Three Cups of BS

Greg Mortenson's school-building plan was never a good idea.

The world was shocked by a report on CBS's 60 Minutes this week that accused bestselling author and humanitarian Greg Mortenson of being a fraud. Not only were some of the stories from his book fabricated, 60 Minutes alleges, but the charity that Mortenson created to build schools in Pakistan and Afghanistan never built many of the facilities it has taken credit for. Mortenson's Three Cups of Tea didn't, as it claimed, bring education to rural Pakistan and Afghanistan. Its finances are a mess, and the charity does not even seem to have kept track of how many schools it built or how many students attended them.

While much of the uproar has been over the lies Mortenson peddled, I can't help wondering: Why, exactly, did we ever think that Mortenson's model for education, exemplified in his Central Asia Institute (CAI), was going to work? Its focus was on building schools -- and that's it. Not a thought was spared for education quality, access, or sustainability. But building schools has never been the answer to improving education. If it were, then the millions of dollars poured into international education over the last half-century would have already solved Afghanistan's -- and the rest of the world's -- education deficit by now.

Over the last 50 years of studying international development, scholars have built a large body of research and theory on how to improve education in the developing world. None of it has recommended providing more school buildings, because according to decades of research, buildings aren't what matter. Teachers matter. Curriculum matters. Funding for education matters. Where classes actually take place? Not really.

The whole CAI model was wrong. But here's the truly awful thing: Looking back, it's clear that everyone knew that that CAI's approach didn't work. It was just that no one wanted to talk about it.

None of the big names in international education, like Creative Associates International or the American Institutes for Research, ever worked with CAI, which wouldn't have met those organizations' tough standards for financial accountability or technical skills. It's also no coincidence that CAI was never a big recipient of funds from the U.S. Agency for International Development. Experts on education and international development think a lot bigger than school buildings.

Mountaineers, it turns out, have also known all along that the origin story of Three Cups of Tea was a myth. When Jon Krakauer was reporting the April article that thoroughly debunks Mortenson's travels and his book, he seems to have simply asked Scott Darsney, one of Mortenson's companions, for the truth. He got it. Mortenson had three companions walk down K2 with him when he gave up his attempt, and he didn't wander alone into the village of Korphe, as he claims.

The nonprofit community in the United States also knew that there was something tricky with CAI's management. Some of Mortenson's donors saw red flags, wondering how he could possibly run an NGO while also conducting his whirlwind speaking tour. The current board has only three members, one of whom is Mortenson himself: a risky structure with very little accountability built into it. Krakauer reports that three board members quit in frustration over poor management in 2002. Yet none of them spoke out. And CAI wasn't rated by the Better Business Bureau, as most charities are, because of a failure to disclose accountability information.

Finally, Pakistan scholars knew there was something wrong with Three Cups of Tea because the descriptions of Pakistan were so inaccurate. Throughout the book, the authors get religious divides, tribal affiliations, and political alliances wrong. A scathing 2010 review of the book by the website Islamic Insights complains that the book relies gross generalizations and only a superficial knowledge of the region. And it's just plain wrong: "Apart from problems with normative assumptions in the book, there are gross misrepresentations which require thorough scrutiny. For example, as one commentator pointed out elsewhere, 'Mortenson could not have attended Mother Teresa's funeral in Spring 2000 … because she died in Autumn 1997.'"

All of this leaves us with a new question entirely: When so many people knew that Three Cups of Tea wasn't entirely factual and that the Central Asia Institute was both badly run and doing flawed work, how did it take this long to come out to the public?

First and foremost, neither international development culture nor nonprofit culture generally rewards critics. What benefit was there to being the one public voice who didn't love Three Cups of Tea? It was much easier to roll your eyes with the other international development folks when the title was mentioned and then go on with your real work. Being branded as a naysayer doesn't help anyone get a job or funding for projects they care about. This combined with a very reasonable fear that criticism of the Central Asia Institute might lead to public disillusionment with aid projects in general -- a fear that seems to be playing out in the reaction to Mortenson. Commenters on the CBS site, for example, have asked, why not extend the scrutiny of Mortenson to all international charities?

But the big reason nobody asked the tough questions was that we fell for the story. We didn't want to ask. Sure, the book was a turgid, overwritten hagiography, but the story was magic. We all wanted to believe. Mortenson's work inspired countless aid workers, such as the blogger who writes Stories of Conflict and Love, who reacted sadly to the CBS investigation in an April 18 post. "I understand that the recent revelations suggest the story is problematic … [But Mortenson's] work and life story still ignite something inside me." Indeed, even the most hardened aid professional would like to think that once in a while, problems have an easy answer. It would be awfully nice if rural Pakistan just needs schools -- not teachers, not social support for education, not money for books and teacher training.

We wanted to believe that sometimes, international aid really is that easy, that a clueless amateur with a heart of gold can bring change in a region that has defeated the experts. If an amateur could pull this feat off, just think what professionals could manage in the future, doing things right. Nobody wanted to pay too much attention to the details because it would have ruined a good story.

I suspect that Mortenson fell for his story, too, and that when he felt it begin to slip away from him, he just kept creating more stories to keep up. Building infrastructure like schools in challenging environments is hard for an experienced organization. For a beginner like Mortenson, it must have been nearly impossible; even the cheerful, sanitized story in Three Cups of Tea makes that clear. It's not surprising that CAI ran into trouble expanding in Pakistan, let alone Afghanistan.

We let Mortenson spin us because we wanted to be spun. Development problems are hard, slow, difficult problems that take generations to solve. It's a lot more fun to believe in a good story. It's easy to pile on Greg Mortenson at this point, but asking the hard questions a whole lot earlier might have helped CAI grow slower and stay on track.

Education is too important to be lost in our love for inspiring narrative. Next time we hear a fantastic story about a new aid effort, we need to look deeper. Does its organizational model make sense? Is it building on the lessons of the past? Is the money handled right? Is there evaluation going on, and are there documented results? Everyone, from children in Pakistan and Afghanistan to donors to Mortenson himself, would have benefited if somebody had asked the real questions sooner.

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Emerging Hangover

It will take more than BRICS to build the post-American economy.

As the economic crisis fades in the rearview mirror, some analysts on Wall Street and in Washington expect the world economy to enter a supercycle, a prolonged global growth spurt powered by the emerging markets. This isn't just some fringe theory: The "Super-Cycle Report" by Standard Chartered Bank posits that world GDP will double in the next two decade as a result of "industrialization and urbanization of emerging markets and global trade." The sentiment was widely shared among the attendees of the latest World Economic Forum in Davos, Switzerland, and among such heavyweights as Goldman Sachs and PricewaterhouseCoopers. Emerging markets, rising to make up half the world economy by 2017, are expected to pull the sluggish, debt-laden advanced economies -- United States, Europe, and Japan -- along. In this bifurcated world, the emerging juggernauts such as China, South Korea, and India will decouple from the advanced nations, relegating the mantra "when the U.S. economy sneezes, the world catches a cold" to the ash heap of history.

But last week's IMF governors' spring meetings and the G-20 finance ministerial in Washington tell a very different story. Rather than celebrating a global liftoff, countries are wrestling with familiar global letdowns, from deepening global imbalances to China's currency manipulation and soaring U.S. public deficits. The depressingly familiar policy agenda belies the supercycle hype. Rather, it suggests that emerging economies remain unsafe from flu in America and unable to power the world economy on their own.

Granted, emerging markets are due to grow almost thrice as fast as the advanced economies in 2011, according to IMF forecasts. They seem light-years away from the massive debts, currency crashes, and hyperinflation of the 1980s and 1990s. Now armed with historic reserves and led by pragmatists rather than populists, they appear stable and sound. Their corporations are globalizing; their financial markets are growing sophisticated; and with a few exceptions, their politics look orderly, with regular transitions of power instead of the coups and chaos of past decades. For all the gripes about the "Washington Consensus," developing countries have more or less followed its prescriptions and gained dramatic health benefits.

But the idea of a supercycle driven by emerging economies is tenuous. The American consumer is still the pivot of the world economy. IMF research shows that consumer demand in emerging economies is too limited to offset dips in U.S. consumption. At about half of GDP, China's savings rate is among the world's highest. Beijing's glossy new five-year plan promises to expand household spending power, but consumption, now at some 36 percent of GDP, will in the best of scenarios rise to only 45 to 50 percent of GDP between now and 2025, well below that of advanced nations and such emerging economies as Brazil and Mexico. Similar trends hold across emerging East Asia. No wonder regional governments stick to their export-led growth models and keep their currencies artificially devalued, paying lip service to the G-20 rebalancing agenda.

Add to this rising oil and commodity prices, and global imbalances are heading toward their pre-crisis levels, risking trade protectionism and a new global economic crash. No one would escape such a debacle; rather than diverging, the fortunes of the emerging and advanced economies are converging. Their trade and financial ties are deepening, and their business cycles have only become more coupled: The correlation of advanced- and emerging-market outputs has tripled over the past decade. Emerging markets weathered the crisis not because they were decoupled from the advanced nations but because of their reserve buffers and improved macroeconomic fundamentals.

At the same time, the future rise of emerging markets is rife with uncertainties. Already, their governments are responding to economic overheating, inflationary pressures, and currency appreciations with counterproductive knee jerks -- capital controls that disrupt global flows of finance and trade and exchange-rate manipulation to engineer artificial export competitiveness -- instead of the best solution, fiscal and monetary tightening. The presumed champions of the 21st-century world economy, the BRICs (Brazil, Russia, India, and China), lack the institutions for sustained growth. Look for them rounding out the bottom of World Bank rankings on regulatory quality and ease of doing business. Corruption scandals are rocking the Indian government; graft and property rights violations cost companies billions in China.

What's more, mass urbanization and widening income disparities will test these countries' already feeble social cohesion. And if Samuel Huntington's seminal 1968 thesis, Political Order in Changing Societies, holds, the rise of almost 2 billion new members of the global middle class in the next two decades will build pressure for political liberalization, especially in authoritarian China and the Middle East. When they reach the boiling point, emerging countries are bound to disrupt global growth much more drastically than the ongoing shake-ups in North Africa or the 1997-1998 Asian financial crisis that engulfed Russia, Brazil, and the rest of the emerging world.

In this imbalanced, coupled, and volatile world economy, the U.S. economy remains critical to global growth. The supercycle hype notwithstanding, emerging markets, coupled to advanced economies, cannot carry the world economy alone -- nor can they be relied on to do so because of their many political and social unknowns. Aging and crisis-worn, Europe and Japan are stuck in a low-growth quagmire. Against this backdrop, lackluster "new normal" growth in the United States would be disastrous, destabilizing emerging markets and sparking zero-sum conflicts over a stagnant global economic pie.

The quintessential question in the post-crisis world is whether the U.S. economy, straitjacketed by fiscal deficits, new regulations, and soaring entitlements, can grow. What is clear is that what got us here won't get us there. Instead of throwing money it doesn't have at the problem, America must reinvent itself to pump up the world: balance the budget, bulldoze barriers to exports at home and abroad, cut taxes on high-growth companies, promote innovation, and unleash venture capitalists.

Global governance poses another problem. Global conflicts over imbalances, currencies, capital controls, trade protectionism, and resources require global management. The U.S.-built institutions -- the IMF, G-20, WTO -- are the best tools available, but they are hamstrung by the divergent demands of their diverse memberships, as epitomized by the G-20's snail-pace progress on global imbalances last week.

Leadership is needed to bridge the divisions. Emerging economies prefer to free-ride rather than take responsibility in global governance, while Europe and Japan are neither able nor willing to lead. This leaves the United States. According to a February survey, the majority of Americans, 66 percent, still want to play a leading role in the world, but the level is the lowest recorded. For its part, Washington is playing defense instead of leading -- procrastinating on pending free trade deals and the decade-long Doha trade round, backtracking on G-20 pledges, and failing to defuse the budget time bomb, the one policy fully within America's control to revive the economy and reduce global imbalances.

Washington must step up to the plate. The world economy needs America as much as America needs the world economy. Promising unprecedented wealth in the United States and around the world, a supercycle would serve U.S. national interests. But it won't spin without America.

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