Building Opportunity for the Majority: Day Two
The second day of ?Building Opportunity for the Majority? had an inauspicious beginning: I was told no coffee would be allowed into the auditorium, a change from the previous day’s policy and a potential threat to my productivity. The threat was averted by something much more powerful than caffeine: Bill Clinton. The former president addressed a packed auditorium for over an hour, touching on subjects from fiscal policy and remittances to AIDS and clean energy. The electricity in the room was palpable, and Clinton lived up to the hype–he’s an amazingly intelligent person who can speak credibly on just about any topic. I never realized how articulate he is until the current President took office–quite a change. But I digress…
So, what did Clinton say? The IDB’s press office does a good job summarizing here, so I won?t replicate their efforts. I was struck by how well Clinton understands the tension between social and economic policy as he pushed the Bank to empower more entrepreneurs. He understands the importance of business environments–a subtle nod to the Doing Business series–and legal systems. His Clinton-esque ?friends with everyone? anecdote about Hernando de Soto?s dead capital work was engaging and funny, but also serious–noting that de Soto would be able to achieve much more ?good? if he didn?t have to constantly raise money.
Another question centered on AIDS work, which really energized Clinton. He’s done a lot of work on developing better market mechanisms for AIDS drugs through his foundation, and it’s right up the BOP alley: ?We went to the major drug producers and got them to change their model from one with high margins and low volumes to one with low margins and high volumes by guaranteeing payments for the drugs.? Substitute telecommunications, financial services, water, energy, etc for drugs and you’ve got the basic BOP hypothesis down. Clinton continued, ?If you get entrepreneurial partners and apply entrepreneurial practices to a social problem to move to a high-volume, low-margin model, it will change the entire system…I?m convinced we could do exactly what we did with AIDS and apply it to ten other problems.?
The presentation was generally engaging–the product of watching an incredibly intelligent, articulate man at his best. What bothered me was the end of Clinton’s speech–once he was done, the IDB auditorium emptied out faster than a Washington Nationals game in the 8th inning. The power of celebrity trumps the power of content, I suppose, which left WRI president Jonathan Lash a smaller-than-deserved audience for his on-point remarks about the Market of the Majority. I?m biased–the presentation is based on my team’s research–but Lash did a great job connecting the power of markets to the empowerment of the majority. His presentation, along with Hernando de Soto?s, were my two favorite content-related speeches of the conference.
The afternoon session began with Bjorn Lomborg, author of the Copenhagen Consensus. Lomborg’s cause celebre is prioritization of development projects–he’s a self-described realist who wants to get the most bang for our development buck. It was an interesting perspective, especially considering the six-part approach being announced at the conference. Lomborg stood in front of some banners touting the six elements of Moreno’s initiative and basically said, ?Choose only three, if that.? Ironic, but interesting. His methodology calls for economists? evaluations of various development options. Those options are ranked by evaluating how much social good will come from each dollar of aid money. The projects with the highest ratios of good to spending come first. It’s a pipe dream to ask development banks to prioritize malaria projects over basic health clinics, since there are so many entrenched interests within the staff and the stakeholders. But Lomborg’s approach, as well as his engaging presentation style, won me over. I wish him well in his Quixotic adventure, and hope he?ll continue to buck the establishment (I smiled when he walked onstage in jeans and a polo shirt to address the buttoned-up audience).
All in all, it was a great conference. Most impressive are the concrete steps that IADB is taking to change its course from a top-of-the-pyramid financing institution to one that focuses directly on projects impacting the majority. That may sound simple or overdue, but it’s neither. Hernando de Soto observed on Monday that it is relatively easy to shift 30 percent of a country’s population into the middle class. What of the remaining 70 percent? That’s where the hard work lies–and that’s what Luis Alberto Moreno wants his legacy to be.