forum americas LEADERSHIP, GOVERNANCE AND COMPETITIVENESS

Today we should consider:

What happens when societies decide to change their path and start to grow, and above all, when they decide to start a learning process?

“The main issue I would like to suggest for consideration here, is: are we creating societies that have the capacity from their own mistakes or, are we creating societies which keep repeating their errors over and over again? Societies that are capable of learning do progress, and ultimately, this ability to learn may be the underlying reason behind their development or their underdevelopment”.

“We should use these ideas as an outline to further our conversations. Additionally, some of these ideas are contained in the documents you have been given, so, I am just going to go over it briefly. All throughout history, there have been cases of societies which decided to change their course”.

“We…..should know a little about what happened in some of these cases: Germany and Italy after the destruction left by WWII;  Spain and Portugal when they  regained their democracies in the middle of the 70’s; Ireland during the  80’s and the 90’s, and  New Zealand, Australia, and Chile after 1989. The last case is truly meaningful.“

"Presently we are devoting time to working on the successful transitions being accomplished by some of the ex-Socialist countries among which, Slovenia and Estonia should be especially mentioned, and probably also the Check Republic.”

The Forum invited Professor Jorge Forteza, whose presentation has been transcribed: A few examples in both developed and developing nations: the foundational phases can be seen in the famous German movie ‘Stunde Null’ or ‘Zero Hour’, which you have probably seen, or the example of an Italy coming out of the war, in 1945, totally humiliated and devastated and having to go sign a humiliating peace jorge forteza forum americastreaty in Paris, in 1947. In this case, we see the combination of De Gaspary, Meni and Tobbiatti, that is, Democrat Christians, Communists and Socialists, all working together toward the reconstruction of Italy. As an example of a crisis in the level of dissatisfaction we have France in 1958: the Fifth Republic crumbling into pieces, the war in Argel, De Gaulle is called in; also England in 1979, where we see a Margareth Thatcher emerging, who represents the hope of change; Australia and New Zealand.

The first stage of change

To start with, we must have the willingness to change; the society itself (as a whole) must decide that it wants to change, and this, as we shall see, can occur due to a variety of reasons.

It can occur due to an extremely serious crisis, so serious, that it looks as if history were about to begin again; or it can occur because there is a enormous dissatisfaction among the people; and this is, to a great extent what we, Americans, are probably feeling. In order for this change to happen within a nation, a number of magical events must take place; sometimes these events take place, some other times they don’t.

A first time in which a Society decides to change: Individuals who live in societies that have the capacity to learn and therefore progress, must decide what kind of a society they want to live in: one that learns or one that keeps repeating the same mistakes. What happens at those moments?


In the Foundational Stages, the Institutional Discontinuity is followed by the appearance of new leadership (Adenauer in Germany, Gasperi in Italy, Juan Carlos I in Spain, Mario Soares in Portugal). Emerging leaders manage to give a voice to the necessities of the society and, on the bases of the aspirations and the lessons from history they construct a Fundamental Vision, some Institutions (generally a Constitution), and an agreement on the basic rules of the political and institutional game. On those bases, a society begins to create the coalition for change (the case of the Agreement in Chile) and mechanisms to create and maintain the fundamental consensuses.

In the Crises of Dissatisfaction, the country’s institutions are not in discussion;acrisis takes place as a result of the increasing divergence between society’s self-image (its aspirations, its pride, and its history) and the frustrating image that daily life presents. Generally, a precise crisis takes place that empowers the renewal of leadership, a leader appears, who promises to recover the pride and the viability of society (the cases of C. De Gaulle in 1958, M. Thatcher in 1979,or D. Lange, R. Douglas in N. Zealand in 1984 and R.Richardson later, are clear examples of this tendency).

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Second stage of change:

SOCIETY GRANTS ITSELF A VISION AND CONSTRUCTS A COALITION FOR CHANGE.

During this second phase, a society, guided by new political generations, establish a new vision and generates a coalition for change.

A vision must be in place and a coalition for change must be built. It is interesting to notice here, that these coalitions, whenever they have been successful it is because they were coalitions between generations; a virtuous combination of young people and mature people. Now, once I have a vision and a coalition, the rest is just daily work.

What is a Vision?

The Vision offers proposals around some key subjects, such as the desired position in the world, the type of society they want to construct, the organizational rules and basic behaviors to be fulfilled, the way society in which will organize itself to pursue competitiveness, or the way society will define the contract between the generations. In some cases, documents such as "Towards 2010" in N. Zeeland or "Partnership 2000" in Ireland appear; in other cases, it takes a more generic or original form, as in the Spanish case, where a student of the process indicates that "the vision in Spain was given by the Constitution of 1978". Yet, the vision as a document or expression of aspirations can be a sterile exercise if a "Coalition for Change" is not generated, which coalition is constructed generally by the conjunction of:

Some unifying leaders that offer the guarantee and the meaning of all the Process (the case of Juan Carlos I in Spain is itself a paradigm). Political leaders who spearhead the political process (the conjunction of Adolph Suárez and Torcuato Fernandez-Miranda in Spain) and technical leaders who develop the concrete process of transformation (we can mention as examples Ludwig Erhard in Germany, Jacques Rueff and Jean Monnet in the Fifth French Republic, and Enrique Quintana Sources in the Spanish process).

A generation that understands and assumes its historical responsibility and works to surpass the ambitions of the past and to consolidate the process of change and the emergent leaderships of Jordi Pujol, Felipe González in Spain, or the generation that takes power in Chile in 1989 and must construct the basic rules of coexistence with the Armed Forces and the political right.”

“Excellent Plan but what happens with we start to see signs of deterioration in the in our working plan? Jean Monet:

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The Third stage of change

SOCIETY CONSTRUCTS THE INSTITUTIONS AND PROCESSES THAT WILL GIVE LIFE TO THE NEW VISION, AND THESE, IN TURN, GENERATE THE CAPACITY NEEDED TO ALLOW TRANFORMATION TO CONTINUE:

This issue is in reference to how we shall construct the institutions and processes which will validate this vision so as to render it permanently legitimized. A society should this re-enact a new social contract periodically in order to develop its transversal capabilities, institutional capabilities, education, science and technology to further the promotion of competitiveness, because, in the last analysis, all we do is intended to improve our societies, and the most prosperous societies must have businesses and generators of wealth that will allow us to achieve $15.000 per Capita.

How do we consolidate change in sustainable transformation?

Having constructed a Vision and a coalition for Change, it is essential to assure the consolidation of the Process of Transformation. Society must advance towards a third time, in which Institutions and Processes are constructed. Why is it necessary to construct these capacities for change? In our opinion, it’s needed to advance on five fundamental levels of action.

I - To construct and to strengthen the foundations, that is, to permanently construct and to reinforce the fundamental institutions of Democracy and the ones that contribute to the macroeconomic rationality, as well as the values and the culture of society (rule of law, the attitudes towards the work, and social responsibility), which some authors call "social capital" and constitutes a fundamental determinant for the performance of a society.

II - Quality and the Financing of the Public Sector, that is, how to have a Public Sector with civil employees of quality, honest and with management processes that assure a performance aligned with the objectives of society.

III - The Institutions for the Quality of the Society, that is, all those institutions that contribute to the creation of a Society that offers one first opportunity to its citizens (such as Health, Education, Associative Life) and also a second opportunity that allows to promote flexibility in the reassignment of productive resources (like social networks, human resources’ training policies, the housing policy and the urban surroundings, etc.)

IV - The Institutions for the quality of factors markets? and the necessary infrastructure for its operation such as the operation of the Laborer market, the quality and depth of the Financial System and the Market of Capitals, the Physical Infrastructure, the Security and the operation of Justice.

V - Policies/Institutions to promote the creation of wealth or the competitiveness of businesses, which must vary according to the objectives and specific needs of the three segments: the great national groups, the small and medium-size companies and the multinational companies.

THE FORUM SHOULD FOCUS ON SPAIN-IRELAND-NEW ZEALAND

There are three cases which we find particularly interesting; and I will recommend that the Forum should you should work on:

1- The vision as it was given in Spain and the successive treaties, starting with the Moncloa Treaty;

2- The vision in Ireland and the successive treaties, through the ‘Partnerships’ and

3- The vision of New Zealand, and how this vision enabled a strategic management of the public sector. When the vision is adopted a process must occur, which leads to the celebration of agreements about objectives, state policies and processes. These, in turn, will allow the advancement on five fundamental levels, which constitute themselves a list of issues that should be checked periodically in order to assess the progress that has been achieved toward development. It is not by chance that when one reads, for example, about the indexes in world competitiveness, the variables they work on are these, and also the indexes about human development. These fundaments have to be a part of this vision, there must also be macro rationality, which is something that has taken Latin American long time to learn, although, in general, I’d say we have finished by learning this lesson.

 

WHAT ARE THE QUESTIONS AND ISSUES TO
BE ADDRESSED BY THE NEW GENERATIONS?

In which direction do we want this society to go? What values do we want to embrace as our core values and later transfer to the world? What is the place we want to reach in the in the new world order? What kind of a society do we want to build? How are we going to organize ourselves, in our quest to become more competitive? What contract should there between the generations? and finally....What should the a state’s policies be? Once we attain the answers to these questions, in the form of a document, possibly, then we most certainly will have a ‘common vision’.

THE VALUES THAT WILL LEAD US TOWARD A FORWARD-LOOKING SOCIETY:

“There are some distinctive issues of our culture, which seem to delay the birth of a dynamic market economy in our countries. I believe, though, that European Mediterranean countries like Spain and for the most part Italy and Portugal, have demonstrated there is nothing wrong about being Catholic or Mediterranean, thus we can achieve development with these values, just as well”.