Yevgeny Kuznetsov's blog

‘What is diaspora?’ –  a senior official of the biotechnology department of India’s Ministry of Science and Technology asked me as she was describing how the department engages with India’s technical and managerial talent abroad.  Relevant expertise is drawn upon for peer review of proposals and mentoring of their subsequent implementation. Diaspora members are relied upon as ‘sounding boards’ and ‘antennas’ when decisions are made on allocation of funds for research and technology development. Engagement with diaspora has become a routine part of the department’s organizational practices. A Moliere character was shocked to discover that he was speaking prose without knowing it. In contrast, in this example, the official was making a good practice in diaspora engagement without having a slightest idea of it – she was indeed ‘’speaking in verse’, yet unaware of it. The diaspora talent has become a part of her daily management practice:  a part of the country.

The post-Washington Consensus has emerged recently as an umbrella denoting the search for pragmatic and context-specific solutions to problems of developing countries. The recent financial crisis, with its epicenter in the rich economies, has demonstrated that the whole world, not just poor countries, is developing. One feature of the new pragmatism is that industrial policy is back. But in contrast to import substitution, it is an open economy industrial policy – the objective is to increase economic openness: enhance flows of knowledge, foster productive innovation, and promote non-traditional exports. Under rubrics such as productive development policies or innovation strategies, governments in developing countries are providing public inputs, each customized and bundled to suit the needs of particular domains of economic activity, but not others.

How are we responding? One way to understand the World Bank’s role in articulating the post-Washington consensus is to imagine a pyramid. At the top are the ‘thinkers’ of DEC, the Bank’s research and data arm. There are encouraging discussions on new structural economics (Justin Lin), empirical work on new trade theory, and – as one would expect – a new open industrial policy. At the foundation are task managers of lending operations. By being responsive to the needs of the client, but without much fanfare, they are in the forefront of the post-Washington consensus in their dialogue with our most sophisticated and demanding clients such as India, China, Argentina, Mexico, Russia, Malaysia or Chile. A new generation of lending technology and innovation operations is quietly emerging which emphasizes selectivity and focus on a few domains and sectors of the economy deemed strategic rather than the across-the-board focus on innovation climate. Practitioners take the need to make ‘’strategic bets” for granted (‘’the entry costs are high, technology is changing rapidly, one can’t do everything, we need to be selective”), so the issue here is to design private-public institutions to share risks and minimize state capture. New institutions of open industrial policy are being self-discovered on a daily basis, yet there is too little contact between the new theory (‘thinkers’) and cutting edge practice (‘doers’).

Addicts are known to be narcissic – they tend to think that their affliction is unique and cannot possibly be compared to anyone else. Long-standing conflict can be usefully understood as an addiction – or so was a claim made by the recent seminar’s core speaker Padraig O'Malley, the John Joseph Moakley Distinguished Professor of International Peace and Reconciliation, University of Massachusetts, a former addict himself. Just like addiction, long-standing conflict is a form of insanity and recognition (which often comes as an epiphany) that the party you are in conflict with is very much the same as you are – is a first step to recovery.

With funding from the Ireland Funds, Padraig brought the warring factions of the Irish conflict to South Africa for a week-long deliberation with Nelson Mandela and his team. The two factions weren’t flying on the same plane, wouldn’t sit on the same table and wouldn’t come together within a half a kilometer for fear of “contamination”. Predictably, the logistics of accommodating the two sides in South Africa was quite a project, which was falling apart continuously, because, say, the size of beer bar in one faction’s hotel appeared to be larger than in the other. The trip to South Africa and the dialogue there helped to open a line of indirect negotiations between the Irish fractions, effectively supported by their South African hosts, which ultimately brought about the peace agreement.