Rolf Alter questions whether 150 years of progress could be eroded in the aftermath of the financial crisis. The interview is part of the Risk Response Network’s “What if?” series.

What is your main field of expertise?
My main field of expertise is public governance and within that, a large part of my time is devoted to work on risk management.

Given your research, what would you say is the most under-appreciated risk?
We have been living through 30 years of very rapid and very profound globalisation, which has always been carried out and supported in the name of the efficiency of markets. The assumption has been that growth will be merely a question of our creativity and will. This is probably still true, but we have underestimated the conditions for that growth to happen in a sustainable sense. One of them is certainly that countries around the world maintain a rule-based society, a set of standards that everybody is willing to adhere to.  Another is the validity of our confidence in globalisation.  What if we turned away from a system of international cooperation and multilateral responses to transnational problems, towards an “every man for himself” approach? The global implications of such a shift would be tremendous.

How would you frame this risk as a hypothetical scenario: “what if” this was to actually happen?
What if the achievements and developments of the last 150 years of globalisation are eroded and reversed in the chaos of the current crisis? The fundamentals of human rights, human development and democracy could be at risk.

In your analysis, how might this scenario unfold?
I see this scenario unfolding as a chain of events. At every point in this chain there are different scenarios to come, prompting different reactions from policy-makers, citizens, entrepreneurs. Some of these reactions could be of a protectionist nature, thereby accelerating economic decline, but they may also be very uncontrolled.  Take the recent democratic movements that we see in North Africa.  If they were to spread to China, one might see a great disruption in its capacities to produce. This would have dire consequences for their imports of commodities, and it would have dire consequences for their exports.

Who would feel the impact the most, and how?
Sooner or later everybody, but countries like Australia and Canada, and also Brazil, would be the first to be affected as they depend on the demand for their commodities. If this were to last for a few years, it would mean that many countries would simply have enormous challenges in adjusting.

How well do you think we are prepared for such a contingency?
Not well. The events of 2008 illustrated this. Interconnectedness was already such that the financial crisis meant that world trade just sort of collapsed. It hit the Chinese economy with real vigour. The G20 offered some kind of co-ordinated response through restorative measures, but is that going to last in extreme situations? I doubt it. In my opinion this raises the issue of the trusted regulator at the national level. Governments are already now showing limitations in their capacities to govern, because we haven’t tested our own institutions in the past to the same extent. I’d say there is a great risk that societies and economies will be very much affected in case of a further weakening of regulatory capacities. But that in turn would mean that exactly the same regulatory capacities are undermined again by the incapacity to deal with emergency situations. That could be a very vicious circle, and this is something we are not prepared for.

What is your top mitigation approach for this risk?
My recommendation is that we really engage in both analysing our democratic institutions to see where the weaknesses lie, and then addressing them in order to strengthen those institutions. There’s a lot of work to do at both the national and also the international level. Over quite some time, we witness an erosion of trust in governments. I’m not talking specifically about Europe or the United States but, in a broader sense, the relationship between governments and their citizens. This relationship is very different these days and it’s changing rapidly. The ability of institutions to establish rules or policies has diminished tremendously as citizens have become more self aware. Governments have lost their monopoly in decision making.

Yes, the protest movements we are seeing today are small in terms of numbers of people participating, but the fact that you can go to practically any place in the world today and say, have you heard about something which is called Occupy Wall Street, and people will nod, shows the extent of this. I believe that we are too conservative in many ways in trying to explain this phenomenon.

On the flip side of risk, do you see any opportunities associated with this scenario?
Very much so, very much so indeed. I don’t want to paint a picture of only downside risks and deterioration because, on the other hand, this movement represents a great opportunity. It means that you put people into what you could call a creative access mode. They have access to each other, but most of all they have access to knowledge, which is empowering. Never before have knowledge and values been able to spread so quickly. So while I see the traditional trusted regulators declining, I see on the other hand these enormous opportunities for people to really rise up at an amazing speed. I don’t know where those two forces will come out at the end, but mobilising people’s intelligence, energy and creativity is extremely powerful.

The World Economic Forum’s Global Enabling Trade Report, which ranks 132 countries on their ability to enable trade, will be published here tomorrow at 1500 CEST. 

Pictured: Workers at an outsourcing centre in Bangalore, India (Reuters)

Rolf Alter is Director of the Public Governance and Territorial Development at the Organisation for Economic Co-operation and Development, and a member of the World Economic Forum’s Global Agenda Council on Catastrophic Risk

“The nation state: apartheid without political incorrectness”, writes Nicholas Nassim Taleb in his recent collection of aphorisms. Keen to break down barriers, leaders participating at the World Economic Forum Annual Meeting 2012 in Davos considered a rough measure of border openness, cobbled together from trade and travel metrics.

The Global Enabling Trade Report 2012 and its Enabling Trade Index will be out on Wednesday, May 23rd, giving us a partial glimpse into how things are evolving. The good news seems to be that though barriers are still very much present, crossing borders is generally getting easier. There’s quite a variation in performance though, with some nations embracing globalization and others less keen on opening up.

Traditionally, travel and trade facilitation have been dealt with fairly separately, with the governing institutions and interested parties for each often separate. In fact, traders and travellers sometimes compete to squeeze through border chokepoints. The Forum has long organized discussions on easing travel and trade restrictions, but more recently has been addressing the two areas together to identify common priorities and bolster the case for action.

Academic research and data on the topics are quite compartmentalized. Last year, we quickly pulled together the overlapping data to build a common view on the openness of borders for both people and goods. As travel and trade are enabled by factors that extend far beyond the physical and administrative border, we tried to take account of these too, looking at the servicing of the traveller or goods to their final destination.

Interesting as this was, a major missing slice was migration. The people side of the analysis concentrated on short-term leisure and business travel. Taking a time-limited perspective, we could view these as a kind of parallel to imported goods, compared to the long-term questions of migration and production investment, in which the importance of the border crossing dwindles.

In our increasingly globalized world, both supply chains and lives span borders. The ways people think about, measure, and enable trade and travel are starting to change. Taxation systems, security controls, infrastructure and business need to become more supply chain and human-centric.

That great border ignorer, the Internet, gives us all an opportunity to make fast progress, reducing some of the biggest barriers: lack of information and the hassle factor. E-visas and E-customs can have major impacts, allowing data to move separately from people and goods, cutting out both waste and waits. We do need to be careful not just to digitize problems though, but use reform as an opportunity to rethink.

Let’s see what the Forum’s Enabling Trade report tells us.

The World Economic Forum’s Global Enabling Trade Report 2012 will be available at 15:00 CET on May 23rd at http://www.weforum.org

Authors: Thea Chiesa is Head of Aviation, Travel and Tourism Industries at the World Economic Forum. Sean Doherty is Head of Logistics and Transport Industries at the World Economic Forum.

Image: A man works at a container area at a port in Tokyo January 25, 2012. REUTERS/Toru Hanai

Robert Madelin on how a cyber attack could threaten the fabric of modern society. The interview is part of the Risk Response Network’s “What if?” series.

Given your research, what would you say is the most under-appreciated risk?
In terms of under-appreciated risks, I would say that thanks to SARS and bird flu, public health risks are better appreciated now. But then if I come from that world to the information society, as I did about two years ago, I would say the risk is the lack of any sense of awareness of cybersecurity of similar proportions.

A key under-appreciated risk is a global cyber pandemic – whether by accident, terrorist or state attack – undermining the global Internet systems on which we depend. And that might or might not be an attack on the Internet as such, or it might come through a challenge to some other sort of networked system such as global air traffic control or global energy infrastructure.

How would you frame this risk as a hypothetical scenario, specifically what if this global cyber pandemic were to happen?
I think what we are talking about is, for example, a Stuxnet scenario where a targeted disease is developed, which could proliferate in ways not intended. Rather like the proliferation of human disease, it could spread from concentration point to concentration point. Some places might (as with pandemics) be reached later. And other places like London, Tokyo or Seoul could be reached sooner. This could either be the viral spread of a problem or simultaneous attacks or a localized epidemic – it depends how exactly it would infect networked systems.

In your analysis, how might this scenario unfold?
The more concentration points break down, the worse it would be. But in any given place – and this is the part that I think is underestimated – it would be an attack on the way modern society functions, with underestimated consequences, so definitely this is not just about the Internet and not just a problem for Internet engineers. In the same way that a pandemic spreads, this is the sort of challenge you face, with a severe breakdown in electronic communications of three or four days.

When we look at these risks in pandemic scenarios, the whole supply chain starts to suffer according to this sort of period. When a smart grid goes down, the consequences are seen very quickly – within 24 hours. And the same is true in supermarkets – if the refrigeration systems break down, the food starts to go off very quickly.

Who would feel the impact the most, and how?
In answering the who and how – the who is that it would affect everybody through networked systems. And how – through transport, communications, logistics to begin with, then power and water systems next.

How well do you think we are prepared for such a contingency?
In terms of the risk of a cyber pandemic in integrated information systems, no one outside the IT domain has thought about this in enough detail.

And so what is your top mitigation approach for this risk?
The first approach, which we have begun to deploy rather slowly, is cross-sectoral partnerships, involving industry across many different sectors, governments and civil society working together to improve awareness horizontally.

And the other approach is for government to mandate more appropriate security. And that is not simply saying that a government’s or the European Union’s firewalls are inadequate, but really thinking about how we can institute and improve security. This is not just looking at the security of households or companies individually, but raising standards across the board.

And presumably joined-up government would be part of that, because mitigation for this type of risk would cut across different ministries?
Absolutely, joined-up government is definitely part of it. And that was very much the challenge I experienced when I was working in health in the (European Commission) Health Ministry– when you spot this sort of thing and say to your colleagues we have to do something, your colleagues say no, do not worry everyone. And I would say that the security world, the NATO worlds and civil society are starting to think about these things, but in parallel, not together.

On the flip side to risk, what opportunities do you see?
The very clear opportunity would be that people start worrying enough about this risk to realize joined-up government at the global level. Then we would have a better chance of keeping the Internet road open for business, which is obviously vital for us all and vital for the growth of the digital economy.

This was apparent at the G8 in Deauville last summer, where it was clear that cybersecurity is too big for any single nation to fix alone. We need to do more to join up efforts. This is vital for the Internet economy, which is borderless and global.

Are we talking about revising the Budapest Convention (on cybercrime), because that is obviously quite outdated now?
Well, that was the landmark G8 moment, where we saw Russia and the US saying publicly that we do need to work together on this. And we had China saying for the first time let’s talk about this. Although I think we are not necessarily at the stage yet of saying we need a new convention. We need the connections rather than the rules at this stage.

The main problem is in our way of seeing the world. Everybody continues to see borders rather than one world. But in the online world that is the Internet – how do we join up? You see it in legal approaches to data protection, cybercrime, cybersecurity standards and intellectual property. And the missing piece is the overarching principle that reconciles territorial jurisdiction with the efficiencies that only the Internet can bring.

If you go into jurisdiction, you run into the same problem again and again. This means you have to deal with it piece by piece, section by section. On copyright, the Internet should never subvert copyright law. And then there is the pressing problem of data protection. So you have to raise it to a more strategic level. The question is not do we want the Internet or not – we need a Bretton Woods settlement for Internet economics, but one which does not do away with national discretion.

Would you say it is a question of how can we best protect our national interests online?
We need to have national discretion and its relationship with Internet governance much more explicitly framed, subject to the usual exceptions in public health and order. National jurisdiction could override global Internet governance, unless we have an appeals-based system. And some people would say that this has already been dealt with in the World Trade Organization and elsewhere, but I am not quite sure that is right.

Pictured: Delegates surf the Internet at the Asian Development Bank’s annual meeting in Manila (Reuters)

Robert Madelin is Director-General for Information Society and Media, European Commission, Brussels and a Member of the World Economic Forum Global Agenda Council on Media, Entertainment & Information

For over 30 years, whenever economic crises hit the world, Jean-Claude Trichet was at the center of action.  As President of the European Central Bank from 2003 to 2011, Mr. Trichet has carried tremendous responsibility.  At endless global meetings, he has helped coordinate – or at least avoided clashes between – the world’s central banks.  In Europe, he has pushed for action at emergency summits that have sometimes descended into haranguing matches.  In Germany, the ECB has faced fierce resistance over the massive extension of its lending to banks and intervention in government bond markets[1].

Non standard monetary policy, European integration, and lessons learned from the financial crisis were some of the topics of the conversation with Jean-Claude Trichet organized by Marco Magnani, Senior Fellow at Harvard University.

Non Standard Monetary Policy

Trichet has directly or indirectly been involved in the many crises that have hit various components of the global economy over the last 35 years: the Latin America debt crisis of the 1980s and 90s, the African debt crisis, the collapse of the Soviet Union, the Asian crisis and the major financial crisis of the past few years.  In the past few decades all continents of the world have been called to drastically change their strategy, to adjust their policies in all fields, especially in monetary policy.

In the challenging context of the financial crisis, standard monetary policy proved insufficient. On both side of the Atlantic Central Banks have engaged in new strategies for monetary policy.  Standard monetary policy have therefore been complemented by non-standard measures, designed to cope with the anomalies witnessed with the crisis and which have aimed to help restore the effectiveness of interest rate decisions.

The widespread introduction of non-standard monetary policy measures by central banks has been a defining characteristic of the recent global financial crisis.  Central banks have each taken disparate approaches to the crisis and have tailored these measures to the respective economies and structures.  In general the ECB has concentrated non-standard measures on banks, while the Fed has concentrated measures on markets.  These tools have been used to support the functioning of the financial sector, to protect the real economy from the fallout of the financial crisis, and ultimately to preserve price stability over the medium term.

For example, the events that unfolded after September 2008, when Lehman Brothers filed for bankruptcy, threatened to create severe damages for borrowers and for the broader economy.  Banks and other financial intermediaries shed risky and illiquid investments and rushed to liquidity, banks’ intermediation was reduced and loans to companies were curtailed.  If not tackled promptly, such developments could eventually have led to financial meltdown.  The ECB was among the first central banks to recognize the severity of the situation as early as August 2007, when the turmoil began and prompted our first reaction to the lack of liquidity in the money market.  As the failure of Lehman precipitated the acute phase of the crisis, the ECB acted decisively again, taking several measures to protect against a disorderly correction in credit and liquidity conditions for the euro area.  Their approach of enhanced credit support and a covered bond program helped restore a more normal transmission of monetary policy and ensured that banks could maintain their crucial role in financing the real economy[2].

European Integration

Trichet believes that as Europe faces new global challenges, European integration, both economic and political, is central to achieving prosperity and influence.  Europe is faced with a new global economy, reconfigured by globalization and the emerging economies of Asia and Latin America.  Thus, the challenge for Europe is to set a correct path for its integration, which will be essential to realize the continent’s tremendous potential.

Trichet argues that every country in the eurozone needs to keep its own house in order and implement responsible economic policies on behalf of governments.  Steps have already been taken to buttress the eurozone over the longer term, including the better monitoring of fiscal policies and competitiveness.  An important step forward would be the introduction of European Union treaty changes empowering European institutions to impose decisions on miscreant eurozone countries.

Trichet has previously proposed the eventual setting up of a European finance ministry. Broadly, he sees a future finance minister as having three main tasks: 1) economic “surveillance” with powers to impose decisions where necessary; 2) oversee the eurozone financial sector – ensuring that the fate of banks in individual countries is not linked, as now, to the strength of their government’s finances; 3) represent the eurozone in global financial institutions.

Lessons from the crisis

When asked about his decisions while President of the ECB, Trichet said, ‘ I don’t regret anything’ about the management of the crisis.’ He continued, ‘ we took our decisions carefully. They were not in a textbook.  We were incorporating a lot of decisions and judgments.’  Trichet described the crises as a situation where the absence of clear guidance from existing analytical frameworks pushed policy makers to place a peculiar reliance on their experience—this experience and judgment inevitably played a key role in the crisis. However, clearly just relying on judgment alone inevitably involves risk and macroeconomic and financial models are pivotal.

A key lesson from the experience is the danger on relying on a single tool, methodology, or paradigm.  The policy makers must have input from various theoretical perspectives and from a wide range of empirical approaches and an open debate and diversity of views must be cultivated.

Marco Magnani is Managing Director of Investment Banking at Mediobanca. He is also a Senior Fellow at Harvard University, doing research in political economy at the Center for Business and Government chaired by Larry Summers.

Ahead of the World Economic Forum on East Asia in Bangkok, Thailand, Rajeev Singh-Molares shares the highlights of his Op-Ed piece which originally appeared in full at The Nation.

Thailand has about 77 million mobile subscribers.  Smart phones, tablets and other mobile devices are becoming a critical part of both Thai business and personal life. What they do with them is changing constantly.  IDC predicts Thais will spend US$968 million on mobile data services this year — a more than 15 percent jump over 2011.  That growth will be driven by mobile internet, video streaming, and email services.

The growth in mobile use poses a challenge to the country’s operators. They must support the growing volume of emails, web browsing, video, business and personal information.  Just as the country had to prepare for last year’s floods, Thai network operators must adapt the technology infrastructure – the network – to successfully manage this new storm of data.

Infrastructure will be the “unsung hero” of Thailand’s mobile digital economy just like roads, airports, and electricity helped shape Thailand’s modern economy.  The quality of the network will help determine Thailand’s ability to participate in the digital economy – to develop new services, deliver healthcare and education, and support new business models.  In other words, the quality of the network will shape Thailand’s competitiveness and growth prospects.

Thailand’s operators, government and technologists are starting to rethink how to provision next generation networks capable of managing the coming “Data Storm”.  Fiber technology will be needed to provide the speeds and throughput necessary to manage the exponential growth of mobile data.  At the same time, innovations like small cell wireless infrastructure, and traffic routing solutions will play a role in ensuring Thailand develops a robust digital economy.

The transition is underway. However, for Thais to reap the benefits of the coming mobile digital revolution, and for Thailand to ensure its ability to compete globally, network operators need to put the lessons of preparedness from a previous storm to work now.  As they do, Thailand will ensure that the benefits of the mobile digital revolution have a positive long-term impact on the lives of its citizens and its regional and global competitiveness.

Author: Rajeev Singh-Molares, President APAC, Executive Vice President Alcatel-Lucent and Chairman World Economic Forum Information and communication technologies, Global Agenda Councils

Image: A student texting behind trees and bushes painted to beautify the campus, on the first day of the new semester at Rangsit University in Bangkok REUTERS/Sukree Sukplang

While today’s crisis may revolve around financial markets, tomorrow’s will stem from the aftershock: hundreds of millions of young adults never incorporated in the job market. The repercussions of this lost generation will be devastating.

Unemployment can create a vicious cycle. Countries with high levels of unemployment will generate lower tax revenues, often resulting in budget cuts on education and transportation infrastructure. These cuts then weaken the business investment climate. Personally, unemployment is demoralizing: it can lower one’s sense of self-worth and create a self-fulfilling prophesy, when a person pursues future jobs.

Over half of the global population, roughly 3.5 billion people, are below the age of 27. In many countries across Europe, youth unemployment hovers at 30 to 50%. In several African countries, only the lucky few have jobs. According to the International Labour Organization (ILO), unemployment is about 65% in Mozambique, 85% in Liberia and 95% in Zimbabwe. In short, jobs are far from an equal opportunity.

Last week, over 770 leaders from over 70 countries gathered in Addis Ababa for the World Economic Forum on Africa. One afternoon, we convened over 60 Young Global Leaders, Social Entrepreneurs and Global Shapers to brainstorm innovative and transformative solutions to the global unemployment crisis. These three communities possess the ambition and the horsepower to lead such change, across Africa and globally.

The brainstorming in Addis Ababa centred on four themes: corporate engagement with education systems; cooperative and social business models; small and medium-sized enterprises (SMEs); and mentoring, internship and apprenticeship schemes.

The most promising idea, endearingly called “Brave Chicken”, was presented by Arsene Yabre, a Young Global Shaper from Burkina Faso. Brave Chicken is a youth-led franchise for poultry farming that could easily be built up across Sub-Saharan Africa to train and employ millions of youth. Throughout the week, the “Brave Chicken” conversations continued with vocational and agriculture-focused universities across Africa; regional retail food chains; global agricultural supply chain companies; and non-profits focusing on business solutions to poverty.

At the World Economic Forum, we are inspired by the conversations that occur within the halls of the meeting and among participants. Increasingly, we are transformed by the collaborations that emerge from these conversations and the impact they will have on hundreds of millions of people around the world.

I was inspired by the momentum of the Brave Chicken idea and how it can simultaneously address several big problems: food insecurity and the lack of protein in the diets of many sub-Saharan Africans; the lack of formal employment opportunities; the lack of skills-based training for agricultural productivity; and the need for hands-on entrepreneurial experience among motivated youth. I hope one day soon, we will all be transformed by the idea and impact of concepts and visions such as Brave Chicken.

Author: Abigail Noble, Head of Latin America and Africa, Schwab Foundation for Social Entrepreneurship

Trust is a relative term, open to a wide degree of interpretation. But any notion of trust usually is based on a number of underlying dimensions, including accountability, reliability, integrity, confidentiality and a fair exchange of value. At its core, trust is really about relationships, a way of describing how things interrelate and connect.  When trust is present, innovative possibilities emerge. Without it, systems break down.

A new World Economic Forum report, produced in collaboration with The Boston Consulting Group, released today, Rethinking Personal Data: Strengthening Trust, explores how the use of personal data can unlock value for individuals, companies, governments and institutions of all types. The vital role of trust helps unlock this value.

On the flip side, a lack of trust in how personal data is currently being used can jeopardize the potential economic and social value it can create. In fact, given numerous, high-profile data security breaches, rampant identity theft, a general lack of transparency in how personal data is monetized and an absence of global policies for privacy, trust in the use of personal data is declining.

A number of steps, however, can be taken to strengthen trust within the personal data ecosystem. This includes:

• Upgrading protection and security: Focusing on how to protect privacy and secure personal data against intentional and unintentional security breaches and misuse
• Agreeing on rights and responsibilities for using data: Establishing consensus on rights, responsibilities, and permissions for the use of personal data in ways that recognize the importance of context and the need to balance the interests of multiple stakeholders
• Driving accountability and enforcement: Holding organizations accountable for protecting and securing personal data and using it in accordance with the rights and established permissions for the trusted flow of data

Resolving these issues will not be easy, especially as a range of actors follow different cultural norms, timeframes for action and paths to potential solutions. Nonetheless, the borderless flow of personal data requires individuals, business leaders, and policy-makers to all coordinate in innovative ways to unlock long-term value. Critical to this will be developing ways to hold organizations accountable for securing data and strengthening the trust transparency and control of personal data by the individual.

The Rethinking Personal Data: Strengthening Trust report is a product of the World Economic Forum’s Rethinking Personal Data initiative, which brings together companies, public sector representatives, end user privacy and rights groups, academics and experts to deepen the collective understanding of how a principled, collaborative and balanced personal data ecosystem can enable greater transparency, resiliency and long-term economic growth. For more information visit, http://www.weforum.org/personaldata

William Hoffmann, Associate Director, Telecommunications Industry, World Economic Forum

I left the closing plenary of the World Economic Forum on Africa in Addis Ababa last Friday with a profound sense of optimism. Josette Sheeran, the Forum’s new Vice-Chairman, moderated a wonderfully inspirational panel with African Young Global Leaders and Global Shapers. She asked: “What if, what about and if you could…”

For three days on limited sleep, we conversed about Africa – what needs to be done, what we’re doing well, where we’re going and the speed at which we’re travelling. South Africa’s Minister of Finance, Pravin Gordhan, delivered his heartfelt remarks, reminding us that there are a billion lives on this continent that need to benefit from Africa’s transformation.

Little did I realize how swiftly and significantly Minister Gordhan’s words would touch me.

For more than 13 years I’ve had the privilege of making friends with exceptional African women. As the head of Lifeline Energy, my work takes me into all sorts of different environments, from crowded urban settlements and refugee camps to isolated rural areas. Here, our solar and wind-up MP3s and radios provide access to information and education specifically for these underserved populations. And, whenever I travel in Africa, I make a particular point of speaking with women who struggle to make ends meet and who use fossil fuels for their basic energy needs. I’m convinced that as long as women are dependent on non-renewable energy sources, the odds are highly unlikely they will rise out of poverty.

On Saturday, I asked my Ethiopian friend, social entrepreneur and children’s TV presenter Brukty Tigabu, who runs Whiz Kids Workshop, if she could arrange for me to meet local women. Brukty took me by taxi to Fresh and Green Academy, a colourfully painted primary school located off a two-lane paved road in one of Addis’s newer neighbourhoods (when I visited Addis 10 years ago this area was little more than a eucalyptus grove).

Fresh and Green, although accredited, doesn’t receive government support. Its founder, 36-year-old Muday Mitiku, relies on sponsorship and income-generating projects to fund the education of 125 local at-risk children from pre-school to grade 4. She also helps support their destitute mothers medically and financially. Although she lives in a modest two-room house, Muday has adopted eight children whose mothers have died of HIV/AIDS and would otherwise have been forced to live on the streets. Some of the children are HIV positive themselves.

Muday told me the tragic story of a woman who was lying on a floor in a shop room nearby waiting to die. Although anti-retroviral drugs are free in Ethiopia, people still have to find the funds for transport, often wait for hours to be seen at a hospital, and then require regular meals to ensure that they don’t become ill from the medication.

During my trip, I visited women in their one-room, rough-hewn mud, straw and aluminium shacks they rented in back gardens and behind a bar. I also spoke with three women, all part of the Fresh and Green cooperative, who were weaving brightly coloured scarves on traditional wooden looms on the school grounds. As I was a textile major at university, I recognized the looms – the historical design hasn’t changed for more than 2,000 years (weaving of cloth is considered a highly skilled occupation, and as such, is usually performed by men).

All the women that I spoke with confirmed what I’ve heard hundreds of women say, that they spend far too much money on kerosene, charcoal and firewood. Their rent includes an unreliable electricity supply, usually a light bulb dangling from the ceiling; they can’t afford batteries for a flashlight or radio. One woman had a clock radio, but it didn’t work because a rat had eaten the cord.

As Brukty and I were saying our good-byes, a wafer-thin girl named Sara ran past us with ripped up paper in her hands, crying. Her mother had torn up her homework and told her that there was no point in her going to school as she was just a girl. We went to look in on the mother. Lying on the ground under a threadbare blue blanket, her silhouette appeared as if she was a ten-year-old girl herself as she was so emaciated. She had lapsed into a coma and could die at any moment. It was devastating to witness this.

Imagine that Sara’s last memories of her mother are those of unspeakable cruelty. Her mother is like many other poor and rural women who migrate to cities across Africa and around the world. Many are often forced to turn to risky sex work to feed themselves and their children just to stay alive.

It is precisely girls like Sara and other children at the school, the mothers of the cooperative and even Muday, who so far Africa’s transformation has passed by.

As I think back to Minister Gordhan’s reference to the transformation of a billion African lives, I truly believe that until we in Africa change our attitudes to the treatment of poor women and girls and encourage the Sara’s of this continent to be all that they can be, we cannot yet congratulate ourselves on Africa’s transition.

The World Economic Forum can be a powerful force in achieving this transformation if we all build on the strong intentions expressed in Addis last week.

Author: Kristine Pearson, Chief Executive, Lifeline Energy, United Kingdom; social entrepreneur, Schwab Fellow of the World Economic Forum

Lifeline Energy addresses energy poverty for poor and vulnerable women and children through the distribution of solar and wind-up prime radios, MP3-enabled lifeplayers, lights and energy sources. Since its inception in 1999, the organization distributed over 450,000 self-powered products, mainly in sub-Saharan Africa, providing continuous access to information, education and light to more than 10 million people. Lifeline Energy owns Lifeline Technologies Trading Ltd, a new product development and trading company which designs, manufactures and sells clean energy products to the humanitarian sector. Read More

Since the World Economic Forum on Africa came to end, I have been reflecting upon many of the ideas and discussions that emerged during the three-day meeting in Addis Ababa.

It has been an inspirational and thought-provoking experience to be in the company of so many innovative thinkers and dynamic individuals intent on driving change for the world and our communities. There was a real sense among participants that Africa is changing.

The empowerment and engagement of youth was a theme that dominated our talks, and I enjoyed contributing to the many discussions about how best to ensure young people have not just the opportunity to develop and prosper, but also have a sense that their voice will be heard and that they have a stake in their communities.

As an Ethiopian from a rural background, I am especially passionate about ensuring the continent’s next generation of leaders, entrepreneurs and thinkers come from all walks of life. Governments and the business sector can play an important role in making that happen and I am confident that many fruitful partnerships will emerge from this year’s Forum.

The support and appreciation for the role of civil society by government and business leaders was especially encouraging. I sensed a widespread understanding of the challenges facing the largely young population of Africa, but also of the potential that could be unlocked by more effective support of civil society.

Translating these hopes into reality is no simple task. I agreed with many of my fellow meeting Co-Chairs who identified challenges of good governance, inequitable wealth distribution, social exclusion and a lack of opportunity as obstacles to prosperity in Africa, but I remain optimistic that change – of the right sort – is coming.

Corporate social responsibility has begun to take root in the continent, but my message to business leaders throughout this Forum has been to put people before profit, and to think more about the kind of investments that will help communities help themselves in a sustainable way.

As I said at the opening plenary, the days of hand-outs and short-term solutions to chronic problems are over. We need to pull together to find innovative ways to change the state of the world.

Many thanks to the Forum for inviting me to Co-Chair this year. It has been an extremely rewarding three days and I look forward to seeing the ideas generated in our discussions translated into action on the ground and contributing to real change for the people of Africa.

Author: Bekele Geleta, Secretary-General, International Federation of Red Cross and Red Crescent Societies (IFRC), Geneva.

Pictured: Bekele Geleta, Secretary General of the International Federation of Red Cross and Red Crescent Societies (IFRC) looks on during a signing ceremony in Geneva. REUTERS/Denis Balibouse 

In a series of posts related to the World Economic Forum’s Rethinking Personal Data: Strengthening Trust report, John Rose and Carl Kalapesi of The Boston Consulting Group discuss the importance of establishing clear rules so that the potential benefits of personal data can be achieved. You can download the report and see related videos, podcasts, and other materials on our Rethinking Personal Data page as of 16 May.

Personal data is everywhere. We volunteer data about ourselves on social networks, payment providers capture information from our transactions, governments record our financial details, mobile phones track our location at any given moment, and hospitals capture and store our medical tests and clinical diagnoses digitally – all of which can be used to make inferences about what we might do next online.

Used appropriately, personal data can create new economic value, as the recent valuations of companies collecting and utilizing personal data would suggest. And it can foster significant social value, benefiting industry, individuals and governments alike. A new report, scheduled for release on 16 May, will reveal, however, that unlocking this potential value requires the establishment of rules and safeguards that balance the interests of all stakeholders.

The report, Rethinking Personal Data: Strengthening Trust, suggests that personal data is a highly valuable asset, like oil or water. And like these assets, it needs to flow or move to create value. But unlike these and many other tangible assets, data is not consumed when used. Instead, its use increases its value because new data elements are accumulated, providing greater insights into individuals. This increased insight, coupled with new data mining and “big data” technologies, often leads to new ways to use and create value.

Without a set of trading rules – clear guidelines for using data and safeguarding against misuse and theft – little of the potential economic and social value will be realized. Establishing such trading rules is complicated by the myriad potential uses of data, the speed at which new uses are being invented and the inexhaustible quantity of the data itself.

Given this, the approach to establishing trading rules – and the rules themselves – needs to be different from those for other asset classes. The rules must be complex enough to encompass the extensive and diverse ways in which data can be used and flexible enough to adapt to the new uses of data that are being invented almost daily. They need to balance the potential value that personal data can unlock with the rights of individuals and societies to determine what are, and are not, legitimate uses of data. And they need adequate safeguards to ensure both compliance with these rules and protection for individuals from the unauthorized access of their data. There is a need to balance the interests of all stakeholders in establishing rules for securing and using personal data.

Rethinking Personal Data: Strengthening Trust, published by the World Economic Forum in collaboration with The Boston Consulting Group (BCG), provides a global perspective on some of the most recent developments in personal data, including different regulatory approaches, and is a welcome counterpoint to much of the current debate that has focused predominantly on privacy and protection. It also identifies the key issues that need to be resolved to strike a balance between the value creation of personal data and the potential negative aspects of its increased collection and use.

To learn more about the report or download a copy, go to: http://www.weforum.org/personaldata and https://www.bcgperspectives.com

Authors: John Rose is a senior partner and managing director at BCG and project adviser to the World Economic Forum’s Rethinking Personal Data project. Carl Kalapesi is a consultant at BCG and project manager for the World Economic Forum’s Rethinking Personal Data project.

Kandeh Yumkella warns of the severe consequences of a combined oil and food crisis in Africa. The interview is part of the Risk Response Network’s “What if?” series.

What is your main field of expertise?
I have a PhD in agricultural economics, but I have been in an industry agency for 16 years and I am the Director-General of the agency. My area of focus is management and public policy.

What area of research are you focusing on at the moment?
There are three areas. First, I am curious about the interface between energy security, water security and food security in the whole context of sustainable development. Second, I’m interested in agribusiness as a way of reducing poverty in Africa and creating wealth. The third area, in a category of its own, is looking at the global energy architecture.

For me, these three interests are deeply linked. As an example, agribusiness development in Africa requires some degree of energy security. Agribusiness can contribute to food security. And to get agriculture moving in Africa, you also need good water management.

Given your work, what would you say is the most underappreciated risk?
I see three risks. One is an oil crisis with prices reaching US$ 200 per barrel. Simultaneously you could have countries in sub-Saharan Africa experiencing problems with drought or other climate-induced agricultural risks – that’s the second risk. As the International Monetary Fund and other experts have noted, the days of cheap oil and cheap food are gone. Third, and in addition to the other issues, you have high population growth rates in Africa and massive urbanization. The demographic projection for Africa is 1.4 billion by 2025 or 2030, and it already has a huge urbanization rate. But we in the development community are not appropriately considering the confluence of these factors and these demographic pressures; a more holistic view would lead us to more dramatically accelerate the pace of our intervention to these interlinked challenges.

How would you frame this risk as a hypothetical scenario: “what if” this were actually to happen?
Take a poor country, such as Kenya or Ethiopia, and then imagine they have a famine or drought, and the demographic trend they have now has continued for another five years… What if this were to happen? It is not unlikely. How would these countries cope?

In 2008, with a financial crisis, food crisis and oil crisis all occurring at the same time, according to World Bank figures we immediately saw almost 40 million people pushed under the poverty line. There was a huge balance of payments problem and riots kicked off. So, I think that this scenario could realistically be repeated in the future.

The other one for me is the urbanization challenge in Africa, which again is linked to energy access. According to some projections, 60% or more of the African population, particularly in sub-Saharan areas, will be living in cities by 2025 or 2030. But Africa has the lowest energy access rates in the world. Think about it – people packed in cities, no jobs, poor infrastructure and a lack of energy and water systems.

I think this will lead to instability in Africa, which could be worse than the wars we saw in the 1970s. People should remember that the “Arab Spring” began in Africa – in Tunisia, Egypt, Libya and Algeria. I see a potential that this spirit could spread south in a few years, and it could be more severe.

Who is most exposed to this risk?
It is always the poor who have little option for adaptation. They do not have alternative sources of income when oil and food prices jump; their disposable incomes go down immediately and they spend over 50% of their income on food. So there is no doubt in my mind that they will be the most vulnerable because the coping mechanisms and social safety nets do not exist.

How well are leaders prepared for this situation?
I think that there is a lot of dialogue about it, but not enough. Neither are there enough public policy, political will and leadership to accelerate even the energy revolution that is needed to give poor people access to electricity through sustainable means. We don’t have the necessary platforms in place to share knowledge and information about policies that are working. I do not feel there is enough political leadership globally.

What is your top mitigation approach for this risk?
There is a crucial need for strong political leadership on these issues in donor countries, but also in countries where these risks might be high. I also believe that we need to create even more awareness for these vulnerable countries to appreciate that these issues are interconnected, and that the push for a green economy is not necessarily a sanction.

There is a lot of suspicion in developing countries – and justifiably so – that the green economy might curb productivity. We need a new narrative where they see the green economy as beneficial to them. We also need a solid set of funding mechanisms to incentivize green investment and help the most vulnerable countries leapfrog ahead.

So, good political leadership on all these fronts is necessary to mitigate this risk.

On the flip side of risk, what opportunities do you see associated with this scenario?
I see great transformative opportunities in industrial energy efficiency. I know from UNIDO’s programme that some companies are moving to developing countries so that they reduce their cost of operation, and they are looking at energy efficiency very closely. I have seen this in Sri Lanka and I have seen it in Bangladesh, where some textile and garment companies are looking at cogeneration. That means they are harvesting heat and making savings through industrial energy efficiency. That is a major change.

One of the factories I visited in Sri Lanka is going green because they are supplying some big chains in Europe that use greenness as a label to attract customers. Thanks to that opportunity, they have built a company that has 2,000-2,500 employees.

We have termed this set of opportunities “Green Industry”. Can we help countries create wealth and jobs, and show them that greening can be profitable and that there are known technologies or practices that will be beneficial to them and still make them competitive?

If we have better resource efficiency, maybe we will demand less from ecosystems; we will try to extract more from every unit of raw material that we are using. Given the interconnected nature of energy and environmental and social risks, we believe that, as a package, the whole greening industry concept is one of the appropriate mitigation mechanisms.

Pictured: A guard at the Heglig oilfield in Sudan (Reuters)

Kandeh Yumkella is the Director-Genera of the United Nations Industrial Development Organization (UNIDO) and a member of the World Economic Forum’s Global Agenda Council on Climate Change 2011. 

What do three heads of state, 10 ministers, 116 companies and a group of farmer leaders have in common?

They all want to see growth in Africa’s agriculture sector.

So do we – which is why we found ourselves at the Grow Africa Investment Forum in Addis Ababa, Ethiopia, last Wednesday, in a room packed with nearly 300 people at the closing session. The atmosphere in the room was slightly electric, suspenseful.

One by one, speakers rose to say they felt we were nearing a tipping point. “What an epic moment,” said Josette Sheeran, the new Vice-Chair of the World Economic Forum, whose previous position as head of the UN World Food Programme brought her face to face with the brutal realities of hunger. Last week she spoke in front of a room full of business leaders whose investments and technologies could dramatically boost African food production.  “This [Forum] could transform the lives of millions of smallholder farmers,” she said, “this is the potential.”

To explain how we got to this moment, let me step back two years to a mysterious request from an African president.

President Jakaya Kikwete had agreed to host the World Economic Forum on Africa in Tanzania, but he had a special request. He wanted a focus on agriculture at the meeting which would generate “real results.” What did this mean? We went to Tanzania to find out.

In Dar es Salaam, we learned that Tanzania’s government had established agriculture as its top priority through the “Kilimo Kwanza” (Agriculture First) strategy, building on the national sector plan. The local community was actively involved, but to reach their ambitious goals, they wanted to bring in international investors and partners. They asked if the Forum could help – and what began as a series of public-private dialogues soon evolved, with the President’s direction and championship, into a major multistakeholder initiative to develop the Southern Agricultural Growth Corridor of Tanzania (SAGCOT).

Global companies, experts and others joined with local stakeholders to work intensively on an investment blueprint for the corridor, then established a SAGCOT Centre to facilitate partnership and sustainable investment. Numerous investments have been generated and expanded, attracting local, regional and global companies.  One year later, when President Kikwete reported his progress at our next World Economic Forum on Africa, six other African governments said they would like to make a similar effort.

By that time we had linked with the African Union and NEPAD, who have an interest in accelerating sustainable agricultural growth throughout Africa. NEPAD has a Comprehensive African Agricultural Development Programme (CAADP), which assists governments to develop agriculture sector investment plans. Until now these had focused on public-sector investment, which is insufficient for the projected needs. Could we build on these plans to prioritize and attract private-sector investment as well? We decided to work together to find out.

In this way, the Grow Africa partnership was formed just one year ago by the African Union, NEPAD and the World Economic Forum, with the goal of accelerating investment in African agriculture, in alignment with national priorities defined through CAADP. Countries would set the prioritiesand Grow Africa partners would help to engage investors. Seven countries volunteered to participate in the partnership’s initial year: Burkina Faso, Ethiopia, Ghana, Kenya, Mozambique, Rwanda and Tanzania.

The countries worked intensively to define and prepare their investment priorities, we engaged a broad network of private-sector investors from Africa and the rest of the world, and on 9 May, all came together in Addis Ababa. In hours of energetic discussion, we saw ideas exchanged, new opportunities discovered and plans developed.

Most importantly, we saw nearly 300 people from extremely diverse backgrounds focus on a common goal. Sustainable growth in agriculture serves everybody: the farmers, their rural communities, companies and even governments.

The initial tangible results of this process will be announced publicly on Friday 18 May. Please stay tuned to hear an exciting announcement.

Lisa Dreier is Director of Food Security and Development Initiatives at the World Economic Forum USA.
For more information, visit our websites at http://www.weforum.org/agriculture or http://www.growafrica.com.