Thursday, December 02, 2004

Real or virtual universities?

I had the opportunity to visit the amazing campus of Monterrey Tech (I.T.E.S.M., after the initials in Spanish for the Technological Institute of Higher Studies of Monterrey) in Mexico City. It is just one of the thirty campuses that this private university, founded in 1943, operates, in which more than 100,000 persons study. Given that the ITESM, in addition to its traditional classrooms, operates one of the most important virtual universities of the world, the conflict between what is real and virtual should provide for some heated budgeting discussions. 

I can imagine the discussions. On the one side, the traditionalists take their stand, the ones who advocate more and better classrooms. They must still constitute by far the larger part of the faculty. On the other side, the virtual crowd must be growing, they who most probably argue for faster and more potent servers and for more publicity to assure ITESM’s place in the list of the surviving and thriving virtual universities. And, in this sense they are right, since in the coming years—or even months—it could be decided who will be the leading virtual university for decades to come. 

To this date, the traditionalists would have surely based their demands on the grounds that a university with a strong physical presence is the only one capable of producing the expected results. Most of us would have had to agree with them. Nonetheless, the corridors are starting to fill with rumors that analyses of early generations of virtual students have demonstrated a surprising and very real academic superiority over traditional students. I have no real proof of this, but the rumor could end up being true, since obtaining a degree through a virtual approach must surely require some very special motivation. 

What would happen if, in the not too distant future, alumni of these virtual universities were considered to be the best? To begin with, we should remember that it is the professional quality of the graduate which really matters to the labor market and not the fact that he or she enjoyed the university years. Thus, if the business sector starts demanding graduates of virtual programs, well, students might need to go the virtual route, even if it means doing it hiding in the old classrooms. 

Traditional faculties need not panic. Studying the “virtual way” requires plenty of individual assistance to students by faculty members. Thus such professors will not only be necessary, but also they could even have the opportunity to teach from the beach! Considering that a certain amount of interaction among students seems important, many traditional classrooms could still be used when converted into hotel rooms to house the virtual students for weeks at a time and provide them with some real physical contact. 

Thursday, July 15, 2004

McPrison

Justice is something very difficult to understand with precision, since it is situated along a continuum that becomes finite only when it reaches Divine Justice. On the other hand, injustices are much easier to identify and, in our countries, prisons themselves represent one of the greatest injustices. In terms of the use of scarce resources, as an economist I am convinced that justice would today be much better served by improving prisons than by investing in Supreme Courts.

I am not advocating, nor do I believe in, imported solutions. Moreover, if we were to respect individual rights defined as extravagantly as possible, for example, by guaranteeing in Venezuela access to justice similar to that O.J. Simpson had access to a few years ago in the United States, this would, because of the cost involved, be an affront to our human rights, collectively.

Nonetheless, I believe in good examples, and I am sure that if prison franchises could be established in our countries we would all reap the benefits, as we are shamed into reforms.

When we read that one factor making it particularly difficult for Schwarzenegger, the new Governor of California, to balance his state’s budget is the 28,500 dollars he has to spend each year on each of his 162,000 prisoners and that one of his options would be to use local private prison services, which would allow him to cut the cost to 17,000 dollars per prisoner per year, we see an opportunity.

If California wants to save even more, it could do so by letting our countries offer prison services for some of its prisoners. Companies could build and operate prisons and would have to apply ISO 9000-type quality certifications. This would probably generate a set of global good prison practices that would benefit everyone. Nowadays, rapid transport and facilities such as videoconferences should make such proposals much more feasible. All that’s lacking is the will to carry them out.

Since some people trace the origin of the violent maras (gangs) of Central America to Los Angeles, and since crime is to some degree attributed to the violence in films, perhaps California, its Governor, and even Hollywood all have a special motivation to welcome an initiative such as this one to help us help them.

Besides, Schwarzenegger’s experience in the movies alone, which ranges from subduing criminals by force to teaching kindergarten, would seem to fit the ideal resume for a real super prison keeper.

P.S. I just read in the press that Schwarzenegger refers to his experience in Kindergarten Cop as useful to handle the legislative branch in California… OK perhaps for that too.

Translated from El Universal, Venezuela, July 15, 2004

Wednesday, May 19, 2004

Communications in a polarized world

(A speech at the World Bank Communication Forum May 19, 2004. Extracted from Voice and Noise 2006)

Dear Friends,

I am just a hobbyist communicator, not nearly as accomplished as Jim Wolfensohn … or Jimmy as someone referred to him today. Therefore I feel more honored about this chance to speak to communication experts than Jimmy needs to be when he plays with fellow virtuoso musicians in Carnegie Hall. As an Executive Director, I should not be seen being any less intimate with the President of the World Bank.

What I then would want to use this precious one-lunch-speech-chance-only for, is to talk about a world where opinions seem to become every day more polarized, which is an issue that has worried me a lot lately, coming as I do, from a very polarized country that is a living proof of the dangers of it.

To illustrate the problem, and as we are supposed to be learning from cases, let me use as an example my very own amateurish case.
Every week I sit down to craft out an article to publish in a major Venezuelan newspaper. Believing myself to be a sensible man, prone to reasonable attitudes (though some might say that’s just trying to make up for other types of behaviors), I usually find myself on most issues in an in-between position, where I can identify a lot of pros and a lot of cons.

The true challenge for any writer, who is not into darkness, is to transmit the message in the clearest possible way. In this respect, I like to think of myself as a conservative jumper from a diving board who prefers executing the easy-graded jumps well, rather than going for the spectacular triple in-and-outs, where you could indeed score higher, but you could also completely lose your reader trying.

Therefore, after duly taking inventory of all the pros and cons, carefully turning them around and finding suitable allegories and metaphors and similes that illustrate the topic at hand, I finally come up with what I normally believe is quite an excellent script. Cautioned by experience, I then take the script to my editors. If it is in English, to the closest available qualified colleague and, if in Spanish, then even much closer, to my wife Mercedes.

These critical editors, who probably assess my script in somewhat more realistic terms than my self-assessment, at the best murmuring a “so-and-so,” then usually proceed to split up my 5-line sentences into five 1-line sentences, to be shuffled around. Their professionalism is evident since they always seem to come up with a product that means exactly what I intended to say. I never understand how they can take it to pieces and still manage to put it back together again.

I then send the embryo away and sit down and wait until early Thursday morning, I can see the newborn on the newspaper’s Web line.

Let me now describe how my readers, through their e-mails, react to my babies.

They mostly start with a direct Per Kurowski, as many believe that “Per” is my title and not my name and just as many think that Kurowski is not my name but my alias. In life, I am frequently greeted with an “Oh! Per Kurowski, I didn’t think you existed.”

Their responses classify then in the following three significantly different categories:

“I hate your yellow . . . despicable . . . how could you . . . . Have you no shame?”

“I hate your blue . . . despicable . . . how could you . . . . Have you no shame?”

“Oh, thank you for explaining it so well and in such clear terms!”

Although I obviously prefer the amicable intentions of the third group, and they do help support my ego, I am still never sure whether their praise of my explanatory power is because they managed to see the green I wanted to show them, or just because they saw an even brighter yellow or blue.

And this is the big polarization that is blocking communications and creating worldwide divides.

In 1872, the British Parliament decreed Speaker’s Corner in Hyde Park of London as a place reserved for free expression, and initially it attracted all those extremists who, although qualifying as nuts, still had the right to vent their opinions. Lately, we have all witnessed how the original Speaker’s Corner speakers moved into Speaker’s Studios and now radicalism, anarchy, or fundamentalism is voiced on prime-time television. All of us others, modest low-key analyzers or rational in-betweens, have to settle gratefully for slots in after-midnight cable television, dubiously sponsored by the most traditional professional services. As rationality could soon be viewed as symptomatic of a modern nut, we might all have to line up at Speaker’s Corner.

As you understand, this polarization poses many challenges.

How on earth, in an ever more colorblind world, can we be sure the reader knows what color we talk about?

How on earth do we know that we have communicated, when clearly rating is not all nor should be an end it itself and, on the contrary, sometimes a big rating just guarantees a bigger confusion, as when everyone finds it easy to read in his preferred color.

How on earth do you communicate, when the receiver is no longer decoding the message into its yellow or blue components, but only receiving the whole message, as is, through his one and only yellow or blue pipeline? There are times I actually suspect we are going through a genetic mutation, in response to modern information overload.

And friends, this is not a problem just in communications, as color blindness can hit us anytime, anyway, and anywhere. For instance, in the World Bank, most of those who currently speak about Public-Private Partnerships do so only because they feel they have found a more politically correct way of defending a 100% private or a 100% public alternative and not because they would truly believe in PPPs, or even understand what they are.

As you can understand, this raises all types of serious issues, especially for a World Bank that wants and needs to communicate so much Knowledge with Yellows and Blues but that—for it to become the development Wisdom the world so urgently needs—must all be mixed into various degrees of Green.

So, what do we do? You tell me. You are the experts! Anyhow, armed with the blissful ignorance of an amateur, let me daringly point out some directions.

We can perhaps keep it a very simple green so that there is no way it could take a blue or a yellow meaning, though running the risk of watering down the message so much, that it is just ignored.

Or—we can complicate it so much that the receiver is blocked from any channeling of the message, as he cannot even start to understand it. Though this does not at all sound very promising, it might in fact be the route some researchers in the World Bank are exploring. Just last week, I read a document that was very cleverly obscured in academic jargon, mentioning “modeling this in a tractable way using autoregressive conditional heteroskedasticity” and including so many footnotes that a comparable reference to healthful food would most certainly have included a note: “(Mother. 1958. Published on the magnet memo board on the Fridge)

Or—keep the colors so pure that a blue channel would choke on a yellow message and vice versa. This could be a stupendous idea, but only if we were looking to be ordained as High Priests of the Purist Blue or the Purist Yellow Churches.

Or—do we need really to diversify and open two or three Web sites? One for each color extreme and one for the mix, and how do we hyperlink them?

Or—should we use ex-ante censorship, like some radio and TV channels, where you are only allowed to call in your opinions on line yellow or line blue, to help the producer avoid mixing colors? By the way, this new era of media apartheid seems already to produce its counterrevolutionaries as we can already hear an insurgent movement of color cheaters, the blues on line yellow and the yellows on line blue.

Or—set up ex-post filters with questionnaires that the receiver is obliged to answer before being allowed to leave?

Now, as long as I have you all sitting there, let me also dare some recommendations that could generally help the World Bank in reaching out to a world that does not seem to hear even our loudest fire alarms.

First, I dislike the concept of “The Knowledge Bank,” as it sounds too much like arrogant yellowist or blueist to me, and I would much rather prefer a more humble “The Search for Solutions and Answers Bank” or, even better, “The Learning Bank”: knowledge comes from learning, and the Bank—although having acquired a significant stock of cumulative knowledge over sixty years of operations—has still a lot to learn from its clients. Such an approach would stand a better chance to transform its knowledge pool into wisdom, which, at the end of the day, is what the developing and the developed world really needs.

Second, we need to start talking more with the world instead of with one another, hoping the world listens in. I myself would prohibit the use of all acronyms. I am certain that Mary Poppins would never have been able to communicate as effectively had she used an SCE instead of supercalifragilisticexpialidocious, much less Shakespeare had he used a TBONTB instead of a To Be Or Not To Be. Today, I tell you after having asked around, the sad fact is that our lead product, the MDGs, has very low name recognition among the NONNGOs, the normal citizens, and this does not bode well for our future. Do we need a flashy MDG logo?

Third, whatever we do, let us not badmouth the NGOs, since they might very well be, at least for the time being, the only wall that echoes our voice and so, without them, we could find ourselves with virtually no voice at all.

Fourth, we all might benefit from better focusing. Doing and communicating about so many things, ninety and then some thematic themes, might signify, or at least leave the impression, that we are not doing anything at all—which might also be true. For instance, the way the Board is drowned in tons of communications, might be exactly the reason why, frankly, it is currently quite nullified.

Fifth, I believe that it would not hurt if we also lighten up our ways of verbal expression. It has lately become an unbearable fashion to speak in a grave voice, in a tone of solemnity, and with an accent that could come only from using the same tutor as Robert Williams used for the role of Ms. Doubtfire.

Finally, as for myself, as a true green, a radical of the middle, an extremist of the center, with perhaps poor ratings and condemned for ever to Hyde Park Corner, I will go on, doing just the best I can, searching to communicate with simple natural and organic ingredients, while following Dori’s safeguards of … just keep swimming … just keep swimming.

Thank you and, now I am ready for your answers.

NO ANSWERS … just questions, some on the issue of voice.

Q. What do you think about more voice for the developing countries?

A1. Before we worry about our voices in the Bank we should perhaps worry about the voice of the Bank. The sad fact is that were it not for a couple of NGOs, the whole world might be unaware of our existence. Hey! They even ignored our 60th Birthday. We were not able to rouse up even 60 protesters. Is that not a sign of irrelevance?

A2. I could have a big voice and still not be heard at a Knick final at Madison Square Garden, or out in the desert of Tucson. I could have a small voice, and still be heard a lot, if the acoustics are right and so, let us work on the acoustics. At this moment, with about a thousand formal board documents that come our way each year, plus about four thousand other projects, plus about a hundred seminars and brown-bag lunches, plus having to call home now and again, in fact no one at the Board has a voice … and so in the famous words of Alfred E. Neuman: “What, Me Worry?

Sunday, April 25, 2004

Global Tax

Dear friends and colleagues, (my fellow Executive Directors at the World Bank)

Timidly, within brackets, and diluted by an “among others,” the most recent Development Communiqué spells out the possibility that, in order to mobilize additional resources for aid, we should at least examine the option of a global tax. We must have touched a raw nerve somewhere, and I at least have been approached by a surprising number of persons who, moving up close, give me the what-do-you-think-of-it whisper. Colleagues, we will certainly have endless discussions about this matter in the Board, or at least our inheritors will, but, for the time being, let me share with you my not so hushed up but precocious answer. 

In general terms, like any normal citizen, I hate taxes, but, in this case, that might be precisely why I find it interesting to look into a formal global tax so as to see whether in that way we could get rid of some of those informal global taxes that we are already paying or, if deferred, we will pay some fine day soon. As we live in a minuscule interrelated world, with a lot of butterfly wings flapping, no one will convince me that there aren’t many problems out there that already have someone somewhere paying taxes for them, albeit not always in cash. 

I come from a country where we have grown too accustomed to paying some sort of hidden taxes in many forms and ways: holes in the street gobbling up the car ties, insecurity that requires our paying private guards, a precarious health system where some even pay with their lives, poor public education whereby even if your own kids get a good private education it is worth less as they will be unable to count on the synergy of other educated citizens, and you could go on forever. On a global level, for instance in matters of the destruction of the environment, it is clear that we already are paying taxes, at an ever increasing rate. 

Therefore I would analyze a new and formal global tax, not in terms of its being a new tax, but in terms of whether it is a more efficient and transparent tax to substitute for some of the current and future awful-consequence taxes. Intuitively, I would answer “yes” on both counts, and here are briefly my reasons: 

In terms of effectiveness, at least it sounds quite good to be able to count on some type of centralized funds that could be allocated strictly according to global priorities instead of being captured by local interests. Just as an example, it is absolutely clear to me that, from an environmental perspective, we would be much better off allocating scarce financial resources to help Brazil cover for the fast-growing opportunity costs of not developing the Amazon, than building windmills in somebody’s backyard. As you can see, this is impossible, while taxes are parochial. 

In terms of transparency and coming from an oil country, what more could I say? Huge taxes are currently levied on oil in the developed world, and most of the contributors (consumers) believe that these taxes have environmental purposes that extend much beyond curtailing consumption. Well, no, the truth is that not a single net cent of each dollar goes to the environment, perhaps even less, when taking into account the economic inefficiency of investments in wind and solar energy and the environmentally negative implications of coal subsidies. 

But, as always, the devil is in the details. How on earth should an earth tax be run? I haven’t gotten that far yet but, as a starter, perhaps a petit committee of experts, world leaders, and scientists (not any self-appointed eminences) could allocate the resources to development institutes, through yearly public hearings, based on proposals and performance, and could also help to fire some healthy competition and accountability into development. 

And tax on what? On our airplane tickets? No, if we are going to have a chance to work things out globally, we should meet frequently, not only through videoconferences. If forced to give an off-the-cuff answer, I would mention a type of Tobin tax[1] on capital movements as a probable candidate, as that would also perhaps help us to slow financial movements down, from minutes to nanoseconds, and help the world to move out of its shortsightedness where full weight is given to the next quarter’s results and nobody thinks about the next generation. 

Summarizing, those opposing a global tax are blind to the fact that such costs exist anyhow. Perhaps they are living out their teenage illusions of never growing old and never needing to depend upon others. 

Friends … pssst … what do you really think of a global tax? 

Per 

[1] Tobin tax refers to a very low tax proposed by James Tobin, Nobel Prize in Economics, 1981, of between 0.05 and 0.1 per cent, to be applied on all trade of currency across borders, in an effort to put a penalty on short-term speculation in currencies. 

Thursday, April 22, 2004

Odious Credit

I recently wrote about odious foreign public debt, that debt about which there is a current debate in the world as to whether it can be legally repudiated if it is taken on by illegitimate governments or for illegitimate ends.

The other side of the coin is odious credit. Please don’t think I’m against banks—quite the opposite. But I respect the role of the financial middlemen too highly to keep quiet when they are not doing their job right. In 1981, the representative of a foreign bank in Venezuela showed me a letter in which his boss instructed him to “give credit to the INAVI, Venezuela’s National Housing Institute. It’s the worst public institution, which means that it pays us the highest rate and, as you know, in the end it’s just as public as the best of them and Venezuela will have to pay up just the same.” Odious credit, isn’t it?

The first thing a good banker should ask a client applying for a loan is what is it for and if the answer is not satisfactory he should reject the application, regardless of the guarantees offered. Simple plain-vanilla fraud of the Parmalat kind will always exist, but the asinine way all their creditors fell into the trap makes one suspect that this is only the first case of systemic risk in the banking system: tempted by the regulators in Basel, banks subordinate their own criteria to those dictated by auditors and credit raters. This development, bad in itself, is even more serious in the case of public credit, where the what it’s for is being replaced by how much can be carried, perversely derived by calculating the level of sustainable public debt.

When I call for the total elimination of foreign public debt (which is feasible and would not require huge sacrifices in an oil rich land like Venezuela) my colleagues often argue that a certain level of debt is good and necessary for the country. This does not convince me, since it makes debt sound like electricity that must be kept at a certain voltage. Because public debt must always be paid back, regardless of whether anybody ever knew what or whom it was for, I’m fighting for the day when the private sector in Venezuela can return to the markets, freely, without having to carry that huge monkey—foreign public debt—on its back.

In my opinion, the Benemérito (the dictator Juan Vicente Gómez (1864–1935) who ruled the country between 1908 and 1935) deserved great credit for ridding Venezuela of her foreign debts He certainly knew that to shake off that vice more than patches or pieces of chewing gum are needed.

Thursday, March 25, 2004

Odious Debt

One of my recent articles, which focused on the need to protect the environment, concluded by recalling the ancient proverb, “We have not inherited the world from our parents; we have borrowed it from our children.” On that occasion, as always, I thought about Venezuela and I knew that, as borrowers from our children, we have acted like veritable pigs. Not only have we extracted our country’s oil without putting it to much good use, we have even mortgaged its future in the process.

Some countries may be in need of foreign loans to get on their feet, but here in Venezuela we ought to know by now that our foreign public debt, be it the debt of yesterday, today, or tomorrow, only serves to fasten us all the more securely to a sinking ship. Foreign public debt is a monstrous obstacle. It keeps our citizens from getting loans (or at least makes loans much more expensive) that could indeed lead to growth in the country and allow the government to satisfy social needs through taxation.

Our only salvation is to learn how to resist the lure of the eternal sirens’ song, which goes “foreign debt taken on by the previous administrations is evil and good for nothing, but rest assured, with us, everything’s going to be different.” How do we—like the ancient Odysseus—tie ourselves to the mast?

There are those, in similar desperation, who argue that since our creditors were accomplices of those administrations, we shouldn’t pay our debts to them. I accept the theory of complicity, at least on the part of the intermediaries, but I think we should punish them much more harshly, by canceling the entire debt and never again taking out another loan.

What can ordinary citizens do who want to and have to go about their daily lives and can’t be continually overseeing the government? The same as any company: they can refuse to provide their management with authorization for contracting debts. Along these lines, a doctrine is now being discussed in the world according to which, if the debt was contracted by an illegitimate government, or for uses that were clearly of no benefit to the country said debt could be declared odious and, as such, its collection would not be legally enforceable.

Dear friends, if we are going to do right by our children, our grandchildren, and our great grandchildren, and return the country we borrowed from them in good shape, maybe we should take advantage of such a possibility and declare our foreign public debt eternally odious. Given that threat: Would creditors dare provide us with loans? What would the credit-rating agencies say? 

Or let us be even more clear about the message and amend our constitution to say that the government of Venezuela has no authority to borrow from foreign sources, that any attempt to do so is illegal, and hence that all such illegal debts will not be repaid. That should stop foreigners from lending us money!