Ashraf Ghani: How to rebuild a broken state

ashraf ghani

 

 

Ashraf Ghani (pictured above) believes there is something fundamentally wrong with our world today: he believes the world’s current aid system is not working and highly ineffective, that our world’s education system, in a 7-billion-strong population dominated by young people, is still based on that of 19th century, that capitalism and democracy are malfunctioning in many aspects in most developing countries, and that there is a great absence of a strong, international leadership to solve our world’s ages-old problems.

Afghanistan even suffers worse. It is beset by corruption, terrorism (by-products of Cold War, with thousands of combatants trained by both Russia and United States), and an economy largely domineered by illegal drug trading. Despite gigantic potential revenues from mining sector (the country’s mineral reserves are estimated to be worth nearly 3 trillion US$), all these problems, using current problem-solving approach, will take more than decades to solve. And, we must acquiesce, Ghani, having served as the country’s finance minister from 2002 to 2004, will not be able to solve these problems alone. However, at least, throughout his tenure, the country has seen some major improvements: currency stabilization, budget reforms, and long-term public investment schemes.

He once competed for 2009 presidential election, but didn’t manage to secure enough votes to win. For the second time, for the 2014 election, he will compete once again for the seat. Let’s hope he can bring more positive changes to this new, uneasy, and fledgling nation.

 

Listen to his TED talk to know more how he helped rebuilding a once broken state.

 

Planet Plutocrat

plutocrat

 

Crony capitalism, as it seems, remains a chronic economic problem for most countries. Despite its ‘capitalist’ title, these plutocrats seemingly operate under business principles which, paradoxically, contradict the essence of capitalism themselves. One obvious feature, as we can see, is their overwhelming control in strategic sectors with required strong political connection with leaders, or other political figures, something The Economist itself labels as ‘rent-seeking sectors’. No wonder, either you are in a developing country, an emerging market, or a city-state, you can always hear names of those who ‘gain complete control in transport, infrastructure, real estate, telecom, and numerous other highly lucrative sectors’, and you know their huge invisible political prowess they can make use anytime to advance their agenda.

Growing from this concern, The Economist has published a list of countries – 23 in total – which they consider to be heavily reliant on this system. Read the full report here.

 

Bonus: in order to save capitalism itself from crony capitalists, countries, and emerging markets in particular, will need their own Roosevelts to tackle this problem. Here’s another one, still from the same source, that explains how to mitigate their influences.

Hint: here are the 23 countries The Economist released in regard to the percentage of billionaire wealth to these countries’ total GDP values.

crony capitalism

What failed Mitt Romney?

mitt romney

 

 

The story of how the presidential candidate, despite his decades-old expertise in business consulting and economic analysis, failed the election of 2012 against Barack Obama.

Hint: looking back at your past success was not always a guarantee you could win support among your voters.

Read the full article on Bloomberg Businessweek, originally published in November 2012.

 

Excerpt:

 

By the time Romney left Harvard in 1975, a wave of entrepreneurialism was changing how businesses were run. Large but poorly performing companies, undervalued by a nervous market, saddled with expansive bureaucracies and expensive labor issues, struggled to compete, and became easy targets for mergers and consolidations. Panicked executives turned to firms like BCG for answers, and Wall Street opened up to new kinds of people.

“It was a time of great foment and thinking about strategy,” says William Sahlman, a classmate of Romney’s and now a Harvard Business School professor. “American business hadn’t really had to compete for a long period of time. That whole period was the origin of the shift in the economy toward knowledge workers and gave rise to a meritocracy where anybody who was really smart could get a job and do well.”

Romney had plenty of connections to the old pedigreed world. But his acumen, more than anything else, brought him success in the new one. Working with CEOs, strategic consultants guided businesses through corporate successions and transitions, focusing them on doing a few core things well. If a company was underperforming, a good consultant could figure out why and advise on which divisions to shed. If a new product was under consideration, he—and it was then almost entirely men—could study the market and the competition to determine how, when, and where to launch it.

To an almost unimaginable degree, given their age and experience, consultants still in their twenties and thirties reset the course of major American businesses (including Chrysler), helping many CEOs twice their age survive by forcing them to confront the realities of a new marketplace. A colleague of Romney’s from this period, seeking to convey the challenge consultants faced, says that Chrysler executives firmly believed people would continue to buy Chryslers because they had always bought Chryslers. Consultants found that this was a common tendency among executives: the belief that past success was a strategy for the future. Romney shone as someone possessed of both the analytical ability to find the right answer and a presence that inspired trust in more experienced executives.

Can we invent a friendly version of capitalism?

 

Too many earthlings have grown discontented with the current economic system which many criticize as being unfair to the people, and particularly, to the Mother Earth. This has been vividly shown by the unleashed anger by Occupy Wall Street protesters, and hundreds of Occupy-inspired protests taking place over the whole world, demanding an end to the capitalism. Meanwhile, some others are currently proposing a new breed of capitalism that is not only profit-driven, but also responsive to the social state of the surroundings, and environmentally responsible. ‘Social entrepreneurship’ is increasingly becoming a catchphrase among many bloggers and educated savvies, and is claiming much more popularity after Forbes for the first time released its annual Social Entrepreneur list. But, according to your opinion, can we make capitalism more friendly and socially sensible, without reducing its very priority at the same time, that is seeking profits?

 

Read it at TriplePundit.