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Posts Tagged ‘Financial Crisis’

An article in yesterday’s Washington Times addresses the role of philanthropy  in spurring economic growth in developing countries as government aid lessens due to the financial crisis.  The article covers the Forum on Philanthropic Giving and U.S. Foreign Policy that was organized by the Council of Foreign Relations in Washington last week.   It quotes our CEO & President, Jane Wales,  on the potential impact of the spread of information technology on the world’s poor:

“[M]any of the problems we face, and many of their solutions, will lie in the individual choices made by millions, hundreds of millions, of individuals; and … informing those choices could be the most important thing that we do.”

Read the full transcript from the forum here.

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The Economist published an article yesterday on the effects of the credit crunch on philanthropy – both from rich to poor countries, and within rich countries themselves.  The author seems optimistic about the ability of US foundations to continue to give at the levels of past years, and highlights discussions on this subject at GPF last month:

The word at a do-gooders’ shindig held in April, the Global Philanthropy Forum, was that big private donors will want cannier use of their money. One change would be to tie donations more tightly to specific projects. Another would be to concentrate on collaboration with existing projects rather than starting prestigious new ones. The outfits that receive the money to carry out the good works see it a bit differently. They want more flexibility, not tighter rules.

Look for videos from GPF posted here.

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The Philanthropy News Digest spoke with Jane Wales, the co-founder of the Global Philanthropy Forum and president and CEO of the World Affairs Council about the world’s poor, the global economic crisis, its effect on philanthropy, and the Obama administration’s interest in social innovation.

Read the full interview: Jane Wales, President and Co-Founder, Global Philanthropy Forum: Philanthropy and Social Innovation.

The last four Newsmakers recognized by the Philanthropy News Digest will be speaking at the Global Philanthropy Forum’s 2009 Annual Conference in Washington, D.C., April 22-24. See all the articles here.

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Martin Wolf, Associate Editor and Chief Economics Commentator for the Financial Times , joined us at the Council a few weeks ago to discuss the state of global finance.  In conversation with James Manyika of McKinsey, Wolf talked about the links between the microeconomics of finance and the macroeconomics of the balance of payments, demonstrating how the subprime lending crisis in the United States fits into a pattern that includes the economic shocks of 1997, 1998, and early 1999 in Latin America, Russia, and Asia.  The video below contains highlights from the talk, or you can click here to watch the full program.

Wolf continues his coverage of the financial crisis in the FT – including a great article from yesterday that outlines the pros & cons of nationalizing our banks.

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more about “Martin Wolf on fixing global finance“, posted with vodpod

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Michael Lewis, who chronicled the excesses of Wall Street in his 1989 book, Liar’s Poker, has written a piece for Portfolio.com on what went wrong in our financial system and the select group of people that saw it coming. It’s called “The End of Wall Street’s Boom” and is one of the best accounts of the financial melt-down that we’ve seen, and a pretty digestible read to boot.

In a program we held here at the Council in November, Liz Ann Sonders, Senior Vice President & Chief Investment Strategist at Charles Schwab & Co., Inc discussed this same topic – the US financial crisis – with a San Francisco bent.  Watch here.  Also, look for our upcoming program with Martin Wolf, described by former US Treasury Secretary Larry Summers as “the world’s preeminent financial journalist,”  to explain what has happened to the global financial order and what can be done to avoid the shocks of global finance.

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John Bruton, former Irish Prime Minister and current EU Ambassador to the United States, urged Congress on Monday to refrain from any “Buy American” provisions in the American Recovery and Reinvestment Act now headed to the Senate. Bruton expressed the EU’s concerns over such action, saying that if approved, the measure would set a “dangerous precedent” for protectionist policies. A BBC article today quotes Ambassador Bruton as saying that “Nobody will take this lying down.” And that it would take the world on the same exact path that we took in the 1930s – when, Burton believes, retaliatory protectionism caused the Great Depression to last years longer than it might have otherwise.

Ambassador Bruton shared these same thoughts when he joined us at the Council on Friday to talk about what the new administration in Washington might mean for transatlantic relations. He spoke about ways in which governments on both sides of the Atlantic can turn a series of separate problems into a chain of interlinked opportunities – particularly regarding the financial crisis of late. Bruton warned that this “Buy American” clause would sap global confidence and trigger more protectionist policies at the very time that we should be opening up and working together to turn this crisis into an opportunity for global cooperation.

FT also has an interesting blog on the “Buy American” debate here.

Update: CBS News posted a clip of our Council program with Bruton – watch here.

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The 74th Secretary of the Treasury, Henry Paulson has been on the front lines of the most significant global economic crisis in a generation. He joined the Council via webcast last week to offer remarks on US-Sino economic affairs.

The moderator, Mr. Timothy Dattels, is a Trustee of the World Affairs Council, and served as head of Investment Banking at Goldman Sachs for all Asian countries outside of Japan from 1996 to 2000.  He worked closely with Secretary Paulson during this time, and guides the conversation based on his experience.

Watch a video of the webcast here.

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Across all panels in the past two days, and especially this morning, we have seen that technological innovation now arms us with unprecedented opportunities for alleviating poverty. In our final panel for the poverty alleviation track, we heard about the nexus between information and poverty from moderator Sonal Shah, Head of Global Development Initiative at Google.org, Holly Ladd, President & Director of AED-SATELLIFE, Brian Richardson, Founder & Managing Director of WIZZIT Bank in South Africa, and Mary Ellen Iskenderian, President & CEO of Women’s World Banking. Each panelist highlighted the great opportunity presented by mobile technology in expanding and accelerating access to financial services, and explored other ways to leverage information technology to strengthen the service delivery of existing health and microfinance initiatives. Sonal asked each to discuss how technology can best collect and share information about poor communities and individuals, such as demographics, health statistics, credit history, etc.

Holly emphasized that our challenge is to alleviate the burden of disease, so that we can move to alleviate the burden of poverty; creating wealth by creating health. She argued for the use of new technology to capture data more effectively – and more importantly, to make every effort to make this information widely available. Brian seeks to provide affordability, accessibility, and availability in financial services for the poor, and believes that mobile technology is the best way to achieve this. Banking via mobile phones enables up-and-coming entrepreneurs to save valuable amounts of time and productivity. While there remains a lot to be done on regulation and building trust in the security of mobile banking, he is working to prove scalability and commercial viability to take his model global. Mary Ellen pointed out that despite the attention the microfinance movement has received, only 133 million people in the world have access to its services. Banks need information on customers, but we must work out the sensitivities of who owns the information. Sorting this will be fundamental to enabling microfinance to have the impact that it can and should.

At the close of working group sessions, we all moved to the ballroom for the final plenary with Prime Minister Gordon Brown and President Clinton. We learned of the range and depth of commitments made this year in our 3 days together, and heard from past commitment makers who have made extraordinary progress. Prime Minister Brown spoke of the financial crisis, and argued that there is no future for isolationism, just as there is no future for protectionism. The essential thing to do is to begin to restore confidence in markets, and to do so globally – for this global problem requires a global solution. President Clinton reflected that instead of pouring money into the narrow housing market, we should have invested in our poor neighborhoods, in a clean, independent energy future – in solar power or wind power or bio-diesel or electric cars – into making an energy partnership with Haiti, the Dominican Republic, and our other neighbors in the Caribbean. It would have been a different world out there, and a lot fewer people would have taken improvident risk. He urged us not to forget that as it turns out, doing the right thing is the best economics, and that over the long run, it’s the best politics too.

Now that CGI has concluded for another year and production staff is busy pulling down the lights and microphones, we must pause, reflect, and take with us what we’ve learned. The poor are worthy of our efforts and it is time for us to make good on our promises. It requires a real commitment and true audacity from each of us. I have been moved by each of the members of CGI – experts, activists, philanthropists – and I look forward to advancing their work and the work of others in the year ahead.

Jane Wales
President & CEO, World Affairs Council of Northern California
Working Group Chair, Poverty Alleviation, Clinton Global Initiative

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“This country that we sit in is a great country. And it’s a great country because it’s not just a country, it’s an idea. And that idea was supposed to be contagious – it’s bound up in the idea of the inalienable rights of men and women and children, equal in the eyes of God.” This morning, at the opening of the 4th Annual Meeting of the Clinton Global Initiative in New York, Bono called each of us to action. He asked us to place the current financial meltdown in a larger context – to remember the privilege from which we come, and of our responsibility to help those who have been living with this kind of insecurity for their entire lives. Joining him on stage, President Ellen Johnson Sirleaf of Liberia, Vice President Al Gore, and fellow panelists introduced the four focus areas of CGI – Poverty Alleviation, Climate Change, Education, and Global Health. Queen Rania of Jordan highlighted in particular the need for a paradigm shift in how we view education – that we must see it not just as the responsibility of government, but of everyone. This shift is needed across all issues – for we each must have a stake in improving these pillars of society.

As Working Group Chair for the poverty track, I structured each of our panels to address a core dimension of poverty. We began today with a panel discussion on strengthening financial services for the poor. While we in the rich world consider ways to rescue and repair our financial services industry, 2.3 billion people in the world have been living without access to any financial services. Even in the face of frightening developments in our own markets, we must work to reach these people. Confidence makes or breaks financial systems – and right now, we lack it. Robert Rubin, former Secretary of the Treasury in both Clinton Administrations, and now Director and Chairman of Citi’s Executive Committee, spoke on the panel about the current financial melt-down and its implications for the poor. He identified our situation as a “crisis of confidence,” and emphasized that we must address it as such. We need responsive action to restore confidence, and must prepare for the hugely consequential challenges this crisis poses, especially in helping the poor move in to the mainstream.

Dr. Julio Frenk, a Senior Fellow for the Global Health Program at the Bill & Melinda Gates Foundation and Mexico’s former Minister of Health, spoke powerfully on the links between health and poverty. He believes health insurance is crucial in mitigating the risks that drive people in to poverty, and that micro finance institutions should work in partnership with government to provide health services. He noted that the high cost of health and medical care has driven more than half a billion people in to poverty around the world. As President Clinton said almost fifteen years ago, millions of people in the world are only one serious illness away from losing their savings. We must provide services to help the poor protect their assets in the face of these risks. Fazle Abed, Founder and Chairman of BRAC, highlighted the regulatory constraints that currently limit NGOs from accepting savings deposits, thereby forcing microfinance institutions to borrow money to provide loans, which is not a sustainable model. CEO and Managing Director of Equity Bank in Kenya, James Mwangi argued that we should adopt a philosophy of “taking banking services to the people,” which Equity Bank does through mobile vans powered by solar panels and equipped with simple computer technology that travel to poor villages. The poor need savings products that are structured with no restrictions regarding frequency or amount – Mwangi believes this simplicity is key to usability.

Our audience participants concluded that we must decrease fraud, improve transparency, encourage cross-sector collaboration, and impose new regulations to ensure stability and flexibility in financial services – advice we can all appreciate, and should bear in mind as we react to the crisis in our own financial system.

Jane Wales
President & CEO, World Affairs Council of Northern California
Working Group Chair, Poverty Alleviation, Clinton Global Initiative

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