Future business leaders love taking pictures with accused genocidaires … ??? …

Perhaps they know not … ??? …

Stanford Graduate School of Business is a funny place when it comes to politics and controversial international issues – they are almost never discussed. You can only ever have authentic and deep political conversations with classmates who trust you to a flaw. At that point, they’re generally pointless, because chances are that you’ll generally agree on what is being discussed.

Perhaps some classmates with a burning desire to discuss politics (like yours truly, and I know there are many others like me) are too aggressive and uncivic. It’s mostly their fault, and they need to double down on compressed classes like “Persuasion” and “Political Communication”, and learn how to break through those barriers. After all, Silicon Valley is all about taking personal responsibility (which is an inherently an apolitical way of thinking).

Perhaps some of our classmates are super savvy and understand where these conversations generally go and what they tend to lead to – nowhere and nothing. They have either consciously or unconsciously taken Dale Carnegie’s lessons to heart (Author of “How to Win Friends and Influence People”). They don’t want to do anything to jeopardize this opportunity, which they believe they have been blessed with, to build a strong life-long professional network. To these individuals, nothing is more important than building a network – it’s almost an end in of itself.

And perhaps business people are business people, and people like yours truly should have enrolled in a Public Policy School (I am not very fond of those schools, because they don’t ever get anything done). Apathy and ignorance on political issues is only to be expected. Changing lives, organizations and the world (the “MECE”ness ingrained in me in an earlier professional organization makes me cringe every time I hear those three changes), are inherently apolitical pursuits – and this is reinforced by the Silicon Valley’s Libertarian bend, and its disdain for Government and the nation state.

I generally do fine here – I realize that the culture is apolitical, and I like the fact that everyone’s trying to get along. But I must speak out when GSB study trips visit controversial political leaders, and the controversy surrounding them is swept under a rug – let alone discussed, explored and understood.

Narendera Modi is one such character, recently visited by a GSB study trip – social media was flooded with pictures and articles from my classmates celebrating this visit. And I believe he has been visited in the past by other GSB trips as well. He is the current Chief Minister of Gujarat, having held that office for over 10 years, and is likely to be elected the next Prime Minister of India, unless something changes drastically between now and the Lok Sabha Polls in May.

There are many positive things about Modi. He is largely credited with creating a business friendly and corruption free public sector in Gujarat, India’s 10^th largest state. But many things about Modi are also shameful. He essentially sanctioned the pogroms which took place in 2002 in Gujarat, by providing a 3 day open window to right wing religious groups to butcher innocent civilians of other religions, while the machinery of the state simply watched (and it has been alleged, even took part). At the very least, he scored significant political mileage from inciting hatred along religious lines.

Yes, we only hear about Islamic extremism, but all kinds of religious extremism is festering in South Asia. Travel authors like William Dalrymple have documented this really well as a trend on both sides of the big border, which cuts across all major religions. His book “Nine Lives” is an absolute gem. You’ll hear about Al-Qaeda or the Taliban, but never of the RSS (Rashtriya Swayamsevak Sangh) because they are not a perceived threat to any western country. I wouldn’t say that Narendera Modi is the equivalent of an Osama Bin Laden or a Mullah Omar, but he goes a long way in terms of his similarities with those characters (and by the way, the former was once dubbed “The moral equivalent of America’s Founding Fathers” by Ronald Reagan - the goal posts keep changing, so trying to determine who is the equivalent of whom needs to be a careful exercise).

My understanding of the broader trend towards religious extremism is that as both countries develop and lift more and more people into the (still relatively poorly) educated middle-class, people tend to revert away from traditional forms of religion which have long advocated peace, co-existence and harmony, and revert to more puritanical forms of religion, which provides them with a new identity outlet, and a new found way to express their (shoddy) educatedness. It’s very similar to the Christian Reformation in Europe a few centuries ago.

The issue is complex and I have oversimplified it. Yet if any man on a GSB travel itinerary has even has a blemish on his record, let alone accusations of crimes against humanity, it ought to be discussed, explored and understood. It shouldn’t matter that the issue is controversial or not business related – I thought the whole point of these trips was to provide a holistic view of a country which goes beyond just business and political correctness.

How many of my classmates on two sets of trips last year, who met with Paul Kagame, the President of Rwanda, understand his role in ravaging the Eastern Congo over the last decade and a half? The broader conflict has precipitated the greatest humanitarian tragedy of our time, with an estimated death toll of over 6 million – this is in Congo alone, and not counting the Rwandan genocide. And Kagame continues to be a large part of the problem there, and that too with full US backing and support, under the guilt of US and international inaction during the 1994 Rwandan Genocide.

Some neutral international sources have described Kagame as “one of the greatest genocidaires of our era”. Everyone must read the book “Dancing in the Glory of Monsters” about the conflict in Congo. Again, all this is an oversimplification, and who did what to whom in the Great Lakes Region in Africa is extremely complex. But history is replete with examples of victims becoming monsters, and some part of Kagame ought to be explored and scrutinized as potentially one of those monsters.

And to be entirely fair, there are plenty of reasons to visit Kagame. Just like Modi, Kagame is credited with turning around his country’s public sector. The roads there are new and nice and many individuals in that country are now enjoying prosperity. Kagame is often held up as an example of a benevolent dictator who has achieved plenty of good.

Finally, Bibi, another victim turned monster, is all too keen to host Stanford GSB students as well – that man is in his own league. I won’t even bother to write anything about him, for there are too many who actually support him and his policies, and refuse to try to understand the conflict from the other side. You can read about him and his antics in this Haaretz article.

http://www.haaretz.com/blogs/a-special-place-in-hell/.premium-1.562552

The bottom line is that there are many genocidaires in prominent political positions in the world today – their support of conflict and hatred is one of the factors that has propped them into positions of political power. Institutions like Stanford GSB and its students can choose to engage with them – there’s nothing wrong with engagement and understanding. But if we choose to do so, can we do so fully and holistically? Can we acknowledge the dark sides of some of these characters, so that we may understand currently active and relevant conflicts better, and learn from history?

There is another option – to keep it just about business. Sadly this is a regressive option because I don’t think you can Product Design or NPV your way out of what are often fundamentally political problems. The resolution of these issues involves talking to and understanding others – even if it is really uninteresting, complicated, messy and painful. Business might be business, but some of the more important things in life and in the world require empathy, learning and better understanding.

The power of perceptions & the media – Mexico’s drug challenge and new era of optimism

This is the third in a series of four blog posts from my recent study trip to Mexico, with the Stanford GSB. Here’re some facts and tid-bits on the trip which provide a bit of an overall flavor:

§  The people: 35 Stanford GSBers and their partners, hailing from 14 different countries –backgrounds as diverse and unique as Air Force Officers, Social Entrepreneurs, Finance Ministerial Analysts, Film Makers, Start-up Starters, Seismologists, Sports Analysts, Chemistry Teachers, Family Businessmen … and of course … bankers & consultants

§  The places: 3 different cities over 10 days, including Oaxaca, Monterrey and Mexico City – each with a very different and unique character

§  The experiences: Discussing Mexico’s challenges in meetings with business and public sector leaders; watching Mexican soap operas being filmed, including meeting the most charismatic man in the world (not to be confused with the most interesting man in the world, whom we also met); exploring ancient monuments; eating good food and drinking giant margaritas; and of course, shouting and cheering like mariachis.

The media can make or break countries like Mexico, Pakistan and India. From positive self-fulfilling prophecies to vicious cycles fueling and reinforcing negative perceptions, the media can sometimes be a tremendous help, and sometimes an inescapable curse. While it is obvious where India and Pakistan lie in those buckets, Mexico is surprisingly hard to bucket. Here’s the two sides of the spin …

Let’s start with the positives. The recent re-election of the PRI (The Institutional Revolutionary Party), the Left leaning party which has governed Mexico for much of Mexico’s modern history, has led to a series of tangible reforms which significantly change Mexico’s fundamentals and prospects (at least in my own humble opinion, and as far as I believe, in the opinion of most development experts – there are obviously some political constituents who will disagree with us, and I may of course be suffering from that “in-group bias” which they keep telling us we might be suffering from in many of our Organizational Behavior classes). The PRI has taken on the Teachers’ Unions, historically an important political constituency for them, but one which is blamed for holding hostage Mexico’s less than high quality educational system. This is clearly a huge step in the right direction, and if we believe that “Total Factor Productivity” (TFP), that old friend from Development Economics, is responsible for much of the differences in income across countries, then improving education is clearly the right step in improving Mexico’s prospects. Although it is hard to neatly account for all the components of TFP, clearly education is a big one – just intuitively, a better educated population is likely to be a more productive one.

In addition to this, the PRI has legislated to make broadband-access “a universal right” within Mexico. While this might sound symbolic, and even vacuous, it’s a very clear first step in dismantling the telecommunications monopoly of Carlos Slim Helu. With telecommunications being a key input factor in the information and service economy, having pricey telecommunications services, because of a regulated monopoly, is a huge burden on business and development. The new Government clearly understands this, and the legislation actively begins to politicize the problem, which is an important first step towards addressing it.

Then there were trends which benefit Mexico, not so much for Mexico’s own fundamental progress, but rather due to external factors. Discovery of cheap North American shale gas is a huge and highly legitimate one. Also, one trend we kept hearing about was China’s labor costs exceeding Mexico’s within the next couple of years, arguably making Mexico more competitive than China. While this argument likely under-adjusts for productivity drivers, and attributes the majority of these changes to demographics; conveniently ignores countries like Vietnam, India and Indonesia, which still have much lower labor costs than both Mexico or China; and also ignores away some of the other levers and dynamics of investment decisions at the firm level, such as “Ease of doing business”, it is clearly being cited as an important trend. We kept seeing charts where by 2016, Mexico’s exports to the US will be greater than China’s. But this is a forecast, and as the joke goes – some twenty-something year old analyst at the Economist Intelligence Unit (EIU) made it up; some businessmen believed it and invested on the basis of it; and the same old EIU Analyst, now in his thirties, was elevated to the status of Nostra-Damus, and prophesized the end of the world. But sarcastic jokes aside, self-fulfilling prophecies exist. Ultimately, while forecasts such as those produced by the EIU might seem useful, we ought to be wary of their real value.

But clearly there is something to be said for optimism and the role of “animal spirits” in promoting growth. As Guillermo, one of our trip leaders shared with us – through-out Mexico’s modern history, Mexico has always felt like it has underperformed. Not only did the early wars and the territorial losses impact the national psyche or self-confidence, since then Mexican’s have felt like laggards in many fields from football (some of you might call it soccer) to economic development. But now there is renewed hope and optimism in Mexico. Everyone in Mexico feels that it is finally their time to shine. There is something clearly beneficial and heart-warming in this development – one must appreciate the positive impact of self-fulfilling prophecies.

Look how cheery & optimistic our Mexican trip leaders are - they did an incredible job

Now for the old negative problem – Mexico’s drug wars. I personally believe that it is an impossible problem to solve. So long as drugs will be illicit, and there will be demand in the US, the drug problem will persist. It’s not a cancer which can be eradicated with law enforcement or brute military power. It’s a perpetual problem rooted in incentives, economics and human nature. In many ways, I see parallels with Pakistan, and the fallout of the war in terror being fought in Afghanistan and primarily by the US. Our cities have been turned into war zones, when we do not believe that we have much to do with the root causes, and believe further that the US is doing very little to address the root causes.

You might disagree with me, and there are many shades of grey. But what is most interesting about Mexico’s issue is that not a single business or public sector leader within Mexico cited the drug war as an issue at all – it was never brought up in open ended talks; we as a group didn’t ask any questions about it – perhaps we felt safe through-out our trip, and didn’t feel like it even impacted us as gringos from across the border, where all we hear about Mexico is centered around the drug wars. One leader, the Chairman of the FEMSA brewery, did bring it up, but in a different context. We took this particular meeting in a rather sterile “Business Club” – a large event and conferencing space, in a posh part of Monterrey. He was disappointed that the GSB, which has a tradition of visiting his brewery, and sampling beers fresh off the production line on these annual study trips, was unable to do so this particular year, because the GSB’s security advisors deemed that the brewery part of Monterrey was too risky to visit. In fact, it was clear from his tone and expression that he thought that the security assessment was plain ridiculous. Again, different opinions and risk tolerances are different – but this is certainly something to ponder over. Are the security assessments of two sets of individuals, both of whom are arguably experts in this area, clearly different? Or have the negative perceptions, biased by a sensationalist media, created such an intolerance for risk, that one party has to take a very different stance than the other?

 The chairman of FEMSA, along with his beer

I believe that all media perceptions, either positive or negative are ultimately rooted in some real fundamentals, but then fueled out of control. And it is also important to realize that the media just caters to what the Plebs want, which is difficult if not impossible to change. So if we are to truly create change, we have to begin to change fundamentals. But as Plebs ourselves, perhaps we also hold a responsibility to consider carefully what we choose to subscribe to in the media.

Such a nuanced and complicated conclusion is exhausting, so enough on the media … next post is on Mexico’s monopolies.