Education and its role in emerging markets – Indonesia

I have just participated in the EHEF (European Higher Education Fair) in Indonesia where we presented graduate and undergraduate programs in Samarkand and Jakarta. It has been a hectic week with around 15’000 participating students and over 100 European universities and higher education institutions as well as representatives from embassies and the EU.

The success of the fair and the eager questions form the students reaffirm my belief in education as a key indication for how Indonesia is rapidly moving ahead.  With a GDP growth of 6,2% a drop in poverty and school enrolment exceeding 100% spurred by more and more overage students enrol in primary school. Indonesians have their eyes firmly targeted at education.

In the years to come I believe that Indonesia will benefit enormously from the education strategy in several key areas.

First, today Indonesia is a multicultural and multi-religious society blending its own unique history with Muslim, Christian, Hindu, Buddhist and many other religions together. However, as seen elsewhere economic development also have the backside of creating social tensions as some embrace and utilise the opportunities fully, while others feel left behind. What education can help with in this process is to ease the social tensions by providing a more even playing field (or at least as close to as possible) for young people who have talent. While there are differences in access to the best schools and especially for students access to education in Europe and the US it is significant it’s a significant contributor to mitigate the risk of social tensions.

Secondly, it will bring Indonesians in contact with the world in another way than business can. Through the social interaction between students from the countries they travel to and other international students networks are created which will benefit not only themselves, but also ensue long term social and economic sustainability as students become business and government professionals and need contacts that they trust around the world.

Thirdly, It brings knowledge to Indonesia, which is much needed in the years to come if the growth is to be supported and managed. One of the threats that the country is facing is that huge bubbles are created in the economy being in housing or specific sectors. Just taking a look from my one window at the hotel reveals five skyscrapers being build so it is definitely a risk that one have to take serious. And while bubbles is a natural part of a capitalist economy the impact can be cushioned though a economy which is build one more sectors and have more players. As students take business ideas back with them they create new businesses and thereby diversify the economy bringing a valued stabiliser into the equation.

While there are critical voices around the growing internationalisation of undergraduate and graduate education, as it is seen to some as a business rather than an “exchange” of ideas. It think that the benefits significantly and especially long-term far outweighs the downsides.

Delivering in Doah

SandyHopes were high but realistic when COP18 started in Doah. I for one did not anticipate much after the colossal failure in Copenhagen (COP15). But believing that we have to solve or differences, I did hope that at least something would come out of all the effort put in.

From the outset the ambition was to reduce CO2 emissions significantly in-order to keep the Earth from heating up. Especially the developing countries had hoped for a deal that ensured the possibility for sustainable growth. The impact of climate change have been felt in all the countries that “normally” were against any kind of real restriction on emissions so there is plenty incentive to take action.

The initial target was two degrees reduction in global warming, but now it is more likely that we will hit four degrees no matter what we do. So when the Danish climate minister Martin Lidegaard looks towards 2014 for a start of the negotiation for a solution I for one do not think it is even close to a success. Or as he puts it.

“It is crucial that we will soon have taken decisions to ensure we can keep our political promises. Therefore, I am delighted that we have established that the climate change conference in 2014 will be about how we limit greenhouse gas emissions within the next few years – for example through energy efficiency improvements and the removal of subsidies for fossil fuels”, says Martin Lidegaard.

I do belive that if we continue down this path we are creating the seeds to our own destruction. The current politicians are thinking mare about the next election (for those countries that are lucky) than about how to lead their people safely and wisely to a better tomorrow. For better or worse they are the only ones that can make real changes to global warming if we like it or not.

I have attached the official Danish press release from the COP its in Danish, but the message is clear if you read between the lines – we took a real big step in the wrong direction.

Pressemeddelelse

Tax evasion part of corporate culture

Image representing Steve Jobs as depicted in C...

Image via CrunchBase

Most people would think that countries like Spain, Greece and Portugal would rank among the very top of countries for tax evasion schemes. But even though the US has a relative low tax rate the country tops the list of places where tax evasion seems to be part of corporate culture.

So how big a problem is tax evasion? Take a look at the table below from Tax Justice Network, a London-based watchdog that fights against tax havens and for more transparency.

America’s “black” or “shadow economy,” represents 8.6% of GDP, while the percentage is by far the smallest of any of the countries on the list it does represent a significant monetary post and represent roughly the GDP of Denmark the 32 biggest economy in the world according to the IMF.

How does the companies in the US manage to avoid tax? Well, one suggestion is that companies like Google, Apple and Amazon manage to cut their tax bill by one third through a series of moves that involves countries in Europe and in the Carrabin, a system is also used by big European companies to transfer funds to tax havens. My friend Sarah Wenger has created the infograph titled “The master of Tax Evasion” that explains how the system works.

Masters of Tax Evasion
Created by: www.MastersDegreeOnline.org

Doing “good” also means taking hard decisions and being accountable for ones actions

Some people tend to think that if you are doing good you somehow do not have to be accountable for you actions. It would seem that it is like that ones you are “goodness industry” it is automatically a license to bypass the normal channels of communications and scientific standards. But with the growing number of stakeholders there is however an urgent need for more transparency also on the other side of the fence.
Very few of the stakeholder groups like NGOs or CSOs that I know of have a standardised method and understanding of how to report findings. Most often they god for a headline approach where what ever fits the main thesis is included in the reporting and all that contradicts will be left out. It is not that I think that they do this to be evil or that they are trying to twist the facts in a conscious way it is just that they are unaware that for anything to be true it needs to be transparent and capable of being reproduced. Unfortunately this is frequently not the case.
We often hold the most transparent companies accountable for their actions and dig into their annual and sustainability reports in order to find inconsistencies that we can explore but it rarely is the other way around. The possibility are explored that there is a discrepancy between what the company says and what they are actually doing. And when a flaw is found we make sure that everybody knows about it either through the press of using dedicated campaigns.
The Haitian earthquake disaster provides a good case for. NGOs and to some degree CSOs came under fire from locals who claimed that not enough had been done to transform temporary shelters into permanent homes, or to provide access to drinking water and sanitation services. In some camps run by NGOs, people were still dying from cholera a year after the disaster struck and by that actually doing more harm than good. Of cause it is not all NGOs that are active in Haiti that did wrong but it goes with the case that they cannot be left without some form of control and accountability for their actions.
Another example comes from Cambodia where international NGOs actively contributed to corruption, which was documented in the documentary “The Trap of Saving Cambodia”.

The film puts a spotlight on some of the troubling issues facing this country: government sponsored forced evictions; corruption on a massive scale; the underground trafficking of women and children. And maybe even as disturbing is that local NGOs with the finances of the World Bank, joined by huge donor countries are contributing to the continuation of these problems by providing access to billions of dollars in aid where most of the money is going to officials rather than to the people in need.
There are still NGOs that think the accountability is not for the “Goodness”-industry. Or as Mango a UK based NGO puts it “Research has shown that results-based management is not an effective way of managing and reporting most NGOs’ performance.” And Goes on to list why they should not held accountable for the results that hey produce. To a large extend reminding me of the discussions in the private sector in the 80 ties and 90 ties about quality management.
NGOs need to shape up if they are to continue to be the beacons of truth and uprightness that we have come to know them. They will need to shape up their processes and weed out the organisations that does not live up to the basic criteria of accountability, transparency and good governance or the whole sector will be dragged down into the mud from where it will be difficult of not impossible to escape.