Yesterday, we had Jaime Pozuelo-Monfort introduce his new book, The Monfort Plan himself. Today, we are fortunate to catch him for an interview.
The Road: Reading through the dissertation, I see in front of me an idealist, a dreamer, a marketeer, and a politician. Which one are you?
Jaime: I am a realistic dreamer, a utopic idealist. I am the multidisciplinary European and an aspiring candidate to Chief Dreamer. Nothing can be proven if it is not implemented before. This is a Journey, the Journey of our lifetime. As such it may or may not lead to the final destination. We will know in 2050.
The Road: In what way does plan differ from all other attempts. What makes it unique?
Jaime: It incorporates imagination and creativity, suggests a realistic and implementable forward-looking action plan and proposes the best team of Expert Dreamers that have ever served the global public interest and a group of six countries that become the founding members of The New Architecture of Capitalism.
The Road: What are the 6 countries in subsaharan Africa do you have in mind you mention "that have shown their determination to build up a basis upon which they can prosper"
Jaime: From West to East: Namibia, Botswana, Lesotho, Mozambique, Tanzania and Madagascar
The Road: You make many analogies to the post WWII Marshall plan. But if anything, that was a massive injection of cash into a continent. A multitude of that amount has already been poured into Africa. Why has the impact been so small so far?
Jaime: Microfinance was not exploited. Economies of scale were not implemented. The middle man was not eliminated. The population was not incorporated to the vision. Developed countries did not reform areas such as trade or agriculture. The Bretton Woods Institutions did not help with their structural lending programs of the 1980s and 1990s. The Cold War fed and exacerbated the burden of civil wars.
The Road: If you would suggest a new cash injection, where would that come from, now that aid organisations are even struggling to meet the immediate short term needs.
According to FAO, 1/6th of the world population is hungry. Of which probably 150 million die if they did not receive food aid. But yet, aid organisations are unable to raise even enough cash to feed the dying. Nourish the sick. The L'Aquila promises all seem to be hot air.
Jaime: Innovative financing for development is an area that has not been much explored. I call it positive shock therapy. I call it the value of consensus. There are vast amounts of funds hungry to obtain higher returns with long-term opportunities. There are a myriad of new opportunities that the book will discover.
The Road: You mention microfinancing as part of your theory for economic development, including the development of the public sector. But microfinancing is based on individual entrepreneurship. It seems like the public sectors you mention are typically not individual neither entrepreneurship, but public services. How would you link those public services to the drivers of the success of microfinancing, which were "putting the initiative and responsibility on the individual"?
Jaime: Two different areas. The universalization of microfinance through two new organizations (Bank for the Poor and Yunus-Fund) focuses on microbusiness expansion. The delivery of global public goods aims at providing a social fabric that will contribute to building up an educated and healthy workforce from which entrepreneurs will arise.
The Road: Reading through your dissertation, it looks like you concentrate on politics, and global structures as the solutions.
Jaime: This is am ambitious vision that spans over forty years, the Glorious Forty and targets the eradication of extreme poverty through the increase of average incomes and the shrinkage of the global income distribution. Average incomes have to be boosted up and inequality has to be brought down.
The Road: You would like to start "a supranational organization that accepts new members on an ex-ante conditionality clause". I have visions of lavish state dinners and the typical political gatherings which mean nothing, change nothing, cost a lot. Name me one geo-political organisation that makes a change or has made a change in the past.
Jaime: European Union, SADC.
The Road: One of the theories going around is the that first world likes a poor Africa, likes conflict in mineral rich areas. It gives them cheaper access to the natural resources.
Jaime: I do not believe in conspiracy theories. I think our political and economic elites lack the vision of the great men of the 1940s and 1950s. I think we continue to maintain and perpetuate the national interest over the global interest. We must transition from a world that defends North-American or European nationals to a world where everyone has the opportunity to move forward. It may sound idealistic, I call it utopic.
The Road: Many regions of Africa are poor, simply because "the physical environment" does not allow prosperity. Desertification, continuous floods/droughts,.. Others because of the geo-political climate. Maybe it is no longer the battlefield of a cold war: communist versus capitalist countries, but a new hot war: christian versus muslim countries. All fought out in Africa?
Jaime: I think academia has shown that this is a myth. I think there has been a vision implemented for Western Europe. I think Western societies to which I belong lacked the ambition and the belief that change can be brought on board. There are solutions to the great evils of our time. We have simply ignored that creativity and imagination can propose forward-looking policies that tackle once and for all the very roots of poverty and conflict. There are interests nobody dared to touch. Incentives can be aligned between rich and poor to move forward together.
The Road: Let's take 3 troubled countries in Africa. Can you detail how your theory would aid DRC, Somalia, Darfur.
Jaime: Difficult. I argue that the six countries where the New Architecture of Capitalism may emerge are in the southern cone of Africa largely for three reasons: proven willingness to be part of an ex-ante conditionality scheme, low political risk and high peace index, and a recent history of supranational cooperation. In addition four of the six countries are categorized as Least Developed Countries according to the United Nations. It is important to first build up a successful pilot.
The Road: Your dissertation concentrates on Africa. How about poverty in the Middle East, Asia?
Jaime: If accomplished, the new scheme could enlarge to other candidate countries in sub-Saharan Africa, Latin America and South Asia.
The Road: Jaime, thanks for your time, and the best of luck with your book, and your endeavours!
Jaime graduated from Universidad Politécnica de Madrid in 2000 with a master’s and a bachelor’s in telecommunications engineering. He also studied two years as an exchange student at Télécom Paris and Universität Stuttgart. Subsequently he earned master’s degrees in business administration from Collège des Ingénieurs in Paris, in financial economics from Universidad Carlos III de Madrid, in financial engineering from the University of California at Berkeley, in economic development from the London School of Economics, and in public administration from Columbia University.
He currently pursues a master’s in international law and politics at Georgetown University and a master’s in public health at the London School of Hygiene.
He has worked in the technology sector in Madrid, Stuttgart and Paris, and in the financial industry in New York City and London.
His interests lie in the interaction between financial economics and economic development. He is a columnist in written and electronic press.
"The Monfort Plan" is available via Amazon and Wiley Finance
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Peter. Flemish, European, aid worker, expeditioner, sailor, traveller, husband, father, friend, nutcase. Not necessarily in that order.
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