Author Archives: nathangamester

“We’re Not Greece Yet.”

The view looking across Freedom Avenue, Lisbon

The view looking across Freedom Avenue, Lisbon

Sipping coffee outside a small café on Lisbon’s Freedom Avenue, it’s easy to forget that Portugal is a country in serious trouble.

It is, after all, a country of great history and architecture, incredible weather, and beautiful beaches. It is no wonder that an increasing number of Britons are opting to escape from the cold of the British Isles to visit the sunny Algarve. And yet, even brief conversations with the Lisbon locals reveals that Portugal is a bruised and brittle country. There is hope for the future but this is rarely matched with any real sense of optimism.

While meeting with people in Lisbon this week there was a clear sense that, while the country has been pulled back from the brink of disaster, it is not yet out of the danger zone. It is as if at any moment things might deteriorate once more. At Lisbon University, amid conversations about the financial crisis and the ensuing austerity policy, the most telling comment I heard was: “We’re not Greece…yet.” The inference was clear: yes things have been very bad, and in many respects they still are bad, but we’re not giving up; the future can still be bright.

The University of Lisbon is a fitting analogy of the Portuguese ability to adapt and to thrive by making the best out of what life throws at you. I was hosted by the Instituto Superior de Ciencias Sociais e Politicas (Institute for Political and Social Sciences); a school with a proud history, having taught its first lesson in 1906 in the presence of the then King Charles (whose demise thereafter signalled the end of the Portuguese monarchy). Today the university teaches more than 40,000 students spread across 18 separate schools including another of my hosts, the impressive Instituto de Direito Economico, Financeiro e Fiscal (Institute of Economic, Financial and Fiscal Law).

But while the university offers Portugal’s young the opportunity to learn and develop, the biggest problem facing graduates is the distinct lack of opportunities once they leave. Portugal has an unemployment problem. Moreover it has a youth unemployment problem. The national unemployment rate currently stands at a little over 15% (having come down from a high of nearly 18% a year ago), while youth unemployment stands at a depressing 35%.

I spoke to Alice Trindade, Vice President of the Institute for Political and Social Sciences who spoke of her worry that the talented graduates she sees passing through her classes will have no other option than to search for work outside of Portugal. And who could blame them? Even Portugal’s President Pedro Passos Coelho has encouraged young people in his country to move away from Portugal to find work. While President Coelho’s controversial words may be seen by some as sensible advice for job seekers, as a long-term economic policy it leaves much to be desired.

Proving the maxim that attitude reflects leadership, Portuguese people seem to share their President’s pessimism. Perhaps the most stark reflection of the dire employment situation in Portugal is the mere 7% of citizens who believe that it is a good time to find a job. In Germany, that number is 51%. Further, when asked about their satisfaction with living standards, only 54% of Portuguese citizens respond positively (compared to 82% in the UK).

Attitudes towards the government are equally negative. Government approval dropped from 41% in 2010 to 26% in 2013, which, although low, is unsurprising given the level of dissent over the government’s austerity policies. And it’s not just opposition to policies that’s fuelling the protests. There is a strongly held view in Portugal that government is corrupt. When polled, a staggering 91% of Portuguese people believed corruption to be widespread in government and business. To put that into perspective, that’s the highest percentage in the world on this measure, higher than Zimbabwe (78%), Russia (79%), and Nigeria (87%).

And so what next for Europe’s westernmost country? There are some statistics that are moving in the right direction for Portugal. Measures of entrepreneurship have improved in recent years with business start-up costs falling to 2.3% of GNI (down from 7%). On top of that, a number of social indicators have seen positive changes in the last four years: volunteerism is up by 5%, donations to charity have increased by 12%, and those reporting to having helped a stranger has increased by 13%.

Perhaps these strong social ties are an unintended consequence of the crisis, having caused people to come together to survive tough times. Whatever the reason, Portugal’s social fabric seems to be strong despite difficult national challenges. And that, at least, provides a small ray of optimism for a country in need of some good news.

This post first appeared on the Legatum Institute blog. 

 

Notes:

  • Most of the data used in this post is taken from the 2013 Legatum Prosperity Index™.
  • A country profile of Portugal can be found here.
  • A more detailed briefing about Portugal can be found here.

Technology and Entrepreneurship

At the end of last year I chaired a panel discussion at the Legatum Institute on the subject of technology and entrepreneurship. The discussion explored the role of technology in stimulating entrepreneurship and innovation.

Panellists: Erkko Autio, Imperial College London; Christian Busch, Co-Founder, Sandbox; Luke Johnson, Chairman, Risk Capital Partners / Chairman, Centre for Entrepreneurs; Iqbal Quadir, Founder, Grameenphone / Founder and Director, Legatum Center at MIT.

Euthanasia: The Slippery Slope is Real

Earlier this month King Philippe of Belgium signed a law that extends euthanasia to children. His confirmation of the new law comes after both houses of the Belgian parliament overwhelmingly approved the controversial measures. The most recent vote, in Belgium’s lower house, produced a clear majority in favour of the law (86 votes to 44).

syringeEuthanasia is nothing new for Belgians. The process, whereby a doctor injects a lethal drug into a patient, has been legal for adults since 2002. The ‘safeguards’ in their law specify that an adult only qualifies for euthanasia if their illness is incurable and their suffering is unbearable. But a closer look at some recent cases shows that these guidelines are interpreted very loosely.

In September Nathan Verhelst was legally euthanased after his sex-change operation went wrong leaving him with “unbearable psychological suffering”. In December, deaf twin brothers Marc and Eddy Verbessem, who were beginning to go blind, were legally euthanased claiming they couldn’t bear the thought of not being able to see each other again. Now, terminally ill children in Belgium can request euthanasia with parental consent.

These developments represent a clear case of a “slippery slope” whereby small, incremental changes have morphed the original law into something much broader – and more dangerous – than was ever intended.

In the UK there is currently a serious attempt to legalise “assisted dying”. The former Lord Chancellor, Charles Falconer, has introduced legislation that would license doctors to supply lethal drugs to the terminally ill to assist their suicide.  His Bill is backed by the campaigning organisation Dignity in Dying (formally the Voluntary Euthanasia Society).

Parliament has debated and rejected this issue on many occasions over the last ten years. This time, however, in order to make the measures appear more palatable, Lord Falconer and Dignity in Dying will emphasise the ‘safeguards’ contained in the bill that would limit assisted suicide to those who are terminally ill with a prognosis of six months or less to live.

But these safeguards – much like those in the Belgian law – won’t work. For starters, prognosis for terminal illness is impossible to predict accurately and the scope for error can extend into years.  The truth is that no safeguards will be failsafe.  Even Lord Falconer himself conceded this point when he discussed his proposal on Radio 4’s Today Programme, saying: “I don’t think you can ever have a system that is completely watertight…you can’t be sure [that safeguards will work].”

This should set the alarm bells ringing. Perhaps if we were discussing regulations on food packaging we could play the averages. But we are not. This is life and death. Being cautious is not merely advisable, it is vital. When the person sponsoring the law admits the safeguards can’t be watertight, it’s time to think again.

Beyond the legal questions, assisted suicide prompts serious questions about the nature of healthcare. At the heart of the doctor-patient relationship is the understanding that a doctor’s primary duty is to care for and protect his patients. Regardless of the situation, a patient must know that his/her doctor will first and foremost seek to do only what is in the patient’s best interests.

That is why the major medical bodies – the Royal College of Physicians, the Royal College of General Practitioners, the Royal College of Psychiatrists and the British Medical Association – all oppose legalising assisted suicide. As The College of Physicians stated explicitly, a doctor’s duty of care for patients “does not include being in any way part of their suicide“.  What’s more, opinion surveys among medical professionals regularly find at least two-thirds against assisted suicide.

Advocates of assisted suicide refuse to admit the real risk of extension. Claims on the Dignity in Dying website state that, “the slippery slope argument lacks evidence and is illogical” and that it does not stand up as “an argument of any real value.” In light of the evidence from Belgium, it’s now hard to see how this response can stand up.

Evidence from Belgium shows exactly how quickly a law, supposedly limited to terminally ill adults, is rapidly extended to any age and any prognosis. Such a law does not extend choice in healthcare or drive up standards of care, nor does it empower patients. Looking at Belgium, the vulnerable are less protected and ending life has become normalised.

As we continue to debate the issue of assisted suicide in the UK, we should be mindful of the Belgian example where the legal ‘safeguards’ are interpreted loosely and the scope of the law has been broadened far beyond its original intent. The slippery slope is very real.

Insights on Africa

Over the last few weeks I was fortunate to have spoken at two conferences in Africa: the first was the Sankalp Africa Summit in Kenya; the second was the 7th AfrEA Conference in Cameroon. I thank the organisers of both conferences for extending me an invitation to speak, and engage in very stimulating conversations about the future of the continent.

At both conferences I was presenting findings from Insight on Africa, a Legatum Institute report published at the end of last year.

Below is a summary of some of the points I presented.

Firstly, the way in which we think about national success and development needs to include more than just economic growth. Growth is an important part of a nation’s prosperity, but so too is the freedom of its citizens, the quality of its education system, the availability of healthcare, the presence of democratic institutions, and the strength of society.

It is important to not only realise this, but also to measure it. Data, when used correctly, can change behaviour. And as the Nobel Prize-winning economist Joseph Stiglitz said: “What you measure effects what you do. If you have the wrong metrics, you strive for the wrong things.”

A detailed look at two topics covered in the report—demographics and corruption—shows how these issues have the potential to profoundly affect the continent’s future.

Demographics

  • The total population of Africa has broken the 1 billion mark and is set to double by 2050. AfricaAverageAge
  • 40% of the population is under the age of 15, making Africa the “world’s youngest continent”.
  • By 2030, Africa will have the lowest dependency ratio of any region (meaning the largest ratio of working age adults to the rest of the population).
  • Higher life expectancy combined with lower infant mortality are major contributing factors for this trend, usually referred to as the ‘youth bulge’.

This scenario presents an opportunity, a challenge, and a threat for African countries.

The opportunity is the prospect of back to back generations of working age adults. The potential for economic growth and development for the continent is staggering.

The challenge is this will mean more people to educate, more competition for jobs, and more demand for healthcare. This will be a major test for even the most effective African governments.

The threat can be summed up in one word: employment. This point was made very well by the Nigerian finance minister who has estimated the Nigerian economy will need to grow at 8-10% annually to meet the growing need for employment. Without jobs for this generation we may see growing instability, violence, and even conflict. The 2011 World Development Report stated the predominant reason given by young people for joining rebel groups and gangs was the lack of other opportunities. The devil makes work for idle hands.

Over the coming years, the likely result of this is the emergence of “two Africas”: one which is able to cope with the influx of young workers into its economy, and one which is not.

Corruption

  • The African continent is thriving with business opportunities and investment potential. AfricaCorruption
  • Africans are optimistic about this: three-quarters of the African population perceive that their environment is a good place for entrepreneurs.
  • And yet, data show there has been no marked change in perceived levels of corruption over the past five years.
  • This is despite improvements in governance and democracy-related indicators.
  • Take Kenya, South Africa and Namibia as examples. All three countries are democratic and score among the highest in Africa on governance indicators including rule of law. And yet, these countries all perform among the lowest on measures of perceived corruption (see graphic).

Corruption matters not only because of its corrosive effect on a country’s political system and its impact on everyday life, but also because of the extent to which it complicates the business process. It adds an additional deterrent to external investment in a region that is already at the bottom of the World Bank Ease of Doing Business Index.

That said, there have been improvements. Sub-Saharan Africa was one of only two regions in the world that attracted increased FDI flows in 2012, a year when total global FDI flows fell by 18%.

Since the drivers of corruption across Africa are very different, anti-corruption measures must be tailored to each specific situation if they are to be successful, comprising measures beyond simply passing new legislation or appointing anti-corruption bodies. Also, it is important to bear in mind how any anti-corruption measures may affect the business climate.

In Ghana, for example, the government is creating two ring-fenced funds that will only be used to smooth the impact of future variations in the price of oil. This will have the benefit of providing a level of control over the strength of the country’s currency, and is intended to help Ghana avoid the so-called ‘Dutch disease’. A similar approach was adopted by Norway in the 1970s.

Technology is Good

MobileProgressI’ll be the first to admit that I’m not great with technology. I’m not a regular blogger; I’ve only just started using WhatsApp; I only occasionally post to Facebook; I don’t know what a Google Hangout is; and LinkedIn is still a bit of a mystery to me (“Facebook for grownups” seems to be the best description I’ve heard).

Notwithstanding my limited engagement with social media, I do find myself deeply thankful for the role technology plays in my life, especially social media. The last few days offer some good examples…

Sat in the North Terminal of Gatwick airport on Monday morning waiting for my flight to be called reminded me of being sat in the same rows of chairs many years ago waiting to set off on family holidays. I decided to send a group WhatsApp message to my family which started a back-and-forth as we reminisced about those holidays (and it provided an opportunity to make some jokes at the expense of my dad’s infamous holiday bum bag)!

A few minutes later my eldest brother messaged me to ask for my flight number so he can track my journey on the FlightRadar24app. Traveling for business is often a lonely experience but the thought of loved ones keeping watch over my journey brings reassurance and peace. Upon arriving in Cameroon I received a picture of my flight map from my brother with the words “tracking you flying past the Bavarian Forrest…”. FlightTracker

I woke on the first morning in Cameroon to find an e-mail in my inbox from my wife. She sent me a picture of our daughter wearing a new teddy bear towel with the caption: “Show Daddy my teddy towel!”. The worst part of travelling often in being away from family so these little messages are treasured.

My reason for traveling on this occasion was to speak at a conference. Although the internet connection at our venue was decidedly patchy, I was been able to refresh my twitter feed a couple of times through the day. Twitter is now my primary source of news and comment and it’s great to be able to keep up with events from around the world. My feed today was dominated by the situation in Ukraine and with the Oscar Pistorius trial. Also my oldest friend Ray – who also happens to be the world’s biggest Beyoncé fan – has just come back from a concert and is rather excited about it!

Sat on my hotel balcony in Yaoundé, Cameroon I’m able to share my view with family and friends. Whilst Instagram is open I have a look back over old pictures: my children over the years; places I’ve visited; holidays; family; friends; occasions; life. It’s wonderful to be reminded of these things and also worrying how quickly they’ve been forgotten. Were it not for this visual record I suspect most of these memories would remain buried in the distant corners the mind.

I call my wife via Skype and catch up on what’s happening back home. She’s at a play date with our daughter and what sounds like 600 other toddlers. We manage a quick catch up before she has to dash away. I can’t wait to be home tomorrow.

All of these little interactions make me incredibly thankful for the way technology has brought me closer to those who are far away. I love that, although I’m on a different continent, I am able to experience events from back home whether they’re my children’s bath time or my best friend’s Beyoncé concert! Technology is good.

Dubai from the Air

I love this aerial shot of Dubai showing the tops of skyscrapers poking through the clouds.

dubai_clouds

And it’s worth remembering the remarkable pace of development in Dubai. Twenty years ago the same photo would have shown only cloud with nothing poking through! Consider these two images showing the same stretch of road in 1990 and 2005…

dubai1990_2005

Hercule Poirot and the Rule of Law

Following the final tv episode of Poirot last week, I feel now is an appropriate time to share my favourite quote from the little Belgian detective.

poirotIt comes from near the end of Murder on the Orient Express when Poirot is confronting the group of passengers to reveal to them – and to us – who the murderer is. In most Poirot stories this involves a hitherto unknown backstory in which we discover that two of the characters are secret lovers who have conspired to kill the one person standing between them and their passionate love affair.

Murder on the Orient Express is a little different.

It transpires that the murder victim, Mr Ratchett, was responsible for the abduction and murder of a five year old girl many years ago but he fled the country after being acquitted in a trial that he most likely fixed. We discover that each of the 12 passengers on the train had a connection to the murdered girl and had organised this elaborate train journey to avenge her murder by killing Mr Ratchett (they killed him by each stabbing him once so that it could not be determined who administered the fatal wound).

As Poirot reveals these facts and confronts the group of 12, there is a superb piece of dialogue about the morality of the group taking justice into their own hands. The rule of law, argues Poirot, must not be abandoned otherwise we become like “savages in the street”.

The full transcript and video are below. It’s a great quote from a great story, n’est ce pas?


Hercule Poirot: [furious] You had no right to take the law into your own hands!

Hildegarde Schmidt: M-m-monsieur Poirot, she was *five years old*!

Caroline Hubbard: We were good civilized people, and then evil got over the wall, and we looked to the law for justice, and the law let us down.

Hercule Poirot: No! No, you behave like this and we become just… savages in the street! The juries and executioners, they elect themselves! No, it is medieval! The rule of law, it must be held high and if it falls you pick it up and hold it even higher! For all of society, all civilized people will have nothing to shelter them if it is destroyed!

Greta Ohlsson: There is a higher justice than the rule of law, monsieur!

Hercule Poirot: Then you let *God* administer it… not *you*!

Greta Ohlsson: And when he doesn’t? When he creates a Hell on Earth for those wronged? When priests who are supposed to act in his name forgive what must never be forgiven? Jesus said, “Let those without sin throw the first stone.”

Hercule Poirot: Oui!

Greta Ohlsson: Well, we were without sin, monsieur! *I* was without sin!

Recent Media Coverage

Nathan Gamester - Prosperity Index 2013 cropped

Over the last few weeks I have spoken to many journalists about the latest edition of the Prosperity Index. The global coverage has been extensive and so a full run down would be difficult. However, I thought I’d pull together a selection of articles either that I’ve authored or in which I’m quoted.

  • Four Major Changes to Global Prosperity
    Harvard Business Review (link)

It was Abraham Maslow who gave us that famous observation — “when the only tool you have is a hammer, everything looks like a nail.”  We all understand the implication: Anyone attempting to solve an ambiguous problem should start out in possession of a broad set of tools. It is curious, then, that we continue to fall into the trap of…

  • How Prosperous is the United States?  
    Foreign Policy, Democracy Lab (link)

The results are in! The Legatum Institute has just launched the 2013 Prosperity Index, a broad measurement of national success that looks beyond GDP. Norway tops the rankings (for the fifth year running) followed by Switzerland in second place and Canada in third. The United States ranks outside the top ten, placing 11th overall…

Continue reading →

Five Things Cameron Should Include in His Conference Speech

Britain's Prime Minister David Cameron delivers his keynote speech at the Conservative Party conference in BirminghamA few thoughts on what I think David Cameron should include in his speech to the Conservative Party Conference this week…

1)      Staying the course on deficit reduction

One of David Cameron’s strategic successes in the lead up to the last election was to secure a mandate for austerity. He stood before the country and said that times were going to be hard, that we had a huge debt, and that the economy was not growing. And he explained that the only sensible response when facing huge debt is to reduce spending, which means everyone has to tighten their belts. With reduced spending, economic growth would return and prosperity would increase. Of course the return to growth has been slower than predicted. But the economy is now growing and unemployment is going down (it’s lower now than when Mr Cameron took office in May 2010). Now is not the time to go wobbly on the economic plan and risk the progress that has been made.

2)      Defend the 45p income tax rate

Labour loves to denounce the government’s “tax cut for millionaires”. But the evidence suggests that the 45p tax rate for the highest earners has actually brought in more revenue than the 50p rate. That’s more money to spend on those who need it most. More money for childcare, hospitals, infrastructure, etc. By opposing this policy, Labour is saying that they would rather punish the rich than help the poor. Mr Cameron needs to challenge Labour on their narrative about the “tax cut for millionaires” and explain why the 45p rate makes good economic sense. Right now Labour are winning the argument because they are shouting the loudest.

3)      Announce that marriage will be recognised in the tax system

It’s high time Cameron made good on his longstanding promise to recognise marriage in the tax system. This was a Conservative manifesto commitment, it was in the Coalition Agreement, and Cameron has said on numerous occasions he still intends to do it. Next week he should announce exactly when and how he’ll introduce it. To his credit, Cameron has always been an advocate for strong marriage and strong families. Over the last few years, however, all the political discussion around marriage has focussed on gay marriage (much to the despair of many conservatives). Earlier this year I asked Treasury Minister Greg Clark about this issue and he assured me that it is still in the government’s plans during this parliament. But time is fast running out.

4)      Recognise that Miliband has the right diagnosis but the wrong prescription

The “cost of living crisis” that Ed Miliband described is a powerful message. It will play very well on the doorsteps and during the campaign. Mr Cameron must acknowledge this problem but set out a different solution. Many people are experiencing a cost of living crisis. Part of the solution is to ask people to keep tightening their belts as the economic recovery continues. Another part of the solution is to set out clearer policies for helping those on low incomes (like taking more low earners out of the income tax). Another part of the solution is to encourage greater competition between energy providers so that bills don’t rise sharply. But Mr Cameron should be very clear that you certainly can’t solve the problem by legislating to prevent energy firms from raising their prices (the unintended consequences of which have been discussed in detail). 

5)      Be Positive.

Finally, the tone of Mr Cameron’s speech is very important. To those on the left, Ed Miliband’s speech was spot on in both content and tone. Where necessary Mr Cameron should rebut Labour proposals. But overall he should set out a positive, clear message outlining his vision for Britain. And he should highlight the government’s successes. There is much to be proud of: lifting more than 2 million low earners out of tax altogether; reforming the welfare system to make work pay more than benefits; bringing rigour back into the education system; opening 93 new free schools at the start of this new school year alone; a benefits cap to ensure that claimants won’t receive more than the average family earns; vaccinating, educating, and feeding millions of the world’s poorest people by sticking to the overseas aid commitment; and the list goes on.

These five are just a few that came to mind and are in no particular order of importance. I hope that at least some of them feature in Mr Cameron’s speech on Wednesday. 

UPDATE 28 Sept: The PM is obviously an avid reader of my blog. Just minutes after I posted he announced plans to give married couples a tax break. One down, four to go…

On International Development Policy

If you are a British taxpayer, then right across the developing world are children who have been vaccinated against a multitude of deadly diseases because of you. Today millions of children are going to school for the first time – because of you. Fewer women are dying in childbirth – because of you. More AIDS sufferers than ever before have access to antiretroviral therapy and are thus living with, rather than dying from, their disease – because of you. British people should be proud of this.

This is an extract from an article I wrote on British International Development policy for ConservativeHome. The article coincides with the launch of a new policy pamphlet authored by Andrew Mitchell MP (published by the Legatum Institute).

I conclude the article by praising Andrew Mitchell and the government for sticking to the promise that they have made to the world’s poor, despite the challenging economic circumstances at home:

Many people who have served in government can take credit for ensuring Britain keeps its promise to the developing world. But perhaps the most significant of those is Andrew Mitchell. Mitchell has been called many things over the last six months, many of these it now appears were untrue. However, his lasting legacy – and perhaps one of this government’s most significant legacies – will be the commitment that is being shown to the world’s very poorest people.