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The foreigner? Exiles and migrants | 29 May 2013 at 7.00pm

Chair: Baroness Amos

Speakers: Lord Malloch-Brown, Saskia Sassen, Kathleen Newland and Mamphela Ramphele

Baroness  Amos (BA): Good evening everyone and welcome to the first night of the Zamyn Cultural Forum.

I am Valerie Amos and I am delighted to be your Chair this evening and this is an event over the next few days which is really about looking at some of the major contemporary issues that are facing our world and particularly how do we as cultures, as societies, as peoples relate to each other, what are some of the economic social issues which are impacting our world and which in particular are having an impact on culture and on issues of identity.

And tonight we are really going to focus on the people and in particular the impact of migration flows on how we feel and  develop as societies and the impact that that has had on how we treat each other.  

We have got a great panel lined up for you and a couple of major speeches to get our conversation going.

I am going to introduce each of the speakers just before they speak rather than now because I think it contextualises it for all of you and gives a much better sense of why we have chosen who we have chosen to speak tonight.

So our first speaker is a very good friend of mine, Mark Malloch Brown. I am currently at the UN, Mark was at the UN. I used to be the African Minister in the British Government, Mark was also an African Minister in the British Government. I used to chair the Royal African Society, Mark now chairs the Royal African Society!

We haven’t done this deliberately but I can think of no better person just to say a few words by way of introduction as to why the forum is so important and why the issues that we are going to discuss tonight are so absolutely critical.

Mark Malloch-Brown.

Lord Malloch-Brown: Valerie thank you and just because we have worked together and like the two ends of the pantomime horse together one of us doing one job and the other the other minding each other back, you in the British Government when I was at the UN and the other way round.

I know when you say “a few words” to take my instruction literally and it will just be a few words but let me just first thank Michael Aminian and his whole team who have put this ambitious Zamyn programme together and also the wonderful sponsors Tate our host tonight, Barclays who have been so generous and supporting, the African Progress Panel which is very close to my heart for the work it does, SOAS and Accenture all fantastic supporters of this.

Now I mean with a panel like tonight’s and the panels which I hope you will come back and hear in the coming days there isn’t much for a poor introducer to say except I suppose to acknowledge that it is great that we are doing it in London because if one is thinking about global citizenship London perhaps like New York or Hong Kong in a sense gives one a glimpse of the future of what global citizenship is becoming, of cities which in a way often seem to have a greater proximity to each other than to their own inter-lands. London today for example which has only now got 45% white British population, where one in three of us is foreign born and where if you look at the sort of political and policy agenda of London it sometimes seems to be a completely inverted one to the rest of the country with you know still a very strong pro immigrant view here of what that brings in terms of richness and brilliance to our society here. Also I might add a rather anti tax view in London and a light regulation view which are quite at odds with the politics of the rest of the country.

I think all of that because of the focus we very consciously as Londoners feel towards issues such as diversity and its links to entrepreneurship and innovation whether it is in commerce but as much in culture and yet of course great cities if they somehow fail the test of global citizenship don’t necessarily remain great for very long. I have spent a life working in international development and politics around the world and you know political campaigns in Bolivia took me often to the city of Potosi which in the year 1600 is the centre of Spanish silver minting was as big a city as London was at that time. Similarly to Manaus, a city built as similarly on the single product of rubber in Brazil with an opera house the Teatro Amazonas which is one of the finest opera house in the world except that the first time a foreign opera company went there half of them died of yellow fever. To Buenos Aires in Argentina is another favourite city of mine which grew rich and big on beef to just recently a few weeks ago in Rangoon, Yangon as it is now called, with a great friend who is a conservationalist. We were walking around the colonial city, what’s left of it, and he observed that in the early years of the twentieth century more immigrants came into Rangoon airport every year than passed through Ellis Island into New York.

And so I just mention those examples of one track economy cities which have ultimately briefly been global centres of magnets for people from around the world and then fallen back to be almost grown over by jungle in the case of Manaus.

So this issue of a diversified economy of what are the ingredients of a global citizenship which isn’t just of a city but a country and a region and ultimately a world is very much going to run through these coming evenings ahead of us and I am thrilled that with Mamphela here tonight we are going to start with what is a theme of the discussions in many of the sessions to come which is South Africa, such an interesting issue itself as to how you forge a citizenship which is inclusive, inclusive and outward looking, after all of the experiences that her country and she has gone through.

How do you in a sense build communities and citizenship which is both focused on what differentiates people and societies but also what links them to the world beyond. The kind of big challenge of open societies and open minds if you like.

So I thank that it’s going to be an extraordinary rich discussion in the evenings to come and on behalf of Michael and his team I am delighted to open and introduce this and now hand it over to much greater minds than mine.

Valerie, thank you.

BA: Mark, thank you very much indeed for getting us off to such a great start and I think your final point about the challenges which face very open societies I think a very pertinent to us here in London this week given the events of last week and all the discussions we are having not just around the issues of diversity and extremism but also what that means for us as a country, as a society, as a culture and particularly how do we retain the openness that is so important to us when that very openness could be under attack because of how we respond to what happened on the streets of Woolwich.

And thank you  all again for reminding us again that this is about a world class conversation happening in a world class city supported by global institutions and you mentioned the sponsors but I really want to particularly mention too Barclays and particularly its Chief Executive Anthony Jenkins who is with us this evening. Thank you so much for joining us and thank you Amanda for also being here and also Tate for hosting us and hosting all the Zamyn events. And I think the linkup between culture, economics, finance and social issues is one which is really important to discuss in a place like this. 

To our first key note speaker and Mamphela also a very good friend. I can’t remember how long we have known each other, its perhaps better not to try to identify the time. A prominent South African activist, a doctor, a former Vice     Chancellor, a former managing director at the World Bank and also most recently the leader of a political movement.

We look forward to hearing from you Mamphela. Thank you very much indeed for being with us this evening.

Mamphela Ramphele (MR): Good evening and thank you very much for including me in this very important discussion.

When your friends can’t remember when you first met its better left unexplored because it will give away our respective ages.

I am delighted to be participating in this important discussion because my experience at the World Bank and particularly when I was Co-Chair of the Global Commission on International Migration was similarly disheartening on this issue of openness and dealing with issues on Migration and so I hope that the good officers of the Zamyn Cultural Forum will get people to really explore this area with a greater openness than was the case at the time when we tried to give it a go.

There was a time when people could cross borders without the need for authorisation to leave nor permission to land. Only a hundred years ago a conversation about what it means to be a member of nation states would have been very different from the conversations we are having today.

The advent and implementation of passports following the First World War provided citizens with a physical representation of their obligation and loyalty to a particular country. It gave material meaning to abstract concepts such as foreigner, migrant, exile. It formalised national divisions and brought government monitoring and surveillance into a new era.

However while national divisions were constantly being reinforced and redefined the last hundred years have seen an intensification of global interdependence through trade. Capitalism has always provided a reason to cross these borders. To forge relationships with new groups.

In the twentieth century economic isolations became both rare and unsustainable as Mark reminded us of the cities which were very isolated and focusing on one thing. They were not sustainable. And in my own country the apartheid government soon learnt that even they as a regime were not sustainable because of their isolationist approach.

Global trade has altered the course of human history. The concept of a global economy is so deeply entrenched in our understanding of the world that we can effortlessly draw a logical connection between pension cuts in Ireland, painful, and the transaction irregularities of an investment bank from as far as the United States.

But the global economy brings with it a long list of intricate political and social dilemmas. Questions are raised that the raw economic incentives and the dependencies that lie at the heart of global cooperation could never answer.

We are often left without a solid framework on which to base our policies and legislation and this has severe repercussions not only on national economies but also for the lives of individuals.

In order to address these wide ranging concerns we need to be proactive in stimulating around international policies and regulations and we need to adopt a global moral framework that embraces humanism inspired by what in Africa we call  the spirit of Ubuntu, the spirit of interconnectedness of all human beings.

Once such issue is that of migration and the complexities related to it. It is a subject that requires our critical attention because national migration policies do not adequately address the concerns shared by organisations such as the United Nations and there is little dialogue or debate between nation states despite the cross cultural relevance of the matter.

Why do we often perceive these issues of migration as being so complex? For one thing the causes and effects of migration differ in each part of the world making a unified approach to migration policies and regulations a challenge. Migration in developing countries brings challenges that developed countries do not have to deal with such as porous borders and economic and refugee migration driven by intrastate and interstate conflicts as well as climate impacts and the search for sustainable livelihoods. This contrasts with the issues that the EU for example is facing. Whilst monitoring migration into member states from outside the union the union allows for often beneficial relationships of migration within the Union.

As Co-Chair for the Global Commission on International Migration convened by the UN in 2005 I am well aware of the challenges associated with Migration. The work of the commission looked at all sides of the issue from cause to policy responses and best practice. So I understand why governments, particularly those with inadequate policy and control regimes and those overwhelmed by regional mass migrations of refugees, in humanitarian crises are often wary of the threats associated with migration and I will just mention a few.

First, the influx of migrant labourers brings with it the potential for civil unrest and can threaten social cohesion. Second the possibility of finding work across the border frequently proves too inviting for skilled labourers who have no prospect in their home countries. Their departure drains their own countries of their vital skills and expertise. Yesterday as we were going around meetings here in London we met lots of South Africans including doctors that are needed back home but they are freely enjoying themselves here in London and so this is very poignant relating to my own country.

When certain passports and visas are highly desirable the possibility of corruption and fraud become apparent and this is another very sore issue in South Africa because your government decided that we now need to pay and get visas to get here.

BA: I am an international civil servant now!

MR: I know. I am talking about you as a citizen.

There is also evidence to suggest that the global economy, whilst strengthening areas of wealth and prosperity has also served to widen the gap between rich and poor people, rich and poor countries. The absence of adequate policies that address these issues has had tragic repercussions in my own country.

South Africa which is soon to celebrate twenty years of freedom owes much of its freedom to neighbouring African countries. For the economic and political support that we received in the anti-apartheid struggle.

Yet close historical relations have often not translated into considered and strategic b-electoral cooperation with regards to migration policies after 1994.

It is to South Africa’s economic and social detriment that we have not been able to strike the balance between our moral obligations, the contributions of skilled people to our economy and the challenges of overwhelming economic migration. The lack of a strategic approach to migration in my country and our failure to articulate policies that attract and retain the skills needed to enhance our competitiveness has left us with the worst of all sides of the migration issue. We should be the magnet for Africa’s most talented skilled people and be able to respond systematically to deserving political refugees.

A failure to protect our borders has created a huge burden of uncontrolled movement bringing with it a hostile response from poor people who are already struggling to survive because sadly nineteen years of democracy has not yet brought freedom to 80% of South Africa’s people.

So the arrival of migrants in that kind of environment creates conflict and we know that migrants are normally very determined people and in our case they are often more educated than the locals. In 2008 this led to tragic xenophobic attacks which left South African’s and migrants dead. There have continued to be sporadic outbreaks of violence often targeting the darkest is Africans, an indication of deep-seated beliefs about identity and the perceived threats to the indigenous population real or otherwise.

As Africa’s leading economy we should have anticipated that our country would become an extremely desirable destination for many of the continents migrant workers. South Africa has been unable to manage migration to respond to its own political and economic needs nor have we fulfilled our obligations to our neighbours and other African allies in this regard.

The failure to embrace the influx of skilled people and the refusal to integrate migrant labourers into the formal economy has only further disrupted the balance in the available workforce.

The lack of effective migration policy is creating pressures in our labour market and is further distorting the economy that is already under performing. We are part of the fastest growing continent yet our projected growth of just 2.4% and I am told is probably going to come down even further this year compares unfavourably with an average across the continent of 5% growth. Migration can carry a threat but where there are threats there are opportunities and the question is how countries harness the opportunities. In my view a progressive approach to the global economy and policies relating to migration would include acknowledging not only that international migration is a reality but that it is likely to become an even more significant factor in the future.

Second, acknowledging that states need to agree on shared fundamental principles and objectives that can drive their migration policies.

Third, encouraging open honest debate and dialogue such as we are having here amongst states, tackling both the positive and the negative repercussions of migration. Acknowledging that integration of legal of migrants is essential to social and political cohesion in any country. Providing a working moral that facilitate cooperation and consultation between states. Adopting policies that stimulate economic growth and create job opportunities so that labourers are not compelled to migrate. Establishing a thorough responsive framework will be essential to the future global economy. Without it we have only monitoring incentives to guide our thinking. With it we have a refined understanding of what drives global human interaction and a solid basis from which to act. We need to learn from the mistakes of the past and understand that context to which they happen are important to take into consideration. South Africa has taught us that failure to develop coherent migration policies is costly and that poorly managed migration can explode into xenophobic will only attacks and fuel identity politics.

Africa has shown us that migration can be an incentive to drive local growth and sustainability and from a global perspective we have learned that there is no such thing as an isolated economic crisis but above all we have learned that global migration is a fact and that in the coming years it will only become more apparent. It presents opportunities for states to grow and to prosper. To develop new skills and to forge new ties. Only by embracing this reality can we ensure that the global economy gives rise to true global prosperity for global citizens.

Thank you very much.

BA: Mamphela thank you very much indeed and thank you in particular for putting all of this in context, for linking it so directly to what has been happening in South Africa but also crucially for introducing a moral dimension to all of this because I think that very often we talk about the economics of this but we don’t talk about any kind of moral dimension. I think that you also raised something which is the importance of states talking to each other but also we do have interconnectedness between people because people talk directly to each other particularly through social media but that does not mean that we don’t have fragmentation at the same time so quite a lot to come back to in the discussion and I am absolutely sure that we will.

I would now like to introduce our second key note speaker for the evening, Saskia Sasses who is the Robert Lynd Professor of Sociology and Co-Chair of the Committee of Global Thought at Columbia University. She has written extensively on these matters and her new book is called ‘Expulsions When Complexity Produces Elementary Brutalities’. She has received numerous awards, too many for me to mention this evening. She was chosen as one of the top one hundred global thinkers by Foreign Policy and was a 2013 winner of the Principe de Asturias Prize for the social sciences.

Saskia over to you and thank you very much for being here.

Saskia Sasses (SS): Thank you very much for that kind introduction. I also want to join the other speakers in thanking Zamyn especially Michael Aminian for organising this, for putting us all together. I brought two books for Zamyns library I don’t know if it exists, they are very boring my two books on migration but you can take it as a gift rather than a burden.

When I think about the current period and when I engage a subject like immigration, complex you already described it I think that this is a time when stable meanings have become unstable. Think economy. Think middle class, one of my favourite subjects nowadays. Very unstable meaning. Think politics if I may. Government. And what I want to do tonight and I don’t have a lot of time to do it is to de-stabilise actively the meaning of immigration.

I think you already alluded to you know it is a very ambiguous meaning today. Now that also means a bit towards the end destabilising the meaning of citizenship. Citizenship is an incompletely theorised contract between the state and the subject. It doesn’t have to be a queen. I mean subject as a rights bearing individual. That incompleteness allows for many formats. In my reading today in much of the western world we the citizens are losing rights. So I want to arrive at a point that marks the ambiguity of these two foundational subjects, the citizen and the foreigner in her many incarnations, immigrant being one of the thickest, richest, with most traditions that has captured most imaginaries. But these two foundational subjects for membership both today are unstable.

So the question in both who is the immigrant, whose the citizen? Now I have my own way of doing things and I always run in trouble in the academy. I have now found an elegant way of putting it so I am going to put it to you very briefly. We, social scientists, have to deal with method. To do my kind of research I need a little zone before method where I can sort of play around, mess around. The elegant way of putting it is the space for epistemic outrage. Epistemic outrage is not where you are beating your head but it’s mental and so I call this ‘before method’. I adore that little space and it has some resonances with Kafka’s as you know before the law but one version only.

And so the first thing I want to do is say who is the immigrant and to start by arguing that one first step is to think of spaces, immigration spaces. These are just a few we could add, we could refine but you will recognise them. Each of these spaces is constructed by law, by practices, by agreements, by private contracts, by public decisions. An individual can cut across some of these spaces. I do know cleaning women who made it out of the cleaning women immigration space. Who arrived in the country knowing that they were more than a cleaning woman, who resisted being flattened into that subject. So thinking of immigration spaces already opens up the question that introduces of course a certain kind of ambiguity.

Now a second immediately one thinks of, now this is my personal list it may be a bit obscure for some of you you know but we could maybe return to that during the discussion, but I also think that there is quite a variability of the immigrant subject. One of my favourite ones is the IMF Citizen so let me give you a footnote on this which is an example. If you are a long term employee of any of these international organisations you get a special set of protections. Say your country invites you, I am talking about real cases these are not invented so they are examples because I don’t want to name anybody, but you are invited for a high level position in your government because you are a citizen of that country. You actually have a choice. You can stay in whatever the international organisations protections but you don’t have to declare that or you can declare it and say that I am going to exit my IMF Citizenship and become a regular citizen. So I am just using this as illustration.

The final one, documentary citizenship. A student of mine when I was at the University of Chicago did years of field work in areas of the world where modern states cut across old pre-modern nation, nationhood and hence when political parties want a few more votes on one side of the border they bring them in, they give them brand new passports. The ones who have old documents, citizens. The ones who have the brand new documents saying I am a citizen guaranteed. They are actually in terms of the modern state division an immigrant who has come across. The long term citizens of many of those areas they don’t have brand new citizen. So the ambiguity of the subject again one could go quite a bit more.

Now there is a second element that I want to trot in which is often associated with a question of immigration and that is remittances. I think that is a familiar term probably to everybody. Now remit starts as a little innocent word. You send money in a way that is not simply you know a leather bag with cash or coins. You send it via some means. Today when you say remittances it has a narrowed meaning. It literally is understood especially if you are dealing with immigration as something that has to do with earnings made in rich countries that immigrants from poor countries send back to their poor countries which in itself can generate a kind of hostility you know a negativity. You make your money here and you send it back home. So I, and usually the way the data represented what you see is sort of all the poor countries where remittances are sent, I changed the question a bit in my search to destabilise this particular term.

So I asked what are the top remittance receiving countries in the world. Not where do most of the low wage immigrants send their remittances back. And so what you get now I took this year long before the crisis. If you look at today not much has changed. The crisis did change things. And so what you see in the top 10 there are 5 rich countries. What I really like is that the United States is also. The United States are always complaining all that money leaving us is also in the top 20 and the United Kingdom is number 9. I also have the data for 2011, I was sort of interested, and the United Kingdom actually since we are here actually gets more remittances than Poland. Now you know what I mean right? We think all these polish immigrants no! Now the Polish may have other circuits than this but clearly what you are picking up here is the professionals. So the category remittances itself cannot be simply confined to the notion of these poor immigrants etc.

Now a third point to destabilise. I think increasingly this is an old story but it has become a bigger story. A bigger share of immigrants come to certain types of countries, I guess we call them the rich countries though they have growing numbers of poor also of course but they come  today because they are really they are refugees. They are being expelled by whatever the conditions. There are multiple conditions that are expelling people. The environmental catastrophe, desertification, civil wars etc. I just want to illustrate with one element, which is the vast amount of land that has been brought by foreign government agencies and foreign firms in certain countries that are sending immigrants, also countries that are not. And so here just a very quick look. This is an old story. We have always gently called it land grabs. It is not a very scientific term you understand but anyhow there are many phases and I think that a new phase really begins after 2006 when the crisis is brewing and in fact some of the main investors are financial firms that buy land. Hedge funds have brought quite a bit of land not because they want to become farmers. It is that they make land liquid and then once it is liquid you can move it around.

So here are the figures. I don’t want to go into the details but just to give you a sense. Over 200 million hectors between 2006 and 2011 concentrated in about 10 countries. That is quite a bit.

Secondly that creates an expulsion dynamic. You know when a country buys and I have all the detailed lists with hundreds of these contracts, when a country buys 3 million hectors in Zambia and 3 million hectors in Congo to grow palm what does it do? It expels floras, fawnas, villages, small holder agriculture, raw manufacturing districts. Where do those people go? They migrate to cities. Eventually some of them do actually become international migrants. So this is an example of expulsions.

There is a second issue. Most of that land is used for industrial crops. You cannot eat it. So you are not just growing stuff in a way that expels more people than it employs, you are actually growing something that whatever the small holder economy around that etc cannot eat and so we have hunger in Brazil, we have hunger in Argentina, we have hunger in various countries where before there wasn’t. There was poverty but not necessarily hunger. So to me again what this indicates is this notion of you know migration as expulsion. So again marking the ambiguity of this and we know about civil wars etc.

Now unstable meanings, membership. The whole notion of membership. So it seems to me that the particular relationship between the state and the subjects is a very unstable one in the last 30 years. As I said, citizenship has a long history. It has varied enormously. But it has also had outlooks of stability and when you think of the major template in our modern states in terms of membership and that to some extent affects the immigrant as well so this is like a shadow effect if you want. So at the heart of our modern states, this is a template for the French and American constitutions, its innovation was to say ‘ruler you are not divine. You are me and I am you’ and that was a major breakthrough. It also means that the state is the people, the people are the state. It seems to me that we are sort of, it was never perfect clearly. That I would say under the Keynesian period it worked a bit. I mean politically, war you know all that stuff, that is always messy but it worked in a way that it doesn’t work today. And so it seems to me that today one issue one way of phrasing it is a growing distance between state and subject and the question is at what point does that distance grow to such an extent that the foreigner, the immigrant, all these other categories, that there is a kind of structural approximation actually. No matter the ideological warfare, no matter the fact that many of the disadvantaged citizens today, the easiest target that serves also as explanation why they are not doing well is the foreigner, is the immigrant. That the structural reality beneath that might be an approximation.

Now it is interesting to see that in the constitutions that were done in the 1980’s after apartheid the constriction in South Africa, the constitutions with the fall of the Soviet Union in eastern and central Europe, the constitutions in Latin America after the dictatorship. These are constitutions that were elaborated you know in the 80’s and some of them in the early 90’s but mostly in the 80’s.

Now those constitutions all contained a clause that gets at the same issue though it does so in many different versions. So the Brazilian constitution very very long version and the Polish is very pissy very short. But at the heart of that clause is the following and I think this is a radical break with what is the modern constitution, the French and the American template, and that is sovereign that well let me just put it in my terms, that the sovereign even if legitimate whatever the instrument to make that legitimacy, can not presume to be the exclusive representative of its people in international fora.  Now what that international fora, because that is where the, what is the expression, the rubber hits the ground. In other words that is the moment when the state claims I represent all of you right? That is precisely that notion that the state is the people. Internally inside a country you have the politics of parties etc etc. Now that is a very interesting proposition and that gets to me at this notion also of this growing distance. Now I want to and I am looking at that enormously beautiful red clock that you cannot but notice and I know that we want to have a bit of time for discussion so I want to wrap up with a final element again that is a provocation and that is this subject of the unstable meanings of memberships and it comes back to this argument that beneath the intensity, the growing intensity of this ideological combat ideological hatreds towards immigrants, towards outsiders actually lies in someways a zone of structural approximation. Structural is deep not always visible but it seems to me that it could just click into view in one way or another.

Now parts of the evidence and I am sure many of you are familiar growing inequality in our countries it was already mentioned alienation etc etc and I just want to take the case of the United States which is in many ways an extreme case. I am an immigrant there and I am very glad to be an immigrant there but it has extreme conditions so I just want to take this no surveillance apparatus. It’s not what you have here measuring traffic and little cameras. We are talking hard core surveillance, 24 hours, day after day that starts with a war on terror which allows my university for instance to read my email. That’s part of the deal. So a lot of professors now use Gmail. Everybody’s using Gmail because that’s the only way of getting out of it. Not that universities do that. The President of my university is one of the most distinguished free speech lawyers that the United States has, Lee Bollinger, he would not do it. But what I mean is they are entitled simply with firms. So it’s this enormous surveillance apparatus.

I just want to show you an image, it’s a very poor slide. This is what we know. 10,000 massive buildings, this is all in the public domain this information, I would not be bringing in information that is not, what we don’t know is what we don’t know, you understand that formulation? Also what we know from the Pentagon. 90% of our emails, all acts of communication telephone, emails etc are being surveyed. There are not analysing they are just gathering. If something intersects and says let  me check it out, the data there. Now what I ask and this system of cross transnational system the UK is part of it, so is the Netherlands, so is Germany etc. I am just looking at those countries. So my question is who are we the citizens and I am clearly sliding into a diminished distinction between citizen and immigrant confronted with certain types of conditions.

Now I am giving you an extreme condition because I don’t have time. Otherwise I could give you more modulated but who are we if he have this enormous apparatus that is gathering all the data on us but may not use the data but that reduces us to something and by the way up there because we also have those data. There are almost a million people with top secret clearance besides the millions of others. They include lots of foreigners. If your best algorithm builder is a Russian mathematician by god she is there! It is full of foreigners which I find adorable. Actually that is the one part that I am so charmed by that. It is a sort of denationalised zone. But then here are we the others and so I think that sooner or later sort of transversal alliances transversal connecters taking notice of each other, we are on the same side of some things not of all. I still think that we are so privileged certainly in countries like this so I don’t want to...I am not complaining. I am just observing that structurally speaking all the citizens who are losing ground in our country and the United States is really very very serious. You know at one point does this structural kind of connection and then final thought I go back to history.

I am not a historian. All I do is sort of guerrilla incursions into historiographies. Sort of see what can I learn and basically I chose historic moments in periods that serve as natural experiments that have sort of completed their trajectory. So it’s actually wonderful. We social scientists need natural experiments you know. It is one of the books that I brought. I looked at Europe but intermigrations inside Europe where the outsider and sort of the 1700’s the best data in archives of cities of course, the 1800’s and then the early 1900’s. The outsider basically was your cousin. Same phenotype, same religion, same whatever you know moral as a group. So when Haussman’s is rebuilding Paris Hausssman needs a lot of workers. He brings in Belgium’s, whatever Belgium was called then, and Germans. The French hated those workers because they were the wrong type of Catholic. French workers...I evoke France because France has actually a glorious history of accepting the foreigner you know, much better history than some other countries and French workers in the south of France and in the salt works, this is all archival information. There is a lot of date on this. They actually killed Italian workers also because they were the wrong Catholics.

So then I want to come to our period. This is just elements you know there is much more to be said about this. I want to come to our period. Today I argue, let me throw it as a provocation. It’s an exaggerated version of what I think but you know it works as a provocation that way. I think that we fool ourselves if we think that it is the distance, the distance of phenotype of race, of culture, of religion which makes incorporation so difficult. There is something about the outsider even if she is your cousin. It has to do with settings, with structures. European cities were complex environments. To bring you in meant membership. In the United States in a way they said you want to come you come but you’re on your own and then they were on their own. They were segregated. So it is interesting to see that the more we care and a country like the United Kingdom has a history of a strong welfare state, public health, public transport etc etc that all of that can actually make it for difficult to incorporate the outsider. That if the outsider is given similar rights and is fully recognised that is what counts. Not that it is the same religion or the same phenotype. So I end with that optimistic note I am not sure if it is but anyhow.

Thank you very much.

BA: Saskia, thank you very much and you have definitely I think achieved your goal. I think you have been extremely thought provoking and the issues that you have raised around ambiguity, around the notion of citizens losing rights and thereby becoming closer to the immigrant, I think that all of that very relevant and certainly your last point in terms of what happened historically when the Italian workers were killed we are seeing examples right now including in South Africa where there are some very powerful movements against immigrants not only in South Africa but in many countries around the world 

We are now going to move into our next stage of our discussion. I am going to whilst she is being miked up...Catherine are you miked up yet...oh great....introduce Kathleen Newland. She is a co-founder of the Migration Policy Institute and directs its programmes on migration and development and refugee protection. She is also the founding director of the International Dispora Engagement Alliance which is a partnership among the Migration Policy Institute, the US State Department and US Agency for International Development. I am going to ask Kathleen to be our discussant as it were in terms of what she has heard so far.

You have all been extraordinarily patient but I hope that you have recognised that our speakers have given you considerable food for thought. After we have heard from Kathleen I am actually going to turn to all of you, get a few questions and then come straight back to our panel.

So Kathleen, thank you very much and over to you.

Kathleen Newland (KN): Well thank you and thank you Michael Aminian and Zamyn for having me here.

Saskia certainly succeeded in that I am feeling very destabilised at having to quickly respond to some of the superb and stimulating thoughts that Saskia and Mamphela and Valerie have left us with.

But I think what we have learned this evening is that the second law of thermodynamics applies to people too. Stay with me here....

For those of you who are as far away as I am from the time when I was forced to study science let me remind you that the second law of .... dynamics is the conservation of matter and energy, You can transfer one into the other but you can’t really get rid of them. A great physicist once explained it to me this way, there is no away. You can’t throw anything away. And I think this is one of the features of globalisation. Connectedness. There is no away.

A lot of the ways we have been accustomed to thinking about migration and foreignness in the past are really out mooted by this. Immigrants are no longer lost to their countries origin. You know all the tragic stories and those Irish ballads about leaving your mother and your sweetheart and your homeland and never seeing them again is not the norm any longer. By the time someone’s plane has landed in another country they are already telephoning or texting people back home to say they have arrived. So there really is no away in the same way that we have been thinking about it and more and more countries are looking to their immigrant, to their populations, to their diasporas to be a part of the national project.

We just heard Mamphela talk about how she has been visiting South Africans in London and enlisting them I presume in the project of the political transformation of South Africa and there is one of the pilgrimages that politicians face these days is to their diasporing communities.

So that’s my sort of big take away from the conversation we have had so far. I will just make maybe one or two other points about things that really struck me.

One is Mamphela's call for an open and honest debate amongst the states about migration which has a moral dimension as well as an economic one and I am somewhat encouraged to know that this has started at least in the United Nations. It started formally back in 2006 migration, a formal discussion about migration in the UN. They called it a high level dialogue on migration and development. And right after that states agreed to get together regularly every year to talk about migration and develop. Now the end development came because that was sort of a safe space. Everybody was for development and it created a safe space for states to talk about migration but the conversation quickly expanded beyond just migration and development and this year in fact in October there is going to be a second high level dialogue at the UN. So it is sort of baby steps but there is at least...there are conversations going on and that I find encouraging because migration has decided who gets to come and stay in your country. It’s always been seen as the last bastion of national sovereignty and I think we are beginning to see just a little bit less fear about that. Maybe partly as a result of the EU experience. You know the EU open borders among all 27 states has no higher a rate of migration amongst states than the rest of the world. You know which is really pretty remarkable. So you finally with great trepidation remove those barriers and what happens? Nothing. Pretty much. Now of course it happened between countries that were on a similar if not identical economic plane and that’s another story but it is certainly something to think about.

Saskia, you sort of opened our minds by looking at which countries are the largest remittance receivers and I think that’s a very fruitful line of thought. When you think about ok what are the largest immigrant exporting countries as it were to put it crudely. In the United States of course the biggest source of undocumented migrants is Mexico. The next, in the top 10 certainly and probably in the top 5 next highest sources of undocumented or unauthorised immigrants you would find Canada, Ireland, Poland. Nobody thinks it’s a problem. So that again you know is sort of something to think about.

Which countries have the largest proportion of their native born living abroad? I am not sure what the answer to that is...

BA: The Netherlands...

KN: Well I do know that Mexico and the United Kingdom have about the same proportion of their native born living outside the country. Nobody thinks it’s a problem for the UK.

So it’s not really about migration per se. It’s about whose migrating and to where and what are their characteristics, particularly what are their economic characteristic but even more how are they perceived, what are the fears that are sort of attached to them?

My final point I will make is one about membership which again you sort of stimulated my thinking on this Saskia. There has been in the last 20 years an explosion of dual citizenship or triple citizenship or plural citizenship let’s say. And one of the reasons for this was the completion of the UN Convention of the Elimination of All Forms of Discrimination Against Women. Long title! The treaty usually known as CEDAW. Now when countries signed up to eliminate all forms of discrimination against women, as if, one of the things they signed up for was allowing citizenship to be passed by mothers as well as fathers. Clearly a form of discrimination against women. Countries agreed to bring their own laws in line with the conditions of the treaty so all of a sudden you had a tremendous number of people being born with two citizenships automatically. One from your mother, one from your father. All those mixed marriages of people from different countries which was also growing because of globalisation and at the same time more countries allowing people who were born on their soil to foreign parents to become citizens eventually, even Germany which has been one of the toughest holdouts. Now some of those countries force people to choose one citizenship when they reach the age of but not all so you have this tremendous explosion of multiple citizenship because of this treaty relating to gender and I think that has changed the sort of perception of what it means to be a citizen of a single country. I personally think that everyone should have as many passports as possible and I was very proud when I hired a woman who had Filipino, American and Icelandic passports. I thought wow that’s got to be a record for most exotic! So I think times are changing and we are living in a whole new world so thank you my fellow panellists for a wonderful start to this discussion.

BA: Kathleen, thank you and I love that notion of all of us having as many passports as possible. It usually means you are in a Bond movie actually but I particularly loved what you said about there is no away. I mean it is such an important way of thinking about the issues around globalisation and migration and of course getting right into the heart of these issues around perception and it’s about who is migrating and who is seen as a threat.

Thank you very much indeed. We will come back to the panel in a moment but now it’s your turn to take some questions and comments. Can I please ask you when you get hold of the mike to say who you are before you ask your question or make your comment and you need to indicate otherwise I won’t know. Ok there is a gentleman at the back we will start with and then there is a gentleman at the front.

 

Audience 1: Ok shall I start? I don’t know if this is on. Is this on? Hi my name is Deliam from the Royal African Society and the question I wanted to ask is none of you actually talked about the media and I would be quote curious to hear what you think can be done to sort of maybe mediate or kind of change the discourse that some of the media have around the topic of migration because for example in the UK for a long time there was this big conflation between asylum seekers and immigrants which is false but obviously there is a big discourse then that also plays into the discourse around race and identity which have histories but which the media play on so I would be interested to hear what the panel think about that.

BA: Ok, thank you. The gentleman here...You ladies don’t let us down now. Don’t let all these men hog the questions.

Audience 2: Hi, thank you for a wonderful discussion. My name is Hamish Stewart. I am a law student. My question is with the free movement of capital around the world now that has happened quite quickly and capital can move from countries like Sudan, Libya or Burma into institutions here but there are still powerful restrictions on the movement of people so where is the drive to free the movement of people going to come from and with all due respect to the United Nations there are problems with moving things forward and both the Canadians and Americans, I am Canadian, are not always very supportive of the UN so what are other drivers of free mobility.

BA: Thank you. Let’s take a couple more comments. Gentleman here down on the left hand side.

Audience 3: Good evening. My name is William Wong. This morning I was looking at Twitter and a tweet sort of made me smile. It was posted by Lucy Tobin, journalist at the Evening Standard. She was quoting Prince Philip who went to visit Cambridge probably yesterday and he asked a polish scientist ‘did you come here to pick raspberries’? All joking apart, I was just listening to Kathleen earlier and it made me think about the concept of ex-pats versus diaspora in the context of immigration which I think is quite an interesting twist of words but have very different connotations but just a very key question I really want to ask the panel is even here in London in my experience most people, Londoners, are not global citizens, we are not. And particularly during hard times economically if you want to gage a nations sentiments you only need to watch BBC Question Time on Thursday evenings, immigration immigration immigration! It is not even just political sound bites. It is kind of completely fear driven xenophobic. I would just like to hear your views. And apparently it is the same across the rest of the EU because of the way things are. So I don’t know how many really globally minded people here say please come in, let’s keep all the borders open now that the UKBA’s been abolished. Thank you.

BA: Thanks very much and we have someone up there. Yep thank you. There is a lady just there. Yep thanks very much.

Audience 4: Hi, I am Rosalind. I work at the New Statesman. I was just wondering whether you thought it was a generational thing and whether as generations get younger and the world becomes more and more globalised and social media becomes more and more a tool for accessing the world it will change.

 

BA: Thanks very much. Ok one more and then I will take this round of questions and then come back to all of you.

Audience 5: I am Zami Majuqwana and I am one of the dual citizenship South Africans having fun in London. I have a question for Mamphela in particular and it applies to other nation’s large diasporas as well. I am just wondering as a highly anglicised duel citizen for a country that apparently has an allergy to remarkably different Africans coming in how welcome is a diasporas member who wants to go back and make a difference in a country that is developing that allergy the more the problems exist grow.

BA: Right, put on the spot Mamphela. I was going to say that South Africa had an allergy right at the beginning straight after independences were in terms of who stayed and who left.

 

Audience 5: My father was an exile as well so I have experienced [inaudible]... 

MR: I think South Africans have got a real problem which has less to do with migration and a lot more to do with who we are or who we think we are and because we haven’t resolved the issue of identity within the national borders of South Africa its actually quite scary to see that over the last 19 years we have regressed in terms of the unity and diversity. We have become much more fractured and this is a function of the structural inequalities that come with a systemically corrupt system which people get to understand that you have got to be so and so connected to so and so to be able to get even the basics. And so the question of South Africa’s resistivity to both fellow African migrants, people who are South African diasporas  living somewhere, who they are and we have had a very famous case around the 2009 elections when President Thabo Mbeki he made sure that people living in diasporas don’t vote and an individual citizen, that is the beauty of the South African constitution because as a citizen you don’t have to go via via you just go straight to the constitutional court and say my rights are being violated and thanks to that individual citizens now if you are a South African you are entitled to vote. Of course it is in my interest to say that. 

So the reality is that South African society, the point I was making about honest dialogue between nations, we need honest dialogue within the borders of South Africa. We have another problem and Saskia talked about this issue of subject and citizen, we have a systemic problem in that South African citizens are still mentally subjects despite the fact that our constitutional democracy makes citizens the sovereigns. They are subjects and they invite their subject identity to find expression in the way they fail to hold those in public office accountable.

We now have a government in South Africa that has conflated the present, the person of the present the governing party, the government and the state. They are all one big conglomerate and so we have a major problem of identity not just of the people but of the institutions so talk of stability and instability, well come to visit my country. 

BA: Did you want to pick up on any of the other questions?

MR: No I think that is enough!

[laughter]

I have to resolve my problems at home, they are big!

BA: Thank you. Saskia are you going to destabilise us some more?

SS: Well I wanted to particularly pick up on the law question. I mean maybe you can I don’t know but I can also answer the other ones but I am particularly interested in that subject. 

So we actually have given rights to firms as you say and it is interesting to see how their mobility is constituted in the law and I have done a lot of research in this because it’s like it is an invisible world of particularity...oh you’re a lawyer, your already smiling...of particularities that then appears when it pops up you know when it surfaces as some sort of homogenised space to start with. And I go into a bit of details because I think that has implications also for this notion of a mobile person who can carry rights across borders. I mean I do think that this questions of rights for people is very important. So there is no such druidical persona as the global firm. It doesn’t exist. The Europeans tried for a decade to produce a European firm and they only have produced a few instrumentalities. There is no such thing. And yet we have like 400,000 plus firms that conduct themselves as if they were global.

So how do you close the gap? The way you close the gap is each national states and if the vast majority of states in the world uses its particular instrument which vary enormously. You have incredible variability but you give these firms which are building national firms from another country, you give them guarantees of contract and protections of property rights and thereby you have enabled these firms to conduct themselves as if they were global.

Now I see in that mechanism that uses the specifics of each nation states law traditions, is it an executive order, is it a judge, is it legislator etc, that we could also do that of course for people. Now the only thing that we have that is an approximation is WTO Mode 4 for those of you who are...I like to bring that up always when I am talking with immigrant experts who don’t necessarily focus on these issues because the argument among those who discuss immigration always is the citizen rights, the rights that citizens have they are so closely connected to the national state that we cannot give them to non and I always say actually be the early 90’s we had produced a subject who carried rights that were globally valid in all globally... in all the countries that were members, signatories, to WTO and that’s WTO Mode 4.

Now it’s a very convulsive method but we actually produce that subject so we have a global subject who has portable rights that are valid and quite a few rights that are term rights, they don’t go on forever, in all countries that are signatories. You may know about that right?

Now when you look at the immigration issue you know between the way they gave rights to firms and this particular subject that most people don’t know about which I find amazing. Everybody knows about WTO but they don’t know about this particular mode of WTO. We have the elements I say to enable the formal recognising of the fact that all immigrants are citizens, they are rights carrying individuals. And so I see in place you know the mechanisms now what drove the regime visa via the rights of foreign was of course a very powerful concerted effort to enable that globalising. So to me there is a lot of interesting stuff that it could sort of tip over into a different concept but the starting point is the notion that we have when I ask the question who has gained rights in this global era? Firms. They have expanded their citizenship rights would you say. We the citizens, because this is a little project that I have, we have lost rights.

Can I go on for one more minute? Really?

So my husband who is sitting here in the front row smiling, he always says that I need a hobby. Now I probably sound like I need a hobby I know. But I grew up in Latin America where hobby is a very vague word you know. I just never managed and then between being Dutch, Dutch may be different than Latin America, and so one day in 1996 Clinton is President. Clinton passes his immigration reform act, I was dinging in it and a discussion emerges. It is not only immigrants who lost rights. We, the citizens of the United States, under a democratic party lost rights. So I went to Richard and I said I have a hobby. I am counting all the rights we citizens are losing and I have pen pal here in the UK so for years now I have been checking.

Now there is in our constitutions no such subject as a Christmas tree with all the ball balls, a subject a solid subject that we could call the citizen and will the ball balls are the rights so if two rights disappear you say that ah ha! I have lost two rights. We don’t exist in that solidity. We exist to cross highly specialised technical domains from which we acquire certain rights so most journalists can imagine it is really difficult to detect when we lose rights. But in the United States we have really been losing all kinds of rights and that is an interesting story in itself.

So what I see is a very biased world you know where firms we have managed to give firms rights etc and then on the other side citizens and immigrants are actually a bit on the losing end I would say and then the super rich today they don’t need to be citizens and the very poor I don’t know how much they gain from citizenship either because the state gives less and less. So it’s a bit of an unstable...from the way I put it yep. But any how nice other questions but I am going to leave you to answer them.

KN: The clean up.

BA: Saskia, I have to tell you that you know what you call a hobby most of us would call sort of serious intellectual...

SS: But if I had time to tell you some of the stories of the kinds of rights we had lost it does lead to giggles every now and then. It also leads to very bad things admittedly.

BA: Thank you. Kathleen?

KN: Well the other 3 questions were pretty closely related it seems to me because talking about the role of the media, perceptions of migrants which are so often shaped by media and then whether xenophobia is sort of a generational thing because the younger generations are using different media. So I think those all are pretty closely related and it seem to me that the sort of crux of the matter of the relationship or the role of the media in shaping views about migration has a lot to do with the transformation of many so called news media into really almost pure entertainment media and particularly in times of economic downturns as you mentioned. Immigrants become scapegoats and scape goating sells tabloid newspapers and tabloid television programmes. That’s a sort of reductionist view in a way but when I think about sort of most of the newspapers in the world that our really...that I am limited to most English language media and La Monde occasionally but most of the serious newspapers are still pretty reasonable on immigration. Even the Wall Street Journal which those of you who know the US media is a very conservative newspaper, is the closest we have to an open borders advocate in terms of immigration because there is a very strong libertarian streak there.

So while I really think the role of the media comes down to a matter of selling entertainment and its profoundly disturbing that sort of xenophobia is embraced by the much of the media consuming public but it does, the use of new media, does really give me hope that maybe there is some prospect of a generational shift. The trouble of course with social media and the internet generally is that it encompasses everything, absolutely everything and so there are probably as many specialised sites and social media that trade on xenophobia as trade on a more liberal view of immigration but I think that merely the wide open nature of communications in new media are more likely to erode xenophobic tendencies just through exposure. I mean social science demonstrates that exposure tends to reduce antipathy so maybe there is hope there.

BA: Thank you.

I will take another round of questions in a moment but I suppose I am going to take Chair’s privilege for a moment because I do think that there is an element of all of this in terms of perceptions and xenophobia and everything else which crucially is about lazy politics. It requires really strong leadership to talk to people in communities who are fearful and they become fearful for a whole variety of reasons and some of it may be because their community has changed. You know they used to always hear, in the context of the UK, English being spoken and they will go out of their door and they walk for ten of fifteen minutes and they don’t and they think what is this about? My community is changing in a way that I can’t control.

And you need political leadership in those situations. You need strong political leadership to actually help people to understand and appreciate not only what is happening but why there are positive elements to that.

And by saying its lazy politics I am not pointing at any particular political party because I don’t necessarily think that my party was any better at it when we were in power because you have to go out on the street and you have to help people to understand what it is that’s happening and why it’s changing and one of the reasons if you listen to people and I am not living in the UK right now so there are many of you who may say I have got this completely wrong but one of the things when I listen to the UKIP,  when people respond to UKIP what they very often say is they listen to us. They listen to the concerns that I have. None of you others are prepared to actually come and talk to me about what my concerns are. And that is really interesting to me because people want to be heard and they feel that they are not being heard and that they are not being listened to and that they are not being respected.

Now one of my former political colleagues is sitting in the corner over there, Chris Smith. Chris I don’t know if you have anything to add? Whether you think I am completely off the wall in relation to that statement and of course you are still here in the UK so you may have a different view and I am putting you really on the spot which I love to do. So Chris over to you. There is a mike just coming your way.

[laughter]

Chris Smith (CS): You are absolutely putting me right on the spot and you’re not wrong. I think that particular in times when economic times are hard, when people feel that they don’t have very much money, they are struggling, the fear that can very easily be generated about difference, it’s an easy political pitch. It’s something that is very easy for people to grasp and it is something that is enormously to challenge and to try and talk people through the fact that it is not because of difference or people who are different that they are struggling or their struggles are not being recognised. There are other things that are at stake here. Hugely difficult. I am not sure if there is any politician anywhere in the democratic world who’s solved the problem of doing it with the possible, the certain exception of Mandela but that was in very different circumstances. In the older democracies it is a high difficulty, a high challenge but we have to keep on trying to do it.

Sorry not a very good answer.

BA: No you did ok for someone who was put on the spot.

CS: Thank you.

BA: Thank you Chris.

SS: Can I add something to this? Because again when I looked at other historic periods, I mean it seems to me quite interesting there was an époque especially in the Keynesian period when you had a mobilised syndicalism made up of many immigrants in quite a few countries including in France not just in the United States or in Canada and the struggles that they engage in, the demand for collective goods, access to public transport, public education, public housing, electricity you know all of that, meant that the more you included also the foreigner, the outsider, the more you expanded the rights and you get really collective sort of consumption rights out of that.

And I think that there was something about the DNA of the époque that made it. In other words, including the outsider meant expanding the rights of those who belong. This period does not have that DNA and I think that you put your finger on the issue at least from my perspective which is we have an economy which is really bifurcating, middle classes becoming poorer.

So secondly politics, since you brought it up politics. I think that politicians are, I don’t know if you said it this was or not, but politicians are not always doing their homework. You know figuring out what are the issues that are wrong etc etc and finally a scarcity of political languages, explanations. If the easiest is to say the outsider is wrecking my community, my life instead of...so on the shelf there are very very few political words you know or terms of categories and we need to really rethink and that is why I think this thing about if we are also losing rights we the citizens, the middle classes are getting poorer you know these are grounds. They are structural. The speech is not there to sort of bring us together.

BA: Ok, let’s take another round of questions and comments. Lady here then we will come to you. Right they are all getting very brave now.

Audience 6: thank you very very much. This has been very stimulating. My name is Daphne Plessner and I have just a question or rather an observation which...can you hear now...ok...so my name is Daphne Plessner and I just have an observation first and would be interested to hear people’s views.

It seems to me also part of talking about the kind of characterisation if you like of the migrant as a characterisation if you like as a migrant as a kind of pariah or whatever in this kind of populist way.

It seems to be kind of tied to as well how we conceive our economy and the kind of ways we conceive of the migrant as either a positive contributor to a nation state and how the nation state then conceives of the migrant in terms of turning the tap off with regard to the flow of whose the good or the bad migrant in terms of it propping up the economy and it seems to me that that is a really profound problem given that you know that is run and brokered through banks and cooperate life etc and its part of that imaginary. So we have a kind of, it seems to me a kind of lacuna implicit in that kind of imaginary of how economies are conceived and how governments then set out to address you know on the one hand pretending that is about local differences or prejudice etc but on the other hand kind of facilitating or perpetrating if you like prejudice through how the migrant is seen as useful.

BA: Thank you. Will come to you next. Are you going to tell as more about Saskia’s hobbies.

Audience 7: The hobbies she wouldn’t have are cooking...

[laughter]

I wanted make a comment really about what you and Chris have said about politics which is I think there is a side of this where we have to be a little more self critical.

I have studied in the course of my career white working class racists, people who are very anti-immigrant and so on and I have studied them in Britain and the US and to some extent in central Europe and one common feature is that people like us, enlightened you know good hearted who deal with them as shameful and so on are read as actually a kind of put down as a kind of condescension. Upper middle class condescension. The enlightened middle class against, in league with these people who are made in to unfair people below immigrants taking our jobs. In the case of American blacks, people who getting unfair advantage because of all these guilty whites. And what you have is that if you like a kind of politically correct or enlightened view which is what I would prefer to say translates a class view.

There are very few politicians who speak the language of enlightenment, who don’t humiliate the mass. Very few. The only one I know of in the United States was Bill Clinton who is a genius at avoiding that. But the normal problem is that enlightenment translates as another form of condescension and we have got that today. Look at David Cameron’s description of UKIP you know. If there were anything that could drive a white working class or white working class British voter into the hands of UKIP I think it is his description of them as shameful. They are shameful but it translates in an entirely different way.

So I think this whole relationship between enlightened politics and class politics is something we aren’t thinking about straight. That’s my comment.

BA: Thank you very much. I have got a little clutch of hands there and I have got a couple more over here so I will take this clutch and then I will come over to you and if you do want to say anything this is really your chance because I am going to come back to the panel and then probably wind up so please note this is it. Yep, there is four of you here who is sort of a little cluster.

Audience 8: My name is Azadeh and I have worked for the British Council. I had a comment about the idea of becoming sort of similar under the same government surveillance. As an Iranian immigrant here in the UK its quite interesting for me how people who try to integrate to the British Society try to distance themselves from the Iranian politics or culture of whatever it is.

So for example, in the American kind of experience after the hostage taking in Iran the Iranian prosperous wealthy community turned to a crowd of terrorists over a night. So for me it’s not only the distance between one citizen and the subjects, an immigrant with a government but I think it’s the distance that as an immigrant you have with the receiving country and the country of origin that makes you stand out as an immigrant. You are not a subject of one state you are in a more two dimensionally kind or relationship with two states.

BA: Thank you. Just pass it behind you. Great. Thank you very much.

Audience 8: Hi, my names  Fran. I just wanted to draw upon the point that Baroness Amos made and also that this gentleman reflected on in his remark that I think it is really interesting what you said about people feeling like UKIP supporters in the UK feeling that they are not being listened to by main stream politics and that’s why they are turning to a party such as UKIP and I think the story in the news this week which I am sure lots of people saw about the mosque in York’s reaction to an EDL protest outside and their reaction was to invite the EDL protesters in for cups of tea and they ended up having biscuits and they ended up talking and I thought it was amazing on lots of levels. First I thought it was sort of very quintessentially British that we diffused this situation over cups of tea and biscuits and the kids are playing football and actually it was really interesting to read one of the...You know I think I had fallen into a trap of sort of stereotyping an EDL protester and actually when she was interviewed in the news said actually she wasn’t anti-Islamic, she wouldn’t declare herself as being racist or xenophobic as such but she felt that she didn’t have a platform to speak and I think that that’s really interesting what you said Baroness Amos there that actually people are just feeling that they are not being listened to and it is not necessarily that they want to take that out on somebody else but they just want a platform and I think that is something that we could definitely explore of having the sort of grass roots dialogue between different groups of citizens in informal situations like that one that happened in York. I think it’s really interesting to explore how that could develop because obviously there’s lots of people who have this anger and really they just need a moment to defuse that and really sort of experience speaking with other people. I think that is something really interesting to explore.

BA: Thank you. Could you pass it forward to the lady here? Thank you very much.

Audience 9: A really good cluster too because we are kind of talking about the same thing. My name is Lisa Taylor. I am producing a film bases on the book ‘A Rival City’ about rural to urban migration and one thing I have sort of noticed in this is that incoming communities, whether they are new comers from other countries or from the countryside often don’t have a voice of their own so what you brought up about people meeting each other in these circumstances is something.

There is some work going on as many of you will know in England about engaging with hard to reach communities and there should be much much more of that. People who just need to make a living don’t have time to worry about whether there are planters down their row or whether they should join the Business Improvement District. They need to feed their families and maybe send money back you never know.

But getting a voice for these communities that are coming in is increasingly important so suggestions on how that might happen would be great.

BA: Do you have any?

Audience 9: Well we are working on it in the film!

BA: Ok, thank you very much. As you are standing there, do this one first and then there is a lady right at the back there.

Audience 10: I will be very quick. My name is Mary-Ann...

BA: That’s ok, you have time.

Audience 10: I work across the river at Fidelity and I just wanted to say something very briefly about the fantastic hosts here because one of the things that we often forget is that art holds an enormously huge space for all citizens across the world and this particular institution has provided an enormous forum for a huge number of Londoners and an incredible number of visitors. It’s massively successful. It’s also a place where I have been bringing my poor benighted children since they were very long and subjecting them to all kinds of different experiences but most importantly they understand that they know what that crack is about. Not because I have had to say anything because art has a great benefit of doing this without words and growing up in South Africa I am another one of Mamphela's diasporas.

BA: You are getting lots of potential voters here!

Audience 10: My primary identity there was forged through the art that was around me because all the other identities available to everybody was so complicated and right now on the way in the car as we drove here quickly getting out of half term play mode I handed her a book that has no words in it. It’s a book done by Guy Tillim, Immigrants Living in Johannesburg, and she could quickly be brought up to speed with what we were going to have to discuss.

Now I just think the Tate does an incredible job here. The Ellen Gallager show on here at the moment everybody should really try and go and have a look at it. It is just a very very positive part of our global culture. That we are now living in a time where there is democratic access to so much visual material. Visual, cultural, musical etc which goes against so much of the sadness and the close-mindedness and the terrible consequences of people not accepting each other.

BA: Thank you very much. The lady there? Anymore indicating?

Audience 11: My name is Shazray.  My comments actually relating to Saskia’s comment about the DNA of the  époque. I thought that was quite an interesting point to make there because it feels like politics, economy, rights even have become a zero sum game really in the narrative of the times which has spurned on my global capitalism and we find that, I’m not a big Marxist myself, but it feels like sort of in the middle half of the last century Marxism was almost a counter narrative and the various different forms of counter narratives that we had from that to this spread this narrative of fear that was brought on by global capitalism and the zero sum game of politics and economy and society even.

And my point really is where is the counter narrative today? Where do we get that from? Because it seems like with the end of the Cold War with the rise of almost global middle class around the world there is no voice really that is countering that, no real voice.

BA: Thank you. Any other questions or comments? Ok, there is a gentleman here.

Audience 12: Good evening. My name is Amir. I have two passports so far.

BA: You are working on getting a few more clearly!

Audience 12: To get an EU one! I feel uncomfortable with first identity. With national identity and I was hearing that South Africa doesn’t have yet a national identity and was wondering if that steps that a country must go through. We have nations with 200 years of history of constructing a national identity and I was wondering is this a natural step. There is no way of going forward, skipping it? Going to a way of more including identity that would in a way resolve or lighten the immigration problems or the identity of the difference between citizens and immigrants.

Thank you.

BA: Thank you very much. Gentleman here.

Audience 13: I wonder if we deserve a better language than the language of identity to express all these interesting consideration. It seems to me that we are trapped within this language because we still think that we have to be someone and we have to belong to some place with a specified identity. So that if we mix this identity we have migration or something worse than that. So what if we try to consider identity as such a problem to be overcome rather than to be solved? What if we consider the possibility to ask different questions. Not who we are or where we are but what can we do with a specific place or what can we do together. Could we shift this questions framework?

BA: You have been reading Saskia’s books, right? Destabilising. Turning all the questions upside-down.

Ok, we have a gentleman right at the back there. Yep, it’s you! I know you’re not really right at the back but you’re nearly right at the back.

Audience 14: Thank you very much and again my compliments to all the speakers. 

Audience 14: Thank you very much and again my compliments to all the speakers. I’m Enrique Manalo I am the Ambassador of the Philippines. 

I just wanted to ask, if we take the perspective of a question was asked earlier, we have all this free movement of capital, how we encourage a freeier [sic] movement of labour etc and what would be the appropriate means of trying to bring that about.

I just wanted to comment that on the issue of...someone mentioned earlier, one of the speakers, that the UN is now discussing this issue. I really wonder whether your view that the issue of migration can really be tackled at the multilateral level because it is such a complicated issue. Though I do hope it can be but from our experience the UN would probably be the last place to try and come up with something concrete.

We can raise all the problems but do we really think agreement can be reached upon 180 countries, some with diametrically opposed positions on this issue. To really come up with something concrete...in fact that’s why I think the Global Forum on Migration and Development was set up precisely to move away from the UN. The problem with the global forum, none of the decisions are binding. So though we can raise all the problems, all possible ways of trying to solve the issue perhaps maybe the multilateral way at least that this stage doesn’t appear to be probably the quickest route to trying to address even address the problems quickly.

Would you suggest or at least in your experience are there other ways that perhaps you can really make concrete progress amongst nations in dealing with the issue other than, for example, the UN or the Global Forum or are we really just going to have to hope that time will eventually solve all these problems through forums such as this?

Thank you.

BA: Thank you very much. I am going to ask the panel for some quick wrap up points addressing some of the things that you have identified and Kathleen why don’t we start with you.

KN: Well let me take the last one since I am very very deeply involved with the Global Forum from before the beginning and your right, it was the countries, the governments that have participated in it decided very explicitly not to take it into the UN. Although that remains a subject of great controversy because there are many countries that would like migration to be in the UN because in the General Assembly at least decisions are made by majority vote whereas migration is a realm in which resources are at stake and those countries that feel that they have the most to give or to lose want to have more of a say in outcomes.

So I have great reservations about any progress being made on migration in the UN. I agree with the assumption behind your question because there is just not going to happen among 192 voices.

The Global Forum has served not so much as a forum for decision making as a place for governments to get together and to recognise their common interests and think well you know we care about that issue too, let’s talk. I think it’s given some impetus to regional debates and that’s really where we have seen more progress on more liberal attitudes towards migration has been at the regional level, the EU being the most outstanding example but also in West Africa, in South America you have limited freedom of movement regimes that are being at least tried.

A colleague of mine coined a wonderful term I think which is meant to indicate that the countries that you need to have in the room to make progress on any subject or the minimum number that will cover sort of 80% of the phenomenons. So on migration you would need to have the United States, the Philippines, Mexico, China, India. You know the big ones and if they can get together and agree on something then most of the others will either be somewhat isolated or you know will go their own way or will have to sign on. Moises Naim calls this ‘mini-multilateralism’ and I think there may be some progress for migration in mini-multilateralism.

If I may Valerie I just wanted to respond very briefly to our participant of Iranian heritage who talked about how their identity can shift overnight depending on events and it brought to mind an American comedian called Dean Obeidallah. I don’t know if you are aware of his work. He is a sort of half Palestinian and half Sicilian which as you can imagine is an extremely volatile combination and he is hilarious but he talks about the conversations around the family dinner table which are pretty extraordinary but also about the impact of September 11^th on his identity. How suddenly he went from being a sort of average white American to being an Arab and therefore as Iranians after the hostage crisis a putative terrorist and he has a stick about sort of how white people in American view immigrants and then he will pause and say, I know this! I used to be white!

BA: Kathleen, thank you. Saskia?

SS: Well I want to pick up on your question too and it seems to me that we are at a point now given globalisation, given interconnections, given now a history of changing little things that make a big difference collectively. Each country making a little difference for good or for bad when we accepted the financial needs you know of controlling inflation rather than creating jobs. All countries also accepted that.

I think when it comes to people, when it comes to immigrants the starting point has to be a recognition of all states that are involved in whatever. It might be just the ones that have but I would think of all. That the immigrant is also a citizen. There is no such thing as an illegal human being, right? And we have formalised those rights. It is not just an aspirational thing. We have formalised them. So the challenge is not necessarily the United Nations, that could be a challenge to do it through that, but some sort of set of agreements because states have done that quite well visa vie their needs of finance to have a global capital market and visa vie firms. Now we know that those are two very different conditions. But I think that starting point must be that the notion that the immigrant somehow can be treated as a, I don’t know what, you know at its worst is simply unacceptable. Every state, because we have mutual, you know every state wants her citizens to be recognised. So I think that that sort of a common platform that has remained somewhat unutilised. Now I am not saying that it is easy.

The other thing on identity I completely agree and that is what I was trying to say you know that we are dominated by identity and I think it’s a poverty of political language. So that even if there are structural conditions where we share problems we fall back into these differences and I really think it is a poverty of politics. I must say, I know that I’m surrounded by politicians here or former but when I look at my state, the United States, I don’t think that there is much politics that happens in that state. The legislature is more like a food fight. I love that name. The legislature in the United States, it’s not serious. But the question is who is making politics? Who is making the political? And that to me is a very difficult question to answer because I will not simply leave the making of politics to the state apparatus and the formal institutions of the political because there is no zone. I think Mandela was making politics, well he was in jail. He was making the political, there was something that was being made.

Now I have a few other things. The question also...

BA: Saskia, you’ll have to be brief.

SS: I have to be very brief?

BA: We promised everybody we would finish on time and it’s 8.59pm. 

SS: Yes yes...but the question. She raised a very sharp...Oh my god! The Iranian question, yes. You are right. But again as I see that as a poverty, like her story too as a poverty of how our political space is constituted. Now there is more to be said but I agree that there is a difference there. But it’s a failure of something you know on the part of the citizen to suddenly binarize you, dichotomise whatever.

BA: Thank you. Mamphela, this is your moment to get all the South Africans in the room....

MR: I want to return to this issue of shame and silence because after the first xenophobic attack our President Thabo Mbeki at the time said this is not the South Africa I know. And I want to use that to come back to the issue of identity because I think we might wish identity away. I come from a country with 300 plus year’s people were fighting to have an identity. So it’s very easy to dismiss it. It’s a psychic issue in my country.

Interestingly last year there was a survey done. Less than 10% of South Africans self identified in the first instance as South African. They will tell you there are Zulu, they are this, they are everything. So I invite you to the politics of identity in my country because it is not only a matter of poverty of politics and language. It is deeply psychic.

SS: But could we go beyond it maybe...

MR: Because I believe that to be able to go beyond it you’ve got to do what we are not very good at doing whether we are middle class, whether we are academics. Listen. Listen to the people who are struggling to express themselves in terms of who they are and how that makes sense or not and the counter narrative that someone was talking about is not going to arise necessarily from just simple analysis, not simple but complex analysis as well but we have to listen to people. And out of the listening we will be able to forge that language which is missing because you and I are using the language of academia and can wrack our brains but sometimes just sitting and listening to villages talk you get the narrative.

And so I have spent the last four months having announced this new party listening and its really interesting how much I have learned about people who live in South Africa, who vote for the same party that disrespects them and they say we feel like forgotten people. Our voices don’t count. And yet they didn’t see that there was a way out of this. Someone was talking about identity as a trap. Yes people are trapped. Not necessarily by identity but by not even being able to find a language to express how they’ve come to be forgotten people in a free South Africa so soon after that freedom.

So we’ve got a lot of listening to do, we’ve got a lot of forging of new language to do in South Africa and I invite all the South African diaspora to come and help with the conversations.

BA: Please give our panel a great round of applause.

It’s been an incredibly rich discussion. The discussion and dialogue will continue on Monday night.

I want to once again thank our panel: Kathleen, Saskia and Mamphela and also to thank Mark for getting us off to such a good start but I have one major major thank you at the end.

The Zamyn forum is the brain child of Michael Aminian without his commitment and dedication...we started talking about this at least 5 years ago and we all encouraged Michael but I think we also thought is it really going to come off? Well here we are!

Thank you for being such a great audience and again a big thank you to the sponsors because without all of them this would not have happened.

Thank you and come back and hear some more. 

Close Transcript

Video Transcript

The University | Monday 4 June at 7.00pm

Chair: Paul Webley

Speakers: Christopher Cramer, Jo Beall, Stefan Collini,      Pratap Bhanu Mehta, Richard Sennett and David Willetts MP

Paul Webley (PW): Good evening everybody. My names Paul Webley. I am the Director of SOAS, School or Oriental and African Studies.

It’s a real pleasure to welcome you all tonight to the second of Zamyn's cultural forum events on global citizenship and it’s very good to see such a lively audience. I have spoken to a number of people already so I know we are going to have an interesting session.

Now last week the opening event focused on our notions of migration, foreignness and identity. This evening we are going to be considering the university in a global context.

Now we have got a 2 hour slot and the structure of the evening is as follows.

First my colleague Chris Cramer will introduce the theme of the evening, how it relates to the overall programme of events and then he will introduce the panel members.

I’ll say a few words and then ask each panel member to make an opening statement and we will sort of go down the tables this way so you will know where we are. After some reactions from the panel members and some questions from me I will open up the session to questions from the audience and I will make absolutely certain that we have at least 40 minutes for questions and answers from the audience.

I am just going to briefly introduce Professor Cramer and ask him to set the scene for this evening. Chris is Professor of Political Economy of Development as SOAS. He has worked in and on sub-Saharan Africa for more than 20 years teaching and conducting research on rural labour markets, commodity processing and violent conflict. He is currently head of our department of Development Studies though he is about to step down and enjoy a sabbatical leave. He also cycled 75 miles on Saturday just for fun. So as well as being a fine scholar he is also a very fit man. So Chris over to you.

Chris Cramer (CC):  Thank you very much. Not that fit, just exhausted.

So good evening everybody and welcome to what is the second event in a series of events in the Zamyn Cultural Forum.

Thank you for coming in such amazing weather out there. It’s quite a dedication to come. But I would also like to thank some other people involved in this evening’s event. People and organisations that have made this event and the whole programme possible.

Our sponsors Accenture and Barclays and the other partners involved so that’s the Africa Progress Panel, my own university SOAS and the Tate and of course Zamyn itself. But I would before we get going like to note in particular the contribution of two individuals to this and the related events in this series.

I have been talking for, I was trying to think, it must be nearly two years to Michael Aminian, the creator of Zamyn,  about this programme of events and it’s been an amazing I think journey is the word, the clique. It’s been a huge pleasure to be involved with Michael, to be drawn into his passionate commitment to doing something very difficult, to bringing together the world of the arts, of business and economics and that questioning edge of psychoanalysis. Very very big challenge. And I have also seen up close the immense amount of work and patience that Michael has put into and a determination in creating this programme. So we have him above all to thank.

And I know it’s taken a lot of other people at Zamyn and elsewhere to make this true but there is one more person I think we should mark the contribution of and thank for that which is Mark O’Daniel of Tate, Head of Public Programmes here and he has been just you know fizzing with ideas but also very firmly pragmatic in enabling this programme to take shape and to take place here so Mark thank you very much wherever you have gone to. There you are, thank you.

Some of you will have been to the first event last Wednesday evening and you will know that it was a hugely successful fascinating discussion of global citizenship, of exiles and migrants and of identity and today we are going to talk, we are going to shift a little bit, and talk about the production of knowledge, the circulation of ideas and the shaping of minds that takes place or is meant to take place in that varied institution called the university. And we will discuss this very much tonight in terms of the global context and challenges and opportunities within which universities function.

There are though various ways in which this evening’s topics, the themes, intersect those of the first event last week. Ideas travel with migrants and they are often remitted as well and knowledge, research, ideas are like the movement of people shaped and constrained by their interaction with global capital and resource flows, things that we will pick up on in future events within this series.

And above all, just as people movement is infringed by borders or regulated by identity cards so to the flow of ideas and knowledge is regulated by institutional boundaries, especially perhaps when bound up with co modification and market value.

Now the other night Saskia Sassen unsettled us all as an audience by exploring the ambiguities and the shifts in categorical identities partly thorough discussing shifts in the relationships between states and citizens and I would like to frame tonight’s discussion by recognising that historically over the very long term there’s always been a shifting relationship between states and universities and other groups and institutions. That relationship has often involved a kind of tension between the idea of university as a source of reproducing what we might now days call the human capital of authority of states and so on or of the church long gone and the idea of the university as a sort of thought beyond the needs of and even challenging often challenging power and authority.

Julien Bendea of course wrote in the early twentieth centre of ‘La Trahison des Clercs’, his critique of European intellectuals who were precisely not honouring what he saw as the role of challenging increasingly dictatorial political regimes then.

These issues, the relationship between authorities and universities, the tension between freedom of ideas and the claims to private property rights over research and education and so on they now days play out in new and profoundly globalised ways. We don’t always see those here clearly enough beyond the specifics of say the UK fees debate but these things are all connected and that’s why I hope tonight we’ll hear about and discuss and you’ll join in the debate around these issues.

So for example, to give you two examples, does technological change and the changes that make MOOCs for example possible. Does that mean we are entering a new stage of the global democratisation of higher education or is it a signal of a new phase of corporate concentration and control over knowledge and research emanating from within the heartlands of G8 countries?

Are research partnerships between say British and Indian researches funded perhaps by a UK funding agency, is that straightforwardly a way of generating an equitable shared effort and then producing a global public good of knowledge or do these partnership relationships often or sometimes represent the reproductions and the uncomfortable relations of hierarchy and resistance?

These and other things are some of the things I’m hoping and looking forward to hearing about so I will hand over without further ado to our panellists whom I would like to briefly introduce alphabetically to you.

So Jo Beall sits on the executive board of the British Council where she is also director education and society and before that she was a Deputy Vice Chancellor of the University of Cape Town in South Africa and before that she was in and for a while Director of the Development Studies Institute at the LSE and before that she has got a very rich going back in particular to her involvement in the anti-apartheid struggle in South Africa.

Stefan Collini is a well known Professor of Intellectual history and English Literature at the University of Cambridge. He is a well known public commentator and among other things he is the author of ‘What are Universities for?’ Maybe we will find out tonight. He is also written on intellectuals in Britain and I think currently he is just back from 9 months in the States where he has been working on a project on the history of literary criticism in the UK so I hope he is not still two jetlagged after coming back.

And then we have Pratap Bhanu Mehta who is President of the Centre for Policy Research in New Deli. Highly prestigious think tank and research centre there. He also sits on the National Security Advisory Board in India and is a member of the World Economic Forums Global Governance Council. He’s taught at Harvard, JNU another school of law at NYU as well and is an editorial consultant and contributor to the Indian Express and in the past has also been closely involved with the National Knowledge Commission in India.

And then we have and are very pleased to have Richard Sennett a distinguished sociologist who teaches both at NYU where he is University Professor of Humanities and at the LSE where he is the Centennial Professor of Sociology. The author of many books including the Craftsman and Together: the Rituals, Pleasures and Politics of Cooperation and currently working on a project on a book on urban design.

We are then very pleased to welcome the Right Honourable David Willetts, the UK Minister for Universities and Science. He has been an MP since 1992 I think and has held a number of posts but also has written on social policy, on social and economic affairs and not lease as the author of The Pinch: How the Baby Boomers took their Children’s Future and Why They Should Give it Back. An interesting comment on that in The Times when it was published in 2010 before the last election was Matthew Parris’s saying that this is a book that takes the voter right above and beyond party politics.

And then slightly out of political step I would like to introduce and hand over to the Director of SOAS, my boss that is, Paul Webley. Paul has been a director of SOAS since 2006 where he is also a Professor of Economics and Psychology. He specialises in tax compliance, somewhat relevant these days, and also in the economic behaviour of children and perhaps that’s about how they work out how to make their parents give them back the future that they nicked. And on that note I would like to hand back over to Paul your Chair for the evening.

PW: Thanks for that Chris.

All of our speakers this evening have an interest in experiencing universities and have valuable perspectives to contribute but you might ask just at the outset why I am chairing this event. SOAS has got a special focus on Asia and Africa as a global take on all issues and the position and function of universities is not exception which is why as Chris has indicated when we were approached to be involved in this we were so excited by it.

During my seven years as director my perceptions and understandings of the role of universities, what universities are for, has been challenged by talking to our students, to our staff, by visiting universities in other countries, by technological changes and through funding issues. So I am all too aware of things like the intensification of competition between universities because both within the UK and internationally because part of my day job is to ensure that my institution exceeds in this competition.

I am also familiar with the huge range of challenges facing universities across the world. I have been to Korean universities where they have had anxieties about how do they integrate international academic staff who don’t speak Korean. I have visited Kurdish universities who have been worried about basic infrastructure, the teaching of English and then how to ensure universities of Tongli what do they do about political interference and I have discussed with the Minister of Higher Education of the South Sudan how you build an entire university system from scratch.

I have also witnessed some very positive trends. There have been some significant moves towards the democratisation of knowledge with the internet, the growth of open access to academic journals and in the UK and other countries freedom of information legislation.

There has also been, Chris referred to the historical side and I think this is important, a massive increase in the proportion of young adults that attend universities across the world. The highest participation rates are now in Korea where 60% of young adults have a degree. This is a huge proportion and very different from a few decades ago.  And in most countries now women make up more than 50% of students.

So the issues, the only reason for saying all of this is the issues that we are going to discuss this evening are not theoretical ones. They are not just some interesting academic debates. These are very live issues for my colleagues, for me, for our students, for our staff and I am looking forward to being enlightened by the speakers and the audience but I would just like us to bear one thing in mind. The session is called The University but that terms hides a huge variation in form, function, purpose and practice. Universities range in size from what 1000 students to in the case of open universities over a million students so some universities are huge. They may focus on one discipline only or they may have comprehensive coverage. They may concentrate only on undergraduates. They may focus on teaching more than research or vice versa. They may be vocational they may not. The students may be full time resident on a campus or they may be part time resident in their own homes. You may have in your mind the model of an ideal or idealised university but one think I would just like you to bear in mind when you are listening to our panellists is what the range of institutions are embodying the idea of a university these days and it is hugely varied across the world at size, function and so on.

So without more ado I am going to pass over to Pratap to kick us off. Over to you.

Pratap Bhanu Mehta (PBM): Thanks very much. It feels intimidating to be in front of an audience that has given up this lovely weather to be here. And also a lot of what I will say in the next 4 minutes or so I learned from many of the colleagues in this panel.

What I thought I’d do since I’ve been asked to give a kind of opening comment is to just sort of kick us off with kind off four or five propositions that I will just sort of lay out as to me the kind of defining that define the debate or the relationship between globalisation and the idea of the university and I will just lay them out very sort of pointedly hopefully as provocations.

I think the first thing to remember when we talk about globalisation of higher education is that the current phase of globalisation that we are seeing in higher education is a product of two fundamental imbalances in the global system.

The first is a demographic imbalance. You have lots of rich countries with aging populations and lots of developing countries with large numbers of young people not finding enough opportunities for education in their home countries and this is actually a fundamental driver of this globalisation. It’s not some sort of you know kind of ideological thinking about what globalisation might do to pedagogy. In this case demography matters a lot.

The second thing to remember is that education globalisation at this point, particularly I think this is true for the UK it may not be true for the US which is an outlier in many respects, is a product of massive governance failures in the countries of the south. Why do tens of thousands of Indian students go to Britain, Australia? You know there are five thousand Indian students doing medicine in China at the moment. It’s telling why right. They are paying large sums of money simply because as for the domestic systems are not able to respond to the kinds of demands that are being placed on them.

So we have to recognise that the drivers are these two imbalances and how these imbalances get resolved will shape the future of the globalisation of higher education.

The second proposition I want to lay out is the following. There is a debate, there is a global debate, and this debate I mean you can pick up the British press, you can pick up the Indian press, the Chinese press. It’s roughly the same terms of debate about the relationship between universities and the job market.

Now just to provoke you I would like to put out the following proposition. In the current conjuncture of globalisation there is a large structural fact that we are struggling to come to terms with and that is the following: that wages, productivity and employment generation do not all seem to go in the same direction. Some countries have shown high productivity growth but not enough jobs being created, jobs being created but at stagnant or lower wages.

Now the big debate is what is the role of universities in as it were producing this structural impasse. My own view for what it is worth is that I think that universities are being asked to bear the brunt of something that it actually a much deeper economic and sociological as it were structural transformation of the world economy where we are looking or we are assuming that if we simply got higher education right somehow we would actually solve the structural problem of jobless growth or stagnant wages and so on.  And we really need to think hard about this proposition because a lot of assumptions are being made about how it is that education as contribution has contributed to as it were our inability to solve this dilemma if you like.

The third proposition I want to lay out is that a lot of the challenges that universities are facing have got to do not so much with the logic of globalisation as much as with the logic of democracy. And the logic of democracy being in a sense because we can’t name it we give it another name, globalisation and I have two particular things in mind.

The first is there is a kind of inherent tension in higher education. On the one hand we want to expand higher education 60% gross enrolment ratios in Korea. India is aiming for gross enrolment ratio of 30%-40%. On the other hand by its very nature higher education is about distinction, setting yourself apart from everybody else.

Now as far as I know there is only one system that is very self-consciously manages to preserve this distinction. That was the German system right. There is a vocational stream and then there is something called higher education the research university or something. Most democracies will not tolerate that distinction right. Either because there is a kind of implicit hierarchy and if there is that implicit hierarchy then it is a question that society needs to answer about why it has kind of put up with this hierarchy.

And so what is happening in a lot of universities, I think it’s true of Britain, I think it’s true of India, is that there is an attempt to convert the traditional research university into something of a hybrid model which is part remedial school education, part vocational system, part sort of honours undergraduate degree, part high end research university which is making it hard to answer the question what is the fundamental identity of that university. Because you actually cant in a sense separate these different functions out. It’s going to be politically hard to do, it’s going to be sociologically hard to do.

The second proposition is that wherever there is democracy there will also be bureaucracy. It is all propositioned in nineteenth century social theory but particularly applicable to our education why? Because a democratic system will demand accountability from the system from bureaucracies. Most historical universities are kind of elite clubs self generated you know sort of products of you know various crazy ideas. Witherspoon doing this,  Presbyterians doing that,  Jesuit’s doing something or the other. That logic simply cannot function in a modern democracy and particularly where public funds are at stake.

But once you are in the realm of accountability essentially you are looking for something that’s measureable. More importantly something which is commeasurable, where you can compare one thing to the other. Is it worth doing X more than doing Y? And even more importantly some measure that is non-discretionary which does not involve any measure of judgement because there is a suspicion in democracy that elite clubs spear reviews, communities of judgement will build in their mechanisms of exclusion right which is how universities historically operate.

But once you take on all these three characteristics then there is only one unambiguous measure that satisfies all three criteria and that is money. The beauty of money is commeasurable. You can measure it without discretion. It’s egalitarian in that sense. And I think there is a serious logic of accountable that I think is constraining that is shaping universities in different ways in all our democratic systems.

Last and final proposition is universities have what is called the 1% problem and I think it impinges on universities in a way that’s peculiar. The distinction David Gable made between the 1% and the 99%.

In the case of universities that distinction in a different way is particularly relevant because for the production of knowledge let’s face it the top 1% and the top 2% matter a lot more than almost anybody else. It’s true. It happens to be so right. The challenge is that you have a gigantic vacuum cleaner for the top 1% which is called the United States of America which has essentially the logic of the US system, the dominance of the US system is that the negative externalities of that system is that it raises the cost for everybody else for running cheaper education systems and in some ways that structural imbalance in between the dominance of the US system and the rest of the world is making the degrees of the freedom that the rest of the world has to draft its own education systems immensely narrow.

All of the larger sociological phenomena I would submit to you are the ones that are impinging and making it very hard to answer this question what is the identity of the university but more importantly who should define the identity of that university. The advantage that the US system has is that is has great tolerance for lots of elite groups, all kinds of people doing all kinds of things. Most other democratic systems do not have that kind of tolerance where somebody says look I want to set up a crazy religious cult university let me do it.

So the political question we are all going to face is who should get to define the identity of the university? Students? Facility? Bureaucrats? The wider democratic demos? That I think is going to be the question that defines the nature of globalisation in higher education that we experience. 

MW: Jo over to you.

Jo Beall (JB): Thank you.

I have been asked to talk about my experience at the University of Cape Town in South Africa as much as my experience of the UK education system and I think what that dual perspective offers is insights into some of the issues around international higher education from both lenses.

So if we take globalisation which is a fact and if we recognise that it proceeds selectively which it does I think the common thing that I would identify both in the UK and in South Africa was a failure of most students academics and university managers to recognise that higher education is no exception to that rule.

We did at the British Council a study of UK undergraduates in 2011 and 2012 asking them about their international aspirations and how they thought about globalisation. What was interesting is that most students understood what globalisation was, could define it, they recognised the term. A majority were internationally aware and indeed many had travelled but very few had made a link between that experience and their future employability or their future live. So they saw a gap year as something that you would do but they didn’t see that as important for their employability.

Similarly and for different reasons students in South Africa saw the problems that they faced in a context like South Africa as so overwhelming the project of nation building, of developing and maintaining a bricks economy so critical that it was perhaps less important to be engaged globally.

Now in both cases that applied to the majority of students but there are select groups in both the UK and in Cape Town who were very much aware of the importance of global connectivity, international awareness, intercultural fluency. In the UK it’s the pre-92 universities who held that view, students in the arts and social sciences rather than the sciences and most particularly students of modern language which is perhaps not surprising. In South Africa the students who were interested in global citizenship and international opportunities were also amongst a more elite group, were amongst the international students there the majority of whom were from the rest of Africa and less so those students coming from disadvantaged backgrounds.

And so if you just look at the issues through the lense of students both in this country and abroad I think the fact that globalisation proceeds selectively is something that we have to recognise both at the broader level and at the level of the individual.

What I am going to do is just go through three areas where I will lay out why I think an international perspective in higher education is critical and then come back to the experience of the University of Cape Town and say something about where this leaves a university in Africa.

So what we know is that demographics mean that areas of high supply of higher education have more limited demand whereas of low supply and China would be an obvious example here have historically had less supply of higher education so that basic demographic reality means internationalisation has grown.

I think the second broad issue is that the financial crisis from 2008 onwards has led to greater competition for international students amongst traditional mature markets and at the same time economic growth moving east has meant that there is much more competition for those same students from higher education institutions in emerging economies.

I think the third broad political economy aspect is that most governments and I am sure David will say something about the imperious for the UK, most governments are looking at higher education as a critical part of their development and economic planning, their economic strategies for the future. And what that means for many emerging countries is that there is competition for the most talented students and researches. So Singapore for example is investing as a government huge amounts of money attracting the best researchers to up the ante in terms of their offer as a higher education and research hub.

What does that mean? If we take the three areas of university activity being teach and learning, research and public engagement. What does that context mean? Around students the competition for international students, what we do know is that the absolute number of students who are internationally mobile has risen very dramatically in the ten years up to 2009 but we also recognise now that is slowing off.

Perhaps the most interesting factor is that the proportion of students enrolled in tertiary education who are internationally mobile has not changed. It's around 2%. So although the absolute numbers have gone up the proportion remains the same. That has huge implications for the competition to attract international students, for the importance of transnational education which is partnerships between universities in the UK or US and emerging markets which is where most of the transnational education experiences are and it reinforced the idea that globalisation is a selective process. So its anxieties that students are going to flood in to countries abroad are unfounded.

Why should we care about whether the students are internationally mobile? Why should we care about them having an international experience? Research that we did with employers in the UK demonstrated that employer’s want the soft skills include language skills, international awareness, intercultural competence and want it badly. It was considered to be more important amongst the sample that we interviewed than the university that a student went to or class of degree they got.

We weren’t sure if this was just a UK phenomenon and so we repeated this study across ten countries looking at employers in government, not for profit and private sector across ten countries and it was confirmed particularly for not for private and private sector that internal experience and savoir faire was critical.

So it’s for that reason that some of the best universities and the most mature systems have had outward student mobility as part of what they have promoted. I am sure David will talk about his initiatives in the UK to promote outward student mobility, something that is very much looked forward to given that we have about 1-3% of our students going abroad compared to an aspirational target of 20% for the Bologna countries.

But I think it’s not just for theses efficiency reasons or employability reasons that we should be concerned about students having an international experience. It is also about those intercultural skills and the whole notion of global citizenship that this series is about.

We confronted at University of Cape Town very demands and challenges where we had a semester study abroad programme that brought in students from the better off countries. Very few options for low income South African students to go abroad. So a lot of work was around raising funds and working with the diaspora the South African diaspora to facilitate those opportunities but also to create a nationalisation at home programme and I’ll come back to that. Something that would enable students who couldn’t move for whatever reasons to work and to have that exposure.

Have I got time for a little bit more?

So the other things to briefly mention is transnational education. This is where universities from different countries come together. UK universities offering a UK qualification in the university abroad. There are many models from the distance education of the Open University to branch campuses such as Nottingham.

I just want to say a couple of things from the perspective of the host country. First of all many of the transnational education initiatives are about students and about programmes and often to meet the demands of employers and I think that’s very important and many host countries use private or transnational education providers of education to meet labour market demands. However the divorcing of transnational education from the research imperative of universities is perhaps a problem and that’s something we can come back to.

Transnational education started off sometimes as an initiative on the part of host countries to make up for deficits, to play catch up but other countries are much more defensive and sometimes very rightly so about for providers about being swamped, about it distorting the education arena and in South Africa at the University of Cape Town we had many experiences where universities would come in, they would do a programme with us. It would then be a case of them poaching our staff, setting up a campus of their own down the road. So I think it’s those sorts of things we need to think about. How the host countries engage with those issues. I think India has been doing a lot of thinking about that recently.

The last to say is a brief word on research. The challenge for universities in Africa and more broadly is that often they are in a position where they are in a position where they are expected to provide the labour force of tomorrow. The challenge is to combine that imperative with being part of a global research community and getting that balance right and I think that was the balance we tried to strike at University of Cape Town and I think successfully but it’s an ongoing battle not to feel necessary just to produce the workforce and not to produce the research and innovation.

MW: Thank you Jo.

Richard over to you.

Richard Sennett (RS): Thank you.

I want to talk a little about what is good research and what works to promote it and to destroy it and I thought I might start by just sharing with you an experience that I have been having the last 25 years in China with the Chinese Academy of Sciences.

When the Chinese began in late 80’s, early 90’s to put serious money into research they had what I would call a shopkeeper model of what they were going to do. Which is to say they were going to have very tightly defined research with clear outcomes, testable hypothesises, no waste in the programmes, clear methodology and so on. And they put a lot of money in the social sciences and in technology into this kind of work. Really tight you know. Real value for money kind of research. And the results were dismal. Dismal! Boring! Predictable! And after about 4 or 5 years of this people began saying these results are dismal, predictable and more important there is nothing to patent.

So there began to be a real period of self questioning about what it is that produces good quality research which moreover you can patent and the result of that, and I take some credit for the label, is what could be called the MIT model which is where I used to teach as opposed to the shopkeeper model.

The MIT model is MIT’s recognition that they have to spend a lot of money and that only some of this money will produce results. You can’t predict in advance what somebody will find, that negative results are important, that if somebody abandons an experiment in the middle of it saying this is not worth pursing that’s productive if they do something else. That this is the way in which you produce new knowledge. You do it through we commonly say through trial and error. That means you do it through waste and even more important the recognition of failure.

Now, if you were painters you’d know instantly what the MIT is about. You begin working on a canvas. It looks dreadful. You scrape the whole thing off and you start again. And that’s part of the creative process. That same thing is true in science. Good science. Even good social science of which there isn’t too much but that’s another story. But good science works the way good art does which is that it enables trial and error and to do so it takes seriously the idea of risk which is that something may turn out not to be worth doing. And the reason MIT has done this is not because we were all a bunch of artists in the laboratory but because in fact this procedure which has been followed since the days of a very enlightened President Ron Wiesner has produced tonnes of patents. The School has made itself rich by doing something that looks on the service of it not very sensible and by the shopkeeper model the MIT model is not sensible except it works.

Now I guess the argument I want to make to you, I have watched this process unfold over the last 25 years, is that the Chinese who have embraced this MIT model alter the good we in the West except for places like Stanford, MIT and some really quite less prestigious but equally innovate places are going back the other direction. We’re going back to the shopkeeper model. Governments are forcing this on us. Of course there is no money so if there is no money how can you waste the little that you have? Isn’t it better to get a certain result even if that result is poor quality? At least you have got something. You can say I carried out the experiment and it wasn’t worth doing but I finished it.

The shopkeeper model also has much more deeper and I think structurally insidious forms of it. For instance, our professor mentioned the issue of accountability. Accountability is the shop keeper’s ghost in the machine because accountability means accountable to whom. If you’re Steve Jobs or even more Jonathan Ive who is his great design innovator your accountable to one person. You’re not accountable to committee and the committee that recognises that you may produce what Jonathan Ives did in fact produce, not to me mate you know, the practical aspect of this is if you can patent it, it’s yours and ours as well.

But to understand what I am talking about, we are walking away from the idea of discretionary spending. Were walking away from the idea of personal judgement and sponsoring research. The Chinese now, apart from the huge corruption that’s in their academic system, the people who are not corrupt and there are many who aren’t are saying yes in the end what good science is about is a judgement that this is a good scientist so give him his head whereas here we are saying it can’t be that. We need objective criteria all right.

I would like to just say one final, well actually I want to make two comments about this. You all know William Empson’s famous bold move that the arts are unfair ok. And what I am describing is a situation which is unfair and involves waste, it involves personal judgement. It, on the part of the researcher involves risks that can turn out to be very self-destructive and so on.

But the final thing I would like to say to you about this is do not equate what I am saying with the issue of hierarchy. I just speak very personally about this. If you look in the American Ivy League universities which I know much better than I know Britain, the variation in the quality of research is immense. For instance, I said this in print so I will say it to you, the Harvard sociology department which is one of the most well endowed sociology departments in the world produces really mediocre work whereas next door to it Tufts University who nobody has heard of produces fantastic research with no money but they have followed the MIT model and they have hired lots of young people who they have given a free hand rather than put on a regime of RAE, sorry what do you call them now here? RAF’S? Publishable articles? Tufts got to be a great place to do research because it says take 5 years if it takes you that long. Do whatever it takes to make it work well rather than make it work.

So I think this issue, what I want to leave you with is that the issue of quality research is not an issue of elitism and we have got to think that through in order to support places like Tufts of whatever its British equivalent is, that are not part of this elite structure but may contain wonderful researchers in it or have a research ethos that is in the end going to produce good quality research and even David lots of British patents.

PW:  Thank you Richard.

The Minister was taking notes so I think we are ok.

Stefan?

Stefan Collini (SC):  Well when I was asked to come and talk at this panel I assumed there would be a lot of people here, people on the panel and in the audience, who know a great deal about universities around the world and who know a lot about the nuts and bolts of financing and governance and so on and so I thought I would try and talk about something that’s likely not to be mentioned. Talk about something that might even be a little provocative or unpopular. So what I have now done is put myself in the paradoxical position and I have come prepared to talk about creativity and originality and by doing that am going to be absolutely mimicking what Richard Sennett has just said! You don’t need us both on the same panel I think is the motto for the future.

The reason I was thinking along these lines is that obviously there has been a huge expansion of higher education in the world and will continue to be in the immediate coming decades in terms of numbers of students and numbers of institutions and lots of the institutions that are set up or are now expanded do a range of as we all know very worthwhile often very practical things which may be related to kinds of vocation training, maybe related to stimulus of the local economy, maybe related to preparing the next generation of schoolteachers and so on which in certain social or cultural circumstances are absolutely essential things to do.

But the question that I wanted to raise and this is as you will see just really another version of the question that Richard has just been talking about, is what do we think are the conditions that can conduce to high quality intellectual activity?

I think it’s not if you have enough political will and a moderate amount of resources. It is not that difficult to produce a middle level technical institute. You can train a lot of people to do a lot of useful things. It’s much more difficult and seems in a way almost an elusive goal to aim to set up or to convert one of your existing institutions into an absolutely high level hub of open ended top quality enquiry. And really I think the questions I want to put is why that is and what things we might think about apart from the financial and governance aspects and I am just going to mention two very obvious ones and as I say all I going to do is just repeat what Richard said and put these in other words but I think the first of these is something to do with the ethos and moral that you have among your academic and that has got to be fundamentally something to do with a kind of autonomy.

What Richard was talking about just now with the MIT model is in part and example of this, of the willingness to let people have their head as it were but I think it can be generalised a bit further to say that it’s something about encouraging a shared commitment to that scholarly enterprise independent of its practical benefits. And unless you can in some ways support this among your academic faculty you are forever as it were going to be turning out very good lab technicians but not very good original creative scientists and the same for other fields of enquiry and I think this is where something that has been touched on by several speakers already now comes in. there is this inevitable tension between the conditions for creativity and the conditions for democratic accountability and we are all familiar with this in our own lives now and its already been touched upon.

Thee thing that has been mentioned so far is the need to recognise that at some point judgement will have to play a part which mere measurement, quantities of measurement, cant altogether do and I certainly support that. But I think the other aspect of it as I say is that you are going at some point to have to be willing and this is a difficult thing to do if you are in any responsible position in an institution and more difficult still I think if you are responsible to an electorate as some kind of elected politician or official. The thing you are going to have to do is try to explain to those whom you are accountable to that the best way to make the academics in your top level institution serve their purpose best is to leave them alone a good deal and that is a very unnatural thing to do. It’s absolutely essential that we provide constant reports on what they are doing and that we measure it against what other people are doing and so on and some of those things are indeed necessary but the difficult task I think is to find ways especially if you are establishing new institutions is to find ways to conduce to having that ethos where a professional commitment to the shared project rather than any form of alienated labour which is doing it out of some kind of compulsion or fear of surveillance is what animates your academic staff and that’s not an easy thing to create.

The other also rather elusive condition I think that helps here and this is one that is a good deal rarer than the first is it helps no end to have some form to have some form of public discourse which is effective in your society which can give voice to the long term purposes of universities. That’s to say we are all very familiar, any daily paper will provide us with new examples, we are all very familiar with the language of contribution to economic growth. Indeed an important aim. But we are not at all familiar with other ways of talking about the long term intellectual, cultural, scientific, social and eventually economic benefits that open ended enquiry brings to their host societies if it is conducted in sufficiently high levels and this is again whereas you can hear I am in a way just restating something that Richard said that is that you have got to find some vocabulary for generalising some of the apparently wasteful or unattractive aspects of what he was calling the MIT model. I think you have got to find a language about creativity and a language about autonomy that will have some purchase in public debate when confronted with a very hard edged language about short terms economic benefits and again that is not easy to do but if you do not develop some attempt at languages of that kind I think in whatever society you are where your setting up new institutions what you will end up with are again those relatively limited intellectually sometimes somewhat mediocre quite useful institutions which are among the institutions we need but not what if we want to have good universities we mainly need.

I think this also does have in a different and perhaps unexpected way a so called global dimension in that one of the things that we should think about for the next couple of decades is how far there’s a kind of cultural dependence being re-enacted in this expansion of higher education because the intellectual agenda for so many disciplines is being set by a very small number of very well supported first world institutions and all the while that its difficult to develop any rival institutions all the while that the other countries are committed to what I calling the short terms or practical conception of these institutions, they will find I think that they are in the medium and long term very much in the cultural and intellectual shadow of those big intellectual power houses.

It is I think in other words something that is urgent for a range of what have often up until now been called developing countries all these vocabularies as you know as well as I are not very satisfactory but for a range of such countries it is not just a matter of prestige or amour propre it is a matter of whether they can develop the right kind of intellectual enquiry at the right kind of level and not simply imported.

So my concluding thought is that it’s very difficult to sit up here and hold forth about the aspects of intellectual enquiry which are the most elusive, which can seem to be in some cases rather snobbish, which as again Richard said often are assumed to be related to an elite hierarchy of institutions and nonetheless want to say as I do want to say to you that I think those are absolutely fundamental questions about what universities do and that for any society in the world these are not something which can simply be bypassed in pursuit of some short term economic goal if that society want to have good universities then I think these are among the things it’s going to have to develop.

Thank you.

PW:   David you’re in the position of sweeper now.                                 

David Willetts MP (DW): Thank you Paul and thank you for the opportunity to join this discussion and I think what I had better to let me respond to the Sennett/ Collini critique and then move on then to the globalisation issue.

Richards’s examples I thought were very illuminating. He began with exampled from the American Ivy League Stanford, MIT. Largely privately financed and with substantial endowments and insofar as they receive public money related to projects and programmes so this free enquiry and I can completely support the model isn’t that US Department for Education is writing a cheque for the philosophy department at Stanford, when they write a cheque for Stanford it’s to do this project in electrical engineering but Stanford separately has endowments that enable them to function in a way that Richard describes as well which is completely animal.

We are fortunate we have got some universities and notably but not only Oxbridge that are kind of in that situation and I share Richard and Stefan’s admiration for it and love of it.

The Tufts example is where it gets trickier and Richard being scrupulously honest about these things then sights Tufts. So what would we do if we wanted to support somehow those social sciences at Tufts?

I think the thought process might go as follows. Well first of all we should keep politicians out of it and what we need to do is have a group of scientists themselves who will assess by their own peer review standards the quality of the social science emerging from a range of universities so that we can spot talent and high quality work in a place like Tufts. So you would invite your leading social scientists to sit on a panel where they would identify Tufts.

You would then say it is very important that we don’t specify to any social sciences what actual work they should do so when these social scientists have identified the work we will then give the money to that university with no strings attached for it to spend on whatever projects it wishes and that is currently how approximately £2,000,000,000 goes to our universities is absolutely an attempt through public policy to do something like supporting that social science at Tufts.

If anyone has any better model of how you could allocate public money not the Ivy Leagues in on the big endowment, allocate public money in some model where Richard can say confidently I know they do very good social science at Tufts and it should be supported, the question is what is the way you would use public money to do that and I think the model of a group of leasing social scientists doing peer review and not incidentally supposed to be looking at the prestige of the journal in which this work appeared would be quite a good model. In fact it is largely being developed by the academic profession.

The extra tweak is you might after 10 or 20 years of this say because we have been focussing so much on the quality of their academic output we are slightly worried that all they are focusing on is getting those articles out that meet the highest academic standard so we need to get their heads off the academic treadmill of the excellent articles and invite them not all of them invite lets think of a low percentage say ten percent of the evidence they were to be also something where in whatever, however broadly they define it their work has made an impact on the outside world. It could be a play has been produced drawing on an interpretation of this author from the literary critic or scholar in our department. It could be as a result of this insight in social science a public policy has shifted somewhere in a developing country. Invite them to look out beyond the production of their excellent peer reviewed articles, and that is essentially the model we have. In other words it isn’t, it may be imperfect though I have to say nobodies defined a one that’s much better that involves the use of public money that’s why the Ivy League is a bit of red herring really, but that is where this model comes from. In other words this is not an assault on the values that Richard and Stefan are advocating, it’s an attempt through British public policy and the spending of really quite a substantial amount of public spending, incidentally not being reduced even in this age of austerity, we’ve actually even managed to maintain it, we’ve even managed to maintain it, it’s an attempt to deliver the Tufts challenge.

Now that however as Stefan said is part of higher education, it’s not the full story of higher education and if you’re sitting in India you probably think our institutes, our IITs advance institutes for technology our a bit of a disappointment really, they were funded on that type of way. We’re going to have great smart Indian thinkers doing first rate science research in India without any of these constraints and you visit them and they feel like Oxbridge or Stamford and they have beautiful sites carved out of them in leading Indian cities and they’re pleasant environments and they basically have not flourished in a way that India hoped they would, there are people that know far more about India than me, but from my experience of visiting them is that of frustration. So it’s not easy to do and I go all around the world and if I added up the different numbers of different opposite numbers I’ve made of different governments that have told me their governments commitment is to get five universities into the world top hundred, it’s probably adds up to a thousand by now after all the visits I’ve paid. It’s harder to do in practise and we’re very fortunate it’s partly path dependent. We’re very fortunate that in a small number of countries like Britain and the U.S we’ve got some of those types of institutions. We also incidentally tried to sustain freedom of inquiry by the other thing you might try to do if you were trying to preserve this Richard/Stefan model which we should try to do is you might also say, why don’t we give money to our leading learned societies for them to hand over no strings attached to people they think are doing are brilliant researchers without any requirements on output whatsoever. So we also do that and also incidentally not reduced either in the age of austerity, so this British academy the royal society do that with public money that we provide to them where we have absolutely no view on who it should go to or what they are doing, we just tell them here’s the money for you to give out to people who you think are potentially great scientists. Meanwhile you have, so that carries on and that is something we can be very fortunate to have in this country and America.

Meanwhile there’s the subject we’re also trying to talk about today. Meanwhile the Indian Education Minister says to me he wants 40 million more university students in India. The Indonesian education minister says to me that he wants a quarter of a million more university students in Indonesia year after year growing each year by a further quarter of a million. So my next question to Richard and Stefan is, right so you can do a kind of Oakshottian prose poem about these beautiful great institutions where freedom and intellectual enquiry flourishes and I love it myself I can I’ve ever written on or two in my time, though never as good as Stefan’s, but is that totally relevant when the Indonesian ministers comes knocking, says right I want another quarter of a million a year, how is Britain going to help? And the answer is it doesn’t actually massively help them in their challenge, and although Stefan I thought just slightly dismissively said of course you also have people who produce technicians or teacher training or things like that. If you’re sitting in India or Indonesia these are completely legitimate ambitions to have. These are also legitimate and valuable roles of higher education institutions. Is there any responsibility that anybody thinks sitting in and Oxford or Cambridge common room they have to help the world to meet those challenges. Fifty years ago we produced the Robins report which was about the challenge of expansion in Britain. The world now faces globally the equivalent of the Robins moment. A desperate hunger for the massive expansion for higher education in a range of crucial countries that are going through a kind of demographic sweet spot with a surge in the number of young people, where they becoming middle income, where there are enlighten governments that want to see their young people better educated than ever before they’re looking at what if anything the west can offer. And I have to say on that, Stamford, MIT, Oxford, Cambridge, LSE brilliant, but on that to be absolutely honest the west has pretty much not offered much at all, because offering something to help in those type of requests that I get involve rather different types of models, because what you’ve heard from Richard and Stefan is that kind of trusteeship model of the university, we have this incredibly precious intellectual (inaudible) and we want to pass it on to the next generation. And that as I say I completely respect, I have no desire to change that, we are not forcing anyone to do anything differently, but there is separately a kind of enterprise model which is if you really did want to say I’m going to try to deliver higher education to half a million people in developing countries in the next five years, what would you try do? You probably concluded that you need professional management and you need some kind of access to private capital and you need some kind of standardised operational model so that you could roll out higher education, not of the sort that Richard and Stefan love, and not a threat to them, but you would say the only we can provide India with the teachers or Indonesia with the engineers is some type of model like that. And other countries do it, America has several organisations that do it, India incidentally does as well, The Amity Foundation, monitor mass delivery of higher education, and what Britain has not done because we are transfixed with this alternative model completely admirable, I always have to say this I’m not against it all we have completely failed to rise to that challenge.

So the closest we’ve got is saying to China, desperate for mass higher education, we might set up two campuses and then after five or ten years they might have about two thousand students each, that’s kind of ambitious internationalisation in the world of English higher education, but it doesn’t really rise to the challenge. If we’d wanted to rise to the challenge we’d have to look at alternative models (inaudible) of alternative ways of organising higher education, not forcing this change on any existing higher education institute that didn’t want to do it. We’d have to think how would we organise ourselves if we were serious about mass delivery of higher education in Indonesia or Colombia or Mexico or Turkey, what would we actually do? And you have to organise and engage in these types of challenges and I, slightly to my disappointment no single English university has tried really to do that.

Probably it’s going to be happening by some version of MOOC’s this is my final point to touch on. It’s probably going to be some version of MOOC’s. And we asked some questions about MOOC’s in its early days, I think that they can deliver a high quality education experience, probably the use of education analytics which I suspect isn’t going to be used in the institutes that Richard and Stefan were rightly praising, but if you do want to know how someone is learning the maths they need at the higher education level probably knowing every single stroke they do on the keyboard as they work through a set of maths problems and exactly what point they go wrong and whether 50% of people go wrong in the same way or the different ways they go wrong and what you do to help put them right is probably in the long run quite an important advance in educational, in pedagogy and educational technology and I think it’s going to be harnessed. It will probably not be purely online it will probably be interaction with others, it may involve concentration in a single platform which I would regret but there are certainly people on the west coast of America think that’s what’s going to happen, and after we’ve had Amazon and eBay and we’ve had Google they think that’s there’s going to be a single H.E. platform which around the world is used to access online courses and that they think they are winning that race because Britain was very slow to recognise what was happening. You may find that there is a significant British platform probably Future Learns, sponsored by the Open University, you may find that there is no single platform that wins out and my very final point it may paradoxical also offer some kind of support to those more established and conventional universities that we have in England because one way in which existing universities will use this is as a recruitment device and what the experts tell me is one of the things that happens when the internet arrives within a new  service industry and essentially higher education is on the receiving end of the arrival of the online experience, one of the crucial things that can happen is disintermediation.

So university that adhere to rely on agents in other countries to help them find their students sometimes we’re not completely defensible and straightforward arrangements either, we’ll find there is this new, they have this new set of potential recruits who are doing a university course online, but even that will face them with a challenge which would be very uncomfortable.

Imagine that you are a leading British university with a well let’s say we’ve got a social sciences department like Tufts and imagine that you have fifty thousand international student who want to start doing social science, who are doing social science on an online course, and incidentally these online courses although often start with things like electrical engineering and artificial intelligence, the good news for humanities is this enormous hunger to do things like philosophy, history of art, it’s not all stem subjects. Well say you’ve got fifty thousand people doing social science, now there’s a very high dropout rate, very few people will complete a course in the conventional route now, maybe five thousand will complete the course, and of those five thousand who complete the course imagine there are 10% of them who think they are as least as good if not better than my own first year social science students at my own, studying physically, at my university. You still got five hundred students that you’ve identified around the world who are now potential recruits for university and that could well be larger than your current social sciences undergraduate social science numbers. So even then you will face a challenge do we expand do we welcome more oversees students, what do we do? And it will be very interesting to see the reaction of English universities, but that agenda is, I think the global agenda, and there was one practical thing we could do in the next months which help progress it and that would be that the millennium development goals currently only describe education in terms of schooling, they have nothing about tertiary education or further education in them.

The history of Britain would be very different if we had not had any universities until we had achieved 100% literacy. That is the model hat in the past twenty or thirty years the development establishment has imposed on a range of countries including notably sub Saharan Africa, where there is sometimes I meet fellow ministers with deep resentment at the focus on literacy and numeracy completely admirable objective, but at the exclusion of the support of any higher education institutions in their countries, the world bank was part of this consensus as well and is now reversing. Imagine a millennium development goal that accessed to tertiary education, I think that would be a great way in which we could conclude that debate this evening, thank you very much indeed.

PW: Thank you David, I’m going to give Richard and Stefan, because you bracketed them, just the opportunity to comment to see if they have anything in response to what you said first.

RS: I have many comments. I guess the first thing I would say David is that your problem is not you, that is it’s not the model, your model is and you personally are something quite different to the bureaucracy that you oversee operates. Am I putting this delicately? I hope I am. Now in that regard I’d like to…and I think that’s a serious problem for you, because most academics would listen to what you’ve just said, say if only. So that’s a bureaucratic problem and I think it’s something that you neither can or will be able to address or not, but its practise rather than policy that’s the issue in the shopkeeper model.

In that regard I’d like to say something about something that we shouldn’t be talking about Tufts and its American equivalent which is called Smith’s College. Which I think is a remarkable institution, it mostly trains people at night, most of the people  that are trained are not born in Britain, it has intellectual standards which at least in my area are much better than the LSEs and I asked its Principal, my friend Ben Pimler a long time ago, how did this happen? And he said well nobody was noticing. So that’s what I mean that your problem is not you, it’s actually that they were so unimportant that they were below the radar screen. So anyhow that’s a set of issues I don’t think we can really discuss, but it’s my comment to you both.

I want to say something on online teaching and MOOC’s because I’ve done a lot of this MIT was early on committed to this. Like many technological aspects of mass education it’s not what it cracked up to be and I’ll give you a very simple example of this. I did one of the first online courses at MIT about the development of the urban form, a historical course, a theoretical course, lots of pictures, looked beautiful when I looked at the screen it was absolutely fantastic, and if I may say I did a pretty good job in the these opening lectures. You know what the problem was? My email address was online and after the first lecture I get seven thousand emails. Now that’s great but you see the structural problem already I also had four teaching assistants who’s emails weren’t online, but even if I had forty, imagine dividing up seven thousand emails each week among forty people, and what happens with moods on online teaching, I think it’s the experience the open university has had, is that really because unless you’re just teaching facts, where there’s no interpretation of thinking, just memorising facts which you can do online to millions of people. Unless you’re doing that you have to follow the principal of the Open University, which is the course is open to as many people as can be accommodated in some face to face responsive situation. And for the kind of situation you’re talking about, how can a quarter of a million new students its back to square one, which is that you have to have let’s say twenty five hundred teaching assistants and those twenty five hundred teaching assistants would have to be able to communicate with me. You see where the problem is about this? So it looks like a cheap solution and believe me they look beautiful these course they are fantastic and in some way they are very instructive except they’re not teaching, that’s the problem with them, so I think that’s the issue we face. This is not a technological fix for the kind of problems we’re talking about. This would be my two response, one in which I know you can’t answer and the other which is a real issue, and as I said I was very enthusiastic about this, I love high tech I use it all the time until I made this error of publishing my email address.

SC: I think we all know now who the tune goes in these discussions, this is not the first time David Willets and I have talked about these things in public and it has a certain familiar style to it I have to say.

PW: We’ll move on quickly then.

SC: Well it doesn’t turn out to be as quick as you might like actually. I mean it is I’m sure I ought to regard it by now as extremely flattering to be cast as a more or less unworldly Cardinal Newman who is rather out of touch with the world, but I do want to say one thing first, I’ll get onto the more substantial issue shortly, but the one thing first is self defence. I have to say this each time we have this discussion, which is that I didn’t mean and I don’t mean and I don’t think I am at all dismissive about the various more limited and practical objectives which different types of higher education institutions carry out. Those are absolutely essential and as I think I said, and I try to say very explicitly, are depending on your cultural and social situation they may be your priority. My question was about if you want to go beyond that and are interested in the question of what it is to develop really high quality university work, what sorts of things should we be thinking about? That doesn’t demean the other things it just means that there are things to be thought about. 

Now on the question of the types of progression or institution. The one additional thing I would say because actually on a lot of these matters most of us up here don’t hugely disagree. Let me just give one other kind of example, take us back to a different sort of American example, the California model, much cited, recently of course in some trouble because of voter recalcitrant’s about tax and so on, even though that may have change in the last two years. The key point I think here I would bring out of this is that it was a deliberate attempt to construct a system, not just a few good universities, but to have local community colleges which did something which the British system on the whole has been rather bad at, which is the second and third chance education, to provide nobility between types of institution, these could be gateways and ladders to going somewhere else. To have then a whole tier of state universities which often combine much more ambitious intellectual programmes, with a great deal of local and practical relevance, and then to have the University of California at the top as it were in those terms and within that system they certainly managed to reduce many good institutions of each of those three kinds and of course two of the most famous world universities perhaps in the case of UC Berkley and UCLA. Now  that seems to be something that we should think about because we should think about a system of higher education and it seems to me that the merit of that example, which was mainly  initiated by the chancellor of the university system there Clark Kerr, was an attempt at some overall planning of this and the parts of the world that David mentioned as being at the moment very much engaged by what they should do in the future seemed to me might well learn more from a public conception of the system like that, than from a variety of, as it were, market led private initiatives. The only other thing that I would say, and again I’m going to remain, I forget where I’m put, on a pedestal or in the clouds or somewhere very elevated anyway, but very easy to push over. Is just to say that one of the things that recent writings about universities around the world remarks, it’s not confined to any one national system, is a sense of malaise in universities that for all this expansion, and people here could give you impressive figures for increased expenditure on higher education, for all this expansion the feeling that something is not going right, the feeling that there is something here that is making universities, both university teaching as a career, but possibly university education as an option for students, future students. Something making it less attractive rather than more attractive. I think unless we can try and improve that very widespread feeling of malaise our confident assertions that we’ve got the right systems and what we need to do in terms, of it were generalise them, are not going to produce really the results we hope they would. So on that score I think we should be more cautious, lots of other things we could say we’ve said them before so I’ll stop there.

PBM: Just one sort of... I enjoy everything you said and agree with the challenges you are planning, particularly your scale, but I think there’s a real danger. The danger is the following that developing countries, I think the place where we went wrong was in misunderstanding what is it that gives the American or the British systems resilience? To my mind the core aspect of that resilience is the diversity of institutional forms. The trouble is once you get into the games of scale and number, the immediate impulse of government is to actually eradicate all that.

What killed India higher education effectively in the Indian university system, and it’s actually like Britain in the fifties and sixties, there were several great public universities doing great great work at low cost which effectively was sidelined, was when they actually got into this idea. So in a sense that MIT model needs to be extended to institutional forms as well, as it were, that you will have to play around with different kinds of institution. When other kinds of education ministers come here unfortunately what they don’t get is that message. What they get is the message is there is a model out here that is going to scale up to two hundred fifty thousand students without teachers and so forth. That’s just a small plea.

PW: Yes David, briefly.

DW: Let me just respond to that, I very much agree with the final point and the number of times when you visit an Education Minister around the world and what they want is, now how can we, I’d like to link our universities up to Oxford and Cambridge please, and I’d like to send more of our students to Oxford and Cambridge please.

I do try to explain that we have a hundred universities with diverse missions and that actually the University of Bournemouth is an excellent institution. And if you want I think the only university that is in the top ten for diversity of entrant, that takes people from a wide range of age, social and ethnic backgrounds, and in the top ten for employment outcomes afterwards, the only British university that’s in both of those leagues within Britain is the University of Huddersfield. They won’t, so there is a sort of incredibly powerful prestige model where you’re pushing against sort of a very strong value system and so I think it’s a fascinating point.

Let me just touch very briefly on the three other comments, first of all on California and Clark Kerr. Clark Kerr was in a way America’s Robins for a state, not the entire federal system, but rightly at the same time he was a man of state. But remember how the Californian state system works. It is run by a board of regents, and the board of regents enforce the specific roles on the component institutions within the Californian system. And in other words they are not the, none of the universities within the Californian state system have the autonomy the English universities enjoy. You are if you are part of that system and your job is the vocational side or you’re the feeder institutions or you’re the people who do doctorates, those roles are set for you by a supervisory body that is more powerful than the individual universities.

RS: Except for two, which were the two most flourishing institutions which were Berkley and UCLA, and this top down management broke down with them, they wouldn’t have it.

DW: All I would say is I’ve had this conversation with the President of The University of Berkley in the last nine months and he spent half the meeting  complaining about what the regents were trying to do. And his argument was as we get more of our funding from fees and less and less from the state, the state has to grow up and recognise that its ability to give me instructions in the old way in the Clark Kerr model is breaking down.

So I stand, I repeat my assertion, they are not autonomous institutions and what we have done in England because of our history is the mantle of Oxford and Cambridge autonomy. Those fellows of Magdalen College in 1686 or whenever it was, rejecting imposition of a President chosen by James II, that tradition now belongs to every university in England. They each enjoy greater autonomy than in the Californian system. And second point about the Californian system, the other way it works because its state financed and ultimately state run is they can say something like, we’d like the top ten percent of kids from each one of our Californian schools to go to university, and that in some way is an admirable step to social mobility. I said well you couldn’t get away with that in Britain you’d be denounced as Socialist and social engineering, and I remember a Republican in California saying to me, but there are smart kids in central Los Angeles and of course they don’t get very good grades because they haven’t been very well taught, but if you have the top ten percent from each school then the smart kids from every school go to university. And the fact they can run that also tells you something very important, which is that academics do not determine admissions. That the heads of department and the academic faculties are not determining who goes to those universities. If you have a policy like saying that the top ten percent of school kids from each school goes to our universities you are then running an admissions system with far less autonomy than our universities expect. So my view is that Stefan wouldn’t allow me to get away with Richard’s model. Actually this wouldn’t stand up the Californian system.

Now the final point, emails, the final point, Richard and his seven thousand emails. Now I’m in danger of sounding like a Californian technophile, but if you have sat as I did in the lecture theatre at the LSE to hear Sal Khan of the Khan Academy describing what the Khan Academy has done in the past two years you would realise that this is soluble. He has that, he started putting on Facebook his little videos for his extended family and he immediately found he encountered this problem, and what they’ve done, what you do Edex, what you do at the Khan Academy, what Future Learn is going to have to do, is that you create a learning community in which the students compare notes with each other and share how they solve these answers, you have some moderation, but what you’ve managed to deliver at the Khan Academy I think he said they average fifty million students signed up, not necessarily of course all going to complete, a tiny fraction will complete in convention of course. He got fifty million students with a staff of thirty five, so that’s quite a good ratio if you want to spread access to higher education. So if they, and you do it by pooling the fact that even the students, your learners have also got something that they can share with your other learners. So I personally think that’s why I am more, I think this is a more significant change in education than Richard as I actually do think that the arrival of social media and the internet in H.E. is a big change.

PW: I have failed miserably in my role as Chair, I hope you don’t mind since I for one have enjoyed greatly what the panel have said. It wasn’t my intention, but it was great, so that’s fine the MIT model thank you. We’ve got half the amount of time I said we would for questions, there are roving microphones, we’ll take blocks of questions. Can I ask people to make sure that their questions are short, just ask one question, don’t make a statement, that will give the panel an opportunity again if we can answer those briefly to give as many people as possible an opportunity to something. So starting right at the back first, then we’ll just move on down.

Audience 1: My name is Natalie...I teach at Goldsmiths and at NYU. I’d like to bring up the issue of technical education which I think is being grossly underserved by the current models of MOOC’s and demonstrated a promising model by the Khan Academy, and this is a model of essential mobility we’re in fact becoming a sociologist tool. Literary theorist is not the aspiration or the channel for mobility that most students are attracted to university through. What it is is an engineering degree or computer science degree, medical degree, some kind of professional degree that is actually not heading towards the kind of research methodology, and this is where the profession, the transformation of the professional and technical education is perhaps less challenged because the model of the MOOC has promulgated the worst form of stem education, right, in every single problem set driven analysis standardised test has been celebrated as, and we know from years of looking carefully at the attrition rate of women and minorities in the science and technology and engineering and math fields that that doesn’t work right? I’m getting to my question.

PW: Yeah, quickly please.

Audience 1: The question is how do we seize the opportunity of MOOCs to change professional education and technical education so that it is not, so that it seizes the material experimentation, changes what is professional research, changes the capacity of who gets to do what is distributed on the ground experimentation. Not in the lab, but in action research and how we reimagine and redesign our urban systems through that?

PW: Right we’re going to take five questions, please can the rest of you keep the questions, forget about the preamble, just the question. Right over there. One sentence. Or two at most, but short.

Audience 2: My name is Kunah Beck, I shan’t give my institutional affiliation lest is cause some embarrassment. I’d like to come back to one the first that the German education or higher education system its, during its hay day was undoubtedly one of the most successful it was very unbureaucratic, interestingly it was largely publicly funded, and yet not to any large measure or due measure government controlled. In fact it bestowed very considerable autonomy on its academics.

So my question is what makes it impossible now for a publicly funded higher education system to work in this way and does that not highlight some pervasive problems with our society at large and perhaps one final sentence if I may? Generally I think conservatives have a very good grasp of what makes a good university maybe they’re forced to act too much like new labour now. Thank you very much.

PW: Thank you. Are you going to be brief? If you’re going to be brief, otherwise I’m not letting you have a microphone. One sentence, try just one sentence, come on.

Audience 3: I’ll try for one sentence. My name is Rod MacDonald. I’m a civil engineer, so I’m steep in science and technology and all the rest of it, and I’ve spend a lot of time travelling around the world in the last few years. What concerns me when I see this country, and I’ll talk about this country, is that we are absolutely steep in colonialism, we still believe we are better than everyone else in the world, we’ve been hearing about our education system and how everyone should be copying what we’re doing and all the rest of it. What are our universities going to do about changing that attitude?

And the second thing is the most important thing I see missing is open mindedness, so technology I’m completely steep in, but open mindedness, being able to see outside the box and being able to do things differently, and what are our universities going to do about that because it’s not around at the moment?

PW: Thank you Rod. Right who would like to try one or more of those? Jo, pick one of those, have a go.

JB: I think I’d like to pick up on the last one because it echoes very much with my experience of both being on the other end, on the receiving end of visits by one vice chancellor or a deputy vice chancellor international after another, all of whom would come to the University of Cape Town and say what can we offer you? And very few offer what can, how can we benefit from some sort of mutuality? Just take the MOOCs example I was there before MOOCs, but I was there at the time of open source and open access and we had a partnership with the University of Michigan where we developed an online course together in infectious diseases. Now Michigan got a much better product on infectious disease by working with the medical school at the University of Cape Town than they could have done alone. So there are examples of where mutuality can be of benefit. Putting out all those issues as I did earlier on competition I have the view that we in the UK have five to ten years of being able to hold our position as a preeminent supplier and provider of higher education and research. I think we are we have to be very cautious of ignoring what’s going on elsewhere. In China, where the rest of the countries which have higher education and research collaborations between 2000 and 2010 that’s double, that’s five times greater in China. So I think the competition is great I think a lot of what of Richard and Stefan have been talking about is exactly what makes our education system precious and which will enable us to maintain a strong position in the world. But that if we ignore the differentiated systems that are growing up, particularly in emerging power countries, it will be at our own peril.

PW: David what makes it impossible for us to have a publicly funded H.E. system?

DW: I thought it possible yeah, we have a significant amount of public funding, in the provision of the loans and writing up the loans for people whose incomes don’t go above £21,000. Maintenance grant which is more generous than in Germany, one of reasons why they have resident universities and why we have people who move around the country to go to university. We are covering the cost of higher cost subjects through the band A and B disciplines. Yes we do have public funding, we have a public private mix, just as the benefits of universities are also both public and private.

PW: Do you want to have a go at commenting on the first question?

RS: Well this is a subject that really interests me, ‘technicoligication’ I wrote badly about it my book The Craftsman. The old model is the workshop, and the alternative model that is learning surgery or a surgical procedure by watching the screen is equally impossible. And what we need in ‘technicoligication’ its really no different in ‘technicologication’ than I think learning any kind of craft, poetic craft whatever, is how we can handle some of the conditions of hands on learning, without have a world of small workshops anymore. That’s why and this is something that I think is really important for you, which is why getting paid apprenticeships for people in businesses is absolutely crucial. The Germans do do it and we’re starting to do it, and this to me is the only way that we can do this, we have to get, what’s called in the States vocational education back into the vocations. I think the most important thing this government or any government at this moment could do. There’s a real skills gap in this country at the level, and I’ll keep you here all night if you’ll let me, but there’s a real skills that borderland between skilled working class or middle class manual labour. It’s not because the Poles work for less money that they’re getting those jobs, we have this fantastic problem. Since we don’t have polytechnics we have to solve it in the work place rather than the schools.

PW: Next set of questions. Craig at the back...wait to get miked Craig...yeah that’s why I thought I would ask him!

Audience 4: I begin by saying that I thought Pratap’s comment was really important at the beginning. That there is no single model of the university and we’re destined to a fairly incoherent conversation as long we keep talking about the university and ignoring all the many kinds of differentiation and the muddles we get into when we try to bundle all these different missions indistinctly into single institutions. In that regard I think that part of it is, when does higher education need to be become coupled with research and when not? What can be scaled up effectively? What not? These sorts of things, and back then to the Senate Collini line, which sounds like some sort of part of learning about World War 1.

I want to ask Richard then...I want to say that Richard is wrong about one thing in his speech that I thought was overwhelmingly very interesting and very good and see if it matters that I think he is wrong. And that’s the Harvard/Tufts comparison where I both disagree about the sociology departments, which is interesting but that’s not the important part.

It’s that Tufts is richer than any UK university other than Oxford and Cambridge. That it costs more than any other UK university to go there as a student. That that money is used to support whatever blue sky is research and open ended enquiry is being conducted in Tufts exemption as support. So does that matter to this model? Does who pays matter and the extent to which Tufts is radically unpublic, where or not we agree about how good the work being done there is.

PW: Thank you. If you pass the microphone over then that will save a bit of time...

Audience 5: Julius Weinberg, Vice Chancellor at Kingston, one of those terrible universities that produces people who go out and create jobs.

This is a university which houses both the Centre for Modern European Philosophy and the largest workshops of any universities in London for designers, fashion people, those that are creating the economy of modern London.

I just wonder why much of the panel seems to be in a rather bizarre elitist discussion and I must say it does remind me of the ghost of J H Newman.

PW: Thank you. Let’s have one from down here.

Audience 6: Excuse me...can I just do a very quick one...a one sentence one...

PW: If it is genuinely a sentence...

Audience 6: Yep, unusually I am going to break the rule because I am a journalist and I am going to do it in one sentence. Anne McElvoy from The Economist.

David Willetts if you had absolute freedom, no fear of a reprisal or being called a socialist would you go the top 3% route in terms of allocating places in universities per school and alienate possibly the entire middle class parentage of Great Britain?

PW: Right, that was a nice brief question...in pink....thank you.

Audience 7: My question is how can we make changes in our institution to move towards an MIT model in the face of undemocratic university management, government policy and broader global neoliberal trends? I am a student at SOAS and the SOAS Student Unions Campaigns Officer and I would love to explain...

PW: Thank you, I am glad they are on the panel! I am just the Chair!

Audience 7: I would love to explain the negative effects of privatisation and David Willett's policies in detail at SOAS to you. Obviously there is not enough time but yeah how can we reverse those changes?

PW: Right, would either of you like to reply to your bosses questions first? Richard or not? The question was, does who pays matter? That is my understanding. Tufts actually is a very rich university.

RS: It is yeah. I don’t think so but that’s because I don’t know much about money. I am sure it makes a huge amount. I am sure it makes a huge amount of difference to you because you have to deal with these problems. I mean my end of this is just to say that I think the important is to think well, not to think like a shopkeeper and the bureaucracy is stacked towards that kind of shopkeeper accountancy. Sure it probably helps to have money but then I give you the example of so many, and you know this as well as I do, of so many really good universities and colleges in the US in which people are just scraping by and doing really good work.

I am probably very idealistic about this but I just think if you start with the notion of what you want to achieve that then the means begin to fall into place differently than they are falling into place now...

PW: David, if you had absolute freedom? Top 3%?

DW: Well first of all the...it’s on the 3%...on Anne’s 3%.  No we are in a completely different system. I have no desire to control admissions to universities. I have the whole UCAS universities choosing who they admit model is a key part of the English system. We are an outlier but that’s our history and I support it and celebrate it.

The American system depends on far less autonomy then we have in our system and this leads to the bureaucracy question, the question from SOAS. Because I do sometimes think in these debates that I have strayed as the Minister into a series of essentially internal cultural issues in universities, of which there are about three.

One is, certainly in Oxford and Cambridge, a lot of it is colleges verses university. Although I may say that it is also a bit of an issue in London. So you have the endless sense that colleges have to fight back against the university which leads into the second one which is arts humanities verses the physical sciences where there is a sense of vulnerability on the side of humanities which is then transmitted as seeing government is attacking us when we don’t sit around trying to plot the demise of the humanities. We rather like them. 

And then there is thirdly, where everything is now so bureaucratic and there is virtually no bureaucracy at my disposal whatsoever and I would not wish to have one. The bureaucratic debate, and I hear it from my friends in the universities, is almost entirely about the internal organisation of universities. What has happened is institutions which used to be people sitting in libraries and operating from relatively small labs with modest budgets have suddenly become organisations with total budgets of a quarter of a billion pounds, half a billion pounds, three quarters of a billion pounds. And suddenly sets of organisational challenges and responsibilities follow from that and the process of adaptation to this growth in the size and scale of the university and its budget also creates cultural tensions in universities.

None of those issues are essentially government matters though I realise party of our responsibility is to be the people upon whom these anxieties are transmitted.

PW: Stefan? I think we are going to give you the last word Stefan because it’s getting on.

SC: Well it will be very short words and three short points.

One is just that it seems to me a pity if any talk about quality, if any attempt to think about the conditions of quality has to be in some ways stigmatised as elitist. I think quite a few of us have made an effort to try and say this is a serious issue which isn’t just a matter of some kind of traditional hierarchies or some other kind of intellectual snobbery and it can concern any type of institution and I think that is true.

Who pays, does it matter. Just to add one small point to that, not the practical point but...It sometimes I think makes a difference to the population’s sense of, as it were, ownership of the institutions and of how far they cater to that population rather than how far they cater to a small by and large well healed select slice of that population. I think that’s not a simple question as we all know here but I think that affects the public perception of universities in that way.

And the third one just about governments. I think there is another aspect here which is where academics have been culpable which is by withdrawing from many of the internal administrative functions of universities it has lead to the necessity of a professional cadre of administrators who sometimes have other conceptions and maybe other interests and although academics have partly done this in response to pressures of things like research assessment and so on its been a career model move I think and it seems to me to have been a very bad one. I think academics just as we should take at least as seriously responsibilities of teaching as research even though the pressures are the other way, we also should take seriously, no doubt this is part of the view from my pedestal, but we should also take seriously the obligation to run our institutions and to take our own turn in doing this. And if so I think some of the things I suspect your pointing to and which I would certainly recognise would not now be in place in a lot of British Universities.

PW: Thank you. That’s very good timing. That’s 9 o’clock. I was supposed to be timed five minutes to do a summing up. The idea that I could sum up what the panellist have said and what the audience had seems to me utterly absurd but I for one at least will take away a few points. One of which is about the importance of diversity and diversity across the board.

Another one a number of speakers have mentioned is autonomy and the importance of university autonomy in all sorts of different ways. I was particularly taken by Pratap’s point about the logic of democracy and bureaucracy and what that does to universities in a wider sense and the importance that we think in terms of university systems and not in terms of single universities.

 

Can I just conclude the evening by thanking all of those who made this possible. First of all the panel members and you the audience. Without them and without you we wouldn’t have had an evening. We should also thank Michael Aminian and Zamyn. Without his vision and drive none of these events would have happened and this evening and its very good. And also the five sponsors Chris mentioned at the outset. They are all up there on the board; Accenture, Africa Progress Panel, Barclays, SOAS of course and Tate Modern. We are very grateful to everyone for making this possible.

And finally there are always in these events large numbers of people who work behind the scenes and who don’t get thanked but they know who they are so my thanks to all of those who worked behind the scenes.

We are pleased to be part of this and I am sure some members of the panel will still be around if you want to ask them questions afterwards. There may be others who are rushing off but anyway!

Thank you very much indeed. 

Close Transcript

Video Transcript

Artefacts | Tuesday 4 June at 7.00 pm

 Chair: Chris Dercon

Speakers: Nicholas Serota, Elvira Dyangani Ose, Wu Hung and Olav Velthuis

Nicolas Serota (NS): Good evening Ladies and Gentleman I’m Nicholas Serota, Director of The Tate and it’s my pleasure to welcome you here this evening for one in what is a series of debates taking place here at The Tate on what will address the issues political, economic, social and cultural dimensions of globalisation at the start, no longer really of the start of the 21^st century.

I think Tate is a very appropriate place for these debates to be taking place, sometimes thought that art should be removed from society, that a museum of this kind should be in some way a refuge from what is happening in the wider world  but I think we all know artists are determined , or many artists are determined that there work should address some of the issues in that wider world and some of the issues that press most urgently upon us at the beginning of the 21^st century so we make no apology, indeed are rather proud that this series of debates should be taking place at Tate Modern. They have been organised as you are aware I think, by Zamyn and I would like to thank Michael Aminian for conceiving the series, for working with us in presenting it and Michael you are a force to be reckoned with and I think the quality of those engaged in the debates over the past week or so and the next three weeks is very much a product of your energy.

Here at Tate I want to thank Marco, Daniel and Chris Dercon, who I will introduce in a moment for being involved in the presentations and in the series and I also want to thank the partners for the whole project. Those partners are Accenture, Africa Progress panel, Barclays, School of African and Oriental studies here in London and of course Zamyn and those partners are genuinely partners and not just financial contributors.

Tonight, Chris Dercon, Director of Tate Modern, will act as moderator. Chris, formerly Director of Witte de With, Rotterdam then the Boijmans Van Beunigen museum also in Rotterdam and most recently, before he became Director of Tate Modern he was Director of the Haus der Kunst in Munich from 2003 until 2010.

The debate tonight is about the role of museums not just as collecting institutions but as institutions that display works, bring together artists and the public and debate the place of art in society and debate interpretations of history. What this panel will do will be to question the way in which museums have played this role in the past, how their role is changing and what it might be in the future and with that I will hand over to Chris Dercon. Chris, thank you for moderating this evening, we look forward very much to the discussion.

Chris Dercon (CD): Thank you Nick, thank you Marco and thank you Michael. What an agenda we have tonight and we only have 2 hours, my goodness.

Ladies and Gentleman, I’ve conceived after coming back from Venice where we had similar discussions and Germany where people are discussing the same kind of subject I wrote this morning on the lane a little statement and I would like to confront you with that statement.

Ladies and Gentlemen it is true that we live in an époque when the old economy, the western world by which of course, I mean especially Europe and America is, if not declining, at least in crisis. It is in crisis for of course an economical point of view if only because new economic powers are emerging most of which are challenging quite seriously western domination, but its economy is even more in crisis in the field of cultural production. The epicentre of global transformations is located very firmly in global south and in the east and it seems to me that these transformations call for completely new forms of engagement. Engagement with foreign worlds and foreign cultures, they also call for rethinking of cultural institutions that have to recalibrate their traditional roles in order to take into account the creative forces that are emerging in the global south in particular. What is striking is the high velocity of circulation of creative forces and forms and the huge desire form local actors to be connected to larger entities and ensembles and in that sense we will have to invent new forms of intervention all of which aim not only conciliating what already exists but helping cultural thinkers and cultural creators to enter into cross disciplinary conversations such as the one we had yesterday and the day before yesterday and the one we have tonight. Cross disciplinary conversations which are involving politics, economics and of course culture because without taking into account culture I don’t think we can reinvent economics and we definitely cannot reinvent a new form of politics.

Tonight we will debate with Professor We Hung, next to me and Elvira Dyangani Ose and Olav Velthuis and all of us will discuss these and other matters. We and the organisers put to these three speakers three provocations and I will come to you later with these three provocations, they worked on it for a very long time.

Elvira Dyangani Ose is working with us at the Tate Modern since 2011 and she is Curator of International Art and we were able to work with her thanks to the support of the Guaranteed Trust Bank in Lagos Nigeria. Guaranteed Trust Bank which of course has also very important economical relationships with the rest of the world and while she was born and has her roots in Equatorial Guinea she studied art history and the history of architecture in Catalonia in Barcelona. Since then she is doing many many different things, amongst others she is completing at Cornel University her Master of art in History of Art and visual studies and specialising in African culture and African arts with somebody you might know well Salah Hassan. She also has been working in the Garn Canaria in Las Palmas and she has been working in Cameroon in Douala and she has also been working quite recently, and has continued to work in Congo in Lubumbashi and Elvira she is going to publish very soon an essay which is inspired by the famous sociologist  Achille Mbembe who is teaching in Witwatersrand in South Africa and he wrote this fantastic  book ‘Sortir de la grande nuit’, Let’s get out from the big night, and he introduced, together with the famous Nigerian writer the word Afropolitanism and she is now writing and publishing an essay which is called ‘Are you an Afropolitan’? In that essay Elvira suggests it is time to get rid of the qualification of African. OK? If we have to get rid of the qualification of African or Chinese for that matter or the Middle Eastern so how are we going to all these things and how are we going to call these things which we call new forms of engagement and intervention?

And of course Wu Hung who is the Harrie Vanderstappen Professor in Chicago since quite a while, he is very interested in that because he thinks we have got it completely wrong in the way we in the west look at this thing we call Chinese modern, Chinese contemporary art and he has been writing about this. He has been writing about this always like playing ping pong with the old. The old and the new. He is very interested in the relationships between older  visual forms and traditions and older forms of ritual, social memory and even political discourses and he looks at the new through the eyes of the old and he looks through the eyes of the old at the new and his book which he published years ago, ‘Transience, Chinese experimental art at the end of the 20^th century’, published by the University of Chicago press is for many of us interested in Chinese modern and contemporary art a true bible. Last year he published ‘A History of Ruins’ which is a story which an analysis of the concept of absence in Chinese, traditional and even contemporary culture and now he is working for Thames and Hudson on a book called ‘Chinese contemporary art, A History’. I’m really curious and to how you are going to combine the old and the new today in this debate because of course you have competition. Think of somebody you might know, Lothar Ledderose at the University of Heidelberg who keeps telling us stop at the way you look at Chinese contemporary art, try to understand at first the old and then talk about the new. Let’s see what you do with this.

Then Olav Velthuis.  I’m not going to speak Dutch with Olav tonight, I am not from Holland but he is from Holland and we speak the same language. He is now Associate Professor at the Department of Sociology and Anthropology of the Universiteit van Amsterdam, see that’s Dutch, the free ………

Olav Velthuis (OV): University of Amsterdam

CD: Oh the University of Amsterdam so he understands Dutch, it was just a test. And he is there at the department, he is the Director of the master programmes but before I was an avid reader of his pieces, of his essays, before he was the staff reporter of globalisation for the Dutch newspaper The Volkskrant, the people’s daily. His books and he published amongst others this red book about the globalisation of the art market which was published by Sternberg Press in Berlin thanks to an initiative in Stockholm to Tensta Konsthall and in that book which he co-edited with Maria Lindt he’s speaking about contemporary art and its commercial markets report on current conditions and future scenarios and also he is publishing about patterns of globalisation within the contemporary art market. I mention these two titles, he has many more provocative titles but every time he is publishing in the Volkskrant, Corriere della Sera , Le Monde, people in the art world get a little bit anxious, they get a little bit upset because I think he starts to understand how it all works and he is making of course the difference between the cultural and the economical powers and one of his stronger statements lately has been ‘don’t worry so much about the economical powers they are there and they are big and powerful but cultural power might be just as important and maybe even more important’.

To these three speakers we put the following provocations, now listen carefully

1. The appropriation and ownership of art mirrors the world of commerce. True, not true?
2. The display of art, artefacts and works of art fetishes them and perpetuates archaic definitions and perceptions of other cultures. Perpetuates archaic definitions and perceptions of other cultures. True, not true?
3. Art can provide the mode of engaging with the conditions of globalised culture that gives voice to individuals and makes material their concerns.

Wu Hung, now it’s up to you react on these three provocations and I believe you have some images.

WH: I have three images. I have also have 3, 4, 5 minutes

CD: But not more

WH: No more, so yes it’s very exciting to be here to join this panel discussion where we debate. I would respond to these questions with a few remarks. I won’t answer these questions because these are very big issues. I am just paid a very interesting discussion. I wrote down some remarks I want to read. I will start from the topic of this panel, Artefacts. Artefact is a word favoured by archaeologists, art historians and art museums where we prefer the more lofty word the work of Art. By calling an artefact a work of art we give it a special status as well as a distinct aesthetic and commercial values. How these values have been established is a long story but we should keep in mind that the concept of art or fine art is how we historically and culturally defined. In China for example the idea of fine art was restricted to painting and calligraphy before the 20^th century. No sculptors, print makers or architects were ranked artists before 20^th century. Their works didn’t exist in so called art collections of emperors and scholars. This situation changed fundamentally in the 20^th century when the country embraced the European art system. As a result art museums not only in London, Paris but also in Shanghai and Beijing started to reinvent independent art histories of Chinese sculpture and architecture. Such a historical reinvention of artefacts was not just realised in museums and art academies but was also realised in the field and the market place through destruction and through shady transactions. Buddhist statues for example were removed from cave chapels to become transportable works of art as wealth commodities. Sometimes an entire building was relocated to a western museum but if this process of decontactalisation and the redefinition started as a colony or imperial practice it soon became a basic technology of the new nation’s state in rewriting its art history. For example no Chinese art collections in China before the 20^th century included this kind of work, beautiful clay statue filigree because everybody knew it was created for the dead and belonged to the tombs so nobody collected it before the early 20^th century. Such works called spirit articles first appeared in the market place, the antique market in the early 20^th century when China entered modern era so it’s very interesting there is a coincident timing became commodity enter the market became museum objects and in the early modern era, but now they have become indispensable for any museum display in China and in the west. So, should we cast this modern art historical system away and then re- embrace the pre modern concept of arts and artefacts? I don’t think it can be done so easily.  The dilemma is how to integrate indigenous aesthetic standards and art historical discourses into a modern system that is essentially homogenous and alien.

For art historian museum it is a very difficult challenge how to integrate, to explore the complexity of this situation it is interesting, I put a comparison here, it is interesting to juxtapose, here, a beautiful statue of Buddivista in an art museum with this installation by Ai WeiWei, contemporary artist Ai WeiWei, which displays, as you can see, ten pairs of stone feet broken off from Buddha statues. So this consider this feet, broken feet considered useless for their damaged condition. But this pair of images raises a more challenging question for me, where Ai WeiWei work delivers a sharp critique of the antique market and the system of art collecting that supports it, this work nevertheless transforms ancient artefacts, in this case the broken ones into art by means of what we call the readymade. Thank you.

CD: Thank you. Elvira

Elvira Dyangani Ose (ED0): Well it is really exciting and challenging for me to be here since I am part of this house, this is my home. I said to myself in order to respond the these provocations I will use two of them to frame my ideas and I promise to respond to your question which is a fourth provocation later on in the debate because I think it is interesting to talk about why we should get rid of the African artists  in a specific context but in order as I said  that to talk about artefacts  and the subject of this panel I decided to give two examples and the first one is the ‘Statues Also Die’ a film, a short documentary  that  was made by Chris Marker and Alain Resnais in 1953, and commissioned by Alioune Diop a Senegally intellectual who in 1941 was started to conceive these magazine which would reflect on ideas of revised , let’s say, African socialism and will try to convey the new ideas beyond the subject of the male or the female black men and women. What I, what they wanted to do at the time was to reflect on ideas that Nkrumah and George Padmore, Jomo Kenyatta and William Du Bois were considering through one of the congress, the panafrican congress that happened here in 1945 in Manchester and the idea was to reflect on the, how we can conceive a new African personality if we want to use Nkrumah’s term. So Alioune Diop asked this question to Chris Marker and Alain Resnais, why is African art displayed in the Musee d’Orsay in Paris while Egyptian and Greek art is displayed at the L’Ouvre and that was what triggered the film. As you know in 1941 they couldn’t do the magazine. They wait until the Second World War came in the way and they decided to move ahead in 1947 with this. Presence Africaine, we became one of the most challenging magazine sort of trying to collect all those and convey those ideas.

What they did with the ‘Les statues meurent aussi’ is to explore how the meaning of African institutes, the traditional African Art, was changing when displayed in the museum and the movie star with this sentence that we can also ask ourselves in the context of these panels, they say when men die they enter into history, when a status die they enter into art and the botany of death is what we call culture. And I think it’s an incredible and a provocative way of addressing the subject and I wanted to bring a couple of images and a little bit of a movie but I am going to try to summarise very briefly what I think they camera does to present us with these ideas.

So the camera guides us through the shadows by a thoughtful narrator commentary using the words that I just pronounced take us inside the museum. He poses for a seconds to each shot and he stares excessively at objects which leap to the screen at each shot as he is trying to engage us in a dialogue that could otherwise not take place.

The images make us accomplish this to the date of these works which become mute as soon as they appear since nobody is prepared to listen then and to confront there through. The field announces their forcible insertion into a commercial circuit that you and Chris were talking about in which a relationship with the art world is based shiftily on the detached observation which is far removed from the role played by this object within the environment and the context of social and cultural practices in which they are made and my provocative question is to think about how objects of that kind nowadays but also, as they were put in the provocation, the archived definition and perceptions of other cultures production still prevail and I see a movie like that one is still valuable today and this is a provocation that I send to you guys in order to reflect on the ideas presentenced to the panel.

The second example that I want to use and I have still have my minute and a half is the Angola National Pavilion Participation which is this one for those of you who that can attend to the preview maybe you already have collected the return of 5 or 6 of these 23 offset posters that were displayed in this room, these large pieces of found objects that the artists Edson Chanas found around Luanda.  

And what is interesting about the pavilion is that it’s a way of reflecting in the public space and in the changes in the future that is occurring nowadays in Luanda but it’s also a reflection for me in how important it is the way in which art is intervened in the public space because as some of you know, some of the objects were found in the place where the photography was taken but some others of these were removed from the original setting to sometimes meters away but also sometimes 2 kilometres away to state a perspcific meaning. So there is also the action taken by the artists and made that the record of this event and this particular work very very interesting.

Angola’s National Participation I would entitle ‘Luanda Encyclopedic City’ in parallel to Massimiliano Gioni ideas on the encyclopaedic, his exhibition on the encyclopaedic world and it was curated by Beyond Entropy which is a duet, curatorial duet formed by Paula Nascimento and Stefano Rabolli that are looking at also the way in which the public space was also challenging in the case of their participation in the biennale in architecture.

So for me also I wanted to use that to respond to the second provocation that was how I can provide a more disengaging with conditions of globalised culture and Luanda is one of these spaces, one of these cities in the global south that is connected ideas and consumerism, that is connecting artists that are challenging the public space and there is just a lot of potential and there is strong activist potential of this kind of project in order to interrogate the public space but also the role of art as an agent for social transformation. And I want also to use that to talk about in the debate about the dislocation of certain words, the location and sort of like joining together these two proposals. The location within the displays as a dislocation of those works and I think I am going to stop there.

CD: You should.... Elvira...bravo.

[Applauding]

OV: I will mostly respond to the first provocation that the appropriation and ownership mirrors the world of commerce which is a bit of an ambiguous provocation but if you think of it as well we live in an era of profound economic globalisation so that will lead to or will somehow produce or coincide with profound cultural globalisation at least for official art, for high arts, then my answer to that provocation is very simple. Its no. Not at all.

I think it is very easily overstated how profound, how deep cultural globalisation is. I am studying at the moment art worlds in four of the biggest emerging economies, China, Brazil, Russia and India, together with a small research team and one of the things that we are doing is basically counting in Europe and the United States but also in those countries what people are really at. What they are collecting, what museums are exhibiting, what galleries are showing and what we find is that all these worlds and that I am not talking just about those BRIC countries but also about Europe and the United States are extremely local. If you walk into a random gallery in New York or in London or in Amsterdam what you will mostly find are local artists. If you walk into a random museum, if it is not that Tate, but if you walk into a random museum you will mostly find European artists in Europe and American as well but very little from other regions. There is a lot of discourse about cultural globalisation but if you look at the actual collection policies it’s only a couple of percent. It’s on the rise that’s right but it’s still only a couple of percent.

Now it’s not very different in the BRIC countries, in Brazil, Russia, India and China. I was just a couple of weeks ago I was Dehli visiting one of my PHD students who is there for a year studying the world in depth and I was talking to some art collectors and I was quite amazed, I mean not positively or negatively, but just amazed how shallow their knowledge and information is about what is going on in contemporary art worlds in Europe and in the United States. To some art collectors when I was mentioning the name of Damien Hirst they would really have to think hard. Well yeah, I think I have heard that name once! And that is as far as it goes. In New Dehli what people are collecting is almost exclusively Indian art, Indian art that gets consecrated very good Indian art but it’s Indian art. There is very little collecting of European art, American Art.

Now you might say well maybe this just a beginning of an era and with globalisations people travelling around things being shown abroad that will happen. I mean it is just a matter of time. I have serious doubts about that. I don’t think we should think of cultural globalisation as a linear process, as something that it starting off, that is being propelled maybe by economic globalisation and that will lead to a further integration of a global art world. I don’t think that is going to happen and I think actually the discourse that you find right now in art world, it reminds me very much of the discourse in the 1970’s when I wasn’t around. Well I was around but I wasn’t participating in a discourse but at least what I read in books from the 70’s and 80’s about globalisation of the cultural industries of, for instance Hollywood, we were thinking that there would be this tremendous Americanisation of the cultural industries. That everybody would be looking at Hollywood movies and would be looking at the soap operas being produced in the United States and look at what has happened. A little bit of that but am the same time what you see is all kinds of regional centres around the world that are as productive when it comes to the output of movies for instance in, say, Bollywood or in Nigeria in, is it the word...how do you call the Nigerian film industry? Is it Nollywood? Yeah that’s how you call it.

So what you find is a strong regionalisation and I think that is also what we are heading for in the art world and one reason, and it’s what I probably should already be stopping with, one reason for that...No I will mention two reasons for that. One simply has to do with taste. If, taking the cultural industries again as a example, the cultural repertoires that you find in different countries are not compatible to once source of production that has been spread all over the world. There are local repertoires taste repertoires that people have and that make them prone to understand, make sense, like certain types of cultural products and others not. So there is a taste component to it.

But apart from that there is also an organisational reason. I think actually the Tate here is one of the few institutions in the world that has the organisational capabilities, that means people all over the world, networks, travelling almost continuously all over the world to have a good grasp of what is going on in those different regions and very few institutions have that type of organisational power. I mean it’s not easy to have a good grasp of what is going on in, I don’t know you name it, Sao Paulo or in Buen Asiarias at the moment. You have to have a very deep presence there. You have to be there for a long time and organisationally that is just not what is possible for a lot of cultural institutions in the present world.

Now what that leads to and that is what I am stopping with, what that leads to is, you know, these...it’s a form of globalisation that is taking place right now where curators are travelling around the world but what they are basically doing is just working off those lists, kind of preconceived lists of artists that are considered to be hot at the moment and they will pay a quick visit to their studio and they might be included in shows that are about something new Indian this or contemporary Brazilian that and that is what I hear artists in this country complaining a lot about. That they are in the end selected frequently not just for their artistic merits but more for their nationality and I think that is what is irritating in those worlds.

Just to round off, so cultural globalisation yes it does exist but I think it is overstated. There are very strict limits to how far in the visual arts globalisation can go which you will...I think what we are heading for is more like in the cultural industries regional centres that are to some extent connected through a smaller group of artists that really have a global presence, that are being shown and talked about, understood and made sense of in a more global sphere but mostly predominately it remain organised in a local way.

CD: Thank you Olav.

[Applause]

Olav, are you still a journalist?

OV: If I say yes are you then not going to tell me interesting things or....I am not a journalist!

CD: I am just going to bring you the news about globalisation. I mean you heard this morning, you read probably, all the newspapers that the Americans and the Europeans they want to break open NAFTA and that also culture is up for grabs in Cairo. Charles Tannock, the European Commissioner, was responsible and was presiding the negotiations. You know he doesn’t consider culture anymore a taboo and its David Cameron ladies and gentlemen who is really at the, I would say, at the forefront of breaking it all open. I mean you are talking about the fact that globalisation is in terms of cultural networks is not happening, is not going to take place but now we see that Hollywood is already like celebrating tonight because they know that they can defy la culture ou bien the exceptional idea of culture the French would try to protect French products and many filmmakers this morning they signed together a piece of paper saying we don’t want this to happen. We are afraid because if we break open after then it’s over. So US journalist, how do you react to that?

OV: Well yeah it’s very simply. A lot of countries don’t have those protective measures that France has at the moment and still you find that local culture remains strong there. By the way, the dynamic of the high arts, of the visual arts, is a very different one than the dynamic of the cultural industries of the movie industries.

So my main....

CD: How do you see the difference?

OV: Well, I think partially, for me, I think what puts a break on globalisation – so I am not saying it’s not happening – what I am saying is it is happening in a very small group. In a group of artists that you see at the Biennales for instance. But we don’t have a clue here in Europe about what is going on for instance in China, in like a market that is very strong there of these, what we would consider, sentimental kitsch artists who in the market are doing extremely well but we just don’t know what is going on there and we don’t have an interest in either.

CD: Wu Hung, do you agree with Olav who tries to make a difference between let’s say the cultural industries and culture industries it’s music, its cinema, it’s all the visual products and this thing which we call artefacts of works of art. Should we make a difference?

WH: Yes. I think we are making a difference when we use these words. But I want to come back a little bit to your discussion because these global, local things have been controlling our discourse, discussion for quite a few years but I feel, just say your discussion, also suggests...seems this polar concepts themselves probably need to be re-examined. For example, when we talk about global we mean kinds of networking, when we are talking local it’s some kind of place. It’s already within this network.

I just want to use Hong Kong as the example. It’s very hard to define. Hong Kong now, you probably know, is emerging as a major centre of contemporary art, especially commercially. Now these commercial artists have however moved there from London, from New York, from other parts of the world that are fast becoming the most powerful one but Hong Kong by definition is a Chinese city. It has a colonial past. People are educated. They speak Chinese and English. Often studied at Oxford or Cambridge. So it’s an interesting example. Can we use local/global, these polar concepts to describe....

CD: Do you agree this whole idea of taste as a regional product or as a regional expression? Do you agree with that?

WH: ...what is Hong Kong taste? What are Hong Kong artefacts and what is global here? So that’s also...I join your question.

CD: We were talking before about Francois Julian who is a very famous French sinologist. He brought this book in praise of blandness and he, you know blandness, and he considered for instance the work of Ai WeiWei as bland. But bland in the words of Francois Julian is a quality.

Now the interesting this is that we don’t have yet I think a system to measure these kinds of expressions which are belonging to a very kind of local, I would say environment-like, local context. So is there a future for global art Elvira?

EDO: I do think there is a future for global art. I do not if we will qualify it as global. And I want to add another reason that may we also have to connect these local and global and what you were saying because one of the most important things to remember here is that colonisation was a kind of globalisation as well. So in the case of African countries, African societies and I am talking, you know, for the sake of the conversation and the argument in general terms but we should make distinctions between countries because Africa is a huge continent and within the continent there are countries that have within them societies that operate in different ways. But I wanted to say that colonisation also brought to most of these communities an understanding of the world before they could really even define or put on stage their own culture. So when you have Nollywood or you have other ways in which the local is integrated into that long conversation we are talking about an understanding and a production of culture, a productions of knowledge, that is very much localised. But within these as the Afrapolitan intense states within a regional as you were saying conversation. So people are focusing in Nigeria or in Lagos in expressing things or in rethinking history in their own terms because they need that history to be said, to be written. It doesn’t exist in the context of the colonial and it exists through the independence as a way of conversation that has overlooked certain aspects of the history. So there is a need of producing knowledge culturally, locally. That is one thing.

And just I wanted to...just a second thing...

CD: Right.

EDO: The second thing is to respond to your comment before on the African and we should get rid of the African, the qualification as African only if African means, as you were saying before, to localise the artists in a confined framework, conceptual framework where they can remove from a set of motives, they can remove from a certain ideas or topics and what I say is that this artists are working and talking to the rest of the world. They shouldn’t be defined only by their cultural background in that sense cultural identity and cultural branding works as a confined territory which to the artist seems like a kind of removed from them. So I think that when you talk about, you know, these curators, certain curators not certainly Tate curators, that go around the world just looking at a given list to invite these artists to participate is that curators are looking at geography as an aesthetic value and that is the thing that we should avoid. That’s why I am saying, you know, African if that is the user of Africaness that you are claiming for should get rid of and you should talk about, I don’t know, other international and certain global...

CD: I think what Elvira is saying is extremely important for our debate because I have the impression that if we would have done this debate with you in ‘58 when Chris Marker and Alain Resnais produced for French state television ‘Les Statutes Meureit Aussi’ it would have been a completely other debate because in the ’50’s and the ‘60’s we have seen all these world cultural festivals, Jeddah, Shiraz, we went with famous Dutch filmmakers to China to celebrate what was going on there.

Now after ‘68/’69 and especially with the opec with the oil crisis we have a completely different situation. Not only tensions between the West and the East, not only in terms of what’s happening and going on with the cultural revolution but also locally we have many many corrupt regimes which are stepping up. So the whole idea of global ‘40’s/’50’s/’60’s and our optimism of Chris Maker and Alain Resnais suddenly gets interrupted and there is a stasis of about 30 years and now we are starting again. Did we miss something out? I mean would it be interesting for you for instance to go back and say ok, let’s think what’s going on in the ‘50’s and the ‘60’s.

WH: Very interesting historical perspective. Actually I think it’s when we think back, 1920’s/’30’s, even part of ‘40’s, represent the global moments actually than like Tokyo or like Shanghai were global cities but what was true somehow created a very deep gap separation...

CD: It was the first gap...

WH: And that reinforced by cold war. So somehow we started all over again and from ground zero somehow, you know, the Shanghai was Paris in the East, you start a visual culture, started ballroom, started music, jazz somehow restarted in 1980’s/’90’s, somehow East/West is suddenly pulled apart.

I feel your question is very interesting. You see the local, global is not only currently, the shifting, negotiating, but historically sometimes gets together secluded in the past from Ancient Rome all the way to China Sui/Tang dynasty were connected but then some point were pulled apart then I think now probably we tried for close again to close the gap but again starting from very different points because separation you cannot naturally get back together. There different rhetoric, ideology, politics and the new situations so I feel your question in very interesting. We now have a different layer. It is not just a global/local, also different histories, different memories like Africa this local memory. How this memory can become global? Actually it's....

CD: Local memory might be a very viable alternative for your local tasting.

WH: Yeah, like these local memories somehow in Venice.

CD: Olav, why don’t why we use local memories instead of taste?

OV: What is wrong with local taste? What irritates you about this?

CD: It irritates me because, you know, I mean I am irritated since a couple of years by our taste maker bourgeois. I mean I think the whole idea of taste is for me especially in these very complex new societies, I think taste is something which is not a given. I mean it’s a complete construct which changes constantly so the whole concept of taste I have a problem with and I think we should speak about local memories because Elvira what can we learn from the ‘50’s and the ‘60’s of the l’congrès Africa in algérie the optimism around Senegal and all these cultural festivals.

EDO: Well I mean....

OV: Can I just say, all this cultural...it’s still, it’s a very small fraction. I mean I don’t...so for me it is partially I want to understand like how deep do these processes go and if, I mean honestly, what we do in our project is partially just counting. We go to collectors and count in their house what they have there and where it is coming from and we do the same with museums, with galleries and we find that it is very very little is cross-border, is art that is coming not from the country where that institution is or where the collector is and I find it important because it is a different picture if you just look at what is being collected, what is being exhibited.

Even in biennales, I mean look at the Venice biennale now, in the end the number of artists coming from outside of Europe and the United States remains a small fragment. So I think there is a disconnection between the discourse about globalisation and that it is all the time about those events that do happen and yeah, of course, where great dialogue exists between different regions but it is a minority of what is going on in the art world.

CD: But our provocation Elvira and my provocation is that it used to be different. Even in the ‘50/’60’s we can give you examples of China, we can give you examples of India, think of the Ahmedabad factor, we can give you examples of Africa, so Elvira what happened in Africa in the ‘50’s/’60’s? What should we learn from the ‘50’s/’60’s from Africa to do, to make this discourse which we use to today which is finally an economical discourse to improve it, to correct it, to remediate it so to speak.

EDO: Well I mean I think the question here will be, first of all ask when they start to collect because I think that is important as well and also in the case of African countries or African festival in biennale I think I will agree with you like for me we are more interested with what’s happening in the 60’s and 70’s in Lagos, Algiers and Dakar than what is happening in the biennale Dakar nowadays or maybe even in the biennale Mumbai where reaching into, for obvious reasons in terms of like shipping the work to those cities etc the understanding of the connection with like global I think could be limited but I think what is important and that’s where I get the title or the term of local memory is that that was already in the way in which people in Dakar, Lagos and Algiers wanted to embrace the world. Looking at that internationally more inclusive narrative. So the problem now is what happened with that and I think examples like the biennale Dakar which also as I say when you were from the ‘80’s and ‘90’s and also in 2000, what you want is to create events that are, of course, international but that help to showcase local culture and local I mean in this case regional because this is what happened in Dakar and what happened in Lubumbashi and what happened in Bamako, what happened in Ethiopia there is a need of platform that will give opportunity to local artists, so it’s about the production of local knowledge that will then engage with other networks and in the case of African artists today it’s also they are participating in a conversation, very much in the global south, so again we are making this connection with a local memory that tried to embrace  the international but this time escaping let’s say the west.

CD: Question for Wu Hung and for Olav, shouldn’t we stop being cynical about these Chinese auctions houses and Chinese collectors who only buy Chinese art and try to reinvent even the tradition of collecting Chinese ink paintings because when I read reports in the art world but also beyond the art world it’s complete cynical. These Chinese they have too much money. They don’t understand what’s going on. Would that be a first step, a G8 step to stop being cynical?

WH: [inaudible]...journalist?

CD: He’s not a journalist anymore...

You’re first.

WH: I feel as a curator I cannot afford to be cynical otherwise I just become a journalist.

And so being a curator you have to be positive. You see, of course, a lot of garbage, a lot of commercial, a lot of bad things, a lot of these things floating on the surface. You just see a beautiful lake and there’s always something of dirty things.

But curators see reflection, you see what’s brought them and I feel that a lot of things very interesting like that piece Ai WeiWei piece its nowhere no,  actually I don’t he will ever be published. I think it’s about absence. It’s not the beautiful statue is absence, is something we talked about, these very difficult Chinese term called the ‘dan’ meaning insipid. Insipidness, how can insipidness be beautiful? It’s boring right? How can boring become bland become beautiful?

CD: Bland.

WH: I feel still modern people still try to remember it, some artists not all artists.

CD: So a curator cannot afford to be cynical but you can suffer as a curator...when you look at the prices of the Chinese auction houses you must suffer!

WH: I can suffer... I am sure you suffer a lot and especially you do visual art I feel, oh my god, I had to watch hours and hours and hours in the hope to find that a 5 minutes, you know we have to go through it but art is there.

CD: Olav, should we stop being cynical about these local markets? About the Chinese paying too much money for art, are the Indians paying too much money for art? Should we stop being cynical?

OV: Yeah, I am not cynical about it at all so I will continue being positive or optimistic about it and for a couple of reasons.

Once thing is that these collectors, a fraction of them, after having collected that type of stuff and brought amazing prices and we are talking really about multi-million dollar prices for those types of paintings, they sometimes get into collecting something more seriously which requires more... a different type of knowledge of contemporary arts. So that’s one reason not to be cynical about it.

Another one is what I particularly actually like about China and the way art is being marketed there is that it also has a refreshing directness about it. I mean here in Europe and in the United States, of course, still the model is even in the upmarket, even in the galleries is that you shouldn’t talk about money. I mean it’s all about commerce but don’t mention it. And there it’s the exact opposite. It’s about commerce so let’s be as in your face about it as you can. So you really still have those practises there of artists that will bring their own work to an auctions house and sit in the front row and see and participate how the work is being bid up and it has something refreshing to me as well.

CD: Back to the news. Two weeks ago at the occasion of Art Basel in Hong Kong, the Financial Times published this special, it’s called, of course, ‘Collecting’ but I think that the first essay, the head one, on the front page was kind of interesting. It’s called ‘Beyond the Samosas’ and this essay was interviewing witnesses, artists, curators and these people, Aaron Cezar here from Delfina, were saying let’s stop this whole regional thing because what the new thing should be is that we are connect Latin American artists with Indian artists, Chinese artists with artists from Angola. Is that a gimmick or is that something which you as a historian can you live with that?

WH: I feel it’s a particular agenda and prospective just to see local artists in a kind of international framework because that’s typically like a Guggenheim they are doing that. They select a particular kind of local artist from a different place. If you ask them they have a reason. They say we are looking for that particular kind of artist. They are international, they are transnational so they are very clear. I feel it is a particular agenda. It doesn’t represent a place, represent a particular kind of natural being ambitions from

CD: How do we feel about that Elvira? Is that something you would like to propose to the Tate Modern? Say we want now to go beyond the cliché of the national identity?

EDO: Beyond the Samosas...I think samosas are delicious but anyhow I think one of the things that I will add to that is that we are trying to do a list at Tate and with the strategy in Africa is to also rely on local expertise. The way that you avoid the list, the given list of 100 most important artists in Africa is that. Is to work with local expertise, to work with local artists that are the ones that are defining their countries, that are the ones that are in contact with their society, with their communities that surround them but also they are the ones that are creating these conversations, global, south to south, in defining a global arena in the sense that somehow escape the west and I think that’s the only way to escape cynicism. And I think this is also something very important is that what are we going to tell as a story about these regions within the international context, the Tate collection for instance in this case operates but also I think one of things that you were saying Olav is also important, is what are these local stories telling. And I think there is going to be a moment where we are going to see a conversation happening locally that is not necessarily the one that we are going to have a conversation here in which we include certain figures that will help us to tell a story Tate way, there is not necessarily this story that other countries, regions collectors are going to tell and I think that is also crucial.

So there is a moment in which the popular and the significant are going to be classing and I think this is a very interesting moment and the fact that we won’t have ways in which to consile those histories, to agree on those histories for me is the most beautiful aspect of this job. As a curator I feel like very engaged with the possibility of embracing the uncertainty. Yes?

WH: I have a question. I just want to say Guggenheim that’s actually very understandable for the New York audience, you present this kind of artist, everybody can immediately understand but as you say we want to represent the local story and the local memory in a city like London or New York or a different place like in Marmaris I say somehow insert them into a different system, different kinds of cultured history can we actually do that or we have to do some kind of very complex translation and in the process of translation we turn them in to someone else. There is a possibility...

EDO: Well I mean there is obviously and I agree with you there will be something that will transform that but what is interesting to hear now is that as celerity will say this is not only creating a history or creating a new history but repairing. So reparations is a thing here. I mean it’s not that we are going to be corrective but we are going to tell a story that was actually happening, you know, like people like Ibrahim El-Salahi was already in touch with people in the Mbari Club in Ibadan in the ‘60’s and they had conversation with this Spiral Group in ‘60s New York at the time. We haven’t told the story yet. We are going to tell the story through including his work in the collection. So it not about inventing history, it’s that putting in the platform things that were neglected or overlooked.

CD: Olav, you are writing in our red book about contemporary art and its commercial markets. You are saying in other words that super wealthy collectors, they behave more as taste followers than as taste makers. The economic power of these collectors may be enormous. Their cultural power is very limited. Is this helping us to not, I mean, regulate a little bit this new markets, that we say ok let’s not make the same mistakes as in the past. How can we increase our cultural power over these artefacts, these new works of art? Should we do something extra? Should we do something which is firmly saying, you know, we want first to culturally establish these things. Maybe we need new institutions, institutions which are not about curating but about remediating because, you know, remediating means correcting and improving. Would it make sense to reinvent institutions in order to protect and to create more of a kind of cultural power?

OV: Let me just, I mean you present a bit out of context. Let me first, let me say a little bit.

CD: I am not a journalist.

OV: What I mean with that phrase there, I think there is at the moment in the art world this discourse. You can put names with it, Isabelle Graw in Germany very strongly who talk about this in a global art world about this dealer/collector figure. So what she is basically arguing, and I think a lot of people in the art world agree with her, is that in this new global art world/art markets the people who determine the cannon of contemporary art are more and more the art dealers, super powerful art dealers, and their superrich collectors. They are billionaires whether they are from Russia based in London or in China or in Sao Paulo or just in the old centres like London and New York, they would be determining the cannon and I don’t agree with that. I think that collectors, especially collectors in these newly rich economies, these new billionaires, that they are in a tremendous need of legitimation. They are in a tremendous need of hearing from all kinds of institutions, including the Tate that it’s really good what they are doing and they are looking very closely and what is going on in the old world institutions, at the Museum of Modern Art and the Tate and the Centre Pompidou. So they are not making taste, they are following what the institutions are doing. That’s just the context...

CD: Ok, that’s number one. But number two, question to the three of you, in order to do things differently with these new works of art, artefacts do we need to reinvent our institutions? Do we need institutions which are not as much about curating, which is selecting, embodying with meaning but maybe remediating which is improving, taking care, correcting. A kind of new type of institution. Modern anthropological museum, not an entomological museum, not a Tate Modern, not the Guggenheim. Something new maybe?

OV: Why is everyone looking at me? I mean partially things are being reinvented. I mean the Tate is reinventing itself partially with its acquisition committees and....

CD: I am just the moderator, I don’t...

OV: Yeah, yeah. So I think there is quite, I mean it’s not like the present institutions are non-responsive to what is going on in this limited global art world.

Would it need like entirely new institutions built from scratch? Well I don’t think it makes much sense to talk about it in such a way, as if you can design them like on a drawing table or we are in this world now so we should have that type of institution there and no that’s not what is happening but I do think that all the present institutions, the way the biennale’s work, the way in the market the fairs work, that they are reinventing themselves permanently. I think everybody realises right that now the dynamism of the present art world, you cannot stand still.

CD: Wu Hung?

WH: You raised two questions. The first one I think your remark, your writing is very interesting because as a historian I think that your statement really challenges the old notion of patronage because in our history we, since the 1980’s, there is a brand of art historians that place very heavy emphasis on the role of patrons, basically like Maddie Chu, like those kind of powerful patrons, they define the taste, they chose the best artists then they were followed by other less noble...whatever.

So what you are suggesting maybe that’s a new condition. Right now the museums and other institutions, even art fairs whatever, who chose those works. The selectors’ initial people who screens artist’s work so...that’s just a comment. I feel in the current condition maybe what is real patrons? Even the notion of patrons. Who patrons now? And what is the role of money in this? That’s become really interesting.

The second one about museums actually is related now exactly your question I am thinking about when we thing about museums we immediately think about the British Museum or Metropolitan Museum, these kind of what we call super or encyclopaedia museums but I feel we have to put it in a historical perspective because these kind of museums resulted from particular historical condition basically colonially, imperialism and today no other countries can do that anymore. No other country can go to Africa to collect all this work, go to China to take away all these statues. So that what to do with other countries now, how can you have museums even, if a country, China has a lot of money but you cannot just buy a museum like that.

CD: So how are you doing that?

WH: Exactly. So that’s really if you come to this kind of encyclopaedia museum can represent different cultures, less than 10 in the world, some are smaller. I mean the big ones you really can cover every period, every country, that a totally new notion of imperialism.

What can China do? Actually I have been talking to them and talking to India and some other, maybe there is a different notion of museum, just a collection is not really important because collection means possession. You just possess things through markets, through powers, through army, who bring things back often break them away from their contacts.

CD: Exclusion.

WH: Yeah, something’s were created apart portably that’s fine. Something’s actually belong to the place. You have to physically take them away. So I feel that’s really terrible, unhealthy acquisition in the name of beauty we still enjoy them. But today I feel maybe that sort of museum is now really our dream, our purpose is not to add more collections especially from other places but rather something more...like things can move or people can move. You don’t have to see everything here you can go there you know. You want to see Africa, you go to Africa. It’s not in New York. You see it there you can see everything. That is sort of my notion. Museums should change, should be challenged, should be criticised. Sometimes condemned! Anyway, so I feel like we can have a new version of an exhibition, museum artefacts and people.

CD: So the Louvere in Abu Dhabi and the Guggenheim Abu Dhabi is your ideal museum then. 

WH: No, actually I am sort of on the community with Guggenheim. I have a difficulty to see a big, these looming beautiful like mirage in the desert and the Guggenheim is selecting artefacts for the museum. I don’t know. I feel that’s not the issue I am talking about.

CD: What is your idea of place?

EDO: Well my idea is that museums have always been about the truth, about certainty and I wonder what will happen if museums start to embrace uncertainty. If museums start to display questions instead of presenting the history as it is, if we embrace the moment that we are living as something that is transitional ephemeral that refers to that and maybe in that sense collecting is less important and it is more important the programme and how the programme brings this other context. You know when you think about the notion of the museum linked particularly with colonialism was one of the, not together with the census and the map which one of the things that helped to shape and confine the colonised countries. If we think that in reverse, if we think about how we want to engage in a conversation, in a larger conversation, with people and cultures from other regions maybe what we need to do is something that is, as you were saying, mobile, more ephemeral more flexible, more organic there are loads to that. I think in a way we are doing that with all the programmes that we do at Tate in relation to the exhibitions that we bring but also what our colleagues are doing in learning what we are doing through projects like turbinegeneration or there’s that connecting schools because I think learning processes is also very very very important for this so uncertainty and the way that uncertainty reflects on things that are immediate that I think this way.

CD: Olav, you are a sociologist and I know sociology is the art of asking the right questions in order maybe to find a perfect answer. I am going to ask you a question maybe not perfect but how can we for god’s sake organise a museum of uncertainty? How do you do that?

[laughter]

OV: My god!

CD: You want to think about it?

OV: Yes.

CD: Ok. Give us an answer in half an hour. The floor is open to you and questions for Elvira Dyangani Ose, Olav Velthuis and Wu Hung and don’t forget Olav, you have half an hour to think about my question.

Who has a question? We need a microphone. You want to give a remark, that’s also possible.

The remark here on the second row.  Please tell us your name.

Audience 1: My name is Youngsook Pak. I am a Korean art historian, formally taught at SOAS and Hung is very good friend and colleague so I am very happy to be here.

Since I have been teaching art history I am educated in Heidelberg in western art history and East Asian art history. I found Europe has a great tradition, however in many cases I found Europeans fairly Eurocentric. No matter how long I am living here but I still find in every aspect. For instance, Elvira already mentioned that in the early period in France they showed African art in Ethnography Museum while Egyptian art in Louvre. For instance, that is their concept of ancient culture. Except China Europeans have very little knowledge, except China and Japan I must say. Very little knowledge on Korea as well.

Just coming back to your comment on localisation versus globalisation and here local galleries and European galleries show mostly contemporary local artists. It is not the case in Korea for instance. We have Samsung company built famous modern contemporary art museum which was built and the most famous contemporary European architect were invited to build this museum, for instance Renzo Piano and Frank Gehry, they all participated in this new building and I was very pleased to find in the museum Yousef, Bouise for instance, great German artists as well as Damien Hirst, also represented there.

CD: So what do you...

Audience 1: My question is, in many other parts of the world, except India probably, China and other parts of the world they are more interested in globalisation, in art and culture.

CD: Than in Europe?

Audience 1: Than in Europe.

CD: Ok. Olav?

OV: Yeah. I mean the example that you mentioned, there are many of them. By the way it’s interesting that it’s always a small group of architects Gehry, Jean Nouvel, Renzio Piano that are building these global museums all over the world. But anyway, I really don’t agree with that it is something about Europe or the United States. It is in China as well. If you talk to European or American, I am sorry that I am making references to the markets all the time, it’s my specialisation, but if you talk to Europeans and American art galleries who are active in the Chinese market and they tell about the difficulties they have to represent and promote the work of European and American artists there. They have to have a very very long breath. It is not something that is going overnight.

In Brazil not that last but the art fair of last year which was a great art fair, there were I think about 5 galleries from outside of Latin America. There were hardly any artists being presented from other regions than Latin America. It was an extremely local affair. Extremely dynamic, extremely interesting. I mean these are not judgements about qualities but this local orientation of art worlds I honestly find everywhere and there are many exceptions everywhere just like the one you mentioned but it is not the norm as I encounter it in my research.

CD: Another question.

Audience 2: I was just wondering how global the panel thinks what we are talking about is, if you think about the countries that keep getting mentioned and I thought about this not long ago, Brazil, India, China, Azerbaijan, Angola, Nigeria, it seems a bit diverse but the commonality is that these are countries that in the last few years have had GDP growth of over 7% and have an incredible dysfunction in the spread of wealth. So it’s about the commerce driving globalisation. I was just wondering what your views are on this.

CD: Olav?

OV: Well, yeah it is one of the drivers. I think why there is a moment of globalisation right now is, of course, partially because of economic globalisation and because of wealth in these countries, usually it is wealth that is spread very unevenly so a small class of very rich people but it’s definitely not the only driver. I mean there are many other drivers. Of course it also has to do with migration more generally and museums getting interested because they want to be in dialogue with the society that they are in and it’s a multicultural society.

Another driver is the art world itself. I mean what has been briefly mentioned, this search for new geo-aesthetic franchise. A curator can make a reputation by kind of well, yeah that’s the way it is, by at least it’s the way it used to be by finding this new region that nobody didn’t think of yet and hey we find some very interesting, and this is not meant cynically, we find some very interesting art being produced there as well. So well let’s try to introduce it in this or that biennale and then it filters into the system.

So that it has many different drivers and I think the reason why the current moment of globalisation is relatively strong, if limited, the reason why it is also strong is that you have a couple of those motor engines working at the same time in the last, I would say, two decades since the late ‘80’s.

It also, of course, has to do with like in China and in Russia with just political reasons. With the collapse of...

CD: Wu?

WH: I follow your last sentence. I feel economy, of course, very important but there are two other factors and I want to emphasise one is technology and another is politics, political condition.

Just now thinking about internet, computer as taste makers. So anywhere you can see almost same thing if you want and also talking about different countries you are totally right. Each country had a different condition but somehow you see after 1990 or the 80/90’s the movement of the people, the artists, they travel including the biennales and this kind of movement also plays down local political conditions like China before 1980’s people couldn’t move. I couldn’t go out! I went to America in 1980 and most artists, thousands, moved to different parts including London in the early 1990’s. So that is a globalisation on these kind of individual levels. They moved around and now they go back to China, you know most of them go back to China. So that’s very interesting so we see this....

EDO: And I wanted to follow up in your last comment to say that another thing that drives that kind of phenomena is the diaspora, the role of the diaspora and also the role the diaspora plays in creating ownership because all these comments on local culture is about owning, you know, the narrative, being the agent of your own narrative, being the narrator of your story.

CD: And now we have after the diaspora, we have even a new phenomenon which Achille Mbembe is describing also which is, of course, China taking over Africa. Right?

EDO: Indeed, yes.

CD: Go to Bamako, go to Ouagadougou Elvira, I mean you are travelling a lot in Africa and what you see are not the Belgium’s or the British of the Germans but Chinese. So I wonder when the first Chinese museum will be in Bamako.

EDO: But I think in terms of that, I think the conversation between China, I think it’s happening in two different rather lists but I can tell in my experience in Lubumbashi you have that conversation in the political realm so it’s authorities talking to authorities, corporations talking to authorities and the other way around and also people imagine a different world like there is sort of a different demographic. In 50 years or 20 years we will have these new kids. Michael MacGarry the South African artist is calling one of his series ‘Chocolate City’ which are a neighbourhood made sort of in full by immigrants from Africa living in Chinese urban areas. So I think that conversation is happening in a way. I don’t see much happening in the cultural realm. What we are seeing is the witness, like how photographers, artists are reflecting on that kind of conversation but I haven’t seen yet the museum or like a very much integral conversation between these two communities.

CD: Question? First gentleman over there? And then you.

Oh sorry.

Audience 3: Just to pick up on your point there is that I am South African but I live in London and I am very aware that the art world in Africa is quite fragmented and I have South American friends and where the South American art world generally, that’s Brazil, the whole of South America is not fragmented and it seems to me that if we are talking about the role of places like the Tate of big museums and biennale it’s both to mirror the local culture but also to act as a repository from which people can act. So it’s both something that is deep and also generative and really just to think about how that might be achieved in Africa.

EDO: Well I think that you are totally right. On the one hand because collecting hasn’t been, at least privately and in terms of public institutions, hasn’t been that prolific in the continent.

First of all I think in the case of Latin America there have been all those conversations happening and in the case of...and it also has to do with the language...most of these Latin American countries speak in Spanish. What happened in Africa is that you have the Francophone areas talking to each other, the English speaking countries talking to each other, the Luciferian countries talking to each other and that kind of regional configuration, they respond to that, also in terms of the culture that they present and as I say because they were not strong or as strong as they are now at collection or collecting activities. The festival had a crucial role. If you think about 60’s, when they needed to set up the cultural policies of Senegal became the main motive of a city but also a way of understanding culture throughout decades until, you know, the new government replaced those policies in the 80’s.

If you think about how for instance the importance of the discourse of  negritude but also Africaness in the countries of Algiers also reunite everyone and told an idea that pan-africanism  could only be what was happening in Dakar because it was more about blackness and that excludes the North Africa or if you this about Festac and I think about Festac in ’77 which for me is the most important of these different festivals throughout the country that the period because in the Festac they were asking the question about the black and the African world together and they were looking at not only what was happening within the region but what happened around the world with black communities  that were as far as you know in Russia. All those communities. There is an incredible book called ‘Lagos Programme’ which looks at twenty years time from the ’77 to see how culture and education will embrace those aspects. The problem was that the programmes, the economic programmes and the World Bank in the ‘80’s killed those ideas and people started to be worried only about what was happening in their own communities, in their countries, look at cultural policies and the pan-African conversation never took place. So that is why for instance like in a place like South Africa you had the cohesive Gibran art scene and in places like Dakar it seem that there is a momentum sort of like months before the biennale and right after but then you know for almost a year and a half things sort of like fade away although there are people responding to that and in Bamako the same.

I mean what is interesting is there a very rich and vibrant art scene in all these places and what we are trying to do for instance is not to, I don’t think it’s the role of a museum like Tate to create...to be the depositary of the knowledge. We have to help and if that is what they want to produce these things there locally. Once of the scenes that I encountered when I was in Ghana recently and invited several people from different areas is that they are having several conversations that are almost the same. That they are talking about what is happening in the public sphere, they are talking about how the artists engage with society in the local context and that conversation is happening in Johannesburg, in Addis Ababa, Bamako, Luanda why does these you know things connect more? Why don’t they connect in a different way? So this is something that we can provide, have a conversation between different protagonists for that to happen. But in general these things are happening. There are local experts that are taking care of that so it’s not our role to do it. It’s our role to be in the conversation I think.

CD: She’s good no? Third row, your question.

Audience 4: Thank you. My name’s Lang. My question is to Elvira, because just now our conversation didn’t use the power directly but everything we talk about is about power so we want to think about the power in the art industry. Do you believe that we are still on the continent we call the postcolony coined by Achille Mbembe postcolony do you believe that there are only western artists versus the non-western artists giving the example do you know Venice Biennale this time there are other than the Chinese pavilion there are more than 300 Chinese artists went there then why is this phenomenon and usually in recent years a lot of Chinese artists come to New York or London to help their exhibitions not necessarily to be invited by those top level institution but they pay the venue themselves and then they write this exhibition on their CV and when they go back they can show off, ok I had an exhibition in a certain western place.

So what do you think? Is it because they are non-western identity? Are we still the post-colony something?

Thank you.

EDO: I mean I think in a way I agree with you. There is very much, it’s a question of power I agree with you totally. What we need, for instance like think about the Angolan pavilion that now wander the golden lion. Is this going to change the art in Angola? Is this going to change the way in which we perceive the art from not only Angola but other places in Africa or other areas in the world. This is the question. What is that about? Is that about sort of like our knowledge in recognising that they cannot change.

I think what is important is that and this is what I learned from my research in Africa, is that people try to create new role models and maybe the museums that they are embracing is not the museum that we know. They are doing platform art centres, companies, things that somehow are more organic and help to create an easier conversation, a more nuance conversation with things that are happening locally. That doesn’t mean that it’s not connecting with the rest of the world. It connects with the rest of the world in their own way.

What we need to think is what is the definition of success? Is success to be displayed at the Tate Modern? Or is success to be you know resourceful and provide different ideas and different elements in locally? Is successful somebody that goes to Bamako and then goes you know to the Bamako in countries and became you know displayed in New York? Or is successful somebody that maybe had used that success in order create a Biennale for the artist locally to display their work and be presented you know beyond the framework of the local.

CD: It may be interesting to ask our sociologist also how can you...are there new ways of measuring success which is equally important for alternative institutions by the way?

OH: Yeah, this would be typical I would remark to a student that an empirical question that is easy to find out and this is partially what we do. You can just ask artists what are your aims. I mean what would be your biggest dream, what are you achieving for. And what we hear a lot in our interviews is still that they want this solo show in an institution in Europe or the United States. That’s unfortunately...

EDO: But then do you think that this is a construction like the taste, like being at the Tate Modern, having a large show at the Tate Modern is a construction...

OH: Of course it’s a construction. Of course it’s a construction. It’s a construction absolutely. But it’s a real answer. It’s a real dream.

WH: Yeah, the question you just mentioned the Venice Biennale that’s amazing to me. This kind of army of Chinese artists and I wonder actually [inaudiable] I don’t have answers but just talking about powers still, where is the power located there? I still return to your answer. The power still is held by the curators, the gatekeepers and these people, 300, try to the gate but they are still outside. So I feel there main audience is in China. They go to Venice, they can tell the people in China oh I was here you know among but for the mostly international curators in Venice they are still remain outsiders. So your gatekeeper is I feel is an interesting phenomena.

CD: Jurit Nesbitt

Audience 5: Thank you. We hear a lot about the hundreds of museums that have been built in China and there is a very common place observation that they are just buildings and there isn’t the software, the people, the expertise, the art to fill them but I would very interested to hear Wu Hung’s response to that. What impact do you think these museums will have over the longer term and if you were emperor and in charge of all of these hundreds of museums what would be your dream for these museums?

CD: He said he doesn’t want...

WH: Definitely not emperor! But it’s a good question. It’s really I see [microphone distortion] you know it’s a transition from like China was dominated by politics than dominated by many markets now the culture becomes catchwords so culture. So right now these museums are still hard words, they are not soft words yet. They have these buildings very one big than the other but they don’t have people, they don’t have a good show, they don’t have a curator, even handlers so I feel in time there will emerge a public culture, people go to museum, maybe new kinds of museums. So I go there I don’t work to talk about the just use MOMA or use metropolitan as a model those are experienced, those you can use including Tate.

The important thing I feel, they have a lot of younger directors, younger curators. They can talk to people here. What would be the next generation, next future now based on the past, based on what’s going on here including our discussion. So I feel it takes a lot to realise including what kind of museum, private museum and government museum, public museum. The definition is, at the moment, very confusing. I feel it’s a process.

CD: You had a question.

WH: He is a curator himself.

Audience 6: But I don’t have any comments on the Chinese army artists in Venice.

Following your discussion on the museum Olav,  I would like you extend a little bit about the re-examination on the notion of museum particularly when you say that some artefacts or artworks can go back to the original context which will make a lot of sense and it’s sounds so encouraging that some artefacts in the super museum can find their way home but I think on the other hand but within the museum that the collections, some artefacts or artworks, they are produced for exhibiting but some are out of the context. So would you like to discuss a little bit more about this please?

WH: You mean produced in China?

Audience 6: I mean not necessarily in China overall because some artefacts are produced for exhibitions and some...

WH: ...these ideas of art emerge that arts were produced for no exhibition, collection. I feel in that case but still there sense of context. Like here the third question is that art can become a kind of way to connect people, to make people in different places to understand each other. I feel that’s part of an idea, art should travel, so including all sorts of art should travel, like the thing that art created for exhibition or art not created for exhibition but for separation from...I feel right now just how to travel is the question. So I talked to big disgruntled Chinese museum. I said you have the money, you can use this money to buy things. You can also use money to fund the high quality temporary exhibitions. For example you buy one little painting, you can probably organise ten good exhibitions from anywhere around the world, then the people in the city you have this stream of exhibitions from anywhere. That’s much more important then so-called permanent collection.

I just feel just from receivers end that what a museum can do to the community, to a city, even a city like Beijing and Shanghai if there is, say, hundreds of museums. I think it’s thousands of exhibitions would be better just because exhibitions represent ideas, curatorial ideas, not just objects. Because in exhibition there is gender, there’s a new plan, there are new aspects I feel... 

CD: Question and then you. In the middle, seventh row.

Audience 7: Hi. Thank you for that. I was just wondering you haven’t talked about the authority of art schools that are for most of them in Western Europe or America and also about how local the artist is when he wants to study in such a school. For instance, Shonibare and then comes back to his county and gets an international representation.

Anybody?

EDO: Well I think in the case of African countries there was a very interesting initiative in the ‘20’s in Lagos, Nigeria lead by Aina Onabolu who thought that he wanted to have art schools and art education as part of the curriculum of middle school. So that is to put to you an example of somebody that within his own sort of practice decided to learn art and art will be something that any human being should have. After that in the ‘30’s, ‘40’s, ‘50’s they had been a number of art schools in Africa that were sometimes lead by colonial administrators, colonial teachers etc that somehow also lead to different understanding of the arts, sometimes where you know art is where following specific curriculum that was exactly like the one that you will be taught in Paris or London but some other in other cases like in Lagos with Benin for instance that will change and will ask the artist to look at the inner self to transform that and there are many cases modern art schools in Egypt, in Sudan, in South Africa, in many places where the artists and the local authorities and local artists create a new understanding of modernity,  their own understanding of modernity through that in which many cases has the western world asked as a way forward but in other cases was, you know, linked in the case of Sudan for instance with koranic art school, koranic school sorry not art, and a different understanding of how the visual vocabulary of those, you know, different places happened.

What happened in most cases is in the ‘30’s or 40’s depending on which area you are looking at. For instance, if you think about somebody like Ernest Mancoba that had to travel to Paris in order to produce his work because he was limited by the South African understanding of the apartheid and the South African understanding of what a black man could do at that time. He had to go to Paris, he travelled also to London and connected with the Cobra Group for instance, people like Gerard Sekoto happened to the same but somebody like Ibrahim Al-Salahi for instance was educated in the arts in the context of Sudan before he travelled to do masters studies here. So again it’s of course there is a western colonial power behind the idea of art education but there were also examples before that were linked to art education as well and we have to also take into account the traditional understanding of the art, if you think about somebody like Benny Voodoo. The way that he conceived art is an igbo understanding of the arts. So he is an igbo man and wants to reproduce his work as it was conceived as connected with nature, as connected with a specific cosmology. So art in that case also refers to or arts education in that case also refers to a local system. An artist in the ‘50’s somehow challenged a curricular, for instance the Saudi Arabian’s in the late ‘50’s in Nigeria they challenged the British curricular in order to achieve a different aesthetic that connects both their post colonial subjectivity and their tradition to produce some examples of things that were happening in education.

CD: First over there and then you. 

Audience 8: Hi, on the note of it all going global and I would like to make a short remark about Hong Kong. I think Hong Kong is maybe a bit of an extreme example. If you look at how Art Basel took over art, they just came to Hong Kong. So it’s actually it’s like part of a globalisation and this kind of globalisation is not only on a cultural level but then also on capital, like for example with USB now is going to sponsor Art Basel HK next year so DeutchBank is being kicked out so this is also a kind of globalisation. And then during the art fair the international galleries, western galleries in particular, they did really well in terms of the sales but then for the Asia-pacific galleries like from what I know is that they have to struggle for the first few days and then....

CD: So what is your question?

Audience 8: Well my question is, in the other Asian cities they are all very curious of Hong Kong’s situation and that actually they aspire be Hong Kong, like for example Singapore, so I am just wondering if Hong Kong is actually this window or a gate to globalisation for Asia as a whole.

Thank you.

CD: Wu Hung or Olav maybe?

WH: I can say a few words because we were talking about it, Hong Kong. I feel again just to return to my earlier suggestion, I don’t think Hong Kong is really either local or global. Actually it’s established the current situation really is supported by these transnational museums, galleries and the art fairs. Somehow they have this idea, it’s a global mapping, but Hong Kong is just exactly because it’s both, it’s a hybrid. It’s both English, there language and Chinese. They are very close to all these Asian and Chinese cities so it can become like a very ideal connector. So I feel it’s really maybe represents. As you suggest, it’s a kind of new networking. So these very powerful institutions try to find those space which is both global and local you can form some kind of pattern.

CD: And a new word, hybrid.

Olav?

OV: What is interesting about Hong Kong is that it is one of the few new art capitals that is not completely but quite disconnected from a community of artists. Of course there is a community of artists, a very vibrant one, but not as vibrant and not as big as it would be in, say, Beijing or especially in Beijing or in other Chinese cities. The reason why it became in a very quick time like only over a couple of year why it became such a strong centre in Asia partially had to do with very mundane reasons that for, especially for, the galleries and also for the fairs it’s much easier to organise things there because there’s much less red tape, you don’t have the taxes that you would have in mainland China. So there are very mundane reasons why Hong Kong got there, which also means by the way that it could be kind of a fragile situation.

Coming back to those European galleries that did very well there, yes they did indeed very well but not necessarily selling to local clients there. They also sold a lot to like Europeans and American collectors that were flying in to Hong Kong as part of this whole welfare biennale circuit that has emerged.

CD: Last question. Very last question because Olav still has to respond to...

OV: That will only take 5 seconds so you can easily put another...

Audience 9: I was just wondering how globalisation will impact, whether your views on globalisation in relation to art history and how those new art coming from China and those new emerging places could be incorporated in this discourse which is fundamentally European or Europe centric, I guess. So I was wondering your thoughts on this issue concerning yeah...

[inaudiable]

CD: Can you speak a little bit louder? Just...

Audience 9: Yeah, how do you think, how will it be possible or how art history as a European mainly discourse from its origins...

WH: So we return to art history.... [inaudiable]

Audience 9: Will be able to embrace or to incorporate.

WH: So you know, you must know, the recent years has been a trend to try to find, to write a kind of global art history. It’s not just a European but all different cultures. There are some efforts by colleagues and including myself. It is very difficult because the result can be very boring, just like different chapters covering just like you put ten books together as one book but there is not actual connections. So I feel people are still trying, trying very hard. There is a different ways, so for example talking about the interactions, it’s not chronology but find the interactions, like colonialism, even before like a circle like people travel, objects travel. Use those as a kind of narrative strand. That’s one possibility.

The other kinds of evidence, so every culture went through  for example from these crafts to art stage, like they created ritual art, religious art and then gradually the birth of the artist, every culture went through that. So we can talk about the evidence once we study ancient art. It’s not just ancient Greece, Rome but it’s about archaeology. We all use archaeology as our evidence. What we, we began we talk about artists, biography, painting, portable, easel painting, and scroll painting. So I feel those parallels can provide a very strong methodological tools. So I feel that sort of I have been talking to my colleagues.

CD: Interesting. Olav, can we organise a new type museum, a museum of uncertainty?

[laughter]

OV: On a very general level I think museums are by definition in the business of uncertainty. I mean because the contemporary art is about uncertainty. What contemporary art museums are doing, not knowing how an audience will respond to the way it puts together it’s exhibitions but also much more fundamentally that being certain itself about artistic worth and what will remain worthy in the long run. It is already about uncertainty and I think they are also limits to the amount of uncertainty an audience can bear so please don’t make it more uncertain than it is already.

CD: So will Chinese contemporary art, will it stay forever?

WH: Contemporary, contemporaneity stays forever. Contemporary art comes and goes. Actually the terms itself was meaningful in the ‘90’s because contemporary art as a term carries a lot of meaning in China, political, alternative but we know just a word like here is contemporary art [inaudiable] something we don’t know.

CD: Elvira, contemporary African art. To be taken seriously?

EDO: It is taken seriously. Just wonder when it’s Golden Lion. More settled than that.

CD: Ladies and gentleman, global citizenship and culture. Angola one the golden lion to the best national pavilion. I think we learned a lot today. One of the first things, one of the most important things is that talking about global citizenship is not, we cannot afford to just talk about economics, about religion, about power. Because so many things are coming together finally in this thing called art, artefact, work of art. We don’t even know anymore how to name it and maybe the naming of this thing is becoming another form of interesting certainty.

What we do know, what is a certainty however, is that we have to stop being cynical. We have to stop being cynical about for instance the Chinese auction houses. Are these incredible prices some collectors want to pay for Iranian art involved in Dubai. Stop being cynical.

Maybe local memory is as important than local taste. Do we really still know what is going on in the ‘40’s, in the ‘50’s, in the ‘60’s? And maybe we have to give up this linear concept of time because things are coming back in cycles, especially when we start talking about global art.

And maybe we have even to invent a new type of museum. Uncertain, mobile, stop possessing, we don’t know yet and even a new form of artistry.

I would like to conclude with the following words: global citizenship is not the same as global art and global art is not the same as global citizenship but citizenship, our civitas, our civic society spreads over the world and we have to work on that, that society is getting even more civic and not do without art because art is just as important as religion, as political power and definitely as economical power.

Thank you so much Wu Hung, thank you Elvira Dyangani Ose, thank you Olav Velthuis...

[Applause] 

I still have one minute to go.... and thank you so much all the partners, all the project partners. I would like to thank Accenture, Africa Progress Panel, Barclays, SOAS, Zamyn and especially our director, director of Zamyn, Michael Aminian. Michael thank you so much. Thank you Marko Daniel. Thank you everybody. Thank you.

[Applause]

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Video Transcript

Resources | Thursday 6 June at 7.00pm

Chair: Robert Guest

Speakers: Caroline Kende-Robb, Walter H. Kansteiner III, Tito Mboweni, Ben Okri and Simon Taylor

Caroline Kende-Robb (CK): Good evening Ladies and Gentleman.  My name is Caroline Kende-Robb, I’m the Executive Director of the Africa Progress Panel, a Foundation chaired by Kofi Annan.  It is my pleasure to welcome you all here this evening to the Zamyn Cultural Forum at The Tate Modern here in London.  This evening’s event is one of a series of events focusing on political, social, economic and cultural issues related to globalisation, citizenship and identity.  I would like to give a very special and warm thanks to Michael Aminian and his team at Zamyn. Thank you Michael, thank you so much, you have put together a very interesting serious of events and your incredible dedication and commitment are truly commendable.  [Lots of clapping]. Yes please, thank you. Thank you also to Marko Daniel from the Tate who also has done fantastic job at pulling everything together so thank you so much [More clapping]. Of course I must also thank the sponsors, Accenture, Barclays, Penguin Books, SOAS and the Tate as well as the Africa Progress Panel.  I think we can all be very proud to be associated with this event and I am delighted to be introducing this evening’s theme on Natural Resources and I am sure everybody in this room is very aware that this is a very complex subject and can be extremely contested at the same time.  I am delighted to see we have an incredibly high level panel here this evening. 

So let me just say a few words to frame the issue. I just have a few issues to raise to basically introduce the topic itself. I think we all know the story of the butterfly that beats his wings and somehow through a change of events unleashes a typhoon on the other side of the world and I think something similar is happening when we use natural resources.  Most of us here in this room use these resources pretty much every single day of our lives whether its fuel or even the whitener in our toothpaste and our actions and our decisions, some of them that we don’t even know about or don’t even notice, have an impact all around the world so I think this whole concept of globalisation and citizenship is very much embedded in this theme of natural resources.

I think that some of you may be aware that we wrote this report last year, in fact it came out in May but we started writing this report last year, ‘Equity in Extractives’. What a challenge is that?  When we started writing this report on oil, gas and mining in Africa we recognised that although Africa is riding the crest of a global commodities wave, resource led growth had yet to transform the lives of many people in Africa.  I think it is a familiar story and in many countries natural resources are in fact widening the gap between rich and poor.  Billions of dollars have been squandered on building personal fortunes often supporting corrupt and unaccountable political elites.  What we did not anticipate was that over the year the momentum for change would accelerate. Quite surprising, quite surprising when we look back. Indeed I think it is a really rare opportunity in global policy making that all these interests of different parties are beginning to align. 

Let me just briefly outline some of the significant changes that have emerged over this last year. So twelve months ago, who would have anticipated that the US mortgage crisis and the Euro zone’s predicament might improve global transparency and accountability? As austerity bites across many of the G8 counties, citizens are demanding fairness and action and this is really changed within the last year and I am sure you are all really aware of that.  Many citizens, they feel cheated and they will no longer tolerate secret deals, illicit financial flows and tax havens.  For citizens everywhere, in Africa, in G8 countries and other countries across the globe current tax practices raise questions about fairness, social justice and citizenship.  Such practices affect the grandma in Manchester up north as well as a mother in Mali but they affect Africa more.

Another significant development is a recent passing of the Dodd Frank Act in the US and similar EU measures that require extractive companies to meet highest standards of disclosure.  It was a surprise that these were past.  Now the G8 is on the case.  I think you’ll all be familiar with the discussions that Cameron has been having with the UK presidency putting tax and transparency on the agenda for the G8 summit this month.

In Africa too citizens are in opposition to the growing squandering of oil, gas and mining resources as evidenced in the under evaluation and mismanagement.  Indeed trade mispricing costs Africa governments in the region of 34 billion dollars annually.  Recognising the costs, some governments are taking action.  Like Liberia, Sierra Leone and Guinea now make mining contracts publically available. This is a huge step.  Ghana is strengthening accountability in the management of petroleum revenues.  Such actions strengthen the social contract between the state and its citizens.

At the same time many companies are now looking beyond short term profits towards long term investment partnerships.  These companies recognise the economic as well as the ethical case for strengthening linkages to local firms and engaging in local communities.  They know that sustainable investment needs a stable country and a social licence to operate.  What is emerging is that the silos of secrecy are crumbling and this is a shared agenda which is quite unique.  In which different parties have overlapping interests and similar goals and as Mr Annan states in the report, ‘Building trust is harder than changing policies, yet it is the ultimate condition for successful policy reform’.  He adds ‘Mutually beneficial agreements are the only ones that will stand the test of time’. 

So, in conclusion, I just want to highlight about five issues that we raised in the report and made recommendations:

The first is that the G8 summit should serve as a Launch pad for a rules based global system both for transparency and taxation to be developed with the G20.

The second, all foreign owned companies should be required to publically disclose the ultimate beneficiaries of their profitless secrecy. 

Switzerland, the United Kingdom and the United States, all major conduits for off-shore finance should signal intent to clamp down on illicit financial flows. 

African governments can work towards adding value to natural resources before export, securing adequate tax revenues and spending these revenues more equitably and transparency.

Finally major investors in Africa’s extractive sector, like China, and emerging investors, such as Brazil, must also engage.

So in conclusion, public scrutiny by citizens across the globe will continue to be a crucial force for change. As interests align and the context shifts everyone has a role to play the report says. In stewarding Africa’s natural resource wealth to transform the lives of many in Africa and across the globe. The report concludes that a huge opportunity exists in Africa and leaders across the globe in government, in industry and civil society must take action now.  The benefits of seizing these opportunities will not just transform the lives of Africans but will also be felt in countries across the world. 

So, just before I hand over I have a quick thank you to say to a lot of the panel members you see here this evening who all helped us put this report together.  It was based on a lot of consultation with different parties and different stakeholders. So I have to thank ExxonMobil, AngloGold Ashanti, as well as Global Witness. You will see all the really interesting thoughts and ideas about what we do with the extractive sector reflected in this report.  I think that is really important because we can see overlapping interests where people want similar goals and there are many, many ways in which we can look at these overlapping interests.

So with that it is my great pleasure to hand over to Robert who will chair this evening’s debate, thank you very much (applause).

Robert Guest (GW): Sorry that just fell off, I’m going to have to do this sitting down aren’t I?  Sorry, can everybody hear me?  Is that working? Brilliant.  Thank you very much Caroline. 

I’m Robert Guest, I work for the Economist Magazine, I’ve done that in various guises: I’ve been Africa Editor for a while, Business Editor for a while.  We’re a magazine, who about a decade ago, we did a cover story, quite a notorious one about Africa that was headlined, The Hopeless Continent, and the interesting thing is if you sort of look at a graph at what’s happened to Africa’s GDP growth per head since then it’s just gone up and up and up and up and up. So, I suspect that you can place deep discount on everything that I say. 

I’m not one of the speakers I’m just here to try to bring out the best in our wonderful panel today.  Let me just try to frame a couple of things before we start.  We are talking about natural resources, the things that you find in the ground. 

Now I recall, I think it was 2005 visiting something called the Kolwezi tailings in Congo. This was an enormous great heap of cobalt and copper tailings. That’s the by-products of an earlier mining process and basically at the time when all this stuff was dug up we didn’t really have the technology to process it cheaply and easily into pure, precious metals, copper and cobalt.  Now we do, so it is basically a big pile of cash lying on the ground, and the extraordinary and tragic thing about it is that it is still lying there.  This is not a small pile of cash.  I mean you get into a big truck and you can drive up onto the top of it and keep driving for some way.  It is absolutely enormous, it’s worth hundreds of millions of dollars and all it would take to turn that into money, the kind of money that could be paying for schools and roads and hospitals in Congo, would be for one moderately competent mining company to come in and process it.  That doesn’t happen. 

The reason why that doesn’t happen is because the government in Congo is absolutely appalling. Instead of trying to come up with a proper deal with a reputable company to process this, the people in charge are too often interested in just making a quick buck and then a few months later, someone else will just tear up the contract.  So it just doesn’t happen.  This is a tragedy; this is an extreme example of a tragedy that we see in many parts of the world.  There are all these resources there waiting to exploited, waiting to be turned into money that might benefit the people that live on the land where these things are.  It doesn’t happen because you don’t have the governance necessary to make it happen.  This is a really serious problem. 

Sometimes you find, again if you go to the Eastern half of Congo, where I was the year before that, you find that actually conflict can be fuelled by the minerals that are under the ground.  You find that when you can’t do business with a government the reputable mining companies stay away and the disreputable ones flood in.  And the low tech ones, just the ordinary people who are looking to pan through the rivers to get out gold or looking for diamonds, you find the war lords come in and they want to control the area to get an extract, to get up rents, to extract money from the small scale miners.

I recall going to a village, called Walungu, which is in the Eastern part of Congo, and talking to some of the people who lived there about what it was like living in one of the low-scale, under-reported, low-tech, civil wars that you find in too many parts of the world.  One lady I met there really struck in my mind.  Her name was Charlotte Numugali.  She described the night when the men with guns came to her house and they beat her and they took all her stuff.  She didn’t have very much, but they took her food and her blankets and her pots and pans and then they raped her and then they went away. Then a few months later they came again and this time they took all the stuff that the previous lot hadn’t taken and they made her carry them to her camp out in the bush.  Then they gang raped her again, then they broke her arms and then finally she was able to struggle back.

The level of human suffering that comes when you have people with guns fighting in a sort of chaotic state over trying to get a bit of money, a bit of gold out of the ground, a bit of diamonds out of the ground is staggering.  So, the question that we have is how can we make it different, how can we make it that the resources in the poorest countries in the world and the middle income countries become a blessing rather than a curse.  It may be slightly facile to say well yes they are doing it very well in Norway.  It is possible that proves only that it’s a good idea to be a functioning democracy with the rule of law before you strike oil.  However, I think it can work in other places and it requires the kind of cooperation that you need between governments, which need to be cleaner, and companies, which need to push them in the right direction.

So I am hoping that this evening we will be able to come up with some ideas, to discuss ideas about what the solution is to these problems.  So with that I think I am going to start with our first panellist, Sir Walter Kansteiner, who at one point was George Bush’s man in Africa, and is now ExxonMobil’s man in Africa.  So he has worked for one oil man and now another oil man.  Mr Kansteiner.

Walter Kansteiner (WK):  One is considerably bigger than the other!

RG: One is indeed considerably bigger than the other! So as a representative of the largest, private, oil company in the world, I mean many people would see you as the villain, others would say actually the situation would be better if more reputable, functional companies like yours were doing the work rather than the disreputable small ones. What can you tell us about how to solve this question we’ve outlined?

WK: Well thank you very much. Just to perhaps set the stage a little bit using The Economist as the…

RG: Kicking boy again!

WK: Yeah, exactly. To take the other side of it, seven of the ten fastest growing economies in the world are in sub-Saharan Africa.  By 2030 there will be more middle-class families in Africa than there are in China.  So what is this economic growth attributed to?  What’s going on in Africa that is being successful, perhaps for the first time in a long time? And there are lots of reasons. Part of it is in, and this is a bit of a counter to Robert, your story is actually better governance. Some African countries are getting it better, they’re getting it right, they’re actually committing themselves to infrastructure development, better health care, better schooling.  With that better infrastructure, comes economic growth. Maybe because we have to be, we are optimists about the future.

To your question about who owns the worlds resources and I think that’s kind of the cornerstone kick-off question and I think it is a good one.  The short answer is the sovereign government and the people that live in that country where God put those resources, that’s who owns it.

I think a more interesting question, is who develops this, we know who owns them.  Now I will say this, there is an exception to that on who owns it and that’s in North America.  Actually North America, who owns it is the landowner, he has the mineral rights too. Virtually, other than Canada and the United States, every other country, actually I think New Zealand might have it too, every other country the mineral rights and the ownership of those rights rests with the sovereign people and their governments.

So to the harder question, who develops that?  This is perhaps an idea that we are just coming to really understand.  The idea of a global shift and it’s a bit trite and perhaps very easy, especially for us in the west, to say that this global shift is the south south, the China’s the BRICS and they’re developing and they will be the developers of the natural resources in Africa and elsewhere.  It is easy to say that but the data is starting to show that in fact that is the case.  China today is Africa’s largest trading partner, by far its largest trading partner.  Thirty per cent of all Chinese investment in Africa today goes into the extractive industries.  As China and the BRICS, and the B of the BRICS of course is Brazil, Brazil is very keen on Africa, as they look to make these investments, how do they do it? What processes do they use? What assistance do they get?  That’s a really interesting differential for say the Western, and the BRIC countries. 

Sovereign government assistance, be it financial loans, grants become a very important part of how those investments are made by the Chinese, by the Brazilians, by the Indians.  So this creativity, and it is financial creativity, is very much a different pattern, a different paradigm and a real shift from what we have seen in the last 50 years.  But I will say that Africa’s starting to wonder about this relationship particularly with China. In 2006 President Obasanjo welcomed President Hu to Nigeria and he said, ‘The 21^st Century is China’s century to lead the world, take us with you”. Five years later Mr Sanusi of Central Bank in Nigeria said ‘China is no longer a fellow under-developed country, it is the second largest economy incapable of exploitation, we need to be careful’. 

So an interesting five year deferential there and so where this paradigm shift is going we’ll just have to wait and see. I will leave you with this picture.  So, as the Euro zone went into its 23^rd financial crisis a few weeks ago, the BRIC countries were meeting in South Africa, planning for the future.  I will leave it there.

RG: Thank you very much Mr Kansteiner.

[Applause]

 I’m just going to keep going from my left to right, just because that is easiest.  So Mr Taylor, you’re the co-founder of the Publish what you Pay Index.  You helped invent that idea and I think just recently Tullow Oil, one of the largest, independent, private oil companies in Africa has agreed to publish everything they pay.  You know, how much to each government, when, all that kind of thing. So you know, you could argue that you’ve been a great success here.  On the other hand, you could argue that actually this is mostly an exploration company and the big money is in the extraction, not the exploration.  So what do you make about, I mean how much of people listening to you, if you take sort of a very big oil company like, I don’t know ExxonMobil, how would you rate them? Be nice Simon, be nice!

Simon Taylor (ST):  (You know, you’re separate to some extent to Exxon in my head, I can be mean to Exxon without being mean to you. Perhaps we can come back to that.  That’s a very difficult question to answer.  I think there’s two answers to it actually.  I would suggest that Exxon, along with Shell and BP and a number of others are being very constructive, very functional, very useful within this process called the extractive industry transparency initiative which, for those who don’t know is a process kicked off in 2002 by Tony Blair in response to the launch of the ‘Publish What you Pay’ Campaign. Basically EITI is a process whereby Governments voluntarily come to the table and say that they will disclose the payments they receive from extractive companies and at that point companies are obliged to disclose the payments they make and civil societies integrally sort of bonded into the process. Then there is an international sort independent verification process that verifies the numbers and the whole point of this is to bring accountability to the money flows.  It sounds good, it is good, and the principles are good.  There are some very much better practitioners than others so I think they mix between reasonably good performance to really bad performance and within there the companies do more or less what they can within the process. 

There is a bigger fish to fry really and that is that the EITI is only so good as the countries that volunteer to come to the table. What do you do with the kleptocratically run countries where there is no interest to create a system of governance, because it will challenge the ability to asset strip the country.  We could name lots of them here but many will simply not join this process at all and they haven’t done over the last 10 years. 

So in parallel to that we need a system, a global system that will require all oil gas mining companies, at least we are talking about the extractive sector at this point in time, to disclose all the payments they make of a significant amount in every country of operation. That has come to the fore as a possibility through the passage of this Provision 1504 in the Dodd Frank Act in the United States in 2010. More recently, this is what Caroline was just mentioning now, the European Union is putting to bed the final stages of the European Accounting and Transparency directives which should be affectively signed, sealed and delivered, probably next Wednesday we hope.  At which point we will have, I think it is fair to say the beginning of the role out of a new global standard that will require these disclosures right down to a hundred thousand dollars or euros, depends where you are.  You know any item above that would have to be disclosed and you would see this down to a project level. 

Now there is a huge fight going on right now in Washington and this is one thing I can’t really call you out on this, because you are sort of out of the loop on that side of things but Exxon together with the other companies I mentioned are at the forefront of a fight, fronted by the American Petroleum Institute to sue the SEC basically to kill off Dodd-Frank, the provision that requires this disclosure.  They are not interested, they’ve said this very publically, they are not interested in amending it, they simply want to kill it and the citations that they make as to why are essentially a repeat of all the arguments they present in the public record process that was submitted to the SEC that created the rule that is effectively the mechanism around how this law should be implemented. 

You can go on site and you can see all the public submissions and you can see the various comments from the different parties and soon and what the SEC concluded, if you read through carefully its 234 page rule, is that the intellectual merit of we shouldn’t disclose to this level or to this level or the various problems that are cited and now repeated in this law suit, they simply dismiss them and they dismiss them as intellectually non rigorous.  Essentially, the evidence was not there to substantiate the arguments, so what do the companies do? Kind of, I have to be rude, in a fairly sort of infantile way, toys out the pram; they simply go to the next stage and will just bludgeon it to death with a law suit.  That’s basically what they are trying to do.

So you know we’ve been trying to bring them back round to have a more adult conversation around this and there is counter of course.  A counter-legal strategy going on right now and we will see where it goes.  I think that the strategy does not work to kill it because, apart from anything else, some of the dual listed companies that are in the states and here in Europe are now going to have to disclose even if they do kill off Dodd Frank 1504 because they are listed in Europe or actually delist from Europe.  So there is the choice.

I think a much cleverer strategy actually would be say look there is a breath of wind in the air here.  We have got an opportunity to make a new global standard of accountability, let’s run with it. We could work together and actually make something really meaningful.  There are numerous other aspects of the work we do on natural resources and corruption including to do with various sort of projects that we’ve analysed and some of which Caroline has referred to, some of the data that we’ve put together which hopefully we can come back to during the course of the conversation.

RG:  Super, thank you very much.

(Applause). 

Mr Kansteiner, I’m going to let your respond to that but not yet. We are going to get through all the speakers.  We have one or two left to talk before we start the fisticuffs. 

So, Mr Mboweni, can I call on you next.  I’m not going strictly left to right here but we’ve just had a representative of the NGO community here and as you are here representing among other things AngloGold Ashanti, the large gold mining company of which you are the Chairman. Mr Mboweni, for those of you who don’t know, which I’m sure is no one, used to be the Chairman of the Reserve Bank of South Africa, the central Bank of South Africa.  He did a really very good job under very difficult circumstances.  Interestingly he has now moved to the Chairmanship of a gold company and the relationship between gold companies and central banks is rather interesting because by and large the price of gold goes up when central bankers mess up. When the value of a currency is not maintained stably, when inflation is out of control, people panic and they buy gold and that is great for gold companies.  I am sure that there is not link whatsoever here (laughter).

You are a man of many hats and you have a global view of what is going on in the mining business. Perhaps you could address the questions that we have raised so far, the question of who should own the resources, and how good a job are we doing at getting them out of the ground efficiently and in a way which benefits the people who should benefit.

Tito Mboweni (TM): Thank you very much indeed.  Thanks for the invitation to be here. You know for all the years that I was Governor of the South African Reserve Bank I failed to get the Economist to be transparent (laughter).  You don’t know who the ghost writers are of the articles, you hardly see the line-up of the ownership, it’s one of the most interesting ghost field publications. So if you are going to talk about transparency (laughter) I think we should start there (laughter).

I promised myself when I left the Central Bank that there will be three areas of human endeavour that I will avoid because they are full of so many pit holes. The arms industry, because no matter how hard you try to be transparent there, it’s very difficult. The oil and gas industry, which is full of so many difficulties, and would get my reputation into trouble. Third was the mining industry. I regret to inform you that I am now involved with the gold mine and two weeks ago I joined an oil and gas company so all the problems now are going to come back home to roost.

The company which I work with, AngloGold Ashanti, doesn’t just operate in Africa. It operates I think in about four continents. We’ve got different challenges depending on where we are.  In Australia for example we have got environmental questions. Mind the gold but don’t disturb the jewels. In the United States we mine the Rocky Mountain; we cut the mountain, remove the rubble and get to the gold. A key issue is to not overuse water in the Rocky Mountains because of the environmental regulations and laws.  In South Africa we face a challenge that our mines are very deep and there are too many accidents.  Every time there has been a fatality the mine must be closed, at least for a week.  In Ghana, we face very serious problems around the environment.  They are problems that have been left behind for us by British miners and the Government when they nationalised the mining industry there. Now they expect us to fix the problem.  We’re trying to fix the problem, only if they could cooperate more.  In the DRC we face difficult problems. You are mining on the one hand and you are looking behind to see whether anybody is shooting at you. 

Then you’ve got the NGO movement.  The high priests of everything that’s good who quite correctly have to make sure that you do things properly in the interests of the people. So I’ve learnt in a very short space of time that mining actually involves, the investors who want a return on their investment, you have the communities who not only want to benefit in terms of the workers who work but in terms of community development projects.

AngloGold Ashanti is a slogan that says we want to leave the communities better off by us having been there.  Very noble slogan but I can tell you one thing; it is as costly as anything. Just to give an example, in the Eastern Congo we received a concession to start mining but very soon we discovered that ten villages must negotiate to move them, not by force but negotiations, ten thousand dollars per family to move.  In no time the ten villages became one hundred villages, that’s it. It’s a different matter. Then they say an old Catholic Cathedral, so we had to move the Catholic Cathedral and build a fresh one.  At the end of the process the people say, but we’ve got graves there.  So what do you do?  So then you go through a long process to move, to relocate the graves. So then you build a school, a clinic.  We found an old Belgian, hydro power station that was not functioning any more. We remodelled it, only to find that the actual mechanics still worked so we had the hydro power station supplier generate the supply there and so on.

Then you have the government that you must work with.  The governments have different competencies.  There are certain situations where the mining company is far more resourced in terms of its intellectual capacity and capability, more than the government.  That is why we have this problem where the mining companies end up writing the laws and the procedures and the regulations because the governments have no capacity or capability. A big problem, which maybe the NGO movement should fill? 

Then you have within certain countries the challenge that their payment and settlement systems don’t work. In the end there has to be the repatriation of the income earned in the particular company to the head office of the company. May I mention the NGO’s? 

Then in certain parts of the world, in Africa, parts of Latin America you have what I call rogue mining companies. I think more often than not are the ones giving the mining industry a bad name. The industry as a whole has to do something about it. 

Finally, I think we have the terrible legacy that mining companies have left us with the destruction of the environment and I think mining companies have to be held accountable for this.  Very seriously, where there is a pollution of the rivers, killing the fish, destroying fresh water, all of that, this is something the companies must be held accountable to. The governmental environmental agencies are also accountable to this.

I end then by saying that my experience so far, and I am not a mining person per se, but my experience so far is that to a large extent the industry is an enemy unto itself.  It has been unable to demonstrate positively what it can do. That it is not just an extractive industry but actually a major developmental resource available in many countries if they act responsibly. So the issue of all the resources is a semantic question because at the end of the day the company does apply to the government for a mining licence so whether the people, the government and so on, that is a semantic question, it’s not that helpful.

The key issue is: Are communities benefitting? Are Companies, not just mining companies, all companies actually, paying what is due to seizure in a particular country?  The arms companies are worse, whether they are from Britain, or the US they are horrible.  The kind of corruption that you find emanating from British armaments companies is worse.  More often than not you listen to British commentators who think corruption in Africa is not in London, it’s here.  Similarly in Washington and as so on.  That’s where the bulk of the really serious corruption is to be found. 

When I was a student here there were two ministers who fought over military contracts, the Minister of Trade and Industry and the Minister of Defence, about which helicopters to buy for the British Army.  At the core of that is which company is going to look after which minister when he retires. That is corruption.  So I think let’s not have this thing that corruption is to be found only in Africa.  That’s racist. 

Finally I think we should, I welcome very much the Secretary-General Kofi Annan’s report and I think it provides the basis for us to try to clean up the industry which needs a lot of cleaning up.  Also it will allow us to have cleaner governments. I tell you friends for as long as you have military governments you will never clean up government. For as long as you’ve got weak institutions in countries you will never, you’re just dreaming. For as long as the highly educated people in Africa don’t want to live in Africa but in London and New York (I’m sorry Ben) it’s a problem.  They do so because the conditions are not favourable where they are supposed to be.  I’ll come back to those things later, thanks (applause).

RG: Thank you very much Mr Mboweni.  Now let’s move to Ben Okri.  As I’m sure you all know he is the Booker prize-winning author of the great novel The Famished Road. A poet, a thinker and as Mr Mboweni rather tactlessly pointed out, a man who lives in London.  Now Mr Okri, you once wrote that the magician and politician are very like each other in that each of them is trying to distract your attention away from what he is really doing.  I am wondering if you think that is an appropriate image for the mining and oil industries in Africa and maybe you would care enlarge on that.

Ben Okri (BO): I think it is a very appropriate image, very fitting for many reasons. Many wonderful things  have been said round the table but amongst the most significant has been a very detailed list of reasons why mining companies cannot do what they ought to do in relation to natural resources and nations. The excuse is the lists are important but they don’t deal with the problems that we’re here having to deal with.  First of all, who owns the natural resources? It is more than a semantic question.  Actually, it is a question that affects the livelihood of ordinary people as well as very powerful people.  It is a question that affects the texture of nations, how people live, how they die. What their salaries are, how they raise their families.  I think it is a very, very intimate question indeed.  I think it is a question that should be asked in relation to really who should benefit from the resources of a nation.  Is it just the shareholders of companies, is it the government, is it the ministers of government, is it those who are actually able to work intimately with deals or is it, should it be the people of the country?

Now I want to speak for the people who can’t be at this table.  I don’t think it is important where I live; I think it is much more important where my heart is. It is much more important what my vision is, what my feeling for the world is.  Now I think one of the most important things about globalisation and the thing that has been raised around this table is that in the 10 years that you referred to Mr Guest when you had that famous headline about Africa’s hopelessness one of things that has happened is in fact one of the results of globalisation.  One of those elements is the element of surprise.  We have been surprised by what these factors can mean and how they can influence nations.

It is interesting that it has taken an African magazine to actually say quite clearly that Africa is poised on a very hopeful decade.  It’s poised, it’s on a cusp and I think it needs to be stressed what we are dealing with here is the gap between Africa’s potential and the realisation of the potential. That gap I think is where we should address the problem of mining and the problem of resources. 

The companies I think should acquire more vision.  It shouldn’t just be about the extraction of material from the ground. It shouldn’t just be about looking after the more contingent communities.  I think it should also be an act of vision.  I believe in globalisation plus justice.  I believe in globalisation plus concern for the environment, concern for the local environment.  I speak in relation to places like Niger Delta where I come from and that is very, very close to me in terms of what is going on there. I’ll tell you a story to illustrate it.

There was a certain company, a certain oil company that shall not be named (laughter), a certain company that should not be named is moving into a part of the Delta region.  As they moved in, they moved in not individuals in ties as beautiful as yours they moved in supported by trucks, by armoured tanks.  They rolled over the farms of people, rolled over their houses and there is a particular story that was witnessed by an archaeologist who was part of one of these missions where these tanks were rolling over.  The woman who owned the land came running and shouting saying you can’t do this, this is my land and they rolled right over that land.  It is that image that haunts me. 

So when we talk about natural resources, who does it belongs to, who does it benefit what comes to my mind is the collusion between the big companies and government. There is corruption on the one hand yes but there is also tremendous collusion.  It is interesting that Mr Mboweni when you say that the incompetence of governments that makes mining companies have to write their laws for them.  If that is the case, why don’t you write better laws?

TM: I didn’t write anything.

BO We’ll come to that.  That’s my passion, that’s what upsets me, that’s what frightens me.  People talk about all kinds of optimism but when I actually picture, when I Iook at the picture on the ground when I go visiting, it is a horrifying picture. The Niger Delta is one of the ugliest; the effect on the environment on the earth, on the land, on the farms is one of the ugliest things I have seen on this planet.  I don’t see why it has to be that way.  I’m genuinely perplexed by it and genuinely annoyed by it.  I don’t see how anything that has been said round this table explains to me why it has to be that way and why it can’t be differently and why it cannot change.  That is what I would like to know.

RG:  OK thank you very much indeed.

[Applause]

I think I am going to toss that over to Mr Kansteiner as he’s our oil man here. I mean bearing in mind some of the things Mr Mboweni gave a very eloquent description of just how much a large company has to do to make things OK when you are operating in a country where the government is dysfunctional and it doesn’t get any more dysfunctional than Eastern Congo.  I mean Mr Kansteiner how much responsibility do extractive companies have, where do you draw the line?

WK: I think you have to look at it as a partnership.  When you are an extractive company coming in to a sovereign nation, you become the partner, you become the developing partner.  You know there is a wonderful picture that happened just a few much ago and it was in Nigeria. ExxonMobil, four years ago said, ‘We need to do, what we call, supplier development’.  Supplier development is part of kind of a three legged piece that we do in every country that we are involved in. We do supplier development, that’s supply chain, getting local businesses up with the capacity to run, develop, produce and sell products that we need as we develop our production. 

The other part of it is workforce development and that is actually what we all call capacity building and we do that through education systems, bursaries, scholarships, training programmes and then the third part of that is corporate investment, be it health, education, infrastructure.  All of those things, those three legged parts of all engagements in every country that we are in are extremely important to us.

Back to the story that we just did in Nigeria and that is for first time, and I wish it had been earlier, but it took a long time, it took four or five year, we christened a platform that is an offshore platform that was designed, built, produced and delivered by Nigerians in Nigeria to us. So a completely local supply chain and these are tens of millions of dollars’ worth of products.  Now that took four years to get that company, it was a joint venture between NNPC and ExxonMobil to get that engineering, architecture, manufacturing business up and running that they could actually supply.  Now they don’t just supply us, they supply not only Nigerian oil and gas companies but up and down the Gulf of Guinea, the entire region.

So you know that is just a story where we take the partnership part of it very seriously and spend a lot of time and a lot of money doing so.

RG:  Ok thank you very much.  Mr Taylor are you satisfied with that answer?

ST:  God how to judge.  Look I’ve been in lots of oil production countries and seen what I would consider to be a good project like that with local domestic development but I’ve also seen absolutely appalling

RG:  Have you ever seen anyone move a cathedral?

ST:  I haven’t seen anyone move a cathedral. I’ve been to Abu Simbel which was moved, which was not done by an oil company but quite impressive. I think there is a bigger set of things going on.  You’ve rightly pointed to what is going on in the Delta.  We are currently investigating and continuing to investigate a story.  In fact this is in Nigeria right now that involves both Shell and Amni who acquired an oil block, a contentious oil block that was originally obtained, in fact stolen by Abacha’s oil minister, a dictator, Abacha’s oil Minister Dan Etete who is also a convicted money launderer, who set up a company in 1998 and then promptly organised the giving of this oil block to his company. He owned the company through a sort of hidden set of proxies and so on and then as Abacha Senior died he then defrauded a junior out of the shareholding of the company.  Now he pretty much owns the whole thing, certainly controls it.

The horrible thing about this story really, leaving aside the legitimacy or not of him taking the block, the company in the end really wanted to get the block.  You might think that if you develop this offshore block and it generates revenue for the state that is a good thing and perhaps it is but their efforts to get the block have gone through various different channels.  There is all sorts of great complications I won’t go into now.  At the end of the day the deal was constructed in April 2011 in which the company has agreed to be one billion, ninety-two million and forty thousand dollars to the government and almost instantaneously the government cascaded one billion, ninety-two million and forty thousand dollars out of the recipient account which in itself was not the appropriate account to pay money into if you acquiring an oil block in Nigeria because it has to go into the Federation account and to pay money for an oil block not into the Federation account is a breach of the Nigerian constitution. So that straight off was a crime. The money then cascades out and goes to an account earmarked for Malibu Oil and Gas, a company that Dan Etete owns or now owns and controls. Very shortly after, and this is how we know about this, the middle man, in theory involved in the deal, felt that they had been ripped off and then sort to freeze the money that was in London and some of the money was frozen, the amounts that they thought they were owed and there’s various legal processes going on right now which are in the process of resolving themselves. We will see what happens. But shortly after that, so by late August 2011, 801 million went out of this account in London to two accounts in Nigeria and 400 million, we don’t know what happened to the 401, but 400 million, sorry 401 million further cascaded into the accounts of five shell companies all set up by an individual who has very close connections to some very senior officials in the current government.

Where did the money go? Where was the benefit for Nigeria of this if this is worth a billion dollars to a man who essentially stole the block? Why didn’t the government take it back off him? Instead our opposition at this point is that certain people stood to benefit and they worked out a mechanism in order to pay the money across and this is the mechanism they chose.

I think the point I would raise is, you know, we will have to wait and see whether this transaction from the company side was a legal transaction or not and some very clever legalling went into the thinking behind this. But what we do know from the court testimony that has already come into the public domain is that both companies spent nearly two years in personal meetings with Entete deciding what price would need to be paid, wining and dining him, enjoying in quote unquote “iced champagne in one location and nice lavish meals in a set of other meetings”.

And so I suppose my point really is, the conclusion we have come to is that they may well have paid the money to the Nigerian government but they did so in the full knowledge that the money would end up in the company possession of the man who stole the block in the first place. So when we start to think about how we can make these kind of transaction function I would suggest it takes two to tango and there is a company responsibility element to this and there is also obviously whoever happens to be a corrupted individual who operates in a governance vacuum in whatever state we happen to be talking about whose obviously the other part to play. And then there is all the middle people and the bean counters and the accountants and the lawyers who set up the clever system. But there is also the systems out there like the banks that take the money and like the hidden shell companies that get established in tax havens where you can’t find out who owns the companies. And so if we really want to deal with this stuff and really seriously want to deal with it so that the money flows can be transparently seen going through the system and hopefully end up being deployed for the benefit of the people who really own the resources and let’s face it, it’s the people of the country, then fix we have to fix a number of things.

One of those things involves transparency of the revenue streams and down to a significant detailed level which is why we need project level disclosure but funnily enough the oil companies don’t want that which is why they are trying to kill Dodd-frank Fifty in the States.

And then other areas we need I think are, you know, beyond the governance. We need to address this whole issue of disincentives. We need to start looking for assets that are stolen out of countries and freezing them and repatriating them and prosecuting people who are in the process of setting up corrupt deals and I include in that the individuals within companies who decide to set up deals that, you know, may well be illegal. They jolly well shouldn’t be!

RG: That’s a very interesting description of a very complicated deal there and I presume that what you’re suggesting here is that there were some companies who were trying to follow the letter of the law while subverting its intent. Is that what you are saying?

ST: I am suggesting they spent two years negotiating directly in different places having ice champagne and lavish meals with a convicted money launderer who they knew or should have known had stolen that block and they put together a deal in which they knew the transference of the of the money from government would then go to the company owned by this person and if they didn’t know that, frankly I don’t think it’s creditable given what we know about the way in which the process was put together and it doesn’t say very much for their due diligence given what we can find out and it hasn’t been that difficult. It’s been time consuming, it’s been difficult, complicated yes but if we can find this kind of stuff out how come they can’t over a period of more than a decade? It just doesn’t stack up. So I don’t really want to get stuck necessarily on one deal but it represents I think where we are going to in some, some cases, not all companies, not all places and some companies we see, as I said, don’t do a good thing here but behave impeccably here so there is nothing if you like, pardon the expression, black and white in this. It’s sort of depends on the location and the people involved and the opportunities.

RG: We are going to have a little bit more to and fro here before we throw it open to questions from the audience, so bear that in mind if you want to think up a penetrating question to throw at any one of the panellists.

I would like to throw this across to Mr Mboweni if I may. What you said there about how companies, you know you get companies who behave well in some jurisdictions and badly in others. I mean if you are a country right you have one government ok and that is government is, you know, either very clean or not very clean or somewhere in between. The supply of potentially crooked businesses in the world is almost infinite isn’t it? I mean there is always going to be someone out there who wants to, you know, pay bribes in order to get an advantage.

And so from a countries perspective is it not the case that the thing you can fix most easily starts at home and Mr Mboweni you have had experience in government. What do you think?

TM: Well I know that corruption takes place because you have got two parties or more who are corrupt. Make it you know, they meet and so on and a deal comes up that is born.

Now the legal route helps in that when you find the corrupt people you can send them to jail. As an example to the others. And then the process, I am sure, it develops a whole set of jurisprudence perhaps in the process.

So legal regimes are very important but also the moral and spiritual regime of a country is very important, you know, and a whole set of things.

I didn’t come here to discuss corruption because it’s, you know it’s a huge global problem that can be discussed I am sure at some other place.

I think the key issue Ben Okri is saying that, with due respect I understand what you are saying, but what I was trying to mention is that most of the highly technical African’s that should help us to fix the continent don’t live at home. So the key legal people, the juries, the mathematicians and so on don’t live there because the conditions are not conducive for them to live there. So they are not there to help us fix things and what to depend from time to time on these so called development experts while the second generation missionaries sort of come there to think they can come and civilise Africa. But if you can mobilise all these Africans to come home and work it would help a lot. I understand their circumstances which sometimes make it difficult and also maybe people can operate global. So that is the point I was trying to make.

The second point I was making was that when I said the issue of ownership in this conversation is a bit of a semantic question. I meant it in the sense that if you move from one jurisdiction to the other, governments define ownership in different ways. If you go to South Africa they will say mineral ownership vests with the people and the state represents the people. Does it? Or you go to another country, they just say state ownership. Another place they say no, these minerals beneath the soil here belong to King so-and-so. So for a mining company what you do must approach the appropriate authority to make an application. It differs from place to place. Maybe. Anyway we can talk it later.

It is really complicated and a question does arise sometimes and I have asked that question in my company, should we really be in the Congo at all? You know? Because it’s a minefield. It’s a difficult difficult environment to operate. Somebody might ask the question should you be in Argentina at all. And whether big mines there in Argentina with all the difficulties which are there. So I think companies have to have maybe a list of characteristic countries where they can operate and where they can’t. But if we are not there in Eastern Congo, whether one likes a democratic system of government there or not, but the fact of the matter is that they say they had an election. They were democrats. Now how much democracity does to the people is a different matter. Should you be there in the Eastern Congo or not is a very difficult question.

According to some of the regulations coming out of some of the US laws it may be difficult for us to operate in the Congo. Some computer companies have difficulties for example using the gold from the Congo as part of the manufacturing of the gold chips then you need in the computers. But on the other hand I know for certain that areas we’ll operate have benefited quite a lot by our presence. Is that sufficient?

And every time I come back to my days as an anti-apartheid struggle activist, when we used to say these American companies must pull out of South Africa because by their presence there they are bolstering the apartheid system. So out. Barclays out. These ones out. And so on.

So what should the criteria we should allow us to operate in countries or not? As a former activist I come across that question all the time and should you be in Angola at all...there is a democratic government in Angola but should you be operating there, well I operate there. Not just in oil, not like ExxonMobil but as a manufacturing company.

Should we be in Mali at all? Now investment in Mali that took place over many many years. Now there are problems in Mali. You can’t close a mine today and open it tomorrow. So you have to decide what is a strategic level in the medium to long term. It is a very difficult process. And what I emphasise again, I think the mining companies over the years have not done themselves any favours by their own behaviour and they relationship to the communities and governments.

About the point Ben about the drafting of legislation. I was making in particular reference to the work was recently done by the World Bank around the capacity of governments to write and understand complex contracts and legislation. I know for certain that, I won’t mention the name of the company, that company has got a legal department that is far bigger than the legal department of the country where they operate. There is no way in which the legal department in that country can sit and have a proper legal conversation with that company. The consequence of which has been that the drafting of those contracts and laws happens to be done by that company. Whether that is a good laws or bad laws that is a different thing. I am just mentioning the issue in terms of capacity and how we need to mobilise capacity for...

I mean the issues are complicated but I think that I have seen instances where things have worked. Our operations in Australia, despite the difficulties that we have with the environmental loss and all other things it is working. Safety standards are high, we hardly have fatalities in Australia. But in South Africa where the gold mines are as deep as 4 kilometres underground almost every other month somebody dies there and it’s a big problem. I have seen how companies have polluted rivers in South Africa in Ghana and in other places and I have also seen how lack of capacity from the government has allowed the infiltration of the industry by unscrupulous so-called small scale miners in Ghana for example. Chinese, Lebanese, and so on who have no care whatsoever for the environment or the community where they operate or paying tax or contributing to the growth and development of that country. Well, maybe again I made a mistake by joining a mining company. Should I have stayed as pensioner of the Central Bank?

RG: Can I ask you just a quick follow up there. I mean a lot of governments don’t have the same detailed knowledge of mining industry law as big multi-national mining companies do. Is there an organisation to which you think they can usefully turn for advice? I mean do you think, for example, that the help that the World Bank gave to the government of Chad in trying to work out a deal for an oil pipeline there, do you think that that sort of thing can work well or...

TM: There are thousands of organisations out there and institutions that can help countries. World Bank is one of them with all its problems. The United Nations, the UN, is probably the best placed institution that can help. But you also have thousands of legal firms which can assist governments. I know speaking from London is not a good thing because bankers are unpopular here but you have many capable legal components or otherwise of investment banks which can support governments and there is the NGO’s. That’s their job anyway, to help. The only thing that I don’t like about the NGO’s from time to time, as I said earlier on, is that they tend to behave like the second generation missionaries. I don’t like that. That have come on a kind of civilising mission to try and help these poor incompetent incapacitated Africans. I hate that. I can’t stand it! These high priests of goodness!

But I think that the capacities and I think governments as well in Africa and Latin America as well and so on, need to learn how can we best utilise the Diaspora as well. There are many capable people in the diaspora. We are finding for example that we are able to source Ghanaians who now live in Australia for our business and they understand the environment much better than South Africans can understand but they live in the Diaspora.

BO: But you are contradicting yourself...

TM: I know. I want you to come back home.

BO: I was enjoying you wandering around to your self contradiction.

TM: No.

BO: But you inevitably will because the upshot of what you are saying when you talk about, you know, you’re saying that really people should not travel. They should not find the opportunities that they can in the world. In fact the background to this conversation is not just natural resources actually it is globalisation. It’s the movement of people across the globe. What you seem to be saying is that you want to put a prohibition on people moving across the globe.

TM: No.

BO: It’s a very dangerous sort of area to go. But that’s not what I want to address.

TM: Let me just finish very quickly...and then I will let you...

BO: Well you have been speaking for about 15 minutes...

TM: So yes, people must come back home. Yes, we can reach them wherever they are in the diaspora because we need that capacity to be able to engage with the companies but anyway.

RG: Mr Okri... say whatever you like and then we are going to throw it open to questions from the audience.

BO: Well I am going to try and keep it brief. Just a couple of things I would like to say.

First of all, I would like to know is there some kind of more than a regulatory mechanism whereby cases that you spoke about can be officially tried. Something like the Hague? Something that has authority and teeth in terms of the world. Because otherwise if there isn’t then really what you are talking about is just a paper case.

ST: I think it’s hard to answer that in five seconds but there may well be different opportunities in those central places like the Hague, no.

BO: But shouldn’t something like that be set up because otherwise these things that you are talking about will continue to happen and these are part of the problems of these nations. It’s like a giant leaking tank basically.

ST: Yeah but it takes two to tango and sometimes a whole bunch of others, not just whoever happens to be corrupted or you know whose sort of emerged from the governance deficit place but it takes predatory behaviour coming from the side that enables this to happen which is kind of I think where your coming from with company behaviour and it goes in to environmental instruction as well. If you run roughshod over the rules or there aren’t any perhaps or you just you take advantage, you get things like happening. We come across this kind of stuff all the time.

BO: I mean a very recent example that hasn’t been addressed but I think should be at some point is what happened in Marikana which is when you raise the issue of whether mining companies, your mining company should be in Angola I tend that take the view that, you know, those whose come from a great moral background actually are the people that we look to to help establish that moral background.

RG: Can you perhaps tell the audience what happened in Marikana? There may be one or two people who don’t know.

BO: It’s a very complicated story do you want to tell the story?

TM: No...you?

RG: I can give a very brief summary if you like.

BO: Very brief and I’ll add to it.

RG: Ok, very briefly it was a mine in South Africa. There were two rival unions who were competing to represent the workers there. There was a certain amount of violence between the unions and there was also a standoff with the police where the police shot a large number of people and this, I forgot what the death toll was, but it was really staggeringly large.

BO: It was significant even in relation to South African history.

RG: I will shut up. No you carry on.

Well this is a very brief...

Audience 1: It was a British mine not a Chinese mine...

RG: Did I say it was a Chinese mine?

Audience 1: No, but it’s important to say whose mine it was. You said it was a mine...

RG: Ok, ok. Thank you for that.

BO: It is a very precise audience.

RG: Yes very precise audience.

BO: They are not going to let you get away with anything.

For me what is interesting in the case of Marikana is not just what happened. It’s the vision again. It’s those who are on the board, those who should know better as it were. I am concerned and I was in South Africa at the time. I was deeply concerned at what happened. At the way it was handled and at the fact that significant conclusions have not been reached.

That is not as serious to my mind as what happens in places like Guinea and bauxite miners, where you actually have people in government actually say to individuals who are struggling and working in the mines and being paid very very little, say to them well it is not the problem of the government. It’s the problem of your relationship with the companies but actually it is a government problem. It is always a government problem.

ST: We have got another nasty, sleazy deal that’s gone down in Guinea which we could talk about afterwards.

RG: I think given the wonderful detail you went into on the last individual case I think I might throw this one open to the audience. Now just a housekeeping point. Raise your hands, I will point to whoever I think should be given the microphone. Please if you could wait until you’ve got the microphone and then please say who you are or you don’t have to ok but if you would like to say what you do...Please also ask a question. Do not give a speech and try to be as brief as you can.

So let’s start on my right here with the gentleman. Wait until you’ve got the microphone. Thank you.

Audience 2: I am Bobby Beneton, Professor of Management as CASS Business School. I want to start with the questions Mr Mboweni also started with.

I study conflicts and mining for a living and I think the two questions you raised about who owns and who benefits are actually much closely related than you think. People are asking the question who owns resources because they haven’t benefited from it.

I study mining in Australia. There has been mining in Australia for 250 years and there are no aboriginal CEO’s, there are no aboriginal Vice Presidents. Yes they have jobs, they clean toilets and I think the price to pay for the environmental and social dislocations are too much to ask for.

Your other question I think, Mr Okri, you hit it on the head and I am going to ask those two questions as to how do we expand on that. Is collusion between the state and the cooperation’s. To say that sovereignty exists with the state and God put resources there, it’s an incredibly naive position to take because after conflicts I am studying I stopped at 25 because they only fit on one A4 piece of paper. It is no coincidence that all the 25 countries are former colonies. It is also no coincidence that all the companies involved in these conflicts are head quartered in Paris, Berlin, New York and Montreal. The difference is instead of white men in suits, now you have black men in suits so there is a collusion very much between that and if God put the resources there then there is a divine failure as well as a state failure because the troubled communities are saying how do we resist this?

So the real question I want to ask is, again this is a particular tribal leader I spoke to who has tried to take out a fund to say I want to pay this to the mining company to leave the bauxite in the mountains. Then he stopped and said actually I have to pay the government people as well and even the NGO’s because they won’t have a cause. So my question is how do we take your question about should we have mining and ask the question is it possible to imagine an economic development future without extraction in those regions? How can that conversation take place in public policy other than this field?

RG: Mr Mboweni, would you like to answer some of that? There were quite a lot of questions there.

TM: I’m just waiting for the mining centre, you know Ben says I talk too much.

(Unknown): I’m sorry perhaps we should take a cluster of questions from the audience and then go back to the panel?

RG: Do you want to speak?

(Unknown): No, there are other people I’m sure that want to speak.

RG: Well, there are yeah.

TM: Maybe two or three or something like that.

RG: Yes sir, if you could wait for the microphone so people can hear.

Audience 3: There are sort of two images really, watching a while back a wonderful programme that was on the BBC called ‘Welcome to Lagos’, it was a young man called Selender who was working a rubbish tip in the middle of Lagos and he was joking with another friend that actually in his village he had an oil well, and for the me the contrast between this guy from the Niger Delta working in a rubbish tip, recycling rubbish and where he came from. Probably from one of our civil rights activists said, probably about $40 billion has come out of that area and he’s on a rubbish tip. And what has come out of his area is fuelling civilisation in London and Paris and it’s just amazing. The other side to that and how it leads to conflict is that Abacha who you’ve mentioned was involved in a project at one point to turn himself into a civilian president and went round and gathered what we call all these different area boys from around the country as part of that project. He brought them all to Abuja from the Niger Delta and these kids looked around at Abuja and thought we’re living with nothing, no water, dirty water, polluted environments and the money that has come from our neighbourhood has built this, and that was when the insurgency started, in the Niger Delta. So there are a lot of very angry people who are fed up with mining companies and other extractive industries coming in, fuelling civilisation in other parts of the world and leaving them in abject poverty and the anger is rising and so I think a lot of these things that we’re talking about we need to do something about because people are getting fed up. The final image I wanted to talk about is of Robert Maxwell who used to sit on top of his building in Holborn and every so often as people were passing by he would want to go to the toilet and he would piss over the side of the building on the people below, and I sometimes feel as though the extractive industries are doing that to the rest of us.

RG: Do you have a question?

Audience 3: No, it’s a point of information, but the question is that in 2001 after September ’11 because it is all about collusion, after September ’11 we were able to count down very quickly all the financial stuff that was fuelling terrorism. So we know it can be done, yeah? No we know it can be done.

RG: [inaudible]

Audience 3: No we know it can be done and we need to stop the collusion.

RG: Maybe if you could pass the mike to the gentleman right behind you there, that will be the quickest question we can get to, and after you’ve asked we’re going to get a couple of brief answers from the panel.

Audience 4: Thank you, my name is David Gee, this is not a debate, it’s not a debate when you have five men speaking and only one woman, it’s not a debate when you have four white people and only two people of African heritage, it’s not a debate when you have six, basically wealthy people, and no poor people talking about the fate of most of Africa which is still very poor. It’s not a debate and the way you’ve been talking about Africa as if it’s one place, not withstanding what Tito Mboweni and Ben Okri have been saying, as if Africa is a single place and not a collection of communities, a collection of different cultures. Is the same kind of presumption of colonial entitlement, the colonial complacent presumption, it’s the very same presumption that carved up Africa in the first place, it’s an imperial presumption and there is a new empire and it’s based on cooperate power. If we’re talking about dysfunctional governments,

Unknown: Question, is there a question?

Audience 4: I’ll come to the question in a sec. We’re talking about dysfunctional governments, if you go to

Speaker: Pass the microphone or get to your question.

Audience 4: You take the top of a mountain off, that is dysfunction, that is dysfunction going on there. My question is how come the debate got organised with five men to only one woman, four white people, only two people of African heritage and no poor people at the table, no activists and no one who can represent a genuine diversity of views on the issue?

[Applause]

RG: Well, I think actually all the panellists are of African heritage and they do seem to represent a diversity of views, from oil companies to global witness to mining to poetry to moderate. If, I don’t know, does it count as a genuine debate? We will try and make it more genuine if you like. Now would the other panellists like to reply to, there was a comment about Nigeria and the inequality there, perhaps Mr Okri would like to respond?

BO: I think that was eloquently spoken about actually, it doesn’t need further elaboration.

RG: Ok fine.

BO:  No just to add to that that it is, he’s right that people are getting angrier and it’s not just in Nigeria that they are getting angrier. They are getting angrier in Tanzania, they’re getting angrier in South Africa, they’re getting angrier all over the continent. I think that anger is going to be an important part of the transformation that we’re looking forward to. The transformation is not going to come from these guys, it’s going to come from those people, the angry ones.

RG: Ok, would anyone like to address Mr Beneton’s question? Mr Mboweni perhaps?

TM: I couldn’t quite understand the question, but I did ask the question about whether mining companies should go into certain jurisdictions or not. The global question about whether they should be mining or not I think is maybe worth discussing that today, but maybe we should. I know there have been mining proposals which have been brought before my board which were not taken up because we felt that on a whole set of reasons we were not comfortable going to mine in that kind of jurisdiction.

Unknown: It was too expensive?

TM: No, no not because of expense because overall the consensus was it was not favourable. The political environment, where there is a dictatorship for example, it is very difficult. Where there are human rights violations, and when one of the biggest questions that [inaudible] there has been a very big question to answer. I’m assuming that no one here in the audience is saying there should be no mining companies, I think what you’re saying is mining companies must take responsibility and operate in a manner that benefits the people of a particular countries as well. I think, if I understand it as what you’re saying, and you find at least the companies I know, you’ll find there is that attempt to undo so many things which have been wrong. Let me give and example in South Africa, the position of black mine workers in South Africa for many years has been absolutely unacceptable, over many years. Living in single sex male hostels and so on. Now what is the responsibility of both the state and the mining companies today? Is to undo that historic injustice by making sure that accommodation for workers is proper, by making sure that that labour sending areas benefit from the fact that they are sending the labour to the mines, but the communities are not developed, something has to be done about it. It’s about health, education scholarships and so on. But at the end of the day if I hear Ben correctly these things are more than just money, it’s a bigger question I think he called the vision. Where are we going? I think that’s a difficult one, but we should discuss it.

RG: Ok let’s have this lady here, then that gentleman there and then at the back. So let’s start down here please.

Audience 5: Hello

RG: I’ve got my eye on you don’t worry, and if you could make it briefer than some of the earlier questions.

Audience 5: I promise. My question is to Mr Kanstiener and Mr Mboweni. Considering the need for a vision, and I agree with Mr Okri and I would appreciate actually straight answers from both of you, given the undeniable finite nature of oil and minerals do extractive industries have real conversations in the board room about the long term viability of the future of your companies as much as you talk about your short term ROI?

WK: Great question

RG:  We’re going to get that gentleman in the middle there.

Audience 6: Thank you, I think mining has never been a benevolent exercise so to expect mining companies to exercise any kind of responsibilities [inaudible] I wanted to ask my question just about Zimbabwe, do you think the model that Zimbabwe has followed enforcing mining companies to give 51% to the government, into community share trusts is a viable model

BO: To give how many percent?

Audience 6: 51% of mining proceeds, the model that Zimbabwe has.

RG: So you’re addressing that question to Mr Okri are you? Or to anyone? Ok. Right and there third question in the back there, gentlemen in blue.

Audience 7: Thank you my name is Giles, the question to Mr Kanstiener and Mr Mboweni and also to Mr Taylor. Is there enough, I mean you don’t hear much about whistle blowing in mining companies and extractive companies, is there more that can be done from government, from mining companies themselves to encourage this?

RG: Ok, what shall we start with? Perhaps Mr Kanstiener would like to respond to the question of oil being finite, go ahead please?

WK: It is very much discussed. It’s discussed because it is the very future of our corporation and it’s important to our shareholders and it is discussed in the near term and in the long term. Every year ExxonMobil puts out a production that is looking ahead to supply and demand. We call it the energy outlook and we spend millions of dollars doing it. Now we spend millions of dollars doing it because that’s what we base our capital expenditures on. These are not platitudes that we think might be nice. This is what we really believe is going to happen. So it’s a forecast so we can forecast where we are going to spend our money and these forecasts suggest energy demand is going through the roof. The middle class families of the world demand electricity. They want power in their houses or their apartments. They want to be able to cook. Instead of burning wood they want charcoal or gas or preferably, we think, gas.

But the mix of those energy sources that are going to supply that electricity or fuel is going to change and we know that and we try to anticipate it and plan for it. It’s moving from coal which is the largest single source of electricity today in the world to natural gas. So we are seeing that and we are planning for that but we very much look at a long term. You know the energy demand in Africa to be specific is probably the fastest growing of anywhere other than South East Asia. South East Asia is probably first and Africa is probably second. And it’s partially because we are coming from such a relatively low base. You know it’s about what, 15% of the population of Tanzania has electricity in their homes. 15%.

Audience 8: No renewables?

WK: And part of that package is renewable absolutely.

[Cheering]

No doubt about it. Renewables...can solar be a part of it? You bet. Can wind be a part of it? Can be nuclear be a part of it? Now maybe not in Japan but nuclear is going to be a part of the mix. So you know there are going to be all of the above that produce the energy demand that this world wants.

TM: But if I understand the question very well it’s whether companies discuss the future of the company and also the future of the community, whatever it is. What’s the medium to long term? Well in my case the board certainly does discuss what is the medium to long term viability of the company, in particular mine, but also what is the current plan to ensure that when we close the mine the communities do not as well come to an end. You know the ghost towns and things like. What to do about that and to ensure that when we leave that area the environment continues to be viable. And it is very difficult for mining companies because historically they have not cared about the environment and you have to have very clear closure plans, how to rehabilitate the environment going forward and are there any viable projects which will keep the communities going thereafter. So it’s not just the shareholders that one must care about. You must also care about other stakeholders in the business in the practical sense and in the budget for the company you see budget lines about the plan for the community when the mine closes.

RG: It seems that there’s two sort of environmental questions here. One is the direct effect of pulling stuff out of the ground [inaudible] and then there is also what you do, particularly if you are talking about hydrocarbons, when you burn them. I mean there was a study that came out recently which we covered in the Economist that sort of suggested that we are not going to run out of oil because there’s so much already there in the reserves that of we were in fact to dig it all up and burn it we would be going so far over the sort of limit of what we think we can think we can put in the atmosphere without very dangerous change to the climate that actually we are going to have to figure out a way of not burning it. Nonetheless...

BO: So we can burn it but we won’t because of these changes...is that what you are saying? Because you said two things there...

RG: I am saying that if we do burn all the stuff that we have already found that’s extractable that we would put so much carbon dioxide into the atmosphere that, unless we come up with an amazing technological fix such as geo-engineering, we would be going into the very high probabilities of catastrophic climate change.

BO: So we can do it. Your saying we can’t...we can’t do it...the argument is this...

RG: ...I think it would be very unwise to...

ST: You can burn it but they consequences would be a disaster. So if we don’t want the climate disasters we can’t burn it which by default means a significant proportion of the stock market value of oil companies, which is to a large extent predicated on the bookable reserves, is redundant.

[Applause]

Therein lies the problem. Your value is there if you can burn your product but since we can’t burn your product your value needs to be devalued and that’s just a mathematical fact of life. That’s the quandary.

RG: I think we should answer the other two questions that were asked. Who would like to tackle the Zimbabwe nationalisation question? Either perhaps Mr Okri or Mr Mboweni? Mr Okri do you want to do it?

BO: There is 51% nationalisation.

RG: The deal is then Zimbabwe recovers...the government has said that all companies at some point will be, they have to put 51% of their shares in indigenous hands and there is an argument that much of this means basically handing it over to members of the government.

BO: Well nationalisation has defaults and positives sides. In Nigeria, as you know, it has not been beneficial the people. It’s not been beneficial at all. You are talking about people whose backyards...I come from a place where oil literally comes out of the backyard as well. If I were an American believe me I would be seriously seriously rich. So it works only if there is accountability and if there is a genuine desire on a part of governments to put that back into society. That’s when it will work. That’s when it will be of great benefit to the people. But I don’t see that happening where I come from at this particular time but that’s not to say that in 10, 20, 50 years time that that might not be the case.

RG: Ok, thank you very much. Mr Mboweni...ok did anyone want to answer the question about whistle blowing? Mr Taylor perhaps?

Mr Mboweni....

TM: In our case we do encourage whistle blowing but you know at the end of the day it’s whether the management takes it very seriously and will do something about what has been reported. I mean here we are dealing with contracts which are worth billions and billions of dollars and whenever there is a huge contract around you must know that some things like to go wrong and so we encourage people to come forward and report. But I think at the global level we still have to create an environment which is favourable to whistleblowers. You might think that I was reading a story in the FT today or another day about some fellow who blew the whistle but he ended up being the victim because the society and the companies did not support him at all. So yes we should encourage whistle blowing and protect those who have come forward.

RG: Ok. Gentleman with the beard in the middle who seems very enthusiastic about asking a question and then perhaps when we have done that you could pass it to the lady a couple of rows in front of you.

Audience 9: [Inaudible] My name is Andy Higginbottom. The answer to many of the questions from the floor is on the day after World Environment Day why were we so stupid as to allow the future of our planet to be left in the hands of a few mega corporations? I mean in actual fact this is a very pro-corporate agenda. It’s only Ben which has opened up the debate in terms of what communities want, what workers want, what people want right? Because the way you framed it, it is not the colour of your skin it’s the way you frame it right, which is that those people over there don’t have to govern themselves, they are all corrupt, they are all war lords and so on and the corporations are the good guys. Well the corporations like Maxwell and like Barclays Bank are not the good guys and that is a system of corruption where the money ends up here! And its massive profits from the extracted industry.

 BO: Can I dissociate myself...

Audience 9: No you don’t interrupt a question. I will come back to you right...now we expect a higher moral standard. You claim for mortality, the antiapartheid struggle but you are here as a representative of a corporation, Mr Mboweni right...

TM: No, I was invited in my personal capacity actually.

Audience 9: Ok well you are here as the chair on the handout right and in Colombia, my question is this right, there are tens of thousands of people in Colombia in Tolima who protested on environment day yesterday, forty/fifty thousand people. They don’t want your gold mine. They have made it very clear. So are you going to uphold the morals of the previous struggle or are you just going to repeat this corporate greed. Are you prepared to walk away from Colombia even though it means you don’t make as much money because it’s better from the environment?

RG: Ok, thank you for your question. Can you pass the microphone two forward to the lady there please.

ST: Can I just say something...

RG: Can we have the other question first and then we will...

Audience 10: I quite like the heat to die down just a bit before proposing this but the reason I think that the question of who owns the worlds resources is a good one and it speaks to the whole issue of justice and benefit and 51% and how you negotiate and how you even define a fair deal, is because if you took it as a logical conclusion and if you looked at a countries assets as we currently know them and you ask not just who stands to benefit but you develop a vision around it depending on how much you have in terms of population, how long those resources might last, what they are worth, what the cost to the environment would be, to the economy, the jobs and so on you may come up with a very different answer to begin with. You might come to that conclusion that actually for this country it’s not worth even starting and the reason I am very interested in this is because the World Bank and others have defined 20 countries in Africa as being resource rich. But when you do the math down to the per capita benefit you will get a very different and much shorter list which means to me that resource rich, and when we talk about assets and Africa’s wealth we are talking about wealth for a very few and we are not talking about wealth for Africans and if we explore that question of whose innumerate the population, really  think through vision as Ben mentioned again and again and again we may come up with some very different conclusions whether or not we go or don’t go.

RG: Yeah, I think we have got the question there.

Let’s try and answer those two before moving on to some more because we are very short of time.

I would actually like to throw it out to Mr Mboweni because I think...

TM: Why throw it at me...

[Laughter]

RG: Well no because I would like to say in Mr Mboweni’s defence that, and I mean I have lived in South Africa for a certain amount of time and I don’t know any serious person there who doubts Mr Mboweni and his struggle credentials or passion against apartheid and the laws that he is best known for having helped write there were in fact the labour laws rather than anything to do with mining. I think the question...I mean I don’t remember the apartheid struggle being about not mining at all in South Africa. I thought it was something to do with control of the government but what’s your...do you feel that you should pull out of Colombia? 

TM: Well that question, I wasn’t aware there was this demonstration.

Audience 9: The question is do...

TM: No no.

Audience 9: ...those tens of thousands of people who do not want your mines...

RG: Yes we have heard the question.

TM: I heard the question. Pardon?

Audience 9: Are you prepared to pull out?

BO: He is going to give you the question again....

TM: No you don’t have to do that. I have heard the question. I have not received any information about whether the total view of the Colombians is that we must not mine there. Now we can debate this, whether if a section of the South African population says there should be no eating horses after the 4 months so they stop eating horse and we were having that debate in South Africa actually. A section of the Colombians say they don’t want the mining. Can we have a debate with them because that’s not the impression that I have got from other Colombians there. Now there are some very difficult issues in Colombia and one must not belittle them and I am sure those issues will have to be considered but we have not reached a point...I am sure you don’t expect me to stand here in London and say that the one billion dollars invested is now going to be withdrawn. You don’t expect me to say that certainly but I am sure the people will consider all the issues but mining is difficult in any environment and if you a chief executive of a mining company you would know what the difficulties are.

I think what I understand this conversation to be about is that mining companies need to have found a more better medium to long term vision, there must be more responsive to the issues of the people, they must be careful about their relationships with government and so on. Some of the issues I tabulated at the beginning. And that there is a feeling that mining companies are benefiting more, extremely more, than the ordinary people are benefitting, both materially and environmentally and other issues...

ST: No competition?

TM: Maybe promotion of competition...

ST: but that relationship is the same for logging companies who operate with globally predatory bases. It’s the same for oil and gas, it’s the same for pretty much the whole extractive set. There are shining examples but that’s why this stuff does go back to the government and I think one of the things I slightly take issue with, at least if you are going to fire this sort of big colonialist sort of thing in my direction is that if you listen to what I was saying, it take two to tango and this stuff goes on right here in this city. You know some of the, I will give you another quick example that doesn’t go into a lot of detail. We investigated a bank looting process that came out of Kirgizstan and we found a company that listed, not listed on the stock exchange, but that it’s domiciled here in London that’s dormant. It has a director that was dead for two years before it was created and although it filed accounts to Companies House saying it was dormant 790 million dollars went through it. That was half of the pension fund of the people of Kirgizstan that got looted by corrupt people.

So my point is we can view this as a sort of, you know a conversation by outsider in, I think we also have to look at the evidence and the evidence points to the fact that there are predatory companies that behave very badly. There are companies that behave better. Some of them are the same, it depends where you go, and there are corrupt individuals who operate in a terrible way in a governance deficit and that’s a fact and the evidence shows that.

So as to your question should companies go in or what do we do about this whole problem of un-burnable carbon and so on, absolutely I think there are places where companies shouldn’t go in. I can see the quandary for mining companies that already are in there when it blows up in their face. I don’t know what you do about that.

RG: I think we have time for two more questions so long as they are brief...sorry were you asking...so there is one and then there is one more perhaps that lady at the edge there.

So this gentleman in the very front row first please.

Audience 10: Yeah, thanks very much. The question I heard coming through most loudly was the question asked by Ben Okri was does the Niger Delta have to be like that? And I have been looking for the answer. I have heard Simon Taylor say that there is some progress with transparency and legislations that come in America and so forth...

ST: It has taken 15 years...

Audience 10: Right but its some progress and I have heard Tito Mboweni, my brother from South Africa, saying that the mining companies need to take responsibility and be accountable. 

So those are two things I have heard but I am not convinced that there is going to be some major transformation in the Niger Delta anytime soon. So my question is what is it that needs to happen to change that situation because it is a truly shocking situation that exists in the Niger Delta and what are you going to do about it panel?

RG: Can we take the last question and then...

[Inaudible]

Audience 11: My name is Alex and I am a teacher in London and I spend my day with young people, I am a science teacher trying to explain to them why it’s so important that we consider the kinds of questions you have been talking about today and my question might be a bit vague, I hope it’s not too bad. It’s just that isn’t the biggest opportunity in countries that are developing to learn from the mistakes that have been made from countries that have already developed, have made mistakes, have polluted land, sea, air and they are now in decline some of those countries as we have talked about briefly. Can’t we learn from those mistakes because that’s exactly what I am trying to teach my children every day. 

RG: Ok, great. Let’s go to Mr Okri.

[Applause]

BO: It’s a very important question. The only problem with the question is when you talk about learning from the countries that are supposedly in decline, they are in decline from a particularly high place. So, you know, if they were to go on declining like that for another 100 years it will still be an Everest compared to the conditions of people in places like Nigeria that I know about. So to ask at this rather late stage in the human story that one set of people go on and join their decline and all of the benefits that are attached to it while another set of people should go on living in very difficult conditions and have not have some of the benefits that you take for granted with your decline is kind of seriously unfair question to ask about the human spirit. It’s unfortunate but it’s like saying freeze history at this point, let everyone remain exactly at the point we are right now. It’s simply not fair. It’s not possible. It’s not possible at all for the very simple reason that people can see how people are living in other parts of the world. You know the world is now so interconnected that it is impossible to hide your own misery from yourself. It’s not possible yeah. So that’s a very difficult question.

What can be done is how to learn from the mistakes in a way that still makes the development of our people possible. I mean everybody wants to live a life, a reasonably good life, on this planet. It’s a human right. You have decent roads, electricity, send their kids to school. It’s a human right to want the best for yourself and for your family and the only way which it can be done on this planet right now is by tilting some of the balances towards those who have not had for a hell of a long time and might not have at all if we go on like this. That’s a problem. It is an impossible moral dilemma.

What are we going to do about the Niger Delta? Well I can tell you one thing that will go on happening if something doesn’t change. The situation there will get worse. They will be more oil, local oil, terrorism. They will be more kidnappings. There will be more blowing up of oil mines. There will be a greater call for breaking away of that region. It will get worse and worse it will become one of the most dangerous places, not only in Nigeria, but in Africa. I don’t know what it takes for a country and for these great corporations to actually see that a situation has now reached the point where it is intolerable. It can go no further. I don’t know what it’s going to take. Maybe the stupidity, the levels of stupidity we are talking about it so high that we are going to have a catastrophe never before described before we actually start to see a turning point. I can only see it getting worse. I don’t see how, with the visions that I have heard around here, it’s ever going to get better.

RG: Thank you very much. Because we are really running out of time now what I am going to do is to ask each of the panellists to say just like two or three sentences to what they think the conclusions are this evening.

So quick fire starting with ExxonMobil.

WK: I thought should the minerals and resources just be left in the ground question was a good question and if you asked the people in Mnazi Bay and Tanzania they want that natural gas because they want electricity. They don’t want it to be left in the ground. They want it to be produced effectively, cleanly, efficiently and they want to be the beneficiary of it and we respect that.

RG: Great, thank you very much. Mr Taylor?

ST: I think we’ve barely touched the subject. We’ve referred to a number of sort of positive things that are going on there. There are other things going on but I would stress that they, you know to drive change, to seek to drive change, is not a fast process especially when you have huge vested interests going in the opposite direction and you know it causes everyone at every level I think to play that role whether it’s in a local place or trying to change laws in other places that can prevent the kind of things we are talking about from happening in the first place. And furthermore create consequence for the individuals who are actually the decision makers who make certain things happen. Right now there is no consequence for assets dripping a country. You can just do it and this city down the road here provides a brilliant conduit to move the money and you can’t find it.

RG: Thank you very much. Mr Okri, super briefly.

BO: Super brief. It took a couple of thousand years for different peoples to get to the point where we can have this kind of conversation here.

There’s only one language that I think that we understand. We understand the language of violence or the language of inevitability and I think we are faced with both of these languages right now and unless the companies and the governments have a vision that is a vision for the benefit of the people, it’s either violence on the one hand or inevitability on the other.

RG: Thank you. Mr Mboweni, last word goes to you.

TB: I think I have already summarised my views earlier when I said I think the conversation sought to brought out to the attention of companies but also hopefully the audience as well about what the keys issues are that will confront what has been a big struggle in my head, which is one of the reasons why I accepted the invitation to be here, was the relationship with the G8 Summit. So I don’t know this conversation has made any contribution to the G8 Summit at all and that’s the reason why I came here, 11 hours. I thought we were going to talk about how we are going to influence the G8 Summit. As it is we will probably be closing companies than influencing the G8 so I don’t know how the organisers are going to pull put anything to do with the G8 Summit because we didn’t even mention G8 during the course of this whole conversation. But anyway, thank you very much for the invitation.

RG: Well thank you very much Mr Mboweni. I think the answer to your question is that the G8 meets to consider big issues facing the world and the way that Zamyn is organised is that we take a number of the big issues and say what we think that they ought to be focussing on and obviously we have many different and passionately felt views on that and we are very grateful for your contribution, and also for that of Mr Okri and Mr Taylor and Mr Kansteiner and thank you all very much for coming tonight.

[Applause]

Close Transcript

Video Transcript

Capital | Friday 7 June at 7.00pm

Chair: Ian Goldin

Speakers: Ashok Vaswani, Caroline Kende-Robb, Maria Ramos, Gayatri Chakravorty Spivak, Lord Adair Turner

Ashok Vaswani:  Maybe we get started?

Good evening ladies and gentlemen and welcome to tonight’s discussion which is a part of a series of lectures on global citizenship by the Zamyn Cultural Forum.

My name is Ashok Vaswani and I am the CEO for the retail and small business bank at Barclays and I am really delighted that Barclays has decided to sponsor these lectures and it’s really my pleasure to introduce the panel and the speakers tonight.

But before I do that I think it’s really important we thank a couple of people. In particular, Michael Aminian, the founder of Zamyn Foundation and Sir Mark Moody-Stuart, the chairman. Sir Nicolas Serota, the director of the Tate, for hosting us. Marko Daniel, the convenor of the audit programme who has developed this series of lectures and debates and our partners, SOAS, Accenture, the African Progress Panel and, of course, the Tate for making tonight’s event possible.

These lectures are very timely ahead of the G8 Summit in bringing together leaders from the world of politics, business, academia and in the arts to explore new perspectives on citizenship, in particular those facing African nations.

At Barclays we recognise that businesses can only thrive if the communities in which we do business thrive. Citizenship is not a side project or something that we do on the side of our desks. It is an integral part of our business and we seek to build it in to our business model.

Finance and banking can play a critical role as key enabler of social and economic progress, growth and development. This requires us to ask ourselves how are decisions impact broader society and how we create products, service and solutions that also have a benefit to wider society. 

Therefore the business decisions we make will be informed by our purpose, our values and the changing expectations of society. This is a critical part of building a go-to bank for all our stakeholders. And for society it means we can serve as an enabler for greater, more inclusive prosperity for current and future generations.

Tonight’s topic is capital. We know that capital is flowing into the African economies but all too often the benefits are flowing straight back out. Therefore if we are to realise long term and sustainable growth in sub-Saharan Africa then we need wide ranging, international solutions. That’s the challenge facing tonight’s panel which is made up of extremely high calibre set of speakers.

Firstly, Maria Ramos was the chief executive of Absa Group and Barclays Africa. Maria, of course, is a colleague of mine and I know her very well and I am sure she will bring her unique insights in the role of finance on African economies.

Second, Lord Adair Turner of who many of you know as the former chair of the Financial Services Authority and someone who has huge experience of governments and regulators can influence economies.

Thirdly, Gayatri Chakravorty Spivak, the distinguished Professor of Humanities from Colombia University and a widely recognised expert on globalisation.

And finally, our chair tonight, Ian Goldin, Professor of Globalisation and Development at the University of Oxford. Ian was previously vice-president of the World Bank from 2003 – 2006 and also served as an advisor to President Nelson Mandela.

So without further ado, please give a round of applause for tonight’s chair, Ian Goldin.

[Applause]

Ian Goldin (IG): Thank you very much and thanks to you all for coming on this wonderful spring evening and spending it in an amphitheatre talking about subjects which are not normally what we talk about on Friday evenings when we want to have fun. But I hope we will have a fun time. I hope that you find it worthwhile and I’m actually convinced that the panel that’s been invited can provide the stimulus for a fantastic conversation.

We are very fortunate to have people that have worked, and Maria, on both sides of this, as the Treasurer-General in South Africa, the Director-General of the Treasury and now in a bank. Adair Turner who’s a regulator and also has wide ranging interests and in Gayatri who has thought about this from the bottom up and she has actually just come off a plane from the areas around Calcutta without her luggage! She’s exhausted and particularly grateful to you for making it despite all of that!

The topic is capital and by capital we don’t mean a wonderful capital like London, in case any of you have come for that you’re in the wrong place, and we also don’t mean what economists sometimes mean by capital now which is human and physical capital. We are thinking about the capital that’s the fuel of economic activity, the capital that flows through your bank accounts, the capital that people want as money but the capital as well that drives firms, that governments need to finance investments and which is increasingly virtual around the world.

And the question we are asking is, is this a beast that we have let become the fuel that is now enveloping and leading to instabilities and of course we have just suffered and have still suffering the biggest crisis that we’ve all known in our lifetimes and certainly competing now with the great depression which many ascribe failures of capital, failures in capital markets, in regulation of capital and a symmetry in the controlling of capital with those in governments that are trying to regulate it.

So it’s absolutely part of globalisation. Interestingly enough many of the economies which have been most effective at benefiting from globalisation, like China, have had very strong capital controls and regulatory environments around it but other’s have not. And of course for Africa and that’s part of the conversation we want to have this evening, what can capital do for development, what can it do for poor people? The problem is often too little capital, not too much and we’ve for many qualified people to talk about this problem of capital and development.

So I am going to give the floor to our panellists. We are going to have a little bit of discussion up on the table and then we’ll open it up. I’ve asked them to be very strict with time so I am telling you that they are not allowed to speak for more than five minutes. You can all look at your watches and start tapping them if they do.

And I am going to start with Adair Turner and then turn to Maria.

Adair Turner (AT): Ian, thank you. Well you have given us a bit of a challenge because I see that our suggested discussion points include the free movement of capital, the reform of the global financial system, regulation and restriction, immigration, rising inequality and a tax haven and all in five minutes.

I’d like to make the following points. I think before the latest financial crisis of 2007/2008 we had reached the real apogee of a certain self confident economic liberalism that we knew the answers. That if we unleashed processes of financial liberalisation and market liberalisation both between countries in terms of capital flows and within countries in terms of liberalisation of financial markets that the processes of economic catch up by which poorer countries achieve rapid rates of economic growth and catch up to richer countries, that that was almost inevitable.

I think there are three problems with that proposition.

The first is that I think we have learnt a very big lesson in the financial crisis that finance is different and that the propositions in favour of free markets which I think are pretty good in the market for restaurant or the market for cars are not so good in the market for finance for some fundamental reasons. We know that things went seriously wrong with the financial systems of the developed world but we also know bluntly or we ought to know that the case for total free movement of capital including short term bank cross-border capital flows is not very good. There’s no economic evidence that it is favourable. It’s one of those myths that get propagated and the easy movement of in particular credit capital across borders has been behind a lot of financial crisis over many years. That’s point one.

Point two is that I think we just need to be a bit cautious at believing that the processes of economic catch up are inevitable and that we know what the formula for that success is. It’s quite intriguing that if you think about the process of catch up to developed world standards of living, there are only three significant population countries which are clearly either there or on a path to do it, i.e. to catch up with the initial economic leaders which were in Western Europe and North America. Those three countries are Taiwan, Korea and Japan. I discount Singapore and Hong Kong because I think the economic possibilities of small city states are quite different from the economic possibilities of large population countries. And if you actually look at the story of how they achieved catch up in the ‘50’s and ‘60’s is they broke pretty much every rule of the neo liberal Washington consensus model. They did not have totally free financial systems, they had very significant internal direction of capital. As for the rest of the world I think we are really unclear as to whether there is a sort of middle income trap. If you look at countries like Thailand. They spurted in economic growth but they then seemed to have stalled in their catch up process, so have the whole of Latin America. So I am not as confident as some that we have the total answer to catch up. As for countries like Africa, where there is a lot of confidence at the moment, I think we are growing from a very small base and I think there are some absolutely fundamentals of economic growth. Things like too rapid demographic growth which I think could still be fatal for the economic prospects of countries like Niger or even Uganda.

My third point is inequality. Even if we are being relatively successful in achieving some aspects of economic growth and in particular the transformative fact of the last twenty years has been the growth of China from which I have just come from spending a week there last weekend. It is being accompanied by very significant inequality. Essentially the inequality between countries has diminished. That’s bound to happen if China grows at 10% and the developed world grows at 2% then China’s standard of living relatives the rest of the world or indeed Africa’s or India’s goes up. Inter-country inequality has actually declined but intra-company, both within the developed world and the emerging world, has gone up very significantly. I think we understand some of the reasons for that and some of them are inevitable. When you have a world of free movement of capital and of goods and even if you don’t have free movement of labour, then it will be the case that the available wage rate of a low skilled in America is somewhat impacted by the wage rate of someone in China. And it will also be the case that the wage rate of a very highly skilled person in India or Africa is pulled up by the wage rate of what that person could get if they emigrated and that is the group of people whom we broadly speaking do allow to emigrate, if they emigrated to the developed world.

So we understand some of these things and some of them are quite fundamental and very difficult to know what we would do about it. That I think defines the problems that I want to talk about and I guess we are going to talk about whether there are any solutions.

IG: Thanks very much. Maria?

Maria Ramos (MR): Well thanks Ian and I thought I would chose from the many, many topics you have given us. You’ve really, as Adair said, you have really given us a lot to choose from and we have got two hours this evening and if we want to talk about all of them we will be here for a lot longer than that.

So I thought I would just talk a little bit more about how national leaders and international institutions work together to ensure sustainable growth that is inclusive, reversing the trend of rising inequality in most countries in the world and I’ll talk a little bit more about Africa because that’s where I come from and that’s where I thought I could be a little bit more knowledgeable and more helpful about.

And I talk about it not just from the perspective of capital because I think capital is fundamental to this equation but if we think about it just narrowly from a capital point of view and whether or not this is about capital controls and capital flows freely then I think we begin to miss a much bigger set of issues in economic development and sustainability.

You know I think the first point I wanted to make is that we have seen over the last two decades coming out of globalisation a much higher degree of interconnectedness than we’ve ever seen before. And there are many positives to that but there are also many things we need to concerned about and Adair’s already referenced some of those growing inequalities and certainly in our part of the world we’ve seen some of that as well.

We’ve seen out of that half the number of people living in extreme poverty being halved but we’ve also seen in sub-Saharan Africa much progress in terms of the number of countries that are actually growing and you’ve seen many of the statistics coming out of the IMF showing that actually Africa is now the second fastest growing region of the world, that five out of the seven fast growing economies in the world are in my part of the world. So keeping that in perspective is really important. A lot of this has come but solely from commodity prices. There are other things that have played an important role here.

One of the things that has played an important role is what governments have done to create macroeconomic stability. Now we all can say that macroeconomic stability is a necessary but not sufficient condition for sustainable growth but without it we’re not going to have sustainable growth.

I think the other thing that’s important is that we have seen many governments across the African continent take important decisions about how they allocate fiscal resources. We’ve seen great improvements on the fiscal side. We’ve seen African governments cut foreign debt from some 82% of GDP to 59% while we’ve seen budget deficits come down and that makes a big difference in the way governments spend, how they spend, what they are spending money on.

We’ve also seen great improvements in political stability. All of these are important for development and for sustainable development in particular. We’ve also seen important developments in the other important macroeconomic variables such as inflation. Now the reason I raise this is because all of that put together is important for us to create sustainable growth and for ensuring that overtime we get the improving and rising levels of equality in many of the countries we are talking about.

Having said all of that, inequality continues to be an issue and so thirty two out of the forty three African countries still have geneco efficients higher than medium countries are globally.

So what else needs to be done? In my mind there are three things. You need to continue ensuring that macroeconomic stability is maintained because that’s the one important way that we can extend and consolidate the gains. We need to ensure that fiscal stability is maintained and that the benefits of that are distributed more fairly and with both more reliable revenue bases in each of the countries that are on the continent, that we see more and improved distribution on the expenditure side. And thirdly and importantly in Africa, we need to ensure that the investments in infrastructure happen. Without the investments in infrastructure we are not going to get the improving and rising living standards that we need on the African continent. And it’s in that space in particular that capital becomes an important variable in this equation. You cannot finance investment in infrastructure without capital flows and you cannot have the capital flows without having a high degree of capital moving across Africa, between African countries and externally into Africa and for that the importance of both private markets, the institutions such as the development institutions and increasingly I think greater stability in the financial markets and clearer rules of the game are what makes a difference.

So I wanted to make those three points. 

IG: Thanks very much Maria. Gayatri?

Gayatri Chakravorty Spivak (GCS): First of all sorry I can’t be a little more ethic for you but he’s given me, Jacksonville Florida here I come!

I believe, thank you Michael for inviting me, I believe I was I invited because I do speak of course a completely different language because I am not in fact an economist, I am not a money maker, I am not in the service of money making institutions, although these days one can hardly tell from universities, and I don’t teach making money or anything of that sort. 

On the other hand I very much take your point that one cannot just talk about free markets if one is taking about finance capital and that is I suppose because I live in the United States. Because when in 1976 Ronald Regan slowly turned by pulling Gerald Ford, slowly started undoing the New Deal it finally ended in the collapsing of the separation between investment banks and commercial banks, The Glass-Steagall Act 1933, and some of us were absolutely horrified. Most people did not realise that this was actually presiding something that was absolutely lethal and of course slowly today when in fact people talk about, and you’ll excuse me for talking like someone whose doesn’t know an economics, I mean on the other hand I dare say that they kinds of things I am convinced of, you could probably excuse me for saying this I’m an old lady I can now say something’s with confidence, you could probably not be able to discuss what I would broach. You would probably dismiss what I would broach as impractical but indeed that is the only solution I believe and I will come to it.

Anyway when today we talk about austerity or stimulus nobody in the United States talks about bringing Humpty Dumpty together again, re-establishing something like the Glass-Stegall Deal. It’s gone. But that’s how it began and it seems to me if one looks even at counsel given to the federal government in the United States by the various states when the subprime crisis was at its height, pleased to regulate a bit more, I mean you can read this in congressional records not just sort of blazing red newspapers, it was not possible for the federal government, for the centre to listen to them. It’s part of the record because of the fact that, as you pointed out, the borrow and lend, borrow and lend, borrow and lend, borrow and lend trade in foreign exchange so that you have to keep certain kinds of borders alive even as you are borderless this sort and then the transforming of the world trade sector through futures and so on and so forth into what we call specturalised, sorry different kind of language, that sort of thing has the states in various kinds of nation states in such hock that it’s not really possible even to listen to people who are not at all on the left of centre when they ask for a little more regulation in order to keep things moving.

So it seems to me that we are, I have used up four minutes now, so let me at least say, let me at least read what I’m a little afraid to read because it sounds so impractical, anyway. Our task is to, see I’m interested in producing problem solvers rather than solving problems. And of course our idea of what can global capital do is for it to be done constantly in to the social and I would describe capital as something completely different from the way you distinguished it, from not just human capital and so on and so forth. The Random House Dictionary says capital is wealth but I can’t really say what I would say normally about what capital, how capital might be described. But at any rate in order for this to be done what we need is a change in desires in order for, I’m sorry to say that this is not something just impractical, it’s inconvenient but unless this kind of thing is done it is not possible that we would have indeed a socially just world with global citizenship. 

I can’t say anything more. I have used up my five minutes. But let us in fact think about some of these things.  I did not mention GDP, I didn’t not mention macroeconomics, but I think I would be able to answer your questions as to why it is that I don’t believe that’s where ultimately the full solution lies and I would like to say something about Africa but then I think I would go into six, so thank you for listening to me.

IG: Thanks very much.

[Applause]

All the speakers will get now a few minutes to elaborate on the points that interest the other speakers because we’ll have a discussion amongst ourselves first. But perhaps I could just begin by trying to drill down on a couple of the areas that were raised.

So Adair, you sort of set out the problem and you said now I have run out of time I don’t have time to tell you the solution. Let me give you another two minutes to give us the solution.

AT: The proposition in favour of free market approaches which are very strong in other sectors of the economy do not apply to the same extent in finance. In particular the tendency of the financial system to create too much debt, too much credit and money is fundamental and a subject which modern economics, the economics of modern neoclassicism has dangerously ignored for the last thirty years although there are brilliant insights on this subject in Hyman Minsky and in earlier economists such as Wicksell or even Hayek. Insights which cut across what people usually think of as the different schools of economics, you know, Minsky as a Keynesian, Hayek as definitely not but you read that you will find things about the dangerous unstable dynamics of credit creation which are fundamental.

We need, even compared with what we have done so far, much more capitalised banking systems, much higher capital ratios. We need to control fairly directly the tendency of banking systems to create too much credit in the upswing and that may require uncomfortable things like maximum loan to value ratios, maximum loan to income ratio’s and on a global basis we have got to deliberately recognise that whereas Maria is absolutely right to say that movements of capital can be very important to enable investment in countries which don’t have high enough savings to do that themselves. It makes a huge difference as to whether those capital flows take the form of foreign direct investment or long term equity and a debt commitments or whether they take the form of the most dangerous form of capital flow of all which is short term cross border, a bank credit flows. That is what caused absolute chaos in the Asian financial crisis in 1997. You had banks able to lend money across borders often into commercial real estate developments rather than into something more sustainable and long term. We should therefore completely reject what was the dangerous tendency of the IMF until recently to believe that all forms of capital flow are absolutely equal. In 1997 the IMF was actually on the verge of suggesting that total free movement of capital of all categories should be an article requirement of IMF membership. That shows just how extraordinary far that a fixation with a totally free market approach has gone. Many countries round the world are saying no we are not going to accept that now and I think they are absolutely right. I think one of the most important things we should do is to distinguish within capital flows a real difference between different categories of capital flows and accept that countries, emerging countries in particular, may want to put limitations on the most short and volatile forms of capital flows.

So I hope Ian that’s a few ideas....

IG:...Absolutely. I think in the same spirit Maria you spoke about the things that countries, the reasons that countries need capital and what they need to put in place but you began by talking about what I characterise as the butterfly defect of globalisation which is hyper connectivity leads to the super spreading of bads as well as goods.

How would you if you were in charge of the world or if you’ve been in charge of the finance of at least one country and now you are in charge of a big bank, what would you do? What would you push for to both increase the capital flows but to not also increase vulnerability in the process?

MR: Well you know it’s interesting what Adair’s just said because I was still in the treasury actually when the IMF was pushing really hard for exchange controls in South Africa to be lifted and we had a different approach to it. South Africa still has exchange controls actually. We didn’t believe that we needed, that we could afford to lift exchange controls in that way. We wanted to lift exchange controls in a measured way. In a way that allowed for us to develop our own regulatory environment and to strengthen the regulatory environment and the country has done exactly that. It’s lifted some exchange controls and it’s done that as it’s been able to strengthen its own institutional framework and it’s done that at a pace that meets its own developmental needs. So South Africa still has some exchange controls on capital and it’s got no exchange controls on trade so you can trade, you can buy and sell things. We’ve eliminated a lot of exchange controls for inter and intra-African trades because that’s where we are and that’s where we want to see development and so I think one of the ways of dealing with it is to make sure that you set your own pace. That you build your own institutions, that you strengthen domestic institutions and that domestic institutional frameworking capacity and capability rather than just follow some prescript that says this is the right thing to do because, as Adair points out, actually everything suggests that there isn’t one size fits all. It’s what is good for a particular country and that you must move at the pace that makes sense for that country. So, you know, you interact in a globalised world but you must interact with it in a way that to allows you to grow and develop as well. So you have to set your own terms within that.

IG: Thanks.  Gayatri, I am going to push you a bit as to try and understand what you are proposing. You know you don’t like this system. Are your proposing a sort of barter system? In the conversation we had before I asked you whether, you know, you are thinking about things like BRAC Bank or Grameen Bank as viable alternatives and you said you didn’t like them. So, I am interested in what...how you would see an economy functioning in your ideal world.

GCS: Ok, I think I’m really not the person who can answer that particular question but I am certainly not proposing a barter system, no! In fact, as I said, I think what should happen is that the capital should in, and I don’t believe you disagree, should in a proportioned way be constantly turned around in the interest of social welfare. I mean who doesn’t believe this? That’s the question. At least in one way or another people say in public that they believe this unless you really count the horrifying republicans today who are not even expanding medicare. Let’s forget Medicaid. Let’s forget the United States. It’s hard for me to do so. I have lived there for fifty two years. But at any rate, no of course I am not proposing a Barter system. What I am suggesting is that in order for this really to happen, because quite often when one speaks about sustainability, I am after all Jeffrey Sachs’ colleague, quite often one forgets what it is that is being sustained. What it is that one is minimising for what. And I agree with Maria that it is not one size fits all. It is in fact something, for me it’s not even each country has to have a different kind of fitting but in fact sectors within a country have to have.

I’d like to tell a story here, after all I am a narrative type of person right not an economist type of person. I’m constantly asked, as indeed Michael kindly has asked me here and as I told you Michael, I want to come to these things, I’m on the Council on Values of the World Economic Forum because it’s a certain kind of exceedingly sophisticated fieldwork to which people like me who are taken to propose barter systems in the face of economy, you know, to people like me in fact never get a chance to enter these enclosures. So therefore I come for my own instruction and to you that we are not just Luddites sitting in the corner and weeping because there is capitalism no, but... thank you!

[Applause]

So at any rate I’m asked to these places and I was asked by the Global Development Network to go to their meeting in Arusha and I was...there are always people who think, you know, perhaps someone will listen and so I was listening to these RND people and policy, agricultural development, African academics on one side, the policy folks on the other side. I was very quiet. I was very quiet because I always know what I don’t know at least after all these years of university teaching. But the end after everything was over I asked the best, we asked the best people, if they actually went to the people for whom supposedly, and these are African academics alright, for whom supposedly they are supposedly doing work in the agricultural sector and the answer was yes and I was delighted and I said well talk to me about how because I believe statistics are produced at the expense of ignoring texture. I could give you many examples. So the answer that I got was roughly this, we first established our figures, you know, we verify, we do all kinds of things. We collect data and we produce our figures. We train research assistants. Then we send out the research assistants into the field, into the areas to find out, to verify the date and so on. And I asked each one of them separately are there ever any surprises and the answer was universally no and it seems to me this particular thing, the RND and policy going in circles in that way and something being left out completely when one talks, which as I say is texture, we work with, I am not saying you should, but I am saying that rather than think of us and to that extent we ourselves also ought not to think of us and you but you also ought not to think of us as expendable, impractical and, if I may keep on quoting you Adair you really gave me...you will be quoted outside of the room, but at any rate as long as you don’t think that we are hopelessly impractical and looking backwards it seem to me that given, you see I was invited to sort of give a talk in Athens by the Nicos Poulantzaras Institute, the sort of new broad left ,and I read very carefully, I gave as my title ‘Europe and Bull Market’ and I was looking at very carefully for people who are uninstructed in economics but sound not completely dumb. I was looking way in which world markets are defined. Each and every one of them finally, even the most incredibly incomprehensible textbooks, finally I mean this is why Obama to an extent has chosen Samantha Powell for his UN Ambassador. We each and every one of them finally went into somewhere and, affective description, investor confidence. That’s an affective description. So too an extent what we are talking about is a genuine and careful textural training of affects so that it is not just we doing something top down for the poorest sectors, the poor people of the world.

Rather than that have a feeling, have accountability which comes from actually engaging ourselves with large sectors of the electorate and as you know, as you say, one size does not fit all. The world has a great wealth. We cannot talk about global citizenship unless there is a certain kind of uniformed governmentality across the field. So as the World Bank used to talk about people and I remember Andrew Steer saying to me in 1993 that the European Parliament Professor Spivak you are summarising and I said to him of course I am summarising. When you use the word people what do you think you are doing? And in the same sense when we talk about global citizenship we are assuming these kind of things that are then dismissed as impractical.

So I’m really proposing that we work with you so that your solutions do not but that you listen to us and it will involve that there will be some kinds of compromises. You know we cannot all depend on different sectors having different kinds of assumptions and I can see on some of your faces a great deal of impatience here but it does seem to me that you have to really put your money where your mouth is. You cannot simply carry on talking constantly about how to keep the worlds poor happy and bring them up and emphasise the social productivity of capital and always somehow ignore bad statistics when it comes to what happens when one produces social productivity at one end. It’s not something that one can...the statistics are available. So that it seems to me that’s what I’m talking about. That we create, we work with you so that those whose problems are regularly solved and I don’t want to talk to long but I want to come around to Africa at some point when the discussion continues so that we create a certain kind of...we keep on trying to create a certain kind of possibility in those who otherwise remain simply the possible benefactors of the growth of the rest of the world. That’s really what I was talking about and it is a solution. Not impractical, very inconvenient, interminable because each generation is born afresh and we have many, many languages, many, many planes but if this is about people and citizenship you have to actually face up to it. Not all the solutions are macro. I’ll stop there.

IG: Thanks’ very much. I am glad I...

[Applause]

I am glad I provoked you to unpack some of that. So that was the purpose of it so thank you in that.

I am going to give the panel now an opportunity to sort of probe each other a bit and discuss this issue and I don’t know who’d like to go first.

I have never known these people stuck for words.

Well I can keep it going if you want?

AT: Why don’t you ask another question and then...I didn’t know you were going to ask us to do that. We can think about that.

IG: Yeah, Ok. Well we don’t we start with that. I mean so what I’m picking up from you, Gayatri, is sort of a belief that obviously capital should be the servant of development, of individual needs, of people and that one needs to start with that. With an understanding of people, values in that. And I think that’s something that we would certainly want to subscribe to and the question is operationalising that with capital, banking or other capital and when I speak to someone like Muhammad Yunus or the others that do micro lending and start these incredible institutions like BRAC or Grameen and those institutions they will say that’s what they are trying to do.

So I am interested in why, you know, your perspective on why you think that maybe they are not achieving that. Where would you be that’s different to them on it?

GCS: Well thank you. You asked me that question and I didn’t want to take more time. I don’t think capital should work for individual people. I actually was talking about two different kinds of things. I was saying that capital should be turned around constantly so that in certain just proportion, I mean people shouldn’t become Jesus Christ suddenly, capital should be constantly turned around for social ends. That’s not individuals. Social is something quite other than talking about individual people.  Then in another context I was saying that in order for this to happen people must want, and I’m not alone in saying this, this has been going on now for I don’t know two hundred years people have been saying,  people collectively must and today in the United States , in India, the two countries I know best, people must want to do this because in fact, I am sorry audience, but I am the kind of person who reads a little bit of Kant every morning and every night and you’ll see that these arguments are very, very old indeed.

AT: That was Cant rather than Kant...

CGS: Hey come on. I got bartering from this guy....

[Laughter]

AT: I just wasn’t sure to start with....I was thinking the idea of reading Kant every morning before breakfast is very, very exhausting and dangerous.

CGS: Well there are different kinds of people in the world. It cheers me up believe me to see that I might not be completely wrong in the face of people like you. But at any rate...

IG: It’s good to know that this is being live streamed....

CGS: Now, to go back to what I was saying, jokes aside. What I was trying to say was that on the other side one can indeed be and one can acknowledge that these desires have to be in you, in me, in us, in the poorest. It’s not like somehow the poor are either better or worse or, as you folks used to say in the nineteenth Century, deserving or undeserving. It’s not like that.

IG: Not me folks. I was one of the migrants.

[Laughter]

AT: Can I ask...when you say ‘these desires’ I am still not getting the argument. I have to say. What desires?

GCS: The desire to give up something in order that the many can be served. That’s the social. It’s not just individual. I mean once again...

AT: Absolutely.

GCS: To take the capital and make that happen for individuals, that is once again a very altogether impractical and Luddite notion. No. The idea of the relationship between capital and social, you know, the breakdown of socialised medicine. Privatisation over against the social etc etc. That word socialism is not unknown even in common conversation so when Obama was talking at the Press Club he made a very nice joke. He said well, you know, I mean I thought of myself. I believe I have changed a little bit. I thought of myself as a socialist Muslim. So that was a joke. Ha ha ha ha.

So this is the meaning of social that I was thinking about. Nothing particularly. That has to be based...this is why socialism failed. Because after freedom from there was no development of freedom to. So the freedom to somehow give up something to help others sounds a little bit like you shouldn’t be so, so tired of what I am saying. You know what I mean? Pay a little attention alright.

Hang on. Let me just finish Grameen Bank and I will come back to you.

IG: Well. One minute...

GCS: So what happened with Grameen Bank was this. I am agreeing with Mohammed Yunus but as you will know at first I was working with Fady Joudah, who was his student. At first the reason for lending money to women was because their rate of return was very, very much higher and then what happened was slowly the argument, and this is very distinct from Savar [Dev] as I said before. Slowly the argument changed into a gendered argument and if you actually went into the actual places where these microcredit undertakings were taking place and looked at the video opportunities and so on and so forth. It was not possible for the women to say anything apart from what they were saying. So therefore I am speaking from the experience of being spoken to by hundreds of women in Grameen Bank configurations who could speak in Bengali to me knowing that there was no camera, no nothing and so the kinds of routines, and this is also in Bengali language newspapers all over Bangladesh, so the kinds of routines, it’s a very old argument that some of you at least have seen already in that terrible turgid essay ‘Can the Subaltern Speak’. No engagement with the actual mental production of these people, these women into something other than the recipients of an extraordinary gift from an extraordinary man giving proof on television of how this is happening when our...it’s nothing against Muhammad Yunus. He can’t be present at every little Grameen Bank all over the place but this is not something I am saying alone.

And so therefore my general argument about microcredit, which I will hold because a minute has passed, it takes time to explain, relates to this but is not completely identical with this. I am not against microcredit. It’s better than locked up garment factories but I believe once again if microcredit is going to succeed you folks have to work with us. That’s really my bottom line.

IG: Maria, You’ve worked a lot on trying to make capital work for poor people. What’s your sort of take on this conversation and what capital can and can’t do?

MR:  I think there is, there are some issues here because you know you can’t...again it’s one of those issues where you can’t just generalise. I think you have to be sensitive to the communities you are trying to serve, to what their needs are. You can’t just assume that a Grameen type model is going to work everywhere. That it hasn’t...I remember walking around villages in Bangladesh, looking at microcredit schemes with women and asking myself a lot of questions about why it works, if it works, and if it’s delivering on the promise. At one level of course it did because there were, you know, women had access to credit. They needed to put their kids through school, to provide education etc. I can speak the language so I saw what you saw, what you spoke about. So clearly some parts of it that serve a particular need in the community and there is no doubt that lots of things in Bangladesh that were very successful.

IG: Why couldn’t you do that in South Africa? Why couldn’t you get microcredit going in South Africa?

MR: Well there is microcredit in South Africa but it doesn’t look like the Grameen model, simply because South African society doesn’t operate in the same way as Bangladeshi society. You can’t structure the credit schemes along a community based credit scheme where ten people get together and they form a club and you can lend there into that club and people stand surety for each other etc. So it’s not the structured in the same way and therefore you can’t just transplant the same model.

I mean we try different things. One of the things for example we are trying is we know that women who trade every single day selling fresh fruit and vegetables are on the streets of Johannesburg and trading cash need very, very small loans. We are just piloting a scheme at the moment where we give them very small loans and we help them maintain the cash slips from buying the fresh produce at the fresh produce market. But it’s an individual loan and then we helping them with cell phone banking so that they can begin to transact on using cell phone banking so that they don’t have the cash with them so that they are not exposed to all of the issues that women carrying cash at the end of the day on a dark night in Johannesburg are likely to be exposed to.

It’s a different thing. It’s not the same model. You can’t just take a model that works in Bangladesh in a village and transport it to Johannesburg. We’ve just been in Nairobi and in Kibera and they’ve got a model, they’ve got multiple models there, but they certainly have the model there that looks a lot more like the Grameen model and it’s working incredibly well there.

So I think microfinance’s has an important role to play but you have to understand the circumstances, you have to understand the environment, you have to understand who the customer is, you have to understand people’s lives and what their needs are and then you can service them. If you don’t, I don’t think you’ve got the right model and that’s, you know, that’s an important issue that we have to understand as banks as well. Can’t just produce a product and then go and try to sell it. I don’t think that works.

IG: Adair, let’s go from the micro of understanding people that you want to serve to the macro. You were the regulator in the UK. I presume you understand the needs of the British people for finance. What do you think you can do at the macro? What can government do? You know, the individual banks can design their products and you can or don’t get cooperatives going and that’s all sort of an organic process and a competitive market process. But what can governments do? What can a regulator do to better serve the British people in your view?

AT: Well, I mean I can argue that...I could answer that in relation to British people but I am not sure that that’s.....

IG: Or in general...

AT: All that interesting in terms of development because I think the needs, the financial needs, of rich developed societies are totally different from the needs of emerging and growing economies. I mean in the UK, you know, you’ve got to work out what you expect the financial system to do itself freely, what you have to stop it doing and what you’ve got to do to compliment what its doing.

At the moment I think we have a financial system which left to itself it’s banking system will have a huge skew towards lending money against real estate and lending money to people who want to consume immediately. We have iconic stories in banking and you will find this in almost any economic textbook. It says what does a bad bank do? Takes money from savers and intermediates it through to businesses to invest.

Well the UK banking system lends 1.7 trillion pounds. The element of that, which is reasonably described by the 'I take the savers of households and turn it into loans to businesses other than commercial real estate’, is about a hundred million or so out of that seventeen hundred billion. That’s a fact. That’s how much is going on. The vast majority is lending against mortgages to enable people to buy houses, usually pre-existing houses. That’s about 1.2 trillion. About  hundred and fifty billion is consumer run secured credit which is essentially lending to people who want to consume today rather than consume in one year’s time and about three hundred million is lending to commercial real estate development. Nothing wrong with that in many ways. The process of good commercial real estate development can be part of a modern economy but actually an awful lot of it is actually buying already existing commercial real estate investment. So an awful lot of it is actually financing what in economics we call an asset play or impatient consumption. Only a small amount is actually, you know, funding real investment.

Now there’s several reasons why these may be perfectly good things to do but there not what we often describe as the iconic activity of what a bank does. I think some of these we will do too much of if we leave it to regulate to banks freely to chose and we need to constrain it and conversely I think there are issues as to whether the banking system or even the capital markets totally left to itself will provide adequately long terms capital for some of the infrastructure developments or green technology investments which we need to deal with for instance with the problems of climate change.

So my general point is you simply cannot assume that you know the processes of credit creation left to themselves will end up serving what we would think is the most fundamental needs of a society unless we regulate and manage in quite a significant extent. And that’s why if I were in an emerging market I’d be wary not only about too rapid as Maria described it liberalisation of short term capital flows. I’d also be wary of some of the domestic liberalisations as well. If you go back to how Korea and Japan achieved extraordinary rates of economic growth in the 1950’s and ‘60’s and just remember this fact – in 1950 South Korea was poorer than the Congo. Right? In 1950 South Korea had a lower per capita GDP than the Congo. And if you look at what they did, they were actually very tight in terms of allowing the liberalisation of consumer loans because they said well if you do that the whole banking system will focus on consumer loans for short term consumption and they actually made sure that there was a preference for the investment in their industrial base.

These are things which the consensus has moved hugely away from over the last fifty years but they are important. One thing I would say on micro investment, microfinance can be very important but don’t knock big finance as well. The process of economic growth, and we can argue about whether we want economic growth or not. I mean my basic point of view is that once you get to the standard of living as the rich developed world further economic growth, further growth in GDP per capita is not terribly important. I think it’s very, very important when you’re on a thousand dollars a day, two thousand...a thousand dollars a year. Sorry!

[Laughter]

IG: Those terribly poor people!

AT: I’ve spent too long a time with investment bankers!

So there’s a curve here, you know, growth in its most straight forward per capita income terms matters a lot in the early stages of economic transition and then you get to a stage where it doesn’t matter much. And those transition processes they can’t be done, I don’t think, just on microfinance and micro businesses and there is a danger sometimes that in our iconisation of small businesses, because small and medium enterprise businesses is one of the great icons of this world. When a politician can’t think of anything else to do they give a speech about SME’s because, you know, there these things we all love. The economic development process involves lending to and the development of small enterprises but it also involves well run and well regulated big businesses doing some of the economic functions which only can be done with large economies of scale and we must remember that as well.

IG: Great. Well I guess the one problem for the rich countries, even if they are on thirty or forty or fifty thousand dollars per capita is when they are in crisis so one couldn’t really imagine Europe or the UK not growing because it has such debt but that gets us back to the beginning of the conversation we had which is how you stop crisis’s.

Let’s open it up. If you have a specific question for an individual please do say so otherwise I’ll use my discretion and if you feel like identifying yourself please do.

Yep, the gentleman with the hat on.

Audience 1: [Inaudible]

IG: Sorry, the mike’s not on....now talk.

Audience 1: Ok cool...thank you.

My question is directed to Maria Ramos. I think talking about specificities, countries of particular histories and circumstances like South Africa for instance and there for the past seventeen/eighteen years been trying to address the legacies of apartheid. How does capital relate to addressing social and historical injustices?

Thank you.

IG: Ok, thanks. I’ll collect a couple. You’ve set a wonderful precedent. Keep your questions to questions and keep them short. So thank you for setting that precedent. 

The gentleman over here.

Audience 2: Thank you. My names Mend. I am a post-colonial studies student and my question is for Maria Ramos. What surprises me is that she keeps....you’ve been talking a lot about microcredits and infrastructure but you haven’t actually responded to one of the points Spivak made which is on social welfare and so while I understand your argument that you are trying to put forward I have a problem with like understanding how microcredits can actually be useful for people if they don’t have any social welfare system that they can benefit from. Because for many people if they don’t have social welfare it simply means that they are going to die. So whatever micro credits are there for them they are not going to be able to use them.

IG: Ok, I’ll take one more question. The lady down here.

Audience 3: Judy Moody-Stuart. I come from the NGO world really with some interest and gratitude to the world of capitalism. I’m a kept woman.

My question is where do you get your information from because I know you don’t want a statement from me but hidden in here is an impression I’ve got that when tranches of money are given, say by divid which is capital nonetheless, the business of evaluation and monitoring is done by a sort of cadre of a peer group of people who study with great emotion and time spent with the people that Gayatri is talking about and this happens actually in the criminal justice system here in Britain but they tend to write for one another and the trustees of the donors think oh good we have done an evaluation but the people are not involved in a sort of feedback loop with the information that’s measured.

This is the impression I’ve got. I’m sorry if it turned into a statement. So where do you all three of you get your numbers from.

IG: Great. Alright, we’ll keep the responses as short as the questions please because there are quite a few more hands up and we’ll have many rounds of this if we keep short.

Go ahead Maria.

MR: On the first question on addressing historical injustices. I think it’s been a combination of things. I think South Africa in the post-democracy periods did a number of things. It took a lot of discipline and actually a significant amount of political leadership by initial President Mandela, followed by President Mbeki and subsequent governments to keep the country focused on what it needed to deliver and to do the right things politically and to take business along with it and other social partners and I think it’s been a combination of taking the right decisions, making the right choices from an economic point of view, from a social point of view and staying on that path. It hasn’t been easy but I think over a period of time we have got there and it’s not something you can do...you cannot change the social injustices of apartheid in ten or fifteen or twenty years. It’s going to take a long time but I think one of the things we have learnt is that we have been able to take a whole range of people along whether they’re in business or globally or domestically...so I think...and made some very important and very difficult decisions actually internally on what the right sets of policies are.

So I think on that, on microcredit, we’ve spoken a lot about microcredit this evening but I agree with Adair. It’s not the be all and end all. In my opening comments I did make the point that you have to have fiscal sustainability as well and you have to make the right allocations in your fiscal budget. I can only tell you from my own personal experience that one of the reasons why we needed to get fiscal sustainability in South Africa was because in the first few years we ran the danger of ending up spending more money on debt service costs that we had available to spend on health, on education and social welfare and we needed to change that balance. So we needed to make some serious decisions. We needed to cut the budget deficit. We were spending too much money on the wrong things. If you look at that budget now, the bulk of the spending is actually on health, education and social welfare. So you do need to have a rising floor of benefits for people who otherwise would be excluded from the mainstream of society. So you do need to have that otherwise there are too many people who fall behind.

I also have to say though that if that is all that’s going to happen in society you are going to overtime have more and more people falling behind. So you need to have both. You need to have economic growth, you need to create opportunities, you need to be able to make sure that that economic growth is inclusive so that young people who don’t have jobs today overtime will have those jobs but in the interim you need to have a social welfare system that cares and caters for people who otherwise would be excluded from society.

IG: Great. Do you want to comment?

GCS: Yes. I want to agree with you that the injustice of apartheid can’t just be undone in a few years but what I think I would want to add to what you said, you know, just as in the case of the different kinds of countries requiring different kinds of microcredits stuff, I mean what you give the loans to the South African women selling vegetables and then banking through cell phones and so on, but some of the things that I would say would be is go from there even to texture and I’ll talk about it more when the moment comes. But going back to how to undo the crimes of apartheid, and you can’t do it in twenty, thirty years, I completely agree with you but what then we have to also think about is that the kinds of crimes that these kinds of things do and I am thinking for example of the millennia caste system in my country. That is a kind of apartheid which is also horrifying. What they do is they do cognitive damage to the people and that’s where I began to undo cognitive damage it can take, in fact not just especially if you think about the castes system for example, to undo cognitive damage of that sort you cannot have a solution that’s around the corner but you also have to engage with where I began. It’s not impractical. This kind of complete denial of the right to intellectual labour, production for manual labour, punishing for intellectual labour and so on and so forth. I know I’m coming from both schools. I’ve been doing this kind of work time and skill given for thirty years. If I were a sociologist you would call it intense case studies. I don’t. I’m simply a teacher at both ends of the spectrum. But that’s what I guess I’m very happy that you actually mention that because in order to undo it you don’t just invest, you don’t just give credit, you don’t just say more is being spent on social welfare and I think that’s very, very important to recognise that it’s undoing cognitive damage, sometime millennial and that’s a different kind of argument from the arguments that you are proposing. Number one.

Number two. What you were saying about DFID. I have a lot to say about the NGO world and since I’ve said it in writing over the last few decades I won’t say it again. But in terms of the DFID I have nothing against them. I don’t blame anybody who belongs with them etc etc. I just know that they came to the same places where I do my work. They would come, they would produce statistics by having, I am talking about the education sector, primary education, having whatyamacallit workshops and so on and the guys, the primary school teachers who were absolutely useless, they would be very very happy to go, you know, good clothes etc etc . Those management style workshops and so on and what would happen is good statistics would be produced. Just as you were saying, how, where do you get your numbers because they were very good at these workshops? They were having a grand time. But nobody, nobody followed through by looking at what happened then so when you say it’s spent on schooling, what schooling? When it’s you own children you go around looking at the quality of schooling and when it is even the human development index its quantity. How many years of schooling. I mean it is common sense what I am saying. So you know they would produce these statistics and you would find [inaudible] talking about it, you would find it in Seminar Magazine, all of these credible statistics. You go back to the schools, nothing. Exactly what used to happen before the workshops came. So I would say, I would certainly say, and I mentioned it in my first few remarks, learn to look at how statistics are produced by ignoring texture and the idea that economic growth is not necessarily a description, I mean this is not something just coming from me. I was looking at the newspaper, The International Herald Tribune and the economist, Turkish, American economist, discussing the idea that Turkey has become so wonderfully democratic because of economic growth. Look at it! It’s the most recent International Herald Tribune, where he is talking about the fact that what was necessary was people being trained into being able to participate in the structures of the state and protesting, objecting and so on and so forth and it seems to me these are not just superficial arguments. These are arguments that are common sense and have actually held good and at the bottom there is what I was saying, training people to want other kinds of things rather than just justified self interest as often in the international civil society but that’s another argument.

IG: We’re going to have to keep our responses short if we get around to more questions.

Do you want to add anything on evidence Adair?

AT: Well I don’t think I’ve got much to add on evidence. I mean I’m not at all an expert on the evaluation of, you know, divid type expenditure. I mean the only thought I have is that I think when your operating in a developed world the statistics have a certain credibility. You know they tell you what...they appear to tell you in the sense of, you know, I’m pretty sure that my statement as there is 1.7 trillion of bank lending is a good statement and that the breakdown of that between different categories is meaningful. I also think that our figures for what is GDP per capita are meaningful but only go far as they go. I mean they are what they are. They add up a certain set of productions across the economy and they say well when we add these up they were worth a bit more this year than they were last year but that doesn’t really tell us much at all about whether that was good for humanity, whether that’s likely to increase the welfare of people, whether that’s likely to make people happier or have better, you know, a real better standard of living.

Indeed I think increasingly one ought to think, and it actually raised a point Ian said earlier that once you’re in a rich developed country what matters in terms of this thing that we measure through GDP, is that we don’t have big setbacks to it because when we have big setbacks to it, when we make a mess of our macroeconomic management people become unemployed or they lose a house that they have already bought and that really does upset people. It causes pain. But actually this thing that we’re measuring is not finely enough measured for us to really, for it be worthwhile getting worked up about whether over the next twenty years it’s going to grow at about 1.7% or 1.8%. I have not the faintest idea which of those will be better in terms of the average level of welfare and happiness.

So I think there’s a difference between...there are some parts of the world where you just don’t know whether the figures are true or not and there are others where you can be fairly confident that the figures are what they are as long as you understand the clear limitations of them in terms of what they are telling you about the fundamental things that you need to care about.

IG: Thanks. Yep, the gentlemen in the back. Yep...

Yeah it’s on. Is it on?

Audience 4: [Inaudible – microphone not working]

IG: I think they want you to swap the mike there sorry. That one doesn’t seem to be working.

Audience 4: Yes. I was saying one example of Mozambique is just because of coal and natural gas you are going to have a development of one thousand railway line, one thousand kilometre of railway line, ports, airports and then energy is attracting a lot of investors. We are speaking to the major financers of this world because of the resource boom. This is not happening only in Mozambique but other places.

Just one last comment that I would like to hear some response from the panellists is...well actually what I wanted to say is Africa as a continent and the regional blocks are working on programmes for infrastructure, development and attract investment. What would you have to say on what they are doing? There’s a master plan for SADAC infrastructure, there’s a master plan for the continent. What can you tell us about this? I think we should study them more.

IG: Thank you. Alright, a lot of hands up. Not much time left. So short questions and short answers and we’ll be able to get everyone.

I’m going to take that little cluster of people there. So the gentlemen behind there.

Audience 5: I’m Kevin. I’m a PHD student, cultural studies. My question, I suppose like Gayatri started her speech by pointing out this, but I found myself in this position today that pretty much, let’s say 90% of what has been said is in a language that I don’t really seem to understand. So, perhaps, you know, the sources that people read also indicate a lot of, you know, how they also speak.

So my, you know, as a fifteen year old I was probably, I would consider myself privileged to have on my school desk, you know, I had Dante’s Comedy, Marx’s Kapital, which is what I thought the title of the seminar would be about, as well as Kant’s Critique of Pure Reason. Really chunky big books that probably a fifteen year old shouldn’t read.

So my question would be just to Lord Turner and to Maria since they have had big positions in the economics world, whether they have read Marxist Capital, what their opinion of it is and that’s all. Thanks.

[Applause]

IG: That’s great. I am very impressed by your reading. I wish my son would read as well as you.

Yeah, the gentleman over there.

Audience 6: ...question and it’s to ask really what...is there a lot of scope for mutuality. I mean we are talking about these big financial flows. One hundred and fifty years, two hundred years ago there was a real space for mutual’s to set up where ordinary people were able to try and control capital and put it to their own uses.

And then the second very quick question is that we are taking about globalisation and the huge financial flows that are moving across the world and some of those are being sent by ordinary people and lots of migrants are moving, about half a trillion dollars worth of remittances are sent across the globe, and that hasn’t been discussed at all. Remittances have been very important in the story of India coming back and China coming back. So I wanted to know whether Maria particularly, whether that’s something that African’s and somebody that’s running an African bank, whether you’re interested in harnessing.

IG: Great. The gentlemen...just take those two there.

Audience 7: Very quickly. Alexis Flynn, I’m a journalist with the Wall Street Journal.

On globalisation and a rise in inequality, I mean it seems that a big part of this is due to the trade imbalances in the world and that’s an issue that never really been addressed properly. I mean I’d be interested to know the panel’s view on that particular thesis. If they do indeed see, you know, the current account issue, current account imbalances as kind of a critical issue around the flow of capital and a way of perhaps addressing this inequality, possibly by, I don’t know, re-evaluating you know this international clearing house idea that Keynes came up with at the time of Bretton Woods. That’s something that particularly now I think would be quite appropriate and perhaps even to, you know, take into account things like remittances as well which are obviously a very interesting thing for capital flow. But yeah, something on that would ...

IG: The person in front of you...

Audience 8: Thank you. Just a question on medium sized businesses. At the cold front of these implementation of these capital flow restrictions are a lot of medium sized businesses. You can talk about hot money. Maria, as you know in South Africa we’ve done is liberalised hot money while the constraints on small businesses remain incredibly tight even if not on paper in practice. It’s almost impossible. So entrepreneurs, and the same applied in Nigeria and Kenya and so on, who want to build the next Google step number one is to leave the country. And in fact even if I want to run a hedge fund from Cape Town it’s impossible. I’ve got to go and set it up in Mauritius or somewhere else.

So that we’ve created this quite arbitrary constraint on domestic citizens and completely freed up everybody who’s not a South African, a Nigerian or a Kenyan to plough money in and out of the country as they feel like which surely must harm development.

IG: Thanks’ Frank. Let me just see a show of hands of who still wants to ask questions.

Person there, person here. Ok. Person there.

So that’s great. Not too bad.

But be very short in your responses otherwise we won’t have time for another round.

Maria...you’ve got the most questions so why don’t you think first.

MR: I am hoping to share my [inaudible] I have no intention of answering all of them myself.

So let me start with some of the issues around capacity and then I will try and take all of the capital flow kind of questions together.

I think capacity is an issue. I think the gentleman, the...from Mozambique, made that point. And Mozambique is one of those seven fast growing countries in the world and in part because of all the resource finds. I think one of the challenges actually is not necessarily going to be whether the capital is going to be there to finance all of the projects. I think one of the big challenges Mozambique is going to have is going to, potentially going to be around whether it’s going to have all of the resources from a people point of view to support all of that development and also whether it’s going to be able to develop all of the institutional regulatory frameworks that it’s going to need in order to manage and harness all of the benefits of such rich resource findings and I think the governments doing a lot of really good work but all of the gas and all of the coal resources have been discovered quite quickly and you need to put all of that regulatory framework in place very fast and these things take time and they take time to put the regulations in place, the regulations take time to mature, the systems take time to mature, and it’s not so easy to do.

So there is quite, I think there is quite a bit of challenge associated with that and I think it’s the ability to work across a number of sectors to try and attract the right skills to take advantage of other experiences, to learn from other people and other countries mistakes and to work regionally as well with their regional bodies who were doing the work on this.

You mentioned the regional institutions and the work that they have done in terms of putting together the infrastructure plans. I think they are there. They are pretty well defined. I think the biggest challenge from a regional point of view is to make sure that they actually implement that. And if you don’t they are just interesting plans and without the implementation it’s a nice planning exercise. So I think that’s one of the challenges that we face.

Let me say that I think the second question was from the, you don’t look like a fifteen year old anymore, but I was really impressed that at fifteen you were reading Das Kapital and Dante and I was disappointed that you weren’t reading Keynes at the time.

But yes I was an activist at one point in my life so I probably read a lot of, I don’t know how much of Marx you read, I hope you read much more than just K. But I did actually read quite a lot of Marxist economics and wrote a thesis on Keynes. I won’t bore you with the details. But happy to discuss it afterwards.

On capital flows, I think Stuart you make an interesting point and I think of course your right. There are challenges because what we’ve done is we’ve got no real capital constraints on inflows, on portfolio capital. Some of that because we’ve got very well functioning, very deep domestic capital markets and you want to have some of that. That does bring in foreign investors into your domestic bond market for example, into your domestic equity markets. But we still have capital flows on South Africans investing offshore, particularly if they are investing outside of Africa. And that is part of the complexity. I think one of the challenges comes back to the point I made earlier on and that is how to...the governments always been quite cautious about insuring that they’ve got the right regulatory environment in place to ensure that if people are investing offshore that they understand where that investment is going.

Now that doesn’t always work for medium sized enterprises and I think they get that but it’s about how you liberalise and what pace you liberalise and how they do it in a way that they can still manage.

So I think that those are some of the issues.  The portfolio flows, the portfolio liberalisation was designed to liberalise the domestic capital market and we’ve had lots of inflows of foreign holders of our domestic debt and I think that that’s sort of...

IG: ...stop there. We’ll let Maria come back to the other questions in the next round otherwise we are not going to have a next round.

Gayatri, do you want to...

GCS: I’ll be much briefer than I have been, ok?

First of all, I now understand why I am agreeing so much with Maria because of your very far activist past.

[Laughter]

It’s coming...

IG: You should be agreeing with me too then!

GCS: Well good! I am trying. I’ll try next...

Ok you know the reason why there was all this kind of talk about what good can capital do etc I was trying to kind of keep to the provocation ‘how can global markets serve the global good’ which I was given.

I mean I normally don’t talk about what good capital can do. So please don’t think I am just a kind of moralistic person.

Second of all, I wanted to say, I wanted to ask you a question, two questions. We haven’t talked about gender at all really and, you know, you talked about Taiwan as one of the models right? And I have just been working with a Vietnamese researcher, a woman, who’s talking about how Vietnamese women are showing their own reality as decision makers by willingly going into marriage brokerage to Taiwan, learning Chinese so that they can move into a more driving capitalist society. I’ve got the thesis with me. She just gave it at Columbia.

And so my question to you would be what would you propose for a place like Vietnam so that it doesn’t produce this kind of admiration of Taiwan in the gendered sector by producing a description of free choice on the part of women by going into marriage brokerage and learning Chinese in order to go to...we haven’t talked about this very microcredit, yes, but not these kinds of very peculiar problems of gender liberation...

[Laughter]

...and I think we do ought to think about everything.

IG: Adair, I am sure that’s a question you have been asked before.

[Laughter]

GCS: My third question. You see because it works and this is why housing is so important. Also all of the idealistic stuff around housing. Believe me fifteen year old, one can talk about it in terms of Marx, I’m controlling myself.

Now my final question is you know you describe yourself again and again as these very rich developing countries, developed countries. Very sorry that was also very poor Freudian error. Very rich developed country you are. But anytime I come into my usual haunts here and talk to university students, what I hear about the privatisation of the universities does not come from, you know, all of these student loans, how that would be free choice and so on. What I hear from the students does not describe a very rich country that is kind of completely to be distinguished from all other parts of the world and on the other hand when I am in China let’s say or in India we don’t talk that much about Europe. All we say is the Eurozone is a collection of credited countries and debted countries that enter union. That’s how that part of Asia talks to the common kind of person about Europe.

So three questions. Can one talk about this Taiwan stuff, you know, in terms of a full gendered idea. And the other question, it wasn’t a question, that the benevolent stuff came because of the provocation given. And finally...

AT: Sorry, which benevolent stuff?

GCS: You know when you saying you can’t just talk about...you Adair cannot just talk about is it doing good for people. It’s such a...you can only say...

AT: Did I say that?

GCS: Yes. Indeed. You said...

AT: I...

GCS: Let me finish my sentence!

AT: I’m really getting confused as to what it is I’ve said that....

GCS: Let me finish. When you said that in our part of the world the very rich developed countries, all we can say is the statistics are correct. That’s...

AT: Yes.

GCS: Ok. So we can’t really make these statement about that will do good...

IG: I think you agree on this point...

AT: No, no, no. Your completely...I think we have got crucially to ask the questions as to whether our development process is serving good or not and I am saying the statistics do not answer that question. So if you thought I was saying we can’t ask questions about the end objectives of society and whether the economic growth process is serving the needs of humanities deepest needs, that is precisely the questions which I am attempting to put on the table and saying the statistics don’t answer it. So it sounds like you must have just completely misunderstood what I said.

GCS: Absolutely and also...

AT: And I am afraid I have really very little to say on Vietnamese women going to Taiwan...

[Laughter]

Other than, other than, you know, I think successful development processes once they are successful and this is why although I doubt the materialist proposition that relentless growth is required I do think the fundamental transition from low levels of income to the sort of levels which the rich developed world, i.e. us, America, Europe, got to twenty or thirty years ago. I think that process is important and it tends to be also associated with the ability of women not to feel that they’ve got to make those sort of choices in order to pursue their life chances and that’s why, you know, although I am not a sort of growth, growth, growth forever person, indeed absolutely believe that that is not right and that we’ve got to ask searching questions about the long term objectives of economic growth.

I also believe that one shouldn’t flip into a sort of romanticisation of poverty which tends to be something which rich people fall into rather than poor people themselves.

So that’s my attempt to answer those questions.

Can I say something on Das Kapital?

IG: Yes.

GCS: Das Kapital! Good heavens!

IG: I think we could all say something.

[Laughter]

AT: You know cause we were asked this sort of what was our reading list etc type stuff...

GCS: I teach it of course.

AT: Yeah well I am sure you do. But I mean I think I score two out of three and a dip into the other. Yes I have read the Critique of Pure Reason and I did predict earlier that we’d get on to Kant with a K as well as Cant with a C.

I did read Das Kapital and I think I dipped into Dante’s Comedy. Das Kapital. I think it’s sufficiently long since I read it that I cannot recall which bit’s of Marxist thought are in Das Kapital versus what’s in the Kant Communist Manifesto and things like that.

But very briefly, I think Marx has a crucial insight that the ultimate basis of all that we call economic value must be labour and that capital is only stored or previous labour. I think that is absolutely right. But I think unfortunately it doesn’t answer  fundamental questions that and I don’t think Marx does answer fundamental questions about first of all why are different categories of labour, even as pure labour, paid so very different rates and why are the rates for different categories of labour diverging so dramatically at the moment. Because quite a lot of the divergence of inequality at the moment is the remuneration of something which is clearly current labour rather than simply the remuneration of capital, which is where Marx tended to think. You know the fundamental drivers of inequality would be. And I think there are so there some huge unanswered questions.

Secondly I think Marx’s view of history, that there is a fundamental role to understand the dynamics of history by understanding the economic conditions of production exchange is fundamentally right but massively oversimplified in the sense of any theory of history that becomes undimensional and I’ve got the answer, I’ve got the formula, is overstated.

But most importantly, and I am not sure whether this is in Kapital or in the other writings of both Marx and Engels, I think when it gets to the practical explanation of what will happen to socialist, communist societies and to capitalist societies Marx is completely wrong in two respects.

First because he believes that it is possible to have a successful extreme socialist societies which do not recognise a legitimate role for self interested motivations. Because those self interested motivations exist and if you do not allow them open expression in a market economy they will be expressed in a socialised economy in destructive fashion, in the corruptions of the Soviet Union.

And secondly in his prediction of the inevitable collapse of capitalism, in a sense he was right that completely free market capitalism left to itself would have been destroyed, but he failed to realise that the very processes of political exchange would lead to reactions which saved capitalism. I think saved capitalism was fundamentally saved in the 1930’s above all by people like Roosevelt and by the introduction of the fundamental institutions of forms of welfare state which moderated the hard edges of capitalism and made it work for enough people so that it didn’t lead to the relentless immiserization of the working class.

And that is why I would very strongly agree with Maria, because if you want to understand a statement of an understanding of mankind as both part selfish and part altruistic and of a market economy which has a certain dynamism but which has to be saved and managed by the organs of the state and political processes, read Keynes, John Maynard Keynes, who I think is a greater economist and a greater philosopher than Karl Marx.

IG: We won’t have that particular debate here. What I am delighted to find is that I think all of us have read Marx. In fact when I did economics, I did Marxist economics as well. It was part of economics and part compulsory and one of the tragedies of economics is that it’s got so lost that people now only read certain things in a very narrow bandwidth and they don’t read, and this relates also to the topic of this evening, they don’t even read John Stuart Mill or Alan Smith because they are much more nuance and they believe for example in the free movement of labour and that goes to the point of the remittances which are clearly absolutely key.

One of the big advantages of remittances is that they are not captured by the state and one of the most dangerous things that’s happening is states trying to redefine them as aid or public flows when they are really private flows and of course for many economies they are very big numbers. But I don’t think we have time.

I am going to try and squeeze one more round in but that really depends on your cooperation, asking very pointed and short questions and the panels very quick responses.

So the gentleman here, gentleman here, lady there and gentleman there and then we’ll draw to a close. Please keep your questions to under a minute, otherwise there just won’t be time.

Audience 9: My name is Ken Theron. I’m a psychoanalyst.

On the resources platform Simon Taylor of Global Witness talked about or illustrated actually the siphoning off and the illicit or unethical movement of capital by people who really ought to know better in sort of political office and very often businesses...

IG: ...keep it short otherwise I’m not going to get everyone in...

Audience 9: ...and I am just wondering if you thought that this was enough of an issue to be concerned about.

IG: Ok, thank you. The gentleman here.

Audience 10: My name is Joe Cooper. I work in international development. Is this working? Yes? I just wanted to ask a little bit more about inequality. We’ve heard about how the sort of free movement of capital is causing greater inequality both in developing countries and in developed ones.

Adair has mentioned how here the problem is therefore more of a distribution of wealth rather than absolute levels of wealth.

What can we do with capital controls to reduce inequality?

IG: Ok. Lady over there.

Audience 11: Thank you. I just wanted to see if Lord Turner could just follow up on Gayatri’s last question with respect to the internal discrepancies in wealth in rich countries which I think you were asking about with the university students. So if you could just comment on that.

IG: Thank you. And the gentleman there, final question.

Audience 12: Alberto Tuscano, Goldsmiths College.

My question is about the concept of capital and the abstract for the talk seemed to use it in a sense that is almost synonymous with wealth and we know that historically the accumulation of capital often depended on the destruction of wealth. The industrialisation of other countries and so on. And in the present there are forms of wealth, housing in Spain, food being left unsold, products being left unsold and so on, which in order to make the circulation and accumulation of capital is destroyed or devalued.

So my question is really a) shouldn’t we really keep the concept of capital analytically very distinct from wealth and b) whether it isn’t the case that the link between wide spread social welfare and capital accumulation that seemed to be suggested by Maria Ramos is actually a very contingent, historically contingent and geographically contingent, link and then in fact the certain forms of human wealth and certainly human needs might be radically incompatible with accumulating capital at certain rates.

IG: Thanks very much. It’s been a fabulous set of questions so I’m going to give Adair the first response and we will just go this way.

AT: Can I just first of all, cause I meant to on the previous round, also pick up this issue of resources, natural resources. Because I meant to say on the previous round.

I think long terms economic success is extremely difficult for large population countries which have large natural resource endowments. It’s the great irony that there is a curse of natural resources and that you need a set of management processes to make sure that you are not dragged down by it.

I mean if you are Qatar and you’ve got a population of three hundred thousand and you’re sitting on the biggest gas resource in the world then whatever you do, you know, you can keep everybody rich because it just, you know, the money’s just coming out Gusher on a massive scale. But if you’ve got a significant scale of population natural resources are very much, you know, they're a difficult thing to manage because they create streams of income, what economists call economic rents, which are quite easy to grab hold of by corrupt practices of by the way that mineral rights are auctioned etc and it is a fact of economic development that many countries which are reasonable natural resource rich do very badly because the very processes of having those natural resources and having to manage that. First of all it tends to stymie the development of others sectors of the economy, in part from a macroeconomic reason that your currency goes up to a level to make the other areas uneconomic and secondly because of some of these processes of the corruption of the process.

These are very difficult things to manage. I think the process of the appropriate behaviour of international investors is part of it but it’s not the whole of it and I think, you, know countries which have large natural resources have to, they really have to try very hard to make sure that the short term benefit of that does not have some long term disadvantages. I mean the great stories of successful economic catch-up of Japan, Korea and Taiwan are of countries which had very few natural resources, not many.

IG: Adair, we are going to have to end there and then let the others respond as well...

AT: Ok, sorry. I’m finishing. That’s it.

IG: Ok, thanks very much. You can follow up Gayatri afterwards if your questions aren’t answered...

GCS: To go to the internal discrepancies in developed countries of course I know much more about the occupy Wall Street folks, I mean who have now gone quiet. But this 99%, 1% thing that is the slow...see I agree with Adair in terms of Roosevelt when I said that the breakup of the New Deal began and then finally Glass-Steagall was undone. I was actually talking about, I mean the left response to that is well Roosevelt did that because so that workers then could become soldiers for an imperialist war and I think that’s nonsense. That’s the kneejerk leftist response in the United States. Believe me I go to enough left forums. But I’m with you. That’s what went wrong.

Ok. And it seems to me that that kind of thing, then the slow dismantling of welfare, number one. I can’t say more.

Number two, that’s what’s happening as we say we are fully developed and wonderfully rich. I mean...number two, the idea of thinking about capital. You see one has to be understanding of capital which is very broad, which is that it arises out of the fact that a human being can make more than its needs. He or she. And out of that rises something which then can be kept and then of course the olds Marxist argument was that the person who made was given back less so that he or she could subsist and of that difference what was taken was capital. And the argument was that if the agent of production could voluntarily give that capital then it could become, that could be used in, capital free, that could be used to create the welfare state and that was where the mistake was. I agree with you too.

The desire to do that, to somehow having got, they never got the means of production, the history of communism, you’re quite right. But having received this, the desire then to use it for the general good, that bridge was never crossed. If one had time one would talk about Gramsci but one doesn’t.

But at any rate...I know I am with you...so therefore these are the two things that I think I could speak to at this point. The bringing capital into the political is a very important issue but I am afraid I won’t be able to say anything about it very briefly. It’s a very long...

IG: If you go to Gayatri’s website you’ll find out more.

Maria.

MR: Well we’ve run out of time. So I just want to pick on two things.

One is on the question of capital controls and whether you can use capital controls to deal with the big questions of inequality. I don’t think you can pick on one thing alone. If we just use, if we pick something like capital controls we would not address inequality. That alone is not going to deal with it. You have to have a set of measures. A more holistic approach to it.

Countries are complex. Economies are complex. And you have to resolve for a number of variables simultaneously. And you also have to understand that on those short term solutions so you’re doing it, you’re doing it domestically, you’re doing it regionally and you’re doing it in a global environment. Picking one thing alone is not going to resolve it. It may be that capital controls are part of the equation but capital controls on their own are not going to resolve the problem.

I think the only other issue I wanted to very quickly add onto what has already been said on natural resources and the financial flows arising from natural resources is part of the answer to the Mozambique question. I think you do need to have solid regulatory environments. I think you do need to be clear both domestically and then also with your international investors. I think you need transparency. And I think you need involved communities. I actually think that that’s also what’s changing globally and domestically in many countries that are resource endowed. And it’s not just resource endowments. It’s involved communities, it’s a younger generation, many of you. I look round this auditorium and it’s this much younger generation who are all connected, who are asking the tough questions, who keep politicians and the owners of firms on the line and asking what’s happened, who’s benefiting, where are the flows from the exploration, where are they being credited to, why is the local community not benefiting. Because that’s what really is going to keep people honest and that’s also what’s going to make sure that the benefits flow to the right places.

No point in making resources, as Adair says, if local communities don’t benefit from them.

IG: I think that’s an excellent point to end on.

I do want to thank the panel for what’s been at times surprising but also surprisingly fun panel, not least on a Friday night. That’s what one needs.  But also because of the wonderfully stimulating questions that have been posed by the audience. So thanks to you, thanks to this wonderful panel and thanks to Zamyn for putting this together and to the sponsors who’ve made it possible to go out on a Friday night for free and have a wonderful intellectual conversation.

So thanks to all of you and have a good evening.

[Applause] 

Close Transcript

Video Transcript

Sustainability, citizenship and the environment | 10 June 2013 at 7.00pm

Speakers: Faisal Islam, Paul Polman and Mark Spelman

Mark Spelman (MS): Good evening ladies and gentlemen, let me introduce tonight’s session which is on Sustainability, citizenship and the environment, and this is session number 6 that we have had in this series on global citizenship and a very warm welcome to all of you and thanks very much indeed for joining us.

This whole series has been put together by three people, in particular, and I’d like to in particular recognise them. There’s: Michael Aminian from the Zamyn group who really is the inspirer and the founder behind this whole programme; Sir Mark Moody-Stuart, in front of me here, who’s the chairman of Zamyn and also Marko Daniel here at Tate Modern, who have been the three key people who have really been instrumental in putting, I think, this original programme together around global citizenship. And we’ve had five partner organisations which have been, if you like, supporting this event, Tate Modern itself, SOAS, The Africa Progress Panel, Barclays and Accenture.

And before we start, I’d just like to ask you as an audience: who’s actually here for the first time? So actually quite a lot of you, probably something like 50% of you. So what I’d like to encourage you, is that all the sessions so far have been recorded and there is a website called the zamynforum.org and if you want to go back and look at some of the sessions that have been presented beforehand, then go to that website and you will see some really interesting video clips around the previous sessions. And obviously in the booklet are the previous 6 sessions. There are two more in this series to come; there is one tomorrow which I think is going to be very interesting, looking at the whole question about what happens after the G8 meeting. There’s Ian Bremmer who has got a particular, sort of, view about G-zero; so that’s the focus for the session tomorrow. And then on Wednesday, our closing session is going to be looking at what are some of the key lessons that have come out of global citizenship and the various lecturers that we’ve had around the lessons for G8. And so if you can’t come in person then what I'd really like to encourage you to do is to look at some of those key messages and see, what I think are some of the key and interesting insights to have come out of it.

Now as far as tonight is concerned, I am very pleased that we have got two guests here with me tonight. Paul Polman who is the chief executive of Unilever, and I’ll talk a bit more about Unilever in a second as part of the introduction. And Faisal Islam who many of you will recognise as Channel 4’s economics editor. Channel 4 have worked extremely closely with us. We’ve also been talking to Jon Snow. Jon in fact was hoping to be here but he is actually out in Tehran to cover the Iranian elections, so he is not here, but is here in spirit. And in terms of format for tonight, what we’d like to do is, I’d like to set the scene for you, then Paul is going to give a key note lecture, really looking about sustainability through his lens and his eyes as one of the role models, I think, in the business world around sustainability. We’ll have a bit of a discussion up here around some of the themes that come out, and in the second hour we are very much keen to have an audience participation, so dialogue with you and talk with you.

But let me just try and, sort of, set the scene and just provide some context around sustainability, citizenship and the environment. And there couldn’t really be a more interesting theme than sustainability, when you look at it from the point of view of both global and local because sustainability and the environment transcends national boundaries. And so what makes this particularly interesting is that when you talk about being a citizen of the world, there are some very real issues about how does that impacts us as individual, sort of, citizens. And what I want to suggest as we set the scene is that there are some very important issues which operate at the level of policy making, both internationally and nationally, very important in terms of the role of multiple stakeholders business for example, civil society, but we also have a very key role around sustainability when we look at it individually, because we are all consumers and we are all citizens together.

But I wonder what you, sort of, think of when you use the word sustainability. And what I’d like to suggest to you is that sustainability is really about thinking about the way that we live and work. But it’s actually thinking about how we work and how we live in the context of our economic, our environmental and our social impact. So as we talk about sustainability, think about those sorts of roots. It's about the way we are going to work and live. And if I was going to crystallise about it a little bit more in the global context: there’s 7 billion people in the world today. There’s 8 billion people in the world in 2027 and there are more than 9 billion people in the world in 2050. And the key challenge for all of us is how are we going to live and work together, in a way that provides people with the right sort of health, the right sort of education , the right sort of shelter, the right sort of food, and the right sorts of mobility – the basic standards of living that people would expect. So I’m very keen as when with think about sustainability, it’s partly about where we have come from but a lot of it is about where we are going to.

And yes the sustainability road has been a difficult journey. You can go back to 72 – the Stockholm Declaration – you can look at what happened with the earth summit in 92, you can look at what happened last year around Rio plus 20. It is… there are some very major challenges out there. And perhaps at the biggest level, the biggest macro challenges, is where are we in terms of planetary boundaries. And if you go and talk to scientists today, if you look at some of the models that are out there, we talk about 2 degrees warming, but the reality is that we are probably closer to a path which is taking us towards 4 degrees. How do we feel about that? What does that, sort of, mean? Where are the tipping points? We don’t really know. And then we can look at some of the other sort of factors, and we look at for example the 1.3 billion people today that haven’t got access to electricity. And the predictions are it’s still going to be 1.3 billion people without electricity in 2030, because as the population grows between now and 2030, even with the weight at which electricity energy is getting  improved, that is not going to improve the numbers of people without electricity.  And we could look at the other statistics that exist out there in terms of the number of people who haven’t got access to clean water or access to sanitation.

But I think it is very important to say it’s not all black. There are some good news, it’s not always great news, it’s very mixed signals, but if you look at the Millennium Development Goals, and the progress we’ve made, actually, the amount of extreme poverty has come down in the last 20 years. It might not have come down enough but it has been, sort of, coming down. We have made progress on things like vaccines.

But there are some still very real challenges we face. So for example we know that hunger is a very real problem.  That children’s, if you like, lives, are being stunted by failure to, sort of provide efficient access to food.  And we know that the numbers of slums is growing and the number of people living in slums has continued to increase. So the thing is that today it’s a very mixed world – mixed messages. But let’s try and look forward, think about what some big drivers that are going on in terms of the world and where it, sort of, stands today. And some of the drivers are economic; we are in an economically interdependent world, and yet in many ways the politics of the world has become very local. Just look at what happened with the American elections; 9 states basically drove the outcome of the US election. Economic interdependence - politically very local. 6 billion people today though access… 6 billion people have access to mobile technology. It’s interesting; I was looking at a country like Bangladesh, 148 million people in Bangladesh; 100 million of them have access to a mobile phone; that’s in Bangladesh. Kenya – 28 million people have access to a phone out of 42 million, so it’s not all bad. Economic, political, demographic, technology - these drivers are playing through together in terms of impacting the world in which we live. Economic interdependence, political localism, demographics in terms of the growth of cities, technology which is empowering, particularly, the ordinary citizen, not just in the West but in many emerging markets.

But the real challenge with sustainability is that a lot of the benefits that come are general but the pain points are specific. And one of the questions, I think, we need to get in to, as we talk about sustainability, is who wins, and who loses? Where are the gains and where are the losses? And when you actually look forward, there are, actually, I think, many directional indicators as to what needs to be done. We know that it’s very important that we have economic development, particularly for women. We know that there are issues about the cost of externalities– carbon, water and ecosystems. We know we have to reduce greenhouse gases, we know that we need more low carbon energy; we need more low carbon mobility. We need to fundamentally improve our use of resources, probably by something like 4-10 fold over the course of the next 30-40 years. We know also that we need to half deforestation. We know we need to double our agricultural output, without increasing the land. These things we know; the question in how do we bring all those together, and what I would suggest to you is what we need to do is we need to have the politicians out there. We need to take the things like the Millennium Development Goals, we need to take them on; we need the political ambition to take them forward. We need the business world in there.  Because the business world actually has many of the solutions. We need to release the power of the business world to be able to provide some of the solutions.

But we also need you. Each one of you. Because you individually make choices every single day about what you consume, what you buy. And the choices that you make all impact together this sustainable world, or lack of sustainability, as we go forward. And so what I hope that I have, sort of, given to you is that, yes, this is a very big and a very broad subject, but I hope that we can particularly look forward. We know it is difficult; we know there are some challenges. But what we‘ve got to be able to do, I think, a lot of this is around speed, it’s around acceleration, it’s about how do we make those choices, around the solutions that we know exist, in a way that is going to be more impactful, not just for  the developed world, but critically also for the emerging world.

Anyway, enough from me, I want to introduce you now to a person, who I think, probably has done more than anybody I know in the business world to actually try to put forward, I think, a very proactive case around sustainability. He has lead from the front; he has developed a strategy around Unilever which has put sustainability right at the heart of that commercial strategy – and I’m sure Paul will talk a bit more about that. He has been involved in the policy level; he has been involved in term of defining some of the sustainable development goals. He was involved this weekend with some of the big discussions around nutrition, with David Cameron and the announcements there. And I think what he has done in terms of trying to galvanise the leadership team at Unilever has been particularly impressive. And in many ways, I think that in many ways it is a great privilege for us tonight to hear someone who is very much at the front end, trying to say, OK, how is it that we, from a business point of view, can really make a difference on the sustainability agenda, because it matters. It matters from a business point of view, it matters because of trust, it matters because of transparency and it matters because business needs to have a licence to operate going forward. And so with that, I am delighted to welcome Paul Polman as the CEO of Unilever and let’s give him a warm welcome. Paul, thanks very much for joining us.

[Applause]

Paul Polman (PP): I see Caroline there as well. So I wonder what you guys talk about at home, you know – because you are both so passionate about it. My wife is a musician so she keeps me honest by introducing me to the world of art, and I was always glad to be in the modern Tate, and Nick, I didn’t see Nick; is he here? No, but we’ve been a long time sponsor of the Tate series and the Unilever series. And the crack is still in the floor. Anytime you come into the turbine hall, and that will stay there forever I think, so there’s proof, so there you have it. Anyway, as a Dutchman, they always tell you, ‘never follow an Englishman’, because somehow you guys are amazing speakers, and Mark is showing that again. He was just explaining to you all the things I wanted to talk about. So now, you know,  I’m stuck; either I’ll repeat what he said (you’re all nodding so you are convinced anyway) or we spend a little bit of time on the questions and the answers, I’ll make it a bit shorter here, and we’ll have more discussion.

I was at the airport the other day and I saw three people sitting there, and I listened in. I know it’s very impolite but I’m sure you’ve done it as well. What are they talking about, you know? And quickly I found out one of them was a doctor, the other was an engineer, and the other one was an economist. And the doctor said, ‘Hey we have the oldest profession in the world, because you go to the book of Genesis and Eve came out of the ribs of Adam, and that was probably the first successful operation that we did, so we’ve got the oldest profession.’ And the engineer said ‘I don’t think so, I think we have the oldest profession, because when there was chaos, we created the universe, order. Engineers, you know, are the ones that create order out of chaos.’ And the economist said ‘I don’t think so, I think we have the oldest profession, because who created the chaos in the first place?’

So here we are, as Mark has elegantly told us for about 10 minutes, we have to clean up the mess that the economist left behind. When I finished in the Netherlands, my father (we didn’t have much money, we had 6 children, but thanks to the government and all the other things, we could get a decent education, or at least I hope it was decent) gave me a little thing when I graduated. And it was a little porcelain thing, that had in Dutch written on it, because I did my economy studies in those days, and it said on it ‘an economist is someone who doesn’t know it either.’ And I didn’t understand the meaning of it then. That was in ’79 and I thought, ‘why did the old man give me this?’ and all that stuff. But I kept it in my desk – I have always kept it in my desk, in my house. And when I open my draw; before I need something I see that little plaque. He is long gone. But it is what we are; it keeps you a little humble. We don’t have all the answers; we need to work together to solve some of these bigger problems.

So, I’ll stand here with a certain level of humility to share with you what we are doing, but I’ll also tell you the challenges we have are bigger than we can solve alone; so this is not a Unilever story. This is a story of how we can sure that we can ensure we have a better future for all of us and our children and our grandchildren. And I don’t care really if you work for business or not, somehow I ended up in business. Believe it or not I wanted to be a priest  and I wanted to be a doctor. Then in Holland, I abolished all of these things. Not the priest side, I abolished that because I discovered some other things. The doctor side was there is a lot of competition in the Netherlands and they only have so many places. And then if you don’t get in you do something else. So I ended up in economics at that time, and somehow that’s how life goes… and then you stand here running a business and having the honour to do that.

First and foremost we are all citizens of this world, and we have some responsibilities that go way beyond the small institutions that we represent. So I’m very glad that you do these series – and Michael and Nick you should be congratulated on that, with your Zamyn organisation or however you pronounce it. And I was just flicking through the book and was seeing that Mary Robinson is coming next; so you are able to attract some quite formidable speakers, and I feel a little guilty having our office across the street, that I’m only here at my own lecture, even knowing what I am going to say, so it’s kind of a bit boring for me… but not being able to benefit from it. Because, a lot of people are critical of the G8 or the G20, and I’ve be involved in many of their activities and the G8 itself you shouldn’t underestimate that, because whoever they are, they shouldn’t talk about the total world. And they have no right to, but at the same time, it’s about 50% of the global economy and it is easier to get 8 people to agree, you’d think, than 195 people.  And if you are half the economy then you can do something good with it. And the same for the G20 which is actually probably about 90% of the world economy still. It is not right that is 90% but that is the reality; so you can create an enormous critical mass by leveraging them well.

One of the things I had the honour to chair in my activities in life, was to be the chairman of the Food Security Task Force for the G20 to help the people figure out how to solve the issues of food security. It is absolutely ridiculous that we live in today’s world where 870 million people go to bed hungry. And not knowing if they will wake up the next day.  Among every 6 seconds a child is dying still of hunger. Then we are able to waste about 30-40% of the food in between at if it doesn’t count. And then we have on the other side 1.2 billion people obese and rapidly increasing, where the biggest epidemic of disease is obviously diabetes 2. So there is something there that the most intelligent species in this world haven’t figured out yet, that bothers me, and we ought to be able to solve that.

 And it is in everybody’s interests by the way. It takes nothings; it takes absolutely nothing to solve that. The numbers we put out are 70-80 billion to solve the food crisis. In fact 1% more food in the world given to the poorest people already solves the fact that they go to bed hungry or not. And that’s why we had the summit here this weekend and we were hosting that in our office. I’ll talk about that a little bit later, but it is actually a very good thing. But the… what you are doing is right, because we have talked a lot with the UK government on how to exploit the fact that they’re now chairing the G8. As you know the previous ones were the US and there are some things that are actually leading up to the G8. One is this nutrition and food security events that we had this weekend, called ‘Nutrition for Growth’ and in the afternoon we had the heads of states of Africa; we had the ‘New Alliance for Food Security and Nutrition’ and they are obviously closely linked. And there is another event on science and innovation, it’s very important. You need growth; you need progress, and that is obviously something we need to develop further in this part of the world. And then tax and transparency. Mark was saying you are not going to use the word tax in your talk probably, and I am. I’m not even starting the talk and I have already used the word tax three times now. And I’ll say it again as tax, as first time. But it is very important that we can talk about everybody contributing its fair share to society and also to solving the issues now.

But let’s first start on the positive note, not to make this a doomsday scenario. Because I’m actually an optimist, and I’m an optimist for different reasons. But one of them is having the negative train of thought, which my mind has tried to force in me many times in life, I’ve always discovered doesn’t lead to anything. And if for the short time we are on this earth, if we don’t keep that positive attitude, I think that would be one of the main enablers to achieve the challenges we have. The negative mind of thought doesn’t lead to anything. It doesn’t mean you don’t want to be realistic but it doesn’t lead to anything.

The positive thing is that globalisation that we’ve seen – the technology that has become available, the digitalisation of society, the connectivity – has lifted an enormous amount of people out of poverty, in fact in the last 30 years about 500 million people. And indeed as Mark was saying, if you look at some of the Millennium Development Goals, we have halved the number of people living under poverty - below the $1 a day, now we are talking one $1.25 a day. That’s an enormous progress, and in fact, many of us wouldn’t be sitting here without that globalisation. Child deaths have come down by about 30%. And we were, this weekend, with Bill Gates, if you look at some of the other things like Malaria and all that... significant reductions on the Millennium Development Goals… 25%-30% there as well. Record numbers of people in school. For the first time plenty of girls and boys in schools. So there are a lot of things we can be proud of. But I think what happened in 2008, because of this interdependent world, I think it became so complex, if you want to keep it simple, that no one was even able to see the relationships anymore and the connectivity.

And when everything was going well for us, stock markets were going up every year, house prices were going up, everybody thought every year ‘I’m a little bit better’, companies were making more profit without putting in significant efforts, nobody asked themselves questions. Why should you? So when we thought we were on a little bubble, it all of a sudden started to change our mind-set of what we were doing. And what we were discovering was as we were lifting an enormous amount of people out of property  - no doubt about it – but we were doing it in an unsustainable way. We were doing that by ranking up enormous levels of governmental debt, enormous levels of private debt, and frankly overconsumption. But more importantly, I think the main conclusion that we should come to is that we developed a system that was very good for few, but not for all. In a system when too many people are excluded, from the participation, or feel that they don’t get their fair share, will ultimately be rejected – just like cancer in your body. So these 1 billion people, I talk about more or less, that go to bed hungry, they’re not happy about this. If you see that the bottom billion in society only consume 1% and the top billion and a half consume 70%, that’s not a world that’s in equilibrium. If you see that 400 billion has more of a GDP than India that’s not a world that’s in equilibrium. So that’s why you get these occupy Wall Streets,  that’s why you get the Arab Springs and increasingly consumers obviously are able to voice their concerns, to connect themselves; this is when digitalisation is a very positive force. But if it only becomes negative energy or frustration because they are not participating, without an ability to find the solutions, then you will have a major problem. This is what you see happening in some parts of the world where you don’t see a solution.

So this is where we come in because as a company we just started to think a little bit about, these constraints we have on, what Mark called Sustainability, on these planetary boundaries, is obviously limiting a lot of people improving their standards of life. It’s the biggest concern in China, by the way, because China understands very well… if you talk to any Chinese person in government… if they cannot keep their Chinese economy going and lifting many Chinese out of poverty, they are not going to be there for a long time. So if they want to change their system, responsibly over time, they need to attack these planetary boundaries.  I don’t know if you saw it two or three weeks ago, you couldn’t even see the other side of the street in Beijing because of more than 400 particles a year. And immediately you get an iPhone, it goes across the world, ‘oh what have we done?’  And two days later they have the most stringent car exhaustion standards in the world. So you see the power of people coming through every day, every day. And in fact you also see what the failure of acting responsibly is doing now, much quicker than before. Now, trust is law in society, we all know that, and often people like to say trust is law in business, or trust is this…

But I was just thinking coming here in the car, you know, just looking at it in the past 3 months… and just let you memories go back a little bit over the last three months, reading the FT or anything. We’ve had little children being molested by some religious faiths, we have had telephones hacked by some organisations, we have had horse meat being fed in our mouths which people thought was something else, we have had people manipulating with our interest rates which we pay for our mortgages by figuring out what the best libor rate is for themselves, we’ve had governments or others filling in expense notes, making tax payers pay for things that weren’t there. Now, these things were always going on; don’t be naive about that. It’s just that we have become a society that is far more transparent. These things are immediately in the public eye and you can see it. And that accountability is aggregated now, and becomes much more transparent for everybody. And as a result you’ve also seen that companies that are not behaving responsibly have seen an enormous amount of market cap wiped off very quickly.

You know, it only took take 17 days in Egypt, with this Arab Spring, for a regime that was there 40 years, because consumers discovered that they could organise on Facebook with each other, they could communicate with each other on Twitter, they could show the world what they were doing on YouTube. And the telephone has become a more powerful weapon in this world than the atomic bomb, believe me. So they were able to do that. If they can do that in 17 days in Egypt, with a regime that was so engrained, they can do that to companies in nanoseconds. To me it’s so obvious, and sometimes I wonder why I have to explain that to people.

So, businesses have to realise, as much as anyone else, they cannot be bystanders in a system that gives them life in the first place. They have to become solution providers as much as anyone else, because they are equally part of the challenges we are facing right now. I don’t call them problems; notice that, I call them opportunities. But they are equally part of that, so they have to work together with governments and NGOs to find a solution. Business cannot be a bystander in a system that gives them life in the first place. So what we did with Unilever was very easy. We said, Unilever, if we want to be in business for a long-time to come, if we want to be successful, we just simply need to find a system that is more in sync with society. Where your exposure is less, where you are actually contributing.

When my parent grew up… (I was born in 1956)… when my parent grew up, you know, they were products of the Second World War. My Father, I don’t know if he could have gone to university or not, but he never went to university because of that and it bothered him probably his whole life. He was determined that his children would go to university. The man worked two jobs to make that possible. They were also determined to be sure we didn’t have any more wars in Europe anymore.  You forget that. That is the reason why we have the European Union. Don’t let yourself get side-tracked by other political sound bites now. But they work for the common good. Somehow we forgot that. So why can’t you make a business model like how we want to live our lives? What’s wrong with that? Because businesses are made up of individuals as well. And the business model is very simply – how can you give to society, versus take? Wasn’t that the origin of business in the first place? When we were all running around naked trying to hunt the animals, didn’t we discover that being all hunter animals wasn’t a good idea – because some could walk faster than others, some were  a little stronger than others? Didn’t we decide that some were going to back bread? Others were going to make shoes? And others would get the meat for us? And we introduced some efficiencies so we could feed more people and all be better off? Wasn’t business invented in its origins for the greater good?

Wasn’t Adam Smith, who is quoted so often, a professor of moral ethics? Have people forgotten that? He firmly believes that in any of these efforts to advance the course of any individuals in their business communities, the pressures of wanting to belong to, would make them conform in the overall society. That’s basically what he said in his theory, and I’m sure many of you have read that. So we said very simply in Unilever, ‘Why don’t we think about a business model where we give to society versus take from society?’ It’s the only thing. It’s a small word but a big thing. It’s not easy to do, and it’s not something you certainly can do alone.

So our business model is one of doubling our turnover – very energising. But that doesn’t get people out of bed… don’t be mistaken. Everybody puts a big number on… you forget it is like a rallying cry.  It’s not something that motivates you. But the world is growing there are 2 billion more people coming. Many people living out of poverty; there is no reason why a company like ours cannot double, and we are well on our way to do that. But why don't we do that whilst at the same time reducing our overall environmental impacting and improving our social impact. So we set ourselves 50 targets. All of our products agriculturally based materials – we are a big food company - how can we source that sustainably? How can we create 500,000 jobs for small hold farmers? And actually it’s the women you want to invest in, I’ve said that before. How can we give a billion more people access to hygiene and wellbeing? That might sounds like a lot, but we happen to be a company where 2 billion people use us every day and we happen to be a company that is in 7 out of 10 homes globally. So why not use that scale that is now possible to aggregate, as a force for good? Now we also said it will take 10 years because it is a thing that is not easy to do. And we also said we cannot do it alone. Some people were worried about that '50 targets - how are you going to do this? No CEO is going to survive his job for 10 years so that's nice of you to put something out there and you don't have to deliver anyway.' Sure, there were a lot of sceptics, because it is easy to be sceptical. As I always say scepticism is probably the lowest form of taking responsibility. 

But we did some things; we stopped giving guidance; we stopped doing quarterly reporting; we changed our compensation system for the long-term. The first thing we did, was five years ago when I become CEO, is to create the right environment for people to behave the right way. The crisis of 2008, above all, was a crisis of morality, not many people went to jail, but a lot of the loss of morality, the interest of the common good, the dignity of the individuals – those were the laws that were violated. So how do you create an environment around you so that people can behave the right way? And then, obviously, we put this business model out there. We also said we can't do it alone. And by saying we don't have all the answers, we can't do it alone, we actually show some humility, and actually some authenticity - whatever you want to call it. And all of a sudden a company – a big, global, multinational monster becomes a little bit more open. And we said 'why don't you come and help us?' You think we should all do this; we agree. We are there at the service of society. Why don't you help us on the journey? Instead of being only fixated on the end point, become part of the challenges of getting there.

And that actually also changes the dynamics of NGOs. We had before that, quite some NGOs climbing the buildings or trying to tell you to do this or that, dressing up like monkeys or gorillas, or I don't know what (any suit, I think, has paraded around our offices at one point or another) and now they are coming in and working with us together to see what we can do to make this a better world - and using the scale and size of a company like ours; sometimes to give an example, sometimes to give other people a bit of courage, sometimes to be the tipping point. You know there are… only about the top 100 companies in the world use 15% of the world's resources. If you get these top 100 companies… for us that would be tea. We have 22% of the world's tea supply – with brands like Lipton, PG tips and all that stuff. So, if you get companies like ours, you can really move the tea market to sustainable tea. Some other company like Palm Oil, happens to be us as well, but some other companies, some other materials. So how do you get to these 100 companies and get them to... Don't be fixated on the end point; be fixated on what it needs to get the tipping point. And that's basic.

And if you look, there are about 60,000 companies in the world that make up all the market cap of all the stock exchanges (believe it or not, sounds low), 600,000, I'm sorry. I said 60 - 600,000 companies. But it is only the top thousand companies that account for more than half of them. Focus on those! And help them. So I’ve come to believe you only need the coalitions of the right 20-30, whatever these coalitions are, to get to these tipping points. And it is in the interests of all of us to get these societies to function. If society doesn’t function, business cannot function either. And businesses, like ours, like to be around for the long-term, so you want to work on these longer term solutions. It sounds so obvious (hard to do) but sounds so obvious. So I give you two examples of how these coalitions are playing out, and why I am optimistic about it. And then I'll give you some of the things we need to focus on.

One of them is what we did this weekend, as we mentioned before, 'Nutrition for Growth' or the 'New Alliance of Food Security and Nutrition' – two projects to really solve the issue of food security. The heads of state were here from… at least 12 heads of State from the African countries were in town this weekend. We had the governments here. We had the NGOs here, the Bill Gates of this world were here. Some of you might have seen him in Hyde Park with the ‘If’ campaign. And we spent the whole day… it happened to be in our offices because we were hosting it… in bringing people together. The issue of food security and sustainable sourcing, the small hold farmer jobs you want to create, the capability building you need to do, to train the women etc. in Africa; nobody can do that alone. In fact if someone could have done that alone, the issue would have already been solved. 

A company like ours, even today, has to input 30 or 40% of its materials for the products we sell in Africa, from outside of Africa. That can’t be right. It’s also not efficient. Why should an African in the Ivory Coast pay more for Flora Margarine than someone in Rotterdam? Why should someone in Kinshasa pay more for Lifebuoy soap to wash their hands than someone in Brazil? So getting sourcing in Africa, and supplying our products with the growth of African content and potential sounds like a normal business thing.  We also need to get the security of the supply. How can we do that by employing people in a continuous way? Then these communities grow. Isn’t that after all what Henry Ford had as his starting principle? But we need governments to function. If you have corruption, you don’t have rule of law, you don’t have access to legal systems. If women don’t have right to participate, then society only pulls at 50% versus 100%. It’s not going to work. If our truck gets ten times stopped because someone wants corruption it’s not going to work either.  But who is going to train these 50 or 100 thousand small hold farmers on a specific project? We don’t have that capability. We would be bankrupt. So we need the rainforest alliance or Oxfam or any other ones to work with us. So it’s these coalitions that get you to these solutions.

This weekend 4.1 billion was pledged just on the nutrition part alone.  And 19 billion was pledged on issues like water and sanitation, to stop the 170 million children from being stunted, which by the way, in some countries, is about 10% of their global economy… globally 2-3%, that’s a cost on the economy. We have to worry about that – also as business people. It only takes 7-10 billion a year to solve that. Without any doubt we spent 50-100 billion to bail out Greece. I don’t say that’s wrong. We have to do that perhaps. But if we can spend 100 billion to bail out Greece, can we spend 7-10 billion to give everyone the minimum right of dignity? To have the right to food? Or to have their brains developed to the fullest potential, like we all have? Isn’t that the minimum we all have a responsibility for?  And as we do this, we obviously also have more possibilities to sell our products.

The other one is an alliance we created with the industry. So this is a case where the industry decides that by working together it is better for all of us than not working together. And obviously within the competitive laws and all the rules and regulations that are out there. We created the global consumer goods forum with companies like Tesco, Wal-Mart, Carrefour, including companies including manufacturing companies like ours, or Craft or Pepsi. So about 3 trillion in consumers here. These big companies went together and said, ‘wouldn’t it be right if we just take a very strong signal and say by 2020 we stop selling all products that come from illegal deforestation?’ Illegal deforestation – half of it is driven by food. The need for soy, for beef, for palm oil. So the food supply companies, like ours, have to take some responsibility. But you can’t do it alone.

 So we create, we send this signal that we want to do that. Then governments come on board. We want to be part of that. We now have the US government, the UK government, the Norwegians, the Dutch, the Indonesians; there is a big conference in three weeks in Jakarta. Funds are coming in. Norway has paid 1 billion to help them with transitions. The World Bank is now coming in. I’m convinced that we can solve it for a great way, by the timing we’ve set ourselves. Because we have taken the risk away from politicians, we’ve created these alliances of the right 30, if you want to call it that way, and you get to a tipping point. And that’s a better business for all of us. Sustainable palm oil has a higher use, over time, it is a secure supply. The costs are lower, but who’s going to pay for the training, the development, helping indigenous tribes, alternative things that need to be solved? That’s why you need to work together. So that’s these very simple coalitions.

I always like to quote Viktor Frankl, who wrote his book ‘A man’s search for meaning’, where he said very simply in his book, when they built the Statue of Liberty on the East Coast of the United States, ‘they forgot to build a statue of responsibility on the West Coast.’ And he was right. You cannot run companies of this size, or have this skills and this liberty to operate in places in all places in the world, like we do, if you are not willing to take the responsibilities here – the core responsibilities. But it is also clear to all of us that the challenges we face, the challenges of food security, water, access to energy, alleviation of poverty, maternal rights, and I could go on and on and on… you cannot… these problems have been created. You cannot solve them in the same way as these problems have been created.

It was Einstein who said that the definition on insanity is to try to do the same thing over and over and expect different results. If we really want to solve these challenges, we also have to work at a different level. We have to work together across these coalitions. That’s why you have a global compact that Mark is leading. You have 7,000 companies with the human Global Compact, and many of the world businesses councils for sustainable development, and many of these other organisations. Now, what is the biggest challenge? Look long-term - I talked about. The second challenge is to create these partnerships - you need trust.

Stephen Covey in his book ‘7 habits of highly effective leaders’ said something very perceptive. You cannot talk yourself out of something you have behaved yourself into. You cannot talk yourself out of something you have behaved yourself into. It is true with everything in life. It’s also true for the way companies have behaved, governments. So we have to work to build the trust that comes with transparency. And then you need something that is a very scarce commodity which is courageous leadership. Because the forces against change will always be spending more and will be more vocal, because they have more to lose than the forces that benefit from change. And you need to be driven by an enormous sense of purpose. (Ah sorry, am I messing up the whole thing? [microphone] I’m getting too excited.) And you need to be driven by an enormous, an enormous, sense of purpose to not let yourself get derailed. So it’s about that purpose, it is about that passion, if you want to, and it’s about partnership. And if you have those things together, I am convinced, I’m convinced, that bringing the right people together, we can create a better future, not only for ourselves but for many generations to come. And isn’t that what life is all about? Thanks for your time.

[Applause]

Faisal Islam (FI): Thanks Paul for that tour de force, racing through the statue of responsibility – Chinese air particle pollution standards. What else? The Arab Spring, horse meat, libor, and tax – which we will mention later because you didn’t get to talk about that. But you have presented me with a problem, as a cynical journalist, because I want to be really cynical, but you are infectiously enthusiastic about this and it is affecting my cynicism, which I find to be a dangerous place to be. So I am now going to make up for the fact that I’m being sucked into ‘Planet Polman’ and be even more aggressive than I really want to be. Because it sounds really cool what you are doing now. I’m just joking…

PP: You’re still young, so that’s OK.

FI: Listen, I’m going to fire, 2 or 3 quick-fire questions at you before we bring Mark in, about how this actually works on the ground. How it works, if you like, when push comes to shove, when you have to make a tough business decision, because this sounds amazing and it sounds brilliant, but on the one hand you’re, like, you know, holding up the standard for many other giant companies around the world, so I‘m sure they’d want to know, seriously what… I mean the first thing, you mentioned when you gave you’re new strategy, when you arrived on the scene and you gave your new strategic initiative of which this was a key part, a central part, and you… part of that was telling your shareholders that you weren’t going to give them, you know, guidance, quarterly, that they’d have to see this out, all this sort of thing, how this was going to work. How well did that go down at first? How convinced were they by this? And how applicable therefore is this approach across other large businesses that aren’t doing this?

PP: No, I think it is applicable to many businesses and we are not the only ones, so don’t make this… I don’t want to make this a Unilever story alone because there are many others.  But the challenge we had with… the two things I learnt was obviously it is not a surprise when our business is not doing as well as it could have been doing.

When I came I was the first CEO coming in from the outside but I also thought there is only one window of opportunity to change things. And I’ve said before my thinking was, the day they hire me, they can’t fire me. So that’s when I did it. But unfortunately because the business results weren’t that strong, the first reaction on the markets was that there must be something really bad that they are trying to tell us, and the stock price went down 8%, which gets you to this point of you can’t talk yourself out of things that you have behaved yourself into. Subsequently, our share prices have been the best performers in the last two years in the Netherlands, the Dutch Stock Exchange, because we are a dually listed company, it has more than doubled. Because we don’t do the quarterly reporting anymore, it saves me from explaining to people that Ramadan is a week early or the weather was bad for my ice cream, or that Easter fell: things that I’m not too enthusiastic on spending too much times on. And people forget that the 90 days is minus the weekends, it’s only 76 days; I mean you go to bed, you wake up and it’s another quarter. 

So our communications with the Shareholders have become more strategic. That has allowed us to better think through our own communications with them, our strategies. We have spent a lot of time on attracting other shareholders. So I have also been sometimes too vocal, I wouldn’t do that again perhaps as much, but about what shareholders we want and not to get… be driven by the shareholders itself. There are many shareholders out there… and if as I believe…  too many CEOs cater to the wishes if the shareholders, and then drive you nuts because so many shareholders have so many different objectives in your business; so you need to be very strong with your own strategies. I’ve found it easier to get rid of shareholders than to attract new shareholders – surprise, surprise.  But, but, at the end of the day, if you deliver, and you deliver consistently, your value will be reflected anyway.

So we find ourselves in a good space now, where people understand what we are doing. And actually shareholders understand that. People will tell you that. The companies that are ESG investors… are impact investing… is going up enormously. There is more and more evidence now, that it has a higher chance of getting a better return. The questions at shareholder meetings now… I did a study the other day – 25% of questions at shareholder meetings are related to sustainability things. We can now, with the internet, look at our websites and what people look at, it’s not anymore the top and the bottom line, because they understand, better than anyone else as I was saying, that it’s amount risk management, it’s about creating an environment where people can rise to their biggest challenge, it’s about effective use of resources. Take this month… take every day, every week, but you have to Czechoslovakia flooding, you have the Turkish turmoil, so last year alone, we reckoned, all these things, from the droughts in the US to hurricane Sandy to flooding here, and you know every week nearly, it cost us 3-400 million. By building into our business models a different thinking about the use of our resources, all of our factories are zero waste, all of our energy is green energy, all these things, save us well over 300 million. So by thinking about it, we can mitigate risk. And investors increasingly understand that.

And then the last thing which is not the most difficult to understand is, if you want to be a solution provider to some of the toughest challenges, you need to set the bar on innovation higher.  Some of our fastest growing products right now are waterless shampoos, because lots of people in parts of the world don’t have access to water, or our bar soaps, or our Dove where we have women’s self-esteem. So ever of our brands now, has a more defined, or a better defined social mission, that obviously connects better with consumers, and as a result, you accelerate your growth. So you have to be able to want to walk the journey, but what I’ve found actually easier than I had thought it was, if your purpose is strong enough, it’s actually easier to align the organisation than I thought.

FI: Did you need fundamentally that space though, from getting rid of the quarterly reporting?

PP: It absolutely helps behaviour. If you look at about 3-4 months ago, Roger Martin, from the Russian School wrote a book which was called ‘fixing the game’. I was actually reading, and what he tried to advocate, you know, you don’t have to support everything he is advocating, but what his thought there was is, we’ve basically become an expectation management society versus a reality society. The newspapers report if you miss versus guidance or you don’t miss versus guidance, they don’t talk about the actual thing anymore. There were in some quarters that Unilever was growing 10% but the market for some reason thought we would be growing 11%. Competition was growing 1 or 2%, but the headline will say ‘Unilever misses market expectation’. So we’ve become this expectation society versus this reality society.

And he compares this G.E. under Jack Welch. He was a great business leader, but when Jack retired he said market shareholder value alone in isolation is… shareholder value was probably the dumbest thing I did. Unfortunately he only discovered it after he retired; I don’t know why it took so long. But of his 40 quarters… he had 40 quarters… he only missed 2 of them, and he only missed them by 1 penny.  If he had 40 quarters where he hit the estimate, and only 2 of them he missed by a penny, he missed his vocation, because he should have been in Las Vegas. He would have made much more money. So the whole system, not surprisingly when he left, the share price went to half. And Jeff Immelt had to clean up the mess. In the US there was a study that Al Gore shared with me the other day, that 75% of the CEOs would postpone the right decision for their company, if it meant they would miss their quarterly guidance in the company. But think about that – how sad it is.

FI: This town is built on shareholder value and guidance and…

PP: I am not advocating abolishing shareholder value.  I am saying that a business really needs to go back to really focussing on its purpose in a responsible way. And if you do that you will maximise shareholder value as well. If you maximise your value to society in a responsible way, shareholder value will also be maximised. But it is not the purpose of business. We did not go into business to build our share prices to the highest levels; we go into business to serve a purpose. When Lord Lever invented in the 1870s or the 1880s Sunlight bath soap it was because there was cholera in Britain and 1 out of 2 babies didn’t make it past year 1. That’s why he invented it. He didn’t invent it to maximise shareholder value.

FI: So just lastly then, in this part of the chat, can you just describe a situation when you are round the board table, where there’s a bottom line to a business decision you have changed because of sustainability issues.

PP: Absolutely. We have example said we want to go to sustainable palm oil and by 2015 for ourselves.  And the market wasn’t totally ready for that. And we ended up buying 75% of the sustainable certificates and that cost us about 15-20 million a year. And some people were saying ‘yeah but we could save just 15-20 million just by not buying sustainable certificates just like others companies are doing’. But then you don’t help galvanise the system of change.  And as a CEO you have a responsibility, as I said, that comes with this size, to invest in some areas, to galvanise that change, and then you make some savings on other areas. And as long as the total adds up, it’s fine. That’s how you manage your business anyway. How much do I invest in training? How much do I invest in IT? Those are all long-term decisions. How much do I invest in capital? Well, also start asking yourself, how much do you invest in some of these externalities. How much do you invest in living wages or social compliance in your supply chain? How much do you invest in paying some fair share of taxes in some places or another? How much do you invest… and if you make these very balanced… when we run our factories on zero waste, we save about 50 million dollars a year, for a company our size for not having to bring our products to the waste... to the dump… whatever you call it… the landfill.

So my thinking is, instead of saying, ‘here is 50 million more for your shareholders’, which is very easy to do, you say, ‘here is 20 million more for your shareholders’ and with the other 30 I prepare for an even better future so the shareholders also have something for tomorrow and the day after tomorrow. So the compromises you have to make are not as high as you think, if you look at it holistically with the size of the business that we have.

FI: So Mark, when you look at that, how… sort of, how applicable is that model? I mean Unilever is dealing with the biggest companies in the world.  What lessons are there for, you know, the whole gambit of the world’s biggest multinationals?

MS: I would look at it in two levels. One is the external world and the other is the internal world. If you look at the external world, I think one of the things that Unilever is trying to do is consumer proposition, which is trying to, sort of, present, if you like, sustainable products to consumers. And Paul talked about for example Dove, and it is about how you, sort of, build sustainability into your propositions. And I think that this core of, as part of if you like, being part of a sustainable organisation, going forward. 

I think the other dimension which is really important is that you can have people like Paul out there, preaching the word, but at the end of the day if your organisation, particularly your middle managers particularly, don’t get it then you get a different internal alignment within the organisation. So I think it is really important that you understand, if you like, the power of sustainability, you have to bring your people along with you. And it’s about, not only making them aware; but it’s about engagement and commitment. How do you get people in the organisation committed to understanding, if you like, the real value of, not just the environmental side of it, but also the economic and the social side of it? That to me is part of the trick here.

FI: So that’s quite interesting, particularly, as I say, in this town that we all seem to live in here; we know about how bonuses, very brutal monetary bonuses, incentivised highly short-term and ultimately damaging behaviour. Can you actually factor this into the remuneration structures of middle management? Can you say, ‘doesn’t matter if you don’t make this financial target, but if you help increase the, I don’t know, the literacy rate, I don’t know how you do it, has anyone managed to make that work?

MS: Well I think we are beginning to see that work. So a good example would be, let’s suppose you are running a plant. And let’s suppose it produces 100 tonnes of carbon per annum. If you can actually reduce that from 100 tonnes to 96 tonnes, there is some value in that; you can provide some incentives. I think one of the things that is very important here is that, actually, we’re not trying to, if you like, create something that is sustainability, which is aside from the economic realities. I think the more you can get some of the alignment there, I think you can get some real power in the motivation. And I think you can begin to get the right sort of performance measurements. Because if you look at it from the point of view of – what are we trying to do at the corporate level? What are we trying to do at the personal level, and how does that link back to your individual performance? It is ultimately a portfolio of approach. Not all… not every company has done that, but I think certainly a number of companies are doing that. And if you look at some of your critical objectives, particularly around things like – how do we reduce our carbon footprint, what are we doing in terms of some of the social impact – and you can look at it out there in a number of companies today who are looking at the global reporting initiative, who are trying to come up with a much more balanced score card approach. I think that is the end tray into having a much more balanced approach to performance management.

FI: So how do you do that then? Do you actually give people alternatives to, kind of, stakeholder metrics?

PP: So there are a few things that you touched on. First of all, on the compensation system. First of all, the stronger your purpose, the less you have to worry about your compensation system. I’m not an exception, but it is very seldom I think about my salary. Then people say, ‘yeah because you are paid enough anyway’. So I understand that. But if that drives you, you shouldn’t have these jobs in the first place. And boards are smart enough to see that through. I think it was Warren Buffett that said, ‘when the waves come down, you can see who wears a swimming suit or not’. And you see a lot of CEOs hooking off now because they are not able to live with the higher standards that are being put on society now. The debates that banks say, ‘I cannot attract the right people, when I don’t pay them so much’, is to me, ludicrous.  If you join Unilever you get paid a good amount of money but significantly less than the banks, but we are able to attract the best people in the world.  We are, in most places the preferred employer, because we have a deeper purpose. So what we do with our compensation system, which is equally important, is that it has to be transparent, it has to be linked to performance. We changed our company compensation system at all levels, by having our short-term bonuses. You only gain your long-term plans if you invest your short-term bonus. Put your word where your mouth is. Then you have to hold it for a certain period of time.  Things that I wish any of the financial sectors would have looked at, but unfortunately, no one has done yet. So I think these things are very important for us.

We are working now with Richard Branson and Jochen Zeitz from Puma and others on what is called the B team, getting about 50 people there. Mohammed Yunnis of… and Mary Robinson, you can ask her when she is here, the day after tomorrow (she was with us this weekend). How can we change the incentives system? How can we change the reporting that mark is referring to? And how can we change the leadership that is required. On the reporting, I’m equally optimistic, because here, a lot of companies are starting to do carbon reporting. About a quarter of the big companies have sustainability reports. The companies that sign up to the UN Global Compact and the principles of the Global Compact that Mark is very capably leading, there is a movement there which is obviously linked to that transparency, which is obviously growing. But we have to figure out another way, to count for things that we don’t value currently. Currently, a dead tree is valued more than a live tree. That’s not good. That’s not good for this world, that’s not good for the long-term.

So we are all Capitalists. I'm not sitting here as a Socialist or a Communist, don’t get me wrong, don’t misunderstand me. But a Capitalist is probably best placed to optimise what we have right now – we have defined that as the return on capital. And that is what the profit and loss statement is and all that. But if you give social or environmental values a price, then the capitalists will be best placed to optimise them.

FI: You see, this is, kind of where, people solve… square the circle – as it were - incentivising multinationals to ‘do good’, you put a price on the externality and you solve it. I mean I just wonder, and it’s a nice… everyone can just smile and walk away from this very happy, but we got examples, you know, of that just totally failing already with the Carbon trading market in Europe – it’s a total failure.

PP: Well, yeah. Absolutely. And not everything we do is a success or the way we want it. And it again boils down to, what we were talking before; the world has become so interdependent, that if we don’t figure out a system, that works for all of us, not just a for few... Also in Europe, you cannot have Europe do one thing, then lose its competitiveness, because then we are screaming again for unemployment.  The European economy has gone down so much, so there is no need for these carbon credits because the production has gone down, so you have to be careful there about what these drivers are. But it shows you why you have to work together, more on a global level to tackle some of these biggest challenges. There is absolutely no doubt about it; we don’t disagree with you there. And that is what we are obviously trying to do.

FI: I just wonder, you sort of manoeuvre though, into an area of quite subjective moral judgement over matters that are political, as the head of a multinational. So you know, some people care more about carbon efficiency, some others care more about hunger alleviation and you know, and in the glorious world, you know, you just do the same policies, and everything will be solved. Sometimes, they come into conflict and I just wonder how you begin to make those decisions when you’re obviously not a politician. Maybe you have to become a kind of politician. But that must be a rather difficult place to be.

PP: Well the first thing is you need to… you don’t have a right to tell others what to do so that’s why, as I say, you have to work with a high level of humility. And that’s why you have to work in partnership.  And there is not a day that goes by now, and I deliberately say a day, that I don’t talk directly with one or another NGO or with people in the government. And what you try to do is come together, in defining solutions to things. But you have to be very careful that the size of your company, or the skill, or visibility that you have, doesn’t give you a right to have the right answer. But it certainly is clear that we have to be part of those solutions. And when jobs have to be created, business has to do that, unfortunately, in this world; that’s the system we still have figured out as the best thing that exists. When challenges of sustainable consumption, or there still needs to be products that deliver that, and business as ever will have to pay them. So, being part of that solution is what we are advocating, not… we are not there advocating our solution. That’s not what I’ve said, that’s not what we will ever say.

FI: Mark, how does a good business, as it were, cope with the fact, or deal with the fact that not all these initiatives go in the same direction?  Some of them require acute, delicate, political judgement… how do you begin… you know… one man’s poverty alleviation is another man’s, kind of you know, road building horror, I guess.

MS: Well, I think, what we can see is there are a number of fairly important pathways, that you can sort of begin to map out. There are some things that around, as I mentioned, around economic development and education, things around, sort of… I think carbon is very important, transport. So I think you can only look at it through the lens and the prism of where you are coming from as a business and for example, I was out in Peru 3 weeks ago – big discussion there about the role of mining there for example, in terms of what it is doing there, in terms of, you know, infrastructure, in terms of supporting, sort of, local development there. So I think you just have to understand, and today I think context, understand the context in which you’re operating.

I think Paul’s been very good in emphasising things like, you have to think about your responsibilities, your licence to operate within the context which you are given. If you are a company operating in Peru, you need to understand what is your social responsibility in that context. Yes there are some aspects of how do you develop, for example, silver mines in Peru, in a responsible way, but at the same time you also have to think, ‘what does that mean in terms of environmental, sort of, adaptations, mitigation actions. What are you doing in terms of the social? What are you doing in terms of the infrastructure?’

And I think the other critical thing is time frame. And I think what you have to do is think very carefully about what you are doing over the short-term, medium-term and long-term. And I think one of the big challenges for business, particularly is the medium-term. It’s quite easy to think about what you do in the short-term; it’s also easy to think what’s going to happen in the longer-term. But it’s how do you manage that medium-turn. And the reason why I think it is so important to talk about the coalitions is because at the end of the day, you have to work with governments, both central and local. You have to be working within civil society, to work out what are the right ways to actually, I think get the right actions in place to deliver across those three dimensions of economic, environment and social.  So I think that’s the way I would look at it.

But, for me, I think that one of my key messages today is, post 2008 you have to understand context. And not enough people I think, particularly in business… they've been to hunkered down, focussing down, delivering to the bottom line, and understanding the context of where we are, how we are operating, and what it means to be responsible, is, what I think, the name of the game is going to be, going forward.

PP: I see if I can build on that Mark, because with the tenure obviously of you being 3 and a half years and with the economy being as tough as it is, there is an enormous demand that proves that pulls you down, and also keep your head down and under the water instead of above the water for many of them, and whilst we actually need the opposite. And so... then encouragement or giving of confidence is 10 times more important. One of the reasons, that we work so much on the post 2015 Million Development Goals, is to get to your question that you were just posing; the world is not that simple anymore, that one issue can solve the world, it has become so interdependent.

One of the good things about the Million Development Goals are, it’s an overall goal that is a morality that goes across the world to end poverty in all its forms irreversibly. Then it has 12 specific interrelated goals on how to do that. Water is linked to food, and food is linked to energy, and energy is linked to education, and education is linked to maternal health. So these Million Development Goals are in fact the moral framework that have been put together with all the countries, to have a standard, that every individual country cannot do anymore. And we are now in the process because they finish by 2015. So we are now on the process to developing the next Million Development Goals. And what is absolutely key, is that, we, as citizens, ensure that the individual members states, that are now starting to negotiate that, don’t water it down to the lowest common denominator, as we have seen in Rio. But we have put all of our energy behind it to ensure there is some courageous goal, to change this world. This is a unique opportunity that we all have, and it comes together with the climate change agreements, and that's another benefit if we do that well.

FI: We are going to go to some questions in a couple of minutes. I'm just, you know, I've discussed this with a friend, we had this, kind of, theory that many, this is perhaps not the case with your company, but some of your colleagues in the FTSE 100 - chief execs -  they tend to alight upon climate change and carbon alleviation, because it's measurable, there's almost like a tyranny of measurement. Because it's easy to measure, you go with that, there's a big tick, it's kind of less controversial. But some of the kind of more difficult issues, they can, kind of, afford to park. I mean they call it green wash don't they. I'm going to try and pin you down on three ethical issues that are currently, vaguely in the news. And clearly you are Unilever - big brands – advertising. Branding and advertising is clearly about getting people to consume stuff that they may not need? Is there a way that a sustainable company will change the model of branding or advertising?

PP: First you have to change the word 'advertising' and make that more communication, and the second thing you have to make... ‘consuming’ is not necessarily the right word here. So we are working with many of these things. What... what we do with our brands is to be able... you take for example the bar soap brands. In many of the emerging markets, in Africa, only 4% of people wash their hands after defecation or before they prepare food. As a result of that many people die of infectious diseases. So you need to communicate how you do your hand washing... and why you do that... and create habits. We spend a lot of money on hand washing campaigns in schools that takes obviously a certain amount of time to make that a ritual and get that engrained. We have to specifically focus on schools and on girls - teenage girls because they are the most influential in their families coming home again. We work there with governments.

So you call that advertising or not. It is a very important thing to do. So how you spend your money is... you see often we judge… so the reality is… if I may be honest, 80% of the people in the world in one generation will live outside Europe and the US. And we try to discuss all of this and solve all of these problems from a European angle. If you work in the other 80%, where, in fact, most of the activity is now happening, people are desperately in need to connect and to communicate to find out what these brands do, and how they do that. And if do that responsibly, you will grow. And you call it advertising or not, that doesn't matter to us.

We spent quite a lot of money on Dove and women's self esteem. Only 4% of women in the world feel that they are beautiful. This audience is obviously way above that. But there is not one teenage girl anymore that wants to participate in a swimming class or anything because anybody you see on television has a computer doctored body that doesn't exist. There is not one normal face of a beauty star that is a real face. So Dove is about real people, real bodies, real feeling good about yourself, inner beauty, outer beauty. And not surprisingly the Dove self esteem campaign... the latest campaign ‘Police Sketches’ it’s called had 170 million people watching it. It had the most, what you might call, ‘advertised’ (we don't spend any money on it) but it is the most branded campaign. In fact I forgot to show you something. Can you give me 2 minutes? 3 minutes? Or am I overtime?

FI: Yes - I got a nod there.

PP: Why don't you look at this for 3 minutes, which I wanted to show during my talking, but with my enthusiasm and passion, I totally forgot about it. Can we show that?

FI: I still have the tough question; I'm not going to forget about them.

PP: Well look at this first...

FI: Don't try and distract me...

PP: Well look at this first and the questions will be softer, but you have to look. I hope we can see it. You will call this advertising.

[Video]

PP: What's your question?

FI: I'm now trapped, because I've been advised to go to questions - other questions now, so it will look like I've wimped out, so I have an incentive to ask you a hard question. No - we will come back to the hard questions later. The hard questions will come from the audience, then I'll come in from behind.

PP: You know, every time I see this I still get a lump in my throat; my wife cried because this is what we do for a living. If every of the brands can become a cause for social good, you're in sync with society, you’ll be very successful, and by the way your shareholders as well. If you call this advertising or not, I don't care. But what we now do in India, we have the perfect villages 70,000 ladies to distribute them, to give them water, health sanitation, food. We bring these ecosystems to life, that give every child a chance - what's wrong with that?

FI: Great. OK let's take some questions. The gentlemen in the orange jumper just here, and there is a gentleman in the back in the blue jumper. Let's take two together. Just if you could identify yourself.

Audience 1: Great, good evening. My name is William Wong. Just a general question for the panel and something more specific for Mr Polman. How do we explain sustainability in jargon free language to an 8 year old? And I think this is critical, because so many people outside of here you can ask them what's your view on sustainability and I bet most people say 'what's that?' And more specific for Mr Polman, you mentioned sustainable palm oil just now. Now that being a critical resource in your supply chain, we all know, the plantations remain a serious threat to biodiversity, so how do you square that dilemma? Thanks very much.

FI: Thanks William. The gentleman at the back.

Audience 2: Edward Davy, Prince of Wale’s office. Just a quick question. Paul, how can we get the CEOs of the major oil companies of the world to replicate the ethical leadership that you have so powerfully shown?

FI: Oil of different descriptions. So why don't we talk... Paul why don't you ask about... answer about palm oil and crude oil?

PP: Yeah. You know there are two groups in the world that you need to focus on. And I'm absolutely passionate about the young and I'm happy to be here and see this young passionate audience because in these emerging markets this 80%, and perhaps that is the part of the world you grew up in? I don't know. Where are you from originally?

Audience 1: I spent my childhood in Hong Kong

PP: Hong Kong. So you know what I am talking about. But 80% of the population lives in these emerging markets. Half of that population is below 25 years old. They understand better than anybody else, anybody else, that they are half today and 100% tomorrow. I was in Liberia, I was with Mrs Sirleaf, part of the panel in Monrovia… 56% of the country is below 15 years old. You don't have to ask them what they think about their sustainability. What they think about sustainability is to have a job, to have food, to be sure they have it also tomorrow, and to not steal the resources that belong to others. And that universal concept is very well understood with people that live in a world of increasing scarcity. Especially in that part of the world that you know. 

The people that we need to focus on, are the young, they are digitally connected, they care about the future, and the other group is, what I call, the concerned, care givers, which are the mothers with children. Mothers understand it; that's why it's so important that you invest in women in everything that you do. If you invest in agriculture and women you get about 30% more productivity. They take their money home; they invest it in their kids and nutrition on top of it. The guy, when he has some money, first stops on the corner, to celebrate the fact that he had some money. So important... absolutely important to focus on those two groups, and frankly, you have a very high return for any responsible business person and for any shareholder as well. 1 dollar invested in nutrition gives you 3 for society. Any business man would love to have such a rate of return. The issue of palm oil and biodiversity is a very important thing because obviously, illegal deforestation, the slash and burn techniques that are happening, the enormous demand and that comes from China and India, we have to stop that. We are finally, because a lot of people look at that and taxing and negative incentives, we finally have convinced the government of India to lower the tax rate of sustainable palm oil. We are trying to do that here in the UK, in Europe the same thing. So that there is a positive incentive for that and helps change behaviour.

Politicians usually think their role is to regulate and to tax; they are very uncomfortable with positive incentives. You call it marketing or not, but a consumer company... the best thing that works is positive incentive not negative incentive. And we can do a lot more if it is positive incentive.

We ran an experiment with a big department, where everybody could see everybody's electricity bill, and all of a sudden they discovered that they were above the average, or on the average or below the average. All the people above the average started cutting down on their electricity bill, because they didn't want to be above the average, just by making it public - positive incentive. So it's very... it's not easy to do but it is very... it's a much better force than anything else.

So on one of the high level penal goals, one of the goals that we have now proposed is in fact biodiversity – which is a very important thing obviously for the equilibrium of this fragile mother earth, and that is exactly why we want to stop the illegal deforestation. Every year, half the size of the UK, half the size of the UK (1 acre an hour) disappears still on illegal deforestation. And if we can for that reason, stop this illegal deforestation, we bring back these biodiversities that you are talking about. It's probably the biggest thing we can do. Consumers, which we have not succeeding in... how can we make consumers value, that our, let’s say, our margin that was made for part in sustainable palm oil or our toilet soaps are worth more to them as they make these contributions. That's still a big challenge. That's still a big challenge. The best power is the power of the wallet.

FI: And on the oil major chef executives?

PP: Well we have some very good executives in the major oil companies. I know there is a lot of baggage and old tape etcetera. But again you need to have everybody. Energy is a very important thing in this world, and the demand for energy as the population grows, goes up enormously. People cannot lift themselves out of poverty if they don't have access to energy either. So we need to obviously build more sustainable energy, and make this energy more affordable. There are many subsidies going on right now... the energy subsidies in this world which are actually not even benefiting the poor, ah sorry, the question came from there, they are benefiting the middle class more. These prefer these. If you were to abolish those, like Nigeria is trying to do would actually save far more money than what you need to solve the food supply issue. So with the energy companies we are looking at a lot of these subsidies and abolishing those which is a good thing. All of the big energy companies have signed up to a major initiative from the UN called 'energy for all' How can you double the efficiency of the energy, how can you get a certain percentage of the sustainable energy...

FI: This is quite interesting…

PP: So these are great initiatives.

FI: …some of the NGOs won't back that at all will they, because in Nigeria poverty will go up and people will be very angry...

PP: Well, in fact, people in Nigeria have proven as well that a lot of that is not benefiting the poor that is why...

FI: Oh OK...

PP: …that's why you have to be careful what you read and what the reality is and I go quite often to Nigeria, and I talk to the finance minister Ngozi and you talk to the people on the ground and you look how it works. It’s quite different right now. So that whole system of these subsidies that has been created has resulted in a bizarre behaviour that doesn't benefit anyone, except a few people.

FI: Mark, do you want to come in here about the oils and also trying to explain sustainability to an 8 year old.

MS: A consultant trying to explain language to an 8 year old is probably really not my forte, but I do think that that thinking about the young, the digital is very important. I also think that thinking about... thinking too much about those that are in cities versus those in the rural and, I think, if I was trying to appeal to an 8 year old, I would be thinking a lot for example around what an 8 year old experiences. Looking at the schooling, thinking about what type of... what’s going on in the school, do they have for example, sort of, any computers, do they have a schoolroom, do they have a… what's the experience like, and then what happens in terms of what sort of food do they eat and what is happening in terms of their health? So I think that you have to appeal to people at where they’re at, in a language that they understand. Cities versus rural - more developed less developed.

I was very struck by two things: if you looked at when the whole question came up with Mali, look at the average age of Mali; it’s about 16. And we had actually last week, we had the UK Ambassador from Mozambique here. And Mozambique average age: 19. So these are the... so it's not just that half the population is under 27, in some of these counties it’s really very sort of young and we have to be able to work with those people in those situations as well as working in more well healed cities like London and Paris, but also looking at some of the more deprived areas as well. So I think you've got to be able to tailor the messages - that would be my, sort of, my key point there.

I think on the energy side, that's a very important area because, I think we’ve got to look very much at how we reinvent the energy system going forward, there are lots of issues there on what we do on the supply side around how we sort of move to the more low cost energy, how do we, sort of, move in that sort of direction. But there’s a lot that can be done, in terms of, I think, how we help people to understand energy efficiency better.  And there is a huge job to be done, in terms of educating people about the costs of energy and how people can be more efficient in terms of the ways they use energy, going forward. And I know that is not exactly, sort of, totally in the province of the chef executives. But if you look at what we need to do going forward, if by 2030 we are going to need 40% more because of the population growth, we have got to be able to convince people to use energy more wisely.

FI: Let's bring in some more questions or points. Yes, there’s a lady just there, and maybe the gentleman just in front yeah, after that.

Audience 3: I was interested to know a bit more about Unilever's expansion strategy. You said emerging markets were one of the main means in which you are expanding. I was wondering how sustainable or how responsible that is in terms of the economic growths of the markets that you are moving in to. By brining big western brands into those markets, are you in some ways restricting the competition for local SMEs to grow within the markets themselves?

FI: And question. The gentleman in front if you could? Yep.

Audience 4: Yeah so my question is: to me it seems quite obvious that the traditional accountability structures of the private sector, public sector and third sector are converging and with that come efficiency and collaboration and joint innovation perhaps. But there is also a risk that it hurts accountability because everyone is working towards the same goal, but who is actually scrutinising that direction and keeping people accountable - other than perhaps hard metrics? Who’s actually looking out much more broadly and keeping everyone in check? And Faisal for you perhaps, as I think the media is probably part of that machine as well.

FI: The Chair does not answer questions! OK, I'll think about that. Paul!

PP: The question is who keeps the media in check?

FI: Yeah you can come onto that later!

PP: That's a further discussion I agree with you.

FI: For another time! So Paul... On… I've lost my train of thought. The whole notion of you going into these emerging markets... clearly Unilever has had a long history in these emerging markets, and probably not emerging markets for your company. Sort of drowning out or crowding out indigenous businesses.

PP: So there is not just one emerging market anymore with 80% of the world being outside Europe and the US there are many different markets in many different states of development. From fragile states in Africa to Latin America, to many countries like Korea that are very well developed, or increasingly big pockets of China – you take Shanghai, you have economies that are better than any European country. So we have to be very careful with these definitions of emerging markets now. We obviously have a long history in these emerging markets, because Unilever had at least had its fortune, if you want to, of merging the Dutch and the Brits – two of probably the most formidable colonial powers, so we find ourselves in a situation that we have we have about 80% - sorry 60% of our business in emerging markets. All of our growth is in emerging markets. By the end of this this decade, if I like it or not, 75-80% of our business will be in the emerging markets, even if I would go to bed and wake up then. Obviously, our presence there, which has been a long presence (we were the only company in India that never got nationalised).  And it brings you back to the philosophy of the company that we just work for the long-term interest of every country that we are in. For us it doesn’t… the concept of being a Dutch or a UK company doesn’t exist. My management team is from Zimbabwe, to India, to Latin America, it’s probably the most diverse way of running a company. We run the world in eight clusters. Our head office here is a very small building for a company our size. And we focus on doing what is right for the countries. Now we have a strategy in which categories we want to compete in, which products, but those products are basic necessities everywhere. People have hygiene needs, they have clean water needs, they have sanitation needs. And open defecation is 2.4 million people, so one of our goals is to build 400,000 toilets. There is nothing wrong with that. Everywhere in the world, people would like their dignity to be able to goal to their own toilet. And then we happen to have sustainable toilet cleaners then that’s fine. Because then they can keep it hygienically clean – it’s not a problem. Bar soap is a universal need.

So if there are local companies, often they might not have the technology or the skill, but over time, as these companies actually develop, what you will see is the same as here, that the toughest competitors, rightfully so, which is good for the economy, is our local competitors. They are often more agile, they are closer to the consumer. There are more patents being invented now in China than the US or anywhere else. So that competitive level… that’s actually good because brands can compete. We would actually advocate that because when brands can compete, consumers are always better off. Where brands don’t have the right to compete and consumers don’t have choice, the consumer suffers. And that’s universal. There’s no exception.

FI: Can I just… there is an allied question that I wanted to ask both of you – which is… there is a lot of pressure, on western so-called multinationals to do this stuff. But I do notice that in the developing world, that some of the local companies don’t quite feel that same pressure on ethics. Are you seeing any difference? Obviously China is multinational, some Indian multinationals, Indian oil companies for example, you’d never hear them going on, or even pretending they cared, about climate change and things like that. I just wonder if you reflect on that. Whether you see that… is it a disadvantage for you?

PP: The question, if I may rephrase it, is if local companies have the same ethical standards as we do? Is that the question?

FI: More or less, yeah.

PP: More or less. That makes sense. The, no, the… what you find is in young emerging economies, institutions need to be built, standards need to be set, and often it is the reasonability of companies like ours to help set those things. We cannot justify, I could never justify treating a Chinese working in a factory differently from an American worker or French worker or a Bangladeshi worker. You can put cameras in all of our factories and we have the same equipment and the same way of working.

FI: I’ll take you up on that

PP: You can. We recently did a study with Oxfam on that because we wanted others to do that, not ourselves. So it is absolutely important that you have the same standards. The UK obviously has a bribery act which we were way above that, but you are now liable if you have different behaviours in that respect in other counties. Rightfully so. So we drive standards. In China we produced the first green LED, they call it, factory. We have a biomass for our energy and that has become a sure factory for the Chinese authorities. Yeah, we invest a little bit more in there, but when China… when they were surpassing the carbons emission standards, because the Chinese are all engineers, they cut off the energy; the only factory that was running was our factory because it was biomass. So increasingly people see the way we do business makes a lot more sense. And you lift these standards up. If your questions is have you ever had a handicap by having these high standards in these countries, versus the local competitor, my question is an outright ‘no’ for businesses that want to be around for a long time.

FI: And do you…

MS: Well I was just going to pick up one angle on that. I think in the west, we sometimes forget that actually we use the word branding in relation to product.  But in fact when you go to a lot of emerging markets… if I can use that word, particularly if you go to places like India, the employee brand of the company is actually extremely important. It‘s the talent, if you like, the dimension. And people are very concerned about where their children or where their family are working, and the reputation of that company. And so I think that one of the things that we are actually learning in western multinationals from a lot of the sort of local companies, is the importance of, if you like, the involvement with local community, the in value of employee brand as much as the value of market brand. And I think that’s where in fact, we in the West have been learning a few lessons from what some of the local companies are doing. And I think, this is part of understanding, certainly the West hasn’t got it all right, and there are things we can learn from emerging market multinationals. Because in many ways they have been very close to their local markets, and that is what has made them very successful.

FI: Do you find though… I mean there is a classic example, and I won’t name companies but I’ll name markets, I’ll name an industry type… I think that there are… there was a study of car safety standards, that showed that in Latin America, South America, that car safety standards were much lower and people were dying from crashes, that they would not die of in Germany. I don’t know that’s very… There is another example of mobile phone companies, famous ones, European ones, that in India… I mean you can’t prove this, I tried to prove it… but they know that a certain proportion of their custom can’t read. And low and behold they get bombarded with nonsensical texts messages, which they press the button and they get charged a rupee and they are standing outside the phone Walla saying ‘why do I have no credit left?’ And they say ‘well you keep answering Bollywood trivia questions.’ I mean that’s a serious example. We couldn’t do a story on that. And I won’t name the company but it strikes me as that, yes, this is the good side of everything that you are describing but there is a slightly darker side to all this which is this differential treatment that some, frankly, poorer countries get.

PP: Where it is the case, and the reasons are not justified, we should work hard to take them in the away. The same that in this part of the world we still treat women and men differently; it’s unacceptable. There is still the same… we don’t give access to education to everybody in this world, in this part of the world… is unacceptable. So when we see this… that is why I say the most important values are dignity for the individual, respect for the individual and common good. So all these examples, wrong or right, is not really important to me. We should fight to take them away. Often, unfortunately in some of these emerging markets, the rules, the laws the regulations, might not be totally there. The purchasing power might not be there. We put our standards on there, as we have to write an article for the 9 o clock deadline, and this sounds very interesting. So these things have reasons. But where it boils down to reasons that violate these two principles – we have to fight hard for that. But all of our products in these emerging markets are the same as what we sell here. But we sell more products there without bells and whistles. So, because some of these people don’t have that purchasing power. And there is absolutely nothing wrong with that because, as they climb up out of their misery, they will be able to do more and that is a good thing.

MS: Sorry, two quick points…

FI: Can we just try and address the really interesting point there, but also about this merger of accountability between the 3 different sectors; I find that fascinating.

MS: Yes OK. So, so 3 quick points. One I think is that you are going to get differences in standards in different parts of the world. But actually part of the benefits of economic interconnectedness, is that now we are now finding out where those differences are and they are getting communicated more quickly. So I think just be very aware of that. The second one, in which I think the NGOs have a critical role, is capacity building, because certain counties just haven’t got the capacity to develop the infrastructure, the institutional frameworks. And I think we have a responsibility, from policy makers through to business to really transmit the best practice.

And I really do think the convergence issue, which is this bringing together of policy makers, business and NGOs in sort of collaborative ways is really critical. And I think what Paul was pointing to, which I think is really the big opportunity, is that if you can start link the targets around particularly sustainable development goals, targets become the basis for accountability. And I think one of the reasons why the Millennium Development Goals were so successful was because they set some clear targets. You can disagree about the targets, but I think targets, helping to clarify accountabilities, and if going forward from 2015, in the post-development era, we can get greater alignment between what we are trying to achieve at a global level around those sustainable development goals, link that to policy objectives and what, I think, business can achieve. I think that gives us a framework in which you can have meaningful collaboration across both the public, private and civil society.

FI: It’s interesting. The question, I found very fascinating because in your sector, maybe this line of accountability, is clearer and easier than… you know… when you are helping people’s satiation – you are saving lives. That’s not very controversial. If you are saying, something like finance, if a big city bank goes into India and offers emancipating microcredit to all, but actually it is what we would call subprime in another circumstance, these are you know… and some would argue that is exactly what happened in America, these ethical questions and these questions for accountability get much more difficult. I mean I know we all want to, in this forum, talk about where everybody is on the same page and we can all just hold hand together and celebrate but these are difficult ethical, political problems and you know, I just want you to talk about that.

PP: No, no, absolutely and I don’t disagree with that. But I think we are entering in a very good space about what we were talking about tonight in terms of the transparency, in terms of the consumer power, that a lot of the things that would not live up to the standards we expect everybody to behave in are much quicker exposed right now.  That doesn’t mean that individuals or institutions or whatever, are driven by other objectives; I don’t disagree with that. We are not, and I certainly don’t want to give you the impression that we are, naive Utopian hippies in Unilever. There is a real world out there. There’s a real world out there – what we are only saying is ‘let’s make the force for good as big as we can so that we get the others with it’. And where  we see trailers, because there are many free riders, also in our industry even in consumer goods, we try to put pressure on, or publically shame, or work with consumer groups, we have no problem with that either, to see if we can get the right critical mass. And as a result, you drive it higher.

FI: So where you are working with an NGO, if that NGO, spots something it doesn’t like about your business and says… and goes public with it, what would you do in that situation?

PP: Oh it depends on the NGO, obviously, because there are so many NGOs. And often there are some very good NGOs but there are also some that have approaches that aren’t actually constructive for anybody to solve things. So it’s like all your shareholders with different opinions. So you have to… it’s a very broad question that you're asking.

FI: Yes.

PP: But what we do is we work with all of the major NGOs to try and solve the enormous issues we have in front of us. We’ve created the Unilever foundation, not long ago – about 3 years ago – and we deliberately decided to take out the world food programme. We supply about 20 million meals a year. Oxfam, Save the Children, PSI, and UNICEF, (did I mention that?) so 5 of them. And we work with them on scalable programmes because we thought that it was better to work with fewer NGOs, which is a difficult choice, but to scale things with real impact globally, leveraging Unilever’s scale than working with many, many NGOs. And there are some NGOs that are so absolutely passionate for some issues or another, that unfortunately we don’t want to… not that we don’t want to, but we don’t have that capacity to work with them now. So that’s a difficult choice, but I think at the end, we only have 24 hours a day and limited resources.

FI: Is there anyone from an NGO here that’s worried about this kind of co-option, or this borderline between corporations and NGOs. So let’s take 2 questions on that line. Yep.

Audience 5: Andrew Ward from the Prince’s Youth Business International.  We’re an NGO and we are a global network of organisations in 42 countries, helping young people set up business, creating jobs on average about 3.4 per entrepreneur. My question to you, Mr Polman, I'm pleased with the work you are doing – it’s extremely good – and particularly obviously in the hygiene and the nutrition, helping young people start a life, but we do have this major, major problem in the world, a global problem, and this is youth unemployment. Nearly 75 million young people aged 18 – 24 unemployed, and we’ve seen in counties, just even like Spain, what happens when young people don’t have jobs. And we are in a situation now where not only young people haven’t got a job but young people haven’t got a job, they never had a job. And that’s a big shift that we have to change. It’s a challenge for us around the world. So I really would welcome the opportunity to converse with you at a later stage on how we can work as an NGO in collation with yourself to make things happen and I’m glad to see that Accenture and Barclays are two of our global partners. And I would hope that Unilever would be able to join that. Because you are helping up to 2020 500,000 farmers. Well that’s a great start but it is only a start. I was recently in Kenya and the youth unemployment is 65% it’s 80% in Uganda. These countries, yeah fine in Germany it’s 7% in this country it’s 20%, but the fact is there are a lot of people in a lot of poor countries that need our help and the only way that can be done is working in a local context but with international support.

FI: OK, why don’t you start answering that and if you could just pass the microphone…

PP: I’m nodding violently yes. I agree with that. You say 500,000 is a start but don’t set the bar at a level that we cannot deliver as a company. We are only 1 company. 500,000 new jobs being created in small hold farming – no one has ever done that. I talk a lot with the prince himself, because I have great respect for the work that the prince’s trust does. We are involved in many projects in sustainable farming and many other things. One of the big supporters of the Cambridge Institute – so all my respect, honestly for all the efforts that you and him are doing. And the youth employment schemes here in the UK were part of the… the apprenticeship scheme… were part of.

I just want to point out one thing that Europe needs to do. I stuck out my neck and we had the first strike in the history of our company here in the UK. And people were saying ‘here you are, Unilever’s Sustainable Living Plan, wanting to improve the wealth, and yeah we have a strike because you are cutting pensions from people.’ Well, the Unilever employees are living longer than anybody else in this world. Their pensions were on the top 1% of the UK. And all we were asking was ‘why don’t we do a little less so we can invest it in youth employment schemes’. I thought that was quite normal. The unions are tremendously focussed on preserving the status quo, in Europe as well, which I protected. That’s why the 50+ party in my country, the Netherlands, is one of the fastest growing parties. Don’t take away. So, the transitions that we all need to make to help this major issue that is going on, that is a major concern to me as well – the youth unemployment, especially in southern Europe. Yeah we want to solve that. We can’t solve it alone but we want to be part of that solution.

I went to Greece; deliberately I saw the prime minster, who is always happy to see a businessman because nobody is visiting him, except Brussels to ask for more money. And, you know, we have the leading olive oil brand, you know, the leading olive oil brand. And that’s an ideal crop to create jobs, because these little islands, you cannot put a factory therefore Europe – it’s not economical, it can’t compete.  But olive oil, you pick by hand, you can create a lot of jobs. So we have 15,000 Greek people working for us because of the olive oil. I said, ‘why don’t we sit together and see if we can create another 15,000?’ That’s the type of discussion we need to have. And that is what the role of business is. But for that he needs to put in, perhaps not the tax system that he has currently, to try to solve his other problems. He needs to help with export facility.  And other things. You need to do that together, instead of saying ‘oh yeah but that’s only for Unilever’s benefit, you make money on it and you do it.’ We are talking about lives of people. So I agree with what the Prince’s trust does; I agree with your questions. Some of these terrible situations in Africa, where I am quite often myself as well. But in due respect, due respect, the 500,000 target that we have set ourselves, we currently have a hard time reaching it because the capacity building on the ground isn’t even there. 

FI: The gentleman over there. Yep.

Audience 6: Yeah so I had a comment about, oh sorry, I had the microphone.

FI: Go on.

Audience 6: Yeah I had a comment or a reservation. You were asking about reservations on NGO partnerships and I’ve been working in one of the 5 that Paul just mentioned, but I won’t say which. I do think that there is a concern that when everybody is working together, in a partnership, when funding streams start to get mixed, when friendships start to get developed, I do worry about whose place it is to take the critical positions and go out on a line and criticise what needs to be criticised. So that’s the reservation I expressed. And I also have a question which is, I find it striking that Paul Polman started talking about growth, about sustainability while doubling turnover. And I wondered if Unilever had managed to get to a point where they questioned the priority on growth.

PP: Priority on what?

FI: On growth. If you could just bring the thing down to just here… the microphone. Paul…

MS: Let me just make one point on the NGO collaboration issue. I think it is very important that we… if you come back to a lot of the sustainability – it’s about scaling, it’s about acceleration and it’s about finding best practice. And one of the things that Paul mentioned is that we waste an incredible amount of food in the food chain. And I have seen a fantastic example of where a comms company, and NGO and a fertiliser company essentially have been working together to help farmers, in East Africa, understand better what are the prices for their food and for their products, and therefore be able to help product to market and eliminate some of the waste. And that is a really good example of where I think tri-sector collaboration has worked very effectively. And I think as we go forward is to highlight examples like that of best practice, and then really be able to, sort of, see how we can scale that more broadly. So how do you take that model and take it to India or take it to a Bangladesh or take it somewhere else. So that I think is part of what we have to try and do, and when we see an example of things not working so well that we take lessons from it. But I think a lot of the way to scaling by being really clear about practice, where things work, why they work, and then being able to move things forward.

FI: And if you just want to answer those questions.

PP: We could not work with NGOs if they were not critical. That does not interest me, because if we all become like minded because one feeds the other etcetera then you defeat the purpose of reason for being. So it’s very important that we keep that alive because the NGOs are aggregations of citizens, and if they are responsible on that we want that critical voice. We are now working on the debate on what is the living wage and what is social compliance standards in the value chain. And I cannot solve that myself. I don’t have any idea on that topic. But working with several NGOs, challenging us, pushing these boundaries. And we actually perhaps running a bit faster or further than we otherwise would, is a very important thing for us to stay alive. So… and on top of that… for that reason for example, one of the WWFs or others, we give limited funding, because we want the NGOs to find their funding by what they do but then we also work together on the projects and the money goes to achieving what we are trying to achieve. And we do that, not because we are mean and lean, but we do that to help the NGOs maintain their role, that you rightfully say they have to play. It’s a very important point that you bring up there.

On the second point on growth and long-term. Just going back to the gentleman from the Prince’s Trust, who is going to solve the unemployment? Everyone is concerned, not just the CEOs, but everyone in society – including the young people. From all the research we do and others do, a job is the first thing they are worried about. And for that you need to create opportunities to have a job; that is growth. You go into the emerging markets and you see the same thing. You see an enormous desire to improve their standards of life. And for that it’s growth. We have to define growth slightly differently from just GDP, in the same discussion as the PML versus SPNL or EPNL, environmental accounting or social accounting, we also need to have a broader definition of GDP.  And it’s starting to happen. Where education is part of that, where pollution or absence of pollution is part of that, where quality of life is… the GDP measure is really a too narrow measure there as well. But ultimately you need growth to create the jobs. 200 million unemployed now, 250 million jobs more need to be created in the next 10 years.

But growth, and this is also what we put in the report on the high level panel, has to be sustainable, has to be more equitable. So we call it inclusive in the report. So the way we grow has to change. Now, there’s no problem growing, but people are going to say, ‘but where are all these resources coming from and how do we do that?’ This is exactly why I tell you in our model we need to de-couple that growth that comes from environmental impact. We are consuming more music now than ever. We had the big records, then it became the CDs, and I thought ‘well that’s the end of it because nobody can invent something better.’ Now all the music is digital. We’ve created an ability to consume, if you call it that way, or to enjoy at a higher quality of noise than ever before, an access than ever before. Yet the stress on the earth… the earth’s resources are less. It’s a great example.

FI: Just there.

Audience 8: Thank you. Tanya Barron from Plan International UK. I very much liked your last question. It was a great invitation from us who are NGOs. We work very closely with Barclays on a big programme. We’ve just got 500,000 into village savings and it’s a great thing to have these corporate civil society partnerships. There are ways in which I think the NGO world is becoming more businesslike, and that’s a good thing. But there are also special things that we can bring to the table and for us in this project… I mean we are to do with village savings, for young people to start up their own small business start-ups. And we bring the young people, because that’s what we are good at.  So Barclays are helping people who are unbanked to have access to banks and we are very good at bringing young people, so we will have at least 100,000 of those people will be people under the age of 25.

PP: That’s very good. Thanks for sharing.

FI: There’s a… there’s a… yes. Can we be quite quick? We’ve only got 2 or 3 minutes left.

Audience 9: Hi, it will be very quick. Graham Randal from the New Economics Foundation. I was also going to ask the growth question, perhaps you can explain Paul… it’s been very inspirational so far, but how can you create the innovation to create jobs, create the kind of growth you are talking and reduce the environmental impact you are talking about in Western countries, where there is much more of a problem and that problem is overconsumption.

FI: OK, we’ll take another couple. Have you got the microphone. Yes, OK.

Audience 10: I would like to ask about the UN Global Compact. Does… will this work? Because it is not legally binding. Big companies like Google don’t even pretend to pay lip service to it. So how… is this realistic? Will it work?

FI: Good question. And there was another one down here. And if you could make it quick we can go to this lady down here as well.

Audience 11: Thank you. Paul, I really enjoyed your talk, I think it was brilliant. You talked a lot about the alliance for food security. I’m here [laughs]. But I have read today, a fair bit of criticism already about this partnership and some comments that some countries are not signing up to it. Partly… from the likes of Friends of the Earth, Grain and George Mobio’s column has just come out. Criticism based on things around it not really allowing seed sharing in Mozambique, some comment around liberalisation of land  deals in Ethiopia, and that running counter to recommendation including from the Committee for Food Security, which you mentioned you had been involved in.  So I’d be really interested to hear your response to that because that upsets me a bit because it sounds like that was a good progress, but some quite good people saying not.

FI: Go on, over here.

PP: I actually also read the friends of the earth article coming over here, so it’s good that you mentioned it.

Audience 12: Very quick one. Thank you very much I found it really inspirational. In terms of positive incentives, thinking about the post 2015 goals, how’s the panel suggesting that we work together to ensure that the nation states do sign up to some very positive targets.

FI: OK, so how do split this up. UN Global Compact and the post 2015 goals, Mark, and final comments.

MS: OK, I think UN Global Compact – again a lot of it is about peer pressure. I think that’s very important. Paul mentioned about the coalitions of the willing, and I think, actually the real issue here is leadership. I think the challenge around a lot of the sustainability companies is that you have a lot of Chief Executives who say ‘sustainability really matters’ the key issues is execution and we really need to hold them to the fire on execution. But I keep coming back to good best practice, examples becomes very important in that world.

 I also think, another subject, but I really think there are some genuine competitive advantages that you can gain by being responsible, environmental, and I think there is an opportunity to really demonstrate leadership in that context. That also links in to where we are going in terms of the environmental, the STGs. I think that it is a critical stage that we are at. This is a decade of transition in my opinion. I think again, it’s very important – no one country can drive it on its own – so I think it’s very important to look for coalitions again, around sort of political leadership. No reason in my opinion why we can’t be reasonably ambitious.

But what I would say to all of you is, that you’ve all got a role to play as well. This is all about big stuff, STGs, political… but you can still... all the digital empowerment… you can still play a role, so I encourage you to… sort of… if you feel strongly about it, get in there, send the messages, make sure it  happens.

And I’d just say one point over here; I do think innovation in the environmental space is key. We haven’t perhaps talked enough about that. But I do think there is an opportunity, going forward. If you look at the speed and scale which things are moving the opportunity for business to continue to innovate, whether it is through the customer end, whether it is the environment technology, all of those, are very important. Thank you.

FI: OK, Mark down here, has said please come to the talk on Wednesday and we can talk about the UN Global Compact a lot more. Shall I pass that on?

[Laughter]

FI: Any other messages? Any tweets?

PP: You know, the key thing on the post development goal is probably the most important question, because I’m thinking a bit and writing down and I was just looking at my blackberry to get some information because we have a window of 2 years and now we have the open working group on the STGs, because unfortunately we are on a trajectory from Rio, where you have the MDG high level panel that I was member of, David Cameron was a co-chair with President Yudhoyono and Mrs Sirleaf. We produced a fairly courageous report that was, overall, well received. Although 10% had the same comments as what you are now referring to, but that’s the world we live in. But overall well received.

And now we need to be very clear that this is what the world wants. We had 500,000 people that reached out and many millions more because they were represented by organisations from Actionaid to PSI, to the Young organisation, so we need to capitalise on that. So one of the things we are trying to see is can we form the networks of the young? There is Nik Hartley Partly here in the UK is the Restless organisation, there is the Young African Movement which has been incredibly vocal. We are going to South Africa in 2 months time – Desmund Tutu, Bono, others on the One Young World and really see if we can use the young to keep pressure on because the politicians even today might not be there tomorrow. So you have to do that. There is the website we've created 'the world we want'. We want people to participate.

September, we have the big event coming up in New York, which is very important. The Global Compact will be there as well, focussing on the Millennium Development Goals, looking at Africa specifically. Yesterday, I was talking to David and Justine Greening to see… the event that we organised and the reason we got involved to be sure that it was organised, that we maintain a few events, between now and 2015. So that activity system is very important.

And then we are working with, unfortunately I have to use the word as we end this thing, with an advertising agency, to see how we can communicate and reach the people, to aggregate and create that momentum. And we are happy to spend money on that and that's what we call advertising and we are proud of that. So that is what we do for a living.

FI: And just on the specific point made by Amy about the...

PP: Yeah the Friends of the Earth. So, it's like in anything. In Holland you say where there's smoke there's fire. But the way we need to do it is very important. We are very mindful of that in terms of land rights, women, sustainable agriculture, issues of bio fuel, subsidies it’s not that easy. Issues of seed rights, they are coming up in every article. So everybody understands that. To not show up, to not participate, then to have your block out with all the things, to me is not acceptable. We are there to try and find compromises to feed the world. We have 12 heads of state coming in, who spent not only the weekend but 1 or 2 days... We have 4.1 billion of pledges. A lot from the European Union, by the way, that we want to put to good use in a responsible way together. You can continue to write these blogs, but fortunately what I have discovered wwith the web is, it's easy to google these blogs and come out on your desk, but the web is now a more sensible system of self-editing and auditing to increasingly makes it the voice of the minority. So you have to be very careful. So I say to these people with due respect, 'come join us with practical solutions.' Practical is a big word on that.

And I think on the innovation - really quickly - what we do on our innovation funnel is all of our brands now have a solution mission. We are not there yet, but my goal in life is... not that... but my vision is every brand has a billion fans, that’s it’s a movement for change. Like Lifebuoy is a movement for hand washing and hygiene. Dove is a movement for women's self-esteem. If all these brands are a movement of a good cause, these brands will do well. I'm not actually worried about that, so how do you create these positive movements so every brand has a social mission? And it's part of a movement that belongs to the broader society - you have to steer it. In our innovation programmes, we look at everything through a green funnel, as we call it. We take the responsibility for the total supply chain. So, for example, from agriculture, to sustainable living, we call it sustainable sourcing to sustainable living. Don't forget about our factories and our travel and our offices - they are important - but we do more than any annual report. But unfortunately it is only a small impact. So if we can get people to take less showers, or cook differently or work differently on the water usage in their homes, we have a much bigger impact that we can all do ourselves. So we work with our innovation programmes, our communication programmes to look at a total value chain impact.

Our plan that we put out that makes it a little bit more unique, in that sense, when we talk about total decoupling, we talk about total decoupling for the world, not just what we can control and make these numbers sounds big. So every hour of our activity systems, our reward systems, our measurement systems are geared towards that. But only on activities that drive our growth. Because we don't have to compromise on that. There is no need to compromise on that. And that's why some people don't understand. Also, only when it's really profitable. Not really profitable in the big sense, but profitable when it’s sustainable. Because, our profits, which we are very proud of, by the way, which have not increased that much since I'm CEO (the growth has, but the profits have more or less stayed the same, share prices have doubled by the way, so someone seemed to care that much about making it too big).

But all of our profits, people don't understand, only go to 2 things in Unilever. We pay dividends, but that is the pension of a lot of people. That's the pension of millions of people. We provide that. It doesn't come from governments. They don't create anything - they redistribute. And the other part of our money goes to building the factories in the emerging markets to give people more access to our products. We've grown 10 billion turnover in the last 3 and a half years.  10 billion turnover in a part of the world where people have one rupee or one RMB is 10 cents or 25 cents. Those are the 10 billion turnover, 30 - 35 billion acts of purchase, of people that don't have any money, who have decided to part with their scarce, hard-earned money, often spending 70-80% of their income on these types of products. And they have chosen by themselves to buy ours, because the solutions that were provided were better than what anybody else could provide, including their governments. That's why we've built the 30 factories and will continue to build the 30 factories. And in our accounting system, that has to come out of profit. So be it. Call it whatever you want. But that is the other part of sustainability that we don't need to be ashamed of and have to be able to confront people with and educate people on including the French by the way, but that's a separate story. Thank you for your time.

FI: We'll get onto that another time. Well listen, I'm... obviously Jon Snow would never have let this go 10 minutes over, so that's another reason for regret Jon's absence. I'll just take that question about the media on and answer it head on. Which is, yeah, frankly I don't think we take these types of issues, given the interest and importance, not just at high level governments, multinationals but also amongst the youth and the young, we don't take these on enough. And maybe it is because, cynically, there isn't enough of an angle and a story. But the beauty of social media is that all of you here can make this stuff really important. It is amazing how much, if all of you tweeted at a boss at channel 4, why don't we have a special programme about, you know, social enterprise business, what impact that would have.

 And one last little anecdote. I do know that one of Paul's fellow FTSE chef executives... if you... I'll tell you now - it's Barclays - if you tweet anything @Barclays, it comes up in his room. Right, so you could actually have some fun with that one day shall we say? That is absolutely true. So what I'm saying is, it's in your hands. But we, you know, the media needs to step up as well and we can change these things.

But listen I just wanted to thank Mark Spelman for introducing the discussion and contributing so much, and I wanted to thank Paul Polman for his time - for his extra time - 11 minutes extra time. We were offered a fascinating insight into how a big business deals with being a corporate citizen in the 21st century.  And we wish you luck in helping to create a better world to inspire more of your colleagues in other businesses to do the same. Thanks both of you for a fascinating evening. Thanks to Zamyn for organising it. Thanks to you all for coming.  

[Applause]

 

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Video Transcript

After the G8: is it going to be G-Zero or a positive number? | 11 June 2013 at 6.00pm

Chair: Martin Wolf

Speakers: Ian Bremmer, David Miliband and Gideon Rachman

Martin Wolf (MW): So first of all let me welcome you to this debate or discussion, after the G8 is it going to be G-Zero or a positive number? I hope the point of that is already obvious but if not, it will be by the end of this discussion. This is of course, part of the cultural forum 2013: global citizenship. It is very relevant.

Before starting, a few acknowledgements and an apology. Firstly, above all to Zamyn - Sir Mark Moody-Stuart, the chair of Zamyn and Michael Aminian, its founder and I have to say one of the most extraordinary social entrepreneurs I have ever met. Persistent isn’t the word, I told Michael a little while that over the last 3 months he had succeeded in sending me more emails than any other person I know, except my wife. It was a pretty close thing – extraordinary. I would also like to thank on Zamyn’s behalf and ours the Tate, Sir Nicholas Serota, the director, Marko Daniel, the head of programmes and all the partners – Accenture, Africa Progress Panel, Barclays and SOAS, University of London and Tate.

The apology, as you know in the original programme and I was very much involved in persuading him to come Trevor Manuel was going to be here I think that he very much wanted to be here, in fact he had a number of things that he wanted to do here today. But political developments in South Africa, and nothing to do with Mr Mandela, but the President said that all ministers had to be home and when a president of your country tells a minister of that country to come home, he has to do that and that’s the end of it, so unfortunately he couldn’t come and it was last minute. Very happily, my good friend and colleague Gideon Rachman at the end is going to pretend he’s Trevor Manuel. No, not really. It is a great pity, it would have been great to have Trevor Manuel, he’s a good man.

Now, on the topic we are going to be talking about: global governance and more broadly in the context of the G8 meeting in so far as I am concerned, the G8 is a corpse, zombie perhaps better - moves even though it is more or less dead. But there is a question of whether anything replaces it.

To discuss this, apart from Gideon we have Ian Bremmer, who is a good friend of mine and founder and president of Eurasia Group, which is, really is the world’s leading global political risk research consulting firm and he recently wrote a book ‘Every nation for itself. Winners and losers in a G-Zero world’, which I think is clear what that means. And to his right is David Miliband, who was Labour MP from 2001 to this year, he was secretary of state for foreign and commonwealth affairs from 2007-2010, the youngest for 30 years. I suppose David Owen was even younger? Yes, well you are certainly going to go on and do greater things than he did.

David Miliband (DM): The bar isn’t that high I think.

MW: That is indeed the point, I won’t go further on this line. He is currently chair of the global oceans commission and will be president and CEO of the International Rescue Committee from September 2013.

So this is how we are going to proceed, we are going to have a discussion until about 7, and then we are going to be open for questions from the audience. I would be very grateful if you could make them questions or if comments at least quite brief. Really quite brief because there are a lot of people here and I imagine that you are all here because you are extraordinarily opinionated and therefore would like to express them so be polite to one another and resist the urge to speak for 20 minutes telling us all how wrong we can.

What I thought that we would do, let’s conduct this as a discussion. I prefer it if we were sitting facing one another but I will do my best from here. The questions I want to consider are I want to go back to the basics. What does one want global arrangements for? What are they supposed to do and provide? What are the public, global public goods that we want global governance to provide? That’s my first big question.

How far do changes in global relative power reduce or change our capacity to provide or change global governance. It’s obvious to anyone that we are in the midst of huge transformations in the global economy, global relative power, and extremely rapid decline of Western domination. The relatively fast growth, pretty well of all regions of the emerging world, and particularly Asia and that has enormous affects and that is shown I think in the area that I’m going to be covered in my third discussion, the third question, which is the shift during the crisis in late 2008 from the G7/G8 to the G20. Which was I think is a very important indicator of this transformation in relative power then here we had an enormous financial global crisis.

One of the things that one might imagine global governance arrangements are there to deal with and it was found really for the first time that the G7/G8 that the old industrial countries were no longer able to deal with this satisfactorily or at least that was the assumption I think, correctly. So we moved to the G20. But linked to that I think is a broader question, which is in the whole panoply of global governance arrangements. There are immense numbers of formal institutions, there are of course the United Nations, the specialised institutions of the UN, there are regional institutions. These G’s are rather a special sort of thing in that they are essentially informal gatherings of States. Mostly, not all more or less powerful and of course, all completely self selecting. And so the question is what role in the whole global system do this sort of grouping play?

And that gets me to my fourth issue, if we think about these sort of G structure what determines the effectiveness and legitimacy of such groupings, is it important that they be more or even less representative? What is there representative function? Should they be completely transformed as I said, they are all self selecting. The G20 as far as I know was invented by Larry Summers in the late 1990s, you might wonder what on earth, what earthly reason should there be that the United States Secretary of the Treasury 15 - 13 years ago decided on all these countries, and some of them are really quite arbitrary, well perhaps they all are. My fifth question relates to I think something that I think may interest a lot of you and we don’t have to cover all this but these are the issues to be, what about non-state actors? We are talking about states here but what roles do non-state actors play in making global governance work?

There are really a big set of issues here and then finally I hope we get to sum up, well can we and if so how can we make global governance more effective in delivering what we want from it, which is near we are going to start. So I am going to start with Ian and I am going to ask you if you would just say, well when we are talking about global governance arrangements what can we actually reasonably expect these things, we’ll get later to how to structure it if we can, what if anything can these sorts of bodies useful do for us.

Ian Bremmer (IB): Look, I mean we are sitting at the Tate; you have a fissure running down the great hall here. I mean it’s hard to be more symbolic than that. I suppose that I’m meant to be the provocateur in the sense that I coined this term the G-Zero, not because I want a G-Zero or I like a G-Zero or because I think that it’s a good thing for the world because I don’t. But just because I think that global, the G that is meant to stand for global, not just governments, is not really workable in this environment.

You asked what sort of things would be like from our global governance – we probably like global standards, we like a global internet, we like a well regulated free market, we like a global trade regime that gets stronger over time, we like some, I don’t know, certainly some base line global security arrangements, we like global response on climate. Lots of things we like, of course the things that we like aren’t necessarily the kinds of things that other people like, people that aren’t from countries that are industrial and democracies.

You know, I think that these are structural issues. There are too many countries to coordinate well so yes I think that smaller numbers are easier to deal with. A lot of these new countries that Larry and then Paul Martin, more recently with the actual G20, is that a state structure fostered on us are countries that are very different, they’re poor, they have very different priorities, they have different political and economical systems, they are also much less capable – less capable in their experience, less capable in how much lifting they can do in their diplomatic core, all of that. Our allies, America’s allies – the Brits focused a little bit on your relationship with Europe right now, focused overwhelmingly on your domestic economy right now and appropriately so. Japan after 20 years plus of lost decades now finally getting their act together, we think domestically and their economy and appropriately so. The Europeans perhaps not dealing as effectively as we like with their existential crisis, but busy, distracted immensely so and then finally the United States.

The United States, I’m not a declinist, I don’t believe that the US is in decline right now I don’t at all. I certainly don’t believe that the US is in decline compared to the rest of the world and I think that there are lots of things that we can discuss that bear that out but the interest of the United States in playing a global leadership role is dramatically less than it was before and you see this in Europe, you see this with the summit we just had with the Chinese this past weekend, Michelle Obama didn’t show up despite Xi Jinping’s wife showing up but let’s face it if this was about health care or Obama getting re-elected, Michelle would have been there. You know, it just shows priorities it doesn’t mean Obama’s a bad guy, it shows what the Americans want to do and the Middle East, it’s even more obvious right, we see what’s happening on Syria, maybe the United States might have a coordinating role in providing, in actually doing the infrastructure around providing military support, not actually giving them military support to the rebels, maybe. We’ll think about it if chemical weapons are used, systematically but not just once. And if you think that the US doesn’t want to do much in the Middle East right now, wait until the energy revolution really hits. The US hasn’t even begun stopping being interested in the Middle East; we’re really going to get there.

So I think for all of these reasons, it’s not that I think nothing is happening globally and I’m sure that our other panellists will come up with many counter examples that show that global can work but the reality is it’s so much so constrained structurally today from where it was and so we need to be thinking that it’s sub-G’s and it’s non-G’s as opposed to trying to figure out really how we can get our old G back.

[laughter]

MW: Ok, so basically let me turn to you David, it’s completely unworkable given the current changes in the world, people are all inward looking, distracted…

DM: I get the picture. Look, so Ian is basically right. He’s basically right that this is an age of extraordinary interdependence, yet it’s an age of extraordinary under governance at the global level. And he’s basically right; I think to diagnose the shift in the balance of power West and East. You talk much about North South in your article in the Statesman. You talk about the Middle East, you talk about Japan, and you talk about Europe. I’d add Africa and what’s going on in Africa as an important global shift but you’re right to diagnose those shifts in the balance of power as being very significant and explaining why there isn’t a hegemonic global power to keep order, which historically Empires have done.

There isn’t a balance of power yet, because the emerging economies are not yet ready to be ‘superpowers’. Remember the worst thing that you can do in China is to call the Chinese a superpower. They call themselves a developing country. They will have one of the, the 80^th highest per capita income in the world when they become the world’s largest economy. It’s a very big change; they are going to be a poor superpower, that’s never happened before. So I think that he is right in his diagnosis but it’s a bit dull if all I do is agree so let me take a slightly different perspective.

If you’re looking for a singular system of global governance then G-Zero is right, but if you look not at a singular system of global governance but at a number, which I’ll come on to briefly describe in a minute, multiple systems of global governance what you see is a messy but in some ways overlapping set of systems. Some of them are regional and some of them are strong, which the EU is relatively strong, the Arab League or Andean is relatively weak but there is in this part of the world a strong regional governance system and in somewhere like Africa, I would predict it’s going to grow in it’s strength.

It’s very interesting to me that in South America: Peru, Chile, Columbia and Mexico are creating something called ‘the pacific alliance’. It’s got a GDP greater than Brazils so it counts as a BRIC, a major emerging economy. They want to have the full freedoms of the EU’s single currency.

So I think that there’s a regional aspect, there’s also functional arrangements that are, it’s important that we don’t forget I’m doing this global oceans commission, the high seas where there’s no national sovereignty involved, they are a terrible example of global under governance, it’s the wild west on the high seas but there is another part of the world where there’s no national sovereignty - Antarctica, which has a very strong treaty base from 1961 and has ensured that Antarctica has remained pretty virgin territory preserved for human kind, without breach.

So you have functional arrangements, you’ve also got some global public goods being protected. I mean the most successful international treaty I think has been the nuclear non-perforation treaty. It’s under a lot of stress but Kennedy when he launched it in the 1960s said by 1980 there will be 20 countries with the wealth and the scientific know how to become nuclear weapon states, they haven’t. I would argue in significant part to the nuclear non-perforation treaty. Though, there is multi-lateralism under the surface.

Final point, which I think is the most interesting and difficult question which is not quite the difference of values or the difference of values between West and East or between democratic and un-democratic countries. There’s another division which I think is more important. And that’s about what are the rules for governing an inter-dependent world. A world of inter-dependent states and peoples rather than independent states and this comes down to whether or not there are rights of the international system within countries when the rights of people are abused or when the rights of the commons are abused. Historically, obviously dating back 350 years the rule was what went on within your own country was your own business. But in an inter-dependent world where there is a global consciousness about human rights or a global concern about the environment or security that principal of national sovereignty isn’t sufficient. And there are people in the West who argue that it’s not sufficient and there are people like me who would say there are circumstances in which it’s, in which what a countries doing to its own people demands an international response. There are circumstances in which what a country is doing globally demands a response. But equally, that’s a very difficult ask, that’s a very difficult message to sell. The US doesn’t want to sign international treaties like the UN convention or the law of the sea even though it follows it but it doesn’t want to have its sovereignty fettered.

Obviously the Chinese are very concerned not to have any external interference in their internal affairs and with the danger of precedent, that’s the principle they apply in Syria at the moment. So I think this question of what are the principles for governing an interdependent world are the most difficult questions to answer because they call into question something very fundamental. I talk about the idea of a responsible sovereignty but we can get into that later. But I think that’s really a hard nut to crack and it underpins the greatest failing which are to protect global public goods, which we all depend on.

MW: that’s very good and helpful and also pleasingly different so thank you. So where do you come out on this Gideon, is there more going on than Ian suggests? Or not?

Gideon Rachman (GR): I thought it was very interesting listening to David because its quite easy, its almost part of the job as a journalist to be a professional sceptic and say look its all falling apart, nothings working and it is good to be reminded that there are organisations that are doing real work and some problems that are actually being addressed and all of that. That said, and I think that Ian’s basic argument that we’re in a period of lack of international governance is correct.

I personally wouldn’t focus too much on the various G’s – the G20s, the G8s and so on. I don’t think that they ever really were the things that provided global order. It seems to me that essentially if you look back even 20 years it was an American leadership that was really crucial, behind the scenes of course the G7 or 8 would meet but the fact that the US was giving the lead was critical I mean for the formation for the big international institutions in the late 1940s, the Breton Woods institutions America clearly forced the pace there, but if you think back to say the 1990s there’s a big economic and political crisis, when Saddam Hussein invades Kuwait it’s America that pulls the coalition together and essentially leads the international effort to reserve that or be with Mrs Thatcher nudging George Bush in the ribs. And then in the financial crisis that hits Russia and Asia in 1997-98 there’s this famous Time magazine cover of our people who tried to fix it called ‘the committee to save the world’ and they’ll all Americans, it’s Summers and Rubin and so on. And now come forward to our present day there was a fairly effective G20 effort to stave off the worst of the financial crisis in 2009 but then with the Euro crisis, although the Americans are kind of trying to prod, to do things that they regard as necessary and so on, in the end it’s kind of Europe on its own with a bit of the IMF. The Americans don’t have the power, or frankly the money anymore to leverage the solution there.

And then the great political crisis of our day was going on in the Middle East, a mixture of the Americans being unwilling and unable to take the lead over Syria. And so you’ve got a sort of absence of leadership, the Chinese certainly aren’t going to do it. I mean, they believe that the Americans made a hideous mistake sapping their own power by getting too involved in the Middle East and they’re determined not to make that mistake again.

And a final word on Syria and I mean David mentioned this idea that one of the things that happened over the last decade is that we’ve had an expanded idea of what global governance might mean and the development of this idea of the responsibility to protect, the idea that sovereignty is not inviolable, there are certain things that a government can’t do to its own people, but I fear that what we’re seeing in Syria is that might have been a very short lived idea because in fact nobodies willing to intervene and stop what is a pretty terrible humanitarian situation so maybe you needed for the responsibility to actually kick in the Americans still to have the power or at least the big stick in the background, well maybe they might come militarily. I think with that idea written off even diplomacy becomes much harder.

MW: I’d like to, before we go into some of these, I’m very interested to tease out some of you think. Turn to you Ian actually first about the role of China in the US, particularly as the rising power on the one hand and the established power on the other. I have to tell you that when I hear an American say ‘I am not a declinist’ I say well of course not. I mean you wouldn’t be allowed back into the country.

IB: Oh there are a lot of declinists in the US right now.

MW: Ok, not many actually and you can probably put them all in a room. But anyway...

IB: Some work for the FT.

MW: Then they are only temporarily in the US.

[laughter]

MW: Let’s start with China, what do you think its role in this context is and is likely to be. And what effects does it clearly its rising weight in the world’s economy have?

IB: So, this brings me back to a little of what David said because of all the pieces that are now moving, G-Zero implies that a lot of geo-politics are in play and the Middle East is exploding and Europe is muddling through. The big piece that’s in play of course, Africa’s becoming extremely interesting and will be much more important in terms of governance not just in terms of growth. But China’s rise is not just the most, by far the most important in fact it doesn’t feel that way in the US right now because the US doesn’t want to deal with it doesn’t make it less true.

Now I thought that it was interesting that David, many of the examples that you gave are places where governance is working are happy examples, the Antarctic is a happy example, we’ve got penguins there, we want governance there. The regional example you gave, right I mean certainly I would add the trans-pacific partnership to that, a happy example. There is governance that’s happening of course that from the Western perspective is less happy and that is a lot of the bilateral coordination you see between the Chinese and other countries around the world. That is going to make some of the Western and regional governance more problematic.

I think one of the things that’s really interesting about China is that they’re not about block building, they’re not about creating a large sort of multi-lateral organisation that they are the hub of, they are really interested in a whole bunch of bi-lateral engagements that were downed certainly to their benefit, hopefully from their perspective both countries benefit. And they’ll be bigger than each other bi-lateral countries that they are engaging with. When Xi Jinping just made his first trip outside to Russia and then to a number of African states he made it very clear – we don’t have any political strings when we invest. We said, he didn’t say what strings they do have, which are very important economic strings but they have bi-lateral economic strings. It’s a very different kind of governance.

I think it’s interesting that China is clearly trying to jettison some of there, even though we’re a poor country, jettisoning some of their non-intervention. You see this with the peace plan, the 2 page peace plan they came up with for Syria. You see this with them offering to engage on Israel Palestinian talks, which is a great place to practice because you can do different things for 10 years and it doesn’t really matter. So I do think there is movement on China but fundamentally if you think that US is focused domestically, the Chinese are much much more so. Foreign policy plays much less of a role in their international focus then just ensuring they have the economic ties that allow them to have the commodities and access to other critical economic pieces that allow their politics to stay stable. And I think as a consequence the willingness of the Chinese to engage in whether you call it responsible sovereignty or responsible stackholdership, the American manifestation of that concept is virtually zero. And the likelihood is that the US China relationship is going to become more troublesome before it becomes less so.

MW: Before we get to that issue and some of the others, I’d be interested David in your perception of China in particular and its likely role, the discussions you presumably had when you were in office. By the way I should say as a small correction the first time I heard China referred to as a superpower was by a senior official of the Chinese embassy in London in 2006 at a lunch, which I’ve never forgotten. I don’t know if you, no Gideon you wouldn’t have been there at the FT. Anyway, and he didn’t refer to China as a superpower he referred to the US as ‘the other superpower’.

[laughter]

MW: I thought that was wonderful. So they’re not as bashful as you think.

DM: Look, there’s a couple of things – first of all the Chinese focus must be internal because they’ve got huge challenges to maintain stability, to develop some kind of balance within their urban and rural, divided urban and rural populations. Ian’s definitely right that there external engagement is instrumentalist, they’re not trying to create more confusion, they’re trying to find partners for the development of their own country. And that leads me to think a couple of things; first of all I think that we’ve got to divide the economic agenda from the wider foreign policy agenda. China has on most foreign policy been more of a veto power than a propositional power. It’s been more likely to line up with the Russians to say no to ideas than it has been to propose them. I think in many areas of foreign policy that will remain the case.

Secondly, precisely because of their economic needs I think it is possible to see that, and we know people in Beijing and China are angling for a more activist, economic engagement and so, one has to divide the economic instrumentalism that drive multi-lateral engagement on the economic front from the foreign policy.

When I was in China two years ago so before the current leadership team were being manoeuvred into position, there was a pretty explicit talk about engaging more proactively on G20 questions because that was a place that they advance economic agenda that was in their own interest. I think the weakness of the G20 has probably disappointed them pretty substantially.

One other point that Gideon and all of you will have thoughts on is more of sort of a psychological question. This generation of Chinese leaders or at least the two people at the top of it are the first generation of Chinese leaders who have lived more than half their lives since China starting reforming and opening up in 1978. I think that he’s 54 Xi Jinping so you can do the maths. And I think that, so the question is does that affect them at all? Does that have any impact on the way they view the world? It seems to me hard to maintain the position that will have no impact on the way they view the world. It’s not that they send their kids to Harvard or that they went to Iowa state university or whatever it was you did in 1984 but I think that a consciousness of the world beyond is hard wired into them in a way that it hasn’t been for previous generations who had to learn about it. And so my instinct is that this will produce a comfort level not just for the kinds of informality that you saw last weekend but eventually for the multilateralism that will speak to Chinese interests and they will do it in a very hard headed way.

But I think if you look across the economic domain I’ve mentioned, climate change – a massive issue in China. I see willingness or an openness to a greater engagement internationally and I think that the psychological aspect of the lack of fear of the outside world will be another way of putting it. I think that this is relevant.

MW: Gideon, on China.

GR: Yeah, I mean I think it would be nice if David is right and this is a more confident and more internationalist generation in China. I mean, I wouldn’t claim to know these people first hand but what I would say is the Americans that I know that are dealing with them recently believe that you know, China as a big country has many schools of thought but the liberal internationalists are actually on the retreat and you’re getting more of a military accent to the people in power in Beijing.

 And I think that’s what made the Obama Xi Jinping summit so interesting, because it comes at a very tense moment, a moment when I think both sides are conscious that their in danger of sliding into a much more openly adversarial relationship. In a way it’s an interesting almost theoretical thing, can two leaders who are I believe probably are quite committed to the idea that we better get on because it’s dangerous if we don’t. Are they powerful enough, and if they establish a decent relationship is that enough to counteract the structural forces that might now be pushing China and the US towards a more adversarial relationship. I would like to believe so but I suspect that probably the structural forces will prove more powerful and those are the shift in economic power, which lead to a shifting mood in both capitals. So much so that I think in Washington post financial crisis a lot of the kind of breezy confidence that globalisation will sort of take care of Chinas rise, they’ll sort of, they’ll adjust to the global system and they will be an easier partner, they’ll probably democratise and they’ll all be fine. I think that suddenly America can see well maybe China will become the world’s largest economy at a point where it’s still a one party state. China’s military spending is going up very rapidly, the US is conscious of its own financial constraints so America is more wary of the rise of China.

And conversely I think the Chinese do sense a kind of shift in power and maybe that is why they have been behaving in a more assertive way in their own neighbour, that the old kind of Deng Xiaoping philosophy about bide your time etcetera seems to have given away to something a bit more assertive, vis-à-vis India, vis-à-vis Vietnam vis-à-vis Japan and America then responds to that by trying to build up it’s own network of alliances within Asia so there are these forces that are pushing towards a more adversarial relationship. And the big question really over the next 2 years is can Obama and Xi call a halt to that and establish a more friendly and collaborative relationship.

MW: David.

DM: Can I ask a question outside of the world I know, the world that 3 of you know better which is moving from government to economics and I wonder if there is one structural force pushing the other direction, which is the internationalisation of Chinese entrepreneurs, the internationalisation of the Chinese wealth creating base. I’d just be interested in what you think the implications are of this word global economic integration? Because it is the case that the Chinese economy is much more closely integrated in to the global economy, not just macro-economically but also in the way that it produces goods and services.

IB: I thought that you were going to take my point and you didn’t. Its close though, which is I actually think that there is something significant that is the counterweight to Gideon’s concern. I agree with Gideon’s concerns but I think there is a market counterweight. And that counterweight is that the Chinese are incredibly pragmatic about finding good places to put their money and the private sector absolutely sees that.

Smithfield the 4.7 billion dollar announcement of this takeover which would be, is the largest takeover of an American firm by a Chinese firm in history announced a week before the summit and clearly the timing was coordinated in advance, if its not strategic it’ll not be allowed through by congress and all that. But the reason Smithfield happened wasn’t because Xi Jinping said go do this, it’s because you’ve got folks in the private sector in China that say if I’m going to park 5 billion bucks someplace, having access to a decent American company and their distribution with US demographics doing pretty well and the economy picking up, that looks better than it did a few years ago. They just bought an American movie cinemas – AMC, same thing right, so I think that is a significant counterweight and it helps.

It would be better if the folks in the private sector were more significant than they are presently in the SME’s, they don’t have the price point and that’s important. In response to your question, I think the answer is yes that it a counterweight but unfortunately it’s a small one because if you ask me right now looking at the economy sort of strengths are in China, who is, which one of them, how many of them are actually moving towards true internationalisation and how many are doubling down on using their legal system, using the attractiveness of their market to get trade secrets. Using cyber to pick up as much information as they can, using their state capitalist system to continue to claw advantages that otherwise would not be down to a country that is not innovating well, still doesn’t educate well, and still doesn’t have an entrepreneurship.

I think that in 10 or 20 years time the factor that you mentioned might well be one of the most significant reasons that we could hope that we could move towards a G2 or a G something broader. But I think right now, the fact I don’t think that it is just the fact that Americans are starting to learn that when China becomes the number 1 economy they’ll still be poor. I think it’s a fact. They’ll still be state capitalist, I mean they might be more strongly state capitalist and that for me is one of the biggest dangers.

MW: I would like to turn then, in this part as these clearly are going to be the central players in the world as states, to the US. The US has gone through some really quite extraordinary rapid mood swings in the last 50 years or so. So not very long ago they seemed to be determined to remake the entire Middle East by force, some of us thought was a fairly crazy venture. I don’t know why I put fairly. And now, the US seems to be in fairly complete withdrawal from all such engagements. As we have seen in a number of events recently including of course, Syria. So let’s think about the next 10 years or so Ian, where do you think the US is going to go as a global player? What’s it going to be after?

IB: I worry that the politicisation and demonization of China as it gets larger and doesn’t bend to American will is going to get greater. The Americans are great exceptionalists as you know; we think our values are the right values. You’ve had a lot of experience with that here of course with folks like Tony Blair but nonetheless it is not helpful when you are sort of forcing it down folks throats, I mean let’s face it the US being exceptionalist and then having this NSA issue blow up on them the day before Xi Jinping shows up in California to talk about cyber security is probably really not the best. They thought it could have happened.

MW: I thought it was rather amusing.

IB: Yeah, no it was from an external perspective. From an American perspective that wishes it could get its act together on China it was like, here we are finally doing a meeting and you know. Look, it’s not like the US has given up on international – Obama did spend 3 days in Israel of course. And they have 7 million people, which if you do the math – 1.7 billion in China – that’s like a year in China I mean.

[laughter]

IB: Which is not going to happen. The United States is going to be attractive as a destination for investments, I mean really attractive. Even though the governance, you may think is poor. They are going to do immigration policy, not because Republicans are good guys or because the Democrats are good guys but because demographics have changed and they want to get elected. Their energy policy is pretty promising from a market perspective; trade policy is pretty interesting from an international perspective. There’s a possibility on tax policy as well and we don’t want to get in to that. So lots is moving in the US right now and I think for the next, certainly 5 years I think the focus in the US is going to be much more in that.

They are going to work really really hard not to get stuck in in Afghanistan. The US are going to work really really hard even it has this huge military to ensure the Japanese don’t go nuts vis-à-vis the Chinese engage the US in a proactive way. So I don’t see a lot of sudden shift in borrowing the kind of black swans that we hate worrying about like North Korean drones. And the US and China are on high alert and we don’t trust each other, or that there’s a sudden market implosion in Europe that forces the US, I mean clearly looking into the abyss could bring the G20 together again. Could bring the US and China together again but that’s not the outcome we’re hoping for and I think barring that, the US, you’re going to see a lot more of the US than you presently have then the one you experienced under W for a few years.

MW: How do you see it David? The US as a leader?

DM: On the geo-political front?

MW: Or more broadly, because I want then to get to…on the base of what you say…

DM: I think, look technologically, culturally America is a remarkable machine of innovation and dynamism. The energy equation that’s been mentioned, I think is important. I think the big, the hard, the hardest question for American policy makers and for the rest of us who take our cue from that is about what they are pivoting away from. There’s a famous pivot now to Asia and that means the Middle East because as America is pivoting to Asia, Russia is pivoting in to the Middle East and you can see that in the Syria crisis.

Now what we are seeing in Syria is that while there are massive risks to interventionism or intervention, there are big risks to non-intervention as well. And the humanitarian one is obvious and it’s the world that I’m moving into in September, we’ve got, my new organisation has got people doing amazing work in very difficult circumstances as a result of the Syria crisis. But if you think about the geo-politics, they to any American planner who’s thinking about risks to their own country never mind risks to their own allies, the geo-politics of a crumbling state structure in the Middle East, which is not a fanciful notion now. The Syrian state may not exist as a nation state in any kind of meaningful form at the end of this crisis, the Jordanian and the Lebanese state has had 15% of its population now entered in as refugees, or refugees that equal in number to 15% of the population, Jordan - 20% of the population. Just so we understand that’s like 15 million people arriving in Britain. That’s big convulsion for the geo-political structure in the Middle East.

So the hard question is whether or not it’s possible to maintain a distance from the conflicts in the Middle East when the geo-politics are so significant. I think there will be extreme resistance; there is extreme resistance to get involved because of the lessons of the last few years, last decade. And never mind the economic crunch that America faces. But I think that’s really the hard thing, it’s obvious really that this is a period much more akin to a, to the kind of mandate that Bill Clinton left to George Bush in 2000 and that George Bush said that he wanted. Bill Clinton’s last state of the union said ‘now we focus at home’. And George Bush said before the last election ‘we’re not the world’s policemen’. 9/11 changed that but we’re now reverting in a post 9/11 period back to that kind of sentiment.

The question is whether or not it’s possible, given what’s going on in the Middle East as a result of the rise of the open society and challenges to autocratic regimes etcetera etcetera. Given inter-regional power plays that are massive.

MW: Gideon.

GR: It seems to me that Obama actually came in with quite a coherent response, intellectual response to the post Iraq post financial crisis world. And that he had 3 basic propositions, the first is we are going to do nation building at home, I’m going to be a domestic presence, and I’m going to rebuild the American economy because that’s the source of American strength. It’s also what matters most to American citizens. The second is no more wars in the Middle East – I’m going to get out of Iraq and Afghanistan and I’m not going to get into another war. And the third is, the pivot to Asia which is a counterpart, which is this is where the futures going to be made not the Middle East in so far that we have a foreign policy strategy about Asia, it’s not about the Middle East and those are the 3 points.

The question is whether they can survive events as David said, it’s like Harold Macmillan’s old thing about ‘events, dear boy, events’ well the Middle East happens to have blown up so can he, does he say ok I’m going to stick with the strategy that I came in with it’s still the right idea, or does he say actually we’re in a new world in the way that George W. Bush had to do after 9/11 rip up the old plan and I think at the moment he’s trying to stick with plan A, the question is, can he?

Just a final point, and I think that there might be analogy not only with Clinton and so on but with the 1930s where Roosevelt had a huge domestic economic rebuilding effort to make. And even when he was intellectually convinced of the need to get involved with Europe he faced public opinion which absolutely didn’t want to. And if you look at the opinion polls on Syria, I think it’s on 12% support for intervention so even if Obama was more interventionist I don’t think he could do it.

IB: I mean he does have a foreign policy group that’s different of course this time around. They are the B team compared to the first time around, they’re not as impressive. I mean, Geithner was very much a China guy, Lew secretary of Treasury now is not, much more domestic. Clinton was very much an architect of economic state craft and the pivot to Asia, Carey just pushed back earlier today what was going to be his 8^th trip to the Middle East I believe since he’s been nominated Secretary so he could do more meetings on the Middle East. In Washington, that’s a different pivot. You’ve got Tom Donilon who was very much China orientated guy and Susan Rice who’s much more Middle East and Africa. I mean the people in place are less orientated towards that pivot but still overwhelmingly the political people advising Obama are going to be telling him don’t do it, don’t do it, don’t do it. And if you do do it, do it differently. Engage multi-laterally from behind don’t put your name on this stuff, even again if you’re going to provide military support don’t do it yourself but facilitate.

I guess I go back to the question on to David and which is, you know, you say this is going to be hard because it’s going to affect the United States. I don’t see many people even in Washington thinking that even into the third year of civil war now in Syria with the government collapsing and the metastasising to Sunni versus Shiite across many countries, some of which we didn’t mention yet – Iraq and the rest. I don’t see many Americans thinking wow this is a huge problem for us. It’s an embarrassment but a problem? An actual national security problem? I see Kissinger going up this weekend – the ideas old but still going strong-ish, and basically saying can you explain to me what is our, what is the strategy interest of the United States doing anything in Syria. Lou Reed, who’s a pretty balanced guy, who’s like I’m not even going to go here. So you’re not going to wonder, you know.

MW: Before we go to the questions, because we’ve focused rightly on the power balance and the relationship because that’s the reality. But I think that David raised some interesting issues earlier about other groupings, that might play a useful role in governance in this world that is G-Zeroish and I agree that the G20 is more or less moribund, the G8 is in my view basically a joke. And the G7 can occasionally be useful as a Finance Minister group but only in exceptional circumstances. And one of the things, I’d like to turn this to you David what is the role in this vacuum of international cooperation of non-governmental actors? What you do, and I’m not just thinking of groupings like yours and also for better or for worse of course the role of private business?

DM: Yeah, I think that the, you’ve got to recognise that the greatest force of integration is economic and the private sector is playing an absolutely essential role to that so I wouldn’t want to neglect that side of it. I think that the truth is NGOs above all are picking up the pieces at the bottom of the cliff. I mean, we are having to deal with, in the case of organisations dealing with displaced people and refugees. More humanitarian catastrophes even though there are fewer wars. It’s a very odd thing, there’s more fleeing conflict even though there are fewer wars, and certainly fewer inter state wars. And so you’ve got an NGO community that is a growth business in that sense.

Now, there’s also a very big change in that you’ve got new players on the scene. I mean, the biggest provider of humanitarian aid in Syria is Jabhat Nusra, who are the Jihadist group. They are running the social welfare function of a very widespread kind in the rebel areas obviously. And so you’ve got non-state players and you’ve also got Islamic states playing a bigger role, the Chinese are not in the Humanitarian space particularly they do their work through the UN they are still contributors to Western peace keeping. And I think that it’s interesting that if you’re interested at all in conflict prevention, its still the UN system that does that and there are still famous examples of failure but if you look at East Timor, if you look at Sierra Leone there are actually examples of relative success and in the Balkans it’s worth a mention what the EU is doing in the Balkans has done well. What the African Union has done on land in Somalia and what the EU has done on the sea in the Gulf of Aden in terms of piracy, is real. I would say the humanitarian world, the humanitarian agencies; we’re at the bottom of the cliff trying to deal with the victims. The people putting up fences at the top of the cliff are still UN sponsored peace and other organisations.

MW: Can we talk also a bit about this idea of regional multi-lateral endeavours and since the theme of these seminars is very much Africa focused, I think the question of how we will evolve is very interesting. And I’ve been quite impressed, I mean you mentioned Somalia and the AU, Latin America is another interesting case at least at the moment and thank god it’s not actually collapsed Europe is not too impressive. But, I mean if you can’t sort things out globally in many regions there are ways that you can think about doing some things locally with the countries there, governments, NGOs and some support from outside powers. Is that a more fruitful way of looking at the governance?

DM: The logic is absolutely impeccable but the reality is not inspiring, I think. I think would be a diplomatic way of putting it. The AU has just celebrated its 50^th birthday and the commentary all over Africa was not 50 years of great achievement. I mean so, but the logic is very strong. I think one more interesting question is why, and we can come to Europe separately, in Africa if you think in Southern Africa, South Africa - focused internally, Kenya, East Africa - focused internally. Nigeria, West Africa – focused internally. The locomotives of stronger regional organisation, sub regional organisation are internally focused at the moment. If that changes then the logic could assert itself, I think the logic is overwhelming and it’s one of the reasons that I have the views that I do about Europe. But I wouldn’t like to say that current practice is the best advertisement for them.

MW: At least one thing I was thinking about the proposition that they haven’t achieved it, that’s very negative and I can see the huge problems with it. But they have avoided a huge questioning of the whole legacy of colonial borders, which was one of the principles they adopted. In the Middle East that seems to me really open to question whether that is going to survive. We start regional shaping all of the national borders of the world we can end up with, what seems to me almost limitless chaos. Africa economically is doing better though with huge problems so that might improve the capacity of governments to provide order.

The other area that I wanted to go to perhaps Ian would consider, you mentioned functional institutional arrangements, which I think would probably be the most successful thing we’ve done. For better or worse, the trade arrangements and so forth. Some of the specialised agencies have been reasonably effective, even though the geo-politics behind them really hasn’t worked very well. Is that not a possible way to deliver some of these global public goods we want? Creating institutions that serve a very specific purpose and there are many many of them. And which are really the pretty important plumbing of the economic and political structure. And we tend to ignore them, what do you think Ian?

IB: I guess when I think about why, so I think the answer is no globally but yes in terms of provision of public goods and many of those public goods will be very important indeed and trade is absolutely one of them. The fact that it isn’t global doesn’t mean that it’s bad, its better, it works. For me the question, when I talk about functionality is what is driving integration. What are the things driving integration, I believe that David your point on getting the logic right in Africa will happen. And I think the reason that it will happen is because the building blocks are being put into place, its not just about commodities, its also about consumption, you’re creating governance that domestically that is clearly picking up educating women, you’re urbanising but you’re also what you really need to bring these things to market is you need infrastructure that goes beyond the individual countries. And absent really strong integrating logic that will tear these countries apart or that will force them in to blocks, there are lots of economic reasons why these countries should start hanging more together as the development continues. I believe in that story.

If you look at the Middle East, there is probably an institution that it going to become stronger and integrate more closely and that is the GCC, which is an organisation of Sunni Arab monarchies. And the Jordanians have signed up and wouldn’t surprise me if over time the Egyptians think that’s where our money is going to come from so maybe we should do that. And it wouldn’t surprise me if as a consequence you do more bigger international or multinational infrastructure stuff in those countries, the problem is that’s a fundamentally devise reason to integrate.

It goes to the initial question you asked, that I thought was really interesting, which is in a world that is economically interdependent how do you do governance? And the answer is that can work if the things that are functionally integrating you aren’t that extraordinarily divisive but sometimes you are extraordinarily divisive. I look at the NSA issue, the Snowden issue and I look at cyber in China and I think that the internet should be a place where I can go and could be incredibly integrative globally and could be focused on public goods, the only problem is the internet is becoming massively politicised. It needs to be, for economic purposes, for political purposes and as a consequence what should be a functional piece of global governance is going to be completely split up, I mean completely split up. I think that your have functioning internets in different parts of the world and I think that’s very bad for global economic growth. But I think that it’s very good, it serves efficient political purposes, sometimes efficient economic purposes and sometimes political purposes are at crossed purposes. And this is one of those places and that’s where I think you do or don’t have interdependence problems.

MW: do you have any last words on this before we go to the floor?

GR: Just a brief thing, it’s quite interesting on China’s attitude to regional organisations because the Americans have typically tried to sponsor European integration and they’ve sponsored the Andean and so on and the Chinese seem to hate facing a coherent block. An instinctive reaction is to try and split it up, the Andean summit when the South East Asian countries tried to form a coherent position on the South China siege, China picked them off by having a special relationship with Cambodia and others and now they seem to be trying to do the same in trade disputes with the EU so not only did the Chinese give the Europeans a lecture about remembering we’re on the slide but also clearly tried to strive a special deal with Germany.

I was talking to a German diplomat who said that every time he goes to Beijing he says he gets what he calls sweet poison poured in to his ear and what he means is he gets the Chinese saying ‘look you’re the only ones who matter in Europe, you’re the only serious players, just forget about those other Europeans, they’re slow, do a deal with us’ and he said he has to remind himself ‘no no mustn’t listen to that, we’re the EU we stick together’.

[laughter]

GR: But, that’s the game and it’s very very different from the way the Americans have tended to play the EU which is to say get your act together we want a single phone number, it’s a bit of a bore having to deal with 27 countries.

MW: I suppose, one conclusion of our discussion is if I’ve understood it is China is rationally realist and one thing a rational realist would like to do is to divide. I’ve always felt that if the Europeans had ever got together and were sufficiently effective to be a challenger to the US, they would have swiftly have shifted their policy to exactly the same one that the Chinese had adopted.

 Exactly they did it beautifully when they had to. They just having felt that it was necessary so far. I think that we’ve had a pretty good discussion so far or why global governance is next to impossible and discussed some of the ways in which one might be able to get round it, these problems, at least to some degree.

I would only say that despite these views, nevertheless it moves in the sense that an enormous amount of global governance has happened in quite a large number of areas, particularly economic ones which we haven’t focussed on but I could discuss, even global financial regulation, imperfect though it is.

But anyway, with this introduction I’d be very happy to take questions. Now the only rule is you’re going to have to wait until you get a microphone, say who you are and please if possible ask a question or at least a very brief comment. I’ll take about 3 at a time and then spread them out that way I can be reasonably confident that we are managing our time effectively. So, who would like to ask the first question? There, this gentleman here. If you stand up it’ll be easier for them to see you.

Audience 1: Andrew Ward, Youth Business International. If we all woke up and it was a dream that actually we never had a G8, G7, G20. What would we be missing? If we could have one answer from each of you.

MW: That’s a very nice question. Ok another, this gentleman here.

Audience 2: Good evening, my name is – is this working? My name is William Wong. My question is on digital governance, traditionally we’ve analysed international relations and politics through international actors, states, NGOs and the like. And now of course, in the last 10 years or so we’ve got an added dimension of complexity, which is really people like us. If you look at Prism and so on. So my real question is in this really messy world, everyone is an actor now, everyone has a voice, who is to govern whom? But also in the cyber world, the United States have constantly alleged that they are sponsored state terrorism so states like China and North Korea and the like sponsoring cyber attacks on financial systems, structures and so on. It’s very complex, it’s no longer just nation states and nuclear deterrents are no good in any of this. So the bottom line is who is going to govern whom? And how? Thank you.

MW: A third question somewhere in the back. Yes the gentleman at the back there, can you stand up?

Audience 3: My name is Joe Cooper, I was thinking about the G-Zero and what that actually means in practice. And I was wondering if you could talk a little about the role of the UN. Which should seemingly fill the void and we haven’t heard much about the role of the UN.

MW: Ok, very good questions. I’m going to start with you Gideon actually. Let’s suppose that nobody had ever bothered to create the G5, the G7, the G8, the G20 – we haven’t actually discussed the G77 or any of those, we’ll leave that to the side for a moment. Would we be missing anything?

GR: Not in the normal run of things but I think every now and then they have been important. I mean clearly, the G20 had its hour in 2009 in our post financial crisis. And then it really did matter that if nothing else they sent a signal that there was going to be global economic cooperation in a time that everyone thought we were going to retreat in to protectionism and so on. David can probably talk more eloquently than me about the Millennium Development Goals and what the Blair government and others did around that so that was important. And I think even when they appear to be nothing and to be doing nothing particularly, I would prefer it to be in a world where there’s a date in the diary where all the most important leaders actually do get together and sit around and talk. Better that then they never meet.

And the UN, to address the question about the UN briefly, obviously it has an international legal standing that none of these other international organisations have so it’s incredibly important that way but it’s a very stiff, difficult environment people stand at the podium and make speeches. At least at the G20 there are only 20 of them, I think that they’ve somehow managed to make it 33 but it’s a slightly less formal situation and there’s more opportunity for discussion and even if those discussions lead nowhere, better that we get in to the habit that these people from very different systems, economies meet and talk. I think that is important, almost as a symbol.

MW: Ian the focus on the last question was because particularly the, the implications of a G-Zero world, what does it really mean and where does the UN fit?

IB: Well, if we had had no G20 the world in my view would look a little less G-Zeroish right now so I’d have one less book. So I do think that the actual creation of the G20 and the recognition, and codification and institutionalisation of this regular organisation brings together these 20 largest economies, a whole bunch of emerging markets and not persisting with the G7 plus 1, where the Russians were never really relevant, where it was really a G7 they didn’t show up a couple of times. Would have the emerging, on the down side, would have the emerging markets take longer to get to a point where they feel like they need to start saying things that are internationally substantive and statesman like. But on the other hand it allowed for much quicker abdication on the part of the developed states and more inward focused more quickly.

Now you could argue it’s a good thing you put the G20 in place because you had this shifting in the underlined power balance that was going to break the old US led global order at some point so if you have to do that you might as well do it soon so you can at least start the process of getting through your G-Zero and then creating or whatever it is that’s going to come afterwards then wait until things get really bad and certainly the G20 had a function right after the financial crisis because you needed at the least the Chinese and probably a couple of other players outside the G7 as well to help coordinate and I think that’s relevant and useful, do you need to create a regular G20 to do that, absolutely not.

Does the UN play a particular role in this world it plays a function, it’s an Antarctic role, it’s great. The World Health organisation, look at that, I mean the Chinese have become much more transparent and proactive in their scientist and laboratories working with international standards and trying to understand the latest variant of avian flu in a way that is much much more resilient then what we saw with SARS and that is a UN sponsored organisation that made that happen, thank god they existed. I am not John Bolton saying ‘lets lop 7 floors off that building, we wouldn’t miss it’. But the Security Council and the incredible ineffectualness the security council they should have told us the G20 was a bad idea at state level. And didn’t, we didn’t learn that lesson.

MW: David, on the two questions – the first and third on what would we miss without them and…

DM: I think the shaming of the Western world in the development of the G8 agenda through the meetings of the last 10 years has been a positive factor. And has made a difference to a lot of people’s lives, I think if you were to ask me to give one example I would pick the pursuit of the Millennium Development Goals, the fact that we’re on the track to meet the anti-poverty target early etcetera etcetera and I think that’s been helped by that.

There’s a wider question and that all these institutions you want to ask two points, one is are they powerful, two is are they legitimate. The trouble with the G8 is that it’s neither powerful nor legitimate. And that explains the relative weakness of it.

On the UN I think that in some ways the UN is its own worst enemy and obviously that’s the traditional thing to bash the bureaucracy and that actually the UN is a symptom of what nation states are willing to cede on the international level and do on the international level. So if you just think about peace keeping there are all sorts of weaknesses in UN peace keeping but some of them arise from the fact that no Western countries put their troops into peace keeping, I’m not just talking about the US and UK past Somalia, past in the US case, past Afghanistan and the UK case Germany is the 50^th highest contributor to UN peace keeping. And so there’s disengagement and that’s not the UNs fault that’s the nation states fault and I think one has got to look at where the power does lie because the power and legitimacy does still reside at the national level.

I think it’s also worth saying and I don’t have to develop it the UN does a lot more than any of us know. Pascal Lamy’s got this lovely phrase about ‘the house of humanity’ and the house of humanity is protected in all sorts of ways from storms and disease and god knows what else and it’s kept going, it’s foundations are tended to by UN organisations that we don’t need to know about but are actually, we’d be sorry if they weren’t there.

MW: I think that I actually, we got away from this but I do very strongly support the view that these specialised organisations, a whole raft of them have an enormous impact on our lives. We don’t realise how large it is and here’s the IMF trying to save Europe from itself which we perhaps shouldn’t mention. This is because the ECB and the German government trust the IMF and not the European Commission. That is quite an interesting fact, there aren’t too many people in the world who would say they trust the IMF like that but there we are.

I just wanted to add one other thing because f my focus on economics, during the worst of the financial crisis – September, October 2008 – about a year – the G7 first isolated the G20 really did play a huge role and the most important moment was the G7 meeting in the, Minister of Finance level in Washington. Before the G20 meeting, this was in October, in which they all agree, in an extraordinary crisis they were going to save every financial institution in the world. That was a rather extraordinary decision. Now it’s an interesting question whether it was a right decision. But it certainly changed the world because we'd established too big to fail as a fundamental principle. That's governing.

And one other point I would make which is important, I think one of the things that these sorts of institutions do and it builds on a comment I think Gideon made, it forces government bureaucracies to talk to one another. And it forces politicians to talk to one another and over time it means that there know what they are disagreeing about and that’s often very important to know what you're disagreeing about. Now we will now go on to the fascinating question – how do you govern cyberspace? Ian started on this by saying 'well we're going to solve that problem by disintegrating cyberspace' I think that’s what you suggested. I discovered recently that the US actually has a cyber command now as a branch of its armed forces. So the US considers it a region of the world in some sense, which presumably the US intends to govern or defend. Or I don't know what it's going to do. So how do we govern the digital whatever? Mesosphere.

IB: We tend to attack it before we intend to defend it, let's be clear. I mean in Washington you talked to the folks on cyber and they'll tell you it's like a football match, you're in the first period and it's 86 to 43 and fortunately the US is on the 86 side but you know there's a lot of scoring going on in cyber right now, there's not a lot of defending. These are people who are spending an enormous amount of effort and cash to try and figure this stuff out from scratch. And they're having a hard time with it. But you know, it gets intermediated and there's a lot of American corporations that are doing a lot of meetings in China, Facebook, Google and Twitter are not three of them. And when the Chinese, the Iranians go to Huawei and say 'hey can you develop our internet for us' what do you reckon that’s going to do to the Chinese Iranian relationship over time? How much information they're going to have, how much integration they're going to have. How much less the US will have and what that'll mean for Chinese politics in Iran. And they'll need the energy a lot more, and help for the sanctions a lot more and everything else and proliferation then it would with the United States, these things are going to matter.

I think that there is a very big difference between the information revolution, which empowers people – you're question and the data revolution, which does not. It empowers organisations, in the US historically that has been corporations but as we found out over the last weekend increasingly it’s also the state. And certainly in other governments, in China it’s the State.

Now, when we look at the Arab spring there's this sense that oh my god everyone's got cell phones, they're going to bring down governments and that’s because they're very weak governments right. I mean the Egyptian government, you remember Davos, we were having this discussion a couple of years ago and suddenly in the middle of Davos there's demonstrations and the Egyptian government shuts off their internet. Why? Because they don't have the ability, the strength, the money the background to track dissidents, find out what they're saying and arrest them and the people, they're just not that good at it. The Chinese, the Americans, we're really good at it.

[laughter]

IB: So, I would not make the presumption that the state loses the battle versus the inmates alright, in determining where the power is going to lie as the information versus data revolution fight continues.

DM: I have a slightly different view of a couple of aspects of that, one is that I think every government strong or weak lives in coalition with its own people. Every government, autocratic or democratic lives in coalition with its own people. The Chinese government spend a lot of time thinking and finding out what their own people care about. The discipline of popular consent is a strong discipline. A stronger discipline when it was 10 years ago and it is a discipline in part empowered by the ability of people to communicate with one another. Sometimes in the view of the state, but in ways that they could never have communicated before. So I think that that is important, it’s not about technological revolutions or its not about saying that Mubarak was brought down by Twitter, but recognising that technology is facilitating contact between people and that is helping provide a discipline on governments.

The second thing is I know very very much less about and my instinct is the world is never going to be less open than it is today. That the drive towards a more open society globally is irreversible. And you've obviously studied this and you think there is the power to disintegrate what is currently integrated. I'm sceptical about that I think it will never be less open, I think it will never be harder for the vast bulk of people to find out more than they do now. I think that the gap between what is known privately between states and governments and what is known by people, that gap is going to narrow not expand.

IB: Let me throw something out here and see how you respond to it. So think about Chinese internet and Chinese internet 1.0 was all about the great firewall of China. And we're going to stop people having access to stuff and so all of these things that they're looking for; they're not going to be able to look for it. We're going to blacklist and all of the rest. They quickly realised that wasn't going to work. Chinese internet response 2.0 is let's have extraordinary surveillance and let's also populate these micro blogs and chat rooms, the water is already past the dam, we can't do anything about that but while the water is rushing past the dam let's dig and figure where the rivers going to go. And let’s have a whole bunch of filters and nets that are watching and catching these big fish that are in this water. You know, you've got hundreds and thousands of folks being paid by the Chinese government on micro blogs that are actually moving and steering these conversations in ways that are useful for the Chinese government. But much more vulnerable than that environment, talking about billions of dollars that Xi Jinping may be worth from Bloomberg, let's go on a patriotic Bloomberg rant that's much more useful from our perspective. The question is, I agree with you we don't know where this is going to play, but why are you so convinced that we are never going to be more open. I thought it was interesting that 1984...

DM: Never going to be less.

IB: Less open, that 1984 is selling record levels of copies in the United States right now. People are actually concerned that the state is not going to be wholly on the defensive here.

MW: But surely the point is both could be true, and it seems to me that is the case. Since that, the public at large in a whole host of ways and as the spread of the knowledge continues, all over the world no more than ever before I think that that is correct. The access to knowledge generation, I don't believe in linear things so I would never use the word never. Never is a really long time so we're presumably not talking billions of years. But never for us means the next 50 years or 100 years, well actually for me it means even less than that.

[laughter]

MW: So the, never implies to anything that applies after my death. But it seems to me that people have the capacity to know more than ever before. As a result of the development of these technologies and it does seem to be very difficult to imagine that that will stop. In principle you could imagine that anything that’s ever been published being available on the internet. And the communication between people is extraordinary. But for the very same reason governments can and do know more about us by many many orders of magnitude than ever before. And I haven't even mentioned corporations.

I mean basically it seems to me pretty obvious that anyone who uses Google must realise that Google knows everything about you. Just everything. And that’s just a reality. So it seems to me that both are true and that nearly all great technological innovations it’s a double edged sword.

DM: It's definitely a double edged sword but lets be clear. Government knows about a millionth about your likes and dislikes, preferences...

MW: As Google.

DM: As Tesco knows about what you want to buy, as Google knows about what you're interested in etcetera etcetera etcetera. Government might decide in very restricted circumstances to find out an awful lot about Martin Wolf other than by reading him in the Financial Times and his brilliant columns, but they might decide that they need to find an awful lot about you. But as a generality, government knows an absolute piddling fraction of what we think and like and dislike compared to some of

MW: That's because you've not really started working at this, isn't that the point Ian?

DM: No, that's because they can...

MW: They can in government explain everything.

DM: The government direct.org website is not the router for everything.

GR: What we've discovered over the last weekend, is that at least in the US, if they should decide that Martin Wolf is interesting for all sorts of ways we've never realised.

DM: They can find out about you but...

GR: All that information is sitting there, because Google, they have access to Google.

DM: Should they decide, but...

MW: That's the point, they have access to all this corporate stuff and so they're not separate. I should go on to let someone else ask a question, I think.

IB: Fair enough.

MW: By the way, the one question we didn't answer, which is the core question you asked, but by implication was answered. Who will govern, who will provide digital governance? I think the implication of our discussion is there won't be one entity that provides that.

GR: I've got a brief sentence on that,

MW: Ok

GR: I think the US are very ambivalent about that, at least in the securities sphere whether they want that, because they think they're ahead. So what was the single greatest act of cyber sort of sabotage was stuxnet which was probably done by the Americans and Israelis, they disabled briefly the Iranian nuclear program so as long as the Americans have an edge then they don't really have an interest in a big international agreement, but I think that they're beginning to realise that their technological sophistication that gives them an edge also makes them incredibly vulnerable because that society is so much more.

MW: Ok, I'm going to move to three more questions. Gentleman here. You next, please.

Audience 4: So my names Thomas Pattison, I guess that I'm an international citizen of being Australian, British and long long term resident of Mexico so one of the things that affects us all living in England is that one of the really powerful moves in European Union and Great Britain was, the United Kingdom rather was the devolution and raising up of powers and one of the really clever things that happened over the last 20 years has been some powers moving down to very local basis and some moving up, and that is one of the interesting questions and what is the function of a G20 or a G8 or a G-Zero is what powers do we want to get up on that level. I mean global epidemiology is a pretty good thing to have at the World Health Organisation level and few would argue with that. And one of the big questions in tax at the moment is arbitrage and using the global organisations using arbitrage for tax purposes so international companies, called trans national, called multi-national can't take advantage of that. I'd be interested in the views of the panellists on what other powers would you want to see on a global governance level, because we can't answer that question its really hard to design organisations for implementing those powers.

MW: Yes, this was actually the first question I asked but they sort of ducked from it so we'll go back to it. Lady there please.

Audience 5: Christina Scalone and my question is the country that we've probably least talked about is the one we're actually sitting in, the UK. And I wonder if that's just a reflection of British modesty or if it signals the current and future role it will play in global politics? And then if I can cheat and add a quick question in for Ian, if you were advising Obama on foreign policy what would you advise him?

MW: On anything?

Audience 5: Generally, yes. What would be the position?

MW: Ok, and gentleman behind you, yes. Please.

Audience 6: My name is Shari Dwivedi. Taking David's point that economic reasons are a greatest force of integration. If you were talking about the same topic 15 years back probably you would have mentioned some of the countries that you mentioned today, be at India, Africa or probably China also. And today, yes, China has a very important plan. But what, that probably means that you assume that these countries, particularly China and any of these important countries. They are on an irreversible growth path that is next 15 years what could actually change this discussion? And second point actually is some of the companies today, be it Shell or ExxonMobil are almost larger than some of the countries in terms of size, what rules could these organisations play in global governance?

MW: Ok, I'm going to start with asking David about British modesty.

[laughter[

MW: You were a famously modest foreign secretary.

DM: As Attlee said 'a modest man with a lot to be modest about.

[laughter]

MW: No, I thought it was Churchill. Churchill said it of Attlee.

DM: Churchill said it of Attlee, that's right. Someone told me the other day that, it wasn't me but someone who I was with said 'you know, we've got to be humble about this'. And someone we were with said 'just remember what Golda Meir said, you've got to be great before you can be humble'.

[laughter]

DM: British modesty, look I think that it actually relates to the first question. You're question, the future is about dynamic and economic entities and those more often than not are metropolitan areas, not countries. My favourite statistic is the 40 largest metropolitan areas in the world 8-10 million people, 18% of housing 85% of GDP 85% of technological innovation. This is not just an urbanising century it’s a century where urban areas are going to become big economic players. I think they are going to become big political players as well. But I don't buy the death of the nation state argument that the nation state is too big for the small problems and too small for the big problems, because the nation state is where political legitimacy resides more than anywhere else and political legitimacy remains key to getting anything done.

The issue for the UK I think is two fold, will it devolve England in the way it has in Scotland and Northern Ireland actually and to Wales. Because the English question is actually a devolution question. How does Manchester become the Boston of Britain, how does Newcastle become the...you can choose your point. But I think there's also the question of whether the UK disconnects itself from its neighbourhood. Because, and therefore the European question. I think if we opt out of Europe it's a very bleak prospect and this is a world that is connecting, not disconnecting. And the idea that we can connect the world by disconnecting the rest of Europe is foolish really. And the connection is political through European Union, but it's also about immigration, the idea that you can reduce the number of foreign students who come and study here is completely perverse and ridiculous and self-defeating. So I worry about a Britain that starts disconnecting, you can't just have this big, be this big nation if you're not willing to be part of the conversation I would argue and it's a pretty fundamental point.

MW: So you've expressed your admiration for our government.

[laughter]

DM: In what aspect?

MW: None that I could hear. Gideon? On British modesty and possibly also this regulatory question in global governance. What do we need up there and what should we actually be pushing down?

GR: On the modesty question, just briefly it relates to the sort of subterranean argument we were going to have about declinism and the end being, because I think the British because they are very conscious of their own decline, we tend to see it in America. And maybe we over interpret so that, I was with a senior British civil servant the other day, he was saying over the course of his career he had seen the reach of Britain really shrink so we look at America and think well guys this is going to happen to you as well and maybe we're getting slightly ahead of ourselves but I think it does account for a lot of British declinists when they look at the United States.

On the question of what's best done at what level, I thought that you came up with a pretty good list, something like epidemiology would obviously have to be done at a global level, climate change has to be done at a global level but we're not terribly good at it. And that's you know, where we may pay the biggest price for the G-Zero world and its inability to get beyond national preoccupations. And as David says a hell of a lot of it comes down to legitimacy because you've got to somehow be this international political who can come back and say 'I've struck a deal, it's going to cause some short term pain but it's fair and so on and nobodies yet been able to do that. So although one can intellectually identify the areas that need to be dealt with at a global level, actually getting national politicians and politicians that derive their power from the nation state to then meet at a global level and come up with a deal and then getting it to stick is the dilemma.

MW: I am going to get to you Ian, you can come back to the others, there was a specific question which I think that you are perfectly positioned to give and if you had 3 minutes with the president, which I'm sure you do regularly, what do you tell him that he should be doing that he isn't doing. Or the other way round.

IB: I guess I'll say two things, one is Jon Huntsman and I wrote a piece in the New York Times last week about what we wanted him to do with the China summit, he did none of it. One of the things that I would have liked him to do was make Jon Huntsman secretary of State, frankly, I mean this is a guy who knows China better than any foreign policy guy who was relevant, he was by-partisan he was Republican who served as Ambassador to China and who did an incredibly coherent job and he also knows business. Ad if you want to talk about the pivot to Asia, the rise of China, the impact of economic state craft, state capitalism, why wouldn't you want that person? No, let's get someone who does the Middle East and Europe. It doesn't make sense.

We need a new communiqué, we need to spend time, the rise of China and the ability, I think it was Gideon that you raised the point before, how do we deal with China, is it possibly that Obama and Xi Jinping will be able to mitigate the structural challenges. I think the answer is maybe, but they only can do it if they care, and they don't. They are willing to put enough effort in to show that on we want to manage it but this is absolutely not a priority for these leaders and in four years time it's going to get so much worse. I think that we just had the last election that you're going to see in the US for decades where China is not a fundamental politicised issue for one or both of the President's running for the Presidency, the impact that is going to have on the relationship is very negative. So I'd try to fix it now while it's not urgent but of course, like climate, you won't do it until it becomes urgent and that is exactly where we are right now.

The big structural thing that I would argue for, which is related is that the United States does not have institutions to deal with the China challenge effectively. We've got, I think, the best state department today in the world, in terms of international diplomacy and capabilities. It used to be Britain; we put a lot more money into it now. Certainly the most effective CIA and state defence department. The US does not have a department that does economic state craft; we have commerce departments, places you don't want your kids to work right. The US needs to have something like MEJ in Japan; they need to be able to have something that's structures by sector, that works with the private sector, that can do this. They need commerce and USTR and energy, they should not be separate. They need to be together and they should work with the private sector, sectors and they need to coordinate internationally with like minded countries. The US is very far from even considering this as an option. And I think that is the most meaningful thing the US can do structurally.

MW: That’s pretty well socialism isn't it?

[laughter]

IB: Like Japan?

MW: Yes, exactly. If I may going to take the chairman’s prerogative of answering the last question, because I think I'm more qualified.

[laughter]

DM: British modesty knows no bounds.

MW: We didn't say anything about the modesty of Britons. I think the question on whether countries are on an irreversible growth paths is a really interesting and deep one. And there are two points I'll make on it because we could go for a long time. Development economist’s talk about something that we call the middle income trap and what they mean by that is there are many countries moved from being low income to middle income. Which then effectively stop growing and it's a complicated question, there are remarkably few countries that have grown rapidly, by rapidly we mean 6/7% or more for more than 25 years or so. Really remarkably few, so we have to be aware that sustaining growth all the way from being really poor to being a developed country is a rare and remarkable achievement. And in the post war period you can't think of many and of that whole period, starting really poor, I mean you've got the republic of Korea, very small countries like Singapore, Hong Kong, Taiwan also. Very small, it’s really a remarkable thing. This said, so that's point one.

So if I was told that one of the countries that had been growing fast stopped when I started on development economics in the 60s, the growth miracle country, this may seem like the big growth country of the 60s and 70s was Brazil. That was just a phenomenal story and it basically stopped. So I wouldn't be surprised if something stopped. China and although on a less growth rate India have managed very fast growth for a generation and it has changed a lot and in Chinas case there's no story that compares with it. Does this lead you to the conclusion that it will continue or it will not? I mean we really don't know, personally I've been making the argument that it is quite easy to believe one on China that it's going to have quite considerable difficulties in the next 10 years. I don't have time to go through why, one and two, nonetheless on balance I think that it is more likely that it will move towards lower development country status than a generation than not, but it really is incredibly difficult to predict these things and it wouldn't be terribly surprising if quite big difficulties arose. Managing this process from where they are now to where they want to be, as they're very well aware is extremely difficult.

So that's all I want to say, I won't go in to the companies bigger than countries thing because I think that it is a little misleading but there are a whole bunch of global governance issues which are affected by the lobbying power of companies and one of them has already been mentioned and that’s the almost collapse of the global corporate tax regime. And that's a pretty big issue that we don't have time to go into further. I can take I think another round of questions. Gentleman right at the back, yes you.

Audience 7: Thanks, my name's Andy Martin. I just wanted to ask this question of failure of institutions or leadership using the MDGs as a bit of a case study. Because although it's a UN process it kind of needed the G8 because the locus of the problem was the donor agenda.

MW: Sorry what was the...

Audience 7: The Millennium Development Goals and whether the G8 was a good place to do that work because it was mostly about the donor agenda. Now in the post 2013 goal it's just a messier problem. And even if the G8 was effective, it would be the wrong place to do that work. Now the question is, is the skill we need the effectiveness of a temporary governance structure fits the problems that we have rather than mourn the ones that don't work anymore.

MW: That's a very good question. Somebody else. Lady there.

Audience 8: I was just wondering about global governance and the financial sector. Let's say commodity trading that's really socially irresponsible, it raises food prices too much or kind of debt bubbles and I was just wondering is there a way to deal with that or is that something we just have to live with.

MW: And, gentleman here.

Audience 9: Ed Davey, what's the optimal global policy that we need to address. Climate change, Apache – Martin's article recently in the Financial Times, Apache, the global oceans committee and the global needs are currently not addressed by existing leaders.

MW: Let's perhaps do this quickly so we can get one or two or more. David – the Millennium Goals and how we go on from this.

DM: Yeah, I think the geography is changing so fast. I think there's one, a World Bank or an IMF statistic that a third of the world's poor by 2030 will be in fragile states. Which are conflict ridden states so I think the whole question of how you get at the most poor, that's more than 1 under 25 a day? I think that your point that the donors have to be broader than the G8 is a good one, if the G20 wanted something to do, throwing itself behind the Millennium Development Goals would be a good way of going about it. And could be the kind of coalition, I mean it’s over dominated by Europeans, 12 Europeans in the G20 but it's still important.

I think Climate that you asked is very very important that Martin do write about it from the economic side because this is the global catastrophe that’s being neglected and has the greatest consequence, the greatest long term consequence. And I've always been a very strong believer in a global deal, but I can't see it happening now. And so that forces you to think about how you take this Copenhagen process, the failed summit in 2009 produced this quote unquote accord that I think 70 or 80 countries have now signed up to. And I think it's going to have to be on a much more patchwork way rather than just going for the global deal which in the end a handful of countries can end up veto-ing.

An interesting question that I don't know if you covered in your column or not Martin is whether or not there isn't scope for China, which is concerned about climate increasingly concerned about climate and the EU which is the single largest global market, whether there isn't more scope for an EU and China cooperation on climate. Whether there isn't enough of a win win on economics and environment that would be a, it wouldn't be the answer to the whole problem but it would set a quite interesting global benchmark, I think if the EU wanted to do anything with China, climate would be high up my list of candidates.

MW: Yeah, like presumably your view from the beginning and subsequently is climate – forget it.

IB: Well don't forget it, just understand who the winners and losers are going to be and makes bets accordingly because clearly it’s continuing to come.

I want to maybe make something, raise a point around this which is maybe a little more provocative, which is a presumption that at the very least it's always good to have these meetings. At the very least it’s good that we get the G20 together, get the security council together and they have the meetings. I could easily make the argument that continually trying to address climate through global summits is actively pernicious. Because it means if you get a coalition of the willing together and they were to meet as opposed to the G20 and they were to say I know that we can't get China on board for x,y and z reasons. This constellations of countries or actors, doesn't have to be all countries feels like we have to do something or else. And we're more responsive, that is the big reasons you could argue for the creation of the G20 in the beginning was a bad idea. Right, because occasionally it allows too many actors to obligate themselves from responsibility but you know what, not it can't do the meeting. We did Rio +20, we did Cancun, we did Durban, we did Copenhagen, let's do it again and still nothing comes. If something is really broken at the global level, let's stop doing global.

MW: This doesn't work very well if it's a global problem.

[laughter]

MW: I mean this is the worst case, I mean there are lots of cases where there are coalitions of the willing, not a phrase I'm very keen on, given its history, but that’s the way to go. Because certain groups of countries can do it and it is true in the case of climate change, 20 countries cover your universe pretty well but you have to have most of them in and if the US for example let's example won't play ball then it's going to be quite difficult to deal with it.

IB: I would like to say that given that we all agree that nothing meaningful is going to be done with the constellation, I mean David Miliband has spoken more eloquently on this than many of us, certainly me, then given that how badly geo engineering might go if its handled in an un-fettered, un-mitigating way. Why would you not want a coalition of the willing who would be able to put some rules of the road together, of how you do want to handle that, how you don't as it starts and what kind of consequences will be placed on folks that do it outside of that regime. Why wouldn't you want a process, an international process that started investing in some of the technologies that look most promising to handle mitigation or adaptation over the long term? You're right that it's a global problem but since we're not going to resolve it globally does that mean that mean that we should keep doing global meetings that fail. I think that the answers no, I think that we should stop that and it's a mistake and we've already lost 5 years of doing global when we knew it wasn't going to work.

MW: Gideon.

GR: Martin, I think I spotted another question you may be more qualified to answer and that is the regulation of global financial institutions, why don't we invite you to comment.

MW: I'm going to be very...

DM: Your last answer was brilliant Martin so please do go on.

[laughter]

MW: You know I'm just going to say something very simple; I have very minimal objectives for global financial regulation which is that we could create a set of agreements that reduce the chances that the financial sector will blow up the world every 10 years significantly. I accept the other objectives, very are very important and they seem to me sort of the minimum objectives and I would say that at the moment I'm not very encouraged. For reasons that are probably clear from things that I and others have written.

GR: Remind us.

MW: The essential reason is that the financial sector has constructed a very very nice system which is based on the proposition that there is no equity in it. Because if there is no equity in it, if anything goes badly wrong the tax payer is going to pick it up. So they can't understand why they should have any equity in it. And what has happened as a result of this incredibly long, tortuous financial regulation discussion is that we've raised the required equity of the financial system, the banks and core banking institutions to approximately 2 to 3% of the balance sheet to over 3%. I'm not joking, I am not joking that's what's happened so I'm afraid that even this minimum requirement has not been achieved. And I'm not even beginning to talk about the sort of regulation that would really shift in any profound way the nature of finance. I'm not going to go into the specific role of the financial and commodity prices and so on. So I think that it's a very depressing story alas because of very well organised interests.

I think in practice I really should stop now. I apologise for all those who had wonderful questions that we didn't get to. I'm not going to summarise this because I think it's impossible but I think that it's been very fascinating and perhaps for at least some of us a little bit depressing. We don't seem to care very much what sort of G there is because we seem to agree; really do seem to agree that none of them is going to do much good. Now the exception to that was when things are really bad, and this reminds me I just had the, I've just done an interview with the outgoing governor of the Bank of England, which will be published of course in the Financial Times on Saturday and he used the phrase, so I am going to attribute it to him and he may have used it before, of the only time he ever saw the G7 do anything useful which was in October 2008 and he describes this as the 'audacity of pessimism'.

[laughter]

MW: Which, I think is brilliant. In other words, if people are frightened enough and what they are frightened of is imminent enough they will do something. The problem with the climate thing is it's so remote that nobody is prepared to do something. So of course the opposite of the audacity of pessimism is the complacency of optimism. And at least for us, for the powerful people, the weight of the world things are ok so why should we do anything much? That's very much where we are. That's the first big point, we tend to act when things are very bad and the second point I would make and I would underline it very strongly is we haven't discussed this very much is an immense amount of governance goes on out there which we don't think about in areas of economics, intellectual property, health and so forth. Some good and some less good - peace keeping I think that's very important and the institutions that can provide that can function even if higher level diplomacy is an extraordinary mess.

And the last point I would stress from this discussion is you will have noticed that I am partly responsible, only partly that there was really no discussion of the role that Europe plays in all this and nobody brought it up. It was very much focussed on the two greatest power and their relationship and clearly what emerged from this that in many respects if you are talking about higher level global governance, the relationship between these two powers – the US and China are going to shape our world. It's very much underlined by Ian and to my mind completely credibly, the incredibly difficult and significant relationship and we have to hope that they manage it without blowing everything up in essence. The very fact that we hope this is important and let us point out that this is the very last point, that I don't want to be very optimistic about this but we are extraordinary dependent on one another, the interdependence point is profound. And at the leader level in China and the US they are very very well aware of that and that's perhaps a good reason for optimism so that will be my last conclusion.

I think the panel has given us a very interesting, provocative, if somewhat bleak view of the world, I suggest somewhat realistic. And I hope that you will thank them in the usual way.

Close Transcript

Video Transcript

 Lessons for the G8 Members | 12 June at 7.00pm

Speakers: Hans-Joerg Rudloff, Mark Moody-Stuart

Chair: Mary Robinson

Panellists: Paul Collier, Jamie Drummond, Strive Masiyiwa

Hans Joerg-Rudloff: Good evening. I am very honoured tonight to welcome you in the name of Barclays to this event which is the last of a series of conferences which have taken place in the last weeks and days and we are very pleased to sponsor this event.

First I would like to thank a few people who have made this even possible particularly Michael Aminian, the founder of Zamyn and Sir Mark Moody-Stuart, chairman of Zamyn. Obviously the Tate Modern for hosting these lectures and particularly Sir Nicolas Serota. As well as a Tate director, Marco Daniel. convenor of audit programmes. So programmes as a partners Accenture, Africa Progress Panel and SOAS.

Tonight’s event is one of this series being held on a brought theme of global citizenship and governments focusing specifically on issues facing Africa, a significant region for Barclays because you might know that Barclays is probably the biggest bank in Africa. Barclays is particularly supportive of such dialogue which brings together thought, leaders from different disciplines to discuss global issues affecting business and society.

This evening we will be debating possible lessons for the G8 governments. Well I am particularly careful in using the ‘word world’ or giving other people lessons but the theme and the discussion will focus on the role of these governments in fostering cooperation between governments, business and other parts of our society.

Let me say maybe two words only - that Barclays has under new leadership and new management fully engaged in, what we do call as well, global citizenship. We do look for cooperation and interaction with not only governments but with any parts of our social fabric. We try and will certainly commit to look at any part of our business, at our actions and our activities with a sense of determining whether these activities stand up, are being conducted in the way prudent, cautious bankers should conduct their business but particularly as well whether these activities, engagements, commitments, lending activities and so forth serve economic progress and serve to make the world a better place.

Personally I spend the last ten years mostly in what is generally called emerging markets which is not necessarily an appropriate expression but spanning from Argentina to Russia and other areas and it is in these areas as well where the bank will have to look at every single angle of our business and it is a good and an important subject to bring up. We are faced with enormous complexities. We are faced with constant decision making whether we should continue our activities in certain countries or should start activities in certain countries, whether we should commit lending our capital to these countries, whether we should accept that these countries are different, whether we should accept sometimes oppressive regimes and nevertheless continue to engage. All of these are very difficult questions. It is each time a judgement. Whether one should appear as a sponsor of a government with whose policies we disagree. It is a question of judgement whether we should support companies who are run by individuals who exploit their own population. Whether we should engage or retreat. I belong after these ten years of activities where I firmly believe that we did achieve a lot of progress with all the inefficiencies which still exist, where we are channelling capital in capital hungry countries, where the presence of ourselves and many others is more important than given or looking for lectures and for boycotts. We do know that finance plays an important role. We do that many of these countries will depend on foreign financing for decades to come. That there will be no progress without the necessary capital supporting these activities.

We are obliged to ask for certain rules to be applied, for certain things to be done, for certain behaviour patterns because we are responsible at the same time to our investor clients, to people who engage with us in these areas. It’s a tricky question. It’s complex. It’s like an engine with ten thousand’s of little wheels which have to turn in the right direction to drive the big wheels. But we do think that in probing, in judging, in making consistently new surveys in how to behave and what to do, in the end we are making progress. We don’t want to teach other countries. We don’t want to impose them on our rules and our laws. We want to understand. Without commitment and that’s what the chairman is doing, without dialogue, without meeting, without understanding and without the necessary respect taught these countries who find themselves in a different phase of development, progress is not possible.

With that I would like to introduce tonight your panel, speakers and panel, who will give us their ideas, what they think, how an organisation like this and how the world can develop and make progress and how interaction and exchange of ideas can help us all.

Next to me, Sir Mark Moody-Stuart. He is the key note speaker for tonight. He is Zamyn’s chair and the chairman of the Foundation for the Global Compact. He was also former chairman of Anglo American and the Shell Group and there couldn’t be more international companies which are I am sure if given you a set of experiences and insight from which we will all benefit.

Mr Paul Collier is Professor of Economics and Public Policy and Blavatnik School of Government and director of the Centre for African Economies at the University of Oxford. He will be a little bit late because he is still on his train but he will join us in the course of this evening.

We have as well Mr Jamie Drummond who is the executive director and co-founder of One, a global advocacy organisation which at the moment is providing a very active crowd with excellent music at the outside of this building. It calls on governments to keep their promise to support the citizens of the world poorest countries indeed. That is an extraordinarily important job and I saw the slogan where it says ‘already at a very young age I learned that without screaming and asking I wouldn’t get anything’. So that is the slogan, it’s on the good way tonight because the music I can assure you is excellent.

We have with us as well Strive Masiyiwa, the founder and executive chairman of global telecommunication group, Econnect Wireless which has been involved in numerous initiatives to promote entrepreneurship and social development in Africa.

And finally tonight’s chair person, all well known to you, Mary Robinson, who is the president of the Mary Robinson Foundation and served and served as President of Ireland from 1990 to 1997 and the UN High Commissioner for Human Rights from 1997 to 2002.

Thank you very much and if I may turn it over to you as the chair person of tonight.

Thank you.

Mary Robinson (MR): Thank you.

[Applause]

Thank you very much and I am intrigued and please to be here because we’re talking about global citizenship and the G8 meeting. I am thrilled that the G8 meeting is happening in Northern Ireland. Let me just put that on the table first because I think it’s an interesting place and the fact that so many people will come to that part of the world I think is a good thing in itself, although it may be a contested one but it’s still a good thing I think.

I didn’t realise that I was wearing the right colour this evening. This is a very red room and I don’t know if there is any significance in that but it’s lovely to be in the Tate Modern Gallery. I am a great fan of the Tate.

I am also aware that there have been a lot of meetings in London. I was here over the weekend for a meeting on nutrition which actually ended up in some good commitments on nutrition and linked nutrition to issues of health and water and, I am glad to say because it is my passion, climate change. And so I think we can have quite a conversation. As I look at the audience there are...it’s actually quite a young audience looking around. Not everybody’s young but to me almost everybody is younger than me these days! So I hope we can have a good diverse discussion when the time comes and I am very pleased that the panel itself is quite diverse and that we can have a good conversation.

There are sort of ways of being provocative about the G8 and I think one of the things that I’d like to provoke in our later discussion is how do we accommodate the right to development in the context of our world today. The right to development of those coming into middle class now. Who want the same lifestyle and consumer gadgets that we have enjoyed and that have been the product of the fossil fuel growth that is warming our world. How do we have a different perception of a middle class that can have a good standard of living but doesn’t have to be as consumer driven? These are one of the kinds of issues that we need to discuss.

We’ve heard the issues of how we address the balance of power that is changing in our world and I have great pleasure in reintroducing, because he was introduced to you briefly, Mark Moody-Stuart, who will give a lead talk and I have no doubt thoughtful speech. I have known Mark for quite a long time. His current position is he is Zamyn’s chair and he is also chair of the Foundation of the Global Compact and I worked with him on the board of Global Compact for a number of years with a healthy tension between us because I chaired the human rights group of the Global Compact and I kept pushing and he kept explaining and I kept pushing and he kept explaining! But it’s a good relationship. Prior to that he was chair of Anglo American from 2002 to 2009 and chair of the Shell Group from 1998 to 2001.

Well I have always found that Mark is somebody who thinks things through and even though I don’t always agree with him I value the opportunity to listen to him. So Mark, you have the podium actually. You’re the only one who is going to be allowed up there until I call on Ben Okri later so use your privilege.

Mark Moody-Stuart (MMS): Thank you.

[Applause]

Thank you very much Mary. Your successor as chair of the human rights working group of the Global Compact is Pierre Sane formally of Amnesty International and you might be disappointed to know that he asked me because he said he needed business in there to co-chair it so I’ve got in, I’ve got inside the tent now!

Like Hansierg I am a bit cautious about giving advice to the G8 and in particular the last time I tried to give advice to the G8 was in 2001 and with my co-chair of the G8 task force on renewable energy, Corrado Clini, we were going to make a presentation to the G8 meeting in Genoa and at the last moment we were disinvited at the request of the Bush administration. It was said that George W would not attend if we made the presentation. That probably did something for my streetcred but I am not sure if it did much for his education.

[Laughter]

So caution is needed and perhaps we lacked diplomacy. There are other reasons. First of all, the G8 gets a lot of advice, much of it conflicting and second, as Ian Bremmer has pointed out in his talk on the G8 last night, that the G8’s a bit of an anachronism. Martin Wolf actually described it in this room yesterday as a zombie and he is quite clearly not a diplomat.

The G20 is much more appropriate I think and representative. Its members generate something like 80% of global GDP and its north, south, east, west balance is a great deal better.

The G20 also differs from the G8 in that it’s always involved business and even does so formally now with something called the B20. I regard this as a positive step but some would regard it as unacceptable access and Mary would probably be included in that!

So I had originally planned to draw on all the talks for recommendations but the range is just too wide. In both the Artefacts and Universities debate the impacts of business and markets were clearly important and discussed. On Monday Paul Polman, the boss of Unilever , a member of the G20, painted a very vivid picture I think of the role of a responsible business and he describes the approach as being not merely one that’s desirable but one that’s actually essential for the survival of business and if there to thrive. Businesses are not philanthropic organisations but that doesn’t mean, Paul Polman said, that they should not serve society.

The Economist expressed in a cover story a few years ago the concern that with cooperates responsibility and so on companies might misguidedly take on the responsibilities of government and indeed visa versa. They defined the responsibilities of governments in setting frameworks and priorities, providing for regulation, regulatory frameworks, providing public goods, regulating collecting taxes to pay for them and I think we’d all say amen to that but what about the large areas of the world where governments are either incapable or unwilling of doing those sort of things or worse still steal the means by which their supposed to do it or oppress and abuse their own people. If we want the sort of functioning society which we can do business, business needs to work with others to create the capacities and conditions in which we can work.

Now you may feel that the concept of business and civil society working to address issues in society which impact on sustainability and governance is a pipe dream, cloud cuckoo land. In fact I believe it’s the one are in the last twenty years where we have seen serious progress through joint action by business and civil society. It started in trade and with consumers. For example, WWF and Unilever working on sustainable fisheries, the Sustainable Forest Stewardship Council, and now there are numerous examples. Similarly the Kimberly Process was set up to deal with conflict diamonds and 99% of diamonds now go through the Kimberly Process and it helps prevent the fuelling of conflict. The voluntary principles of security and human rights were developed by governments, human rights organisations and responsible businesses to develop rules for use in cases where armed security is needed.

And there are two big advantages of business and civil society and indeed organised labour working in this way. First of all they keep each other honest and second the combination of business and civil society is more likely to be trusted than either in isolation, although of course civil society is much more trusted than business is and a coalition can demonstrate to government’s practical things which could be achieved. But if they’re to work together they need to build trust and trust depends on the business side. Businesses reporting very openly on their performance, not just financially but the impact of their business on society and the environment and this can be done using standardised indicators like the Global Reporting Initiative or now developing the Integrated Reporting Council Initiatives.

The largest of such multi-state holder organisations and groupings is actually the United Nations Global Compact initiated by Kofi Annan in 2000 and enthusiastically supported by his successor as Secretary General, Ban Ki-moon. They now consist of over seven thousand five hundred companies in a hundred and forty five different countries around the world employing about fifty million people. They have publically, each individually, publically committed themselves to embedding the major UN principles on human rights, environment, working conditions and anticorruption into their day to day business and the Global Compact provides a forum in which business and civil society and labour organisations can get together and talk about how to develop practical approaches to these rather high level issues.

And the Compact has been severely criticised by many as being voluntary and just talk or blue wash. I think that’s a little unfair because when companies sign up they have to do so in a letter supported by their board and they commit to report publically on what they are doing in each of these areas and if they don’t do it they get expelled from the Compact and many thousands have been expelled. Because people sign up with enthusiasm and then don’t do anything.

These reports are available for public scrutiny and can be used by civil society to hold business to account. So while the Global Compact remains voluntary it is driven by other things, shareholder interest for example is building, and a spinoff of the Global Compact, something called The Principles for Responsible Investment, has been adopted by about a thousand major long-term investors, mainly pension funds, who together control, manage funds of I think thirty three trillion dollars, an unbelievable sum, who have committed to use the principles of the Global Compact and reports prepared by companies relating to their performance in their decisions and at the same time those principles have been baked into things like the performance standards of the IFC and the World Bank and are supported by the banking sector equator principles which I think were referred to indirectly in the introduction.

So my first recommendation for the G8 and G20 governments would be to support and facilitate this process of business and civil society working together and developing a kind of form of soft power. They could encourage reporting, open reporting, in their own countries along the lines I have talked about. And they could also support the United Nations Global Compact local networks which are at present in more than a hundred countries and those local networks incorporate businesses of all size, big, little, national, international, coming together to work on the principles. The multi-stakeholder nature of those networks is absolutely fundamental and the concept of that work is not just a western conceit. Countries such as China and India and Brazil have networks and have recognised the benefits and their governments actually support the Compact. Networks are present in all G20 countries except Saudi Arabia. For example there are over three hundred Chinese companies in the Compact and the Chinese local network a couple of weeks ago, Mary will be very pleased to hear is strong, and held a workshop on human rights, which is quite something for China.

None of that absolves governments from their responsibilities. Businesses are I think, well the process, the responsibilities of business and governments were set out I think in John Ruggie’s great work on the UN guiding principles for business and human rights and Ruggie made a clear distinction between the states responsibility to protect the human rights of its people and business responsibility to respect those rights. He also added a very important third element of remedy. Businesses are clearly not responsible for all the actions or omissions of the governments in the countries in which they operate but they can contribute positively but only provided they diligently respect the various, these other rights and I think process identified by Ruggie in human rights can be extended to other areas.

For many years there has been pressure on businesses to withdraw from countries in which abuses occur and this was debated quite heatedly in the resources session a few nights ago. A responsible business operating to international standards such as those of the Compact and respecting internationally accepted norms I think can make a contribution to the economy, working with others in society to build capacity and raise standards of governance quite apart from any economic impact. But it clearly depends on responsibility and on a need to build trust.

That brings me to another recommendation for the G8 or G20. There has been a tendency of Western governments, particularly in the G8, to attempt to isolate governments which are guilty of human rights or other abuses and which don’t have representative governments. Now I think the expression of disapproval is entirely understandable although one has to admit that the selection of targets has actually be remarkably inconsistent and has been strongly influenced by perceptions of allies or spheres of influence which clearly lead to charges of hypocrisy or bias. Just think about the case of Iran. For more than thirty years the United States has lead largely Western efforts to isolate and impose sanctions on Iran. From my own experience, every time in the ‘90’s when trying to do business sanctions prevented this.  Technocrats you were dealing with lost power and the extremists gained power and were pushed aside and that was not the only consequence. As a result of the private sector being choked off and any foreign investment also being choked off economic activity is increasingly in the hands of the government and the government's friends and cronies and now with very strict financial sanctions the private sector has been devastated and that has serious impacts on the population at large. And that’s not to condone or support in any way the present Iranian government but just to point out that our Western efforts over the last twenty years have in my opinion contributed to the situation. Had we done it differently the fact and attitude of the Iranian government would have been different and perhaps we should look at China. That’s a difficult proposition to prove but the alternative I think could hardly have been worse. In Burma the West also chose to impose sanctions and the RCN countries deliberately chose not to but expressed their criticism. Clearly the very steadfast approach of Aung San Suu Kyi played an important part, including her eventual preparedness to move forward in what one could say is a less than perfect situation. So I think the RCN approach was more effective. So my second recommendation for G8 governments would be that they should honestly sit back and review what are policies for the past decades of isolation and sanctions let alone military intervention has actually delivered and consider instead what a policy of trade and engagement could bring about. It could create an environment which was very different in which businesses of all types large and small could work to create the wealth necessary for society to develop. It doesn’t mean condoning or ignoring the manifest failings of many governments. It just means abandoning the use of economic sanctions as a weapon except in highlighting and targeting the offshore wealth of various leaders. I think sanctions could be replaced by softer power of social and economic engagement. But there is a proviso that companies and indeed the social and cultural organisations who are engaging in this behave in ways which respect the major UN conventions. That’s not going to be easy to achieve nor to monitor performance and there will undoubtedly be mistakes.

That means it’s also incumbent on G8 and G20 governments to ensure that the mechanisms by which remedy for damages can be enforced against those organisations and companies which cause it and whereby companies in their own jurisdictions can be held to account. It’s not possible to advocate that sort of thing, engaging in countries with weak governments without also addressing corruption. Perhaps the greatest global threat to economic and social development and governance and any attempt to corruption has to involve all parties.

So a third recommendation for the G8 is that while continuing to support the collectives efforts through things such as the EITI, the Extractive Industries Transparency Initiative, talked about last week in the resources programme, but they should work to ensure that the beneficial ownership of property in G8 countries and elsewhere is transparent and ensuring that corrupt proceeds can’t be hidden in G8 financial systems and shadow corporations in this city and others.

The principles of the UN Convention against Corruption agreed by member states, including the parts on asset recovery, should be fully implemented and at the same G8 countries could continue to tighten their own controls on corruption and legislation against corruption. But finally I’d say there’s probably no more egregious example of corruption then corruption in the international arms trade, quite apart from the human misery caused, perhaps through a misconceived perception of national interest this is able to reach in to and distort parts of society in even the most sophisticated political systems and the G8 could show a bit of collective leadership in this area.

Now Mary will be wondering how I’ve got so far in this talk without addressing climate which Martin Wolf did extremely ably in the FT a couple of weeks ago. The topic was addressed in lectures, mainly through references to alternative energy and energy efficiency and so on but frankly progress in the last fifteen years in any sort of international agreement and international carbon pricing mechanism supported by many in business has been dispiritingly low and the panel yesterday, I think it cause David Miliband, who said he thought that a global agreement on climate was unlikely in the foreseeable future. I must say I confessed to being somewhat resigned to this and to it happening on a kind of piecemeal basis as a result of corporation and others, consumers, looking for more efficient and less carbon intensive methods buttressed and supported by the work of things like the Carbon Disclosure Project. I think that China surprisingly which has on its own volition set quite challenging targets on energy efficiency per unit of GDP and carbon efficiency may surprise us all and that would remove one of the big obstacles to a global agreement. Meanwhile, I think we better all prepare and start preparing for adaptive measures. Unfortunately while I think in the developed world we will probably be able to handle this quite reasonably, the real impact will be felt in the poorer countries such as Bangladesh which can ill afford adaptation.

In the debate on capital there was agreement that regulation on capital was needed. It was pointed out that the major growth in Korea and Taiwan had occurred in countries with significant capital regulations. Yet in many African countries a lot of capital will be needed for infrastructure development and there’s clearly, I don’t have to say it almost, an urgent need for changes in international structures on taxation. Progressive companies such as mining companies I think already report on what taxes they pay to whom and where as well as their supply chain expenditure and greater transparency would clearly be beneficial. But there is also a great need for transparency between governments and, given the nature of modern business and the sourcing of materials, a lot of work is needed to ensure tax is paid in the country in which operations take place and profits are actually earned. It’s relatively easy and quite popular in governments to point at apparently anomalous tax behaviours and practices sometimes reprehensible by companies but these frankly stand from outdated systems which governments set up and governments need to change them. It won’t be easy to do it because they are going to be winners and losers but it’s something that should be a top priority.

Lastly, you’ll be pleased to hear, as G8 and G20 countries turn their minds to the post 2015 development goals they have to address and think about population growth and food. If we have a population of nine billion by the middle of the century, even if nine billion is a maximum, and numbers and changes in diet are going to require a very large increase in food supply and there is enormous waste in rich countries but this in my opinion is more a matter of individual behaviour and societal behaviour than anything that governments can do anything about. But on the supply side efficiency and agriculture in much of Africa and elsewhere is going to have to be radically increased in yields, in prevention of loss, in processing and in access to markets and as happened long ago in rich countries, it’s going to result in a movement of people from country to city. China is addressing this trend more successfully in that doesn’t have slums than many countries in the past but with clearly controversial methods of controlling the movement of people and having a very large migrant labour force of a hundred and fifty million or so.

To solve this problem without collateral damage is going to require a lot of careful governance and work. We are going to have to make sure that there is great care. That the existing rural population isn’t simply disenfranchised or dispossessed and I think companies such as Unilever and Nestlé, normally quite unpopular in some circumstances, have for many years demonstrated that you can install basic processing, equipment and develop scalable industries and that process is happening in China and in Brazil.

So my last recommendation for the G8 would be to look at that, identity examples that work and make sure that we can replicate them. Success I think could generate a great deal of wealth. Failure could result in dispossesses and dissatisfied people and more awful slums.

So in summary, recommendations for the G8 would be:

A very strong focus on transparency including comprehensive company reporting using indicators such as the GRI and integrated reporting systems.

To support business and society working together in movements such as the Global Compact, particularly in local networks.

To review the consequences of more than three decades of economic sanctions and military interventions and consider whether policies of trade and engagement might not have been better and what could be done to ensure that companies engaged in that respect international norms.

Transparency again, not just supporting efforts such as the EITI but ensuring transparency of the beneficial ownership of assets and facilitating asset recoveries and perhaps applying that to the arms industry as well.

Climate, I think it’s extremely important but I am not sure that the G8 is the forum to discuss it. I don’t think they will make any progress anyway.

On taxation there is clearly a great need for revision of international agreements coupled with transparency. In the meantime companies I think can contribute to this by a great deal more transparency in what they pay, to whom and where.

And lastly, feeding nine billion people is going to require not just less waste of food in rich countries which is up to all of us but harnessing the productivity of land in poorer countries and doing that without dispossessing or disempowering people is going to be a big challenge.

I think transparency is key to all of these recommendations, as is the need to involve different sectors of society and actually if you look at all of those recommendations, they don’t fit so badly into David Cameron’s proposed agenda of tax transparency and trade.

Thank you very much.

[Applause]

MR: Thank you very much Mark for that thoughtful address and for being specific in your recommendations.

I was interested that in the key first recommendation about supporting a process of business and civil society working together you did once mention organised labour whereas in fact the Global Compact makes organised labour a partner in that and it does make a difference if they are a part of that broad process of partnership and I think that’s...I was very glad that you referenced John Ruggie’s work and his guidelines on business and human rights which I think set a real standard of the responsibility of governments, the responsibility of business and the need for better remedies.

I am of course very disappointed that you don’t feel as I do that the G8 should actually utterly take on climate change as one of its priorities but maybe we can have that as part of a discussion later because if we don’t get that right there is no sustainable future and all the rest is aspiration in the worrying and unsafe world if we go too far above the two degrees Celsius, which at the moment we are heading towards, but allow me to retreat from being too inclined to express my own strong views and instead come back to my excellent panel.

I am delighted that Paul Collier has caught the right train and been able to join us from Oxford. I think Paul, if it’s alright with you, maybe I’ll let you...do you want to speak first? You are sort of first on the list but I was going...

Paul Collier (PC): Fine. Fine. How long have I got?

MR: You have got ten minutes maximum.

PC: Right.

MR: Ok, so now that you are here and you have had time to settle I am happy to introduce you.

PC: Sorry was I supposed to speak from here or...

MR: Well I did sort of say that we could speak...I think...are you miked up?

PC: Yeah...

MR: Ok, sit down then.

PC: Ok...

[Laughter]

I have kind of been involved in the G8 agenda. David Cameron is keen on my work so actually asked me to set the development part of the agendas so let me say what it isn’t...sort of justify why it is what it is and then say what you could do beyond it.

The agenda starts with...I mean I should say my first advice was don’t preach. African governments are just sick to death of being preached at by British Governments and don’t promise to double aid or double this or double that when clearly G8 governments have absolutely no appetite or capacity to deliver on that. So don’t preach and don’t promise. Focus on putting your own house in order in ways that are helpful for poor countries. Just recognise that the G8’s own house is not in order and by putting it in order you can do yourselves a favour, ourselves, and help poor countries. And then focus down. Don’t try and do a laundry list. Get real.

So I like to think a G8 which is not theatrical. I think Gleneagles was a lot of pomp and fluff and theatre. Behind the Blair saves Africa was forget about Iraq and that’s I feel what was going on.

MR: Paul I have bad news. You haven’t got ten minutes. The panel has ten minutes.

PC: Oh I am so sorry.

MR: It’s not your fault. It’s my fault. I misread my instructions...so a concentrated...

PC: I have come a long way for two minutes.

[Laughter]

What can we do that really helps others?

One is corporate tax. Clearly the rules need changing. It’s become a nuisance to the G8 countries ourselves but it’s been a scandal in Africa for thirty years and so addressing corporate tax avoidance is a really important thing.

Second, money laundering. African governments can’t do much about money laundering. But it’s the easiest point at which to fix corruption, to close corruption down. Money laundering is the getaway car for bribe money and whose doing that? It’s not lawyers in Africa, its lawyers in London and lawyers link to bankers so go for the facilitators. The G8 can clean this up even though African governments cant. And so that’s the second area, beneficial ownership.

And the third is transparency and extractives which is kind of not a new agenda but we can actually move it into the domain from voluntary to enforcement by mandatory reporting. Europe’s just done that, America’s just done it. We could scale that across the G8.

So those are three sort of attainable putting our own house in orders. When I say attainable they won’t be fixed in this G8 but a process will be launched which will, I hope, be unstoppable. For example you will notice that the secrecy havens. There’s been more movement in the secrecy havens in the last three months than in the previous ten years. That’s the shock wave in advance to the G8.

What else can we do? Finance for African infrastructure. There are huge pools of capital in western financial markets that are basically at the margin yielding nothing and huge needs in Africa where the rate of return will be really very high. And it’s trying to get a risk architecture which will enable African infrastructure to tap into global financial markets. That hasn’t happened yet but the G8 will make a start on devising a financial architecture which will include using public risk capital, public insurance schemes like a scaled up Meagre to try and get an architecture which links these huge needs for billions of dollars infrastructure with these deep pools of capital.

What will the G8 not do? So all those items need to be followed up.

So what will the G8 not do which I’d have liked it to do but it’s just proved politically too difficult? Not because of Britain. I would have liked it to see the economic partnership agreements in the European Union superseded. The deal I have been advocating for some years, which the African Union is keen on, is that instead of Europe saying we will liberalise against Africa is if Africa liberalises against Europe, say we will liberalise against Africa if Africa liberalises against itself. So market access to Europe as a carrot for deeper market access within Africa and I hope that that will happen but it will happen through the European Union rather than the G8 and in due course.

Just a flip remark on climate change. Let me then push back Mary and suggest that actually the right forum for climate change is not the G8, it’s the G20 because nearly all the big increase in emissions will come from the 12 not the 8 and I would like to see us getting really practical on climate change and concentrate on one thing that has to happen if we are to tackle climate change. We have to close down the world’s coal industry. And so I would...instead of all these woolly targets about degrees and emissions and so on I would just like a practical agenda for a sequential closure of the world’s coal industry because if we don’t do that we certainly won’t address climate change. That’s the most polluting emission. So there you go.

MR: Thank you.

[Applause]

Thank you very much Paul. Don’t worry, it was worth your train journey. It’s not just your initial words. We are going to have a panel discussion and then we are going to open it to this very attentive audience and you have overlapped a little bit, more than a little bit, with Mark on some of the areas that you have talked about for the agenda of the G8 and you have added other areas. In particular in relation to African infrastructure and the interesting moving away from the EU partnership agreements and we will debate climate change. I will get into that myself I think when the time comes.

But now it gives me great pleasure to invite Jamie Drummond. Your short at this stage so we can have a conversation. So I leave it to you to be as disciplined...

Jamie Drummond (JD): I will be brief and first of all we have got a great event outside which you are all welcome to, after the various proceedings here, there will be a wonderful film shown on the walls of the Tate Modern at about 10 o’clock tonight after this has hopefully finished, if that’s ok you are all very welcome. It’s actually an amazing film Richard Curtis made and it’s relevant to tonight’s subject. Its part of something called Agitate and it’s about getting the general public more engaged in the policy issues that the G8 are looking at. Exactly the things that Paul and Mark have already spoken about.

There’s not a lot that I disagree with in what Paul said about this G8. You know I think that what I’d like to particularly add is this morning Europe passed a law finally, there has been many iterations of the finalisation of this law, regarding transparency and the extractive sector. Now that law was passed because hundreds of thousands of people bothered to take action. They turned up in people’s parliamentary offices, congressional district offices. They signed petitions some of them. Those who dismiss clicktivists are wrong. We need people to take actions, even small ones as well as large ones. And the pressure that the companies felt and the governments felt has resulted in significant policy change and if people didn’t get you know off their backsides sometimes and take action these policy changes wouldn’t happen. And it is essential that there is a more informed global citizenry, this is subject here I believe is global citizenship, a more informed global citizenry taking action and keeping politicians...put it like this...working with the politicians on the inside who want to do the right thing and holding the politicians who do not want to do the right thing accountable. I don’t like the idea that we’re always about finger wagging at politicians. The ones who are good need help. They need a hell of a lot of help. The ones who aren’t need to be held accountable aggressively. And often the ones who want to do the right thing actually encourage more pressure.

I want to correct if I may or disagree and have an argument with Paul about 2005. I don’t think what Blair was about was purely about Iraq. It was in response to a multi-year campaign by the British public to do more in development. That’s what it was about and we campaigned very hard for that over many years and it manifested in bilateral debt cancellation, multilateral debt cancellation and that’s where the promises of aid came from. It came because we all asked for it. It wasn’t some whimsical gesture by the political elite. It’s actually something we all campaigned for. Millions of people across the country. Some people may think that was the wrong ask but it is actually what we asked for them to do. And by the way, as a matter of feedback, it would be utterly irresponsible for campaigners to ask people to take action, politicians to change policies and then not give people feedback on what happened.

And one enormous failure which I think a lot of people should be held accountable for outside of politics is why is it that nobody knows the good news. We are going to hear a lot of bad news about some trends through to 2030 that should worry everyone in the room about climate change, population growth and so on but the great news it that a lot of this campaigning together has worked, it has achieved results you know. Debt cancellation cancelled one hundred and ten billion dollars of debt. You know the campaigns on aids has helped put now nine million people who otherwise would not be on these life saving drugs on these drugs. Three hundred million people have been vaccinated saving 5.4 million lives. Child deaths down by 2.65 million a year in the last decade, that’s, you know, I think it’s something like seven thousand kids not dying a day. And Mary you are very involved obviously in the Global Alliance of Vaccines and Immunisations and know about some of these statistics. This stuff happened because people came together and pressed politicians to take action. I doubt very many people in this room know about the results of all of this activism and that’s a huge problem that I think people need to come together and address, which is why do you not know the good news?

The reason I am saying that good news is not just to say hey everything is on track, it’s all going to be fine. It’s because you know I feel passionately that if people don’t know that activism works, don’t know that pressing the G8 like we have gathered next week works, then why would you get engaged? And we have a problem. We have a lot of people who are not sufficiently engaged in these issues and we need to find more creative ways, we are trying one outside right now and inside here, to try and get people more engaged in these issues because if we don’t, you know, there’s two essential trends you could say. In the Global Trends 2030 Report by the National Intelligence Council, which I am sure you have all read, which says on the one hand you know we have got this massive population growth, we have got a massive growth in the middle classes, they are all going to want the stuff that we have here, quite right, and on the other hand...and that’s all pointing towards you know going after resources which are in very vulnerable parts of the world and that’s going to cause all conflicts and we have got to worry about that. We have got climate change compounding the problem. A lot of these resources are in places that exemplify what we call the three extremes. Extreme poverty, extreme climate and extreme ideology. And you know trying to imagine that is going to be very difficult into our future through to 2030 and beyond. Against that we have these more economically and politically empowered, socially connected, technologically connected people around the world who don’t necessarily always obey what’s going on within their country. They are global citizens. The point of this evening. And if we can help connect those people around the world, help them take bad politics out of good policy and try and push the better policies through and stop the dumb policies, we’ve got a shot at not screwing this up in the next fifteen/twenty years. But if we don’t connect those people, we don’t help provide them with information so that they aren’t in a position to hold politicians accountable or help the good ones I think we’re in trouble. So we have got to scale up the kind of campaigning that I think we have seen in this country work very well and I think we are seeing it work quite well right now with this government although there is a lot more to be done. It’s actually, you know, there’s some real progresses in made and we’ve got some good things on the agenda for the G8 which I haven’t really talked about very much because Paul said it all but I wanted to make that bigger point about campaigning works, events and forums like this work. We need more of them and we need people more engaged.

Thank you.

[Applause]

MR: Thank you very much Jamie. People power matters. The importance of being engaged an indeed increasingly trying to make connections with global citizens in other countries and other parts of the world to hold governments accountable and try to press for progressive reforms.

 

My last speaker on the panel, Strive Masiyiwa, you’re from the continent that we have touched on a little bit so you have a particular authority on this panel to instruct or push back or more than anything else advise the G8 on what really would be helpful.

Strive Masiyiwa (SM): Thank you Mary.

I had my opportunity last year as you know to advise the G8. I was invited to the summit by President Obama. As we were preparing for this, we spent weeks on end preparing for it, and then somebody told me that you know you are only going to get two minutes...

[Laughter]

MR: Just like this probably...

SM: [Inaudible]...more generous with the time.

Can I have another two minutes... thank you.

 

You know Jamie talked of good news and there’s a lot of good news coming out of Africa at the moment, particularly on the economic front. I mean these are real...this is real good news when we talk about the GDP growth, we talk about the fact that out of the ten fastest growing economies in the world six are African. That’s been sustained now for over a decade.

Governance, you know I say this quite often which surprises people, that there’s been an extraordinary improvement in governance coming off a low base yes but Africa is very well governed these days. If you have lived there all your life like me, well most of my life. If you are a businessman who’s never been able to travel across Africa and do business in Africa as Africans to the scale that we have done we are able to do today and that is good news. But I am on the Africa Progress Panel and that’s the...and I have been part of the process of compiling the report on where Africa is. And the issue that brings me today for us to discuss is our report this year which are the natural resources and Africa’s natural resources are playing a particular role in the good news in terms of economic growth but there are challenges there which is that of equitable growth and development. We are not, with all this good news, we are not seeing real impact on poverty alleviation. The levels of unemployment are, if we spoke statistically, are extraordinary.

Over 40% in quite a number of these counties are resource rich. How do we take something that has been in the womb of the earth for millions of years and bring it to the surface to the benefit of everyone? I think that core guiding principle must be use it in a manner in which is as sustainable as possible, as generational possible. Infrastructure, education, health. Addressing abject poverty and ensuring equitable growth.

I will stop there. Thank you.

MR: Ok, thank you very much indeed Strive.

[Applause]

We now actually have sometime in the panel before I open it to the floor to discuss some of the issues that you have been addressing and since I think all of you in one way or another addressed the issue of natural resources I’d like to maybe tie it to one of the recommendations, I think it was the second recommendation that Mark mentioned, as to whether we need a different approach to governments that are not adhering to standards of governance and human rights but have...as to whether they should be isolated or whether we should do business with them and he referenced for example Burma Myanmer in the past. And I say that because I think very often it’s because there are natural resources and minerals in those countries that people are willing to do business with them. So who wants to take up that challenge of whether there is a better way of trying to encourage good governance in these countries by being willing to do business or whether it’s better to address through different types of sanctions.

Paul, perhaps I could ask you to open up on this?

PC: Yeah, sure. I think the...Strive is right that the issue here, I think of it as stewardship really, that the present generation in Africa have a responsibility of stewardship from depleting these natural assets and needs to hand on to the next generation other assets of at least equal value, preferable stuff that’s more productive. And so getting a narrative of good stewardship across the continent is enormously important and that is core role for leadership but it’s fundamentally African leadership that’s needed there. I am wary of the G8 getting on a high horse and preaching to Africa what Africa’s got to do basically. I think that’s a bit....but Mary’s issue of, you know, should there be rules which say in some conditions companies shouldn’t really get involved in depletion and I think that the answers probably yes. For example, in the early transition in DRC when there was a transitional government, ministers in that government new that they had only got a short period of power because it was a transitional government and they sold off assets very cheaply in a context where all that was going to happen was that they were going to enrich themselves basically. And so I suggested at the time that there needed to be some rules which said no. That this is not an appropriate context. The real issue at the moment is Somalia. Just last week I was with the Somali Minister of Finance and Minister of Natural Resources and they actually struck me as really very decent and thoughtful people but it’s scarcely creditable that Somalia is ready for a lot of high value resource extraction because the deferral government doesn’t even control of its territory yet. And so what’s happening at the moment in exploitation in Somalia is actually heightening the risk of conflict as the various sub national entities compete with each other to claim more territory and so this is a potentially aggravating process at the moment so it’s something which held back and I think there’d be a good case for saying if there’s no mining code, if there’s no EIDI then companies should be very wary basically.

Just to come back to Strive’s point about the Africa Progress Panel, which this year was magnificent I must say, the most striking numbers to me in that were that the capital outflows from over invoicing and basically money laundering were more than double the aid inflow. And so if we could actually address money laundering and over invoicing, and that is within the G8’s power to do something about that, that is going to make a bigger impact on Africa now than promises to make aid which we then don’t keep. So I think that the Africa Progress Panel really reinforced the case for doing this agenda of corporate taxation and beneficial ownership.

MR: Thank you Paul. I must say I also welcomed the Africa Progress Panel in a particular way because I now have a responsibility as the United Nations Special Envoy for the Great Lakes under the RC and we have a framework that was signed on the 24 February 2013 by eleven heads of state and is guaranteed by the four keys institutions, the UN, the African Union, the International Conference, the Great Lakes and SADAC and it has two oversight mechanisms. One a regional one to stop supporting armed groups, to stop supporting bad perpetrators, to stop exploiting in other countries. And the other is the national mechanism in the DRC itself and one of the key issues is going to be how to address this issue of natural resources and it’s going to be fundamentally...you know it’s going to...and the exploitation of conflict minerals has been part of the problem of the terrible sexual violence against women and girls so it’s all...it’s very much tied in...

PC: I was in DRC last week addressing on...natural resources...

MR: Yeah, I think we will have to try to bring together you know sort of expert...the EU as you say has just passed legislation, there’s the EITI, there’s the African Panel. Somehow you have got to bring all those together to discuss.

Jamie?

JD: I mean Paul’s written about this plenty and I am sure you have all got his books. I mean there’s one thing that I think there’s a distinction between countries which you know have governance of some variety that is not necessarily generally considered the worst but natural resource addiction and complications coming with that are already very entrenched versus countries which, for the first time round about now, are discovering that they have got a truck load of resources the world wants. And there you have, I mean just to...not to forget about the countries that are already down a certain kind of slippery slope but tactically and opportunistically to see where you can get ahead of the curb and try and help things not go horribly wrong. The Tanzanians, the Mosambiques and so on would be a good use of peoples time and resources although of course Mozambique has discovered a lot of coal and I am not sure how they would respond to your comment about coal and they would probably say fine if your prepared to write a cheque for, I don’t know, a couple of billion dollars a year to replace the revenues that they will not be getting from selling that coal to the Chinese. I don’t know if you have had that conversation with the Mozambican Finance Minister.

 

PC:...in hot pursuit. What would be a sensible plan for closure of the world’s coal industry. I think the key word is sequence. You start with the richest countries and you work down and you say we are not moving onto the next until whichever country is now in the top of the list actually moves. So Mozambique will be some years away but it gives that way instead of saying oh you know this is everybody’s problem you try and turn it into a specific problem of one industry and one country at a time and that rather sort of concentrates responsibility I think. That’s the idea.

JD: Can I share one thing that I just find really shocking that I think is focusing our minds at the moment regarding countries that are already down the slippery slope. Nigeria, a country that we all know is vital to so many concerns. You know that country made somewhere between fifty and sixty billion dollars for the last year that the EITI has accounts. In that same country one in eleven children who died under the age of five were Nigerian and one in seven women who died in the world in childbirth were Nigerian. By the way mainly from Northern Nigeria. And you know an absolute pandemic of mistreatment in the context of a country with extraordinary natural resource wealth.

How is this possible? What is the kind of activity that we, as global citizens and the G8 as global policy makers who are trying to be helpful not hurtful, what are the sort of things that we can do globally and then specifically what are the things that Nigerian citizens and anticorruption campaigners, transparency campaigners and so on should and can be doing? And how can we help them because the anticorruption campaigners in that country don’t have it easy and they need help.

MR: Mark, I’d like to bring you back in this because that was one of your themes in a way and Nigeria is a country I think you know...

MMS: Yeah I lived there...

MR: For lots of reasons. How would you...I mean it’s part of what you were saying, we need a different approach to countries that have problems but need us to address them in a more nuanced way or more long term way.

MMD: I think Paul’s point about having a period in a country and confusion, DRC and so on of trying to have some kind of suspension of production of natural resources has some merits. The problem is that you could apply that to western companies but it wouldn’t apply to everybody.

So my approach tends to be much more to say can we work with, in the extractive industries, with Chinese extractive companies and so on and voluntarily, because it would have to have to be voluntarily, because the Chinese are not going to and many other countries are not going to and it’s fine to say they are not going to accept mandates and you would never get a UN agreement on it. So in a messy world you have to try and build coalitions and that’s why I am enthusiastic about trying to get business people to say, because there is an international language of business and they can actually see common advantages.

MR: Have you got examples of Chinese companies that are willing to voluntarily accept...

MMS: Well nobody has tried it.

Oh yes, no. International standards. Yeah, many of the Chinese state companies. I mean they have signed...they have signed up to the thing.

MR: Global Compact companies..

MMS: Fu Chengyu, the Chairman of Sinopec is on the Global Compact Board and he is a very intelligent person. And these companies are well aware of the problems and China is well aware of the problems. There aware of their internal problems. When Jiabao who said, what was it, that their economy was uncoordinated, unsustainable and something else which I thought was refreshingly honest and could well be admitted by some of our western leaders.

So I just approach it from a different way, not to try and sit in the west. And I know you’re all enormously excited about European Union legislation and US legislation to make mining companies and oil companies report in the minutest detail as to what they have done with their money. Yeah, good, ok. I don’t think it will make a row of beans of difference frankly except to involve an enormous of work. The EITI countries, you have some kind of commitment from the government of that country. So when you talk about Tanzania or Mozambique who I suspect are, I don’t have the list in my head, are signatories of the EITI, part of the commitment that they make is to set up civil society panels and that to me, even if corruption continues, if you have an independent civil society panel it’s huge progress.

MR: One of the things that Paul mentioned is finance for African infrastructure, the risk architecture. Strive maybe, I mean you’ve talked about the way in which African countries are seeing unprecedented growth and very encouraging growth. I know this from my involvement in the Mo Ibrahim Foundation that you know Africa is changing in a very, in many ways, in a very positive way but what about the problem of financing the infrastructure? Again, look at the DRC? You know the need for huge financing there.

SM: You know Mary twenty years ago the statistic for telecommunications, the industry I come from, was that less than 1% of the African people of the population had access to a telephone in terms of what we call penetration. Today most African countries are well over 70%. There’s more than six hundred million people in Africa with a cell phone and that is infrastructure. I will to see that in power, I would like to see that in water, I would like to see that in roads and ports.

But you know when I talk about my industry, telecommunications, that would not have happened without China. China has funded most of their telecommunications infrastructure. The truth of the matter is, for telecoms entrepreneurs like myself, to build networks in Zimbabwe and Burundi we would not have got it out of western banks. We got money out of China.

So if I were to give a recommendation, I wonder about when you should give the G8 a recommendation because they are from my experience things have been locked up now but I would say look at what China has been doing. Because it is China really which we are talking to about ports and roads and railways. There is a lot of talk in the west but the truth is it’s the Chinese who are coming to the party and Africa is increasingly looking to the Chinese. I don’t know whether we will be sitting and talking G8 meetings in five years time that will be relevant to Africa to be honest with you.

MR: Except if I may, the Chinese investment in Africa is large projects whereas despite the statistic you mentioned and the wonderful spread of cell phone and the leapfrogging into communications with cell phones which is remarkable, you still have of the 1.3 billion who don’t have access to electricity or the 2.6 billion that still cook on coal and firewood and animal dung and ingest these fumes, a lot of them like in Africa and there in rural communities. How do we get to the poorest with possibilities of renewable energy off grid, clean cooking stoves, lights that are now available? Is it possible to use, for example, social protection systems but then business doesn’t work easily with the social protection systems in countries but that’s where the poor are known to be in and identified.

SM: That is so true and like I said, we need to begin to...if we can duplicate in other areas like power, energy what we were able to do in telecommunications. So there were lessons there. Principal to those lessons was creating the correct policy environment for the private sector to come in because that infrastructure was not built by governments. It was built by private companies. You can’t run away from...African governments themselves must create a policy environment. I was in Nigeria only yesterday, seems like a long time ago, and I was talking to the Finance Minister. We were talking about this very issue about energy and she talked about all the great things they are doing to open up the power sector and I said Ngozi, still the people in the rural areas will not be on the grid. They have to look at solar power. And she said yeah, yeah we are talking about solar. I said why don’t you just start by removing some of the duties on simple things like solar lantern so we can ship them in. And she’s very smart and she said they’ll get it done. So...

[Laughter]

So I just wanted to comment on something earlier made by colleague earlier on. You know when the US government passed the EFCC, the Anticorruption Act, when I read it it was horrifying. Just like the British Anti-bribery Act. And my colleagues who American businessmen and British businessmen, first the Americans, talk how can we do business in Africa. But you know looking back at it today and the conversations in the boardroom, because I see it from the boardrooms where we are sitting with American partners and American directors, for the first time the boardrooms were how do we stop bribery, how do we stop corruption, how do we stop our people taking bribes. It works. That legislation works. The answer is not to knock it down but to make it more global. So that the French are in. So that all the G8 are in. I would like to see the same platform of the anti-bribery act because you see no matter what we do in Africa, and this is by no means to exonerate anybody in Africa, but to enforce, to pursue the kind of people who are involved in this type of...no African government has the capacity to do it. But when the US Justice Department said we will take out any director who is in a boardroom where bribery is taking place on the ground. No American companies will play around anymore. No British companies will play around anymore. It works.

MR: So that’s your recommendation to the G8?

SM: Oh absolutely!

It gets done! It’s painful. You know people complained. Some said we are not going to do business in Africa. We are too liable so forth. But you know what, people soon started to sit down and say how do we get this done. Ok. I’d like to see it into the G20, with China and Brazil. Then we are talking. But for now let’s start with all the G8.

Thank you.

MR: Ok, excellent point. I am now going to open it to the floor because this is a panel about global citizenship and you’re as entitled to be involved as anybody.

The gentleman in the white shirt was the first hand I saw and just wait for the mike, wait so that you can be heard and there’s another here. You’re next. And I am hoping I will get a female. I am looking for a woman at this stage...just get some balance. Yes, ok.

So you first. Yes please.

Audience 1: Hi. I’ve got a question for the panel and it’s to do with resources and peak oil will hit eventually...

MR: Do you want to say who you are?

Audience 1: My names Hussain Shaffy. I am part of an organisation called Lobby.

We were talking about resources, natural resources. So peak oil will eventually happen and people were talking about we should have a stewardship of what happens to the natural resources. Well guess what, every single gram of every single resource that goes into making a mobile phone will eventually run out. Those are mostly come out of the Democratic Republic of Congo and one day they will run out. Those materials are going to be needed by society over the next million years. Over the last hundred years civilisation has moved so fast, so forward basically, that we are going through natural resources at a rapid rate and it’s an increasing rate. It’s not diminishing. So we are going to run out of resources very fast so when you say stewardship should be regional countries in Africa actually it’s the responsibility on a planetary level. Everyone should be very careful what you are doing with natural resources that belong to every single human being on this planet.

MR: OK, thank you very much. I’ll put that to the panel.

The gentleman here and I’ll take the one over here and then we’ll go back to the panel for comments.

Thank you. So please just identify yourself and then...yep.

Audience 2: Thank you. My name is Lennon. I am a student.

I just wanted to ask Mr Masiyiwa [inaudible]  because I am honoured what are your thoughts on Zimbabwe’s situation in terms of the complexities that you just highlighted, China, natural resources and sort of the developmental path the country is taking.

Thank you.

MR: Ok, I think that must be you Strive.

Audience 3: I thank you. My name is Bunmi. I’m a reporter with Africa Today Magazine.

We have been here before and [inaudible] Madam Robinson ....we have been here before. I have met you before. We have talked about several topics. Poverty, human rights, war, Africa, hunger and we are still here today, still beating the same drum. June 12^th 2013.

What has changed? What have we missed? The G8 is here again. The G8 will come again. And why are we still talking about the same thing? In fact it’s becoming clear that the G8 is not about the eight heads of state. It’s becoming a media spectacle. That is, I am a journalist, I know that, I agree, what is becoming a journalist jamboree. That is the number of journalists that are facing this G8 that matters not what the G8 achieves. What is different madam Robinson, please?

MR: Ok, thank you. I will take that one later. I will just take one other question because I see another female hand there. As you can see I am clearly biased...

Audience 4: Hi. Amelia Baracat I work in Kew Gardens. It’s just a general question about the relationship between China and Brazil and China and India and what the panel think what are the positives about these relationship and because from my point of view is actually very detrimental to the environment and deforestation and the productions of food and that’s why China is probably investing huge money in both countries because exactly the need those lands and there is a huge debate about how they factor on conservation of the forest in these places.

MR: OK, thank you. I think we’ll take these four and then I’ll come back to the floor again.

Paul there was a question of resources and stewardship and peak oil, the role of the DRC. Do you want to take that one?

PC: Yeah, ok. I mean let me be honest and clear. I don’t buy into these sort of doomsday concerns about running out over the next million years. Sheikh Yamani got this right about thirty years ago. He was the head of OPEC. He said the world didn’t move on from the Stone Age because it ran out of stone. You know we will move on from the oil age. I doubt we will move on from the oil age because we ran out of oil. We’ve already got more oil than we can safely burn consistent with climate change so actually some of the oil is going to have to be left in the ground. I am an economist so economists...basically there’s a very simple idea that when stuff starts to get scarce it gets expensive and as it gets expensive that induces innovation to find alternatives to it and that’s worked every time so far. The world is such an amazingly innovative place. The big resource of the world is not what’s under the ground, it’s what’s in our heads. So I just sort of rely on that.

Can I just respond quickly to a couple of the others?

MR: Ok.

PC: If you think that this year’s G8 is all motivated by media spectacle try explaining beneficial ownership to a big audience right. I mean the public relations people are worried that this is so technically complex an agenda that how on earth are they going to explain it to people so I don’t think it’s a fair accusation to say it’s been driven by media.

Just a little remark to support the point that Chinese companies are all rogues. I gave a key note address at something called the International Conference on Business Ethics. It was in South Africa two or three years ago. And there in the audience were a whole row of Chinese and they came up afterwards with interpreters and said this is the Chief Executive and his team of one of the really big Chinese companies and we come to this international conference on business ethics because we just try to understand how are we supposed to behave in Africa, you know. We look at others, we see what they do, we see what’s expected of us, basically bribes. What are we supposed to do? So the idea that they are all rotten to the core and will be rogues whatever I just don’t think is right.

The G20 is a vital institution. It’s a new institution, a vital institution and it’s not the case that we can just pass an agenda on from the G8 to the G2O but in some spheres unless the G8 puts its house in order first there isn’t a hope of the G20 moving on it. So that seems to me a reasonable proposition. Let’s clean up our own act and then hope that the G20 led by South Africa say well these are issues important for Africa, we’ll put them on the table.

MR: Thank you. Strive, I think the student wanted you to develop some of your thinking on the African prospective. I mean that’s what I understood.

SM: I have nothing to say about Zimbabwe. Thank you my brother.

MR: Ok. We’ll leave that one since we’re ranging more widely.

Jamie, I’ll come back to the what has changed but let me start with you. You have followed G8 pretty closely, so what has changed from your perspective?

JD: CNN once did a story on me calling me ‘the G8 junkie’. I used to have a tragic existence where I’d follow every single sub clause of each line of every communica paragraph, I loved it by the way, something very strange happened in my head and I was very excited when we got a clause in about extractive industries transparency by the way in 2003 and from these things, you know, and Blair by the way was moderately helpful on that in the early days, wasn’t he? Absolutely.

And I find myself also sometimes in the odd position of I was at the Genoa G8 when you weren’t allowed in! I was let in! What’s that about? And we were having an argument with at that time Condoleezza Rice about deeper debt cancellation and more moves on the African Growth and Opportunity Act which helps third country fabric provisions. Quite helpful in providing jobs in some countries in Africa. And so I suppose the point is those details matter and the politicians put in those sub clauses when we put enough pressure to do so and you need to be partly in the room having a conversation with them and partly having a conversation with the public about what’s happening in the room. And those two things need to be going on and I think we’ve seen quite a lot of specific important changes.

My frustration is that we haven’t taken those to scale. So I am not trying to argue with you that everything is great. It so isn’t. It so plainly isn’t. But the specific things that we have worked on when we have got our act together, we have made a difference. My frustration, I sense with all of us, is why haven’t we taken to scale our ability to change policies, persuade the public?

I just want to agree 100% with Paul, so we have got a team of people right now trying to explain what beneficial ownership is, what multilateral tax conventions are, what capacity building for the tax revenue collection authorities are. The reason all of this is incredibly important is because hopefully it will increase the tax base of developing nations so they can fund their own development and in due course very soon not require any add from us at all. And that is you know...aid is an incidental by-product of a much better thing. Not needing aid is an incidental product of a much better thing which is that the domestic resources in developing nations can pay for the development of those countries. Just a fact to leave you with. In the ten years since or twelve years since I have been a G8 junkie aid to Africa for example has doubled from twenty to forty billion dollars a year. That’s not very much. It’s something. But the big picture, the important thing, is that domestic resource mobilisation within African countries has gone from seventy billion a year to three hundred and eighty billion a year and will be four hundred and sixty billion a year in a year and a half’s time. That money and how it is spent is a really important question. How our aid can possibly help and not screw things up and maybe help a little bit and making sure some of that money is better spent is part of the things we need to put on the table. A little bit. But you disagree but let’s have that conversation.

[Inaudible comment from the audience]

JD: I am sort of agreeing with you, I am saying:

MR: You are sort of saying....moving away from aid...

JD: There is an important transition you know. If you stopped aid right now a lot of people would die and that wouldn’t be necessary. So let’s get the transition right.

[Inaudible comment from the audience]

JD: I factually disagree with you I am afraid.

MR: Mark, the question from the woman from Kew Gardens about China and Brazil. Do you want to take that up a little bit? It’s the wider I think G20...the readjustment of power in our world.

MMS: I’m actually quite optimistic about China because I think they are unusual in having not not a democratic government but they have an extremely technocratic government. Their run by engineers, they have let an economist in but most of them are engineers. The previous Premier was a geologist like me so he must have been a good thing. And they are extremely rational and they have quite consciously I think gone for and they’ve had a remarkable progress on poverty alleviation with systems which are, from our point of view, by no means perfect. One child policy, Hukou systems preventing...

MR: And are they doing enough on the environment? I think that was the thrux of the question.

MMS: I think they are now coming to the environment and I think they are, as I said they’ve set targets on energy intensity. They set them five years ago and they met them. They are the only country in the world which actually sets a target which is a rational target which says we want to limit energy intensity per unit of GDP which is what we all ought to be and carbon emission.

So I think you know they’ll get there and as I said in my talk I think they will actually help greatly in climate.  And not just one, if I’m allowed one comment on, I agree absolutely with Paul’s statement on resources, except, I think on fossil fuels. Like you if it wasn’t for climate I would be entirely relaxed about the using up of them because I don’t think we’d ever get to the end. The problem is with climate there is an element of urgency in there which trumps economics.

MR: So you agree then that part of the fossil fuel will become stranded assets because we won’t be able to use them.

MMS: Yes, I think...I mean if it wasn’t for climate I agree with Paul, it wouldn’t all be used anyway because we’d have found something else better, more convenient.

MR: And now we have to do it more urgently.

MMS: Yeah. Urgency is the problem.

MR: Ok. I am going to go for two more questions to the audience. I think that’s probably all we have time for. You and then the gentleman behind.

Yes, madam.

Audience 5: Thank you very much.

MR: Just wait for the mike and if you wouldn’t mind just identifying yourself.

Audience 5: Barbara Frost from WaterAid. I found that a really stimulating discussion. Thank you very much. And it has set me thinking.

We’ve been campaigning for a world where everybody has safe water to drink and decent sanitation, toilets, because we know that’s one of the area’s really holding back economic and social development and we work through citizens action and peoples movements but looking ahead in our next strategy or our next few years who should be work with? Should we be working with governments? Should we be working far more with the private sector? And how should we work as an NGO that’s really trying to bring about change in something very basic, water and sanitation.

MR: Thank you very much, very good questions.

Gentleman in the few rows behind.

Is anybody absolutely desperate to ask a question? I could take maybe one more if somebody is absolutely desperate. Alright, we’ll take you.

Audience 6: My name is Joseph Wicheno. I write and commentate on African affairs.

I would just like to make a quick observation to the G8 that perhaps they should spend less on figures and statistics and probably visit African villages like I do and that they’ll probably realise like in my own village in Uganda what I saw when I was growing up in 1970’s is not necessarily what is there today when it comes to health and education. In fact the education I had helped me reach where I am, amidst all the wars.

The only other thing though is that, for you Mary, in your other capacities, if you don’t mind, going to Congo since it has already been mentioned, I wonder whether the G8 could work with you slightly more, the UN, and follow up the challenges about the pending issues in [Inaudible] especially referring to the two countries, namely Uganda my own and Rwanda who are named as net contributors to crisis’s in that country and I am saying so because I am simply concerned that there is a lot going on on the continent and I write on these issues and have been talking about it today but I rather think that there is an element of impunity within the continent by minority clique of established leaders with good ears in the west and many of the G8 countries simply because nobody else would tell them who to have conversations with on the continent.

MR: Ok, thank you for those thoughts.

Now there was a gentleman there with an urgent question and then I will come back to the panel briefly and....yup.

Audience 7: Hi, I’m Shaval from the School of Oriental and African Studies which is right behind you actually.

I want to make a quick point actually. It’s Malaysia and not China who’s the biggest direct foreign investor in Africa.

Secondly, in relation to that point, there was mention of sort of I think it was Paul who was mentioning earlier about developing the financial architecture to try to figure out how to channel capital into Africa. What surprises me so far is that there’s been no mention of the G8 itself actually investing in Africa. It’s more...you’ve talked more about sort of a role of facilitation and advisory role but less about sort of directing capital not in the form of aid into developing nations and I just want to sort of get your feedback on that.

MR: Ok, thank you very much. Interesting point.

So the first questions from WaterAid. Safe water and sanitation, who to work with. I’ll invite anybody from the panel.

MMS: All these sessions are recorded and streamed and you can get them on the internet and I really would recommend that you watch the one from Monday night with Paul Polman ...oh you were? You have seen it. Exactly.

So I think what you need to do is to find...well I mean Unilever makes a business out of it. Selling soap basically. But he does it with a passion as soap as being a benefit. He is selling a social good. Now I regard selling oil as a social good but not everyone would agree! He does it very passionately. So watch it. It’s really very good.

MR: In fact if I can put that in a different way, Paul was also, Paul Polman was also a member of the high level panel that just reported on the post 2015 agenda and the title is really Global Partnerships and I think that’s probably the wisdom of the global partnerships being government, private sector, NGO’s, wider civil society, women’s groups, social sectors that are increasingly becoming involved. You know the informal sector organising which I think is becoming a real partner on these issues as well.

The next point was really I think the challenges of impunity which I certainly relate to and I can very much take what you said about the need to address these issues, particularly in the context of the Great Lakes but also what you said about the need to know what’s happening in villages and link the voices of those who really know what’s happening in food and nutrition, security for example, access to energy with those who have power and influence.

But I want to pass on the question of investment, the G8 investing in Africa. Perhaps both to Paul and to Strive. Maybe you first Strive?

SM: You know when in 2006 when President then Senate Obama came to Africa. What a wonderful conversation about investment in Africa and then last year I was amazed when we went there that was the first question he asked me about. American companies investing in Africa. He said where are we? And I tell you what I said to him, you know if I were charging consultancy fees for every American company that is enquiring about investing in Africa at the moment I could start another business. So when we talk about investment, G8 investment, of course we are talking about companies. It’s about a Unilever, it’s about a GE, it’s about an IBM.

One of the most exciting observations we are seeing is tremendous interest in movement. It’s not across the whole of Africa but certainly I would say it’s encouraging. China, of course, we see government related investment where the state is participating through China Development Bank. But it’s a different model. But I think the interest from G8 companies, investment funds, for example private equity funds, looking at Africa today. There is so much money from private equity funds for Africa. The actual problem is getting good, what the call, good deal flow. The banks, the Barclays, the Standard Chartered, the South African companies. I mean we talk about the west but corporate South Africa is moving up north at an incredible pace. So you know that’s good news for you.

Thank you.

MR: Paul, can I invite you?

PC: Yeah, I mean there’s an enormous amount of international business interest in Africa and most is not within its comfort zone yet. So I think there’s a role for public risk capital in just brining this huge wave of interest into its comfort zone. And just let me finish with an example of where that worked and its mobile phones in Mo Ibrahim. I was with Mo last night. One of the things that really helped Mo get going, because before he was a telecoms engineer. That was his doctorate. He saw an opportunity and he went round the big international telecoms companies and said, you know, why don’t you do this in Africa? And they all said, you know, no. And so he thought I’ll do it myself and then he needed risk capital and at that time CDC, old Commonwealth Development Corporation, was in the business of public risk capital and so they funded him and that’s one of the things that really got Mo going. CDC then stepped out of the business of public risk capital and has just stepped back in it this last year and that seems to me, that public risk capital role to be really the future of aid if you like. Just gearing up so that you bring private business into its comfort zone into Africa because Africa sorely needs modern private business.

MR: Thank you Paul. Jamie, a last thought?

JD: Well quite a few. Is this a wrapping up moment?

MR: It is but a short one!

JD: Alright. I mean there’s one sort of massive piece of schizophrenia about all this which is when we are calling for investment into Africa and trying to get away from the aid narrative for example into that trade and investment and partnership narrative which were amongst others trying to be part of the Africa rising, you know, not do that, you know the old stuff that’s a legacy of the ‘80’s in certain ways. And then as soon as you get into that you’re suddenly accused of oh it’s land grabs its investment, it’s the nasty private sector and all the rest of it and I think we need a kind of really intelligent conversation with civil society about what really makes sense here.

We are having a big old fight right now with George Monbiot who’s accusing something called A New Alliance, which has just recently been now moved to be, you know, really part of the AU’s comprehensive African Agricultural Development Programme, snappy acronym called CAADP, and he is attacking it not knowing that it’s really an African led initiative. Africans, farmers behind it calling for African investment and most of the investors in it are African private sector but he thinks that because he wants to believe that it’s a rapacious request and nasty capitalists takeover of Africa in part of a new scramble for Africa with the Chinese and you know that might make for a headline grabbing narrative but actually it’s sort of just people saying what does African agriculture need? It needs some investment. Have we helped get that in? Here’s a way. And I think we need to kind of have a bit more of a more mature debate with those who are traditionally the friends of development who also have a sort of kneejerk anti-private sector bias need to come and get over some of that. So that’s a sort of broad point about private sector investment.

But just a very quick thing on the G8. I wish we didn’t live in a world where the G8 really mattered and I wished we didn’t live in a world where celebrity sometimes matter. For the time being, and I wish we didn’t live in a world where aid was necessary, we are in this transitional period. Let’s make the best use of each of these things. Let’s be pragmatic and opportunistic, squeeze as much out as we can of these moments and these opportunities while we try and create something better. To get that better thing we need a lot more events like this and a more global informed citizenry and please have a look at the film at 10 o’clock.

MR: Thank you Jamie for being partly inside and partly outside which is a very good positioning on this panel. And maybe I can reflect for just a moment on the question about what is different. I think it is true that it’s important to try to get issues onto the agenda of the G8. That it can matter greatly as we’ve heard but I actually worry more about the fact that given the challenges that we’re facing in the world today I think we don’t have the leadership that we need. We just don’t have the sense of a real need to move forward. We have an opportunity. I just find it extraordinarily opportune that we have two huge agendas that have to be hopefully concluded by the end of 2015. One is the agenda that was touched on, the post 2015 agenda and we have a good report now of the high level panel on Global Partnerships and I think if that report is not diluted and is taken forward that will make a big difference but it has to be balanced by the other agenda which is the commitment to a new climate agreement by the end of 2015 and I am sorry that Mark was Ed Miliband in saying that this looks to be very difficult because it’s actually vital if we don’t get a climate agreement by the end of 2015 we don’t know what the parameters of our world are to stay a safe world and that’s not just vital for the poorer parts of the world that are already suffering climate shocks but vital in an intergenerational way. We are losing to be able to influence and to be able to stay within the two degrees Celsius whish will still mean that we will have more and more climate shocks but they will be more or less manageable. If we go above that then we’re into unchartered waters that are terrible and our children and our grandchildren and their grandchildren will look back at this period and say what on earth were they talking about. I think the fact that climate change is not top of a G8 agenda is quite extraordinary because nothing else takes on the same sense of how we are to live in this world and the future but that’s my personal view.

I am delighted that this panel has I think performed very well in its task of trying to both advise and consider the challenges facing the G8 and the world generally but I am really delighted that this meeting itself is going to end with the voice of a poet and a very distinguished poet at that that I am quite a fan of, Ben Okri. I am going to invite Ben to come up to the podium. He’s allowed to take the podium as well which I didn’t allow the panellists apart from our distinguished speaker, Mark Moody-Stuart.

Ben Okri as you know is a distinguished poet and novelist from Nigeria. He is a fellow of the Royal Society of Literature and has been awarded an OBE. He has numerous international prizes including the Commonwealth Writer’s Prize for Africa and his novel, The Famished Road, in 1991 won the Booker Prize. He has written a poem especially this evening so I hope that Ben you will inspire us to think further on what the panel has provided us with.

So I invite you to thank the panel for their contribution, in particular Mark Moody-Stuart for his speech and then we’ll hear Ben Okri.

[Applause]

Your frightened me for a minute! I couldn’t see you! I thought you might have disappeared. Left us! But no...

Ben Okri: Thank you all very much. I thought that was a fascinating conversation from the panel and I am going to read a poem called ‘Convergence’ which in some ways coincides with the headline there and for very obvious but not very discernible reasons to everybody it’s dedicated to Michael Aminian because of his work with Zamyn and being an umbrella for these set of events.

[Applause]

The poem is called ‘Convergence’.

~to be released~

[Applause]