Monday, January 31, 2011

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 website and a 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

Sunday, January 30, 2011

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.


Peter Burgess

Thursday, January 13, 2011

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:

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.


Peter Burgess.

Wednesday, January 5, 2011

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.

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