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1 July: Melting Artic. BLM. Helping the poor.

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Last week witnessed the hottest temperature ever recorded in north-of-the-Artic-circle Verkhoyansk, Russia. Polar heatwaves are very bad news. They accelerate global warming. Melting sea ice gives way to dark water that absorbs more heat. Melting permafrost releases huge amount of ice-trapped greenhouse gases while damaging all man-made infrastructure. These changes are often irreversible.
 
It has been hard to choose from what I read and listened to on Black Lives Matter. Feel free to share with me what you have found the most helpful and educational. I need it. I would suggest taking the time to listen to Nikole Hannah-Jones’ 1619 podcast series: it is personal, it has good soundtrack, it provides a whole alternative narrative on how slavery shaped the American economy and how black people’s struggles and fights paved the way for other minorities’ struggles and fights.
 
The Center for Global Development published their 2020 Commitment to Development Index which uses over 50 indicators to assess rich countries’ dedication to helping the poor. While the UAE features last in the list of 40 countries for the overall index, it is in the top-5 countries supporting health multilaterals – assessed through their relative aggregated contributions to WHO, GAVI and the Global Fund. 

My quote this week is from Psychiatrist Julie Holland [28’53’’]: “In medicine, un-checked growth is called cancer. And to me it’s pretty much the same in business: If it’s all about growth and profit you are missing public benefits.”

15 June:Leaders walking the talk. Peace Index. And naming the problem.

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The UN Global Compact turns 20 and opens its virtual forum today. One background document by executive search firm Russell Reynolds looks at “Leadership for the Decade of Action”. It recalls a 2019 UNGC/Accenture study showing that 92% of CEOs believe integrating sustainability is critical to business success but that only 48% are doing it. It points to a 2019 Russell Reynolds study analyzing 4000 role specifications across industries and countries showing that while 15% of them make reference to sustainability (up from 9% in 2015), only 4% actually have sustainability experience and mindset as a requirement for getting the job. These numbers tell us that there is a still work to do to walk the talk in the private sector. To complement these findings, Russell Reynolds conducted in-depth interviews with 55 CEOs and found that sustainability pioneers are 3 times more likely than the control group to have worked in two or more continents, are more than twice as likely to have had experience in two or more functions, and are more likely to have had experience in operations and supply chains.  It finally argues that all sustainability pioneers in business have a “sustainable mindset”. That means that they display the following leadership attributes: multilevel systems thinking, stakeholder inclusion, disruptive innovation, and long-term activation – a lot of catchy words thankfully unpacked and exemplified in the report.
 
Since the beginning of the crisis, hundreds of CEOs have announced that they would share the pain with their employees and take salary cuts. Financial Times Fan Fei and Andrew Edgecliffe-Johnson analyzed – for 554 companies – how these salary cuts compared with returns from equity awards CEOs would be receiving this year. They show that these awards would far exceed the “solidarity” salary cuts as stocks continue to recover. That’s also because salaries only make a small portion of the income CEOs take home. 
 
This graph is from the Institute for Economics and Peace’s ”Global Peace Index (GPI) 2020”. The index is made of 23 indicators and covers 99.7% of the world population. The report shows that global peacefulness has deteriorated 2.5% since 2008, calculates that the global violence price tag is $14.5 trillion dollars, says that COVID-19 adds more tension and uncertainty, and argues that civil unrest and environmental problems could further affect the situation in the future. The graph below shows the percentage changes for each GPI indicator from 2008 to 2020. 15 indicators have deteriorated. Two indicators significantly changed in opposite directions: UN peacekeeping funding improved while terrorism impact worsened.

My quote this week is from Chimamanda Ngozi Adichie on the Daily Show [1’18’’]:  “Feminism is about justice for everyone but you have to name the problem. And the problem is that it is women who have been excluded. So, we need to call it what it is.” And Trevor Noah’s response: “In many ways that’s what people say about Black Lives Matter.”

1 June: Science and policy. Female leadership. And debt.

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COVID-19 sheds light on the need for science-informed policies. Yet, scientists and decision-makers operate with different mindsets and timelines. Decision-makers find scientific proposals too slow, unidimensional and lacking opportunity cost analysis (I talked about this here). Scientists complain about the lack of political will of decision-makers to implement their solutions. Political scientist Selim Louafi unpacks this challenge in “Biodiversity science and decision-making: a relationship to build”. He looks at the role of expert panels on environmental issues and his recommendations are: don’t work independently from decision-makers, bring in social scientists, and expand your target audience beyond national legislators to influence mayors, business leaders and consumers. He argues that scientific neutrality is a myth as scientists are political when they choose their research objects, frameworks and institutional affiliations. He calls for expert panels to be multidisciplinary and engage local decision-makers. And he shows how this works in practice for a global research project on plant genetic resources.
 
Thinking about risk, work, and gender, I was first struck by data showing that more women than men were essential frontline workers and, thus, more exposed to health risk on the job (see here for US figures). Then, I noticed many articles on how female-led governments dealt with the crisis more effectively than men-led ones. And today, this FT article showed how female-led hedge funds outperformed men-led ones through the crisis. But I could not find research on the gender aspect of risk-management leadership capabilities. Evidence needed.
 
This graph from Politico ranks countries based on how well they did on the economic and health fronts in response to COVID-19. Economic performance aggregates GDP, unemployment, and fiscal stimulus data. Health performance is based on testing, infection, and death data. Vietnam is at the top.

This quote is from economist Thomas Piketty [my translation]: “The most interesting method [to rapidly reduce public debt] which has also been the most successful historically is Germany and Japan implementing an exceptional levy on the highest private wealths after the Second World War. […] Public debt which was 200% of GDP dropped to under 20% of GDP in a few years. This gave more leeway to invest in rebuilding, public infrastructure and education. And it greatly contributed to economic growth during the post-war boom era in these two countries.”

24 May: Scenarios. Higher education 2.0. And Human development drop.

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In “Our COVID Future”, Alex Evans and David Steven unpack the three layers and timeframes of the pandemic effect: A 2-year public health crisis, a 5-year economic crisis, and a one-generation crisis of insecurity. Then, they build four scenarios based on whether responses will be polarized or collective, and centralized or distributed. Each scenario shows who has power, who are the economic winners and losers, and how places and people are impacted. Scenarios like those are meant to expand and frame strategic thinking before making decisions. If you see any other similar exercises, please let me know. 

COVID-19 accelerates certain pre-existing trends. One of them is the digitalization of higher education. With confinement and restrictions of movement, higher education has moved online over the past couple of months. Several universities such as Cambridge announced that they will stay online until summer 2021. In the medium term, NYU Stern Scott Galloway predicts that big tech will partner with elite universities to develop hybrid (i.e. online/onsite) models of education affordable to more people. Less prestigious universities will empty out while on-campus experience in elite universities will become a luxury good experience reserved to the richest.

My graph this week is from the UN Development Programme documenting the first-ever drop in human development since 1990. The Human Development Index combining data on health, education and income takes a hit with mortality increasing, school closing and unemployment growing.

My quote this week is from UCL economist Mariana Mazzucato talking about the Green New Deal [7’31’’]: “There is no thinking. Let’s just do it. We don’t have a choice.”

10 May: Global governance. Local boundaries. And optimism.

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n 2017, I wrote in a quarterly trends digest [p. 8]: “A number of high-visibility tech leaders are offering visions for collective action and prototypes of global governance that bypass traditional intergovernmental models. Do these offer a challenge or an opportunity for the UN?” This trend has only grown since. And proposals have gained in sophistication. This week, Facebook unveiled the membership of its new Oversight Board. The board will make decisions on what content should be allowed or not on Facebook and Instagram. The set-up looks great: the creation process was consultative, the board is independently run and funded, and the membership is of high caliber and diverse. Some, like Casey Newton, questions whether the group of 40 people – each working 15 hours a month in their board member capacity – will be equipped to deal with complex issues affecting 2.37 billion people. For me, the main problem is that content disputes are only symptoms of more fundamental issues that this board will not tackle. Indeed, global digital platform content-related disputes bring up issues of rights, inequalities and democracy. They are also products of how these digital platforms are designed and operated. If the new Oversight Board does not have a say on these fundamentals, then who does? I would still argue that because this is about universal rights and global governance, this is UN core mandate. So my 2017 question remains valid: where is the UN?  

Blake Ashforth and al.’s “All in a day’s work: boundaries and micro role transitions” put the finger on a key issue for me while working from home during confinement: the loss of micro transitions between the role of worker, parent, educator, and partner. The article [paywall, sorry] gives a theoretical framework and shows how micro-transitions create helpful boundaries between roles, making it easier to do it all and deal with trade-offs. In regular times, these transitions might materialize through a change of physical location, specific times, or different dress codes. When confined, it all gets blurred so one needs to re-create micro-transitions artificially to operate. I still struggled but reading and thinking about it helps me adjust.  

My graph this week is from the Spring Update of the Edelman Trust Barometer 2020 which surveyed 13,200 people in 11 countries in April. Two numbers surprised me. First, trust is at its highest level since 2012, even gaining 6 points since January. Second, 64% of people think that the crisis will lead to positive innovations and change for the better. I was not expecting such optimism.  

My quote this week is from Tim Bray who resigned from Amazon Web Services where he was VP and Distinguished Engineer: “Firing whistleblowers isn’t just a side-effect of macroeconomic forces, nor is it intrinsic to the function of free markets. It’s evidence of a vein of toxicity running through the company culture. I choose neither to serve nor drink that poison.” Wow.

3 May: How much will it cost? How will we pay back?

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The first chapter of the IMF 2020 Fiscal Monitor shows that, as of 8 April, G20 countries had provided 3.5% GDP of fiscal support to respond to the pandemic. To compare, in 2009 they spent 2.1% GDP to respond to the financial crisis. In addition, G7 countries have already put forth loans, guarantees and liquidity injections amounting to over 10% GDP. It is not yet possible to estimate the full economic cost of the crisis. But we are talking in trillions of dollars. To compare, the Global Preparedness Monitoring Board said that the 2003 SARS epidemic costed $40 billions, the 2009 H1N1 pandemic $45 billions, and the 2014-2016 Ebola outbreak $53 billions. And to recall, the Commission on a Global Health Risk Framework for the Future estimated, back in 2016, that global pandemic preparedness would cost $4.5 billion per year. Yes, that’s in billions of dollars. Globally.

I always enjoy Capitalisn’t, the podcast of Georgetown Kate Waldock and University of Chicago Luigi Zingales. In this episode they discuss who is going to foot the bill. They explain how debt works, and how there are two ways to get out of it: growth and taxes. To debate tax options and their effects on inequalities, they invite Nobel prize Gene Fama, challenge his conservative views, and get him to agree that a one-off wealth tax could help pay back in a fair way.

My graph this week is Vivid Economics’ green stimulus index which shows the “green” component of stimulus funding – ie how funds go to sectors improving climate change, biodiversity, and pollution — in 11 countries. And we do not see much green. 

My quote this week is from former World Bank President recently-gone-back-to-Partners-in-Health Jim Yong Kim [39’30’’]: “If we are using bazooka and nuclear options in fiscal and monetary policies, why are we using squirt guns in public health policy?”.

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