About website: www.truevaluemetrics.org

Dear Colleagues

I have put a lot of effort into the development of a website to support the TrueValueMetircs initiative. The website is a lot better than some, but also has major limitations because of my own level of technical knowledge and inability to convert ideas into practical presentations.

One of the major concerns that is driving my work is the huge problem of data overload. When I want an answer to a simple question, I can easily get a million answers ... when I really want to choose between just two or three good alternatives.

I am also concerned that modern economists and financial analysts seem to spend a lot of time doing analysis about things that are unimportant, while really big questions do not get addressed. The dialog in almost every forum seems to have a preset 'agenda' and in the end the dialog leaves you at the end just about where you were at the beginning.

I am appalled at how little of recent history seems to be presented in current debate the way I remember it when it happened just a few years back. The rewriting of  history may be politically convenient, but it does not help to get important problems solved.

In the end all of this makes me even more convinced that something like TrueValueMetrics is needed, together with a platform that enables TVM to be used by everyone everywhere.  

TVM builds on the idea that there is technology, society, finance and metrics and together they deliver on quality of life. I see little utility in GDP growth as a useful measure of anything. In Somalia where people are starving, some GDP growth would be of huge importance, but in the USA where per capita GDP exceeds $40,000 a year there is an urgent need to consume less and enjoy life more.

None of the media conversations seems to understand how well is just as important as how big ... we have to start changing the dialog and the website truevaluemetrics.org  is a step in this direction. This link goes to a collection of material that I have found to be useful ... in due course I want to see a very specific dialog about the community and the specific association between needs, resources, activities and progress in improving quality of life. 

This is the first 'blogspot' post for several months. As time evolves more and more of the TVM work will be visible on multiple platforms.

Peter Burgess

How to respond to turmoil in the global energy sector!

Dear Colleagues

The increasing turmoil in the oil producing countries around the world has huge risks for the continuing improvement of the US economy. To maintain profits and cash flow, many companies will very soon cut back on their investments, and consumers will cut back all they can on their consumption. It is not time for the same old same old, but time to move into a post-cheap_energy society that presently exists and get ready for tomorrow!

The following came in my email today. It was an idea used a little bit a couple of years back. Someone responded to the idea ... also below, and I have responded as well. The third item below!

THIS IS NOT THE 'DON'T BUY' GAS FOR ONE DAY, BUT IT WILL SHOW YOU HOW WE CAN GET GAS BACK DOWN TO $1.30 PER GALLON.

This was sent by a retired Coca Cola executive. It came from one of his engineer buddies who retired from Halliburton. If you are tired of the gas prices going up AND they will continue to rise this summer, take time to read this please.

Phillip Hollsworth offered this good idea. This makes MUCH MORE SENSE than the "don't buy gas on a certain day" campaign that was going around last April or May! It's worth your consideration. Join the resistance!!!!

I hear we are going to hit close to $ 4.00 a gallon by next summer and it might go higher!! Want gasoline prices to come down?

We need to take some intelligent, united action. The oil companies just laughed at that because they knew we wouldn't continue to "hurt" ourselves by refusing to buy gas .

It was more of an inconvenience to us than it was a problem for them. BUT, whoever thought of this idea, has come up with a plan that can Really work. Please read on and join with us!

By now you're probably thinking gasoline priced at about $2.00 is super cheap. Me too! It is currently $3.08 at Arco and Costco for regular unleaded in Salem , Oregon and climbing every week.

Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at $1.50 - $1.75, we need to take aggressive action to teach them that BUYERS control the marketplace..not sellers.

With the price of gasoline going up more each day, we consumers need to take action.

The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves.

How? Since we all rely on our cars, we can't just stop buying gas.

But we CAN have an impact on gas prices if we all act together to force a price war.

Here's the idea: For the rest of this year, DON'T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL.

If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit.

But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It's really simple to do! Now, don't wimp out on me at this point...keep reading and I'll explain how simple it is to reach millions of people!!

I am sending this note to 30 people. If each of us send it to at least ten more (30 x 10 = 300) ... and those 300 send it to at least ten more (300 x 10 = 3,000)... and so on, by the time the message reaches the sixth group of people, we will have reached over THREE MILLION consumers .
If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted!

If it goes one level further, you guessed it..... THREE HUNDRED MILLION PEOPLE!!!

Again, all you have to do is send this to 10 people. That's all!

(If you don't understand how we can reach 300 million and all you have to do is send this to 10 people.... Well, let's face it, you just aren't a mathematician But I am . so trust me on this one.

How long would all that take? If each of us sends this e-mail out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!

I'll bet you didn't think you and I had that much potential, did you! Acting together we can make a difference.

If this makes sense to you, please pass this message on. I suggest that we not buy from EXXON/MOBIL UNTIL THEY LOWER THEIR PRICES TO THE $2.00 RANGE AND KEEP THEM DOWN. THIS CAN REALLY WORK.

Someone responded to this as follows. I was delighted to see someone looking hard at the issues in a more comprehensive way. I have not shown his name at this juncture, but hope to be in contact with him soon.

Dear xxxxxxxxxxxxxxxxx

This is an excellent plan.

Unfortunately, though, its basic premise is misguided. Low gas prices are exactly the opposite of what we need. We will not rid ourselves of our dependency on this non-renewable, environmentally disastrous resource by focusing our efforts on driving down its prices. Continued reliance on hydrocarbon fuels is a losers game.

The only way to really change things is to accelerate work on finding more efficient, cleaner, and more renewable energy sources. As long as we keep gas prices low, there is little motivation for entrepreneurs and large energy companies to do so. What we need to do is help create an economic environment in which it makes sense to invest in the new and better energy technologies.

For consumers to be motivated by exactly the same kind of short-term, self-interested thinking that they abhor in industry is folly. It's like the luddites smashing looms.

Following the action plan proposed by Ms Mates may produce short term relief, but it is sure to produce long term grief.

I urge you to think it through.

Signed xxxxx

I have responded as follows. My response has some of the perspective that is built into TrueValueMetrics.

Dear Colleagues

Thank you, xxxxx for raising this question. The United States, and to a lesser extent Europe have created extremely energy intensive societies at the same time that they have created amazing innovations in productivity.

Sadly the metrics that are used to measure progress of society are fatally flawed. Corporate performance is simply money profit, with society better when it is bigger ... higher GDP, more consumption, higher stock market ... etc etc.

But society really is about quality of life ... happiness, reduced worry, family and friends, jobs, income, retirement, safety and security, good health, good education, good opportunities, beauty, spiritual support, etc. The metrics for this are conspicuously absent from the everyday dialog about economic and business performance.

In a responsible society there would be a financial reserve set aside so that we have the funding for energy when the FREE oil resources are gone. Norway is doing this. Kuwait has been doing this since the 1970s which explains why they had the money to pay the USA and others to get Iraq out of their country in the early 1990s! But the USA runs on low price energy that cannot last. The emergence of China and India as middle class economies changes the demand equation ... and people's democracy in most of the oil producing countries will change the supply equation. If there is war in the oil producing areas then supply equation is even more compromised.

The oil industry engineers are technologically amazing ... but they are not good corporate citizens for the United States, the places where they operate or the planet as a whole. They can find and exploit new resources better now than in the past, but they are merely facilitating more rapid consumption of these finite limited resources. Their profits and payout to their stockholders are based on accounting that puts ZERO cost on the oil in the ground. The reality is that these zero cost natural resources have taken a zillion years to produce, and one day we will have to be doing that in real time to have energy equilibrium for the planet.

Does this matter? You bet it does. In my own little way I want to see better metrics so that the real issues that we ought to be facing are in play!

Peter Burgess
truevaluemetrics.org
http://truevaluemetrics.blogspot.com

Income distribution in China worse than in the USA?

Dear Colleagues

Someone suggested that I should read an article about income distribution posted on the Roubini website. I do not have access to the whole article but the start is not promising. The URL is:
http://www.roubini.com/analyst-monitor/260596/just_how_rich_is_the_national_people___s_congress_

I sense from the title of the article ... Just How Rich Is the National People’s Congress? ... and the first small snippet of the main text that the idea is that the fact of huge wealth in among the governing elite in China makes the situation in the United States quite desirable. This is absolute hogwash.

Here is the snippet of text.

Just How Rich Is the National People’s Congress?
Adam Wolfe Mar 4, 2011 6:04PM
A Bloomberg News article from Michael Forsythe on China’s National People’s Congress is making waves today. Coming on the heels of the failed “Jasmine Revolution” in China, the article seeks to show that the NPC is representative of the widening income gap in China.

The richest 70 of the 2,987 members have a combined wealth of 493.1 billion yuan ($75.1 billion), and include China’s richest man, Hangzhou Wahaha Group Chairman Zong Qinghou, according to the research group Hurun Report. By comparison, the wealthiest 70 people in the 535-member U.S. House and Senate, who represent a country with about 10 times China’s per-capita income, had a maximum combined wealth of $4.8 billion, data from the Washington-based Center for Responsive Politics show.

In my view, the success of China is much more about many millions of very poor Chinese becoming somewhat better off. In the process the elite has also become very very rich, which is the way the enterprise system tends to work.

But the problem in the United States is that while the poor Chinese are moving up the economic ladder, the once rich Amnerican middle class is moving down the economic ladder. In absolute terms Americans are wealthy by world standards ... but they are incredible concerned about the direction of the American economy.

Until American leaders ... and that includes corporate and financial sector leaders ... take the jobs issue seriously, the USA is in trouble. President Obama cannot be a lone voice talking about jobs, when every institution in the USA is doing all it can to handle its own "agenda". Republicans in Congress have a focus on cutting government spending even though it has been government spending that successfully saved the USA and the global economy from catastrophe after many years of regulatory failure, greed and a whole lot more.

Corporate leaders have done a good job for their stockholders building back profitability ... but in the process there have been jobs lost with a huge impact on US quality of life. But that is not a corporate responsibility ... a corporate management team has responsibility to its stockholders ... and this might well be a fact of law ... but it is a bad situation for society.

And the dialog about taxation does not help. The argument goes that lower taxes stimulate the economy and create jobs ... but again taxes can be legally reduced in many different ways, but government services cannot be paid for without appropriate levels of revenue. The first job in corporate social responsibility (CSR) must be for a company to pay the right amount of taxes.

Government has a responsibility to spend money wisely, and it is true to say that there has been profligate spending in good times and then crisis job cutting in bad times. There is blame for this both on the side of the government and also on the side of the workers and their unions. But there is another issue, and that is the accounting used in government and the public sector. Most of the accounting is cash based rather than accrual based, and the balance sheets that are so important in corporate accounting really do not exist in the public sector. This means that the dialog around matters like current wages and future pensions are not included in any rigorous accounting, and over years this has become a terrible problem. Many unionized public employees are going to get great pensions that have to be paid for ... but the decisions that made this problem go back a very long time.

The concentration of wealth in China is a problem for the Chinese. The wealth differentials in the USA are different, but are also bad. Sorting it out is going to be difficult, but it must be done.

TrueValueMetrics will help because of its focus on value and the importance of a value balance sheet for all the actors in society!

Peter Burgess

The motion is 'Clean Energy Can Drive America's Economic Recovery?'

Dear Colleagues

I would like to share this note with you. I have been contacted in connection with attending an Intelligence Squared Debate in New York. I decided that a quick note to the organizers was in order, since while the premise of the debate is interesting, it fails to address the reality that no matter how much this agenda is promoted, it will be subsumed by all sorts of other issues with bigger financial and political import.

My bottom line, as always is simply that you manage what you measure ... and nothing that is of vital importance is being measured by the key institutions engaged in policy formulation and decision making, and accordingly there is a serious disaster in the making. This is what I wrote:

Dear Colleagues

Thank you for inviting me to come to the next of your debates. The motion is 'Clean Energy Can Drive America's Economic Recovery?'

I am very interested in the topic and have been for a long time ... but the current dialog about this and many other important issues really disappoints me.

There are huge opportunities but most of the time the dialog misses the point. If one starts off with the premise that technology is now more productive by an order of magnitude or two or more ... that is resource use effective ... then the progress of modern society on a global basis is rather pathetic. There are real reasons for this, notably that leadership has made poor decisions over and over again and the high powered high profile analysts and the dialog in the media avoids looking at this.

The prevailing metrics that are the starting point are fatally flawed. Most decision making ... that is allocation of resource ... metrics are simply about money and profit, about GDP growth and about the performance of the capital markets. These have some importance, but other metrics have importance as well, such as the progress in improving quality of life and issue regarding sustainability.

There are a number of well known people who have highlighted the issues around economic metrics besides myself. The huge mistakes that get made by investors and macro-economic managers as they focus on profit and growth without looking hard at the socio-economic and sustainability dimensions make it difficult to be optimistic about any future for the American economy. If profit, measured as it is now, is the only goal then the corporate community will use low cost workers and as a result will leave the American economy a hollowed out shell. The government will be asked to help unemployed more and more and more ... and it is not inconceivable that there will eventually be economic revolution in the US just as there is now in North Africa and the Middle East.

A value construct would change the trajectory of the US economy in meaningful ways. The profit one will send the US economy over the cliff ... essentially the same cliff that almost consumed the US just over two years ago.

Green jobs can make a huge difference to the United States and the world ... but it is a value construct that is an essential prerequisite in order for decision makers who have resources to flow funds into that segment of the economy. Neither the media nor the well-known academics, economists and policy analysts seem to have any deep understanding of this ... and it scares me to death.

Peter Burgess
truevaluemetrics.org

//////////////////////////////////////////
These are points make FOR and AGAINST the motion
FOR
** The current administration expects its clean energy policies to generate 800,000 jobs over the next two years, laying the foundation for lasting economic growth.
** Consumers can save billions of dollars relying on clean energy sources and increasing energy efficiency, leaving more money to be spent on other goods and services.
** Major investment in clean energy will lead to innovation and new technology.
** Reducing dependence on imported energy frees us to spend our limited resources domestically and protects us from fluctuations in oil prices and climate change.
AGAINST
** The Department of Energy’s own job creation estimates are far more modest than those of the President’s Council of Economic Advisers.
** A significant portion of clean energy funding has gone to foreign companies who have the advantage of having been heavily subsidized by their own governments for a number of years.
** Clean energy jobs face the same problems any other industry faces--competition from cheap foreign labor.
** A real green economy wouldn’t rely on government regulation and taxpayer financed subsidies.

____________
Peter Burgess
Meaningful Metrics for a Smart Society
www.truevaluemetrics.org
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blog: http://truevaluemetrics.blogspot.com
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Of course, there is a lot more to say ... but what bothers me is that most of the people that engage in the dialog avoid the core issue of unbelievable waste of available resources while bemoaning the lack of resources that are in short supply. Nothing is going to change until profit is diminished in importance and value adding is increased in importance.

I see obscene waste when 10 or 15 million capable workers are unemployed in the USA. The reason for this is that there is not enough profit in putting these workers on a payroll to do the many things that need to be done. The economy needs a better infrastructure ... but how to profit from this. Not easy, but commuters lose millions ... billions of hours a year wasting time in traffic jams ... that comes free within the prevailing system of socio-economic metrics. If there are 15 million unemployed workers (say $400 a week) that is like throwing away about $4 billion a week of lost economic product. Actually it is worse than this because social costs go up when unemployment is elevated. Nothing will change as long as the corporate community can make no money from employing these people ... and nothing will change as long as the public sector is constrained by all sorts of rules about what they can and can not do with the budget ... and I might add, when there is no value balance sheet to hold government authorities accountable for their decision making.

It is a mess ... but TrueValueMetrics is a methodology that can help.

Stay tuned ... the truevaluemetrics.org website evolves.

Peter Burgess

Sustainability ... important, but far from the mainstream of business

If it was not so serious you would have to laugh!

The organizer of a corporate responsibility conference sent me a message announcing the good news that the CEO of a big success story among successful sustainability companies would be a speaker. The success was based on the DOW-Jones SAM sustainability indexes.

I did not know much about the Dow-Jones SAM sustainability indexes so I did a bit of research. Well it is good that someone is trying to measure these things ... I suppose.

And then I looked at the company that was this big success ... and again good that they have the word sustainability in their vocabulary. But I had to laugh when I found the reference to sustainability in their stockholder report. I quote (from their website):

Sustainability Performance
Chairman's Statement on the Report 2009
Our sustainability agenda gathered momentum during 2009. I took great pride in the fact that AkzoNobel was again listed among the world leaders in the Chemicals sector on the Dow Jones Sustainability Index, with a second place rating. Our clear objective is to remain in the top three. Safety – just one part of our broader sustainability agenda – also remained paramount and continuous step-by-step improvements have been made in our performance. In fact, the total reportable rate of injuries for our employees and contractors improved by around 20 percent during 2009, while we are still striving to achieve our ambitious 2010 target of two or less injuries per one million hours worked. I feel confident that we will get there.

Despite the challenges we faced during 2009, there can be no doubt that it was a year in which we demonstrated the fundamental strength of our company. We have the utmost confidence in that strength, and in the ability of our management to successfully guide AkzoNobel into the future. We will therefore propose a dividend at the upper end of the dividend policy range to our shareholders at the forthcoming Annual General Meeting.

Visit the 2009 Report website for full details about our sustainability performance.

My first read had me thinking that safety was the highlight of their sustainability, but then I realized that safety was a freestanding idea ... which is OK. But in the section of the website about sustainability most of the talk is still about how much return the stockholders are going to get from what the company does.

This is a chemical company. They make all sorts of products that are bought to improve quality of life. They employ people and pay good wages (I believe). They use raw materials that may or may not be part of sustainable society, and the by-products and waste may or may not be damaging to the environment. I know nothing about this company and society ... and they are not telling me much.

It's a joke ... I want to laugh ... but instead I am mad as hell!

Peter Burgess

Informal settlements ... migration into urban areas

Dear Colleagues

I got an e-mail from an organization in India about a problem in Mumbai ... a problem that exists in communities all around the world. Here is the message. My reply follows.

Do suggest solutions to tackle pavement takeovers in Mumbai

info@karmayog.org to me
Posted by Namita in www.karmayog.org - a platform for social and civic issues

100 yards from the Anti Corruption Bureau office on P B Marg, right in front of the sprawling Kamala Mills Compound, diagonally opposite the Hard Rock Cafe, a large group of migrant labourers have taken up residence... with plastic sheets, tiles uprooted from the pavement, railings and bamboos pilfered from a nearby worksite, and bits and pieces salvaged from trash heaps. They have even built a makeshift temple very recently out of these scraps where elaborate puja is conducted by the women.

The pavement is completely blocked. So they have spilled out on the road. They have set up cooking fires on the road itself and defecate and bathe openly on the road itself. They also use the road itself to make their wares ... garlands and baskets and trinkets and food items which they sell. The children, specially the very young, crawl directly on the road.

This road has become a very busy thoroughfare recently, due to all the offices in the neighbourhood. But half the road is taken up by the squatters. Pedestrians inch their way down the middle of the road, trying to dodge buses and cars. Young girls working at the BPOs in adjacent offices, run the gamut of walking through crowds of young men lolling around in their underwear, squatting on the road.

At times, violent fights break out between the inmates, spilling out into the opposite lane. At peak hours, huge traffic jams start as the traffic moves forward in a single lane, barely inches away from the cooking fires burning away on the road. And at night, buses and trucks roaring down the ill lit road are in grave danger of running down the barely seen huddles of people sleeping directly on the road.

Apart from being filthy, insanitary, a breeding ground for disease, apart from being a traffic hazard and a safety hazard, apart from being a complete trangression of all BMC and RTO rules, it is unthinkable that human beings are being given permission to live like this on such a busy thoroughfare - and they must be given permission by SOMEONE, because they can't just live like that in open sight, breaking all the rules without someone in authority turning a blind eye.

So who is this someone we need to speak to? Who is there in BMC who can help? Or the POLICE? The local police have obviously been looking the other way and it obviously is worth their inattention. So nothing to be gained by complaining.

Any ideas?

Posted by Namita in www.karmayog.org - a platform for social and civic issues

Do reply via http://www.karmayog.org/messages/message.aspx?id=4001
Do inform if you do not wish to receive such emails from us.

This is my reply .. addressing a bit of the issue, but not all of it by a long way.

Dear Colleagues

This is a great question. Most easy "solutions" are not solutions at all and merely move, hide or destroy the problem. A "top down" view and top down solutions tend not to be very effective.

Why are these migrant labourers settled in this location? Perhaps they see it as the "best" place to be. Why? Is it the potential for work? Is it a better place to be than the alternatives?

In Harlem, New York, some years ago street vendors pretty much took over a big part of Central Harlem. Eventually a local group in cooperation with the city authorities set up a more formal market area where vendors could operate. There was a lot of noise because the location was not as well trafficked and it was a change ... but several years later the new location is itself now part of the Harlem scene and on tour bus routes! The new location was "better" because (1) it solved the problem of informal street vending on the main streets AND (2) it allowed the vendors to maintain a livelihood. It was not an easy thing to implement but it worked better than some people expected.

Your situation is not the same ... but there has to be (1) a better place for migrant workers to live than where they are and (2) there has to be more potential for livelihood than where they are. These are both tough questions for society to address. Rural area to urban area migration has become a huge issue around the world and is not addressed in the normal metrics used by decision makers responsible for financial fund allocation. Money moves to increase profits but rarely moves to improve quality of life, especially the quality of life of people at the bottom of the pyramid (BoP). The capital markets do not give any credit to people and organizations that improve quality of life unless they make profit doing it. This is an unsustainable idea.

Again, using New York as an example. Several years ago there was a quality of life problem caused by drug dealing in open spaces around the city and homeless people occupying these places. There has been (1) a massive improvement in the performance of the police in addressing unlawful behavior ... but in a constructive way, and (2) an improvement in the social service intervention to help the homeless and address drug addiction. This has been expensive in terms of both police costs and social service cost but for every resident it has improved quality of life substantially. The value proposition for society has been positive. There has also been a "good economy" for much of this time which helped to diminish one of the root causes.

The challenge of poverty is complex. Better health services and better education help, but it is better opportunity to earn a decent wage that is the big item. Again, the profit market metrics are very good to put some people to work, but leave out a big segment of society. I want to see value metrics in play as well so that NEEDS can be matched with underutilized human capacity to satisfy needs. This model cannot easily be profitable, but this model is value adding for society in an amazing way.

This is already too long ... so let me stop now. This is an important subject.

Peter Burgess
truevaluemetrics.org

Testing a link to a page within TrueValueMetrics.Org

Dear Colleagues

I have been struck by the power and the complexity of the modern social media networked world in part because of the dynamic of the protest movements in North Africa and the Arab World ... and indeed perhaps also in the old industrialized world ... places like London, UK and Madison, Wisconsin, USA!

In the next few weeks I will be doing all I can to take advantage of the linking tools that are available to join websites, to blogs, to Facebook, to Twitter and hundreds, maybe even thousands of similar emerging platforms. The following was automatically generated from a "button" on one of the pages of the TrueValueMetrics.org website. This particular page is about "organizations" and it does enable a user to get to a specific page ... which is good. TrueValueMetrics.Org

Maintaining control over user access and security is important ... and fortunately the basic architecture of the website code probably will make it relatively easy to have that fairly strong and fairly easy to use at the same time.

What is particularly confusing is that many different developers have created similar tools, and they all work in pretty much the same way ... but the statistics associated with all these different approaches is unlikely to make much sense.

I have concluded that ignoring social media platforms is no longer an option ... and in due course I hope you will be seeing a very coordinated TrueValueMetrics presence on all the main platforms that are being used globally.

One step at a time. This is just a test. In due course the buttons on the truevaluemetrics.org website will be working, and content will be flowing between all the platforms. We are trying to simplify data to make it meaningful, but the technology to do it seems to get more and more complex all the time!

Stay tuneds

Peter Burgess



//////

Dialog about malaria control from JustMeans

Dear Colleagues

I have just written the following about the cost of malaria interventions.

The issue of malaria concerns me a lot. Efforts to reduce the impact of malaria has gained funding over the past few years impressively and now exceeds $2 billion a year. It is interesting and really quite disgusting that one high profile film star gets more attention than millions and millions of ordinary people!

My main issue is that the use of this malaria control money may have been an awful waste. There is hardly any verifiable data about the cost effectiveness of what is being done. I have been in contact with the US President's Malaria Initiative in Washington and they publish a lot about what they plan to do with the money, but rather little about what they actually have achieved with the money beyond very vague unverifiable generalities. This is, of course, a standard government approach to accountability ... but it is also a process that allows a lot of money to get disbursed without very much of value being obtained from the fund flows.

Organizations like Malaria No More have helped raise the profile of malaria as an international health issue, but they have also been a dangerous part of promoting single approach solutions that are not universally appropriate. It would most likely have been much more effective to start with control of transmission through better control of the mosquito rather than merely putting people under bednets and using Artimesan based drugs. Malaria has an important spatial dimension that is ignored in most of the initiatives that are currently getting big funding. What a waste!

I wrote this in response to this posting written by Tove Rasmussen. The URL is:
http://www.justmeans.com/Ancient-Malaria-Killer-Gains-Spotlight/43710.html This is the text:

Ancient Malaria Killer Gains Spotlight
Posted On: February 04

George Clooney's recent contraction of malaria together with the publicity talents of Malaria No More (MNM) have put the disease in the spotlight. It causes 1 to 3 million deaths per year, with ninety percent in Africa. Of these, most are young children. With some relatively simple solutions and development of a vaccine, the ancient disease can be eliminated.

George Clooney contracted Malaria following a trip to Sudan unfortunately.

This has raised the profile of the disease, prompting many to ask what Malaria is. The disease is spread by the bite of infected Anopheles mosquitoes. Its symptoms include headache, fever, and other flu-like symptoms. Untreated, it leads to comas, serious anemia and death.

MNM has played a key role in putting the focus on malaria, and wants to eradicate the health issue by 2015.

MNM co-founder Ray Chambers approached President and Mrs. Bush to host a first-of-its-kind world event on the single disease. As a result, in 2006 the White House Summit on Malaria brought together global government, health, NGO and faith leaders - and gave the health issue much-needed global attention.

The Economist treated the event as a new product launch: "This Thursday George and Laura Bush are due to host a most unusual product launch …. the eradication of malaria. The brains behind the summit, a group of business leaders and philanthropists operating under the auspices of a non-governmental organization called Malaria No More, are convinced that the time is right to launch what they hope will be the next big thing in the giving business." ("The Branding of Malaria," The Economist, December 12, 2006.)

As malaria has gained prominence so has funding to develop a vaccine, including the Bill and Melinda Gates Foundation $10 billion to develop vaccines for the world's poorest countries over the next ten years. Though malaria is one of the oldest diseases, a vaccine has still yet to be developed. Other available tools to eliminate the disease are basic: long-lasting insecticide treated bed nets (LLINs), education, insecticides, and early diagnosis and treatment.

MNM is also working to ensure each family in Africa has access to the malaria prevention toolkit. In early 2010, MNM provided close to 90,000 mosquito nets to Senegal.

One Tweet by Ashton Kutcher on World Malaria Day 2009 became the most re-tweeted message, resulting in the 90,000 nets for Senegal. With social media changing the face of funding, getting more bed nets is no longer the issue.

The bigger challenge now is distributing tens of thousands of bed nets over a few weeks, rather than thousands in one year. To solve this logistical challenge, MNM has teamed up with the Alliance for Malaria Prevention (AMP), made up of over 40 international organizations who train health workers on how to effectively distribute the bed nets effectively.

In Senegal, a number of organizations including the U.S. Peace Corps, World Vision, the National Malaria Control Program (PNLP), Sumitomo Chemical and local heath workers provided the nets to families, ensuring they were trained in their use. Following the project, nearly 100,000 nets hung in the communities of 265,000 people.

Photo Credit: dullhunk

Subsequently there was another comments as follows. The writer, Ano Lobb, comes at malaria control from a medical perspective:

Further compounding the struggle against malaria is its frightening, and fascinating, ability to evade control by vaccination, being cloaked in a constantly mutating jacket of protective protein: http://jm.ly/5wI9PQ

Innovation in how to develop more effective vaccines will hopefully foil the parasite's wiley guise and add inoculation to the anti-malarial arsenal: http://jm.ly/coh58C

And then my follow up comment:

The matter of vaccination against malaria is extremely complicated ... and I do not pretend to know the scientific details. From a resource management perspective however I would observe that there has been great success in controlling vector borne diseases like malaria by effective control of the vector ... the mosquito.

The origins of the US Center for Disease Control goes back to malaria in the USA ... and explains why the CDC is based in Atlanta and not DC. The history of SUCCESS with malaria control is all about effective investment in vector control ... and for that the best starting point is very good spatial understanding of the mosquito and its habitat, and humans and where they live and go about their business.

Pretty much all the money is being disbursed to research vaccines, distribute bednets and subsidize Artimesan based drugs with virtually nothing going into systems for sustainable vector control.

I am pretty unhappy about this situation, and especially the role of the high profile business and entertainment elite in making decisions that are high cost and not very effective. I am appalled at how little performance information is actually available ... probably in great part because the performance is low relative to what has been said in the PR.

Malaria is a disease that mostly kills poor people ... and the sophisticated solutions to address the problem that are being pursued with available funding are totally uneconomic and unsustainable for poor societies. Much of what needs to be done to improve vector control can be done with local interventions ... but is not really on the agenda at WHO, the NIH, the Gates Foundation, medical researchers and all the rest. Old fashioned low tech may well be the best way to go!

Peter Burgess
truevaluemetrics.org

I have done considerable research around the cost effectiveness of health interventions in developing countries, and it comes as no surprise that there are quite modest results from very substantial resources. The understanding of costs and efficiency is almost totally absent in the community of technical experts that are engaged with the problem, and it is therefore no surprise that the costs are out of control. This problem is aggravated by all sorts of "leakages' of resources out of the system as a result of corruption.

At some point the people in charge of all of this have got to get serious ... hold people accountable for performance ... or be held accountable themselves!

Peter Burgess

About Egypt .. and Socially Responsible Investment

Dear Colleagues

I just wrote this comment in response to an essay about Egypt and Socially Responsible
Investment (SRI) on the JustMeans website at:
http://www.justmeans.com/editorialauthor/389.html.

SRI is very important ... but there is almost none of it emerging from either capital markets or the official development assistance community.

The majority of all fund flows move because there is an inner circle of elite that get benefits with everyone else on the sidelines. Very little of the funding for "good works" gets to serve the beneficiaries identified in the PR, but the fund flow certainly benefits someone.

The Egyptian situation has all sorts of examples of this ... the Egyptian military has great equipment ... funded in large part by the US taxpayer ... with military equipment manufacturers the biggest beneficiary. All sorts of FDI and investment deals have been in play with the inner circle of the Mubarak regime big beneficiaries. Over the years the human capital in Egypt has increased through education, but the economy has never been reorganized so that most of these people could have a meaningful future.

The sad fact is that the metrics of capital market capitalism ignore everything to do with people and their quality of life and the huge importance of jobs and remuneration in the business ... that is socio-economic model for quality of life improvement. In the end this results in total socio-economic instability.

Modern economic misinformation may fool some of the people some of the time, but not all of the people all of the time. Markets are working well to generate corporate profit ... but markets are not working well to improve quality of life for everyone ... not by a mile.

Peter Burgess
TrueValueMetrics.org

This is the text of the essay. Better format and images on the original!

What Egypt Means For Socially Responsible Investment
Posted On: February 07

The past several weeks have been momentous times for Egypt, Tunisia and many other countries in the Middle East and North Africa: regimes are toppling, the people are taking to the streets and protesting en masse, despots are quaking in their boots while world powers are scrambling to navigate the rapidly shifting political landscape.

Perhaps what has been most surprising is the speed at which these events have unfolded - nobody seemed to see any of this coming, particularly the US government, which appeared to have been caught flat-footed as evidenced by initial statements from President Obama and Secretary of State Clinton. While it certainly has been encouraging to see the citizenry rise up and assert their human rights, it is important to note that the aftermath of any regime change may be protracted - it may take weeks, months, or perhaps even years before true stability returns to some of these countries. And sadly, there is no guarantee the regimes that replace the current crop will be any less autocratic (though we hope this is not the case).

So when we consider this region from a socially responsible investment perspective - whether it be as a micro-financier, a venture capitalist, a non-profit aid organization or an individual investor - the inevitable question arises: will the capital we invest help to deliver the social good we intend, particularly if the government in place is actively undermining these efforts?

There's no question that foreign direct investment can benefit developing nations by spurring economic growth, relieving poverty, providing job and educational opportunities, improving basic healthcare and helping to build and support the conditions and institutions vital to a functioning free society. FDI can also be instrumental in improving a country's infrastructure, particularly in the area of technology, which is essential for any economy hoping to compete in the information age (a question that has often been posed over the past few weeks is whether the events in Egypt could have even been possible if the people did not have access to social networking sites like Facebook or Twitter).

But while the potential benefits of FDI are clear, the degree to which these benefits are achieved can often times be murkier, particularly when dealing with corrupt governments that have been in power for - in some cases - decades. Investment dollars and state aid may be welcome by these leaders, but the Western cultural ideals and influence that may come with this capital often times is not.

So when those in the socially responsible investment community tackle this issue, there are two schools of thought that often emerge. These views resemble the "sanctions-versus-engagement" dilemma many developed nations face when confronting diplomacy issues with rogue states.

On one side, there's the purist approach: investing in an autocratic nation not only explicitly endorses the regime's authority and practices, but also helps to preserve the regime's power and foster their growth. This investor tends to be more dogmatic in defining what constitutes a socially responsible investment and is less likely to compromise that view.

On the other side, there's the pragmatic approach: investing in developing nations is by definition a messy endeavor and one cannot wait for the ideal environment to deploy capital because that environment may never arrive. A government will always have some level of corruption embedded in it, and even if a particular government is deemed "acceptable", the nature of politics is fluid: the policies and practices in place today may not necessarily be the same ones in place tomorrow. So rather than wait for the country to meet certain baseline criteria, this investor seeks to take an active role in helping shape the country's future by investing in companies or projects that they feel will have the greatest social impact.

So which approach is best?

Since socially responsible investing is often a subjective and deeply personal undertaking, there is no one right answer on how best to approach it. What one socially responsible investor may find untenable another finds acceptable. So it falls to the individual or institution to decide what their mandate will be and how they will apply social and ethical principles to their investment decisions.

But regardless which approach is taken, what's most important is that the end goal of all socially responsible investors is usually identical: use the resources at your disposal to, in the words of Gandhi, "be the change you want to see in the world."

My reading of the events in Egypt over the past few weeks is that youth have better education and more unemployment than in the past ... while the elite leadership of the country of the country has become incredibly wealthy, what one might describe as a monopoly of power. This unfortunately has become a big part of the modern corporate and capital market business model ... really not much different than the business model used in the old days with Rockefeller and the oil trusts, and more recently (the 1950s) with the market sharing arrangements of the electric generating machinery manufacturers in the USA. Rigging the playing field is good for profits ... and corrupt elites are still helping to play this game.

Transparency is important ... essential. But transparency will not be good for the economic and political elite nor, indeed for corporate profits!

Stay tuned

Peter Burgess

Microfinance ... a study that concludes there has been over-promising!

Dear Colleagues

I would like to share this exchange of e-mails on the Micro Finance Practice (MFP) Listserve.

On Wed, Feb 9, 2011 at 7:04 AM, milford bateman wrote:
Some might find intersting the results of the DFID-funded systematic review of the evidence of microfinance impact in Sub-Saharan Africa.

Milford

From:Dods Monitoring [mailto:sana.ahmad@dods.co.uk]
Sent: 09 February 2011 10:51
To: Jonathan Tanner
Subject: News Alert: Institute of Education:
Microfinance 'raises hopes but makes some people poorer'
08.02.11

Microfinance projects in the developing world make some people poorer, not richer, a major academic study has concluded. It should not be seen as a panacea in the fight against poverty, nor as a blanket tool to empower women.

Aid programmes providing small loans and savings accounts to those who have no access to traditional banking services have been hailed as an important way to use the market to help people improve their lives, and particularly to support poor women. But researchers from the Institute of Education, London, and the University of Johannesburg in South Africa have found that in many cases microfinance not only fails to achieve these aims, but can also damage lives. Recent news coverage of microfinance in India has highlighted the implications of the terrible debt incurred by some borrowers required to pay very high interest rates.

In the first systematic review of the available evidence on microfinance, the academics found a mixed picture. The study reviewed all the good quality research on the impact of microfinance in sub-Saharan Africa, focussing on 15 studies, and found that microfinance is doing little to advance the Millennium Development Goals.

"Health generally increases and, for some, access to food and nutrition" says the report, yet "impacts on education are varied with limited evidence for positive effects and considerable evidence that micro-credit may be doing harm."

For example data from Malawi and Zimbabwe shows that micro-credit significantly decreases primary school attendance amongst borrowers' children. The picture is particularly bad for girls, who are taken out of school or indeed not enrolled at all.

Dr Ruth Stewart of the IOE, who led the study, explains that because the debts have to be paid back very quickly, in weekly or monthly payments, they can discourage long-term investments such as the education of clients' children. "Loans, with interest rates often as high as 30%, need to be invested in business which has a quick return" she said. "In those circumstances it's not a surprise that borrowers can't afford to prioritise their children's education." Furthermore, there is very limited evidence that micro-credit, often targeted at small groups of women, empowers them at all. "This claim is not supported by the evidence" says Dr Stewart.

This is just one element of the rhetoric around microfinance, which raises false hopes and is "problematic and damaging", the report warns. "There may be a need to focus more specifically on providing loans to entrepreneurs, rather than treating everyone as a potential entrepreneur". Microfinance can help some people in particular ways, but "there is an obligation amongst donors and policy-makers not to falsely raise expectations with development aid."

Notes:
. What is the impact of microfinance on poor people in sub-Saharan Africa: A systematic review by Stewart R, van Rooyen C, Dickson K, Majoro M, de Wet T, Universities of London and Johannesburg, was funded by DFID
. The findings can be found at http://eppi.ioe.ac.uk/cms/
Read on Dods Monitoring
________________________________

Parliamentary material is reproduced with the permission of the Controller of HMSO on behalf of Parliament. Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen's Printer for Scotland. All other material may be subject to copyright. Dod's Parliamentary Communications Limited Registered in England under Company number 01262354 Registered Office: 21 Dartmouth Street, London. SW1H 9BP.

I spent Sunday afternoon trying to understand exactly what the report was saying ... and ended up pretty frustrated. It is about 100 pages of small print! Some of the reason for the frustration is evident in what I wrote.

Dear Milford

Thank you for forwarding the information about the Institute of Education Microfinance Study.
(Stewart R, van Rooyen C, Dickson K, Majoro M, de Wet T. (2010) What is the impact of microfinance on poor people? A systematic review of evidence from sub-Saharan Africa (Technical report). London: EPPI-Centre, Social Science Research Unit, University of London.)

I have just spent a happy Sunday afternoon trying to understand exactly what this study is all about. By the time I am through I have really learned nothing and become exceedingly frustrated in the process.

I remember nearly fifty years ago attending a Cambridge engineering alumni meeting and hearing the Chairman of the large engineering group where I was employed suggesting to the Cambridge faculty that they should avoid wasting their effort and talent on learning what industrial practitioners had known for decades.

I also remember doing some work myself in Lesotho about 25 years ago to study the studies that had been done over the previous several years to address rural development. The pile of studies was 3 feet high and about 8 feet long ... approaching a thousand studies ... and we were under instruction not to produce another report, but to summarize what had been done!

What Muhammad Yunus says about some things in microfinance is very clear. When people are working hard for long hours every day and staying poor, there is a systemic problem! When people work hard, create something of value, and all of this value is taken by the usury of the moneylenders ... this is a serious problem. His conclusion more than 25 years ago was that micro-credit would be helpful.

I have worked a lot with microfinance ... but not from the perspective of the microfinance activity, but from the perspective of the community and its development. Microfinance is great if it is part of a full portfolio of initiatives that are addressing all the needs of the community and helping to remove the constraints that impede progress.

Compared to many fund flows to promote "development" microfinance has done well ... and development experts latched on to this because at least there was "something" that worked. But it only works ... and works well ... at the margin. Sustainable development requires increased productivity in the society so that more needs can be met with less use of resources: human, material and financial.

About 60 years into post-independence development and continuing endemic poverty is a disgrace. Microfinance is useful when the factors that are OUTSIDE the limited focus of microfinance studies are being addressed satisfactorily.

In this study I found little reference to the importance of these externalities. From my perspective and based on my experience these externalities are critical. I also found very little reference to the human dimensions of the microfinance operation ... these internalities are also vital to understanding what is going on.

From my perspective the state of the metrics being used in the analysis of the microfinance sector ... not to mention the socio-economy as a whole is also appalling. Financial metrics are dangerous as we have seen with the implosion of the global banking system and capital markets... and their apparent return to profitability! Meanwhile we have nothing that helps to link needs with resources in an efficient way so that important social progress can be made.

Dr Ruth Stewart and colleagues got one thing right ... fast return is needed to pay off high interest short term loans quickly. But most profitable activities repay one loan with another loan ... look at the balance sheet of most corporate entities ... as well as the microfinance client and many children over the past decades have got an education in part because their parents had access to microfinance.

I want to see meaningful metrics about socio-economic progress and performance ... structured like business management information NOT using the incredibly clumsy and expensive academic study methodology where very little data get used to try to draw big conclusions and externalities are effectively ignored!

Its been a happy day ... but frustrating. If I have missed something in this study ... let me know.

Peter Burgess
TrueValueMetrics.org

Whenever I read something like this I am reminded of working in corporate jobs where getting good results was not the primary thing, it was everything. I practiced "management by walking around" in addition to knowing the numbers and knowing the theory of what should be going on. A good pair of eyes is a powerful management tool. When I worked in "development" I used the same approach, and so did a lot of others who were successful at development implementation. It is from this experience that I always concern myself with the externalities ... the things that have nothing to do with what one should be doing, but have the power to completely change outcomes. I do not expect more and more sophistication in an academic environment to get to the key issues that will make development successful!

True Value Metrics and a comprehensive community focus is more the way we should be going!

Stay tuned

Peter Burgess

Interesting times

Dear Colleagues

These are VERY interesting times ... and maybe they will set the direction for a wonderful tomorrow.

MAYBE!!

A huge number of people around the world are young ... many are quite well educated. Few have the wonderful gift of FREEDOM, and in this regard they are severely encumbered.

I live in the United States ... and while I have been a huge critic of all sorts of things in the United States, I am free to be critical. Maybe my criticisms will improve the state of the union ... or maybe nothing will happen. But the IDEA that I can be critical is a magnificent gift.

HOPEFULLY ... the era of repressive regimes is coming to an and.

HOPEFULLY ... real democracy is going to become the norm. Elections that merely facilitate the ongoing rule of a political elite who have little or no interest in the will of the people is hopefully coming to an end.

I am impressed by the value of education ... education that opens up possibilities. If the world uses what it has and what it knows there can be an amazing future. But do not wait for the established financial and political elite to make a great future possible.

Violence is likely ... it is the last resort of established regimes that really have nothing to offer. Theses regimes are very good at building their own wealth ... but building the wealth of the nation, they FAIL.

Time for change ... EVERYWHERE ... and especially time for change in the way we do metrics!!

Peter Burgess

A message to the International Integrated Reporting Committee (IIRC)

Dear Colleagues

I have just sent this message to the organizers of the new IIRC ... International Integrated Reporting Committee. They were organized within the last year and have big ambitions and a lot of high profile people associated with them.

Dear Colleagues

The IIRC initiative is long overdue ... about thirty years overdue, in my view ... but better late than never.

Maybe I am too old to be helpful, but maybe not. I have been inside the accountancy profession as a Chartered Accountant, in the corporate world as a VP manufacturing, budget manager and CFO and a consultant in the area of official relief and development assistance (ORDA) being paid by the UN, the World Bank and others.

My observations over the best part of 50 years is that accountancy and statistical tools have increased in power over this time (maybe a millionfold) but the informational value of all these data are not much better, or some would say, significantly worse. Most of the initiatives to improve accountancy have been either quite marginal or worse, merely designed to suit some special interest.

In my view the data used to help guide society can be improved immensely ... and I want to see it happen sooner rather than later. The TrueValueMetrics (TVM) framework is a modest attempt to set the stage for a paradigm change in the way data are used to handle the state, progress and performance of society and all the entities that make up society. Simply put TVM has some of the rigor of money based accountancy, but using a value construct and not just money ... and having community (the place) the key reporting entity rather than the organization (which is always subsidiary to the place!).

This message is merely to alert you to the fact that I exist ... and that I will do all I can as long as I can to help get meaningful metrics in use throughout society.

Peter Burgess
____________
Peter Burgess
Meaningful Metrics for a Smart Society
truevaluemetrics.org
truevaluemetrics.com
blog: http://truevaluemetrics.blogspot.com
blog: http://communityanalyticsca.blogspot.com
www.tr-ac-net.org (being phased out!)
mobile: 212 744 6469
landline in PA 570 431 4043
email: peterbnyc@gmail.com
twitter: @peterbnyc
skype: peterburgessnyc
Books: Search Peter Burgess at www.lulu.com

You will sense from my tone that I am not expecting very much from this initiative. There are many people in their guiding teams who have very long experience with the reporting situation as it stands. Whether they have anyone in the middle of their community that is going to take a rigorous look at why financial and economic reporting has deteriorated so badly and put something different into play is an unknown at this point. I would love to join in ... but am not overly optimistic that I will be invited!

Peter Burgess

About the US news media in Egypt!

Dear Colleagues

I have been following the events in Egypt ... and before that Tunisia ... with deep interest. I have been incredibly disappointed at the coverage by the US mainstream media, but very impressed by the work of the Aljazeera English network that has had a 24/7 live stream about the eventshttp://english.aljazeera.net/

As I looked for news via the US media feeds, I cam across the following about CNN's Anerson Cooperhttp://discussions.wsbt.com/20/wsbttv/wpix-video-of-anderson-cooper-attack-released/10

I do not like violence ... and I realize news reporting requires risks ... but for the right reason. I wrote a note after seeing the video ... as follows:

Dear Colleagues

It needs to be said ... but the role of media, and especially the US media ... in the world's quality of life is rather pathetic. All the US news assets deploy whenever there is a "newsworthy" event, but there is very little underlying depth to what these news media organizations are doing that will usefully inform the public.

President Mubarak has been "off the media radar" for three decades ... meanwhile Mubarak himself, hif family and his favored friends and supporters have amassed huge wealth. Apparently Mubarak has been in "public service" for 62 years .... about 30 as President and there is talk that he now heads one of the wealthiest families in the world.

This uprising is not only about ordinary people being oppressed by political kleptocrats, but is also something to do with the state of the broader global economic system, misinformation, and growing inequities in society.

Revolutions are not new ... they happen when people have had enough and legitimate aspirations are impossible without real reform.

Anderson Cooper is lucky to be alive ... but good news reporting is a lot more than being a photo -tourist in the middle of mayhem. The problem is not Anderson Cooper and his team per se ... and I wish them well ... it is a systemic problem with a society that measures everything in money.

Peter Burgess
TrueValueMetrics

I could have said a lot more, but there was a limit to the length of the comment.

I would have liked to add some reference to the gross simplification of big complex issues by the US media ... the issue of Islam, another "red herring" and completely off base ... and many other matters. This will have to be for another time.

Stay tuned

Peter Burgess


..

Role of corruption and thuggery needs addressing

Dear Colleagues

I just sent this e-mail to the organizers of conferences that address issues of ethics and business ... but with a very corporate perspective. They know me because they think of me as a potential customer for their conferences!

Thank you for staying in touch.

For most of my career I have had the goal of getting ethics at the center of socio-economic activity. I look at what has been accomplished over the past 50 years, and, bluntly put, I am not impressed. The main driver of society is not what is good and right ... but merely what is good for me and what is profitable. This has worked very well for some people ... but has not worked for all people.

Sadly, in modern society there is a veneer of politeness and doing things in an ethical and proper manner. Behind this, the role of thugs and all sorts of unethical behavior is in play.

My world view is that there is more profit in a stable corrupt society that oppresses the underclass than in a society that has ethics front and center. One day this socio-economic construct will fall apart ... as maybe it is doing now in Egypt.

The events in Tunis ... and now Egypt are very thought provoking. I have been in a lot of countries over the past 50 years where thuggery is a big part of the political and socio-economic landscape ... and I do not like it. People deserve better ... but I do not see much ethical anger about the role of corruption and thuggery in how modern society functions.

These are serious issues ... and broadly speaking ... off the radar. Who cares as long as stock markets are going up?

Please stay in touch ... look at TrueValueMetrics.org

One day people will realize that I want to see more than talk ... lip service ... to ethics and solving problems of corruption and state sponsored thuggery

Stay tuned.

Peter Burgess

January Activity

Dear Colleagues

I have been relatively quiet in the blog space during January, mainly because of work that I am doing to rebuild a website to support the True Value Metrics (TVM) initiative.

In due course there will be a truevaluemetrics.org website and a truevaluemetrics.com website. One of these will have a focus on a database of TVM data, and the other will focus on the more personal aspects of a TVM network.

I have been saying for a long time that modern society needs equally modern metrics ... and while there are many initiatives to improve on the present metrics, none seem to have anything like the scope of the TVM initiative.

Many of the initiatives are aiming to improve the reporting that is done by corporate organizations ... but require the collaboration of the corporate organization. The hope, which almost certainly is unrealistic, is that important corporate organizations will cooperate ... but what happens if they do not?

Many of the new initiatives are issues centric ... which is interesting but not sufficient. TVM, in contrast is not issues centric, but community centric ... and people centric. People may or may not have an interest in an issue ... for good reason or perhaps for no reason. But quality of life is all about what is important for people ... and the measures should alert people that something that appears good today may have bad consequences in the future, and should make this easily visible.

As January closes the events in Tunisia and in Egypt have gained global attention ... and quite predictably the US media sees this largely in terms of politics, religion and impact on the USA. This is not the perspective of analysts from the region who seem to be saying that local economics are even more important, especially the demographics where a very large population of youth has education but virtually no meaningful economic opportunity. This is, of course, in line with the basic thesis of TVM that society needs to have meaningful metrics about the progress and the performance of the society ... something way more than mere corporate profit performance and GDP growth.

And of course as January closes Haiti remains in a terrible situation, with way too little progress. It is increasingly clear that there is little or no accounting for the funds that were mobilized to help Haiti ... and no intention on the part of anyone to address this matter in a substantive way. Be assured, however, that I intend to follow up on this as best I can.

And now to February! Stay tuned!

Peter Burgess

Egypt ... some thoughts

Dear Colleagues

In TrueValueMNetrics, there is accounting for everything that comprises quality of life. Good things are assets in the "state" of the community, and bad things are liabilities.

It is good to be moving up the socio-economic ladder ... good to be progressing out of poverty. It is bad to be stuck in poverty especially when the privileged classes, mainly the political class, the business class and to some extent the people within the security apparatus are getting richer and richer in both absolute and relative terms.

It is good to have freedom ... something that too few people on the planet have. It is good to be empowered ... even in a modest way ... to get heard and to be a part of an improving society.

Greed is a powerful motivator ... but it is not a good motivator. The human spirit is way better than mere greed.

So what is going on in Egypt. Several decades ago there was a global revolt against what was often referred to as Colonial oppression. When I was a student, there was great optimism about the wonderful future that was going to emerge when colonial oppression was replaced by "independence". Sadly, in far too many cases, colonial oppression was replaced by a combination of local political oppression and a new world order of corporate exploitation ... not to mention military opportunism.

The revolt in Egypt represents a very public statement of total dissatisfaction with the way in which Egypt is being run by its leaders ... and indeed, of dissatisfaction with the global community that makes this type of leadership possible.

There will be success if those who are dissatisfied with the way Egypt has functioned are able to do things that better serve the legitimate economic aspirations of the people as a whole. From my perspective this is a business challenge as much as it is a political or security challenge. The business community ... the global business community ... needs to address the root causes of food price increases and do it quickly. The business news channels need to talk as much about economic hardship from food price increases as they do about the potential for more profit from the corporate food sector.

Huge corporate profits on top of poverty is a volatile combination ... in its extreme as in Tunisia, and Egypt ... and indeed in Iraq and some time back in the Shah's Iran ... but increasingly a concern everywhere.

As the revolts in North Africa progress ... one also has to think what lessons there are for Haiti. I believe that there are important lessons to be drawn.

People need to be at the center of success ... and this energy needs to go into building an economic system that really works.

Sincerely

Peter Burgess

Dear Colleagues

Yesterday was the 12 month anniversary of the Haiti earthquake ... and the start of a year of terrible suffering for the people of Haiti.

The text below is some of the PR coming out of the Clinton Foundation and the international enterprise sector that is doing their thing in Haiti. This is the URL:
http://www.cnn.com/2011/WORLD/americas/01/12/haiti.economy/index.html?iref=allsearch

I have strong views about this type of help for emergency and development. More comments below!

Port-Au-Prince, Haiti (CNN) -- Haiti's economy is getting a boost thanks to a venture with one of Korea's largest companies that promises to bring 20,000 garment industry jobs to a new industrial park in the north of the country.

Former U.S. President Bill Clinton and Haitian Prime Minister Jean-Max Bellerive were joined by members of the Interim Haitian Recovery Commission, the Inter-American Development Bank, Haitian business leaders and the chairman of Sae-A Trading Co. Ltd. at the Haiti Apparel Center in Port-au-Prince as they signed an agreement to build the North Industrial Park. It's part of an effort to rebuild the Haitian economy that began even before the earthquake struck one year ago.

"This will inspire people all over Latin America, the Caribbean, the United States, Canada, Europe and Asia who have thought seriously about investing in Haiti and not come through," said Clinton. "What we need is a commitment to be competitive in getting investment and putting people to work, and then we need to build the institutions that will allow the people to flower. That is our commitment."

Smiling, Bellerive said that looking back over the past year, "This is the best day of my life today."

The project is expected to generate $500 million in wages and benefits over 10 years and result in Haiti's first textile mill, according to its backers. Investment in the industrial park will also include the construction of at least 5,000 homes. The United States will oversee the construction of a power grid that will provide electricity to the park and the surrounding area.
The garment industry had been the prime source of Haitian exports before the earthquake and it remains so today. About 28,000 people currently work in Haiti's garment sector, manufacturing products for Gap, JCPenney, Wal-Mart, New Balance and other well-known brands.

Georges Sassine owns a garment plant in Port-au-Prince that employs 530 people. He believes the garment industry holds the key to growing Haiti's economy and making the country self-sufficient.

"Today, this industry represents over 50% of our earned foreign currency earnings. It also represents over 50% of the total commercial exports of Haiti," he said.

Sassine didn't have a problem retaining buyers after the earthquake. "We shipped our first container 10 days after the quake. We were ready to do business."

At the time, he had to ship his goods over land to the Dominican Republic before delivering them to buyers. Today, he is able to ship goods from a reopened port in the capital, Port-au-Prince.

This is not ALL bad ... ... it is not all wrong! But the basic business and economic model being used is one that has serious issues associated with it.

The biggest single problem is that this is a low wage profit driven initiative ... with very little understanding of the key needs of the people and the society. Considering the amount of investment involved there is relatively little value adding benefit that remains in Haiti.

A better emergency rebuilding and development model is one where the needs and the capacities of the people of Haiti are the starting point ... and how can investment be made so that there is the biggest impact on closing the gap between need and local capacity. The industrial parks being promoted by outside investors are serious about profit making for investors but not as serious about the benefit for Haiti. Yes ... there are jobs, and that is good ... but besides this, the product has not much benefit for the economy of Haiti.

The core of sustainable community development progress is using local resources to do things that the local community needs ... giving a return to investors in the process. These foreign direct investment projects have the investors first, and the local community is a second tier priority. Frankly, The Clinton Foundation should know better ... but I do not think they do.

Sincerely

Peter Burgess.

It is nice to see honesty in high places!

Dear Colleagues

It really is nice to see honesty in high places ... but it is all too rare.

The OAS representative in Haiti seems to have drawn the same conclusions I have drawn after almost of year of following the Haitian post-earthquake emergency situation. This interview in interesting.
http://www.canadahaitiaction.ca/content/further-interview-brazilian-diplomat-ricardo-seitenfus

Starting within a week of the initial disaster we called for accountability from all concerned ... but got near zero interest ... even from high profile well known organizations. We wanted to see basic True Value Metrics being used to help with simple accountability ... but nobody NOBODY wanted to do it.

When I learned basic auditing I learned that you know there are problems when nobody wants to give you a straight answer ... and I know enough about fund flows and connecting the dots to conclude that the degree of thievery or something very much like it is disgustingly high ... or is it that there is massive incompetence ... or both!

Peter Burgess

Plans for CommunityAnalyticsCA ... a blogspot blog

Dear Colleagues

The CommunityAnalyticsCA blogspot blog is being replaced by this TrueValueMetrics blog ... the name changes ... but probably not the theme.

It seemed for a while that the system of value accounting being developed would emerge as "Community Analytics" but it turned out that this name was already in use by another organization. While we were doing different things, the potential for confusion existed, and they were "first" so it was our responsibility to arrange to move on. We did not do it as quickly as we would have liked, but now it is happening with TrueValueMetrics the name.

Most people prefer the new name ... some would have liked us to keep with Community Analytics. I am more concerned about the product than the way it is named. As always, ideas to make metrics really work so that we are measuring the right things and encouraging the right behaviors are always welcome.

By the end of this year, I am hoping that True Value Metrics will be starting to be a factor in the way people think about profit. It is long overdue.

Best wishes

Peter Burgess

Transitioning to 2011

Dear Colleagues

I am transitioning from 2010 to 2011. Hopefully this will be an important year for progress ... progress that really matters.

The idea that the New York stock market can be back to the level pre-Lehman Brothers is clear evidence that the system of metrics being used makes no sense. The level of economic problem in the United States is at an unacceptably high level ... and the stock market is going its merry way rewarding profit which is fine, but not taking into consideration in any serious way the economic disruption these same profit makers are causing.

True Value Metrics addresses this ... and will be used in due course to hold the economic actors to account.

Best wishes for 2011.

Peter Burgess