 Late start time here. Thanks all for coming out on this lovely December evening. For the launch of Andrew McLeod's A Life Half Lived, Surviving the World's Emergency Zones, which recounts Andrew's time with the Red Cross in Yugoslavia, Rwanda, his time in Timor, his work with the United Nations in response to the 2005 earthquake in Pakistan, and the 2006 typhoon in the Philippines, as well as his thoughts on the world of development and humanitarian assistance and the role that the private sector might play in improving its effectiveness. Andrew is a non-resident senior associate of my program, the Program on Crisis Conflict and Cooperation, here at CSIS. And he's a board member, advisor, steering committee member of a large number of businesses and organizations, including Cornerstone Capital, Gain Energy, Critical Resource, the Sustainable Accounting Advisory Board, the World Economic Forum's Future of Civil Society project, the UN's expert group on responsible business and investment in high-risk areas, the King College Humanitarian Futures Program Advisory Board, and a number of charities, as well as being a reserve officer of the Australian Army. Andrew has recently joined our program as a non-resident senior associate, advising us on issues related to humanitarian response, disaster risk reduction, international development, and particularly the role of the private sector in all of these issues. And I am extremely happy to be able to host the launch of his book, which is available for $20. He's willing to sign it for you as well, if you'd like to buy it after the event, or during the event. Feel free to interrupt us with $20 bill in hand and just run to the front, and we'll drop everything. So my name is Robert Lamb, and I direct the program on Crisis Conflict and Cooperation here at CSIS. We're a program that works on, I mean, our name is our address, any number of issues related to internal conflicts, disasters, humanitarian response, international cooperation, and in particular, research on improving the effectiveness of the international response to all of these issues. And there are, in my experience, two groups of people who are generally interested in the topics that Andrew addresses in his book, and that we're gonna be talking about tonight. And the first group of people are on the business side. People who recognize not only the moral imperative that people who have economic power should do, at least do no harm to people who don't have economic power, or perhaps in a more expansive version to actually help people who don't have economic power rise up, but who also recognize the strategic imperative that doing business in difficult environments can be risky to profit, risky to operations, and that reducing risks of conflict, improving the health and wellbeing of the communities that international businesses interact with, can in fact make investments in difficult environments much more sustainable. And there's been a lot of work in the business world recognizing not just corporate social responsibility, but also research on environmental, social, and governance issues that affect not only the moral imperative, but also the bottom line, and therefore the strategic imperative of businesses to earn a profit, but to do so sustainably. The other group of people who are interested in this set of topics come from the development world. The, there's been a lot of progress made in the past 70 years in the world of development, but particularly in conflict zones, crisis zones, places that are prone to disasters, places that are often described as fragile states. The, it's been a lot more difficult to make progress than I think everybody in the development world would prefer. And so there's been a lot of research recently trying to figure out how to improve effectiveness in conflict areas, places affected by high levels of violence, places described as violent and places affected by disaster. Most recently, particularly in the last few years, there's been a growing, sometimes grudging recognition that the private sector absolutely has to play a role in these sorts of environments and in development more broadly. My program tends to focus on the more difficult environments, but we also do research on the broader questions of effectiveness. And it's been recognized that if people, you can't just show up in a place and offer assistance, offer technical advice, try to help build capacity and build systems that frankly sometimes look more like our own than what locals would prefer. And then expect that the outcomes, that the development outcomes are either going to naturally follow or be sustainable in any way. People need jobs, people need a self-sustaining economy. And the development world recognizes that all of the other objectives that they have on human development, economics, health, well-being, strong institutions and so on are made more difficult if the country itself does not have a sustainable economy that's well-managed and capable of providing livelihoods to the people who live there and decent livelihoods to the people who live there. And I think in the development world, the recent recognition that the private sector can play an important role in achieving development outcomes is looked on pretty hopefully as something that has real prospects, but I think also a little bit too wishfully at times. A lot of the discussion surrounding the role of the private sector in development is enthusiastic about trying to figure out how to increase private sector activity, improve entrepreneurship, improve the business climate and so on. And they treat those things as a good end in themselves and in many cases they are. But it's also those of us who have studied development for years recognize as well that good development outcomes do not automatically come from private sector activity. It's increasing private sector activity is a necessary but not sufficient condition. Sometimes it can have bad effects, often it can have good effects. Understanding the difference between the two is something that I think the development world has not yet grappled with. And so we in our program are looking at this set of issues. I am directly as well as my colleague Siddiqa Hamid in the back who many of you have met on the way in have been leading efforts to do research in this area. And so we are absolutely thrilled to have with us Andrew McLeod who will offer some remarks discussing his book and discussing these issues. That will be followed by remarks by Erica Karp who's the CEO of Cornerstone Capital and who I will introduce just before she makes her remarks. And Ambassador Kim Beasley who's the Australian ambassador to the United States who is kindly offered to formally host this launch of this book tonight. And I will introduce him as well when the time comes for his remarks. There should be plenty of time at the end for questions and answers for all of the speakers. And I look forward to hearing that. This event is being webcast live. So when you do ask your questions we'll ask you to speak into a microphone which will be passed around. So without further ado I would like to introduce Andrew McLeod, senior associate, non-resident of my program, the Program on Crisis Conflict and Cooperation at CSIS and author of A Life Half Lived Surviving the World's Emergency Zones. Thanks very much. Ambassador Beasley, thank you very much for agreeing to launch the book this evening. Erica, thank you very much for also agreeing to join us on the panel. As Robert said, the book is available for sale tonight. What he didn't say is if you don't buy one you're not allowed to leave. That's your exit ticket. I will sign them giving you permission a bit like a school slip, but best of luck. The book itself does touch on a number of areas as Robert has said that the Centre for Strategic and International Studies is very interested in. And indeed I summarise this book as being in two parts. The first two thirds is pretty much memoir and the last third is challenging people to think about the way we do international development in a very different way. And it challenges people to start looking at international development from the end point, not the start point. And the end point has to be that when we look at a country or we look at an economy we're trying to assist surely what we're wanting at the end is people having decent jobs, sustainable employment where taxes paid to a responsible government and that responsible government uses the money to build hospitals and schools. That's what we expect in the UK, in Australia, in the United States, so surely. That should be the end game objective when looking at the Democratic Republic of Congo, Sierra Leone or where have you. And one of the things that I will speak on a little bit more, one of the challenges that I put up is Oxfam can't provide that long-term sustainable employment, nor can UNDP, nor can Metis en Frontier. The only people who can do that over the longer period of time are multinationals and small and medium enterprises in the economy themselves. If that's the end game, are we actually setting up the framework for international development in the right way? That's what I get to in the last one third of the book. But the first two thirds is in many ways a memoir but in also in some ways challenging as well. Because when you get to the end of the first two thirds of the book, you start to ask are the good guys of international development, the NGOs, the major UN agencies, are they really so good? And are the bad guys, the big multinationals, are they really so bad? And this book really is about challenging thinking and starting to ask how do we do things differently? And when you go through some of the partnerships that I talk about in this book, particularly in countries like Pakistan or Yugoslavia or Rwanda and you see some of the more constructive partnerships that were built, they came from sectors that you perhaps would have thought unlikely. The Pakistan earthquake response is to this day one of the best run natural disaster responses ever, largely because the Pakistan army were so good to deal with. One of the most amazing things in my time in Pakistan for example, was when the female head of Oxfam was hurled over the coals by a male army general because she didn't set up child friendly spaces and women friendly spaces and refugee and displaced persons camps. You would never have thought that would have come out of a Pakistan army general. And these are one of the preconceptions that I like people to look at. Because the whole aid and development sector isn't functioning and it's not functioning as well as we would want it to function. Some people have read my book and asked me, Andrew are you just a right wing person? I point out my background having been like Ambassador Beasley, a member of the Australian Labour Party. We fought an election together and unfortunately lost. We've got beaten by a boatload of refugees and two planes flying into the side of the building if I recall correctly. Kim would have been the Prime Minister of Australia if 2001 had have turned out very differently. And it is a great sadness to Australia that you never were if I can say so Ambassador. But I point out that my views about being left wing or right wing are very much outcome rather than process oriented. And so much of our thinking about aid and development is based on process. Are we giving money to the right people to spend? Not are we getting the right impact for that spending? And surely if you give spending to an organisation and they're trying to do the right thing, that's enough. And what I try to put in the book is trying to do the right thing is not enough. You've got to try to do the right thing and then you've got to succeed at doing the right thing as well. Perhaps one of the more challenging stories or analyses that I have in this book is questioning the effectiveness of child sponsorships. Because surely you need to be some sort of evil grinch to say a child sponsorship is a bad idea. But then I put the challenge to people. I say the average, sorry. I say since 1953 more than three million children have passed through child sponsorships. A million of those through World Vision Alone. The average sponsorship goes for 11.3 years. It's about $23 a month. It's $3,118 per child. It's a legitimate question to ask if you are deeply concerned about the outcome of international development. Was that $3,118 spent well? It's a legitimate question to ask. And when asking is the money spent well? You've got to really have clear in your mind, well, what was the intended outcome of that spending? And my hypothesis is quite clear. A child sponsorship should be there to break the cycle of poverty. It should be there to bring a child out of poverty. So a legitimate question for me to ask and for people who are giving money as part of child sponsorships to ask is have you broken the cycle of poverty? And I say to people when looking at an aid agency consider donating child sponsorship money to, don't ask what is it that you will do for this generation. Ask what is it that you have done for the previous two or three? How many of the former recipients of child sponsorships are doctors? How many are lawyers? How many are teachers? How many are government leaders? How many are business leaders? How many are community leaders? In other words, have you actually broken the cycle of poverty for those children that you were seeking to help? And when you ask the major aid agencies that question, which I have, their answer is, well, we don't measure that. We can tell you how many schools were built. We can tell you how many teachers were hired, but we can't tell you how many children were sustainably pulled out of poverty. The analogy I give, if I put it in the private sector, if you take a big mining company and you ask them, how much copper are you producing in your copper mine? And they say, well, we bought a lot of trucks. Like, no, no, no. How much copper have you produced? Well, we dug a big hole. No, how much copper have you produced? We moved a lot of dirt with the trucks from our hole to the new hill that we're building. No, how much copper have you produced? Oh, we don't measure that. If a mining company said that to you, you think a mining company would be ridiculous. So why, when we go to a child sponsorship organization, because they're trying to do the right thing and because they're not for profit and because they're motivated by the right thing, we therefore cut them some slack. How many teachers are hired and how many schools are built is how many trucks you've got, have digged the hole is and how much dirt you've built. Sorry, dirt you've moved. It's not answering the question of have you actually broken the cycle of poverty? And when you look at the macro level and you look at the billions of dollars that have gone into many countries like the Democratic Republic of Congo over many decades with no discernible result, you've got to start asking the question in some environments is the way we're structuring international aid and development just meeting Einstein's definition of insanity, doing the same thing over and over again, expecting a different result. So the first two thirds of the book is setting that scene. It's talking about my experiences in Yugoslavia, my experiences in Rwanda, which were positive experiences and East Timor and Pakistan and some really good people I met, some amazing interpersonal relationships that can be built. One of the things that did amaze me in many different countries of the world is how well a military to military culture transfers, even if culture between different societies don't. When military officers sit down together, they speak the same sort of language and can often get some incredible results achieved. Let me go back to Pakistan for a second. When you start to ask people about large natural disasters, many people will talk about the tsunami of 2004. Some will even talk about Haiti. But did you know the Pakistan earthquake was a larger humanitarian burden than the tsunami was? And let me justify that statement. Many people like to measure natural disasters by how many people died. And I put the proposition that that's a false measure. To be brutal and cold and pragmatic, dead people don't need help. The living people do. The size of a natural disaster, the burden that people who have to respond to the natural disaster should be measured by those impacted, those injured, and those who survived. The tsunami killed 198,000 people on revised figures. The Pakistan earthquake killed 75,000. So by the death measure, you would say Pakistan earthquake was smaller. But the tsunami injured 100,000 people because the nature of its tsunami, you either got washed away or you didn't, basically. The Pakistan earthquake injured 140,000 people. The tsunami displaced and impacted on 1.5 million people. The Pakistan earthquake impacted on 3.5 million people. The tsunami impacted on a moderate climate, coastal region, and by, again, the nature of its tsunami, it would wipe out one, two, three, four kilometers from the coast, and then everything behind that was fine. So it wasn't that far to walk to a major population center. The Pakistan earthquake wiped out thousands of square kilometers in the foothills of the Himalayas. The tsunami happened in a moderate climate. Pakistan earthquake happened in September, six weeks before a Himalayan winter, sorry, October, six weeks before a Himalayan winter was due to drum 20 feet of snow on top of everyone. So when we deployed as part of the emergency response in less than 24 hours from the earthquake, we hopped in a Learjet provided by the government of Switzerland, and we are flying towards Pakistan, one small amusing story is we were getting ready to take off. At the end of the runway in Geneva, the pilot came over the loudspeaker, and he said, we're about to leave from Geneva. Our flight time will be either eight hours or 12 hours, depending on whether we land in Islamabad or Dubai, and that depends on whether we get overflight permission for Afghanistan, I'll let you know, and we took off. And it's the first time I've ever taken off in an airplane, not knowing where we're going to land. As it turned out, we got overflight permission, we were able to land in Islamabad. But the questions that we had to start asking ourselves is we were flying into Pakistan. The earthquake hit over in the Northwest Frontier province where a lot of Taliban and a lot of Lashkaritiba was, and Kashmir, Pakistani administered Kashmir with the line of control, a ceasefire line between two nuclear armed powers at war, technically, a disputed territory. To go into Kashmir as a foreigner, you needed a no objection certificate, an NOC. The day before the earthquake, there were only seven foreigners allowed in Kashmir, and we were about to rock up to a military dictatorship to try and convince them, near their most sensitive territory, that we wanted thousands of foreign NGO workers to go in with radios, GPS, cameras. Would we be allowed? How would we negotiate with terrorist organizations if we came across them, which we did? What will we do with the smarter terrorist organizations that were doing a Hamas? That is, well, let's create this place, people's camps. Let's give humanitarian services and win over the hearts and minds of the population. How do you deal with an organization like that? Because if you reject them and don't deal with them, you've become part of their propaganda tool about how evil the West is. If you deal with them, you're now the partner of a terrorist organization that might never be allowed in the United States again. What do you do? These were all legitimate questions that we were asking as we were flying into Pakistan. And you know who were the saviors. It was the military. It was a series of very good generals who understood a critical thing that needed to be understood, and that is they had no idea how to run a humanitarian operation. The most powerful example of leadership I have ever seen by anyone, anywhere, ever was by a fellow named Muhammad Yusof, the Director General of Military Operations of the Pakistan Army. In his general headquarters, in his operation center in Raul Pindi, the heart of the heart of the military, he looked across the table at me and the other NGO workers or UN workers at those days. In our initial discussions to talk about whether we could or couldn't have a humanitarian operation, he did the bravest thing I have ever seen anyone ever do. Best example of leadership I have ever seen anyone do. He put in his head, in his hands, and he said, we do not know what to do. And that admission of not knowing what to do allowed us to say, well, either do we. We have these assets we can bring, but we don't know the territory or the people. Ah, well, we know the territory and the people. We also have these assets. Let's marry them up with yours. And we then created a program that was the most unified natural disaster response which has ever been held, which is why you never hear of the Pakistan earthquake response anymore, because it worked and good news is not news. That's just one example of the unusual partnerships that I talk about in the first two thirds of the book. And it's astonishing to say that the critical people to help 3.5 million people during one of the most disastrous natural calamities to fall upon humanity, wasn't MSF. It wasn't ICRC, it wasn't Oxfam, it wasn't UNICEF. Although they all contributed, the real thing that made that operation work was the Pakistan Army. And that made us really think, why is it that the international community had a structure that's been operating for 50, 60, 70 years, but was incapable of providing the command and control authority needed in a situation like that to be able to respond coherently? And then I started to think about it more and you look at the structure of the UN agencies, many of the NGOs, and they're not invested in success. They're not measured by success because they measure themselves by process. They don't measure the amount of copper produced, they measure the amount of trucks and the amount of dirt that's been dug. And Lord knows, I wrote many UN reports that had in the evaluation section something along the lines of we were given $100 million to do program X and we spent $97 million, that's 97% implemented, therefore the program's successful. So in the last third of the book, I then propose an alternative. It's not all negative. Who actually is invested in the success of getting economic development? And shock horror, it's business. And it's the business that provides the long-term employment, a well-motivated private sector company in a well-regulated economy. And they're two very important provisos to what I say. It needs to be a well-motivated company. It's not just any carpet bagger. And it can't be an unregulated economy. It has to be a regulated economy. You can get some incredible results. One of the things I talk about in the book, BHP Billiton, the world's largest mining company, the enemy of the left wing, runs an anti-malaria program in Mosul, Mozambique where they have an aluminium refinery. And why do they run this anti-malaria program? Well, they've reduced adult malaria infection from 92% of the population of 5.6, not because they've taken a get nice pill, but because the improved community health has reduced absenteeism in the workforce from 22% to two. That's increased the productivity of their assets by an amount higher than the cost of the program. In other words, when measured properly, the anti-malaria program is directly, measurably profitable, to which many in the left wing find that uncomfortable and say, well, no, they should be doing this because it's the right thing, to which my response is, well, no. If we're looking at the outcome, hasn't BHP now stumbled upon an anti-malaria model that is sustainable in the three parts of sustainability that we need, community sustainability, environmental sustainability, and financial sustainability? And that third is often forgotten. So what I propose in the last third of the book is how about we rethink things? Are Angelina Jolly and Brad Pitt right when they say the answer is to double foreign aid? If the foreign aid system isn't working, doubling foreign aid is just putting good money after bad. So I propose a rethink. Let's look at it differently. At the macro level, when you look at capital flows, 53% of capital flows from OECD countries to non-OECD economies in 2010 came through the private sector. 30% through remittances, that is, people sending money home, and only 17% through official development assistance. So foreign aid is actually the smallest kid on the block. So why are we relying upon that to be the major driver of economic development? Why are we relying on the smallest funding, the smallest pool of capital to do the biggest effort in bringing the world out of poverty? Surely we should rely on the biggest fund of money to shoulder the biggest burden, and the second biggest to shoulder the second biggest and the third. Interestingly, the second largest, remittances. How well does the international community use remittances to bring the world out of poverty? And honestly, that's probably the worst done. A whole bunch of 20, 30, 40 dollars gone home to Auntie Flo to buy new curtains. How do you actually pool that money into a way in which rather than just giving money home, you would invest in your own community, invest for a return, and don't be ashamed by the return. Take that return and reinvest it in your home economy. Can you do that? Well, strangely enough, there is an organization called Home Strings, which is doing exactly that. Eric Gishard, the CEO of Home Strings, is here in the audience tonight. And what Eric has done is incredible. By giving a tool for people to combine their 20, 30, 40, $50 a month into investable chunks of one, two, three, four, five, $10,000 to invest in their home country and say, I'm sorry Auntie Flo, I'm not gonna buy your new curtains, but I am helping build the bridge. I am helping build a new power station. Imagine if we were able to tap into that and expand the work that Eric's doing in a way that you'd really target that 30%. What if we take ideas like BHP's anti-malaria example and we say to the investment community, measure a company on the way they do this, because if a company truly does a community relationship, well, not a greenwashing, not a whitewashing, not an advertising, but a way to genuinely reduce their risk and in corporate speak, improve their net present value of their assets because they have a lower risk rating. Isn't that going to be a much better investment for the financial sector? And what Erica is doing at Cornerstone Capital is looking at challenges like that. Can we actually find ways to provide better capital, accelerate the velocity of capital to steal some of Erica's words, to small and medium enterprises to be able to do the sorts of things that BHP did. These are the sorts of issues that I have in my book and I've taken well too much time from what I should have, and that's why I urge people to read it and then think, are the good guys really the good guys? Are the bad guys really the bad guys? What are the structures that we need to change so that the principal driver of bringing the world out of poverty is the biggest chunk available, the 53% of capital flows through the private sector? The second chunk is the remittances. How do we target those 30% and the third chunk is that 17% of ODA? I don't say we should get rid of aid, but I do say we should hold it accountable for outcomes not process. And we need to find ways of building those better partnerships between those three sectors of capital, private remittances and official development assistance to really get the impact that we need. And that's what the book says and I really hope you do buy a copy because that's my ODA. And if you read it, please be in touch because we really need to get these ideas out there. We need to rethink the way we bring the world out of poverty by building partnerships based on the level of capacity and ability for those companies, those remittances and aid agencies for them to genuinely help based on outcome. Thank you very much. Thanks, Andrew. I of course have a million questions. I myself would like to post you, but before we turn to questions in the overall discussion, I would like to hear from the rest of our speakers on the panel today. Erica Karp is the CEO of Cornerstone Capital and somebody who has spent her career learning about becoming an expert on and advocating for sustainable investing in finance. She is a frequent speaker and writer on corporate strategy, business models, transparency, excellence in business especially on issues related to environmental, social and governance performance of the business and finance world as well as employee engagement and diversity in the workplace. She appears frequently in the media. She is a frequent speaker at global events. She spent many years at UBS, of course the major global investment firm. She was the managing director and head of global sector research at UBS Investment Bank, chaired the global investment review committee, managed a global team of analysts and strategists there. She served on the securities research and executive committee in the environmental and human rights committees of UBS's executive board and of course is very well known in the investment community. So I'd like to invite Erica up to the microphone to share some thoughts about the field, the book or whatever else you'd like, whatever else is on your mind. Thank you so much and thank you for the invitation to say a few words and congratulations Andrew. Andrew and I have known each other just two or three years, not a long time but I have spent 25 years at large investment banks taking the measure of people and taking the measure of their intentions, their methodologies in doing research, what their goals, missions, what their aspirations are, I have spent 25 years doing this and more recently I have a chance to do this with my own firm and it's a privilege to know Andrew and it's a privilege to speak with someone who understands that we need to bring humanity and capitalism more close together. I happen to think capitalism is beautiful. I think economics is poetry and I think finance can be magic. If it's done properly, if it's done with a systematic consciousness of environmental, social and governance imperatives. And Andrew talks about the scale, the magnitude of the issues. Let's talk about the magnitude of the money. Let's talk about magnitude for the next 30 years over this next generation we're gonna see an estimate by the World Economic Forum. We're gonna see $41 trillion of wealth transferred into the hands of a new generation of investors. Investors who like me reject the notion that there's any dichotomy between long-term corporate profitability and societal need. I reject the notion that there is a dichotomy. I think we can do both. I think we have to do both. $41 trillion, this wall of money coming at a better form of investing. Let's talk more about scale. The institutional investment community, the community that I have served my whole career trying to bring great investment research to asset owners, asset managers, investment bank analysts, portfolio managers. Well, there's something called the UN Principles for Responsible Investment, the PRI. The PRI has over 1,000 signatories, institutional investors that have pledged their tens of trillions of dollars towards an investment process that is more disciplined around issues of environmental, social, and governance excellence, okay? Trillions of dollars, and so when we are here and when we applaud, let's say, the Small Business Administration for lining up $50 billion in loan guarantees for more sustainable businesses for energy efficiency, $50 billion is a drop in the bucket, with all due respect. It is the huge pools of money that we need to bring to bear for capitalism, capitalism which remains the best system the world has ever known for the creation of wealth and prosperity, okay? So bringing honor to the capital markets, accelerating the velocity of money to businesses, sustainable businesses, corporate excellence, we can do this if we think about the evolution of finance and capitalism and investing. And the reality is we're not gonna be calling it sustainable finance or sustainable investing or sustainable capitalism, it's just finance. It is the next iteration. So from my standpoint, again, it's a privilege to get to know people like Andrew to invite him to serve on the board of my company. And I think about this issue of bringing humanity and capitalism together. And if we think about people's best and highest purpose, if we think about the output of human capital, its relationships and its ideas, those are the things that don't ultimately become commodities. And Andrew's ability to articulate the stories, the humanity consistently with what the private sector can do, I find incredibly compelling and incredibly encouraging. If for someone like me I have three little girls, I want a very prosperous future. I know that if the private sector can bring to bear the ability to execute on the vision, we will all be better. And I think about, you know, I'm reminded of a quote from Shakespeare, the merchant of Venice, okay? And it's about execution, right? If to do were as easy as to know what we're good to do than churches had been chapels and poor men's cottages, princess palaces, right? If to do were as easy. It's not so easy to do. It's not so easy to get it done. When we think about the best investment research in the world, it's born of collaboration. It's born of open-mindedness. It's born of diversity of experience. And so Andrew's diversity of experience, his perspectives. You know, the fact that I happen to have a sister who lives in India in Dharamshala, the foothills of the Himalayas. You know, these are little bits of experience that change you. And knowing Andrew, you know, has changed me to some degree. It has made me more optimistic that we can improve the language of finance, the language of capitalism, so that it's not divisive. It's not politicized. It is about economic outcomes, but over the long run. And again, the notion that capitalism and the private sector can lead the way is an absolute belief commitment, and we have proof of it. But again, the language, we have to get it right. And we have to move forward in terms of not being politicized and not allowing ourselves to be divided among ideological lines. Great investment, great analysis of environmental, social, and governance factors is not about ideology, it's about objectivity. Okay? And so objectivity brought to the investment process is going to change finance, it's going to change capitalism, and it's going to the mainstream. And so for someone who has spent all these years chairing thousands of investment review committees, listening to hundreds and hundreds of research analysts pitch their ideas, knowing that every one of them knows everything about everything. Well, the reality is I find it most interesting to know what people don't know. What are the avenues of inquiry down which we need to go? What are the proofs? What are the stories? What are the inspirations? Well, we can find respect for financial capital and human capital and natural capital. And so Andrew's work I think brings us closer to that. So it is genuinely a privilege for me to be here and to congratulate you. And I look forward to further dialogue, thank you. Thanks very much, Erica. It is my honor and privilege to introduce Ambassador Kim Beasley of Australia that we've already heard a bit of an initial introduction. Mr. Beasley was, Ambassador Beasley was elected to the federal parliament of Australia in 1980 and has at various times held portfolios of defense, finance, transport and communications, employment education and training, aviation, and the special minister of state who's deputy prime minister in the mid 1990s and leader of the Australian Labor Party and leader of the opposition in 1996 to 2001 and in 2005, 2006. He's served on parliamentary committees, has been a professor of politics and international relations at the University of Western Australia, has been chancellor of Australian National University and has been ambassador to the United States since 2010. It's my privilege to introduce Ambassador Beasley. Thanks very much, Robert. It is, you're reminding me of this fact that had I succeeded in getting Andrew elected to parliament, I probably would have been prime minister, but that's, so it's a reminder of an opportunity definitely missed. Look, we've had wonderful speeches from Erica, wonderful speech from Andrew and introduction from Robert. I'm gonna talk a little bit more about the book but not at any great length because you want to ask them a few questions. It is a biography as well as a piece of advocacy and as a piece of biography, it is really quite fascinating. This is a book which has on its cover to the content of it, the most appropriate photo and the most inappropriate title. The appropriate for this is Kid here, see. He's concealing his height. He has a machine gun but he is a well-trained young man. His finger is adjacent to the trigger, is not on the trigger. There will not be an accidental firing until he shifts the location of his finger. His face is quizzical, mildly angry, somewhat suspicious, but quite open. He is not determined yet whether or not you need to be killed or helped. So that's the photo. The title, A Life Half-Lived, is hopeless. It is clever, it is clever. I accept that, he's only halfway through his life. Okay, good. We've got that, that's fine, but this is a life lived with a heart on the sleeve. This is a life where no chance has been untaken, no risk has not been engaged, no danger has not been sought, and it's lived with a sense of comradeship for those who are prepared to share those dangers with him, which is really, truly extraordinary, and it's lived too with an appreciation, a determination to comprehend the fact that he's going to be incultures, where he and his view of the world is not necessarily going to be even remotely representative of how the people he is dealing with see life, and yet he is there for a purpose, and that purpose is to produce a set of outcomes which saves the situation in a humanitarian crisis. He's rightly skeptical of the way in which we evaluate the outcomes from aid programs, rightly skeptical about the way those aid programs are administered, rightly skeptical about the aid bodies which organize them. He has a right to be skeptical, but he's worked for every day in one of them. When you go through the list from the UN to government agencies to Pakistan in military, I think he was more a less paid officer of the Pakistani military, at least by halfway through his operation. The Red Cross, he has then subsequently worked for assistance arms associated with the private sector and then more fully in the private sector itself. So he has had the opportunities, done studies for some of the agencies for whom he's worked on aid effectiveness. He has been an intellectual leader and a very ubiquitous practitioner in the aid business. He's been in some of the most dangerous places. He's been in Timor when it was dangerous and it was very briefly dangerous, and well actually it's been dangerous for quite a while, but in different circumstances, and in the process to independence, there was a moment of really great danger and Andrew was there at that point, and then in Pakistan, not danger so much, but it was a society, a country, in which there are certainly dangerous entities that are operating because this crisis of that earthquake afflicted the huge swathes of the community and in areas where Pakistani governmental control has from time to time been spare or from time to time been highly impacted by terrorist organisations. Great danger for somebody identifiably, a member of a society that is on some folks' target list. I would say in terms of Australian contributions to public affairs in Pakistan, there's no Australian has made a greater contribution to the public affairs since the Australian general who founded ISI back in the early 1950s, but it is, of all the stories in the book and there are a lot of them, I love the one about Pakistan most because there is an interesting portrayal of how Andrew, people who are his associates, worked out with the Pakistan military to deliver a really very effective aid outcomes. I'm not as quite as down on aid as Andrew has become, I have to say, I think that often I absolutely agree that we have to get to a point where there is always accountability in terms of the outcomes and it's no good running aid programs that simply deliver expenditures and not an effect on the ground. I also think that there, however, is enormous prospects or possibilities of leveraging aid in the private sector together and indeed that's what Andrew is effectively arguing in that last third of his book. This is not the first launch of the book, it's been launched previously in Australia, but it's the best country in which to launch it. This is the most generous country on earth. This is perhaps one of the least skeptical people on earth. Americans don't think of themselves like that, but Americans are unwise to always think the best of people. And it is the, we got on, we Australians, we get on with Americans very well because we are polar opposites. We Australians are pessimistic and realist and Americans are optimistic and idealistic. We often look the same, our accents are slightly different, but in many ways we're poles apart. But that American optimism and that idealism is reflected in the fact that though the United States, not in terms of a percentage of GDP, but nevertheless in absolute terms, is the world's largest government aid donor, the donations made globally by the United States officially exceeded substantially by private giving. That's not the totality of American charitable giving, that is that portion of American charitable giving, most of which is delivered domestically, but that portion which is delivered internationally exceeds the American aid budget. So there's a lot of people with an interest in the United States in how you get good outcomes from aid projects that are put in place because there's a lot of people prepared to bet on trying to get a decent outcome from it. You ought not to read this book and lose your optimism or lose your idealism, or to lose your faith in the possibility of a personal contribution making a difference. It certainly can, but nobody can make a difference like a person who's prepared to be out there themselves, prepared to take the risks, prepared to stand in the field and work out whether or not the direction they're going is right. It's a matter of profound regret for me, not simply because I'm not Prime Minister, but we didn't actually get Andrew into the Australian Parliament. I actually think he'd be, even though he's doing immensely good work now, and he's working with Erica, he's obviously gonna make a big impact globally, but if you do a hell of a lot better in the Australian Parliament, I'm simply very sorry that he isn't there. To make that contribution to Australian political life, which she is so very well equipped for. Well, I am now going to declare this book launched, and I invite you to advance the contact. So we have about a half hour for any questions that any of you would like to pose. We have a microphone circulating because we're being live cast and videotaped. The video will be posted on the internet as well as on iTunes U, probably sometime tomorrow. We would ask that you speak into the microphone. The microphone will be on, so you don't need to test it. Please identify yourself, your institutional affiliation, if it's appropriate. Keep your question reasonably brief. We prefer that it be a question rather than a speech, but we invite you to address any of the speakers who you wish. Let's start on the far end over here. Hi, my name's Cornelia Weiss. I'm like you, a reservist. I'm a colonel in the Air Force, but I'm here in my own private capacity. And first of all, I thank you very much, and I'd like for you to expand on the definition of success and the measurement of success. You talked about the Pakistanis and how great they were at command and control, but that, of course, is their business. That's what they train in. And when I look at my own military, I often question, what is it that we're measuring? Are we measuring the Toys for Boys programs? How much military equipment we sell? Or are we measuring outcomes? Robert Lam, I've never gotten to meet you in person, but we certainly corresponded when I was down in Columbia. And I think about Columbia, and I think of the billions of dollars we've spent on plan Columbia. And if you measure that, could the money have been differently spent so that you would have had less money being spent and a better outcome? Thank you. Thank you, Connelly, for the question. And I think you've hit on the two hardest problems that there are, which is defining your measure and measuring the success. I'm gonna draw a distinction now between humanitarian aid and development aid. Humanitarian aid is that circumstance in which you are dealing with an immediate response to a conflict or a natural disaster. That's a different circumstance to long-term developmental assistance to bring a country out of poverty. In a humanitarian operation, your measure is relatively simple. In the case of Pakistan, our measure was really, really simple. We wanted to keep 3.5 million people alive through a Himalayan winter underneath 20 feet of snow. And we came through the end of winter and asked, were 3.5 million people alive? The one way you can measure a natural disaster response is if a natural disaster is run badly, you would expect a second wave of deaths equivalent to the disaster itself. So 75,000 were killed in the earthquake. You would expect a badly run response to have 75,000 secondary deaths. We had 511. And 511 people died during that winter was lower than the death rate of a normal winter. In fact, every quality of life indicated in Pakistan went up immediately after the earthquake. And part of that reason was because the area was just flooded with services that it had never had before. Do you know Fidel Castro? It's not a name you can drop in America, usually, with a lot of happiness. But he lined up five 747s, filled them full of doctors, and flew them to Pakistan. We had 2,000 Cuban doctors wandering around the hills of Pakistan. That area of Kashmir never had so much medical service put upon it. It was astonishing. So in a humanitarian response, you've got a much clearer measure. But what about that development context? What's the measure that you're using with your interventions in somewhere like Democratic Republic of Congo or Sierra Leone in a developmental context? And that's why I love the BHP story in Mosul, Mozambique so much because not only did they get a response, they actually set themselves a very clear objective and a very clear way of measuring it. And what was their objective? It was improved profitability of their operation. And the objective on getting it was improving community health. The interim indicators, lowered adult malaria infection, lowered absenteeism in the workforce, were all intermediary indicators and they had very clear in their mind what their outcome indicator was. In a larger development context, it's always a lot harder. And that's why I'm critical about the child sponsorships. Child sponsorships should not be about the number of children that go through a school, the number of schools built or the number of teachers hired. They're very good intermediary indicators. The indicator should be, have we broken the cycle of poverty? So the first part of your question is actually the hardest bit. How do you define your measure of success? Because only once you've defined the measure of success, can you then start to say, well, what are the indicators by which we hold ourselves accountable? And ironically, the military is a very good structure in doing that because how does the military think? What's our aim? What are the factors affecting our aim? In the case of infantry, we season the whole ground. I mean, do you have the hill or don't you have the hill? So applying that type of thinking to the outcome that you're wanting, what is it that we're actually wanting to achieve? We're not wanting to build schools and we're not wanting to hire teachers. We're wanting to bring children out of poverty. And that I think is one of the things that Erica and her cohort is working with and Eric and his cohort are working with which is really trying to define that measure of success. And as I wrap up this question, as I differentiated humanitarian and development, there's an interesting space in the middle called transition. How do you move from a humanitarian context to a development context? Either post-natural disaster or post-conflict, how do you move a society from catastrophe to back on the train of development? The interesting thing that we did in Pakistan and this is in the book, normally after humanitarian operation, after two, three, four months, the emergency doctors leave, the emergency teachers leave, the emergency food supply leaves, the emergency water supplies leave, but the schools aren't rebuilt, the teachers aren't rehired, the economic system isn't re-established. So normally you've got a secondary drop-off of service delivered to the population. What we did in Pakistan, which had never been done before, was plan a transition from relief to recovery. And it was done, it was done very, very well. The question now, let's put it in the context of CSIS between Dan Runde's program and Robert's programs, is how do you actually dance between those two worlds of emergency response or emergency setting or a fragile state to a state that has now got a degree of stability that you can start looking at economic development and then how one really impacts on the other? Because if you do not get effective long-term economic development in a country, it will unambiguously revert back to a fragile state. So a lot more thinking, and I think there's a great role for CSIS between you two, particularly to start to think around intellectually, how do we not only do the humanitarian space, how do we not only define what our objectives are in that immediate response, but how do we define a transitional response and then a developmental response? How do we actually set ourselves all the points along the road until we get to that point where we can say we now have sustainable employment with people paying tax to a responsible government that uses that tax to build hospitals and schools? In other words, the job is done. So your question has hit the hardest question, which we need to do a lot more thinking about. And we evaluated USAID's transition programs in Columbia some years back. And even in the best of circumstances, willing partners, whole government cooperation and so on, there were still problems with that, with precisely the transition from the emergency programs to the, you know, the term is the normal programs, which suggests, precisely as Andrew said, that there is a lot of work to be done to figure out how that handoff can be improved. I'd like to ask my colleague, Dan Runge, to pitch in here in just a minute. Before that, I'd like to ask our other two panelists a variation of a similar question. First, Ambassador Beasley, I wonder if you could comment briefly on USAID's approach to talking about development outcomes or how it sort of has been engaging with the private sector to improve those outcomes. Well, USAID no longer exists. USAID has been abolished. And the organization is being merged with the Department of Foreign Affairs and Trade and the purpose of which the government says is to bring together more closely Australian government strategies and directives in international politics and the donor programs associated with USAID. With a view to insuring in particular, and they've put down as one of the reasons for doing this, the closest conceivable collaboration between what is being done by USAID in the country and what is being done by the broader economic interest, if you like, in that sort of society. So, USAID is in transition. There's a chap here who knows more about it than I, so if people want to know more about it than what I just said, Chris Tinning sitting there is just your man. And Eric, if I'm wondering if I could ask you, a lot of the work that you do involves trying to educate people in the business and investment community to recognize that accounting for these environmental, social, governance issues can improve the bottom line. And certainly in the development world, you get every one or two years of international declaration that we're going to follow these principles. And then a year or two later, we have to re-declare that we're going to follow them when they're not followed. And I think it's because it takes so long for the institutions to really catch up to it. In your experience, what's the reaction of these sorts of issues down at the floor level? What's your sense of how long it's going to take and how difficult it's going to be to really convince the cultures within the business world to pick this up? If you could push the button there, thanks. This is tricky and somewhat scary and potentially rather daunting. But in terms of accounting for environmental, social and governance factors in the investment process and in 10Ks, the transparency around understanding these issues, it's very early days. This is going to take a while. And I sit on the founding board of an organization called SASB, the Sustainability Accounting Standards Board. And then there's something called GRI, which is the Global Reporting Initiative. And then there's something called the IIRC, the International Integrated Reporting Council. And then of course in the UK, the Prince's Accounting for Sustainability Forum, which is probably the oldest beyond GRI. But this is early days. So from the standpoint of lending transparency to issues which are extremely material to economic and profit outcomes for corporations, we're very early. But one thing that I find very encouraging is that the corporate sector, again, the private sector is leading on this. And so when it comes to trying to have standards for reporting on all these ES and G factors, again, early days, but there are critical pieces of infrastructure that are coming into play. And it comes to this question of materiality. I mean, what matters? What would a reasonable investor want to know about all these factors? Would a reasonable investor want more information about risk adjusted return potential? Would a reasonable investor, if they could have information about employee retention and succession, that S issue, about regulatory compliance, about a board structure, would a reasonable investor want to know these things? Can we prove beyond a shadow of a doubt that there is causality between excellent corporate performance and disclosure and better performance in the stock market? No, we cannot show causality, but we have hundreds of studies, empirical studies, that are pretty good at showing correlation over long, longer term periods, right? So one of the things we need to do is get investors and each piece of the capital markets, each participant to focus on the long term, we need to align incentive structures to get everyone looking long term. So to answer the question, it's very early days, but the data is being collected. Organizations like Bloomberg and like MSCI, they're getting the data. Is the quality of data outstanding? No, it's not. It's challenging, it's problematic. Are there standards? Does everyone have the same data to report? No, they don't. Are we getting there? Yes, we are. And then our corporations doing the right thing to move forward themselves and to raise the bar. And so can we have evidence of what companies are measuring interesting outcomes? Take Praxair, it was just with their head of sustainability. And for Praxair to actually give information to make up their own metric, their own measure of how well their employees are engaging with their communities and how much of an impact they're having on people with whom they work. They put that measure out there themselves. They created the ratio. God bless them. And I guarantee that that data point is wrong. Yeah, it's probably wrong. But you know what? It's okay because what they're saying is they're showing their priorities, their commitment. They've given themselves something to benchmark and move forward. And I applaud that. And if you go back to Aristotle, the perfect is the enemy of the good. I agree with that. There is not gonna be perfection. And if we wait, we're gonna wait way too long to attack the issues at hand. So we're getting there on accounting. We're getting there on transparency. We know that transparency is transformational. Look at any industry. Look at the financial services sector. Look at healthcare. Transparency transforms industries. Transparency can transform capitalism too. Thanks very much. Dan, I'd like you to contribute to the conversation. Thanks, I'm Dan Rundy. I'm one of the programs here at CSIS. Thank you very much. I'm looking forward to buying your book Retail, Andrew. Thanks. I recommend everybody do the same just in time for the holidays. Just a couple of points. One is, I wanted you to just talk a little bit further about you've been in UN agencies, you worked in the private sector. I totally agree with your thesis that it's the private activities, the much larger part of development. How do we incentivize donor agencies to work more closely with the private sector? I might be curious about how you have experienced that. I've got my views on that. I've spent a lot of time reading obscure papers about this topic, but I'd be curious from your perspective, haven't been in a mining company, haven't been in a UN agency. And then second, could you talk a little bit more about the role of the private sector in the Pakistan earthquake? I was very involved with the South Asia Earthquake Relief Fund, which was the Pakistan earthquake that President Bush convened and had five American business leaders involved with that. And so I knew that part of it from my place at AID in another life. So you could talk about those two things. Thank you. Okay, let me touch on them quickly. Let me take the second one first, the role of the private sector. Kim, correct me if my gut feeling on this is wrong. About 80% of employment and economic activity is small and medium enterprises and about 20% the larger ones. You can say the same sort of thing happened in Pakistan too. One of the things that the Pakistan government did immediately after the earthquake was distribute 60 or 80,000 rupees compensation for everyone. Can you remember Siddique, it was at 60 or 80, 30. Well, there you go. Next time say either 60 or 80, then correct me later. Anyway, it was a significant amount of money in the context of Pakistan. And what most people then did is went out and bought a mobile phone. And we thought that's kind of silly, but actually our response was wrong. It was really quite clever. There were 300,000 mobile phone connections in Kashmir before the earthquake, three million mobile phone connections within two years of the earthquake. The mobile phone network got up and running sporadically within about three days and up and running fully after about three weeks. If I was the mobile phone company, what a great boon it was for the expansion of the network. But what was the impact? We would rock up to villages about three or four weeks after the earthquake with a world food program a week gifted by the people of Australia and vitamin A enriched oil as you tend to do and found that you had meat and oranges in a couple of the shops. Because what the purchasing of mobile phones did and the re-establishment of the mobile phone network was had a little shopkeeper jump on the phone with his brother down in Lahore who filled up a truck full of meat and oranges and drove it up. Now it didn't work everywhere because there's a lot of places that were inaccessible, simply because the roads were destroyed and the interesting thing about that area of Pakistan is the roads weren't blocked. The roads were destroyed because they carved into the sides of some very steep and young mountains. So in answering your question, the first part of the response stand is the small and medium enterprises shouldered the largest part of, absolutely the largest part of the burden. But let's go to a multinational. Let's go to DHL. What could DHL do in an earthquake response? Well, DHL are some of the world's finest logisticians. And what you find in a natural disaster all the time is airports and ports clog up. They become completely unoperationable because an enormous amount of stuff comes. And DHL now have an emergency response team that goes to new natural disasters and they work into the Islamabad airport and said, right, we'll run it now. And basically it never blocked. The only natural disaster response I've ever been to where the major port didn't block because DHL ran it. So they provided a good role like that. But the third example I will give is in Philippines. And we've seen the Philippines in the news at the moment because of the typhoons there. Philippines is the world's most naturally disaster prone country in the world. 22 typhoons, a couple of earthquakes and a volcano every year. What that means is you know with certainty there's going to be a calamity every year. You don't know exactly where it is and how big it'll be, but you know with certainty there'll be a calamity. And it's in the private sector's interest to restart local economy as fast as they can because well, they're selling products. So what they've done in the Philippines is create a thing called the Private Sector Disaster Management Network. And they are faster at responding to typhoons, earthquakes and volcanoes than the government or the NGO movement because they are motivated to get the economy re-going. You can only do that in an area where you have so much certainty. You can't do it in a country like Australia which has a low population density and there'll be a calamity somewhere in the year but it could be in the middle of nowhere which doesn't count. So there isn't an economic case for it but in the Philippines there is. So there is an interesting role to start saying what is the economic case to motivate the private sector to get more actively involved than there have been. It comes back to your measurement point really. And then the sort of work that Erica is doing is part of what you've got to do is convince the NGOs and the general community that there's a role for the private sector but part of the role is to convince the private sector that there is a role and show the private sector that there is a good measurable framework about why they should do it. The truth behind the BHP anti-malaria example is they stumbled upon it. Now they plan for it. When they went and measured and saw the impact they're now going, ooh, can we replicate similar types of programs? And the challenge for them is what is the objective and the measurability in the different areas in which they're operating? That's a long-winded way of answering your question, Dan. And the second question just quickly, how do you get the donor agencies more involved in getting the private sector? I think both the UK and the former AusAid in their aid effectiveness reviews through Difford and the Australian government identified better partnerships with the private sector as a key element. And I think what we need to do is better engage the general community to hold government spending more accountable to say really where it can be effective is setting the micro and macroeconomic variables and accountability frameworks and the regulatory framework to be right to allow an investment climate. Rwanda is a very, very good example of this going from the biggest basket case in the world, 1994, immediately after a million people were killed in the genocide to where Rwanda is today. It will be the first fully wired micro, sorry, optic fiber country in Africa. It's the highest ranked country on the transparency international indexes in sub-Saharan Africa. And they've done all of this in only a decade and a half because they've created an investment climate that has Paul Kagami called the CEO's friend. So there's a lot of analysis that needs to be done to turn around and say, hang on, why did that work? And if you're able to replicate that in other economies, how do you get ODA official development assistance to do just that thing that needs to get done to create that environment where the private sector are prepared to go in and invest? We have time for one more very short question. In the back, please. Hi, I'm Tony Carroll. I'm in a senior associate here in the Africa program. And you talk a little bit about remittances. And I guess the promise of remittances and the reality of remittances, going to other things than buying auntie new curtains or sending your nephew to school is to me to be yet to be realized. I know that it's a great opportunity, but I just don't know if it's been effectively utilized. I think, for example, Ethiopia, Somalia, countries where you have large diaspora communities outside wanting to get back in, but I'm wondering, have you seen any evidence where there's been effective sort of pooling of this money to for sort of investment or maybe bonding for common infrastructure or health projects or something of that nature? Yes, I have five seats to your left. And you should have a chat with Eric later. I first met Eric Gishard in 2010 or 12, was it Eric? At the Commonwealth Business Council meeting in Perth, just before the Commonwealth Heads of Government meeting, I chaired a panel on business and society and Eric was one of the presenters. And when he explained as part of the panel, his model on what he was trying to do with home strings, I was like, ooh, that's the missing link. That's the mechanism to tap into that 30%. Have we got success yet? No. And with all due respect, Eric, I think you'll agree that you're scratching the surface of the 30% that's out there. You know, you'll measure the amount, if I get it right and correct me if I'm wrong, amounts under management at the moment in the millions, whereas the amount that's available is in the trillions. And what Eric is doing is a really interesting experiment. And we've got to see whether it works or whether it doesn't because it's a huge flow of capital, which can be so better used. And I would draw a distinction between anti-flow curtains and sending your nephew to school. Sending your nephew to school is good productive investment in a community, anti-flow curtains isn't. And how do we differentiate between those two? So I think the work that Eric's doing, and then to come back to your question, how we hold Eric accountable in the future, either as observers or investors, will help answer your question into the future. And to go back to what Eric is saying, Eric is a good example of Eric's proposal that it is all a work in progress right now. We have time for just 30 seconds of any final thoughts that you'd like to share. Ambassador Beasley. Look, thanks for having us here. And it's terrific to see Andrew making this presentation. The next half of his life will be answering the questions that people have asked him and that people have asked Erica. I'm absolutely convinced of that. And so the life fully completed will be a life in which we'll then have absolutely the way ahead, as far as the private sector is concerned with A. The only thing I don't understand is why he wasn't elected. Because if I had been there, I would have rallied for him myself. So I don't understand. We'll do that when I'm at the end. You have a great little lead up. Any kind of fraud. I beg to differ on that last one, too. Great. Well, Ambassador Beasley, Erica Karp, Andrew McLeod. Thank you all so much for being here today. We have, as I said at the beginning, we're selling these books for $20 each cash since we don't have a credit card reader at the moment. Andrew, we're happy to sign it for you. We have a bit of time if people would like to mingle. Please stay in touch. I am Robert Lamb, RDLAMB at CSIS.org. Happy to follow up with any questions, either for me or any of our panelists. And look forward to seeing you around as we continue this work. Thanks.