The Parallel Parliament

by Glen Pearson

Tag: investment

Budget 2016: A First Step

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IN ONE OF THE FUNNIER EPISODES OF THIS MANIC BUDGET WEEK, host Ellen DeGeneres aired a segment showing Canada’s response to the threat of Americans moving up here to escape Donald Trump, titled, “We’re nice, but we’re not that nice.” You can view it here.

The reality is that we might be even nicer at the moment. During an American election season revealing far deeper divisions in the electorate than many realized, this week’s federal budget couldn’t set a more different tone. It was breathtaking in its own way, covering everything from deep investment in Indigenous Peoples to seasonal Employment Insurance programs, from tackling nagging infrastructure shortfalls to invigorating benefits for children and seniors, from beginning to make right the abiding gaps in veteran’s care to opening a new front on fighting climate change. Yes, it has its detractors, but even they were energized by its comprehensiveness.

It’s scope was made possible by the government’s willingness to go into deficit by almost $30 billion to pay for it (almost three times more than the Liberals campaigned on). Many voiced alarm at such a significant dip into the red, but, as this graph points out, we have been in worse situations before. CeMDjJGUYAA3AdK

Following a decade of austerity, many Canadians are hoping for more investment in our social way of life. While both the Conservatives and NDP ran on balanced budget platforms in the last election, Trudeau’s Liberals put it out there that they believed the time had come for some deficit spending in significant proportions. Those who didn’t take to that outlook nevertheless had to come to terms with a Liberal win, empowered by over two million more voters who agreed with the approach.

Just as our neighbours to the south flirted with a less tolerant future, Canada was banking on more inclusiveness. It’s not the first time we showed a certain economic defiance. When in the 1950s we refused to link our currency with the U.S. dollar, as other nations were doing, alarms bells sounded across the nation as we permitted our currency to float independently. We not only survived; we thrived. And when the great rush to deregulate banks helped to drive forward the global austerity agenda, Canada refused and was able to escape the worst of the Great Recession as a consequence.

Whatever opinion one might have of this budget, there is no question that it represents a clear departure from the same old, same old economic policies of recent years – policies that implied we couldn’t afford to strive for our greatest ideals. It was a rationale used by both previous Liberal and Conservative governments to rationalize some of our greatest social and economic ills like lackadaisical environmental reforms, growing poverty, high unemployment, and deep infrastructure decline. Trudeau didn’t just reason that Canadians were tired of underperforming; he ran on that hunch in his election platform, receiving a clear mandate in the process. Rather ironically, it was the very kind of investment plan that even the once draconian International Monetary Fund (IMF) has been supporting.

In many ways were are staking a claim, investing in ourselves and some of our deeper instincts of fairness and equity. The government believed we were ready for it and presented a budget largely to match.

There is just one problem. The budget is one country’s attempt to somewhat swim against the current of a greatly dysfunctional global financial system. All that was wrong with global inequities still remains in place both before and after the Canada’s recent budget. Trudeau is banking on growth to eventually pay back our deficits, but it will take more – much more. Canada must assist the rest of the world, not by mere example, but by articulate and dynamic financial leadership to reverse decades of elitism and the kind of globalization the placed the free market system and not democratic citizenry at the helm of human advancement.

A number of years ago, then Senator Joe Biden made a revealing observation: “Don’t tell me what you value; show me your budget and I’ll tell you what you value.” This week the Trudeau government did exactly that. But it’s only the beginning. Changing the very nature of our global economies is now the next great step.

“Do the Reverse”

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WE MET IN A COZY TORONTO CHINESE RESTAURANT along with Scarborough MP John McKay. Muhammad Yunus had won the Noble Peace Prize a couple of years earlier and he had come to Canada to sell the merits of his Grameen Bank – a microcredit organization that has assisted 140 million of the world’s poorest people to start their own businesses. His demeanour was gentle, his wit disarming, but one could easily see he was totally committed to helping the world’s marginalized. Yet he worried as to the direction the financial world was taking. We talked about his home nation of Bangladesh as well as South Sudan, where my wife and I were running a non-governmental organization. I could tell at once that his wisdom was deep, his commitment even deeper. He left me inspired.

Yunus was in Davos a couple of weeks ago listening to world’s elite talk about money, money, money. When asked what he thought of it all, he simply said, “We must do the reverse.” Quizzed as to what he meant, the Nobel Laureate proceeded to walk civilization back from the brink in which it presently found itself.

But first he set the context by observing that the concentration of wealth will come into ever fewer hands – today it’s the 1%, tomorrow it will be half a percent, then one-tenth. It’s not a linear, but an exponential process, Yunus noted, and the general population isn’t in control of any of it.

It’s then that the wise investor from Bangladesh made his insightful and bold insight:

“Everything we have done is the reverse of conventional. They go to the city; we go to the village. They go to men; we go to women. They say people should come to the bank; we say the bank should go to the people. They say you need to be job seekers; we say you need to be job creators. Everything has to be done in the opposite if we are to save ourselves. Everything has to be done in the reverse way.”

Yunus went on to say how following such practices builds better and more stable societies. Whether one is inclined to agree or not, it’s clear that what we presently have is a clear contradiction to what he proposes.

“You can’t see change until you change the way you see,” writes Raimy Diaz. We as citizens are the sum total of our thoughts, and we’ll never change our world until we change the way we think.

Needing More Than Good Wages

Second-Act-Career-Workshop-Finding-the-Me-in-Meaningful-WorkFOR TWO DECADES THE SUBJECT OF JOBS, or the lack of them, has come to dominate more and more of the public and political space. The conversation runs the range from no jobs, minimum wage jobs, to intriguing new discussions on living wage opportunities. The gold standard that everyone would prefer is employment with good wages – a depleting reality at present.

There has been some movement on the issue, perhaps the most notable being Walmart’s raising wages for some of its lowest-paid employees in the U.S. It has been surmised that the retail giant made the move following the release of the book, The Good Jobs, by MIT professor Zeynep Ton 18 months ago. But rather than being encouraged by such initiatives taken by companies in recent months, Zeynep remains troubled.

She acknowledges that the changes in Walmart’s compensation of its employees reflect an improvement, one that has resulted in a lower turnover rate among its workers. The main premise of her book, however, is that raising wages doesn’t go far enough unless employees themselves become investors. Speaking to the Atlantic recently, she observed that,

“A good job is more than just higher wages. A good job is also a productive job … If their jobs are designed in a way that doesn’t allow them to contribute that much, even hard work isn’t going to help very much. If you ask an employee to have a say in the selection and quality of a product, that person can contribute so much more. If you design a job so that a person can contribute more, you’ll need highly motivated, capable employees, and you can pay them a lot more.”

It’s an investment by the employer, she reasons. Provide your workers with more responsibility and a healthier work environment is created and your employees take on more value. Zeynep defines herself as an optimist and confesses she is hoping for a better future for companies, their investors, and their employees. She has been approached by numerous companies, intrigued as they are by her propositions, but she has yet to see them take her ideas seriously enough to alter the corporate landscape.

On the other hand, she finds that startups and smaller businesses are implementing these concepts at a healthy rate. As with any other type of environment, changing the historic culture can be an ominous task, made all the more difficult by the refusal of companies to change what has proved successful in the past. Smaller companies, and those just beginning, don’t have to fight through all those weeds and can establish their working principles on a clean slate.

Zeynep believes that the key to transforming the work culture is the direct attention of the CEO’s. “There needs to be a committed leader at the top of the organization … willing to believe that this is a long-term strategy that isn’t just based on some kind of quick return.”

She then makes an intriguing observation: “One of the bigger obstacles is that a lot of companies are still making a lot of money through mediocrity. They offer bad service and bad jobs, yet they are still making money.” She believes that excellence is a lot harder to achieve in such a context.

The only way to change that, naturally enough, is to treat your employees as well-paid investors, who will then provide better service. Her background isn’t in labour studies but in supply-chain management, so she carries a lot of authority in her outlook and words. She came to understand that if businesses continue with the mentality that labour is just a cost that they should attempt to minimize, then they have already lost their ability to connect with their customers. “A vicious cycle,” she calls it.

With all the talk about worker compensation, along with the intriguing work being developed around the “living wage” concept, we are entering an era where a growing understanding of the costs of low wages is registering with the business community. As necessary as that is, if it isn’t matched with the belief that employees are also “investors” in the final product, then the business reformation will pass businesses by.

“It is not that we have so little time but that we lose so much. The life we receive is not short but we make it so; we are not ill-provided but use what we have wastefully,” noted the philosopher Seneca. That is the true efficiency problem in the modern world of capitalism. To waste opportunity is a serious thing in the modern business world. To waste an employee is many times worse.

A Tale of Three Rivers

IT WAS ONLY THREE DECADES AGO that Pittsburgh was deemed to be dying – an urban nightmare with polluted rivers, crumbling inner core, steadily declining employment, and a population fleeing for greener pastures. Yet the city my wife and I visited this past weekend showed rare traces of such a blighted past. Instead, we were caught up in a city life teeming with creativity, investment, and a keen new belief in itself. In just few years it has transformed from a warning to a model.

We had first been invited down by officials this past summer for the 15th anniversary of their RiverLife project. Rarely had we witnessed a waterfront so teeming with possibilities. Even though this past weekend’s visit was in the midst of ice-cold conditions, winter blues were nowhere to be found. The city got its game back. It knows it and it’s eager to tell its story.

The difference between the two visits, six months apart, couldn’t have been more distinct. The summer tour was all about Pittsburgh’s dynamic river transformation and the celebration of what that change has made to the city. Situated and the meeting point of the Allegheny, Monongahela, and Ohio rivers, it was known for decades as the City of Bridges. Its riverfronts were essential to its image and economy. When both began to fail, the once teeming metropolis fell into decline along with them. The years weren’t good to the city’s reputation.

Fifteen years later, the city’s waterfront has been transformed from an aged relic of industrialization to waterways designed with mobility, celebration, new businesses, and a strong sense of civic pride in mind. Though hardly complete, Pittsburgh not only has a new spring in its step, it has become the essential American model of how people can reinvent themselves in a way that redefines what it means to be a community in general.

But Pittsburgh is more than just rivers. This past weekend introduced us to new cultural dynamics that basically have the city morphing from the inside out. Key to it all were the city’s foundations sector. In drawing the key actors together, the foundations created the impetus for getting civic leaders to imagine a different city, one not so much linked to its past but its people. What began as a river project eventually mushroomed to focusing on the city’s cultural sectors. Incentivized planning and the desire to include the next generation of leaders has seen the city go from a fading industrial giant to a gregarious community of the arts, technology, and museums.

Grant Oliphant, former CEO of the Pittsburgh Community Foundation, and now the head of the larger Heinz Foundation, was key to it all. He spoke in London, Ontario’s X-Conference last year and challenged the large crowd to think big if it wanted to grow out of its malaise. In less than a month he’ll be back in the city, at the X2 conference, to check and see how we are doing in civic renewal and to talk about how Pittsburgh re-energized its cultural centre.

Jane and I were fortunate enough to listen to how Pittsburgh’s growth has been so successful that its leaders are now meeting to figure out a way to shape that growth for the future. It’s hard to imagine how a city with a declining pulse only 30 years ago could transform itself so radically in such a short period of time. It’s a reminder of what any community could do if it collaborates and doesn’t grow overly concerned about who gets the credit.

Check out this video below for the quick 1-minute ride it took us to climb up the incline overlooking Pittsburgh at night.

Paradise Lost

It was just the kind of move that confirmed for many countries why they couldn’t opt for Canada to claim a seat on the United Nations Security Council. No sooner had the strategic vote been lost than the Harper government began ruminating about the prospect of closing even more embassies on the African continent. When the story first broke, I received a number of calls from African ambassadors wondering whether I had any information on whether their own country would become one of the casualties. Naturally enough, I didn’t, but the concern and sense of abandonment by this country was palpable.

The move to close institutions of Canadian diplomatic identity in Africa has increased of late, with Gabon, Guinea, Malawi, and Cape Town falling under the executioner’s axe. With only 21 embassies left in a continent that will soon house one billion people, we are destined to become a minor player where we were once viewed as a compassionate and strategic friend.

The Globe and Mail’s Geoffrey York quotes the president of the Canadian Council on Africa, Lucien Bradet, who laments: “No doubt that we are witnessing an ‘out of Africa’ strategy. We’d be cutting more and more of the bridges between Africa and ourselves.” Bradet’s group represents a broad coalition of businesses and others important players, keen to expand opportunities on the African continent. With young populations, growing infrastructure and massive natural resources, the African continent represents one of the most lucrative regions of investment that Canada could pioneer, given our lengthy history in Africa. Increasingly, investment firms are putting down stakes on the continent, recognizing that better governance, improved fiscal management, reduced levels of corruption, lowered debt loads, and human resources keen to enter the marketplace are strategic advantages. These very realities are leading to an African renaissance that will propel the continent into trading superpower status in the coming century, if the World Bank has it right.

The emerging economic giants – China, India, Brazil – recognize the potential for their own economies in Africa at the same time as Canada is shutting the door. These countries are in the process of opening up partnerships, consulates, trade centres and embassies in preparation for what surely will become staple parts of their respective economies over the next 100 years. Claiming to leave Africa for lucrative fields of economic enhancement in Latin America, the Canadians are turning their backs to a region which the World Bank and IMF conclude will be a trading giant soon enough. The United Nations has concluded that Africa is the richest continent in terms of natural resources, and yet the Canadian sails can be discerned receding over the horizon. There is no other region in the world with such a vast, open market, and yet we are holding fire sales across the continent.

For too long we have viewed Africa as a land steeped in remarkable history but oppressive poverty. But, increasingly, through initiatives like the Millennium Development Goals and financial investments, the continent is emerging from centuries of darkness to embrace societal reforms that will prepare it for imminent liberation. But it is specifically in the area of economic potential for Canada that Africa holds out its great promise. Inevitably, our economic future will depend on our ability to win contracts and expand cultures. But how can that be accomplished when we have walked away from friendships that go back to the days immediately following the Second World War?

It is our own political willingness to abandon historic commitments that put us in direct risk of losing the Security Council opportunity. The developing world, with its significant voting strength at the UN, had witnessed a compassionate Western country abandon decades of work in a troubled region just at the time when Africa was seizing its potential and it decided it had no advocate in Canada. Our influence was lost like scrap strips of film on the editing floor. The price paid to our reputation was immediate and embarrassing. The economic opportunities lost over the coming years, however, will cause Canadian companies to lobby Ottawa hard for the opening of embassies in Africa and the expansion of our diplomatic clout to enhance relationships. It will be inevitable that these recent years will be viewed as a dark period of great loss in economic opportunity. It’s one thing to lose a Security Council seat, it’s quite another to lose our future prosperity over amateur diplomacy and the lack of economic vision.

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