Monthly Archives: December 2001

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A healthy equation  

I was in a meeting yesterday where someone remarked that it was simplistic to say promote health spending in developing countries and development will result (the person was in favour of such spending, but didn’t want to encourage false hopes on the results).

Providentially, the World Health Organisation chose yesterday to publish its report looking precisely at that equation. Its conclusion? “Increased health investments of $66 billion will generate at least $360 billion annually and save approximately 8 million lives per year.” That’s a mighty favourable ratio.

The figures are sobering for those of us fortunate to live in the rich world. The poorest countries spend 4% of GDP on health, which comes to about $13 a year per head. Harvard economist Jeff Sachs, who led the commission, is quoted in the Financial Times as saying these countries need to stretch to get to 5-6%, but that would still leave them short of the $30-40 a year per head which is essential.

The strong conclusion of the WHO Commission on Macroeconomics and Health gives me renewed faith in the value of some grand initiatives. The commission was launched in Davos 2000 with a worthy session, largely consisting of platitudes about health and the developing world. From unlikely beginnings…

In its analysis, the Financial Times identifies next year’s conference on financing for development in Monterrey, Mexico, as an early test of whether these aspirations can be realised.

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Crystal ball  

I don’t pretend to be expert at predicting the future. In fact, I think it’s a task of delusional impossibility. Read John Lukac’s Five Days in London to understand how hard it is. If in May 1940, few (other than Churchill) had any clue what was brewing, what hope is there for us in times of seemingly far less certain auguries?

Still, it’s fun trying. The Guardian has a crystal ball competition that is very UK oriented, but probably worth a go. Whether you think economies are going to go up or down, I think I can reliably predict that 2002 will be an eventful year.

Cry for Argentina  

Events are spiralling out of control in Buenos Aires. At time of writing, 16 people have been killed in food riots. Economy minister Domingo Cavallo has resigned, and it’s looking increasingly unlikely that the government of Fernando de la Rua can survive in its present form.

Unlike the last failed government of Argentina, Raul Alfonsin’s, it isn’t hyperinflation that is spelling the doom of de la Rua. Instead, Argentina is confronted with brutal deflation. Although the protestors have cheered Cavallo’s resignation, it’s utterly unclear what comes next.

Although a lot of observers had doubts about the robustness of Argentina’s economic achievements in the ’90s, I think anyone would have been hard-pressed to foresee the extent of the collapse under de la Rua. After all, this quintessentially grey man was elected in part because of his sober, prudent character seemed such a safe bet after the fireworks of the Menem era.

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Anyone listening?  

Jonathan Freedland has an interesting take on the Clinton Dimbleby lecture: “When al-Qaida’s complete surrender is within the US’s grasp, why fret about clean water for Africa or the need for a democratic breeze to blow through the cobwebs of the Muslim world?”

I agree that all the signs are that a historic moment to change the world for the better is being lost.

Approaching the problems from a different angle, Martin Wolf has a pithy analysis of how globalisation has helped reduce the inequalities of our world. “The argument about globalisation, as such, must stop. All successful developing countries have exploited international opportunities in their development. What is needed, instead, is agreement on how to reverse the marginalisation of so broad a swathe of humanity.”

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Wrong way  

Agricultural subsidies have long been a bugbear of mine. Why are the governments of advanced economies content to see coal mines or shipbuilders or textile plants wither in the face of foreign competition, while farmers are carefully cossetted? There once was an argument that food security necessitated large domestic production of food, but that’s clearly nonsense given the scale of world trade in agricultural commodities (I recognise the environmental argument in favour of local production, but that’s not the justification made by either the farmers or the policymakers).

What’s criminal about the policy is not that it violates free market principles, although it clearly does that. My principal objection is that it cripples the ability of the world’s poor nations to develop healthy agricultural export industries. Zambia, for example, has tremendous agricultural potential. But the biggest markets in the world – the US, Europe and Japan – have built high barriers to this production.

Europe has long been the worst culprit. But now, the US looks like it’s challenging for the title. Congress is on the verge of approving massive new agricultural subsidies, just as the administration is pushing for a new global trade agreement that would slash such handouts. And the response of the European officials? “It has certainly taken the heat off us,” is the quote from one in the Financial Times.

Whatever the US policy, it certainly hasn’t been working in a healthy way for the vast agricultural expanses of the Great Plains. As The Economist points out, the plains were desert when white settlers arrived, and it may be natural for them to return to that state. The depopulation of rural areas is sad, but agricultural subsidies (at least as they are designed now) seem to be accelerating rather than stemming the trend. And they are certainly doing nothing to encourage the development of economic alternatives in these regions.

Need for scepticism  

Like many others, I read the glowing reviews of Bjorn Lomborg’s The Skeptical Environmentalist when it was published earlier this year. Here was a green-minded scientist debunking most of the accepted wisdom of the environmental movement.

But it seems Lomborg’s science is shaky at best. And the protests of the laudatory book reviewers ring fairly hollow in the face of so much scientific opinion. Needless to say, the criticisms of Lomborg have received a tiny percentage of the coverage of his original claims.

Intellectual fashion victims 

Paul Krugman on Enron and what he calls death by guru: “There is a chicken-or- Enron question: Was Enron so admired because it embodied faddish management ideas so perfectly, or did those ideas become so faddish because of Enron’s apparent success?”

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Deja vu all over again 

Last night, the BBC broadcast this year’s Dimbleby lecture. Bill Clinton, as you’d expect, gave an articulate, learned tour d’horizon, entitled The Struggle for the Soul of the 21st Century.

As a longtime Clinton fan, I suspect I was a rare viewer who stayed up past 11pm to watch the whole speech. I had the definite sense that many parts of the speech are the former president’s new boilerplate: the paragraphs and phrases he bolts into (now highly paid) speeches, whatever the occasion.

It’s sad, whatever you may have thought of Clinton’s presidency, to see how rapidly ex-political leaders become superfluous, even when they are young and intelligent. Of American presidents, only Jimmy Carter – a poor president – has found a worthwhile afterlife.

I did like, however, Clinton’s conclusion. First, he said that whatever the problems brought into focus by 11 September, he remains hugely optimistic about this century. And then he finished: “It’s great that your kids will live to be ninety years old but I don’t want it to be behind barbed wire. It’s great that we’re gonna have all these benefits of the modern world, but I don’t want you to feel like you’re emotional prisoners. And I don’t want you to look at people who look different from you and see a potential enemy instead of a fellow traveller. We can make the world of our dreams for our children, but since it’s a world without walls, it will have to be a home for all our children.”

One for each week  

John Sutherland, who wrote the unmissable Is Heathcliff a Murderer and successor volumes, has a list of 52 things they do better in the US. I disagree about the bananas, both on grounds of taste and to support the tiny island economies versus the central American agribusinesses.


Very nicely, Dave Winer has shortlisted me as one of the 15 Bloggers of the Year. The competition is pretty heady, and includes a number of people who I refer to on a nearly daily basis. In fact, going through the list of Dave’s nominees would serve as a very good basis for finding some of the most interesting commentary about what’s going on in our complex world.

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Different strokes  

In less than three weeks, 12 European countries will undergo monetary union, with the euro finally in circulation. Britain stands outside the euro zone, a topic of constant speculation and controversy. I’m generally pro-euro (and certainly pro-Europe), despite the misgivings of some economists I respect. But two recent articles that highlight how different the two other major European economies are give me pause.

Just across the Channel, France is gearing up for a presidential election next year. Prime minister Lionel Jospin is trying to stir as little trouble as possible. “He always seeks consensus and compromise when faced with social unrest – whether striking lorry drivers, angry farmers or disgruntled pilots.” On the surface, that sounds a good idea, until you see the number of corners into which he seems to be backed. Although the labour market reforms instituted in the Thatcher era here were controversial at the time, now all political parties accept them as the norm.

Germany has very little labour unrest, and admirably high productivity. But that desireable combination has been bought at a cost. Germans work fewer hours than most others, as anyone who tries to call businesses or German government offices knows. For those in employment, the system undoubtedly works. But Germany has nearly 8% unemployment – a figure that has proved remarkably stubborn, as joblessness in the UK and even France has diminished.

Software problems  

“In the 1990s we learned that another country’s faulty financial software can harm our Wall Street portfolios. On Sept. 11 we learned that another country’s faulty education software can destroy all of Wall Street.” Tom Friedman has been wandering off course of late, but he’s back on track.

More gloom  

I know I quote Martin Wolf too often. But he’s the only commentator in English who regularly tackles tough, international economic issues. Today’s another day of agreement with Martin: “The story of post-bubble correction is not yet over. It may have hardly begun.”

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The 2001 Nobel prizes are being awarded today in Stockholm and Oslo (there’s a live webcast of the ceremonies from 4.30pm local time). This morning, on BBC Radio 4’s Start the Week, three laureates discussed a fascinating range of issues.

Economist Joe Stiglitz, biologist Paul Nurse and 1991 literature laureate Nadine Gordimer ranged over talk about the work that had won them the prize, to intellectual property rights, the impact of 11 September and the relationship between their responsibilities in their field, and a wider responsibility to humanity (which the prizes are designed to foster).

The BBC only archives these programmes fitfully on its website, but you can listen to the replay at 9.30pm London time tonight (and I imagine by next week the programme will be available in the archive) or find the programme on the Listen Again page. Here are some highlights.

On IPR and the pharmaceutical companies. “The pharmaceutical companies will tell you the stronger the patent laws, the better for health. That’s wrong,” said Stiglitz. “Intellectual property rights are not a natural law. They are a man-made law and we should be able to design them to ensure the best outcome for public health.”

On scientific work. “There’s no such thing as a breakthrough,” said Nurse, who won the prize for his joint work on the regulators of the cell cycle, described in most press reports as a “breakthrough” in cancer research.

On the alliance against terrorism. “We have an alliance against terrorism,” said Stiglitz, “but we need an alliance on positive things: to create a healthy world environment, to rid the world of poverty.”

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Gobble, gobble  

I know it isn’t done to mock the president at a time of national crisis, but I enjoyed The Guardian’s caption competition for the hilarious photo of president Bush and the turkey he pardoned for Thanksgiving.

“Gobble, gobble” was the favourite, with 350 entries.

Excuses and paranoia 

Some businesses are using the events of 11 September as a lame excuse to engage in shoddy practices. Doc Searls, one of the authors of The Cluetrain Manifesto, pointed me to this extraordinary exercise by a small publisher.

Allegedly books now have a harder time getting attention because the media won’t accept unsolicited post and no one goes to book signings. I know book sales are down post-11 September (except for Judith Miller, Ahmed Rashid and Nostradamus), but people shouldn’t invent reasons for reneging on contracts as they scramble to rearrange their business.

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Bill Safire is raging. The current trampling on constitutional rights in the US has done the impossible: united the arch-rightist (Safire) and the storied liberal (Anthony Lewis) on the same side of an issue. But I fear that no one in power in Washington cares, since the president is cheered to the rafters no matter what he does at the moment.

And a wonderful flourish from Safire, that I’m surprised made it through the editors at The Times: “Our Constitution would be set aside by Cicero’s ancient inter arma silent leges – in time of war, the law falls silent.”

Don’t cry for me 

While much of the world has been focused on a country beginning with A in central Asia, the economic world has looked on with some horror at the collapse of Argentina. Argentina is so safely out of the way geographically, that an eccentric millionaire who used to come to Davos moved there in the early ’90s because he had calculated it was the safest place to be in case of a nuclear holocaust.

At the moment, that looks like the only thing Argentina is safe from. A reasonably large economy (at least among what used to be called emerging markets) has effectively gone into default. This is despite the increasingly frenzied efforts of economy minister Domingo Cavallo, who was hailed in 1991 when he “cured” Argentina’s rampant inflation with his Convertability Plan (which pegged the peso to the dollar – a straitjacket that is now part of the problem). Cavallo spent the major part of the ’90s – after he and former president Carlos Menem fell out – touring the world and telling other emerging market nations how to solve their problems.

(Incidentally, as most of the world has left terrible inflation behind, there’s little need for one of my favourite jokes from the period. I heard it at various times to Israel, Argentina and Russia, all of which had bouts with hyperinflation at some point. “Why is it cheaper to take a taxi than a bus in Buenos Aires [Tel Avis/Moscow]?… Because in a taxi you pay when you get out.” Boom boom.)

The best economic analysis I’ve seen of where Argentina goes from here comes, predictably, from Martin Wolf. From a number of unpalatable options, he reckons devaluation is the best course. The worst analysis came this week from Cavallo, who blamed foreign economists for his problems.

The Financial Times, which finds any excuse to put a picture of a beautiful woman in pages that are generally filled with balding, middle aged men, found another angle on the country’s crisis: despite the implosion of the economy, sales of beauty products and even activity by Buenos Aires’s many cosmetic surgeons is booming. To illustrate the national obsession with looks, the FT choose a picture of the ageing Menem and his newish bride, a young, former Miss Universe from Chile (the website included no pictures). I remember when Menem, like Cavallo, was a regular in Davos. His entourage reputedly included two hairdressers. And it certainly included his mistress of the moment, who happily posed for the paparazzi in front of the Belvedere Hotel. A truly different country.


Dave Winer kindly remembers one of my phrases. He’s thinking of engaging in some MBA: managing by being away. I heartily recommend it. What’s it like in Italy? I’d give a lot to be strolling through Anacapri this evening, heading for my favourite restaurant, La Rondinella.

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Get me the doctor 

When I was involved in Davos, one of the regular programming dilemmas we had was with sessions about healthcare. Everyone cares deeply about the subject, but at a global event it’s very hard to have either a dialogue of the deaf or a discussion dominated by the very particular problems of one system (in the Davos case, usually the US).

These conditions may be changing. The future of the National Health Service is probably the biggest running story here in the UK. Last week, both chancellor Gordon Brown and prime minister Tony Blair indicated that the recently increased funding for the NHS was not a one-off blip, but would continue. Speculation that tax rises to fund this would be essential has continued.

What’s new to the debate is the more informed awareness of other systems. Very few people here want to follow the US path, even though elite care in the US is recognised as the best in the world. There is a very European concern for equity across the system, and the number of uninsured and underinsured in the US offends most political sentiments here.

Nicholas Timmins has an excellent list of myths about healthcare that could, were Davos so minded, be a good basis for a cross-cultural discussion of the issues. The most interesting to me was number three: “demography and technological advance, combined with patient expectations, will push up healthcare costs, bankrupting the system”. I have never believed in a bankrupted system, but I did accept the truisms of the pressures. Timmins is persuasive that technology advances generally lower costs rather than raise them. And the demographic challenge (although more real than he suggests) is mitigated by the fact that the vast bulk of costs are incurred in the last year of life.

I’m not so sure, however, that Bill Gates is going to help the situation very much. Apparently Gates is going to speak at a Department of Health conference this week on the future of IT systems in healthcare.


The only time in my Davos experience that someone was virtually apoplectic with rage was when I suggested, over dinner, that London had five newspapers that were the equal of the two or three best in the US. An editor of Newsweek at the table couldn’t stop spluttering.

I could have qualified my statement, of course (and I would happily admit that the popular tabloid papers here, although great examples of the craft of journalism, are woeful in just about any other terms). The best US newspapers (I’d make that The New York Times, The Washington Post and The Los Angeles Times) have unrivalled resources. Their articles are done with a rigour for fact-checking and source-verification that no UK newspaper approaches.

But none of the US papers treat the rest of the world with the regularity that papers from a relatively insignificant island nation do. And there’s a pithiness and edge to good British journalism that has been erased from US papers. More profoundly, there’s far less respect exhibited by journalists here to the supposed icons of the age.

So I was pleased to see Roy Greenslade’s take on US journalism in the aftermath of 11 September. “How odd, I reflected, that these same tamed journalists spared no effort in their relentless search for muck about the former president’s sex life. Yet they have failed utterly to apply the same energy to hold this president to account over infinitely more serious matters. And they think we’re trivial!”

A modest proposal  

Like anyone active on the Internet, the volume of junk email I receive seems to go up daily. I actively use the screening filters Microsoft Outlook provides me, but it’s a battle not unanalogous to Dave’s against the ants (another emergent, complex adaptive system).

I thought I was clever by filtering out messages with exclamation marks and/or the word free in the subject line or the text. But too many messages I want to receive use the word free in a valid context. On the other hand, I don’t think any message I receive needs exclamation marks. Yet there are still intelligent people out there who feel impelled to use exclamation marks more than once in a decade. Stop, please, and I can have an effective filter against dreck.