injustices and social irresponsibility … all made by a perhaps a somewhat naive but very well-intentioned former executive director equipped only with his long private-sector experience, and his willingness to speak out … sort of.

And so what's is a good title for this? 1/24?

Or, HAVE THINK-TANK, WILL TRAVEL

Or, ANOTHER MOUSE WHO TRIED TO ROAR

Or, Mr. KUROWSKI GOES TO WASHINGTON (My daughter’s suggestion)

Or, VOICE OR NOISE

That’s it! VOICE AND NOISE

Having an opinion and voicing it is what Voice is all about. Putting together thousands of perfectly pure voices might synthesize into a harmonious symphony but, without some noise, it will never ring true and that is what Noise is all about.
The world I remember when I was young moved forward on carrots and hope in the belief that it was going to be a better place, while today’s drivers are more the sticks and despairs of those looking only to hang onto what they’ve got.
To stand a chance of a better tomorrow, we need the Voice to recreate our dreams but also the Noise to make us want them come true.
A shrinking world that makes isolation impossible presents the human race with the challenge of really having to get along. If we resist facing this challenge, the world will be a much-saddened place: let me get off. However, if on the contrary we truly try to make it work, we will at least have some beautiful dreams again.
This book with all its simplicities and contradictions is but an effort to put my voice and noise on the table. All yours are needed too.
P.S. After having decided on the title I found on the Web an article by Ingo R. Titze, Ph.D., titled “Noise in the Voice” that originally appeared in the May/June issue of the Journal of Singing. It reassures me a lot, as it argues that “A little noise, turned on at the right time, can go a long way toward enlarging the interpretive tool." Needless to say, I felt good about my choice.

Did the Minister do right?

I recently ended my two years as an ED in The World Bank Group in representation of Venezuela and seven other countries. Even though it sounds strange, I was nominated for that job through a process that initiated in a chat box on the Web (Foro Nacional) where the then Minister of Planning, Mr. Felipe Pérez, asked for candidates.

I, as a born optimist, sent the Minister my curriculum vitae reminding him in clear terms that I had no experience in the public sector; that I was fiercely independent, “a radical of the middle or an extremist of the center,” and that I had no interest at all in going to Washington if that meant silencing my own voice. But, if the government could live with all that, I felt myself both capable and honored to represent my country.

As I had met the Minister only briefly, once when he invited me to give a conference in IESA about the taxes charged on gasoline in the consuming countries, I did not harbor any major expectations, and, in fact, I forgot all about it. One month later, out of the blue, the minister calls me on my cell phone, and informs me I had been nominated.

The nomination of an Executive Director, politically independent, from the private sector, with no public-service trajectory, and picked on the Web, did also surprise the World Bank, and therefore the question posed by the article’s title. Its answer is not easy.

First. Was my election simply an accident, a craze of the moment never to occur again, or was it just the tip of the iceberg of a new way. If an accident, I was just lucky, but, in fact, the new technological advances are pointing toward new forms of government. In the future, instead of governing by polling opinions, we could have daily referenda, with all citizens, at zero costs, for good or bad. In this sense, as Mr. Perez seems to be a person who believes a lot in the revolutionary power of transparency, my selection could have been a precursor, and the Minister a prophet. Even though I harbor many doubts about where so much transparency could take us, intuitively I support it as such advances seem to be an important evolution of our society.

Second. Of an ED in the World Bank it is expected that he represents, simultaneously, both the interests of his constituency and the interests of the Bank, as an institution. And that balancing act is not easy. In this respect, the question is whether someone with my characteristics could walk the rope. Though clearly someone from the public sector and appointed for political reasons should be much better positioned to represent the short-term interests of the current governments, a free agent like me, inasmuch as he can provide new perspectives on issues, could also turn out to be useful, both for the institutions as well as for the country.

Subjectively, I have no doubt that the Minister did splendidly. I have had an incredible experience and I believe that I have served well the interests of my beloved Venezuela, of the other brother countries I represented, of The World Bank Group and of that whole little planet earth where we are all stuck on.

And so … Thank you, Felipe!

This letter was also published in Spanish in El Universal, Caracas