A Tale of Two Conferences, Part 1
September 18th, 2009
September 18th, 2009
This week I attended two conferences: one at the World Bank called “Understanding the dynamics of the flows of illicit funds from developing countries” and one hosted by the Task Force labeled “Increasing Transparency in Global Finance: a Development Imperative.” Ultimately these conferences conveyed a sense of massive variety in our topic, showing the many, many different varieties of illicit financial flows and their impact on development. But while these conferences were similar in mission, they were as fundamentally different as chalk and cheese.
The World Bank conference, in a typical Economist swagger, returned over and over to a discussion of data and the measurement of capital flight. These conversations often revolved around technical back and forths concerning methodology, data issues, and econometrics.
The Financial Task Force conference was a wholly different animal. This discussion also strived for a multifaceted understanding of the situation, but the underlying implications of each of the speakers called for action, instead of research. Both conferences have a valid place in the discussion on illicit financial flows and together they played to two of my own inherent qualities—my call for understanding and intellectual curiosity and my drive for solutions.
Actually the conferences reminded me of my broken sink. Let me explain. Three days ago, I dropped a perfume bottle into my sink and broke it, leaving a hole and a piece of shattered porcelain on my floor. One friend suggested to sealing the hole with duct tape. Another examined the broken pieces and arranged them like a puzzle so they fit together again. He declared, jokingly of course, that he had “fixed the sink.” Of course, if I turned it on, water from the faucet would still run through the hole.
So using my duct tape and the arranged pieces of porcelain, I mended the hole. It still has cracks in it, but it works. Mostly.
This story reminded me of the conferences. The world financial system is broken and there’s a hole, not a crack, which is letting billions of dollars run out of the developing world.
What the world really needs is a new global financial system, like I need a new sink. But also like a new sink, a new financial order is expensive and difficult to install. So that’s where the solutions come in. The World Bank’s wants to measure the hole and figure out how match the pieces of the puzzle together, agonizing over the way the data should fit. The Task Force, realizing a new sink probably cannot be bought, is going to duct tape the sink by implementing laws and international institutions that would patch the financial holes immediately.
The sink must be duct tapped, but the pieces must also fit on top. We need to understand the problem and exactly how it all works. There is a place for data and agonizing over numbers. But ultimately the hole must be blocked, though it will never be stopped entirely.
Or maybe I’m just rationalizing the fact that I’m too cheap to buy a new sink.
To read more about the conferences, please see A Tale of Two Conferences, Part 2