DCene - 2010 Annual Conference: Opportunities in Crisis 2

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Defining New Avenues of Growth Bertelsmann Foundation’s 2nd annual conference highlights need for global cooperation and solutions to financial crisis

Photo by Kaveh Sardari p The opening panel: Debating the merits of the US, European and Asian economic models

Photo by Kaveh Sardari p Conference hosts Gunter Thielen and Liz Mohn greet Klaus Scharioth,

German ambassador to the United States

The Bertelsmann Foundation again joined forces with its media partner,

Conference participants included AOL Co-Founder Steve Case,

the Financial Times, to host a second annual conference. “Opportunities

Canadian Finance Minister James Flaherty, US Undersecretary for

in Crisis 2: Defining new avenues of growth” was held April 22 at the

Economic Affairs Robert Hormats, US Congressman Darrell Issa,

Newseum in Washington, DC. The gathering, timed to precede the

World Trade Organization Director-General Pascal Lamy, HSH Prince

World Bank and International Monetary Fund Spring Meetings, brought

Alois of Liechtenstein, Dutch Economics Minister Maria J.A. van der

together about 200 high-level representatives of government, business,

Hoeven, and The Washington Post Publisher Katharine Weymouth. Panel

academia and the media. Speakers and participants travelled from

moderators included the Financial Times’ John Authers, Atlantic Media’s

around the United States, Europe (overcoming volcanic ash) and

Ron Brownstein, CNBC’s Becky Quick and the National Journal’s

beyond to attend.

Bruce Stokes.

The day’s debates and discussion centered on using the global financial

The Bertelsmann Foundation’s annual spring reception preceded the

crisis as a catalyst for implementing political, economic and social

conference the evening before. That gathering drew more than 400

reforms that, in turn, would lay the foundation for sustainable growth.

people to the National Portrait Gallery. Guest of Honor Marian Wright

Emphasis was placed on the societal costs of inadequate education

Edelman, president and founder of the Children’s Defense Fund, gave

and the G20’s proper role in global governance. A special panel

a stirring speech about the plight of children, especially in the United

deliberated whether more women in influential positions could have

States, who are denied access to proper education and healthcare.

lessened the severity of the crisis.

DCene is the Washington, DC-based Bertelsmann Foundation’s occasional internal newsletter. It’s designed to inform our colleagues in Gütersloh, Brussels and Barcelona of some of the Foundation’s North American activities. ©Copyright 2010, Bertelsmann Foundation. All rights reserved.

1101 New York Avenue, NW, Suite 901 • Washington, DC 20005 USA • Tel: +1.202.384.1980 www.bertelsmann-foundation.org

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Inspiring People. Shaping the Future.

“Opportunities in Crisis 2” Special Conference Edition

Quotes of the Day

PANEL 1

…on economic growth

Stimulating the Economy: Which way forward?

Public trust in government is near all-time lows in the United States and is anemic in many parts of Europe. Yet publics on both sides of the Atlantic look to their political leaders to take action to reinvigorate economic activity. Americans tend toward smaller, less intrusive government, while Europeans demand intervention and a strong welfare state. Finding Photo by David Hills the right formula for advancing economic and social well-being was the focus of the conference’s first panel.

PA N E L I S T S : Steve Case, Chairman and CEO, Revolution and Co-Founder, AOL Huan Chen, Deputy Director General, China Clean Development Mechanism Fund Caio Koch-Weser, Vice Chairman, Deutsche Bank Darrell Issa, US Congressman (R-California) and Ranking Member, House Committee on Oversight and Government Reform Dave McCurdy, President and CEO, Auto Alliance and former Congressman (D-Oklahoma) Ronald B. Richard, President and CEO, Cleveland Foundation Moderator: Bruce Stokes, International Economics Columnist, National Journal u For a full report on this session, go to: http://bit.ly/bf2010session2

PANEL 2

Growth through Education: Investing in the human potential

PA N E L I S T S : Jörg Dräger, Member of the Executive Board, Bertelsmann Foundation Carol Goss, President and CEO, Skillman Foundation Henry Levin, Professor of Economics and Education, Columbia University Jim Shelton, Assistant Deputy Secretary for Innovation and Improvement, US Department of Education Moderator: Ronald Brownstein, Political Director, Atlantic Media Co. u For a full report on this session, go to: http://bit.ly/bf2010session3

“Innovation comes from human beings. It doesn’t come from government spending…. the American solution is going to have to be reforming our libertarian way to work better, not adopting a European way because it doesn’t fit the American psyche…”

CAIO KOCH-WESER, Vice Chairman, Deutsche Bank “Potential growth rates will clearly be lower globally. The fiscal predicament we got into will require very tough measures, even re-definition of the role of state, less transfers, more investment in R&D and education and so on, to assure future growth.”

DAVE MCCURDY, President and CEO, Auto Alliance and former US Congressman (D-Oklahoma) “…we have to define the proper role of government. And we, in the United States, certainly support smaller government than, perhaps, our colleagues in Europe and Asia. So less intrusion. But there is a proper role…”

RONALD B. RICHARD, President and CEO, Cleveland Foundation “…if we…encourage people to come up with good ideas, create the right environment, make it easy for them to attract talent, and figure out ways to access capital so they can build their business, that’s what creates jobs. That’s what creates opportunity. And that’s really what’s going to have to lift us out of this current mess.”

OPPORTUNITIES IN CRISIS 2 SPECIAL EDITION | 2

A recent Bertelsmann Foundation study showed a direct correlation between a country’s economic growth and the test scores of its students. As a result, nations such as the US and Germany, in which a significant minority of teenagers are unable to perform basic language and mathematical skills, are losing billions of dollars in economic output.

Every year that this situation is Photo by Kaveh Sardari allowed to fester exacts greater costs. Panelists agreed the situation is serious, but noted that solutions existed. Among them: introducing policies to retain good teachers, not necessarily those with seniority, and taking better advantage of the digital age in which today’s students are growing up and in which they have a strong interest.

DARRELL ISSA, US Congressman (R-California)

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Panels

Managing the Crisis: Who Got It Right?

A Bertelsmann Foundation comparative analysis of economic governance in 14 countries Almost every country was hit by the global financial crisis, and many took action to blunt its impact. But the policies enacted differed from state to state, with each going its on way to preserve national interests. A recent Bertelsmann Foundation study examined the steps taken by 14 advanced and emerging economies to determine which were the most effective. The Photo by David Hills answer: Emerging economies often took advantage of their experiences from recent past crises to come out ahead.

The Anglo-American economic model of financial-market-driven capitalism, meanwhile, suffered a loss in global credibility.

PA N E L I S T S : Sebastian Heilmann, Department of Political Science, University of Trier Paulo Sotero, Director, Brazil Institute, Woodrow Wilson International Center for Scholars Moderator: Paul Murphy, Associate Editor, Financial Times and Editor, FT Alphaville u For a full report on this session, go to: http://bit.ly/bf2010session6

PANEL 4

Re-formatting the Global Economy: Should the G20 be the new platform for world governance?

PA N E L I S T S : Shaikh Ahmed bin Mohammed Al Khalifa, Finance Minister, Kingdom of Bahrain James M. Flaherty, Finance Minister, Canada Robert Hormats, Undersecretary of State for Economic, Energy and Agricultural Affairs, United States Maria J. A. van der Hoeven, Minister of Economic Affairs, The Netherlands Moderator: John Authers, Editor of Lex, Financial Times u For a full report on this session, go to: http://bit.ly/bf2010session7

…on policies to combat the financial crisis GUNTER THIELEN, President and CEO, Bertelsmann Foundation “If we continue with casino capitalism, then sooner or later the legitimacy of our entire economic system will come into question on a global level.”

PAULO SOTERO, Director, Brazil Institute, Woodrow Wilson International Center for Scholars “…in Brazil today, you have no financial asset that is not regulated. Everything is very much regulated. That obviously protected Brazil during the crisis.”

…on education CAROL GOSS, President and CEO, Skillman Foundation “Young people are being totally turned off by what’s happening today in terms of education…. They’re not happy.”

JIM SHELTON, Assistant Deputy Secretary for Innovation and Improvement, US Department of Education “President Obama’s administration’s focus on educational improvement is rooted in both evidence and innovation, recognizing that we can’t continue to do the same thing and expect a different result. We’re saying how do we do both, how do we look at the best practices both inside the country and outside the country, and say what makes… school systems work.”

OPPORTUNITIES IN CRISIS 2 SPECIAL EDITION | 3

The G20 is the new G8. The exclusive group of powerful nations that used to set the global economic agenda has become more inclusive. But is it enough? Session panelists agreed that the larger group had gotten off to a good start, but representatives of non-G20 states warned that challenges lie ahead, especially in the area of development. Those in the G20, Photo by Kaveh Sardari however, noted that the fragility of the world economy gives them enough issues to deal with at the moment. But the group’s responsibilities could expand if emerging countries approved, thereby lending legitimacy to wider responsibilities.

Quotes of the Day

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PANEL 3

Quotes of the Day

Would a “Lehman Sisters” have been better managed and avoided collapse? The influential group of female panelists for this session debated a what-if scenario in which more women occupied positions of corporate power. Some agreed that women’s tendencies to build consensus and look at both sides of an issue may have avoided a crisis-prone environment of Photo by Kaveh Sardari ego-driven risk-taking. But others weren’t sure, saying such a generalization cannot be made. All agreed, however, on the need for better policies, especially concerning childcare, to allow able women to move into senior managerial roles.

…on the G20

PA N E L I S T S :

“…it is very hard to get 186 countries to agree to anything. Therefore, is the G20 doing a good job? Yes.”

The Women’s Perspective: A missed opportunity in crisis?

Vishakha Desai, President, Asia Society Connie Morella, Board Member, United States Association of Former Members of Congress, former US Ambassador to the OECD and former Congresswoman (R-Maryland) Susan Segal, President and CEO, Americas Society and the Council of the Americas Katharine Weymouth, Publisher, The Washington Post and CEO, Washington Post Media Moderator: Becky Quick, Co-Anchor, “Squawk Box”, CNBC u For a full report on this session, go to: http://bit.ly/bf2010session8

q Marian Wright Edelman, president and founder of the Children’s Defense Fund, addressed more than 400 guests at a

reception on the evening before the conference

ROBERT HORMATS, Undersecretary of State for Economic, Energy and Agricultural Affairs, United States “…almost every global economic issue one names today and identifies today requires a broad group of countries. The G20 represents the kind of group that can address these.”

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PANEL 5

JAMES M. FLAHERTY, Finance Minister, Canada

“…to the extent financial institutions contribute to a financial crisis, they should bear the cost of the financial crisis – not taxpayers.”

MARIA J. A. VAN DER HOEVEN, Minister of Economic Affairs, The Netherlands “…the G20 declared itself the premium forum for international economic coordination and [for] doing something.

That means that you have to live up to it, that you have to see to it that you really deliver.”

“It’s a very lonely job to be the minister of finance.”

Photos by David Hills

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SHAIKH AHMED BIN MOHAMMED AL KHALIFA, Finance Minister, Kingdom of Bahrain

Quotes of the Day

Pascal Lamy, Director-General, World Trade Organization

…on world trade

Mr Lamy noted that despite severe economic pressures, countries had generally adhered to good trading practices and abstained from any widespread protectionist practices.

He also praised the World Bank and International Finance Corporation for ensuring sufficient liquidity, and he backed their calls for larger contributions from their member-states. As for the future, Mr Lamy expressed optimism about a successful outcome to the Doha Photo by Kaveh Sardari Round of global trade negotiations, while lauding the so-called Geneva consensus, which argues against economic liberalization as a panacea.

For a full report on this session, go to: http://bit.ly/bf2010session5

Andrew Kohut, President, Pew Research Center Mr Kohut reviewed the results of a recent survey showing historical lows for Americans’ trust in their government and other national institutions.

Rising frustration from continued unemployment and Washington’s perceived inability to deal with it despite massive spending is fueling widespread anger. But Mr Kohut warned that it is too early to draw any conclusions about the Obama administration. He cited similar concerns in the country during Ronald Photo by Kaveh Sardari Reagan’s first year in office, and he noted that, despite the survey results, Americans expressed confidence in the presidents themselves. Congress and both parties, however, are generally disliked, as are the media and the business sector.

For a full report on this session, go to: http://bit.ly/bf2010session1

In a rare public appearance, Prince Alois addressed the effects on Liechtenstein of the financial crisis and recent international pressure for financial-sector reform. His Highness admitted that the crisis affected the principality as it did larger countries.

Liechtenstein saw economic contraction and plummeting exports. On the fiscal side, the principality faces a budget deficit equal to 15 percent of its GDP. But Prince Alois noted that his country Photo by David Hills has healthy reserves and that none of its banks required a bailout. He also said that Liechtenstein was meeting its obligations to introduce sufficient transparency in its banking practices.

For a full report on this session, go to: http://bit.ly/bf2010session4

“On the whole, the world economy today is as open as it was at the beginning of the crisis…” “….we now are in a situation where developing countries are more optimistic, more… globalization-prone, and developed countries [have a] more reluctant view.”

...on women and the financial crisis CONNIE MORELLA, Board Member, United States Association of Former Members of Congress, former US Ambassador to the OECD and former US Congresswoman (R-Maryland) “…if Lehman Brothers had been Lehman Sisters, it would have made a significant difference.”

“The boy … says, ‘Well, I’m going to be the doctor, and you can be the secretary.’ The girl says, ‘OK. I’ll be the secretary of health and human services.’”

KATHARINE WEYMOUTH, Publisher, The Washington Post and CEO, Washington Post Media “I am a risk taker, and I took a big risk, and I fell flat on my face last summer. But I said to everyone in my building… “You know what?

I made a mistake, and I’m OK with that.”

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HSH Prince Alois of Liechtenstein, Principality of Liechtenstein

PASCAL LAMY, Director-General, World Trade Organization

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Keynote Speakers

Photo by Kaveh Sardari

Photo by David Hills

Photo by David Hills

Photo by Kaveh Sardari

Photo by Kaveh Sardari

Photo by Kaveh Sardari

Photo by Kaveh Sardari

Photo by David Hills

Photo by David Hills

Photo by David Hills

OPPORTUNITIES IN CRISIS 2 SPECIAL EDITION | 6

Photo by Kaveh Sardari

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Photo by David Hills