Posts

Posted on

The Stockholm consensus on EU enlargement

A disclosure at the very outset: since 2000 Swedish governments have been among ESI’s most faithful supporters.

This is hardly a coincidence. On every foreign policy issue important to us Sweden is a strong advocate within the EU, from support for EU enlargement to the Balkans and Turkey to a European perspective for countries in the Eastern neighbourhood.  Being one of the wealthiest member states, having a good record of implementing European legislation, and not being suspected of having a secret agenda of undermining the European project, adds to its credibility.

What would it take for EU-ropeans, old and new, social-democrat, liberal and conservative, to embrace the Swedish outlook on Europe’s future? To share the vision one finds in the speeches of Sweden’s current foreign minister, Carl Bildt, for instance in his presentation delivered in 2007 in Bruges at the College of Europe:

“In Maastricht in 1991, the then European Community decided to transform itself into a more ambitious European Union, and soon this Union was prepared to open up not only to old former ‘neutrals’ like Austria, Finland and Sweden but also – and far more important – to all the countries of Central Europe, the Baltic region and down towards the Black Sea.

There is no doubt that it was the magnetism of the Union and the model it provided that made the transformation we have since seen in all of these countries possible. When – at some time in the future – the history of the Union is written, this might well be seen as truly its finest hour.

Today, we see 10 nations with some 100 million people from the Gulf of Finland in the north down towards the Bosporus in the south creating a new belt of lasting peace, stable democracies and bubbling prosperity in an area that history had otherwise reserved for instability, conflicts and great power rivalry.

Our Union today is a union of approximately 500 million people. It is the largest integrated economy in the world. It is by far the largest trading power of the planet – larger than the second and third put together. It is the biggest market for more than 130 nations around the world. It provides more than 60 per cent of all ODA to the developing countries. And – remarkable as it sounds – the value of the euros in circulation on global markets exceeds the value of dollars.

We certainly have our problems – but we should not overlook the weight and importance that we have in the global economy. Others do not.”

And then Bildt continues:

“What is needed is a profound strengthening of the soft power of Europe. We certainly need to strengthen the hard power as well – but at the end of the day peace is built by thoughts and by ballots more than by tanks and by bullets.

A critical part of the soft power of Europe lies in the continued process of enlargement – a Europe that remains open to those in our part of the world who wish to share their sovereignty with us, accept the rule of law and commit themselves to the building of open, secular and free societies.

There are those who want to slow down or perhaps even stop the process altogether. We have heard talk of the need to define the borders of Europe. And to draw these borders as close to the present borders of the European Union as possible. But drawing big lines on big maps of eastern Europe risks being a dangerous exercise for us all.

Because it means defining firmly not only for whom the doors will remain open, but also slamming the doors in the face of some for whom the magnetism of Europe remains a major driving force for profound political and economic reforms. It means telling them to go elsewhere. And that means doing things differently also in terms of the evolution of their societies. If we put out the light of European integration in the east or southeast of Europe – however faint or distant that light might be – we risk seeing the forces of atavistic nationalism or submission to other masters taking over. And if that happens, no lines on maps will be able to protect us from the consequences.”

At a recent ECFR meeting in Stockholm Carl Bildt reiterated these positions, striking a positive tone that stood in marked contrast to the pessimism about Europe’s future I noticed among many of the other ECFR members.

Strikingly, in Sweden support for enlargement is not controversial. Swedes of all political families believe that European values can be shared by Turks and Moldavians, Ukrainians and Georgians, to the benefit of all of Europe. As Goran Lennmarker, chairman of the Committee on Foreign Affairs of the Riskdag (parliament), told me just this week, the Swedish consensus today is that when any European country meets the conditions for accession, it has a right to be accepted as a member.

Public opinion is also supportive and so far the Swedish political elite have decided not to strike a populist tune on enlargement. 63 percent of Swedes argue that enlargement has strengthened the EU: this is the highest support among the 15 ‘old’ member states, where an outright majority for this view exists only in Spain (59 percent), Denmark (53 percent) and Greece (53 percent). A clear majority of Swedes is in favour of the integration of each of the Western Balkan states (see below the Spring 2008 Eurobarometer results).

SWEDISH ATTITUDES TO FURTHER ENLARGEMENT (Eurobarometer):

Spring 2008

Alb

BiH

Cro

Kos

Mac

Mon

Ser

Tur

For

58

66

71

61

66

66

61

46

Against

32

25

20

29

24

24

30

45

Undecided

10

9

9

10

10

10

9

9

Some years ago, the Swedish parliament passed a resolution offering Moldova, Ukraine and Belarus a European perspective (provided, of course, that they meet the Copenhagen criteria).

All of this raises interesting questions: why is a position that seems mere common sense in Stockholm so controversial in Paris and Berlin? Namely, that previous enlargements have made the EU stronger, and that future enlargements – as long as they are carried out cautiously – will do so as well?

Of course, some might say, Sweden is doing particularly well.  This is true. Until the current economic crisis unemployment was low (it is now rising fast, however, to almost 8 percent in the first quarter of 2009). The country ranks among the 10 richest countries in the world in terms of per capita GDP. Combining GDP per capita with indicators for eduction, literacy and life expectancy, Sweden came 7th worldwide in the latest Human Development Index published in December 2008. Sweden’s economy is highly competitive: in international surveys of competitiveness, Sweden excels, coming 4th in the World Economic Forum competitiveness ranking 2008/2009, just behind the US, Switzerland and Denmark.

Perhaps one reason for the strong consensus in favour of EU enlargement is a general confidence in the Swedish model of balancing freedom and security?  Perhaps Swedes are more prepared to take risks, since failure is not so disastrous, for individuals and for groups in society?  According to this logic it becomes easier to embrace EU enlargement against the background of a public commitment to social welfare. This promises that within society burdens are shared, so the benefits of enlargement do not accrue only to a few social groups.  A domestic welfare bargain appears to underpin support for an outward looking EU: relatively low levels of income inequality, and comparatively high per capita income taxes (in 2006 Swedish wage taxes were the second highest in the world, behind Denmark: see here).

Confidence in the future is also expressed in one of the most striking recent policy innovations: a reform of the rules for labour migration, adopted by parliament in December 2008. As a result of this reform, a Swedish employer is now the one to decide whether a given non-EU foreign worker is needed for hire (before these reforms the Swedish Public Employment Service decided this; for more details go to the website of the Swedish Migration Board).  This is implemented in a country in which 12 percent of residents are born abroad.

How about gender policies? It is certainly interesting that the country with the strongest commitment to European soft power is also the one with the largest number of women in positions of political authority: in the most recent survey by the IPU on women in national parliaments, Sweden comes out second in the world, just edged out by Rwanda.  Or is having low rates of corruption a key to a shared belief in soft power in foreign policy? In the 2008 Transparency International Corruption Perception Index Sweden comes 2nd in the world, only beaten by Denmark.

Transparency in policy making might also help support a pragmatic EU policy.  Sweden is famously transparent in its public administration, making it perhaps harder for theories of elite conspiracies (“enlargement is a capitalist plot”) to gain ground.  Sweden’s freedom of information policies ensure that all external communications with ministers and state secretaries are made public. In principle all items of mail to the government and government offices are public documents, something that has led to clashes between Sweden and the rest of the EU (see here for one example).

Are people who are satisfied with their lives more likely to be open to others? Swedes score well in international happiness indicators: in one table based on the 2005 World Values Survey Sweden also comes in 2nd place. (Behind Iceland, which was probably before its economy crashed! Let me admit, though, that I am not all confident about international “happiness rankings”, with Bangladesh coming out on top in one global happiness survey, and Nigeria in first place in another).

And then there is the structure of the Swedish economy: its openness to the world economy, the large number of Swedish multinationals, traditional support for free trade policies. Sweden’s relatively small population (9 million) lives in Europe’s fourth largest country in terms of land mass; its economy has historically been dependent on export: first of its raw materials, then its industrial goods and finally its ideas, to world markets.

But neither wealth nor exposure to international trade alone explain the strong commitment to globalisation and EU enlargement: otherwise Switzerland, Austria or the Netherlands would have adopted foreign policies similar to Sweden (the contrast with Austria attitudes, when it comes to Turkish accession, is particularly dramatic).

What then are the intellectual and emotional roots of the Swedish approach to foreign policy? And what would a more Swedish EU foreign policy look like?

To answer these questions, I suggest to turning away for a moment from international league tables; and to pick up a very different set of books and travel to a special region south of Stockholm to understand the paradox of the Stockholm consensus on enlargement and the Swedish approach to politics.  But more on this later.

Recommended, if you want to know more about Sweden: Previous blog entry: Silences and the new Sweden. For Jon Stewart’s take on the Swedish model, please go here. It is hilarious and, as always with Stewart, enlightening. Of course, the country The Daily Show presents is too good to be true … a place without conflict, full of attractive and reasonable people …

To counterbalance (somewhat) this approach let me note that there is of course no shortage of critical Swedes who argue that, for all of its comparative successes, Sweden constantly needs further reforms to remain competitive. Some of these critics can be found in Timbro, a free-market think-tank, which has challenged what it perceived as “Suedo-sclerosis” since its foundation in 1978. There you also find an interesting report by economist Mauricio Rojas, Sweden after the Swedish Model – from Tutorial State to Enabling State, which tells “the story of the rise and fall of the old Swedish model” and the transition to what Rojas calls the current Swedish “enabling state”.

In Stockholm this week I also had a long conversation with one of the most articulate and influential representatives of this view, Peter Egardt – Carl Bildt’s former state secretary (in the early 1990s) and now president and CEO of the Stockholm Chamber of Commerce, member of the national bank, and long-time board member of Timbro (1995-2005). As Egardt put it in an article on how to attract the “creative class” to Swedish cities:

“Abroad, many believe Sweden to be the very showcase for social democratic welfare states. However, ambitious reforms implemented during the past few decades have transformed Sweden into a competitive economy with an increasing degree of economic freedom and strong growth. In the wake of this development, culture, fine food and the arts have all blossomed in Swedish cities. Tourists, as well as businesses, are attracted not least to the capital city of Stockholm. The strategy underlying this development has been based on a sound business-and-growth-friendly policy orientation, not a Berlin style emphasis on public subsidies of culture over families and businesses. Cultural development has occurred as the result of a growing economy, not the opposite.”

For another outsider’s view how in Sweden “high per capita income and open markets go hand in hand with social cohesion” read the latest OECD Report (2008). There is also a lot of information and background reading on Sweden on the website of the Swedish institute: www.si.se.

Finally, let me note that Mark Leonard, the current director of ECFR, first used the concept of a “Stockholm consensus” in his book “Why Europe will run the 21st Century”:

“The Stockholm consensus amounts to nothing less than a new social contract in which a strong and flexible state underpins an innovative, open, knowledge economy. This contract means that the state provides the resources for educating its citizens, treating their illnesses, providing childcare so they can work, and integration lessons for newcomers. In exchange, citizens take training, are more flexible, and newcomers integrate themselves.”

Posted on

Silences and the new Sweden

Amberin, a Turkish journalist, noted how quiet it was as we walked through the centre of Stockholm. We had participated in a seminar organised by ESI at the Swedish foreign ministry on EU-Turkish relations, in anticipation of the Swedish EU presidency starting in a few weeks.  It was early evening and Amberin observed that we could hear our footsteps. This, for anybody coming from Istanbul, seemed an unusual experience to have in the heart of a European capital.  We were only a few steps away from busy Birger Jarlsgatan with its buzzing cafes and bars.   

“Lilla Edet was so quiet a town”.  This is the opening sentence of Andrew Brown’s book “Fishing in Utopia – Sweden and the Future that Disappeared”.  I began to read the book the next day, as always looking for insights into this most fascinating of European democracies.  Brown’s rhapsodic mediation, recommended by a friend, is above all about the author’s life: a book about unfulfilled dreams, silences and fishing.  Its outlook is summed up in Brown’s epiphany, elegant, poignant and honest like the rest of his text, which also starts with his meditation on silence inspired by Sweden’s north:

“Huge silence, solitude, and the smell of trees – the very things that had made Lilla Edet torture me when I first lived there, were now, I understood, necessary elements in my life. … Soon the daughter whom I carried on my shoulders round a lake one perfect sunlit day would be grown up.  Soon after that, in the way of middle-aged journalists, I would be sacked from something for the very last time. I understood my own life suddenly as that of a hooked fish, pulling with all my strength against a painful and bewildering destiny.”

 

Spring midnight in Sweden

Most of the destiny the author discloses unfolds in Sweden.  Brown moved here in the 1970s for a marriage (which later ended in divorce).  He first lived in Lilla Edet, a town in the South of the country where the creaking of the wheels of Brown’s bike was “always the loudest sound”. He then moved to an estate in Nodinge, a suburb of Goteborg, in 1977:

“the first thing that struck me was the loneliness.  The roads within the estate were all closed to traffic but pedestrians always seemed scarce.  The houses might be wonderfully warm, and the spacious kitchens of even the most basic flats were equipped with fridges, freezers, and separate coolers, which worked like larders, to keep food warmer than in a fridge, but much cooler than in a centrally heated room. But the public places always felt as cold as November … I have never lived in, nor could imagine, a place where people talked less to each other … faced with all this sterile silence my hair grew ragged and my beard grew melancholy.” 

Early on in the book Brown reminds readers of the very recent history of poverty in Sweden, describing the life of Anna, Brown’s Swedish mother-in-law: 

“She was born in the middle of the 1930s depression, when very little had changed for poor farmers in centuries. Her parents and all their children lived in one room and a kitchen, on the ground floor of her grandfather’s house. They slept on straw mattresses, which they filled themselves … her mother had given birth to fourteen children in twenty years … “

Anna had left school at thirteen, as so many of her generation in Sweden had done:

“After school, Anna was sent out to a larger farm to work as a milkmaid. All the servants slept in the kitchen there, but when she was fifteen she was sent as a servant girl to a woman named Martha Jacobsson, who gave her a room of her own to sleep in.”

I later read a review which describes Fishing in Utopia as a “lament for a lost Eden“, the supposedly egalitarian, socialist and (comparatively) very rich Sweden of the 1970s, the era of Social Democratic leader Olaf Palme: an Eden later lost to modernizing forces. 

However, this is definitely not the message I took away from the book. It is in the present, not the past, tense that Brown makes Sweden seem most attractive.  It is when Brown writes about what he calls “Stockholm-Sweden” that he becomes most positive: describing a “genuinely sophisticated, cosmopolitan and almost weightless place”.   The Sweden of today that Brown describes is a place undergoing rapid change: open to migration, with more than 400,000 Muslims and Mohammed the most common new name for boys in Malmo. 

The modern Sweden that Brown evokes is a place where popular phone-in-programmes express both “polite and earnest eccentricity” and a sense of what Swedes “mean by democracy: not a voting system, but a recognition of common humanity.”  It is a place where alcohol is much easier to obtain than only a few decades ago, and where the system of state shops which sell it (the Systembolag) are today aimed at “selling not repelling”.  There is crime, and more than there was in the past, but it is still not “Armageddon”, with rates much lower than in England.  If Sweden is no longer “the promised land to which the world was tending in the Sixties” it is still, by almost any indicator, one of the most attractive and open societies in Europe today. 

Skyline of Stockholm

(Amberin also noted with pleasant surprise that when she stepped out of the Opera Cafe restaurant in the centre of Stockholm a Swede came up to her and asked her for directions in Swedish, obviously assuming that she was a local – her parents are from Bangladesh and Turkey.  This would not happen to her in every European country …)  

Neither Browns’ descriptions of Sweden in the 70s nor his observation of the problems which Sweden faces today suggest that the past is better than the present.  At one point Brown notes that  “everything about the old weighty grey concrete Sweden seems to have dissolved into the air”. At the end of the book Brown recalls the past, when he used to spend  “delightful hours lamenting the dreary stolidity of Sweden”, this while dining in a restaurant where potato cakes were “made as if woven out of straw, with sour cream and orange caviar” and where a person he met “had never once heared the word nykterhet, or temperance”.   

Brown underlines that “when foreigners write in praise of Swedish politics, it is from Stockholm that they get their information or their understanding, and this is always influenced by the very great confidence of the ruling class that still run the place.” 

Having met some representatives of this class during this trip – ministers, parliamentarians, businesspeople and civil servants – all explaining the broad consensus in Sweden in favour of a liberal migration policy, European enlargement, and striking the right balance between welfare and individual liberty, I found that this confidence might well be justified. 

But on this more later on this blog.

 

  

Posted on

Reckoning – ESI 2008 in numbers

Boris Marte, Chairman of Erste Foundation, one of ESI’s largest donors

This is a time of reckoning. As one year draws to a close and another one rears its head donors of think tanks want to know what has actually been achieved in the period that has passed. So the end of the year is always also a time for writing donor reports.

Perhaps such reports are read with more anxiety at a time like this. Wider developments remind people of the fragility of all institutions. A colleague recently told me about institutional troubles at two of Turkey’s best known think tanks, Asam in Ankara and Tesev in Istanbul. Indeed: if world companies such as Citibank, Fortis and Ford can get into real trouble, if even international foundations, art galleries and museums around the world are shaken to the core by the effects of a financial crisis, one is reminded of the fact that few human institutions are built for ever.

(In a previous era of innocence, say 6 months ago, I might have added as a bonmot that “all institutions are mortal except for the Catholic Church”, a seemingly eternal institutional survivor; but recently I read an article about growing problems of German bakeries that have specialised in producing altar bread. The Church will remain in business for a while, I am quite sure, but it is striking that even some of its suppliers are in trouble).

The economic crisis has even hit Rumeli Hisari already, my mahala on the European side of Istanbul. A few days ago I wrote that my favourite spot in 2008 was a certain cafe on the shores of the Bosporus. Then I noticed that since the beginning of this year my cafe has ceased to exist. Now its furniture and lots of personal memories have been packed away into lorries. This is not a crisis, of course, except for this Observer. It was not even a very old cafe. But it is hardly the only institution that will meet this fate in the coming months, so I see it as an omen.

On the other hand: the good news for ESI is that it remains very much alive. We are looking forward to celebrate our 10th anniversary as an institution in June 2009. And we have facts to prove our vitality to donors: here is the life of a European think tank, reduced to a few numbers:

  • ESI is bigger than ever. At the beginning of the new year, we have 25 researchers and supporting staff, most of them full time.
  • ESI is more spread out than ever. Our staff is dispersed across 10 countries in Europe, from London to Baku.
  • ESI is more international than ever. Our team holds the following passports: Albanian, American, Armenian, Australian, Austrian, Azeri, British, French, Georgian, German, Greek, Kosovar, Polish and Turkish.

2008 has been an exiting year: Gerald and Chris filming in Rome (April 2008)
ESI in Barcelona: three Balkan Deputy Prime Ministers (Macedonia, Serbia, Montenegro) and a film screening (September 2008)

Of course, none of these numbers are spectacular; and you certainly learn more about ESI by reading any one of the 61 reports or discussion papers on our website than by numbers like these. There are many other think tanks in Europe (and in the US) which are much bigger and much more visible in the public debate. But at least we can claim that, as ESI approaches its 10th anniversary, it is – cautiously – growing in its outreach. Under today’s conditions that is not little.

How about the output of this page, the Rumeli Observer?

In 2008 I posted 20 new articles, missing my ambitious target of one article a week on average by quite a margin.

On the other hand, I wrote no less than 31 articles which, for now, remain in the category “drafts”: in Paris, where I spent a month in the Marais in February (When Heads Role); in Sofia, where I went three times in 2008 working on a film (Are Bulgarians Happy?); in Athens, interviewing Greek intellectuals trying to find out how much Greece has changed in the past decade (The two faces of Greece); in Sweden, where I travelled for two weeks during the summer (A Swedish Saint); and most recently in Pristina, where I spent a week in December to see how things were going (Stuck).

I will try to edit and post these articles in the coming weeks.

I will also try to be more productive this year.

That is another New Year’s resolution. Hold me to it, before the next reckoning, which will certainly come … at the latest 12 months from now.

Posted on

Gas, Wall Street, Hang-overs

Welcome back to these pages in early 2009.

I hope you had as good a transition from 2008 as I had, here in Istanbul. The weather was quite mild, the waters of the Bosporus still deep blue and the New Year’s party I attended, in a 19th century building hosting American teachers from Robert College (Istanbul’s most famous and most attractive private school) was reminiscent of what I imagine parties on the US East Coast were like in the early 1950s.

Put on the music of the film Mona Lisa’s Smile and you understand the mood I am referring to. The 1950s were also, of course, a time of personal optimism (for most households in the West) against a background of geopolitical fears (the Soviet Union had acquired the nuclear bomb and war had erupted in Korea).

I hope that the many warnings about the unfolding world economic crisis did not depress you. My personal strategy against too much pessimism is to take a walk and then to read a book or two about recent European history. This puts most things in perspective. Donald Rayfield’s Stalin and his Hangmen, for example … but more on that later.

Moscow

On the other hand, there has been no shortage of bad economic news from around the world in recent days. Even Gazprom seems to be running out of money, as the NYT reports (“once the emblem of the pride and the menace of a resurgent Russia, Gazprom has become a symbol of the oil state’s rapid economic decline”)! The NYT quotes the strategist at a Russia-focused hedge fund, who says about Gazprom management that “they were as inebriated with their success as some of their investors were.” At the end the article notes that today a significant portion of the Russian corporate bailout fund is to be reserved for oil and natural gas companies. Quite a hang-over.

This is bad news for the Russian state and its oligarchs. It also turns some of my personal spending last year into a minor misallocation of resources. I had bought a whole stack of books about “resurgent Russia”, which I had not yet had any time to read. Starting one (Alexander Rahr’s Russland gibt Gas – Die Rueckkehr einer Weltmacht, 2008; Rahr has long been a leading advocate in Berlin of a strong German partnership with Russia) during these past days, I came across its bold thesis on page two:

“The West is afraid of the new Russian concentration of power, where money, resources and power are brought together. Yet anybody considering toppling this system will recognise: it is very stable. Energy prices will not decline in the coming years and the demand for Russian raw materials will rise. Its natural resources, linked to high energy prices, make Russia immune to economic crises.”

Oh well.

I put the book aside, to read some other time, perhaps. And I think back to the seminar I attended, at the invitation of Carl Bildt, on the island of Visby a few months ago. There, Boris Nemtsov and Mikhail Kasyanov had presented a rather different picture of Russia. They saw a country which had wasted the years of high oil prices; a political economy where both the state and public companies had underinvested; a situation where sources of previous high growth had been exhausted. They certainly did not see a stable system of power.

Nemtsov had published, in February 2008, a report on Putin’s Russia (The Bottom Line) on “the outcome of Vladimir Putin’s activities for the country – an outcome that is hidden from Russian eyes by a smokescreen of official propaganda.” Its conclusion was blunt: “The opportunities offered by the oil windfall have been missed. As under Brezhnev, super income from the export of oil and gas has to a large extent been frittered away and necessary reforms left undone.”

Visby

In Visby, Boris Nemtsov presented part two of his report. It was focused on Gazprom, “the Russian government’s wallet”. It makes fascinating reading as a story of mismanaging (enormous) resources. Here are some of the highlights:

  • 11 of the 18 members of Gazprom’s board are people who either worked with Putin in St. Petersburg or in the FSB in the 1990s; this, the report notes, is “not the typical way in which global energy companies are run … former small-time regional bureaucrats, port and building company managers, do not usually get given top management positions in major oil-and-gas corporations, especially in such numbers.”
  • The results of this management, from 2001 until today, “are pathetic”; it has “almost totally failed to make the corporation perform its main task – that of providing the Russian consumer with a reliable supply of gas.”
  • The paper gives many illustrations of this failure: gas extraction in 2007 fell back to nearly the 1999 level, while demand increased. The paper notes: “Bearing in mind that some of the old gas fields are drawing close to empty, gas extraction may actually go from not just stagnating to actually dropping like a stone.”
  • As a result of this Russia was forced in 2007 to get one third of its gas from non-Gazprom sources. This meant vastly increased imports of Central Asian gas (from just over 1 billion USD in 2005 to 11.7 billion USD in 2007).
  • This stagnation in domestic gas supplies is the result of systemic underinvestment in gas production. “Russia has proven gas deposits sufficient to last it 80 years at current extraction levels. However, many of these deposits are not being worked. A good proportion of these deposits are located in new areas that have not yet been fully explored, lack the necessary infrastructure, and present extreme difficulties.”
  • For all these reasons 2007 saw an increase in sales turnover (plus 8 percent) and a drop in profits (minus 11 percent), against a background of rising gas prices. The reason was rising costs: much more imports, rising debts, rising spending on wages for a growing staff.
  • The economic rationale for many of the current Russian gas pipeline projects is dubious (more in the paper); and
  • There has been tremendous asset stripping from Gazprom in recent years by people well-connected to Putin in recent years.

So far, so disturbing. And surprising, if one looks at the larger picture – and the current investor flight – for one moment.

How, I wondered, first reading this paper a few months ago, could all of this have been news to any insiders? What were all the investors, who had driven up Gazprom’s stock (and who are now fleeing it), thinking about all of these problems? Did energy (or Russia) experts not know these trends unfolding since 2001, when they predicted the rise of a new Russia, powered by the rise of an awesome Gazprom? Was understanding these things – and paying for the best possible research to do so – not a central concern of investors in particular?

This brings me to a second article. I also read it recently, and recommend it strongly. It is another story of massive overconfidence, bordering on stupidity, by a whole class of highly paid experts, massively misallocating resources. Only this story is set in the US and instead of Putin’s cronies from St. Petersburg the villains are investment bankers from Wall Street. Its author is Michael Lewis and it is called, simply, The End.

Lewis tells the story of Steve Eisman and his hedge fund FrontPoint. Eisman had come to a conclusion early on which is today all too obvious: that the subprime mortgage bond market was one huge bubble; and that, as a result, the investment banking world on Wall Street was dealing in illusions. FrontPoint invested the funds it managed based on this insight; when the crisis came, it emerged vindicated.

There is no need for me to sum up Lewis’ article here. If you have any interest in the current economic crisis unfolding around us, you will probably read it yourself. But the most interesting issue the article raises goes beyond any assessment of the financial sector. It is the same question that is raised by the sudden need for most experts to reassess their analyses of the true state of Gazprom-Russia: how could such a large community of experts working in a certain sector be so mistaken?

In one of the seminal paragraphs in his article, Lewis describes the reactions of Eisman and his team when the Wall Street crisis did erupt in earnest in September 2008:

“This is what they had been waiting for: total collapse. “The investment-banking industry is fucked,” Eisman had told me a few weeks earlier. “These guys are only beginning to understand how fucked they are. It’s like being a Scholastic, prior to Newton. Newton comes along, and one morning they wake up: ‘Holy Shit, I’m wrong!” Now Lehman Brothers had vanished, Merrill had surrendered, and Goldman Sachs and Morgan Stanley were just a week away from ceasing to be investment banks. The investment banks were not just fucked; they were extinct.”

London

I sent the article also to a close friend, who first suffered through a PhD in economics and currently works in the financial sector in the City of London. He wrote back:

“I buy the basic point that the main problem for investment banking as for the scholastics is that – despite what would seem to be incredibly powerful incentives for the opposite to be the case – the culture of skepticism and genuine research in order to discover and continually reassess what is actually the case is remarkably underdeveloped.”

“Is not the City of London, or Wall Street, amongst other things a massive machine for generating research and knowledge on even the most far-flung parts of the world and the most esoteric economic activities? Well, yes – but also no. The more I think about it, the more I get the feeing that they are research machines in the way that scholastic universities must have been research machines: lots of resources and activities, but somehow missing the crucial ingredients, the crucial elements of the underlying philosophy, to actually make any use of it all – and to prevent egregious, and eventually ridiculous (or, as in the present case, tragic) errors.”

Here is the meta-question which all these myriad crises raise, and which is of more than passing interest to anybody in the business of analysis and research. It is a question about research, mental models, and the absence of critical questions.

It is daunting, even scary, to realise how not just a few experts, but whole communities of practitioners, with a huge supposed material interest to get things right, could get them so wrong. Of course, there were material incentives involved, and much of the story of understanding this failure must now focus on these: how it actually paid off to be wrong.

On the other hand, there was also a remarkable failure of understanding. Thus, all these stories amount to a very strong case for honest, empirical research. Thorough research, not simply opinions or commentary; research that at times might even be surprised by its own findings.

In January 2009 it is not only Gazprom managers and Russia experts but the best paid people in the most advanced economies that wake up with a terrible headache. And with the nagging question, which Eisman had asked himself before the crash: “The thing we could not figure out is: It’s so obvious. Why has not everyone else figured out that the machine is done?”

Now here is a good New Year’s resolution for anybody in the think tank business today: figuring out now what will be obvious three years later. And having the courage to state it, when nobody else does.

PS: Here are a few recent editorials I recommend, in case you missed them, while enjoying the sun on some Alpine slope: Frank Rich on wall street; Paul Krugman on The Madoff Economy; and Tom Friedman on America’s Generation X.

Posted on

High Fidelity and my end of year list of favourites

My favourite view in 2008 is from my desk: the Bosporus, early December morning 2008

In High Fidelity, Nick Hornby’s novel about “young middle-class people whose lives are beginning to disappoint them, making too much noise in restaurants and clubs and wine bars”, the main hero has many problems, including often losing the plot, “the subplot, the script, the soundtrack, the intermission, his popcorn and the exit sign.” He also regularly misses the plot when it comes to matters of the heart.

At the same time Rob has a strange and entertaining addiction: making lists of his personal best ofs. Thus the book starts with a list of his “desert-island, all-time, top five most memorable split-ups.” Many other lists follow: the top five floor fillers at Groucho dance Club. The four reasons his love, Laura, left him. Reasons to hate Sundays. His five dream jobs. And at the end the top five great records of all time.

I read High Fidelity while travelling to New York this autumn. This comes in handy now as a source of inspiration. Of course, this is a serious site, dealing with serious issues, but now that most readers will have gone on vacation why not conclude the year with a list of Rumeli Observer’s (RO) personal list of “best of”?

So here they are: Rumeli Observer’s Top List 2008

  • favourite book in 2008: Easy to guess: Malcolm Gladwell’s Outliers – The Secret of Success. It has been praised on these pages before. Since then, those friends of mine who have actually bought and read it, have been as impressed as I have been. Thus I need not hesitate to recommend it here again.
  • favourite history book in 2008: Not much of a surprise either: rereading it while preparing to make a documentary about this very city, Mark Mazower’s Salonica is the best introduction to one of the most fascinating urban experiences in the world.
  • favourite place in 2008: This is the place where we were most likely to have met in the past 12 months: the Gloria Jeans Cafe on the Bosporus in Rumeli Hisari. And where we are most likely to meet in 2009.
  • favorite travel book in 2008: The book is older, but it was this year that I fell for its charm: Georgia – In the mountains of Poetry. Even if you do not intend to travel to Tbilisi, read Peter Nasmyth’s fascinating book. After you read it, you will want to go there. And once you are in Tbilisi, you can get more good books in Prospero’s, the bookshop that Peter Nasmyth helped set up.
  • other favourite travel book in 2008: One of the most unusual travel books of the year, given its subject, must be Verena Knaus’s Kosovo – The Bradt Guide. It is not competing here, as I am somewhat biased (Verena is my sister), but it is selling very well and so I feel encouraged to recommend it anyways.
  • favourite autobiography: Fethiye Cetin’s My grandmother – A memoir. A must for anybody interested in Turkey, Armenia and in the necessity of breaking taboos in this part of the world.
  • other favourite books in 2008 on different regions: on the Caucasus Charles King’s The Ghost of Freedom; on France David Andress’ The terror – Civil war in the French Revolution; on the Middle East Mai Ghoussoub’s Leaving Beirut.
  • favourite new poem in 2008: Ibn Hazm’s The Neck-ring of the Dove, quoted in The Ornament of the World.
  • first new book to read next year, as there was never enough time in 2008: Greg Behrman’s The most noble adventure – The Marshall Plan and the Time when America Helped Save Europe.
  • favourite new concept in 2008: “Hypergraphia” – the medical term for an overpowering desire to write. Well …
  • favourite speech in 2008: This is an easy choice: Barack Obama’s speech on race relations.
  • favourite walk in 2008: Along the shores of the Bosporus in summer, from Rumeli Hisari to Besiktas.
  • favorite movie in 2008: Fatih Akin’s The edge of heaven. Where Turkey and Germany become the magic country Turmany.
  • favourite comedy in 2008: Woody Allen’s Vicky, Christina, Barcelona. The city, the characters, the music …
  • favourite concert in 2008: R.E.M. playing along the shores of the Bosphorus and Michael Stipe calling on the audience to cheer for Obama’s presidential campaign. And then they play Man on the Moon.
  • favourite new CD in 2008: Carla Bruni’s Comme si de rein n’etait. I cannot help it.
  • biggest (negative) political surprise in 2008: the August war in Georgia; the good results of extreme right wing parties in the Austrian national elections.
  • biggest (positive) political surprise in 2008: the defeat of the Radicals in Serbia’s national elections; Barack Obama

Ok, this is getting too serious for an end of year list. So let me conclude my list with my favourite saying of the year: “A creative writer is one for whom writing is a problem.” And please let me know what you would recommend to read and listen to in 2009!

Your Rumeli Observer, taking a break in the ESI kitchen in Berlin Kreuzberg

At the end of it all, let me thank Nick Hornby’s Rob for this inspiration. Let me thank all of you – as well as all my colleagues at ESI – for your patience! See you all on these pages next year! Or on the shores of the Bosphorus. Or elsewhere in cyberspace in 2009.

The same Bosporus view at sunset (December 2008)
Posted on

Abolish the summer vacation: a realistic Big Goal for Kosovo

They are waiting for a BHAG: children in Kosovo

Governments of small states who want to send a positive message to the outside world need a BHAG: a Big, Hairy, Audacious Goal.  This is not a matter of public relations.  It is about actually doing something new, difficult and innovative, something that both transforms society and carries a larger message for the world about the will of this society to change.

The small country of Estonia (1.3 million people) had a BHAG: turning itself into an internet-savy, forward looking and information-technology-friendly society.  Thus Estonia created a national infrastructure of wireless internet access, free of charge, covering the whole country.  It set out to create early on one of the most advanced forms of e-government.  And while doing so it did not forget to tell the rest of the world about its experience.etf

A few weeks ago in November I went to Tallinn for a meeting of the European Council on Foreign Relations.  Many of the ECFR board members, including, to my surprise, some of the Swedes in our group, had never been to Tallinn before.  At the beginning of the meeting, which took place in the Museum of Estonian Architecture, an Estonian civil society representative gave a 10-minute video-assisted presentation about his country. It was short but effective and even a few weeks later it is easy for me to recall its main messages: that there was an Estonian “singing revolution” (in 1991), which led to independence; that Estonian governments pursued a vision of transparent e-government, including a paper-free government meeting room that has turned into an attraction for visiting delegations; and that Estonia set out to provide free wireless internet access throughout the country as part of a national vision of development. Of course, other Estonian Big Ideas, such as the implementation of its flat tax, have also contributed to its image of being not only open to but a leader in innovation.  This is not a bad record for such a small country on the edge of the EU.

A BHAG transforms or (re)defines a country’s image when it changes local realities in a way that even a critical visitor – the foreign correspondent of a leading international paper, for instance – will accept as impressive. The key is that the policy idea is both fresh and sound and can actually be implemented.  It precedes public relations.  It is about creating the good story that can later be told.

Which brings me to a Big idea which I believe Europe’s youngest and poorest society, Kosovo, might do well to consider pursuing.  It is inspired by Malcolm Gladwell’s last book (Outliers), as well as by ideas I had preparing recent presentations on Kosovo and the state of the Balkans in Vienna, in Valencia (for NATO parliamentarians) and at Harvard.  For these I had to reread ESI reports and new material on the state of Kosovo. It was not encouraging reading, to put it mildly.

So here is the basic idea: Kosovo urgently needs to convince first its own citizens and then the world that it is serious about addressing one of its most crippling structural problems, a wide education achievement gap with the rest of Europe.  It needs to do so urgently; with the limited resources it has at hand, it also needs to be innovative.

The basic problem is clear: today Kosovars are less well educated and less prepared to compete in the common European market than almost any other society in Europe.  School enrolment rates  (including at secondary level) are low and have not improved in the past four years. Two out of three young people leave the education system without any qualifications.  More than 10 percent drop out of compulsory education.  The vocational training system is in dire straits. And there is a lack of money, even if spending on education has increased as a percentage of GDP: it does not help that Kosovo’s GDP is in fact one of the lowest in Europe.

Kosovo policy makers thus need to find a way – despite limited budgetary resources – to make rapid and serious progress in addressing education problems while convincing the rest of the world that in this field the situation in Kosovo is not only not hopeless but that the rest of the region might even learn something from Kosovo.

Learning from Kosovo in the field of education policy?

You can certainly see why this would be both a surprising and fascinating topic for articles in the European press – and conversations in European capitals – in a few years time.  It sounds counter-intuitive enough to be interesting.  But is it possible?

On the other hand: who would have thought that one could learn so much from Estonia even one decade ago?

In fact, being forced to think outside the box can sometimes help identify good ideas. The proposal is simple: Kosovo should become the first country in Europe to abolish the long summer school vacation. Kosovo children should be able to spend more hours per day and more days per year in primary school than children anywhere else in the region. This additional time in school could be used to give Kosovo pupils one of the most solid basic educations in the region.

This proposal would address three major problems at once:

1. There is in fact a desperate shortage of space in Kosovo schools. As a number of recent reports noted, school infrastructure is stretched “almost to breaking point” (ETF country analysis, May 2008). The majority of schools in Kosovo operate in two shifts, and a significant minority even in three. Given the growth of Kosovo’s  young population, demand for space will increase further.

So there is an urgent need to use space more efficiently. It seems a waste of resources to leave schools empty during the summer. It is also silly, given the need to import expensive energy, not to use the summer months for teaching as well.

2. At the same time, first shortening and then abolishing the long summer vacation could help young Kosovars catch up and – in some fields – overtake other European students, particularly when it comes to basic skills taught at primary school level.

One way to do this with limited resources would be to increase the number of hours and days students spend in primary and lower secondary school classes. Currently, due to space constraints, Kosovars probably spend less hours in school than pupils in most other parts of Europe. The goal should be to reverse this and to use any additional hours to increase teaching foreign languages and basic reading, writing and mathematic skills at an earlier age than in other countries in the region.

As Malcolm Gladwell points out in Outliers, citing the example of a  public school in NY, the number of hours spent in school does matter a lot, particularly for those from a disadvantaged background. The tradition of a long summer vacation – “considered a permanent and inviolate feature of school life, like high school football or the senior prom” – is above all a problem for children from poorer families: it is vacation time that explains a large part of the “achievement gap” between richer and poorer children in different tests done in the US.  This can be measured by comparing students’ scores on tests at the beginning and at the end of long summer vacations:

“the wealthiest kids come back in September and their reading scores have jumped more than 15 points.  The poorest kids come back from the holidays and their reading scores have dropped almost 4 points. Poor kids may out-learn rich kids during the school year. But during the summer, they fall far behind.”

It is not hard to think of Kosovo pupils as the “poor kids” in comparison to any European country. The average Kosovo household probably owns fewer books than the average Slovenian or Irish household. Vacation time is probably used less often for further education in (still largely rural) Kosovo than in most other European countries. There are also fewer private schools and other education opportunities for children during the summer.

Thus a long summer vacation is a luxury Kosovo should reconsider if it wants to become a competitive economy.  And there are examples for this: while the average school year  in the US is 180 days long, it is some 190 days, in Finland, and 243 days lin Japan (German Länder also have shorter summer vacations; see the article by Michael Barrett below under recommended reading.)

3. Finally, there is a need for a clear and compelling vision to mobilise Kosovo society around the need to dramatically raise educational standards. Currently the realistic goal of Kosovo education policy is to avoid falling further behind. There is already now a huge achievement gap, – and it must not grow even larger.

Not falling behind is not the same as catching up. What Kosovo needs is not merely to prevent the gap from growing: it needs to close it! And the best way to do so is to invest significantly in providing the best possible primary education to children at a very young age.

This would require major efforts: more teachers, adjustments in teaching standards, further revisions of curricula (to focus more time on core skills at an earlier age).  There will be many who would argue that for this or that reason it would be impossible to do.

But if more teachers are required, why should more teachers not be trained? This certainly seems one of the most obvious investments to make in Kosovo’s future. Given extremely low employment rates – especially for women – there is no shortage of potential primary school teachers. Still, government incentives are necessary.

A radical and innovative step such as this would also send a clear signal that Kosovo society is serious about catching up. It is a radical and realistic idea. And if it works, it is only a question of time until some neighbours will come and see whether there is something that can be learned here.

Thinking about a prosperous future for Kosovo requires thinking outside the box.  Current trends will not lead to closing the gap. Kosovo is not in short supply of strategic documents on education: there are strategies for developing higher education, for developing pre-university education, vocational education strategies, a national strategy for entrepreneurship education and training, an adult education strategy, and many more.  However, as one very recent assessment noted:

“None of the planned activities in the operational plans accompanying the strategies have been implemented as foreseen.  This is due not only to unrealistic planning but also to low programming and implementation capacities at all levels of the sector, central and regional.” (Lida Kita, European Training Foundation working paper, May 2008)

Further strategies are being prepared, and a new study is planned to “enable Kosovo authorities to depart from fragmented strategic documents” and move towards a “strategic framework for lifelong learning.” There is a very active and committed young Minister of Education, Enver Hoxhaj. There are some committed donors.  So not all is as bleak as the status quo and current trends would suggest. But Kosovo still urgently needs a Big Idea, and becoming an innovator in the field of education policy seems a very good way to start. Questioning the need for a long summer vacation, and defining the national target as a primary education system as good as anywhere else in Europe, seems a good point to start.

PS: Next week I will travel to Kosovo to give a presentation, show a film, and hopefully to test this idea with policy makers and friends, including the current Minister of Education. If there is any interest to explore this further, there might be some ESI discussion paper on this in the coming year.

Further reading:

Posted on

The message from Prague is loud and clear

Our meetings, organised by ESI and the Prague Security Studies Institute, took place in the first week of December at the marvelous Czernin Palace of the Czech Foreign Ministry. Czech policy makers, journalists and experts spoke to a distinguished group of policy and opinion makers from the Western Balkans about the Czech debate on enlargement.

Only a few weeks are left until the end of this year, when the Czech Republic will assume the EU presidency for six months.

The message from senior policy makers in Prague concernin the Balkans was loud and clear:

“We are expecting your countries’ applications for membership during our presidency.  We have been preparing to receive your applications for membership.  We have coordinated with the government of Sweden (the second EU presidency in 2009) in order to be able to promote the cause of the Western Balkans.  We are ready.”

Despite this clear message I left Prague feeling nervous. Listening to key foreign policy makers here it seemed as if, for practical reasons, the big window of opportunity in 2009 is closing for most of the Western Balkan states even before the year has begun.  Countries in the region only have a few weeks left to get their act together if they want to keep alive their hope to graduate to candidate status in 2009.

Here are some of the basic facts leading to this sobering conclusion:

1. Applications

In order to become a candidate for EU membership a country must first submit a letter to the EU presidency that it actually wants to become a member. This is what Turkey did in 1987, Croatia in 2003, and Macedonia in 2004. Before this happens, nothing else, beyond an association agreement is possible. To do this with any chance of success, a country must obviously be recognised by all EU members as a state: this excludes Kosovo for the foreseeable future.

The historical record is that some EU countries will always try to discourage applications until applicants have made clear their determination and have made their case proactively based on a strong national consensus (I have written about this in an earlier blog on the gatecrasher principle). Montenegro might soon offer a good example of how to combine  determination, focus and flexibility to arrive at a positive result – even when facing an initially sceptical (French) presidency.

2. A decision by the Council

Following the submission of a formal application by a given county the European Council needs to agree to to ask the European Commission to prepare an opinion on it (an avis).

Though it is always posssible for the EU council to refuse to do even this, in the case of the Western Balkan states such a step would send such a strongly negative signal that even the most sceptical EU members appear unwilling to do this. (Serbia’s case is different: without progress in bringing Ratko Mladic to The Hague the Dutch government would almost certainly block any further steps for now).

However, the agenda in early 2009 will be  packed.  Unless an application comes soon enough some EU countries might be tempted to postpone dealing with it for a few months.

There are two European Council meetings under the Czech presidency (and two under the Swedish presidency): the first two in March and June, the last in December.

In order to get all 27 countries to agree to ask the Commission to prepare an opinion on an application, weeks of preparation and consensus building might be necessary. As one senior Czech official told me: “We are prepared for and we would welcome having four applications from the Western Balkans on our table during our presidency.”  But for a positive decision to be reached at the March Council an application would need to be submitted at least a few weeks beforehand, i.e. by January.  Montenegrins have been aware of this constraint for a while.

3. The Questionnaire and the Commission Opinion

Following a request by the Council the Commission sends the applicant country a questionnaire with thousands of questions to be answered.

Even if the Commission does not delay this step and even if a country works hard on the questionnaire the whole process (Council asks Commission for an opinion; Commission sensdsa out the questionnaire; applicant country X completes it; Commission drafts an opinion) is expected to take at least six months.

Thus, if the European Council decides in March to task the Commission to draft an opinion, a realistic best case scenario is that this would be done in time for the last Council summit under the Swedish presidency in December.  (An added complication are EU parliamentary elections and following this the formation of a new Commission in 2009).

The best case scenario already requires a lot of things to go well: if all countries of the Western Balkans submit their applications for membership within the first few weeks of 2009, and if the Czech presidency and other friendly member states convince fellow EU govenrments to task the Commission to study these applications; and if all the Balkan countries focus their energies on filling out the questionaires, and if they also succeed in addressing the major criticisms and concerns outlined already in the regular European Commission opinions; then the December 2009 European Council could grant all of them candidate status.  December 2009 would then mirror the Helsinki summit of 1999, a major breakthrough for enlargement at the time.

This would be a strong and welcome message to the region, and to the world, that things are advancing in the Balkans.  It would be all the more useful at a time of growing regional uncertainty, as to the impact of the world economic crisis on local economies and the deepening confusion over future EU policy in Kosovo. It would also send a strong signal in the wake of possible approval of the Lisbon Treaty by a second Irish referendum in 2009.  Finally, it would be a fitting conclusion to  the Swedish presidency, which has enlargement as one of its top priorities.

So far, so promising.

Speaking off the record, however, senior members of the Czech government and administration increasingly doubt that all of the countries of the region are likely to take the steps required to make this scenario even a theoretical possibility in 2009. As one stold us, “we are studying country by country to see where we can move things forward.”

What this incresingly means today is the following set of reduced ambitions:

  1. to complete negotiations with Croatia in 2009;
  2. to help “one country, perhaps two” obtain visa-free access for its citizens to the EU already in 2009: that country being Macedonia (the clear front-runner when it comes to fulfilling the conditions relating to visa free travel);
  3. to help Montenegro get a positive decision at the March EU summit so that the Commission may start working on an opinion following an early Montenegrin application.  Bosnia would be left behind, Albania’s next steps remain uncertain and Serbia is likely to loose more time as well.

Let me admit: I usually like to look at the bright side of things, to see opportunities even when they are small. There is still a small chance that the Western Balkans will finally wake up to the fact that 2009 is a real window of opportunity.

Perhaps a pending Montenegrin application would shake up confused and divided political establishments in Bosnia, Albania and Serbia and stir them into action?

This time around countries in the region cannot complain about the lack of positive and encouraging signals: the messages from Prague and Stockholm – and even from the Commission – have been clear. However, as seen from Prague in early December 2009, the main new question appears increasingly why Serbia, Bosnia and Albania find it so hard to take advantage of significant good will in both EU governments and EU institutions.

This, however, is an issue for another blog.

Posted on

The 10,000 hour rule, the Ahtisaari test and other sticky concepts

The Charles Hotel, Boston

I assume most everybody who finds his or her way to this website will have read one of my favourite books: The Tipping Point by New Yorker writer Malcolm Gladwell. If you have not, do. If you have, and liked it, consider getting the latest book by the same author: Outliers – the Story of Success. I just finished reading it and it is fabulously inspiring.

Of course, there is something ironic about recommending an author such as Gladwell: it is as if, for a moment, one steps into the world of his books and performs one of the roles that he explains there: to contribute to another “social epidemic”. And since many people do this, the outcome is, indeed, epidemic (see a recent article in the Guardian, In Praise of Malcom Gladwell). But this is not hype: any praise for Gladwell’s work is fully deserved.

In his first book Gladwell sets out what he calls the rules of social epidemics. The basic idea: ideas, products and messages spread like viruses. Any epidemic has a tipping point, when it spreads exponentially. So do ideas. Certain individuals – connectors, mavens and salesmen – play a key role in this. Mavens are people who collect information, who read newspapers and magazines obsessively, who share news: information brokers, data banks, people who provide messages. Connectors spread messages. Connectors are those who have a very large and diverse circle of acquaintances: people who know lots of people, who have a foot in many different worlds and can thus bring these worlds together. Salesmen persuade people who remain unconvinced of what they are hearing. As Gladwell describes a salesman: “it’s energy, it’s enthusiasm, it’s charm, it’s likability.”

One of my favourite passages from Gladwell’s first book – which I have used many times during ESI capacity building seminars, trying to explain how we at ESI think about our own writing – is taken from the US TV series Sesame Street. It seeks to explain a concept dear to anyone engaged in the business of producing stories for a (hopefully) large audience: “stickiness”.

The makers of Sesame Street succeeded in making their TV series for children ‘sticky”: their insight was that if you can hold the attention of children, they can be educated. They went about this systematically: devising tests such as running shows on TV screens while giving young children toys to play with. Children were quite sophisticated when to turn away from their toys to watch the screen and when to ignore the show: “they looked at what were for them the most informative parts of the program.”

The head of research for Sesame street then developed what he called a distractor: playing one episode of the show on one TV and running a slide show on another. When would children turn from the TV and watch the slide show? What episodes would hold children’s attention? Often the difference between a message that is sticky – and thus likely to turn into a social epidemic through the efforts of mavens, connectors and salesmen – and one that is not sticky consists in small but critical adjustments. People did not like it when two or three people talked at the same time. Etc:

“The Distractor showed that no single segment of the Sesame street format should go beyond four minutes, and that three minutes was probably optimal. He forced the producers to simplify dialogue and abandon certain techniques they had taken from adult television.”

(This is also a central idea in ESI’s writing: whenever something can be explained in a more simple way, do it. If we can find a simple word instead of a complex one, use it. Cut out any superfluous sentences. Insert no table whose message cannot be grasped at one glance – a rule most international organisations seem to delight in breaking. Make a report sticky. We call this internally our “Ahtisaari test”: every report should be written in such a way that when we get it to Martti Ahtisaari – a very busy man who nonetheless appreciates our work and is interested in the issues we care about – he should never get bored. Thus, no report must be longer than 30 pages, no discussion paper longer than 10. The few times we broke this rule we paid a price, and even well-researched reports failed to have any impact).

Gladwell’s writing can be applied to many different situations. In fact, his own success is an almost perfect illustration of his theory: his messages are certainly sticky. People who read a lot – like myself – feel compelled to recommend him. And when he appears on television, he radiates optimism and enthusiasm and draws attention (a perfect salesman).

So this is what happened to me: I had set up my own distractor in my hotel room in Boston, working on my laptop to prepare a presentation on the Balkans for the Kennedy School, with the hotel TV on in the background. Occasionally I paid attention to the program (CNN). Until Gladwell appeared and talked about his new book to Anderson Cooper. Then I stopped working on my presentation.

Now, three days later, I can still recall what Gladwell and Cooper talked about. The 10,000 hour rule. The fact that it therefore takes ten years of practice to be very good at anything. That this was as much true for Mozart as it was for the Beatles. That when we think about success as individual achievement – admiring a genius and a self-made man/woman – we miss what is essential about the social opportunities that any outlier (exceptionally successful) person requires. As Gladwell puts it: “When outliers become outliers it is not only just because of their own efforts. It’s because of the contributions of lots of different people and lots of different circumstances.”

So the inevitable happens: two days later, now back in NY, I buy the book. I start and read it almost in one go. And now I spread the news. Get the book! And then let me know what you think!

If you need one more push to be convinced, let me give you one more example from Gladwell’s book: a test undertaken by psychologist K. Naders Ericsson at the Berlin Academy of Music. The school’s violinists were all divided into three groups: the stars, students with the potential to become world class; the merely good; and those unlikely ever to play professionally, preparing instead to become music teachers in public schools. Then all were asked how many hours they had practiced in their youth. The finding was striking:

“… by the age of twenty, the elite performers had each totaled ten thousand hours of practice. By contrast, the merely good students had totaled eight thousand hours, and the future music teachers had totaled just over four thousand hours. … once a musician has enough ability to get into a top music school, the thing that distinguishes one performer from another is how hard he or she works. That’s it. And what’s more, the people at the very top don’t work just harder or even much harder than everyone else. They work much, much harder.” (p. 39)

To reach ten thousand hours of practice, however, is almost impossible if you are all by yourself as a young adult. It requires support and encouragement. Families, or societies, where this support is widespread will produce many more people who can turn innate ability into top performance. Without support, even a high IQ or an inherited talent will not be sufficient.

I immediately think of the Kosovo villages we have researched in Cutting the Lifeline (and which appear in our Kosovo film): how many of the young there, in particular how many of the young women, get anything remotely resembling the support they need to develop their talents? How many young women do so in Eastern Turkey? Does the “Matthew effect” Gladwell refers to (“unto everyone that hath shall be given”) not also hold for 2nd generation Turkish migrants in Berlin? And the story of the NY garment industry and who it generated skills useful in financial markets within one generation: does it not fit perfectly into our analysis of textile towns in the Balkans? A good book leadsto countless further ideas …

However, there is one additional lesson from the Tipping point: remember, “no sequence of Sesame street” should be longer than 3 minutes. Perhaps this is a good lesson also for this blog? To read more … come back soon.

PS: And if you want to get more information about Gladwell go to www.gladwell.com.