OECD Forum 2011. Work and family – a tough balance to strike

Cherie Blair offered some insights into the battle to balance work and family life during a session at the OECD 50th Anniversary Forum. Ms. Blair has a unique perspective – she’s a leading barrister in the United Kingdom and, of course, spent a decade in 10 Downing Street as wife of then-Prime Minister Tony Blair. 

She recalled that back in the 1970s, both she and her husband were competing for the same job in a legal firm. “They took Tony because they thought he was a better bet,” she said. “Seven years later, he left that job and hasn’t been a lawyer since; 35 years later I’m still a lawyer.” The incident underlined what she felt was the danger of employers failing to take a long-term perspective: Over the course of a career, she said, maternity leave took women out of the workplace for only a relatively short time, and it should not be seen as a barrier to hiring. 

Ms. Blair also emphasised that parental rights were not just a woman’s issue: Men, she said, needed to assert their right to be caring parents. Women, she said, did twice as much childcare as men, and three times as much housework as men. While Tony had done his share of childcare, she told the audience, he had slipped behind on the housework. She said also that there could be cultural obstacles to men performing their parenting role. In some companies there was also an attitude that “real men don’t take parental leave.” Those attitudes needed to change, she said: “A distant absent father is not good for society.”

In Japan, fewer than 2% of men took paternity leave, said Yoshinori Suematsu, a Japanese Senior Vice-Minister. The rapid ageing of the Japanese population meant it was important to get as many women as possible into the workforce, he said. Japanese needed a new system of childcare so that women could work outside house and not worry about childcare. 

Changing attitudes wasn’t easy, he admitted, but, as Carlos Mulas-Granados, Executive Director of Spain’s IDEAS Foundation, pointed out, they can be changed. The decision to appoint equal numbers of women and men as ministers in the Spanish government had helped shift how women were viewed, he said, especially the sight of a woman defence minister going about her duties. “A pregnant woman reviewing the troops was a very powerful image,” he said.  

Ms. Blair agreed that women in government could serve as important role models. She recalled a story she’d heard from Ellen Johnson Sirleaf, the first elected woman president in Africa, about touring a school in Liberia. As the tour went on, the children grew tired and restless, and one little girl found herself being ticked off by a teacher: “Be careful what you say to me, Sir,” the little girl replied, “because one day I could be president.”  

Useful links

OECD work on families and children  

Babies and Bosses  – an OECD study on reconciling work and family life

OECD Forum 2011.The fight to restore trust

It’s receding into the past, but the Great Recession – and the factors that led up to it – are still very much on attendees’ minds at the OECD 50th Anniversary Forum this week. At a session entitled “Restoring Trust in the System,” a wide range of opinions were heard on lessons for financial regulation and corporate governance in the wake of the crisis.

Seated side-by-side on the first panel were ministers from two countries that had very different experienceces in the crisis: Canada, which sailed through the recession and has come to be seen as a paragon for financial regulation, and Iceland, whose Finance Minister, Steingrímur J. Sigfússon, admitted that “we were not quite as lucky as Canada”.

Steingrímur managed to get to Paris despite the clouds of ash from the latest troublesome Icelandic volcano – “we picked an easier name this time,” he joked. That led him to draw comparisons between the forces of nature and the forces of the economic system: “When faced with forces of nature, we feel humbled,” he commented. With financial markets, we need a similar attitude, he said. We must realise the limits of what we know and don’t know, he said, and admit that things went wrong: “There were fundamental flaws in the system, otherwise this would not have happened,” he said. 

The Icelandic minister raised an issue that was echoed by a number of speakers – pay and compensation for bankers and executives: “Why do we accept that bankers need tremendous bonuses to do their jobs, but not surgeons saving people’s lives?” Steingrímur asked. The point was also raised by Peter Mandelson, a former EU Trade Commissioner and British government minister. “Executive pay has become disconnected from reality,” he said, citing a big increase in payments to British business leaders. In 1998, said Lord Mandelson, payments to executives at FTSE 100 firms were 47 times average earnings at their firms; since then, they’ve risen to a multiple of more than 100, far outrunning any improvement in the firms’ share price. While stressing that he didn’t believe in the politics of envy, he said the “scale of what has happened cannot be justified.”

 But Federico Ghizzoni, CEO of the Italian-based banking group UniCredit, defended his remuneration. He said there was a perception that everyone got huge bonuses, but this was not the case. On average, he said, after-tax salaries in Italian banks were only about 30,000 euros a year. He added that half his bonus was based on customer satisfaction and his company’s reputation, as measured by an independent survey. Still, he wasn’t complacent about the challenges facing banking: “The crisis of 2007 was a crisis of values,” he said, “if you don’t measure and test the values of your management, it will come back.”

Values were also on the mind of John Hope Bryant, founder of Operation Hope, which works to expand economic education and empowerment in the US. He said the crisis had shown the need to improve financial education: “This is a civil rights issue – if you don’t understand the language of finance today, you’re an economic slave.”  

Lord Mandelson warned about the risks to social stability from the after-effects of the crisis. Despite the enormous progress in OECD countries over the past 50 years, “the mood of our citizenry is not celebratory,” he warned. There was a lot of apprehension and scepticism about politicians and business, he said, and these attitudes were very corrosive. If left unchecked, he said, they would sap our capacity to make the decisions we need to make.

Echoing Lord Mandelson’s comments, Christine Varney, US Assistant Attorney General, Department of Justice, said there was an argument for a fundamental change in the attitudes of business. At present, boards were legally required to concern themselves only with increasing shareholder value. That approach may be too narrow, she said; she called instead for a focus on stakeholder value – in other words, the interests not just of a business’s shareholders but of its customers, suppliers, and the society in which it operates. David Begg, an Irish labour leader, went further, and said that the economy must be embedded in society, and not the other way round. “Until we achieve that,” he said, “there can be no possibility of restoring trust.”

Useful links

OECD: Strengthening governance, restoring trust  

OECD work on corporate governance

OECD Forum 2011: The new IMF is the street

Press briefing on food price volatility with OECD’s Ken Ash – head of the Trade and Agriculture Directorate and Professor Paul Collier of Oxford University, author of The Bottom Billion.

Ken Ash argues that speculation can’t explain the volatility we’ve seen recently, and neither can any other single factor. Growing demand; conversion of land used to grow food crops to biofuel crop production;  currency fluctuations, notably as the dollar rises and falls; extreme weather events like droughts and floods; rising oil prices – meaning petroleum-based inputs such as fuel and fertilizer are costlier; and government policy, including export restrictions and hoarding all play a role.

There’s also the fact that only a relatively small share of global food supplies is traded, so increases and decreases of food commodities available for export can have a big impact on the markets.

Such a complex set of factors means that the policy response has to be sophisticated. The focus has to shift towards helping poor consumers via a combination of social safety nets, humanitarian aid, risk management tools, financial instruments to cope with currency fluctuations, and means to improve the capacity of poorer countries to produce food or buy it.

The poor suffer most from volatility and are the most vulnerable to food insecurity. In fact, hunger – to give lack of food security its starker name – is not a problem of global food supply. The obesity epidemic and mountains of food waste are two indications that there’s more than enough for everybody. The problem is, the poor can’t afford to buy enough food.

There are more hungry people now that  food prices have risen, but as Ken Ash points out, the majority of them were also hungry when prices were low. The answer has to come from economic growth and n economy-wide improvement in living standards.

Paul Collier agrees. One of the cruel paradoxes is that many of the hungry are farmers. There are too many people trying to make a living from inefficient agriculture in developing countries, and they can’t even feed themselves and their families. That said, for Collier, the main victims are the urban poor, who may spend half their money on food.

As prices rise, some people eat less. “Some people” often means children. This has long-term as well as immediate effects. Children who suffer from malnutrition for two years are likely to suffer from stunted physical and mental growth, and to pass on this handicap to their own children.

The solution may not be linked to the cause. If growing demand from increasingly wealthy Asian consumers is one of the reasons for price increases, the answer isn’t to plunge Asians back into poverty, it is, as Ken Ash argued, to improve incomes elsewhere.

Collier and Ash also agree that trade bans are a particularly dysfunctional response. If big producers can’t export surplus production when prices rise, they’ll have no reason to invest in boosting productivity.

Collier identifies three “follies” in the food situation.

The European folly was to ban the production of GM crops in 1996. Africa copied this, without analysing the benefits GM crops could bring to a continent that needed to adapt quickly to climate change and the need to exploit less favourable soils.

The US folly was to imagine it could grow its way out of an energy crisis by encouraging biofuels. Even if the whole of US crop production went to biofuels, it would still only provide 8% ;of national energy needs. Rich consumers don’t mind paying more for food to boost energy supplies – food is a relatively less important budget item for them than fuel. The opposite is the case for the poor.

Africa’s folly, encouraged by many NGOs and development agencies, was to resist commercial agriculture, and concentrate on inefficient, small-scale producers (and at the other and of the scale, accept land-grabs from export-oriented international investors).

When asked to forecast food prices, Ken Ash went for a gradual decline in real terms, but from a higher plateau, although weather extremes and oil price uncertainties could derail this.

For Paul Collier, volatility is the most likely forecast, and countries have to be prepared. For poor countries, this means hedging against volatility in their budgets by setting aside sums in case prices rise significantly (aid could help establish such funds).

Events in the Arab world show what can happen when the poor can no longer afford to eat. Food riots preceded the present calls for democracy and political reforms, and governments have to be aware that they’re answerable to their people and not just to national elites and international financiers.

When I spoke to him after the briefing, Collier summed up his view of the Arab Spring by saying that “The new IMF is the street!”.

More power to your grannies

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If you want a solar engineer, get a granny. That was the message of Sanjit “Bunker” Roy, founder of India’s Barefoot College at a session on women’s economic empowerment at the OECD’s 50th Anniversary Forum.

Mr. Roy explained that there was little benefit in training men from rural villages — “men are untrainable, they are restless and compulsively mobile,” he said. “There’s no point in training them, because when they get a certificate they leave the village.” So, his Barefoot College instead trains grandmothers – women who have usually never left their home village and have little wish to do so. “Grandmothers come screaming onto the plane,” he told the audience, “they hate leaving their lives behind.”

But if the journey is painful, it’s also worthwhile, especially for the home villages of the women. As Mr. Roy explained, the college has trained hundreds of women from India and further afield, including 200 women from across Africa. “Through sign language, not through the written word, we trained these women to be solar engineers,” he said.

Once they return home, they’re keen to pass on their knowledge – another characteristic that distinguishes them from the male counterparts: “If you train a man, he doesn’t want to pass on his knowledge for fear of losing his job,” said Mr. Roy. For the village, electricity can be transformative. Solar lamps mean there’s light for midwives when they’re delivering babies. Access to power also means there’s more for people to do once night falls, which helps cut down the birth rate

Mr. Roy’s reflections were just part of a fascinating discussion on empowering women, and the impact that has more widely for societies. Melanne S. Verveer, U.S. Ambassador-at-Large for Global Women’s Issues, argued that there was no better way to drive economic growth than women’s economic empowerment. “Women who run small and mediums enterprises are growth accelerators,” she said.

From North Africa, Nizar Baraka, a minister from the Moroccan government, said events in the region this year showed there was a real demand for recognition of people’s dignity – and, “in order to have dignity we need gender equality”. That meant ensuring women had access to employment, he said, and the opportunities to create their own enterprises. In the Middle East and North African region, he said, women accounted for only about 10% of entrepreneurs, compared with 30% in OECD countries. But, he said, progress was being made, with the creation of a range of “incubators” and mentoring programmes to encourage women to set up their own businesses.

Useful links

OECD Gender Initiative

OECD Forum 2011. New sources of growth: green your life

Two panels in this session, on “Lessons from successful green growth reform” and “Stimulating change in business practice and consumer behaviour”. The amphitheatre is lit like a 1970s ballroom – dim blues and reds, perfect cover for cowardly hecklers.

In fact, the trouble comes from the podium, where Chandran Nair, who intervened briefly this morning, shatters the consensus. I had expected WWF’s Jim Leape to lead the charge against big business, but the panda kept its claws sheathed.

Leape praised the various companies the WWF works with. These include cement makers Lafarge (responsible for 1% of global CO2 emissions by itself at one time according to the WWF director), and a number of big companies like Coca Cola who’ve pledged to help put an end to deforestation by 2020. Other business initiatives include Unilever’s decision to do away with the quarterly report and the short-termism it engenders. Conclusion: business can lead and government can back them up.

For Nair, all the talk of “green” this and that trivialises the whole debate. If we don’t recognise that we’re faced with massive constraints, we’re victims of the corporate fairy tales firms like to peddle to improve their image. It’s simply not possible for billions of Asians to live and consume like Americans. In fact, he argues, restricting consumption is not a bad thing, except for business. So, governments’ role is not to follow, but to lead – by imposing rules on car ownership for instance.

Thomas Koenen, speaking for German industry, is a surprise ally on some points at least. He doesn’t find classifications like “green” sectors all that useful either. Offshore windfarms for example all need steel for their construction.

The first panel ends with no consensus. Then they inflict Björk on us again until moderator Simon Upton asks somebody to put her out of her misery (and turn up the lights so he can see who wants to intervene).

Jeremy Rifkin kicks off, practicing what he preaches by recycling his talk from this morning. Marie-Louise Knuppert of the Danish Confederation of Trade Unions reminds us why so many businesses have “suggestion boxes”: workers don’t leave their brains at the door when they arrive for a shift. They know the products and processes of any business as well as anyone and should be involved in changing not only what firms do, but how they do it.

Bjorn Stigson of the World Business Council for Sustainable Development still hasn’t forgiven Nair for his earlier comments and insists that business is well aware of the constraints. In fact, competition  for access to resources is being transformed into a “green race” to dominate the world economy, with China well-positioned coming out the starting blocks.

One of the most interesting exchanges is between a business consultant from Africa and Stigson. The consultant said that Africa was being neglected in this dialogue. Stigson replied that they’d tried to engage African business leaders but without success – they weren’t interested in sustainable development.

There’s general agreement however that “greening” will need a combination of tools, including technology, pricing, rules, and better information for consumers. Simon Brooks of the European Investment Bank reminds us that greening will mean that some things are more expensive.

Nobody said “there’s no silver bullet”.

OECD launches Your Better Life Index

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As we mentioned a few days ago on the Blog, this week marks the launch of the OECD’s brand new Your Better Life Index . A quick reminder: The Index is designed to let you compare and contrast the various factors that determine people’s well-being – not just GDP, but a much wider range of things like education, income, housing, security and so on.

The Index was launched this morning in Paris by OECD Secretary-General Angel Gurría l, who quoted Bob Kennedy, who in 1968 said of GNP – a more traditional economic measure – that it “does not allow for the health of our children, the quality of their education, or the joy of their play; it does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials … It measures everything, in short, except that which makes life worthwhile.”

Danilo Türk, president Republic of Slovenia, spoke next and described the Better Life Index as a “very important and very precious present” from the OECD as it marks its 50th anniversary. He praised the Index’s “imagination and creativity,” and said he hoped it would help drive a rethinking of measuring progress: “I hope the quote from Kennedy will look obsolete in a few years’ time,” he added.

Inevitably, with such a new project, there were plenty of ideas from panellists at the opening sessions of the OECD Forum on how the Index could be improved and, just as importantly, made relevant to people’s lives and to policymaking.

Jacques Attali, Chairman of PlaNet Finance, a non-profit that works on microfinance issues, felt the Index needed to take more account of democracy issues, freedom of speech and corruption. He said it had become clear that these issues were missing in many international indicators, especially the Millennium Development Goals, but that they were essential to social progress.

Pravin Jamnadas Gordhan, South Africa’s Minister of Finance, said a test of the Index’s usefulness would be whether it helped publics to communicate with politicians. He warned that “significant parts of the population feel excluded,” citing groups like young people in Spain and workers in Greece. He said there was an urgent need for “ruling elites hear voices that are marginalised in society.”

Sharan Burrow, General Secretary, International Trade Union Confederation, liked the Index, but warned that its focus on a broader approach to thinking about well-being needed to be reflected in policy: “The Index means little if it remains separate from our dominant economic thinking.” She also was critical of mixed messages from the OECD: The organisation’s policy thinking on structural issues was bad for workers and would foster inequality, she said, which was at odds with that the thinking behind the Index.

Also commenting was Yoshinori Suematsu, a Japanese Senior Vice-Minister, who said the catastrophes that have struck his country this year had focused people’s attentions on what is really necessary for living a good life. One of the most important, he said was social networks, and he noted that since the earthquake and tsunami sales of engagement rings had jumped by 50% in Japan – a mark of people’s little need for engagement in a dark time.

A quick final note: The Index is already getting plenty of media coverage: “Canadians can’t complain,” reports The Globe and Mail which reckons that the Index shows Canada is a pretty good place to be. What do you think? Take a look at the Index and let us know.

Useful links

OECD’s 50th Anniversary Week