(London, UK) The view from my friend’s apartment…

I went to London over Thanksgiving for meetings. This was my first trip to London. Although the 2.5 days were too short, I was able to accomplish a large part of my objectives on this trip. I also met a diverse mix of people on my trip. The first person I met was a stranger on the Tube. He was from Germany and worked on a farm outside of London. He met his girlfriend from India through Skype, visited her in New Delhi, and will head there next month to marry her. I thought it was creepy initially, but perhaps I should open my mind to the new paradigms that globalization and technology has created.

The Objectives

1. Arrange academic exchange at Kim Il Sung University in North Korea through appropriate political channels
2. Find out if London life is suitable for me
3. Meet people in areas I am interested in working in to find out more about business in Europe
4. Meet director of socially responsible investing at an investment management firm to discuss corporate governance in China

Academic Exchange: Things look to be moving ahead now on this item that has been on the agenda for the last three years (although only recently upgraded in priority). Through some leads, I managed to arrange a meeting with a quirky but nice member of the Communist Party of Britain. He has been involved with North Korea and China since 1983, and recently worked with a partner to acquire a controlling stake in a North Korean bank. His partner is an honorary economics professor at Kim Il Sung University. It was interesting hearing about North Korea from someone with so much more experience and interaction with them, and he agreed to push my case to the University officials when they meet in two months time. We both agreed on the need for North Korea to interact more with the world, and share common interests in this.

London Life: I can see myself living in London for a good number of years after this trip, and definitely after I graduate. I loved the small shops that specialize in traditional tailoring, in shoes, or the Harrods, Fortnum & Mason or Borough Market. To me, they represent a traditional way of life. Although the cost of living is high here, I see it as a fair price to pay for more equitable public amenities. I also believe that the business environment here, with its stronger societal expectations on corporate behavior in the social and environmental fields, would be something I would enjoy coping with.

Meet People: I managed to meet some people in the banking circles in London, and learned a lot about different investment banking functions within the European market. After this summer, I should have a better idea about what the best career will be for me, and how I can prepare for the long trek to a second career in public or international policy in the future through the private sector.

SRI: Over the summer, I published some articles on corporate governance in China. Shortly after that, a director of SRI at a large asset management firm emailed me to discuss some of the issues I raised through my research. I managed to meet the person in London and had an interesting discussion in which I learnt a lot. He also referred me to one of the equity researcher on the Goldman Sachs SUSTAIN team, whom I enjoyed talking to, as his team incorporates analysis of the environmental and social impact of firms into a broader financial, political and industry trends framework to pick companies with superior performances. It is an interesting framework and our discussion was stimulating.

I took part in the 11th Seoul Photo Essay Competition organized by the Seoul Metropolitan Government over the summer as I wanted to stretch my creative muscles in writing on an unusual topic. The competition looked for descriptions of Seoul as an international city. My essay “From Pyongyang to Seoul” took an usual approach in describing Seoul: I looked at the city from the perspective of a hypothetical visiting North Korean friend. I enjoyed this opportunity to depart from the usual academic/ policy-type papers I have become so used to, and was rewarded with the Gold prize of 1 million won. This money will be useful for paying for my education.

Thanks to Pinquan for the heads-up on this opportunity. My essay can be found here.

My train pulled into the station, and I am hit by a pang of nostalgia as Korean words wash over me. While familiar, it was tinged with a different accent. Most notably my tour guide insists on calling the language “조선말” (Choson Language) rather than the “한국말” (Hanguk Language) I learned back in Seoul. I stepped onto the platform and the words “평양” (Pyongyang) greets me. The scene was entirely different, but the beautiful Korean language that greeted me elicited the same excitement I had when I arrived at Seoul International Airport almost exactly one year ago.

Korea is one nation, sadly divided, with two capital cities that grew up on different sides of the borders, each taking very different paths and possessing unique charms. One city sought to reach out to the world, and became a global economic hub – its name is Seoul. The other city chose an inward looking Juche ideology – its name is Pyongyang. Drawing out the cosmopolitanism and color of Seoul that fascinated me is best done through the lens of the differences it shares with Pyongyang, and I imagine someday after Korean unity is achieved, I will walk the streets of Seoul with my friend from Kim Il Sung University. This will be from her diary:

Even if I had stayed forever in Seoul, I would never get used to the bustling crowd that greets me every morning as I step out into the streets at Silim Dong. I let the sounds, sights and smell of this youthful crowd, brimming with energy and enthusiasm, wash over me. It is crazy. The only crowds back home were in the electric tram down Cheollima Street during rush hour...

A friend at Penn, Joyce Meng, recently won the US Rhodes and Marshall Scholarships, the highest honor for a US student. I am very happy for her, and know she deserves it. Congrats Joyce!

(Urumqi, China) Not really no profits…

While my field of research revolves around corporate governance, I feel it is also equally necessary to cast a critical eye at the non-profit sector. Years ago, in Singapore, I came across a charity called Youth Challenge led by former policeman Vincent Lam. According to friends, the organization tapped the energies of hungry resume-enhancing students or kind-hearted but clueless individuals by involving them in many fundraising projects or “charging” people for international conferences that are actually free (without telling them that it is actually free).*

I once stopped by Youth Challenge because a friend was involved in it, and he wanted me to help him do some fundraising. However, I was appalled that such a large organization appeared to revolve entirely around the founder, with 20 interns. This was disturbing as there appeared to be little accountability. The founder gave a pep talk on the importance of God, and promptly asked us to do fundraising. I checked the fundraising accounts, and found that most of it was done on paper with few proper accounting checks and balances. Finding this too dodgy, I decided against any involvement. I knew other friends who were involved in the past, and they had even more improprieties to report, some rather salacious. I dismissed those as hearsay and promptly put the organization out of my mind.

Recently, it emerged that YC was under investigation for accounting improprieties. Its chairman, Vincent, took a salary equal to almost 40-56 percent of the organization’s income. This is not to forget the perks (hotel stays and plane tickets to conferences) and a nice comfortable office in the city of which he is seemingly the only permanent staff. This also ignores any donations not accounted for. Imagine Stan O’ Neal taking half of Merrill Lynch net income. This is unacceptable for any organization, for-profit or non-profit. I would not be surprised if YC started out of good intentions, but the problem with people is that they eventually rationalize their improprieties through entitlement. They believe that the organization owes it to them because of the sacrifice they made. Executives often feel that way too, having expended so much effort in climbing to the top. It is a long slide downwards after that, as they believe they are just receiving their worth.

Anyway, I recently received news that Vincent Lam is now organizing a “humanitarian” conference in Thailand through an organization called Humanitarian Affairs. So do drop by and donate, after all, you can be sure your money reaches at least one beneficiary.

P.S. The management has changed and I believe they will do a good job of strengthening governance. In fact, it can be thought of as a contrarian play as with the media spotlight on the organization, we can expect it to be much more strict in its controls.

*A friend of mine from Harvard interned there said that Vincent aside there was no other “permanent” staff. The lack of accountability at YC is definitely a reminder that we should not blindly trust NGOs.

Update (13 Dec 2007): In the interest of full disclosure, I have removed three sentences from this post which I felt were unfair to Mr Lam without having confirmed the information again with my sources. This action was taken after discussion with Mr Lam, who sent an email threatening possible legal action.

(Geneva, Switzerland) The IOs and NGOs.

Rieff views the rise of civil society as a threat to democracy.[1] He sees in civil society a lack of public accountability. Unlike public corporations, they adhere to no reporting standards. Unlike public officials, NGOs anoint themselves as public champions without elections. This “undemocratic” face of civil society is worrying, as their increasing power inadvertently undermines the state, which Rieff believes is the only institution capable of standing up to globalization.

The “undemocratic” structure of civil society is also worrying as the issues championed by these self-anointed public guardians can be controversial: Rieff argues that one person’s civil society is another’s pressure group, and in praising the good in civil society, we selectively define civil society using prescriptive rather than descriptive definitions. I argue that civil society is necessary to ensure full representation of all segments of society, thus bolstering democracy. The importance of civil society in a democracy is driven by two factors: the risk of the tyranny of the majority and the information asymmetries that exist in society.

Civil society in “democratic” countries is essential because of the need to protect minority rights.[2] Democracies, without protection for minority rights, can easily turn into a tyranny of the masses. For example, gay rights are inadequately protected in contemporary Singapore or the USA.[3] Without the organizing power of civil society to provide this minority voice, the system will depend purely on elections, which might favor a homophobic majority at the expense of the minority.

Reiff would argue that civil society would also include homophobic groups seeking to criminalize homosexuality. While this is true, and assuming that this view is held by the majority, it would only strengthen the case for civil society. This lies in the asymmetry of power that democracies grant to majorities – in this case, the homophobic camp is well-represented within the political process, while the homosexual rights camp relies on their ability to organize as civil society to create change and achieve acceptance. Even if positions were reversed (i.e. the homophobic camp is in the minority), it still strengthens democracy if minority views are able to organize and convey their opinions to the public. Regardless of how distasteful we might find the causes of some groups, we must accept that they represent the views of some segments of society, and should be represented.

Furthermore, politics is a social good which we need information on to be informed consumers. Civil society acts as an information medium as it has the incentive and interests in conveying information. While their single issue activism makes them biased, this biasness represent views and interests that exist, and which have a legitimate claim on the right to persuade society. It should be seen in the same light as corporate advertising: we know that companies have an agenda, still thank them for spending money to inform us of their products! Civil society pursues its individual interests and in doing so, subsidizes the cost of political information for society.

[1] Rieff, David. The False Dawn of Civil Society. The Nation February 22, 1999.

[2] I used a loose definition of democracy here as it is arguable that democracies without proper checks and balances and protection for minorities cannot be considered democracies. .

[3] Homosexuality is illegal in Singapore under Penal Code 377a.

(Beijing, China) On the bus.

I recently met with a friend who studied in Beijing University for a semester. Our conversations naturally turned to my work in China over the summer and my impressions of Beijing, which inevitably drifted to the Olympics taking place next year. Being the closet economist, we pondered the fate of China’s economy post-Olympics.

What would happen post Olympics and how would this affect China? The most direct impact would be in Beijing, where construction leading up to the Olympics is fueling a housing bubble. Rapid growth in Beijing is linked to the rest of the economy through the income of migrant workers brought in to meet construction needs. Arguably, the Olympics might be fueling Chinese optimism across the country, pushing up investment and consumption, but I do not believe this to be the case. Any economic impact post-Olympics would be largely confined to Beijing; although that is a big part of China’s economy on its own.

Assuming that housing prices threaten to collapse after the Olympics, what could the government do? Propping up housing prices can be accomplished through increasing hukou quotas. The hukou system limits the ability of non-Beijing residents to attain healthcare and education for their children. There are a large number of Chinese who are able to find jobs in Beijing, and would like to work there, but are frustrated by the lack of hukou. China slashed the number of hukou allocated to employees of private companies this year, and because of this, many of my friends who were planning to work for the big accountancies sought jobs in the state-owned entities instead. By increasing the hukou quotas, these white collar workers can be lured back to Beijing, driving demand for housing, and preventing a freefall of housing prices.

(Dalian, China) Whatever the problem is, let’s just talk it through and share our experiences.

I realized that my social life overlaps significantly with my work. When I think of what I do in my “free time”, it inevitably drifts back to something related to EduHealth or some other professional challenge I face. In my free time, I enjoy meeting with people I don’t usually hang out with or see very often, and bounce questions, ideas or challenges off them on these topics.

Every week, I try to meet with three or four friends who fall into this category. We would meet over lunch or dinner. The meeting agenda revolves around a problem I face, whether academically or through EduHealth, or around career choices. It is always enriching and humbling to hear from the perspectives and experiences of others. Most importantly, I cherish the opportunity to learn that many of my friends often face the same challenges on their projects. In realizing that I am not the only one facing those difficulties, I feel recharged to tackle my challenges. The discussion would shift to their dreams and challenges, and it is always enjoyable contributing my perspective in return.

Whether it is discussing the politics of creating change in Wharton and West Philadelphia, or discussing school options now that Penn has rejected my financial aid application, it is always comforting to talk about these issues. Simply voicing it out and hearing the advice of a diverse group of friends allows me to define my plan of action more clearly, and makes me more confident of my next steps.

P.s. As a side note, I finally met Joyce Meng, the Goddess of Huntsman Program who we are all betting on to win a Rhodes Scholarship. She is without doubt one of the nicest, most brilliant and driven person I have met here, and is a source of continued inspiration. I wish her all the best in her future endeavors!