Michael Fairbanks — Aid vs. Enterprise & Growth
Co-Founder SEVEN Fund, USA
I can predict the future of a developing nation better than any IMF team of economists by asking one question. ‘Do you believe in competition?'
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Michael Fairbanks—Enterprise Solutions to Poverty
Michael Fairbanks is a co-founder of SEVEN, a non-profit organization of entrepreneurs that provides monetary, organizational and intellectual support for the study of enterprise solutions to global poverty. Fairbanks co-authored Harvard Business School’s Plowing the Sea: Nurturing the Hidden Sources of Advantage in Developing Nations, which was named one of the year’s ten best books in the field by both the Boston Globe and Exame magazine, Brazil’s leading business weekly. More recently, he co-edited and contributed to the 2009 work In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty. He has been consulted by political leaders around the world.
Michael Fairbanks—On the Frontier
Fairbanks founded On the Frontier (OTF), a venture-backed strategy firm focused on developing nations, and conceived and oversees the Pioneers of Prosperity program, which finds and recognizes entrepreneurial role models in the developing world. A long-time angel investor, he is a founding shareholder in Merrimack Pharmaceuticals, which researches and develops therapies for the treatment of autoimmune disease and cancer. He was a U.S. Peace Corps teacher in Kenya.
Michael Fairbanks—World with Political Leaders
Fairbanks served on the Commission on Globalization with Mikhail Gorbachev, Joe Stiglitz and Jane Goodall, and on the President’s Advisory Council in Rwanda with Pastor Rick Warren, former British Prime Minister Tony Blair, and the African Development Bank’s President Donald Kaberuka. In 2006, he received his alma mater’s highest award, a doctorate in humane letters for “accomplishments and devotion to social justice.”
Aid = Resentment
I once said to the President of the World Bank, Jim Wolfensohn, “When the World Bank figures out how you can give a $100 million, $200 million to an African country and they resent you, and an African country can pay me a multiple-million dollar fee and like me, when you figure out what’s going on there, then we can all move forward to help develop Africa.
The Foreign Aid Establishment
Whenever you have an aid agreement, those consultants come into the country, and they don’t work for the country, they work for the foreign-aid establishment. And so what you find is that the aid-establishment severs the sovereign link between the leader of a country and its people— because you’ve got all these consultants running around doing their thing, purportedly to work for the people, but in reality, their masters are in Washington and Tokyo and London and Paris.
Competition and Development
I can predict the future of a developing nation better than any IMF team of economists by asking one question. ‘Do you believe in competition?’ Now, when I go to Venezuela and I say, ‘Do you believe in competition?’ they say, ‘Competition means the rich get richer and the poor get poor.’ They say, ‘Competition is the unnecessary duplication of effort to get two firms doing the same thing.’ They say, ‘Competition is a quaint North American concept. It doesn’t apply here.’ But I go to Silicon Valley and I say, “What do you think about the word ‘competition’?” and they say, “I love competition because even when I lose I learn something.”
Punctuality, Democracy and Development
Democracy is slightly, positively correlated with economic growth. So democracy is a good thing. You know what’s more positively correlated with economic growth? Rule of law. Even in dictatorships that had strong rule of law, we see firms working in a predictable environment where there’s recourse to people who have stolen from them. Therefore, they decide to innovate…. You know what is most highly correlated with economic growth? Punctuality! ‘What,’ you say? ‘If a country shows up on time for meetings, they’re more prosperous?’ Yes! … Punctuality is a proxy for a set of values around tolerance for other people, self-discipline, future orientation, and time-management; and all of those things are part of an innovation process.