Enterra Insights

Vitamins and Development

Almost everyone knows that in the heyday of sailing ships, scurvy was the scourge of sailors. For those not familiar with the disease, Wikipedia reports: "Scurvy leads to the formation of spots on the skin, spongy gums, and bleeding from the mucous membranes. The spots are most abundant on the thighs and legs, and a person with the ailment looks pale, feels depressed, and is partially immobilized. In advanced scurvy there are open, suppurating wounds and loss of teeth." I suspect it was difficult for those sailors to get a date once they returned from sea. Scurvy is caused by a lack of vitamin C in the diet. Because humans cannot synthesize their own vitamin C, we must obtain it through our diet. Vitamin C is widespread in plant tissues, with particularly high concentrations occurring in citrus fruits (oranges, lemons, limes, grapefruits); tomatoes, potatoes, cabbages, and green peppers. Fortunately, today most us have ready access to such foods. We all know that a proper diet is essential for healthy living. Inadequate diets always result in health problems. In a previous post [Iodine and Intelligence], I cited an article by Donald G. McNeil, Jr. ("In Raising the World's I.Q., the Secret's in the Salt," 16 December 2006), in which he noted the negative health effects of a diet deficient in iodine:

"Worldwide, about two billion people — a third of the globe — get too little iodine, including hundreds of millions in India and China. Studies show that iodine deficiency is the leading preventable cause of mental retardation. Even moderate deficiency, especially in pregnant women and infants, lowers intelligence by 10 to 15 I.Q. points, shaving incalculable potential off a nation’s development. The most visible and severe effects — disabling goiters, cretinism and dwarfism — affect a tiny minority, usually in mountain villages. But 16 percent of the world’s people have at least mild goiter, a swollen thyroid gland in the neck."

A more recent article by New York Times' columnist Nicholas Kristof reports the serious consequences of having too little Vitamin A in one's diet ["What a Little Vitamin A Could Do," 13 May 2009]. Kristof's interest in the subject of vitamin deficiency came on his most recent trip to western Africa.

"Americans pretty much take vitamin A for granted, but many of the world’s poorest people lack it. And as a result, it is estimated that more than half-a-million children die or go blind each year. There’s a simple fix: vitamin A capsules that cost about 2 cents each."

Vitamin A can be found in fish and liver, green and yellow fruits and vegetables, apricots, asparagus, beets, broccoli, butter, cantaloupe, carrots, cheese, garlic, green olives, milk products, fresh mustard, papaya, parsley, peaches, prunes, red peppers, sweet potatoes, spinach, sweet potatoes, pumpkin and watercress. The world's poor, however, often have little access to such fruits and vegetables. Kristof noted that a lack of vitamin A can cause blindness. In addition, vitamin A deficiency can affect bones, hair, the immune system, skin, soft tissues and teeth. The effects are bad enough for those afflicted with them, but there are broader consequences as well. Not only are the afflicted often removed as a productive part of society they can sideline caregivers as well. Kristof provides an example of how blindness can affect an entire family:

"A man named Amadou Bailo shuffled toward us, holding one end of a stick as his daughter held the other and walked ahead of him. In wealthy countries, the blind have seeing-eye dogs; in poor countries, the blind have seeing-eye children. The girl, Mariama, who thought she might be about 9 years old, has never been able to attend school because she spends her days guiding her father. Her older brother was the father’s guide before that, so he never went to school either."

Mr. Bailo didn't go blind because of a lack of vitamin A. He has river blindness, "which is caused by baby worms that infest the body and destroy the optic nerve." Kristof reports that river blindness was once widespread throughout Africa, but efforts spearheaded by former U.S. President Jimmy Carter have"In one of the great triumphs of humanitarian workers, it is under control and perhaps close to being conquered. Credit goes to former President Jimmy Carter for helping to lead the fight against the disease, to a number of aid groups and to Merck, which donated the medicines to kill the baby worms. Mr. Bailo will never recover his vision, but these days, virtually no one in West Africa is going blind from the disease."

For more about President Carter's efforts, read my post entitled Carter's War on Worms. Kristof also visited a school where "80 percent of the students had lost their sight for reasons related to vitamin A deficiency." The consequences of their blindness are tragic. What makes their blindness even more tragic is that it could have been prevented.

"According to the United Nations, half of the children in many African countries are deficient in vitamin A (which comes from liver, mangos, orange-fleshed sweet potatoes and dark, green leafy vegetables), and a disease like measles will quickly deplete their supply further and trigger blindness. The upshot is that vitamin A deficiency is the leading cause of child blindness in the world today. Health wonks have found that vitamin A supplements reduce not only blindness, but also death from diarrhea and other diseases. A review by Unicef and Helen Keller International reports that in areas such as West Africa where many children lack the vitamin, child mortality drops by approximately 23 percent after vitamin A capsules are distributed to children."

One of the prerequisites for sustainable development is a healthy and educated workforce. As Kristof notes, vitamin deficiencies can negatively impact both. Although Enterra Solutions' Development-in-a-Box™ approach is primarily focused on business development, it is a holistic approach and touches on every sector including health care and education. The philosophy behind our approach to health care is the same as it is for businesses: implement best practices and standards. One best practice, of course, is ensuring that a developing population obtains proper amounts of vitamins and minerals in their diet so that they remain healthy. Prevention is always better than cure.

Capitalism and Inequality

Opponents of capitalism believe that the system is inherently flawed because it creates enormous inequalities in wealth. Back in March 2004, The Economist published an article that examined that belief ["More or less equal?"]. It wrote:

"Is the familiar claim that capitalism makes global inequality worse actually true?Unfortunately, this apparently straightforward question turns out to be harder to answer than one might suppose. There are three broad areas of difficulty. The first is measuring what people, especially the poorest people in developing countries, consume. The second is valuing consumption in a way that allows useful comparisons to be made across countries and over time. And the third, in effect, is settling on an appropriate basis of comparison. Which matters more, for instance: whether inequality is widening among nations, or whether inequality is widening among all the people of the world, regardless of which country they happen to live in? Judging any claim about global inequality is impossible without a clear understanding of how the researchers concerned have dealt with all three questions."

The article presented a panel of graphs that visually depicted global economic trends. The article concluded:

"Once you take account of the fact that China and India have performed so well since 1980, and especially since 1990, together with the fact that these two countries account for such a big share of all the world's poor, it is difficult to stay as pessimistic about global trends in poverty and inequality as the critics of global capitalism wish to be."

One expects The Economist to be pro-capitalism but the article readily admits that macro-measures don't tell us everything we need to know about poverty. It notes, for example, that the "World Bank attempts to measure 'consumption poverty', as opposed to 'income poverty'." The article also concluded that detractors who blame globalization for the ills of poor countries are ignoring simple logic.

"Can it be plausibly claimed that these countries [in sub-Saharan Africa] are the victims of globalisation? That would be an odd conclusion, given that sub-Saharan Africa's economies are so comparatively isolated from the rest of the world economy—by force of history, circumstance and, to a large extent, the policies of their own and other governments. Sub-Saharan Africa plainly suffers not from globalisation, but from lack of it. The focus of attention should be on how to extend the benefits of international economic linkages to the region."

Readers of this blog know that I agree with the conclusion that developing countries need more connectivity with the global economy not less. In a recent follow-up article with the same title, The Economist reports that inequality gap appears to be shrinking ["More or less equal?" 4 April 2009 print issue]. Five years ago the magazine argued: "Would ... worsening of inequality entitle one to conclude that India and China had taken a wrong turn these past 20 years? Of course not. Look at Africa to understand that there are worse things than inequality." In the latest article, the magazine notes just how unequal things have become in America.

"Between 1947 and 1979 the top 0.1% of American earners were, on average, paid 20 times as much as the bottom 90%, according to the Economic Policy Institute, a think-tank in Washington, DC; by 2006 the ratio had grown to 77. In 1979, 34.2% of all capital gains went to the top 1% of recipients; by 2005 the figure was 65.3%. All this happened during a period when American workers’ median real incomes stagnated (though the notional value of any health insurance would have risen steeply)."

Many people blame stagnant wages on globalization and, the article admits, globalization has played a role -- not just the role that people think.

"Many people would point to globalisation, in particular the opening up of the Indian and Chinese markets that vastly increased the global labour force, putting downward pressure on unskilled wages. But academic studies have not found this to be a big factor in explaining the level of wages for the unskilled in recent years. Globalisation may, however, explain some of the changes at the very top of the scale. The emergence of a global market for talent in areas such as banking, the law and investment may explain why the top 0.1% have been so well rewarded."

The fact that the rich got richer bothers a lot of people and The Economist details some of the arguments that have been used to justify the value of economic inequality.

"In the 1970s it was argued that high taxes had reduced incentives and thus economic growth. Entrepreneurs had to be motivated to build businesses and create jobs. But extensive study by economists has found little correlation, in either direction, between inequality and economic growth rates across countries. One argument advanced in America is that wide income disparities might encourage more people to want to go to college, thus creating a better-educated workforce. But Lawrence Mishel of the Economic Policy Institute points out that several societies that are more egalitarian than America have higher college enrolment rates. There might also be an argument in favour of wealth disparities if social mobility was high and the sons and daughters of office cleaners could fairly easily rise to become chief executives. But America and Britain, which follow the Anglo-Saxon model, have the highest intergenerational correlations between the social status of fathers and sons; the lowest are found in egalitarian Norway and Denmark. Things are even worse for ethnic minorities; a black American born in the bottom quintile of the population (by income) has a 42% chance of staying there as an adult, compared with 17% for a white person. As a result, talent is being neglected. Of American children with the highest test scores in eighth grade, only 29% of those from low-income families ended up going to college, compared with 74% of those from high-income families. Since the better-off can afford to keep their children in higher education and the poor cannot, breaking out of the cycle is hard."

The trickle-down theory touted by some economic conservatives simply hasn't proven correct. It would be hard to argue against the fact that wealthy investors provide the capital for entrepreneurial activities that create jobs and stimulate the economy; but The Economist is making a larger point -- breaking out of the poverty cycle is difficult. Wealth not only affects educational opportunities it affects health.

"The gap between the life expectancy of the top and bottom 10% respectively rose from 2.8 years to 4.5 between 1980 and 2000. That does not meet the definition of a fair society by John Rawls, a 20th-century philosopher, who described it as one in which a new entrant would be happy to be born even though he did not know his social position ahead of time."

The article notes that gap between rich and poor is starting to shrink (mainly because of bad economic times not because the poor are becoming better off). It also makes the odd claim that the poor will be relatively less affected by the recession because they have less to lose.

"Although [the poor] may lose their jobs and default on their loans, they will not be troubled by collapsing asset prices because they do not own assets. Edward Wolff of New York University points out that the proportion of American households owning some stocks (including mutual funds and 401k pension plans) went up from 32% in 1983 to 51% in 2001. But only 32% of the population owned more than $10,000-worth of stock, and many middle-class people are only modestly affected by falling asset prices. The richest 10% of the American population owned 85% of all stocks."

The bottom line is that the gap between rich and poor may be narrowing, but it's not for the right reasons. It would be foolhardy to pursue policies that take from the rich to give to the poor. Such schemes have never worked. What does work are policies that encourage the wealthy to invest in businesses that create good paying jobs and foster a stable, prosperous, and growing middle class. There will always be rich people and poor people, but the fewer poor people there are the better off society becomes. Both developed and developing countries face economic inequality challenges. I'm convinced they can be mitigated through free markets and global connectivity. That is the philosophy behind Enterra Solutions' Development-in-a-Box™ approach. Developing countries need foreign direct investment to promote sustainable growth. That investment comes from successful businesses and individuals (i.e., the well-to-do). In many ways, the debates about economic inequality are red herrings. The debates shouldn't be about wealth but about the moral and economic choices that the wealthy make.

The Debate about Smart Grids Continues

The stimulus package passed earlier this year by Congress contains funding for smartening up America's power grid. An office park in northern Kentucky, sponsored by Duke Energy, is one of several proof-of-concept projects currently underway ["Stimulus Dollars Energize Efforts To Smarten Up the Electric Power Grid," by Peter Slevin and Steven Mufson, Washington Post, 10 March 2009]. Slevin and Mufson describe some of the inventions that will help make the grid smarter:

"One gizmo allows you to run the dishwasher when electricity is cheapest. Another decides when to fire up the water heater if you plan on a 6 a.m. shower. Another routes solar energy from a rooftop panel to a battery in your garage and the wiring in your house. Outside, towers equipped with sensors tell the electric company exactly where a storm has knocked out power. The power grid itself can react to trouble, rerouting juice from a healthy part of the system or isolating itself to prevent a larger meltdown."

They go on to define what the term "smart grid" means:

"Smart grid refers to an array of switches, sensors and computer chips that will be installed at various stages in the energy-delivery process -- in power stations, in electricity meters, in clothes dryers -- in the next two decades, if the vision holds and the technology works."

I believe the first time I discussed smart grids was in a post entitled GE, Google, and Grids. I further discussed smart grids in a later post entitled Building Up rather than Bailing Out. Thanks to IBM and General Electric television commercials, a lot of people have been hearing about the benefits of smart technology. Not everyone, however, believes that smart grids are a good way forward ["The Static Over Smart Grids," Heather Green, BusinessWeek, 13 April 2009 print issue]. According to Green, utility companies are in favor of smart grids while consumer advocates worry about fluctuating energy prices. She writes:

"Can technology make the U.S. more energy-efficient? President Barack Obama certainly hopes so. As part of the $787 billion stimulus package, the Administration is allocating billions to subsidize the purchase of new technologies by utilities across the country. The idea, Obama said earlier this year, is to 'make our energy bills lower, make outages less likely, and make it easier to use clean energy.' But there's a hitch. From California to Colorado to Maine, consumer groups are expressing concerns about these efforts. In particular, they're leery of giving utilities the ability to change electricity prices on the fly, jacking rates up on hot summer days, for instance. Most utilities are prohibited from using variable prices now, but the flexibility to raise rates for a community as demand rises is essential for utilities to get the full benefit of new technology. Consumer groups worry these so-called smart-grid technologies are just another way for utilities to make extra money off consumers. ... The controversial aspect of smart meters is that they let utilities create real-time markets for electricity, with prices that could vary by the minute. If demand is low on a cool fall night, prices are low. But if demand surges during the summer as people blast the air conditioning, the utility can raise prices in the region to discourage usage. That saves utilities money because they wouldn't have to build power plants to meet high demand. And, supporters argue, consumers would learn to conserve energy. ... Consumer advocates have a different perspective. ... An elderly woman home alone on a summer day could see rates in her community triple or quadruple without being able to do much about it."

Green reports that there are "three ways to introduce flexible pricing." States "could mandate it for all customers; they could have it be the default but allow customers to opt out; or they could make flexible pricing a voluntary program that customers choose to join. Studies have shown the mandatory and default options result in the biggest drops in energy use. But consumer groups vow to fight those approaches." She goes on report that utility companies, while not thrilled with it, believe they could still benefit from the voluntary program. She concludes that politicians will likely move cautiously to implement any scheme as long as the recession lingers. The Economist believes that it is about time for the American power grid to get a facelift ["Smart move," 21 March 2009 print issue].

"America’s power system has changed remarkably little over the past century, with centralised utilities delivering electricity to passive consumers. A smart grid would use digital technology to collect, communicate and react to data, making the system more efficient and reliable. For example, sensors would help utilities locate problems and fix them quickly—power cuts now cost businesses more than $100 billion each year. A nimble grid would integrate electricity from both predictable sources, such as coal, and fickle ones, such as the sun and wind. Meters, to monitor both use and prices, would give consumers more control over their electricity bill. Advocates predict that some consumption would move to cheaper, off-peak hours, easing congestion and reducing the need for new infrastructure. Consumers would save money and emissions would fall. Installing smart meters in 25% of American homes, GE estimates, would be equivalent to removing 1.7m cars from the roads. Plug-in hybrids, meanwhile, could charge at night, when demand is low, and even pump power back to the grid while parked during the day."

The article notes that there are a number of pilot projects testing the technologies that will coordinate a smart grid, like the one in Kentucky. They single out two projects, one at the Illinois Institute of Technology and the other in Boulder, Colorado, where Xcel Energy, a utility, is trying to transform the city "into what it calls the world’s first 'smart grid' city." Although the magazine applauds these efforts, it believes that the time has come to scale up and move forward with smart grid technology. The article concludes:

"At the national level, standards are needed so that innovations can interact seamlessly. The National Institute of Standards and Technology, part of the Commerce Department, is expected to present only a rough framework by the summer. The momentum for a smart grid continues to build."

Another pilot project is being conducted by Current Group, a Germantown, Maryland, based technology firm. The company "has taken over a nondescript house in Bethesda and turned it into a laboratory for smart-grid technology" ["Engineering a Smart Grid For Energy's Future," by Kim Hart, Washington Post, 27 April 2009]. Hart reports:

"Smart-grid projects require many components -- digital meters and software systems, for example -- allowing both smaller and larger firms to compete. Current started out aiming to provide broadband service over power lines, but shifted to providing the grid communications system when utilities' adoption of Internet via power lines was slower than expected. GridPoint, [which provides software and information technology services to help run the smart grid and is part of the Boulder project mentioned by The Economist], initially produced appliances to store energy produced by solar panels."

I believe that it's not a matter of "if" smart grids will be created but "when." With utility companies facing opposition to new power plants [see, for example, by post entitled The Conundrum of "Clean Coal"] and usage continuing to rise, smart grids offer a way to mitigate the effects of potential power gap while things get sorted out. If plug-in automobiles do ever catch on (and that's a big "if"), then a smart gird will be absolutely essential for keeping the system up and running. I agree with The Economist that America is long overdue for an overhaul of its electrical grid system and that overhaul needs to include smart grid technologies. I believe the grid will be smart enough to accommodate the elderly woman home alone on a hot summer day and still make the system much more efficient.

LED to the Future

When most of us hear the term "light emitting diode" or LED, we think either about the little lights that tell us that our electronic gizmos are on or solar-powered landscape lighting that dimly mark walkways around people's homes. For a few years now, there have been scientists touting the benefits of LED technology as a major breakthrough in energy savings. LED lights are "about four times more efficient than conventional incandescent lights and more environmentally friendly than compact fluorescent bulbs. The LEDs also are expected to be far longer lasting than conventional lighting, lasting perhaps as long as 15 years before burning out" ["Advance brings low-cost, bright LED lighting closer to reality," e! Science News, 17 July 2008]. It is estimated that wide-spread use of LED lighting could cut electricity consumption by 10 percent. Getting people to use them, however, still presents a problem. Brightness, for one thing, used to be a problem for LEDs, "but recent advances have made them as bright as incandescent bulbs." Cost is another challenge.

Last Christmas in the United States, there was a big push by many retailors to sell LED lights for decorating houses and trees, but they were more expensive than traditional strings of lights. One reason that LED lights are more expensive is that are normally "created on a substrate, or first layer, of sapphire. Researchers [at Purdue University] solved this problem, according to the e! Science News article, "by developing a technique to create LEDs on low-cost, metal-coated silicon wafers." These breakthroughs are being achieved at just the right time. Earlier this year, "the European Commission formally adopted new regulations that will phase [incandescent] bulbs out in Europe by 2012. America will do so by 2014. Some countries, such as Australia, Brazil and Switzerland, have got rid of them already." ["A brilliant new approach," The Economist, 19 March 2009] The Economist article explains how LEDs work:

"An LED is made from two layers of semiconductor, an 'n-type' with an excess of negatively charged electrons, and a positive “p-type” which has an abundance of 'holes' where electrons should be but aren’t. When a current is applied across the sandwich, the electrons and holes team up at the junction of the two materials and release energy in the form of light. The colour depends on the properties of the semiconductor, and these can be tuned to produce light that is similar to natural daylight but with virtually no ultraviolet or heat. Light-emitting diodes have progressed from simple red indicators on electronic products to become torches, streetlights and car headlights. Now the first mains-voltage LEDs designed as direct replacements for incandescent bulbs are arriving on the market. Some, such as the Philips Master LED range, promise energy savings of up to 80% and a working life of 45,000 hours."

The article underscores what I mentioned earlier -- right now LEDs are not cheap. The problem remains the cost of the sapphire layer used in most LED lights. Cambridge University researchers, like those at Perdue University, have come up with a way to use cheaper silicon wafers and gallium nitride.

"Gallium nitride is a semiconductor used to create bright-blue LEDs. These can be made to emit white light by coating the device with a phosphor compound that absorbs part of the blue light and re-emits it as yellow. When combined with the rest of the blue this forms a cool, white light. Most of the white LEDs now on the market are based on gallium nitride. At present these LEDs are made in machines similar to those used to make silicon chips, by depositing layers of gallium nitride on sapphire-based wafers. Sapphire is robust enough to withstand a process that first heats it to 1,000°C and then cools it to room temperature without causing cracks and other defects. It is, however, quite expensive. What Colin Humphreys and his colleagues at Cambridge have come up with is a reliable way to deposit gallium nitride on much cheaper silicon wafers, which they estimate could cut production costs to a tenth of what they are at the moment."

The most widely used alternative to incandescent lights is compact fluorescent lighting (CFL). Getting people to switch over to compact fluorescent lighting, however, has been a struggle. Some people don't like their appearance; others don't like the color of light they emit; still others don't like the cost. Environmentalists don't like CFLs because they contain mercury. Using them outdoors has also been a challenge because they don't like cold weather. LEDs could change all that. "Unlike compact fluorescents bulbs," reports Eric A. Taub, "they contain no mercury and they work well in cold weather. They provide a more pleasing light than fluorescents." ["Industry Looks to LED Bulbs for the Home," New York Times, 10 May 2009]. According to Taub, manufacturers demonstrated their wares at a recent lighting show.

"Manufacturers displayed LEDs incorporated into large warehouse, garage and street-lighting fixtures, flexible light ribbons, and replacements for the halogen reflector lamps used in kitchens and offices. Strips of flexible LEDs from Osram Sylvania put light in places where it could not otherwise fit. Later this year, the company will market tiny LED chandelier lights that use 6 watts instead of the 15 watts typical of an incandescent version. It says they will last 25,000 hours instead of 1,500 for an incandescent bulb. Also this fall, Osram, Lighting Science and Philips will introduce 25,000-hour LED lamps that look like traditional bulbs but use just 8 watts of electricity to produce the same amount of light as a 40-watt bulb. Much of the industry’s effort is aimed at making LED lamps that emit as much light as a 60- or 75-watt incandescent bulb. Cree, a leading maker of LEDs, showed a new version of its LED ceiling fixture that uses 6.5 watts, compared with 11 watts for last year’s model, to create the light of a standard 65-watt lamp."

Most people won't rush out and buy LEDs because their cost still remains high. The processes developed by researchers have yet to be commercialized. A 40-watt equivalent bulb still costs around $20. Taub points out that manufacturers have been slow to get onboard the LED band wagon because long-lasting bulbs will basically put them out of the lucrative replacement bulb business. The cost of LED bulbs is likely to come down, but analysts don't expect them to ever be as cheap as incandescent bulbs -- unless, of course, you consider life-cycle costs. In the long run, LEDs will save people money and reduce the energy needed to light the world. Even the developing world will benefit from the higher cost LEDs. According to The Economist article, "low-cost LEDs [could] ... bring light to new areas. Philips, for instance, is planning to launch a small solar-powered LED reading light for Africa, where an estimated 500m people live without electricity. The simplest version, which it hopes to sell for less than $15, is designed to allow children to do their homework in the evenings without a candle or smoky kerosene lamp. Bringing down the cost of LEDs this way really will let in the light." Fifteen dollars is still a lot of money in poor countries, but the expected lifespan and low energy consumption of LED products still makes them attractive for the developing world.

I first wrote about LED technology in a blog entitled Technology-based Reductions in Energy Consumption Touted. That post contains links to additional information, including information about an unsung Japanese scientist named Shuji Nakamura who invented LEDs. Right now, it looks like LEDs are the best bet for being the light of the future. If that proves to be true, Nakamura may become as famous as Thomas Edison.

In Remembrance ...

Today America celebrates Memorial Day. Although the holiday marks the unofficial beginning of summer, the day was officially proclaimed on 5 May 1868 by General John Logan, national commander of the Grand Army of the Republic, in his General Order No. 11, and was first observed on 30 May 1868, when flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery. General Logan's order read in part:

"The 30th day of May, 1868, is designated for the purpose of strewing with flowers or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village, and hamlet church-yard in the land. In this observance no form of ceremony is prescribed, but posts and comrades will in their own way arrange such fitting services and testimonials of respect as circumstances may permit. We are organized, comrades, as our regulations tell us, for the purpose among other things, 'of preserving and strengthening those kind and fraternal feelings which have bound together the soldiers, sailors, and marines who united to suppress the late rebellion.' What can aid more to assure this result than cherishing tenderly the memory of our heroic dead, who made their breasts a barricade between our country and its foes? Their soldier lives were the reveille of freedom to a race in chains, and their deaths the tattoo of rebellious tyranny in arms. We should guard their graves with sacred vigilance. All that the consecrated wealth and taste of the nation can add to their adornment and security is but a fitting tribute to the memory of her slain defenders. Let no wanton foot tread rudely on such hallowed grounds. Let pleasant paths invite the coming and going of reverent visitors and fond mourners. Let no vandalism of avarice or neglect, no ravages of time testify to the present or to the coming generations that we have forgotten as a people the cost of a free and undivided republic. If other eyes grow dull, other hands slack, and other hearts cold in the solemn trust, ours shall keep it well as long as the light and warmth of life remain to us. Let us, then, at the time appointed gather around their sacred remains and garland the passionless mounds above them with the choicest flowers of spring-time; let us raise above them the dear old flag they saved from dishonor; let us in this solemn presence renew our pledges to aid and assist those whom they have left among us a sacred charge upon a nation's gratitude, the soldier's and sailor's widow and orphan."

The idea of "strewing with flowers or otherwise decorating the graves" did not originate with General Logan. There is evidence that women's groups in the South were decorating graves before the end of the Civil War. One such piece of evidence is the title page of the sheet music for a hymn published in 1867 entitled "Kneel Where Our Loves are Sleeping" by Nella L. Sweet. The hymn carried the dedication "To the Ladies of the South Who are Decorating the Graves of the Confederate Dead." In her hymn, Ms. Sweet penned these words:

Kneel where our loves are sleeping,
Dear ones loved in days gone by,
Here we bow in holy reverence,
Our bosoms heave the heartfelt sigh.
They fell like brave men, true as steel,
And pour'd their blood like rain.
We feel we owe them all we have,
And can but kneel and weep again.

Although Memorial Day was first established to honor the Civil War dead, it has become a day to remember and appreciate the sacrifice of all men and women who have given their lives in service of their country. I fear that too many people consider life cheap. Certainly terrorists who attack public places with impunity have no appreciation for the wonder that is life. Saint Augustine wrote:

"People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering."

On this Memorial Day, let us remember and honor the dead; but let us also remember the wonder of life and commit to living better. Mother Theresa wrote:

Life is an opportunity, benefit from it.
Life is beauty, admire it.
Life is bliss, taste it.
Life is a dream, realize it.
Life is a challenge, meet it.
Life is a duty, complete it.
Life is a game, play it.
Life is a promise, fulfill it.
Life is sorrow, overcome it.
Life is a song, sing it.
Life is a struggle, accept it.
Life is a tragedy, confront it.
Life is an adventure, dare it.
Life is luck, make it.
Life is too precious, do not destroy it.
Life is life, fight for it.

That about says it all -- have a glorious Memorial Day and pause to remember those who have given all to protect liberty around the world.

Investing in Africa

I was recently contacted by Fabiane Dal-Ri from Baird’s Communications Management Consultants about a study her firm conducted in partnership with the Africa Business Initiative of the U.S. Chamber of Commerce concerning attitudes of American business leaders towards investing in Africa. The study interested me because Enterra Solutions has plans to move into the African market with its Development-in-a-Box™ offering. The study, entitled The Conversation Behind Closed Doors, is "an inside-the-boardroom survey of attitudes toward corporate investment in Africa among leading U.S. corporations. The information was gathered between January and November 2008 in a series of closed door interviews with senior officers of 30 American Fortune 100 corporations by senior associates of Baird's CMC." The topic is extremely important because, as I have consistently maintained, sustainable development doesn't take hold in a country until it can attract foreign direct investment. The study's Executive Summary provides this overview:

"U.S. executives point out that Africa is only one of many possible destinations that American corporations consider for investment. Investment is highly competitive, and many countries are vying to become the destination of choice for capital. That said, U.S. companies in some sectors, particularly technology, now regard Africa as the last frontier for growth. These companies believe that Africa, with its market of about 1 billion people, can no longer be ignored. Even with this interest, Africa faces tough competition and huge hurdles to attract U.S. investment. Globally, competition for American FDI is high. Countries from all regions showcase their advantages, align their offers to U.S. needs, clamor for attention, and invest in their own countries to attract additional investment. Consequently, U.S. corporations do not lack investment choices, and they rarely consider African nations. Further, news about Africa is mostly about chaos and unrest. Africa is not active or aggressive enough about attracting investment; the voices of the few countries that are making an effort get lost in the surrounding negative noise. Some African countries are making special efforts to assist foreign companies that invest. For example, Nigeria’s president regularly engages with the local leaders of foreign companies to help cut through bureaucratic tape. U.S. corporations need a strong and specific draw from Africa to make investment worthwhile. This can be the pull of a big market or a big source of critical raw materials or a belief that there is a competitive advantage to early entry into African markets. The survey data show that few of these pulls exist or are not sufficiently strong to be effective in the near term."

The news release announcing the availability of the report provides the following facts about Africa, in general, as well as specifics findings of the study:

• Africa is the world’s second largest and second most populous continent after Asia, covering 20% of the world’s total land area, and home to 14% of the world’s human population, yet Africa remains the world’s poorest and most underdeveloped continent

• Africa has not received its “fair share” of global Foreign Direct Investment (FDI) flows

• Since the early 1980s, Foreign Direct Investment (FDI) flows to Africa averaging only 2.2% of the global total, while Asia received no less than 17.3% of the total

• Corporate America is interested and watching Africa closely; they see pockets of great potential US Technology companies are most attracted to investing in Africa

• Overall, the business case for investing in Africa is less compelling than for its competitors

• To make itself more attractive for US investment, Africa should:

  • Invest in education, health and infrastructure
  • Ensure the rule of law and a business-friendly climate for all investing companies
  • Show it is serious about attracting foreign investment
  • Market itself as aggressively as other regions of the world
  • Demonstrate opportunity cost of not investing

• USA Inc. is more interested in Africa than before, because the African market appears increasingly attractive, but Africa has tough competition and high hurdles for US investment.

• Education is at the top of the US corporate wish list for Africa; “educate your people so that we can employ them"

• The African countries that hold most interest are South Africa and some countries in the North, like Egypt; there are also some pockets of interest in West Africa, most notably Ghana, Nigeria and to some extent Angola; while some in the South (Botswana and Mozambique) and East (Uganda and Kenya), are also being watched

The study's conclusions track well with my own assessment of the areas in Africa most ready to move forward as well as what they must do to look more attractive to potential investors. One thing not mentioned in Baird's CMC list is security. Security is the sine qua non for attracting foreign direct investment. As the news release notes, the study will eventually include two parts. This first part helps us "understand how US corporations view Africa as an investment destination and what their requirements are for investing in Africa on the same scale as their investments in the rest of the developing world." The second part will provide "the response of African political and government leaders to these private sector views." I like this format. It presents real world perceptions and then asks, "What are you going to do about it." Too often, political leaders ignore academic studies as ivory tower exercises. African leaders would be remiss to ignore a study that provides them with a confidential assessment of how their countries are viewed by the business leaders they are hoping to court as investment partners.

The release goes into a little more depth concerning the reasons that Africa remains a less attractive region than others for FDI. They include:

"Rule of law -- The rule of law does not prevail to the degree required to make Africa an attractive investment destination. This applies to corporate, societal, and criminal law.

Attraction -- While the enormous natural resources are an attraction, Africa does not offer a sufficiently large middle class of consumers or show consistent economic growth that could promise a future market. Most African countries are small and have poor markets, and there are barriers to regional markets--such as taxes and the freedom of movement of people and goods.

Risks versus rewards-- Given the currently perceived risks in Africa, the rewards have to be very high to make it worthwhile to invest. Presently, U.S. corporations say that there are very few visible promises of future returns high enough to justify significant interest in investing.

Supportive business framework--Transportation and communications infrastructure, trained or trainable human resources, and equitable trade and employment practices are insufficient to support corporate investment.

A welcoming environment-- African countries are not doing a sufficient job of providing education and health services to the potential workforce, which makes the potential hire-able local insufficient to support investment."

That list should be familiar to readers of this blog. I have repeatedly talked about pre-conditions necessary to attract FDI. If I were to highlight two factors that make many African countries unattractive they would be security and corruption. Those two factors alone can undermine all other efforts that might be made to make a country more attractive. Companies are not willing to risk the lives of their employees because an environment is unsafe; nor are they willing to waste scarce resources lining the pockets of corrupt bureaucrats. Participant quotes drawn from the study are particularly telling. On these two subjects, one participant said, "[Africa is] dangerous in terms of political and economic stability and dangerous also from a personal security point of view, whether it is related to criminality or diseases.”

The report looks to be a valuable addition to the literature of development. Whether it is read by the right people (i.e., African political leaders) and whether they do anything as a result remains to be seen. Since part two of the study will contain interviews and responses to part one of the study, one assumes that many African leaders will get a chance to read and digest the report. Since I have been working with the U.S. Chamber of Commerce in Iraq as co-chair of its Iraq Initiative and as co-chair of its Kurdistan Region of Iraq Investment Task Force, I know that the Chamber's leaders are not starry-eyed idealists who believe that the results of a single study will magically make things better in Africa. On the other hand, they are not the type of leaders who see a bad situation and avoid dealing with it. The study is a good first step towards helping African leaders understand that they need to take seriously the opinions of business leaders who could provide their countries with investment capital. Without such investments, African leaders will never be able to foster a sustainable middle class that can serve as the foundation of further development. If African leaders respond positively to the report's findings, they can help their countries move up on the World Bank's Doing Business Index. When they achieve scores as high as countries that do attract FDI, they will know that they are on the cusp of a brighter future.

The Conundrum of "Clean Coal"

Television viewers in America have seen dueling advertisements between environmental groups and the coal industry. Coal industry ads show a video clip of President Obama on the campaign trail talking about clean coal. He makes the reasonable point that if America is capable of putting a man on the moon surely it is capable of developing technologies that can help it cleanly burn coal. Environmentalists, on the other hand, claim simply that there is no such thing as "clean coal." The debate will continue to rage. Moving toward cleaner burning coal power plants comes with a price tag. With the economy sagging, some analysts claim that its a bad time to be raising the cost of energy generation. Others claim it's the perfect time to start charging "the real price" of burning coal. Among those making the latter argument is New York Times' columnist Tom Friedman ["The Price Is Not Right," 31 March 2009]. Friedman argues:

"Oil companies, coal companies and electric utilities today are selling energy products at prices that do not reflect the real costs to the environment and real risks of disruptive climate change (so future taxpayers will end up paying the difference). Whenever products are mispriced and do not reflect the real costs and risks associated with their usage, people go to excess. ... Our biggest energy companies, utilities and auto companies became dependent on cheap hydrocarbons that spin off climate-changing greenhouse gases, and we clearly have not forced them, through a carbon tax, to price in the true risks and costs to society from these climate-changing fuels. ... This is also why we need a tax on carbon — so we and our power utilities don’t become permanently addicted to cheap coal that makes for lower electricity prices today but spits out toxic greenhouse gases that have to be paid for by future generations tomorrow."

During his campaign, President Obama indicated that he favored a cap and trade system (with the target being an 80% reduction in emissions by 2050) over a straight forward carbon tax. His administration appears to be setting the stage for a cap and trade system with the announcement that Environmental Protection Agency plans to establish a nationwide system for reporting greenhouse gas emissions ["EPA Plans U.S. Registry of Greenhouse Gas Emissions," by Juliet Eilperin, Washington Post, 11 March 2009].

"The registry plan ... would cover about 13,000 facilities that account for 85 to 90 percent of the nation's greenhouse gas output. It was drafted under the Bush administration but stalled after the Office of Management and Budget objected to it because the EPA based the rule on its powers under the Clean Air Act. 'Our efforts to confront climate change must be guided by the best possible information,' said EPA Administrator Lisa P. Jackson in a statement. 'Through this new reporting, we will have comprehensive and accurate data about the production of greenhouse gases. This is a critical step toward helping us better protect our health and environment -- all without placing an onerous burden on our nation's small businesses.' Sens. Dianne Feinstein and Barabara Boxer, both California Democrats, had inserted language in a 2007 spending bill instructing EPA to develop a national greenhouse gas reporting system. If adopted by the end of the year, the rule could produce greenhouse gas statistics by the end of 2010. The EPA requirements would apply to large industrial sources that emit 25,000 metric tons or more a year, including oil and chemical refineries; cement, glass, pulp and paper plants; manufacturers of motor vehicles and engines; and confined animal-feeding operations. The 25,000-metric-ton threshold is about equal to the annual emissions of a little more than 4,500 passenger cars. Most small businesses would fall below the threshold and would not be required to report."

One benefit of either a carbon tax or cap & trade system, proponents argue, is that the use of cleaner alternative fuels would stimulated because raising the costs associated with burning fossil fuels would make alternative fuels more competitive. Getting either system adopted during the current economic downturn may be difficult. People are extremely "price sensitive" and they won't look kindly on politicians that add to their woes ["Cost Works Against Alternative and Renewable Energy Sources in Time of Recession," Matthew L. Wald, New York Times, 28 March 2009].

"Windmills and solar panel arrays have become symbols of America’s growing interest in alternative energy. Yet as Congress begins debating new rules to restrict carbon dioxide emissions and promote electricity produced from renewable sources, an underlying question is how much more Americans will be willing to pay to harness the wind and the sun. Curbing carbon dioxide emissions — a central part of tackling climate change — will almost certainly raise electricity prices, experts say. And increasing the nation’s reliance on renewable energy will in itself raise costs. Fifteen months into a recession, that prospect does not sit well in some quarters."

Wald provides an idea about the varying costs of producing electricity using different sources of energy:

"A modern coal plant of conventional design, without technology to capture carbon dioxide before it reaches the air, produces at about 7.8 cents a kilowatt-hour; a high-efficiency natural gas plant, 10.6 cents; and a new nuclear reactor, 10.8 cents. A wind plant in a favorable location would cost 9.9 cents per kilowatt hour. But if a utility relied on a great many wind machines, it would need to back them up with conventional generators in places where demand tends to peak on hot summer days with no breeze. That pushes the price up to just over 12 cents, making it more than 50 percent more expensive than a kilowatt-hour for coal."

Not only are alternatives to coal more expensive, they are, with the exception of nuclear power, either less reliable or less abundant. Of course, nuclear power comes with its own issues. Coal, however, is the dirtiest of the energy sources which is why there is so much talk about "clean coal" technology. Those who don't believe that coal-fired plants will ever be "clean" continue to protest against the construction of new coal-fired plants ["Is America Ready to Quit Coal?" by Melanie Warner, New York Times, 14 February 2009]. Warner points to the challenges Duke Energy is facing as it tries to build a new coal-fired plant in North Carolina.

"For three years, environmentalists have been battling to stop [the] company from building a large coal-fired power plant in southwestern North Carolina. They say it will spew six million tons of carbon dioxide into the atmosphere annually, in addition to producing toxic gases and mountains of fly ash similar to the muck that engulfed a Tennessee community recently."

Warner insists that "the coal industry, which powered the industrial revolution and supplied America with much of its electricity for more than 60 years, is in a fight for its survival." As proof she notes that, "in the last two-and-a-half years, plans for 83 plants in the United States have either been voluntarily withdrawn or denied permits by state regulators." Why? The answer is lies in the fact that "the roughly 600 coal-fired power plants in the United States are responsible for almost one-third of the country’s total carbon emissions." Under the cap & trade system favored by Obama, energy companies would stand to gain most from the development of so-called "clean coal" technologies. As Warner notes, however, people who don't believe there is such a thing as "clean coal" are as passionate as the coal industry which is fighting for its life. She describes the opposing positions this way:

"The coal industry is aware of all of these issues and is fighting back. An industry-financed group called the American Coalition for Clean Coal Electricity spent $38 million last year informing Americans, via TV and newspaper ads, that coal is the source of 50 percent of their electricity, that it is an abundant domestic resource and, most importantly, that there is the promise of 'clean,' or carbon-free, coal. This argument is what [Robert F. Kennedy, Jr., and the Waterkeeper Alliance] call 'the dirty lie.' Nevertheless, the industry sees clean coal technologies as its best hope for joining the ranks of green power. The problem is that the technology, called carbon capture and storage, is still being developed and could make electricity generated by coal more expensive than power from other sources."

The Economist, which favors a "carbon price or tax, which raises the cost of emitting carbon dioxide," sides with Kennedy about "the illusion of clean coal" ["The illusion of clean coal," 7 March 2009 print issue]. It believes "the world is investing too much cash and hope in carbon capture and storage." Nevertheless, it points out that most of the world's largest economies continue to rely on electricity generated by coal-fired plants.

"It provides almost 50% of America’s and Germany’s power, 70% of India’s and 80% of China’s. Digging up coal provides a livelihood for millions of people. And secure domestic sources of energy are particularly prized at a time when prices are volatile and many of the big oil and gas exporters are becoming worryingly nationalistic. It is hard to see how governments can turn their backs on such a cheap and reliable fuel."

The Economist recognizes that its position is counter to those held by world leaders like Barack Obama and Angela Merkel. Those leaders favor "carbon capture and storage (CCS), or carbon sequestration, [which] entails hoovering up carbon dioxide from the smokestacks of power plants and other big industrial facilities and storing it safely underground, where it will have no effect on the atmosphere." The problem, the magazine reports, is that "there are no big power plants using it [and] just a handful of small demonstration projects." Being pro-free market, The Economist believes that governments should tax carbon emissions in some form and let market work out how best to reduce emissions. It laments the fact that governments appear to be subsidizing CCS technologies.

"With the private sector sitting on its hands, Western governments are lavishing subsidies on CCS. Some $3.4 billion earmarked for CCS found its way into America’s stimulus bill. The European Union, which already restricts greenhouse-gas emissions through a cap-and-trade scheme, unveiled further incentives for CCS last year. Britain, Australia and others have also vowed to help fund demonstration plants partly because they reckon the private sector is put off by the huge price-tag on a single CCS power plant, and also in the belief that the cost of CCS will fall with experience."

The magazine believes that "politicians should indeed encourage investment in clean technologies, but direct subsidies are not the way to do it." One country not mentioned by The Economist is China which has been frantically building new coal-fired power plants. The New York Times reports, however, that "China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants, mastering the technology and driving down the cost" ["China Outpaces U.S. in Cleaner Coal-Fired Plants," by Keith Bradsher, 10 May 2009]. "While the United States is still debating whether to build a more efficient kind of coal-fired power plant that uses extremely hot steam," Bradsher writes, "China has begun building such plants at a rate of one a month." For environmentalists, better simply isn't good enough when it comes to coal-fired plants. Nevertheless, China is at least recognizing that there is a problem.

"China has begun requiring power companies to retire an older, more polluting power plant for each new one they build. ... Without doubt, China’s coal-fired power sector still has many problems, and global warming gases from the country are expected to continue increasing. China’s aim is to use the newest technologies to limit the rate of increase. Only half the country’s coal-fired power plants have the emissions control equipment to remove sulfur compounds that cause acid rain, and even power plants with that technology do not always use it. China has not begun regulating some of the emissions that lead to heavy smog in big cities. Even among China’s newly built plants, not all are modern. Only about 60 percent of the new plants are being built using newer technology that is highly efficient, but more expensive. With greater efficiency, a power plant burns less coal and emits less carbon dioxide for each unit of electricity it generates. Experts say the least efficient plants in China today convert 27 to 36 percent of the energy in coal into electricity. The most efficient plants achieve an efficiency as high as 44 percent, meaning they can cut global warming emissions by more than a third compared with the weakest plants. In the United States, the most efficient plants achieve around 40 percent efficiency, because they do not use the highest steam temperatures being adopted in China."

Bradsher notes that none of China's new plants use carbon capture and storage systems. "China has just built a small, experimental facility near Beijing to remove carbon dioxide from power station emissions and use it to provide carbonation for beverages," Bradsher reports, "and the government has a short list of possible locations for a large experiment to capture and store carbon dioxide. But so far, it has no plans to make this a national policy." Coal's ultimate future has yet to be determined. The only thing I know for certain is that the debates about whether there is such a thing as "clean coal" technologies will continue to rage.

Conflict and Diplomacy

Jimmy Carter is one of the few former presidents whose stature actually rose once he left office. He has dedicated his post-presidential years to helping others and his sincerity has resulted in enormous moral influence as well as a Nobel Peace Prize. One of his most cherished accomplishments was the establishment of The Carter Center whose motto is: Waging Peace. Fighting Disease. Building Hope. On the subject of "Waging Peace," the Center's web site states:

"Wars produce the worst violations of human rights worldwide and are the greatest impediment to human development. Most of the more than 50 major armed conflicts since the Cold War have been internal clashes over religion, national or ethnic identity, or access to natural resources or wealth. The Conflict Resolution Program works to resolve such conflicts and build sustainable peace. The Center has become a trusted broker for peace, serving as an alternative channel for dialogue and negotiation until official diplomacy can take place. As a nonpartisan, nongovernmental organization with access to world leaders and expertise in mediation, negotiation, and peacebuilding, the Center helps warring parties when traditional dispute resolution methods fail, filling the space between official diplomacy and unofficial grassroots peace efforts."

Since my company, Enterra Solutions, is involved with development activities as a result of its Development-in-a-Box™ offering, I, of course, agree with the argument that conflict is one of the world's greatest impediments to development. Resolving conflicts through dialogue, negotiation, and diplomacy is obviously the preferred method. Historically, however, negotiation has taken a back seat to military victory as the principal method of conflict resolution. As noted by Daniel Pipes, "Diplomacy rarely ends conflicts." ["The Only 'Solution' [for Israel] is Military," New York Post, 25 February 2002]. Pipes continues:

"Resolution occurs when one party realizes it can no longer pursue its aims and gives them up. This usually follows its unambiguous vanquishment, either a military collapse (as in World War II) or internal rot (as in the Cold War). 'In every case I can think of,' writes strategist Michael Ledeen, 'peace has come about at the end of a war in which there was a winner and a loser. The winner imposed terms on the loser, and those terms were called "peace." ... Hardly a single major interstate conflict has concluded due to someone's clever schema. The idea that a 'peace process' can take the place of the dirty work of war is a conceit. Again, to quote Ledeen, 'Peace cannot be accomplished simply because some visiting envoy, with or without an advanced degree in negotiating from the Harvard Business School, sits everyone down around a table so they can all reason together.' The oft-heard mantra that 'there is no military solution,' ... in short, has things exactly wrong."

Time and again the pattern noted by Pipes and Ledeen has played itself out. The most recent example just occurred in Sri Lanka ["Sri Lankan Rebels Admit Defeat, Vow to Drop Guns," by Emily Wax, Washington Post, 18 May 2009]. Wax reports:

"Cornered into a tiny patch of jungle about the size of a football field, the Tamil Tiger rebels -- who once operated a shadow state complete with a law school, a tax system, a navy and even traffic police -- vowed ... to lay down their weapons for good, in a stunning and unprecedented admission of defeat in Asia's longest-running war."

As Pipes noted, conflict generally ends "when one party realizes it can no longer pursue its aims and gives them up." This is exactly what happened in Sri Lanka.

"'This battle has reached its bitter end. It is our people who are dying now from bombs, shells, illness and hunger. We cannot permit any more harm to befall them,' Selvarasa Pathmanathan, the Tigers' chief of international relations, said in a statement posted on the TamilNet Web site. 'We remain with one last choice -- to remove the last weak excuse of the enemy for killing our people. We have decided to silence our guns.'"

The final nail in Tamil Tigers' coffin was the reported death of their leader, Velupillai Prabhakaran ["Death of Rebel Leader Marks 'End of an Era' in Sri Lanka," by Emily Wax, Washington Post, 19 May 2009]. According to Wax's earlier report, Prabhakaran "allegedly orchestrated suicide bombings that killed a Sri Lankan president, six cabinet ministers and former Indian prime minister Rajiv Gandhi in May 1991. He trained an elite squad of suicide bombers, the Black Tigers, and was infamous for hosting elaborate feasts for his recruits before sending them to their death." Wax describes the events surrounding Prabhakaran's death:

"After a two-hour firefight, officials said, Prabhakaran was shot along with two commanders from his inner circle: Tiger intelligence chief Pottu Amman and Soosai, the head of the 'Sea Tiger' naval wing, who used only one name. The three were killed as they were trying to flee the war zone in the country's north in an armored van accompanied by a bus filled with armed rebels. The Sri Lankan government sent cellphone text messages to citizens across the country announcing that Prabhakaran and his deputies had been killed."

A military resolution to conflict doesn't mean that everything turns out glowingly. Iraq is a perfect example. As John Keegan notes, "Wars usually end in a mess." ["History tells us that most conflicts end in chaos," The Telegraph, 01 June 2004]. The world will watch to see how the Sri Lankan government treats its Tamil minority. It was single-minded in its quest for victory and the price paid by the Tamil minority was dear ["War’s End in Sri Lanka: Bloody Family Triumph," by Somini Sengupta, New York Times, 19 May 2009].

"The United Nations says 7,000 civilians have been killed since January alone, and more than 265,000 ethnic Tamils who fled the war zone are now interned in overcrowded camps. Some civilians are missing, including three government-employed doctors who worked in the rebel-held area and regularly spoke out about the shelling of hospitals there. Human Rights Watch has repeatedly said the government shelled civilian areas, even as the rebels held tens of thousands of ethnic Tamils as civilian shields. Now, some of Sri Lanka’s erstwhile allies, including those that had banned the Tamil Tigers as a terrorist organization, are calling for an international commission of inquiry into possible war crimes."

The government's victory in Sri Lanka will make the world once again assess the viability of diplomacy for ending conflicts. For one, I'm not ready to toss out diplomacy in favor of military action. Although the odds are long that diplomacy will work, each conflictual situation is different and the tools that will work in each situation change. Even one successfully negotiated end to conflict is worth the effort. On the other hand, political leaders cannot wear blinders and avoid seeing circumstances as they really are. Political leaders in Pakistan tried to negotiate peace in the Swat Valley and the Taliban interpreted their actions as weakness. Even if military victory is the principal means of ending conflict, the Carter Center notes that the end to fighting does not necessity decrease the need for diplomatic efforts:

"An end to fighting does not always mean a conflict has been completely resolved. The often protracted process that leads to a peace agreement represents the beginning of an even longer process of peace implementation and post-conflict reconciliation. All parties must be held accountable for implementing agreements in good faith. Beyond the implementation of a peace agreement, root causes of a conflict may linger and continue to fester to the point of reigniting the conflict. Bringing former combatants together to forge a shared future demands patient, persistent efforts. Steps may be taken to ease ethnic tensions, identify and build consensus around shared social goals, strengthen the rule of law, and bring justice to victims."

This is the current situation in Iraq (especially between the Kurds and the Arabs). As I noted in my post entitled Nastiness in Nineveh, many people in the area believe that only confrontation will result in a solution. Such an outcome would be bad for both sides since it would set back development efforts and drain scarce resources which could be put to better use than fighting a civil war. Security is absolutely essential for development; but, security must be tempered with justice, fairness, and cooperation. The world has need for both military personnel and diplomats. Their efforts should be complementary and their goals the same -- to secure a peaceful and prosperous future for people in conflict.

Nastiness in Nineveh

The very name "Nineveh" conjures up images of past glory. In the Bible, Nineveh is called an "exceeding great city." (Jonah 1:1) It was the Assyrian king Sennacherib who made Nineveh a truly magnificent city around 700 BC. He laid out new streets and squares and built within it the famous "palace without a rival," whose overall dimensions were about 503 by 242 meters (1,650 ft × 794 ft) -- large by any historical standard. The total area of Nineveh comprised about 7 square kilometers (1,730 acres) and it had fifteen great gates that penetrated its walls. An elaborate system of eighteen canals brought water from the hills to Nineveh, and several sections of a magnificently constructed aqueduct erected by Sennacherib were discovered at Jerwan, about 65 kilometres (40 mi) distant. The walled city had more than 100,000 inhabitants (maybe closer to 150,000), about twice as many as Babylon at the time, placing it among the world's largest settlements. According to Wikipedia, "Nineveh's greatness was short-lived. Around 633 BC the Assyrian empire began to show signs of weakness, and Nineveh was attacked by the Medes, who about 625 BC, joined by the Babylonians and Susianians, again attacked it. Nineveh fell in 612 BC, and was razed to the ground." Ancient Nineveh was built on the eastern bank of the Tigris, across the river from the modern-day major city of Mosul, Iraq.

Today, the region of Nineveh is again experiencing turmoil. It's not the Medes and Assyrians who are in conflict, but the Kurds and the Arabs ["Dispute Over Land Simmering in Iraq," by Nada Bakri, Washington Post, 18 May 2009]. Bakri calls the area separating Iraq's Kurdish regions from its Arab regions "Iraq's most dangerous fault line." Throughout the Iraq conflict, the town of Mosul has been in the news as one of Iraq's most dangerous cities. Bakri, however, submitted her report from another town in Nineveh -- Bashika (also spelled Bashiqa).

"Bashika has emerged as a flash point in a growing test of wills over who will control land claimed by Arabs and the Kurdish autonomous government in the north of Iraq. ... Many fear [the standoff] may be resolved only through violence. ... Nineveh was under Kurdish control until provincial elections in January, when Nujaifi's Arab nationalist list, known as al-Hadba-a, won a majority of seats. When the party formed the council, its members assumed key positions in the province, leading the Kurds to walk out in protest. Bashika is one of a string of Kurdish towns and villages that declared they would no longer abide by Nujaifi's authority."

More violence, of course, is the last thing that Iraqis need (be they Kurds or Arabs). Unfortunately, past offenses, ethnic pride, potential oil revenues, and fear have combined in a toxic brew that keeps the area tense. The Kurds simply refuse to recognize the powers of officials who were victorious in the last election and "have blocked Arab officials from carrying out their duties" ["Tensions Stoked Between Iraqi Kurds and Sunnis," by Sam Dagher, New York Times, 18 May 2009].

"American officials have long feared a military conflict in the north, where Arabs and Kurds have competing claims to territory and have legions of trained men under arms. The struggle for power has also fueled the insurgency in the north, giving groups like Al Qaeda in Mesopotamia an opening to appear to back an Arab cause. And it comes as American combat troops are scheduled to withdraw from Iraqi cities by the end of June."

Emotions are particularly high on the Kurdish side. Arabs Kurds from their homes under an Arabification program launched by Saddam Hussein. Hussein also used chemical weapons against the Kurds. As a result, the Kurds consider the land sacred and are unlikely to compromise over issues involving land. The Kurds believe the only way they can ensure that the government doesn't renew attacks against them is to hold important posts within the government.

"The Kurds .... are now threatening to escalate the conflict unless they are given the posts of deputy governor and provincial council chairman. [Atheel al-Nujaifi, the newly elected Sunni Arab governor,] says there will be no talks with the Kurds unless they recognize Nineveh’s administrative borders and pull their forces back to behind the so-called Green Line, Iraqi Kurdistan’s boundary before the American-led invasion in 2003. The Kurds reject that request and say they will not budge before the fate of disputed territories north of Mosul is settled. They say they trust neither Mr. Nujaifi nor the central government in Baghdad, led by Prime Minister Nuri Kamal al-Maliki, which has been seeking to assert its authority in northern Iraq at the expense of the Kurds. 'We do not trust these people, we know their intentions,” said Khasro Goran, the Nineveh leader of the Kurdistan Democratic Party, the most powerful Kurdish force on the ground."

Although the mistrust on both sides is understandable, increasing tensions only make the situation worse.

"Joost Hiltermann, an analyst who is advising the United Nations on territorial disputes in northern Iraq, said the Kurds had more of an interest in escalating the conflict. 'It could be of Kurdish interest to provoke confrontation in order to persuade the Americans that if they abandon the Kurds, the consequences would be dire,' said Mr. Hiltermann, a senior Iraq analyst at the International Crisis Group. The American military has played down the significance of the recent Kurdish actions. Meanwhile, residents here on the Nineveh Plain, a mix of ethnic and religious groups, are bracing for the worst. A checkpoint staffed by Kurdish military forces on the highway between Erbil, Iraqi Kurdistan’s capital, and Mosul was recently moved closer to Mosul. Kurdish observation posts along the plain’s roads and hilltops have also been fortified. Near Bashiqa, dirt shields several roadside military outposts. Machine guns could be seen on the roofs of some buildings."

With the June deadline looming for the withdrawal of American troops from Iraqi cities, renewed efforts need to be made to find a solution to growing tensions. Unfortunately, many people in the area believe that only confrontation will result in a solution. Such an outcome would be bad for both sides since it would set back development efforts and drain scarce resources which could be put to better use than fighting a civil war. Nineveh may never achieve the greatness it enjoyed in the past, but men of good will can make it better than it is today.

Philanthropy and Development in Emerging Markets

Philanthropy and development are two subjects about which I often write. Both are difficult enterprises to maintain during economically hard times. Difficult times will pass, however, and when they do we need to be ready to push forward efforts aimed at improving the lives of those living at the bottom of the economic pyramid. In a book reviewed by Helen Waters, editor for BusinessWeek.com's Innovation and Design Channel, Jacqueline Novogratz "explains how the most well-intentioned aid efforts often fail, and the slow and steady approach works best" ["Philanthropy and Development in Emerging Markets," BusinessWeek, 2 March 2009]. Novogratz' book, entitled The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, provides, according to Waters, "valuable lessons in social entrepreneurship and philanthropy." Waters, however, also laments that Novogratz spends the last-third of the book making "a pitch for the author's nonprofit fund." Waters begins her review this way:

"There really is a blue sweater in Jacqueline Novogratz's book of the same name. It was a treasured piece of clothing she wore constantly from the minute she got it in middle school until a few years later, when some classmates commented on how snugly it fit the now-adolescent Novogratz. The teenager unceremoniously stuffed the well-worn garment into the nearest recycling bin, never to be seen again. Or so she thought. Years later, Novogratz saw her blue sweater again. This time the stretched, misshapen top—with her name tag still on the inside collar—was being worn by a young boy she spotted on a street in Kigali, Rwanda."

That sounds almost too fanciful to be true. But Novogratz insists that it actually happened. The sweater's journey from Alexandria, VA, to Kigali would probably make fascinating reading in and of itself, but Novogratz's book is not about the sweater's journey it's about how truly connected the world now is. That connectivity means that suffering at the bottom of the pyramid should matter to those at the top. Novogratz is chairman and chief executive of Acumen, a non-profit venture capital fund she founded in New York in 2001. A non-profit venture capital fund sounds like an oxymoron. Most VC firms are out to make big profits for the investors providing the capital. Novogratz would like to see the ventures Acumen backs also do well, but the profits are used to back further ventures. Before founding Acumen, Novogratz worked in the credit audit department at Chase Manhattan, then worked at the African Development Bank, and then worked at the Rockefeller Foundation. These jobs provided her with unique exposure to both the world of finance and the world of philanthropy. According BusinessWeek's snapshot of the company:

"Acumen Fund is a venture capital firm specializing in direct equity investments, debt, guarantees, quasi-equity, and lab investments. The firm seeks to invest in critical and affordable goods and services. It primarily invests in water, healthcare, energy, and housing. It prefers to invest in India, East and South Africa, and Pakistan. The firm typically invests between $0.3 million and $2 million in equity or debt with an exit period ranging from five to seven years. It seeks to invest in business models that can be effective in reaching the billions of poor without access to clean water, reliable health services, or formal housing options. The firm primarily invests in non-profit organizations, small and medium for-profit companies in need of capital, and larger companies that are starting specific business units to serve the poor. The firm typically holds minority stakes in equity investments and prefers a board seat in its portfolio companies. Acumen Fund was founded on April 1, 2001 and is based in New York, New York with additional offices in Hyderabad, India; Nairobi, Kenya; and Karachi, Pakistan."

To find out more about Acumen and how you can get involved go to http://www.acumenfund.org/. Back to the book. According to Waters, the book is "a pointed critique of conventional thinking about philanthropy and economic development in emerging markets." Novogratz "is no starry-eyed idealist," Waters writes. "Her stories of working with some of the world's poorest people back her case for a pragmatic, enterprise-based approach to solving poverty. And she is blunt in her analysis that the most well-intentioned aid efforts often fail." I was drawn to the book review because Enterra Solutions' Development-in-a-Box™ is also an "enterprise-based approach" -- just not a non-profit one. However, I agree with Novogratz that such an approach is much better than traditional aid programs because enterprises create jobs and jobs create a viable middle class and a viable middle class promotes a better quality of life and more open government. Waters notes that criticizing past approaches is "a delicate issue." And she's right.

"After all, kind-hearted people don't like to hear that they are perpetuating poverty, not relieving it. But too often, Novogratz writes, that's all that happens. Instead of focusing on passing out grants and donations, she argues that charities and philanthropists should be empowering local entrepreneurs to take risks and responsibility, like Acumen does. The poor should be able to borrow what they can, make investments on their own within a market context, and succeed or fail on their own."

The strongest message I deliver to leaders of developing countries is that they need to create the conditions that fosters entrepreneurship. There is an optimism -- a hope for a better future -- that spreads throughout a society when it is touched by the hands of successful entrepreneurs. "For Novogratz, success lies not in stacks of cash, but in maintaining a slow and steady approach to investment. She believes that building long-term value outweighs short-term gains." I couldn't agree more. The hardest part of such an approach is managing expectations. If those being helped can see the big picture and understand why success is not normally achieved overnight, then hard work and a steady hand can achieve sustainable development. Waters concludes her review this way:

"The lessons are compelling, but much of the power of The Blue Sweater comes from Novogratz herself. She's often entertaining, recounting the tale of an impromptu dance-off with women after her car broke down in a rainstorm. At the same time, she can be a brutal self-critic, particularly as she describes stepping away from her American upbringing to learn the culture and way of life in Africa. At times, her tales are upsetting. She tells of visiting post-genocide Rwanda in 1997, looking to track down the initial supporters of one of her first ventures, a microfinancing organization called Duterimbere. Her account about trekking to a remote jail to talk with one of the women, imprisoned for helping to instigate the genocide, is matter-of-fact and yet astonishingly personal. Her confusion at meeting Agnes, a woman who had worked so hard to elevate the lives of so many women and yet had also committed inhuman acts of atrocity, is palpable and unresolved. It's a reminder that people are complex and contradictory, and also that real people are at the heart of economic statistics. For Novogratz, that's the most important story of all."

Too often people think about business in terms of money, when they would be better off thinking about business in terms of people. If people are successful, then businesses will be successful. The more people who achieve success the better the business environment. Businesses create jobs and jobs provide livelihoods. Novogratz understands the personal dimension of business as well as business' pragmatic side. Aid is still essential for meeting some needs, especially in time of crisis; but development is all about creating jobs, which means supporting promising businesses. Supporting bad businesses is like drilling dry wells. Novogratz understands that a country's future rest in the establishment of successful businesses. That, too, is the goal of Development-in-a-Box™. At Enterra Solutions, expend a lot of thought and effort doing due diligence to find and promote businesses that have the best chance of succeeding in the circumstances in which they must operate. We also work with governments of developing nations to improve those circumstances. Done right, philanthropy and enterprise-based development are complementary, not conflicting, activities. Both have the same objective -- improve the lives of those living in poverty. Without philanthropy and social programs that establish base conditions that support a healthy business environment, enterprises can't thrive and investors can't be attracted. In an ideal world, philanthropists and governments till the fields and plant the seeds and entrepreneurs come along to help them reap the harvests and sustain the momentum needed to improve societies.