Feb 242017

Image result for photos of fidel castro

It takes less than 60 minutes to fly from Miami to go back to a world of 60 years ago in Havana, Cuba. It is a world that is truly unique, dominated by 60 years of revolutionary ideology.

Miami is a city which displays the full spectrum of American life. It celebrates the country’s diversity, great strengths, culture, dynamism, violence, drug culture and rampant materialism. How, I mused, would Karl Marx and Vladimir Lenin have reacted to the contrast between Miami and the last state to have stuck to its embrace of the Marxist-Lenninist economic model for so long? Would they think their theories a success or a failure?

Cuba has had an unfortunate history. Twenty years after the arrival of Colombus in 1492, the Spanish colonised the country. Even by the standards of the Spanish, the colonisation was a brutal affair, effectively wiping out the indigenous Indian population and instituting a savage system of slavery which was only abolished in 1886. In 1762 the British briefly kicked out the Spanish, but shortly after this swapped Cuba for Spanish controlled Florida.

In 1868 a number of Cubans of Spanish descent began a long and extremely bloody campaign for independence. The death toll and destruction over several decades was substantial and it culminated in 1902, when American intervention saw Cuba nominally gain independence. Nominal because the Americans did not involve the Cubans in the 1898 Peace Treaty in Paris which led up to Independence. And they conveniently inserted into the Cuban constitution clauses giving them the right to intervene in Cuba whenever they saw fit and a lease to establish a naval base in Guantanamo Bay.

At the time of independence Cuba essentially had a two tier economy – a small, landed gentry, mostly of Spanish origin, whose wealth was largely founded on sugar, tobacco and coffee and on display in magnificent homes in Havana and elsewhere, and a much exploited peasant class.

In 1952 Batista, formerly a military officer who during his first four year stint as elected president in 1940, instituted some reasonable reforms, staged a comeback via a military  coup. He suspended the Constitution and revoked most political liberties. He received recognition and support from the USA, aligned with the wealthiest landowners, which increasingly became dominated by US interests and cut a deal with the American Mafia who controlled the drug, gambling and prostitution business.  Growing dissent and riots against the gross inequality that was being created by this corrupt system, were met with increasing repression and ultimately the execution of thousands of people.

In turn this created a ripe environment for a young radical, Fidel Castro, supported by his younger brother Raul and the famous Che Guevara to foment a revolution. The revolution began unpromisingly, low in numbers and suffering many devastating defeats. Through a combination of luck, determination, charisma, better mobilisation of the increasingly restive rural population  and improving military tactics, Castro ultimately prevailed in 1959.

Che Guevara (left) and Castro, photographed by Alberto Korda in 1961

Once in power,  advocates of Marxist-Leninism were appointed to senior government and military positions. Most notably, Che Guevara became Governor of the Central Bank and then Minister of Industries as well as being responsible for the trials and firing squads which dealt with alleged war criminals. This was a set of powers which no other central banker has ever had, but every one of them may wish for.  Businesses, private property and land were nationalised and given to peasants to use.  Within two years the economy was facing the first of many crises, with productivity slumping.

However, this did not stop the move towards full fledged communism, which was spurred in part by US attempts to undermine the Castro regime. In particular, US President Eisenhower secretly authorised the CIA  to ally with the Mafia and disgruntled Cuban exiles to overthrow Castro’s government.  Supported by his successor President Kennedy, the attempted invasion of this motley coalition via the Bay of Pigs in 1961, was a fiasco, with Castro leading the army to rout the invaders.

With the onset of the Cold War, Cuba ended up firmly in the Soviet orbit and became a one party state, heavily dependent on its relationship with the USSR. Castro became the first foreigner to be awarded the Order of Lenin. In the fashion of Mao and Lenin, Castro sought to increase revolutionary zeal domestically, while cracking down harshly on dissent. And he did his best to promote revolution in various other parts of the world, most notably in South America and Africa, where Cuban soldiers were used in many civil wars. He backed Che Guevera who returned to being a revolutionary, travelling through South America and Africa, before being killed by CIA trained troops in Bolivia in 1967. Will there ever again be a central banker with such a colourful resume?

Influenced by China’s Great Leap Forward, in 1968 Castro proclaimed his own Great Revolutionary Offensive, closing all remaining privately owned shops and businesses and denouncing their owners as capitalist counter-revolutionaries. All of these measures caused the economy to go into a further slump and then stagnate with a massive loss of financial reserves. Soviet help was critical in preventing a disaster.

On a positive front, Castro was able to use Soviet aid to implement important social projects.  Major emphasis was placed on education, and under the first 30 months of Castro’s government, more classrooms were opened than in the previous 30 years.  Health care was nationalized and expanded, with rural health centers and urban polyclinics opening up across the island, offering free medical aid.  A third aspect of the social programs was the construction of infrastructure; including substantial road, water and sanitation programs. Fourthly, all Cubans were, and continue to be,  supplied with a basic amount of food free of charge.

But the Cuban economy was critically dependent on the USSR for trade, technology, armaments and foreign investment. By the mid 1980s, over 80% of its trade was with the USSR, which paid 11 times the market price for Cuban sugar.  This system started to come under pressure though with Mikhail Gorbachev’s political and economic reforms beginning in the 1980s and completely disappeared in 1991 when Boris Yeltsin abolished the Communist Party, introduced a capitalist multiparty democracy and officially dismantled the USSR.  This led Castro to declare a ‘Special Period’ – code for extreme economic austerity, including dramatically reducing petrol rations, importing Chinese bicycles to replace cars, shutting down factories not producing essential goods, using oxen to replace tractors, firewood for cooking and electricity cuts that could last for 16 hours a day.  By 1992, the Cuban economy had declined by over 40% in under two years, with major food shortages, widespread malnutrition and a lack of basic goods.

This forced Castro to moderate his policies somewhat.  He ceased support for foreign militants, legalised free farmers’ markets and small-scale private enterprises, eased certain restrictions on emigration, allowing more discontented Cuban citizens to move to the United States.

The Special Period came to an end with the election of the left wing Hugo Chavez to the Venezuelan Presidency in 1999.  This led to an agreement whereby Cuba would send over 200,000 workers, including teachers and some tens of thousands of  medics to Venezuela, in return for receiving subsidised oil.  Cuba also provided military intelligence and other support to help prop up the Chavez regime.  The alliance helped to boost the Cuban economy, albeit at the expense of the teachers and medics – the latter were paid about $US20 a month and began in increasing numbers to flee to the US via Columbia.  The decline of oil prices and death of Chavez have undermined the economic value of this alliance during the past decade.

On July 31, 2006, Castro delegated all his duties to his brother Raul due to acute ill-health. While the transfer was described as a temporary measure, Fidel’s health precluded him from returning to visible power. In November 2016 the death of Fidel, the last true revolutionary Marxist leader was announced, leading Cubans to a period of considerable uncertainty and change.
So what of Fidel Castro’s legacy and whereto Cuba from here? It is worth reflecting that both Singapore’s Lee Kuan Yew and Castro came to power in 1959, both running small island countries, albeit Cuba was much wealthier, thanks to having more natural resources.  They both died within a year of each other, but as Forbes magazine recently pointed out, the contrast in outcomes for their respective countries is stark. Lee spearheaded a  remarkable transformation. He took  a country that had no natural resources, not even enough drinking water, and a very poorly educated population and made it one of the world’s most dynamic and wealthy nations. And while Lee Kuan Yew was relatively autocratic, the average Singaporean compared to the average Cuban, enjoys more freedom of expression, better: health care, education, life choices and  potential to thrive, than the average Cuban.
Cuba in 1950, Singapore in 1950, Cuba today, Singapore today
                               Source: Forbes magazine
Lee Kuan Yew began with a reputation for being a left leaning, anti-imperialist firebrand. But in power he was open to learning, developed a coherent development philosophy and was pragmatic in the face of the realities of economics, rather than being stuck in an ideology that was clearly failing. As a result today Singapore’s GDP per capita is almost six times greater than Cuba’s per capita GDP of a little under $10,000.  Reflecting different incentives to work, about two thirds of Singapore’s population is in the workforce, compared to less than 45% for Cuba. At all levels of society, Singapore provides its citizens with a better standard of living and more opportunities to thrive.
It is a moot point what Marx and Lenin would have concluded had they visited Singapore as well as Cuba. The danger is that as demagogues and ideologues, they would have stuck with their failed ideas, as Castro did for far too long.
As a result, today Havana, once a grand city, is literally crumbling. Kicking out wealthy families from grand houses and providing tenancy, for no or low rent, provided a temporary palliative in 1959.  But with no ownership rights, maintenance has been non existent.  Having walked at least 10kms a day through street after street in Havana for a week, the number of buildings that are collapsing around the ears of their occupants is astonishing. The opening of tourism as well as the UN targeting various world heritage buildings, has provided some new and restored buildings. Allowing tenants to have some ownership rights and the ability to sell their properties is helping, but the rules are still opaque and there is simply not enough certainty to encourage significant investment .

The typical scene of a once grand home, handed over to multiple poor families to occupy – maintenance has been non-existent ever since

The streets are filthy with the smell of sewage prevalent in many areas, reflecting broken pipes. Even though car ownership is minimal as are traffic jams, the fleet is so old that it spews out pollution which is odorous, visible and can sting the eyes.  Shops are few and far between and do not have much to offer.  The promotion of tourism has seen the growth of bars and small restaurants. While providing a useful source of employment, tourism has also driven up the prices of scarce food for locals.
For all of these problems, it is a sad reflection that Fidel Castro has probably been Cuba’s best leader since the first Spanish invasion over 500 years ago. While he followed the Cuban tradition of repressive political and disastrous economic policies, he did at least achieve something that no previous leader achieved – educating the population, providing a basic level of universal health care and instituting a social security system that provided for basic needs. It is noteworthy that Cuba’s life expectancy and child mortality rates are comparable to the USA. Not a huge amount of wealth is required to provide humans with the basic foundations for a good life. And if wealth is accompanied by ‘affluenza’ the disease of excessive materialism, it does not produce any meaningful increase in enduring wellbeing.
The peasants and disadvantaged in Cuba, at a basic level may be better off, or at least comparable to their counterparts in the USA and their support for the Castro regime has generally been solid, notwithstanding periods of hardship. Opposition has mainly come from the middle class and professionals, who have far less opportunities than their American counterparts. Their ability to emigrate to the USA, illegally, or in more recent times legally, has provided a valuable pressure release valve.
While most of Castro’s international forays were failures, he was a staunch opponent of racial discrimination generally and apartheid in particular. He was celebrated by Nelson Mandela for sending Cuban troops to Angola in the 1980s, forcing the withdrawal of invading South African troops and contributing to the collapse of the apartheid regime.
And today the country is independent, no longer a pawn of the Spanish, the Americans, the Russians or anyone else. There is a platform for further economic, political and social reform, which could see the country emerge from the shackles of communism and to develop its full potential.  So Cuba is at a critical turning point in its history. Raul Castro has continued and cautiously accelerated some of the reforms that Fidel began, most notably in agriculture and tourism. And improving relationships with the USA was a key step, albeit Cuba still suffers from American sanctions.
While an important step forward, the reforms to date have not occurred in the context of a framework that is clear in its vision, philosophy, direction or goals. The whole process of decision making and what is allowable is opaque.
While further economic reform is important and necessary, thoughtful evolution now is what is required rather than revolution.  Cuba’s next generation of leadership has a chance to develop a coherent philosophy, based on a pragmatic assessment of what works and what does not. They have the chance to draw broadly from the evidence of a variety of systems and the latest research on what is important to create enduring wellbeing for humans.  In this regard as they further reform the economy, they could usefully learn from Bhutan. In its evolution from an absolute monarchy, to a modern political and economic system, the Bhutanese government has sought to assess policies in terms of the impact not just on GDP, but also on Gross National Happiness (see my piece Bhutan: the happy magical kingdom).  In short the optimistic scenario for Cuba from here would be the emergence of enlightened leadership with the courage to shake off its past adherence to the policies of demagogues. And which is able to craft a set of policies, suited to Cuba, drawing from the best in the world.
Whether this, or a darker period awaits Cuba at the elections next year, when Raul Castro will step down, remains to be seen. But the country is a fascinating one for real travellers, looking to experience a country which offers something very different to standard tourist fare. It also provides a useful reminder of the long term consequences of simplistic economic policies, which are being peddled in various guises by the rise of populist leaders around the world.
Our most memorable experience in Havana was being taught how to dance salsa. There were many aspects of this experience that are a metaphor for Cuba.  Our teacher was a graduate in mechanical engineering, who had never worked as an engineer because the salary was only around $20 per month. After working as an air conditioning mechanic, he moved to teaching tourists salsa, something that he does very well. His female assistant, a young, very intelligent, mixed race black woman, had started to study medicine. But the prospect again of a low salary (also about $20 per month) had caused her to switch to studying dentistry as a conduit to becoming an orthodontist, which provided the prospect of doubling her salary.  But with the rise in tourism, she was also studying Italian and English and using her talents as a dancer to make more money part time than she is likely to do if she ever takes up dentistry.
 A country where salsa teachers earn more than professionals has a major economic problem. But economics aside, I have never seen so much joy and energy than watching Cubans from all walks and persuasions salsa in squares, accompanied by blaring ghetto blasters or in cheap night clubs. My mother loved dancing in all its forms and was a gold medal ballroom dancer – a talent that, notwithstanding enthusiastic efforts on my part, I did not inherit. But even she would have been left behind by what we saw on the streets in Cuba. It was a valuable reminder that what can make people happy, at a deep and visceral level, does not require much. We were certainly much happier for the experience.
It made me reflect more deeply on all the research I have read on happiness. There is no doubt that the opportunity to thrive in America, or Singapore is far greater than in Cuba.  But while per capita GDP in the former countries is at least 6 times greater than Cuba’s, the gap in relative happiness levels is almost certainly far smaller. There are many reasons for this, including the fact that every Cuban at least enjoys a very basic level of financial security and reasonable health care, unlike every American. Extended family and community relationships, another important driver of wellbeing, are also probably stronger in Cuba. And in America and Singapore, (as with most other wealthy countries), the complex soft skills on how to best utilise wealth to create enduring wellbeing are still being developed. As we have explained in How Much is Enough? used poorly, wealth can be as much a disabler of wellbeing, as it can be an enabler when used well. Affluenza, drug abuse and other diseases associated with wealth are far greater problems in the USA, than they are in Cuba
If you enjoy what you do and can make even a modest living from it, that is a key pillar of wellbeing. Our dance classes occurred under an asbestos sheet, sheltering us from the hot sun on the roof of an old, crumbling apartment block. Our teachers, despite their qualifications, were very uncertain about what the immediate future in Cuba held. They could not even afford to buy a bottle of water at the cost of $1, but instead boiled their own and took it around in a flask. But apart from income, they both loved dancing. It engaged them, gave them a sense of flow as well as meaning and purpose as they helped their students discover joy in dance. Watch this short video of them doing an impromptu dance together. And try not to smile: Cuban salsa
 Posted by at 1:49 AM
May 212015

How well would Ed Sheeran go if he was playing in a city like Omaha, Nebraska, with a population of under 1 million people? My son told me that Ed’s concert at the Sydney Footbal Stadium was sold out in 30 minutes. But Sydney is an international city, with a population 4 times the size of Omaha in America’s midwest.

When you think about it, the fact that an 86 year old Warren Buffett and a 91 year old Charlie Munger are able to attract over 40,000 people to Omaha to spend six hours listening to Q&A on mainly investment issues is truly remarkable. It is even more remarkable when you consider the fact that the majority of the audience flies in from all around America and the rest of the world, has to book accommodation about a year in advance and that any room under $500 is a bargain.

The huge crowd packed into a sports stadium listening to 6 hours of Q&A with Charlie Munger and Warren Buffett  and no Ed Sheeran

Ed Sheeran eat your heart out: the huge crowd listening to 6 hours of Q&A with Charlie Munger and Warren Buffett

Well, this year we joined the throng to attend the 50th anniversary of the Berkshire Hathaway Shareholders’ Meeting. Thanks to our good friend Scott Pape, the Barefoot Investor, who has been attending for a number of years, accommodation and other logistics were arranged to actually allow it to happen. Scott does a great job in educating his followers, applying Buffett’s principles and it’s worth looking up what he does as well as reading a copy of the latest edition of The Barefoot Investor.

As those of you who have read How Much is Enough? know, I am a Buffett fan and have read most of the books on him as well as his shareholders’ letters. So I was going for the experience, rather than in the expectation of learning anything new. While I did not pick up much in the way of new facts, the experience was great and I walked away with a number of learnings from it.

To have the full experience, we joined a crowd of shareholders the night before the meeting queuing to eat at one of Buffett’s favourite restaurants – Piccolos. The place was packed and buzzing, but sadly the food took me back to Australian food in the early 1960s. It’s one thing to be a fan, but important not to become a cult member, following everything Buffett does, particularly when it comes to diet.

Scott Pape and me joining the throng outside one of Buffett's favourite restaurants - and learning to stick with his investment tips instead

Scott Pape and me joining the throng outside one of Buffett’s favourite restaurants – and learning to stick with his investment tips instead

The venue for the meeting was in a huge enclosed stadium housing 40,000 people –the queues to get the best seats began the previous evening and if you weren’t there within an hour of the doors opening at 7am, you had to watch proceedings on a screen in one of many overflow areas. Even these were completely full.

A huge exhibition space in the stadium was filled with stalls of some the companies owned by Berkshire Hathaway selling their wares. It presented a dramatic visual image of the very diverse array of businesses involved, including: prefabricated housing, confectionary, Coca Cola, lingerie, furniture and railroads to name a few and the very substantial insurance business.

It has become a tradition for the shareholders’ meeting to begin at 8.30am with around a 30 minute video, which in many ways is a metaphor for the meeting itself. It is eclectic and has the look and feel of a home video, despite being professionally produced and featuring a variety of Hollywood and other celebrities. Scenes range from the very serious testimony Buffett was called upon to give to the US Congress some decades ago in the wake of the Salomon Bros scandal (which led to Buffett for some time becoming Chairman of the firm ) to a spoof where Buffett challenged Floyd Mayweather to a boxing fight. Fortunately the video stopped before the first punch was laid.

The meeting then opened to Q&A until 3.30pm, with a one hour lunch break. Questions ranged from highly technical (such as what will a raft of new safety regulations for trains mean for Berkshire’s interests in the sector) to the tough (does Clayton Homes act ethically with respect to its home loans and foreclosure policies) to asking for personal advice with respect to careers and life philosophies.

Despite this great diversity, we left the session with a great sense of coherence which reflects an underlying consistency of values and common sense that permeate all the answers. Here are my main takeaways.

  • Central to Buffett’s success is the fact that he loves what he does and has focused his entire life on getting better at it. In How Much is Enough? Andrew Ford and I argue that while money may not be enough to buy happiness, happiness buys money. In other words, people who enjoy sustained success, figure out what makes them happy first, become very good at it and the financial success then is a result of this. Buffett is the classic embodiment of this idea. He had the good fortune to discover in his early teens that he loved investing, but initially was not very good at it. His love for the work though, led him both to discover great tutors, in particular Benjamin Graham and then Charlie Munger as well as to spend many hours mastering his subject. It is said that Buffett typically reads several hundred pages of material daily.
  • The compound effect of this learning is as remarkable as the effect of compound interest over time. It was demonstrated over the course of the meeting in Buffett and Munger’s astonishing ability to talk with authority on a broad array of topics, rarely having to draw on the managers of the various businesses that they own. But I want to stress that this prodigious ability to learn and apply knowledge only occurs if you love what you do.
  • Equally important is Buffett’s motivation for what he does. Buffett’s sport is not making money per se. Those whose motivation is purely about making money typically end up flouting laws, ethics and make the characters from the Wolf of Wall Street look like innocents. Rather, four of Buffett’s key motivations are:
  1. The intellectual stimulation of analysing companies, not as pieces of paper listed on the stock exchange, but as real businesses and what makes them tick, the sustainability of their cash profits in a dynamic economy and how to value them
  2. The thrill of buying these companies at fair prices, particularly when these businesses can be purchased outright
  3. Providing an environment in which the purchased businesses can continue to flourish, typically under the original owner and management until they choose to retire, with minimal interference from Berkshire’s head office
  4. Genuinely thinking of his fellow shareholders in Berkshire Hathaway as partners and applying the highest fiduciary standards to how they are treated.
  • In short at the heart of Buffett’s success has been passion, a love of life-long learning, continuous improvements in execution, a fundamental commitment to the highest ethical standards and the strength to stay the course. I have come across money managers who have one, two or three of these characteristics, but very rarely all four. Buffett does enjoy the extraordinary financial success he has achieved for himself and his partners. But only because it is a measure of a job well done, rather than because of the pursuit of money for purposes of greed, making up for personal insecurities or a desire to lead a lavish material lifestyle.
  • Buffett, despite projecting a folksy image, is a complex personality, who clearly wants to be appreciated by others and to be popular. But he does not confuse this with being populist – in short, he has not compromised the rigour of his analysis, his focus on long term sustainable success or his values, in order to court approval or popularity.
  • Rather, he has been willing to devote substantial effort and resources to communicating with, and educating, his shareholders and the investing public as a whole. The extent to which Buffett displays empathy in personal relationships is a moot point. His history has been one of being highly introverted and socially awkward. But in mastering the ability to use the key tools of story-telling – aphorisms, analogies and memorable one-liners to make the complex simple, without ever being simplistic, he has become extremely adept at the skill of influencing people.

My lasting impression of Buffett is that he has transcended being a great investor and has emerged as a great leader. It is important not to get caught up too much in the hype of some of his followers and hero worship him. A Saint, a Gandhi, or a Nelson Mandela he is not.

But he has displayed leadership not just in the technicalities of how money should be managed, but wisdom in how it should be used. There are many Buffett wannabes who try and understand the technicalities of what he does, without understanding the underlying character and how the whole has been important to his sustained success.

Munger as usual nailed it when he said that Buffett didn’t want to be remembered as a great investor, or as one of the world’s richest men, rather, he wanted to be remembered as a teacher.

The wannabes who are motivated mainly by making money will end up failing, because the greed that underpins this undermines their ability to withstand periods of great stress. Periods when your strategy, which requires patience to succeed, is perceived by others to be a failure. How many of the wannabes could withstand the many headlines like: “Has Buffett Lost his Marbles?” that Buffett has periodically endured when the market has gone through prolonged manic or depressive phases? Buffett’s emotional ability to stay the course in the face of sometimes overwhelming pressure is arguably his most important strength.  In contrast Isaac Newton lost his entire inheritance when envy drove him to buy back into the South Sea Company at close to its speculative peak, proving that character trumps intelligence. What makes Buffett a leader is that he has both.

And as a leader, putting aside the fortune that he has made for his long term shareholders, he has achieved two extraordinary outcomes, which help to explain why he is able to attract a much larger crowd to Omaha than Ed Sheeran.

  • He has used his skills of influence and teaching directly to help hundreds of thousands, if not millions of people to overcome the behavioural biases that destroy long term wealth creation. And indirectly by influencing a legion of fund managers, like VGI Partners and Magellan in Australia and wealth advisers like Scott and me, he has had an even greater effect, even if the act as a whole is difficult to follow.
  • Spurred by the influence of his late wife Suzy, in the first instance and more recently by people like Bill Gates, he is now devoting the bulk of his fortune to try to solve some of the world’s most important problems via the Gates’ foundation. And he is using his considerable influence to encourage fellow billionaires to join him in this. The long term impact of this is likely to be even greater than his investment achievements

Nobel Prizes for Economics and for Peace have been handed to people for achieving far less.


 Posted by at 12:39 AM
Nov 172014
Leaping for Joy: Thaji Dias and Kushan Malinda

Leaping for Joy: Thaji Dias and Kushan Malinda Photo: Lukshmannan Nadaraja

A dancer, if she is great, can give to the people

something that they can carry with them forever.

They can never forget it, and it has changed them

though they may never know it.

– Isadora Duncan –

 If you want to know what the term ‘flow’ means and how it can inspire joy in others, then you need to see Thaji Dias dance. Thaji is the principal dancer in Sri Lanka’s world famous Chitrasena Dance Company, which is returning to Australia for the first time after 40 years, performing in the January 2015 Sydney Festival.

The Dance Co was founded 70 years ago by Thaji’s grandparents, the late Chitrasena and his wife Vajira, who at age 82 still teaches at the school. Our families have been closely intertwined for over 50 years and the passion that the Chitrasena Co has brought to their art has been an important source of inspiration for my family and an input into my success in business. So how can a Dance Co be relevant to someone building a financial advice and wealth management business? And what broader relevance does this have to exposing our children and indeed ourselves, to the arts?

To start at the start, the origins of Sri Lankan dancing go back about 2,500 years ago to a time when the then king was ailing. To cure him, the artists of the time put on a ceremony of dancing and drumming which went on for days and nights. The ritual was designed to invoke the blessings of the gods and hence was majestic, evocative and inspirational.

The king happily was cured and granted plots of irrigated land to the artists, allowing them to live amongst their peers as economic equals, while pursuing their art. It has seen the evolution of what Professor Ludowyk describes as a dance form full of fluency, of a great range of variety and accompanied by the drum with its spectrum of seemingly infinite shades of tones. “It is pure dance with its own universal language”.

Following the British occupation of Sri Lanka, the danger was that one of the world’s oldest dance forms would be lost. But then Chitrasena, born into a family steeped in art and culture and trained as a Shakespearean actor, spent seven years in a traditional village mastering the dance, studied further in India, before establishing the first dance school in Colombo in 1942. My mother a journalist, as well as being a teacher, spent years training at the school, before she came with my father to Sydney in 1962 on a contract to promote Ceylon Tea.

Australia in 1962 had virtually no Asians, let alone Sri Lankans, had not yet established a national ballet company and was symbolised by meat pies, kangaroos and Holden cars. Notwithstanding this, both my parents, driven by their passion for Sri Lankan dance, came up with the desire to arrange an Australian tour by the Chitrasena Co.  Given that they had no resources and no contacts, the idea was audacious, if not ludicrous.

But their passion meant that they only saw the power of possibility. They used their newspaper experience to invite journalists to our tiny flat, a few at a time, where my mother would first prepare a delicious meal and then demonstrate some of the dance steps, which I would accompany on a drum. This led to contact with the trustees of the Elizabethan Theatre Trust (a predecessor to the Arts Council) with whom the process was repeated.

The end result was that the Trust agreed to sponsor the Chitrasena Dance Co, which in 1963, became, what I believe to be the first Asian dance co to tour Australia, to great acclaim by audiences and critics. For example, Roland Robinson, dance critic of The Sydney Morning Herald, said:

The various pas de deux, performed by Vajira as the Chief Swan and Wimal Nayanananda as the noble King Nala, leave the Western “Swan Lake” sadly lacking in imagination and understanding. This critic has not seen in Western ballet mime, acting and dancing, capable of evoking the nature and spirit of the swan to compare with the performance of Vajira in this role in Nala Damayanthi.

We were successful in gaining sponsorship for the Chitrasena Co to come out again in 1972, again to great reviews. Hope Hewitt, of the Canberra News, said:

The Chitrasena Dance Company from Ceylon gave a brilliant program of dance and music last night at the Playhouse. There was also a strong feeling of sheer delight about the entire performance, which is an attitude to the life the dancers themselves celebrate.

Both in 1963 and in 1972, I was pulled out of school to accompany my parents and the Chitrasena Co on their Australian tour, seeing about 30 odd performances on each tour. I was also taken by my mother regularly to the dance school whenever we were in Sri Lanka. But how did all of this help me in my business career? I think in a myriad ways, not all of which are possible to quantify or understand. But some of the main contributions were to my sense of possibility, inspiration, imagination and integration of ideas.

Watching my parents achieve the apparently impossible, I am sure was an important ingredient in giving me the confidence, as a 24 year old, to follow my own path and become an entrepreneur who wanted to change the world. More generally, I think being close to artists who live simply, inspired almost purely by passion and creativity, has given me a greater sense of personal balance and perspective. It’s also developed the creative parts of my mind, complementing my formal academic education.

The integration of knowledge from many areas has been a source of a competitive advantage for me in business as well as a source of strength personally. The most common comment I get from people who engage me professionally or personally is that: “We value you because you care and think differently”.

And this brings us back to Thaji. Like me she was exposed to the steps of the dance and the sound of drums in her mother’s womb. Unlike me, she had talent, spent all her spare time while growing up at the dance school and has now dedicated her life to being a dancer. In doing she is conscious of the subsantial financial sacrifice that her chosen path involves. But she has found her calling.

What is exceptional about Thaji is the technical virtuosity that she has mastered thanks to sheer hard work, combined with the emotion she feels when she dances. She allows herself to be lost in this emotion when on the stage, which gives her dance an authenticity and magic that draws the audience to her and imparts a sense of joy. The ability to share flow with the audience is what marks her arrival as a great dancer. And one, who at the age of only 26 can still ripen and achieve greater heights.

Thaji (front) performing at the Joyce Theatre, New York in 'Samhara'

Thaji (front) performing at the Joyce Theatre, New York in ‘Samhara’

Recently Thaji had the chance to dance in a remarkably successful collaboration between the Chitrasena Dance Co and India’s Nrityagram Odissi Dance Co which was performed in many dance centres, most notably, the Joyce Theatre in New York. New York critic Marina Harss, said in Dance Critic:

At the Joyce there were three dancers from Nrityagram, and two from Chitrasena, all women. All were excellent…[The choreographers] created an absorbing and varied evening of dances-solos, duets ensembles-that draws on both traditions, a thrilling conversation between two techniques, movement, qualities, and styles

Earlier this year my two teenage sons had the chance to see Thaji at very close quarters in 4 private performances at the Chitrasena Dance Centre. She performed a number of items, choreographed by her cousin Heshma, also a grand-daughter of Chitrasena and Vajira. Heshma’s ability and reputation as an artistic director is growing and spreading, in no small part due her contribution to Samhara and to her latest production, Dancing for the Gods.  Thaji was also accompanied by some wonderful drummers and dancers. The thing that most struck us having spent a lot of time with these dedicated artists is that they have dedicated their lives to creating beauty.

The financial rewards they get from doing this are pitiful and the life of such an artist is essentially a simple one, with few of life’s luxuries. It would be too glib to say that such artists are happier than most other people. But to be able to share in, and enjoy, their creation of beauty is a pretty special experience.

Teaching the next generation

Teaching the next generation

Dazzling the audience

Dazzling the audience










My sons loved the experience and have become engaged in our ongoing support for the Chitrasena Co. How will it influence their lives? I do not know for sure. But I do know their experiences with these great artists will have a wonderful effect in ways that I cannot predict. To spend time with people who are driven not by money, but by a sense of creative inspiration and joy makes us all better, more rounded people.

I hope that you too will have a chance to see Thaji and her fellow artists perform and walk away feeling just a little bit more joyous and inspired. If you hear of her and the Chitrasena Company performing at a venue near you, don’t miss them!

Thaji performing a classic Kandyan Dance solo

Lost in the moment: Thaji performing a classic Kandyan Dance solo


 Posted by at 11:01 PM
Jul 062014
One of the entrances to Dharavi Slum

One of the entrances to Dharavi Slum

What does the word ‘slum’ conjure in your mind? Lots of sad, very poor people, squashed together, living in abject misery? Despite my South Asian origins and work in developing countries, more often than not I would unquestioningly accept that stereotype.

And what prospect could there be for redeveloping a slum in which both slum dwellers and developers may benefit? I could not imagine how this would be possible.

But this is one of the case studies that I was exposed to along with 80 other business leaders from around the world, during a fascinating week at the new Harvard Business School Campus in Mumbai. In this report I want to share some learnings from the case study on the Dharavi slum in Mumbai, which included a visit to the slum.

Mumbai is India’s most dynamic and wealthiest commercial city, boasting a significant degree of world class business talent and of course Bollywood. Property prices in the city are amongst the highest in the world. The city also has the both the largest, absolute number and proportion, of slum dwellers in the world, with close to half the population (ie around 6 million people) living in slums. Of these, Dharavi is the largest. It is home to about 700,000 people, living in an area of around 2.23 sq kms. The size of the average dwelling is 100 sq feet – measure it out and you will find it is an area which is not much bigger than a Queen size bed.

It is a challenge for those living in the West to understand how one would simply survive in this environment. Astonishingly though, from the positive energy many of the people in Dharavi showed,  they seemed almost to be thriving. So how can this be possible?  At the risk of simplification, may I suggest three key factors:

  • Where people have come from
  • The environment of the slum in comparison
  • People’s hopes and aspirations for the future

Many of the slum dwellers in places like Dharavi are economic refugees from neighbouring rural areas where life, especially for the millions of landless labourers, is incredibly harsh and with seemingly no prospects for a better future. Following the Harvard course, I spent some time touring rural areas in the neighbouring state of Rajasthan. It is very arid, with many still performing work in fields or herding livestock, much as they did in medieval times.

Boys loading a camel cart in rural Rajasthan much like medieval times

Their accommodation is at best similar to that of the cattle herders of Samburu Village in Kenya (please see my post: ‘The Most Contented People on Earth, but are they the Happiest?’) . But unlike the Kenyan villagers, the landless labourers in India do not own their livestock, nor do they have any security of tenure. In this sense, even the less ambitious lack the contentment of the villagers of Kenya.  The more ambitious and entrepreneurial are those who move to the cities in search of escape from multi-generational poverty and servitude.

Stone Hut near Ranthambore

Stone hut in a Rajasthan village with no electricity or running water

The slums in this sense are a half-way house for those searching for this escape. At its worst, the  accommodation is similar to what they are used to.  And they probably have access to (stolen) electricity, better basic medical services and much better income earning prospects. Income earning is not through secure paid employment with fringe benefits. It involves doing physically gruelling work, in tough, unsanitary conditions and with limited OH&S. But at least there is work as well as small business opportunities.

The slums are a hive of entrepreneurial activity.  An extraordinary array of small industries operate from tiny premises including textile dyeing, recycling, metalwork and food manufacture. There are also a fantastic number of services ranging from the people who put a stool and a mirror outside their front doors and provide haircuts and beauty treatments to a never ending supply of street vendors. One study suggested that Dharavi has around 5,000 informal businesses. These businesses produced goods worth about $600 million annually, or more than the output of several newly established government sponsored Special Economic Zones around the country.

A tiny bakery - Dharavi is full of small businesses like this

A tiny bakery – Dharavi is full of small businesses like this


Bread delivery from bakery Compressed

And here’s the delivery man-can’t say the bread’s not fresh!

Some of these entrepreneurs become millionaires, build two-three storey dwellings within the slum and drive Mercs. That said, I do not want to glorify life in slums. Many are destined for a life of continued gruelling work. They lack financial security and good health care. They are vulnerable to exploitation by more powerful leaders and live in a grossly polluted environment – all of which limit one’s ability to thrive.

But there is far more industriousness, entrepreneurialism, dynamism and above all hope for a better future in a slum, that is masked by the physical squalor. And there is a very strong sense of community, long lost in our more sanitised, luxurious but sometimes very lonely, Western environments. There is a continuous interaction between all age groups, with the elderly in particular having a chance to play an important role in day to day life.

How does this translate into property redevelopment opportunities? As part of the case study, we met the remarkable Mukesh Mehta who has been working on the Dharavi Redevelopment Project since 1997.He and his team guided us through our visit to the slum. Mehta’s plan involves in essence a public private partnership. Developers would be responsible for building infrastructure such as roads, schools and hospitals. The infrastructure would be of the quality to attract the middle class to the area. The government or charitable trusts would be responsible for maintaining the infrastructure once built.

‘Registered’ slum dwellers would receive new apartments in the development at no cost in return for giving up their ‘squatting rights’ and providing their support. The developers in turn would have the right to build additional apartments for private sale. They would pay a fee to the government for the development rights, which would include the right to build higher rise buildings on a particular plot size, than normally allowed.

On paper, the potential profitability to developers is over half a billion dollars in the case of Dharavi.  And on some estimates if this creative approach was applied to all the slums in Mumbai, the state government would stand to gain nearly $25 billion. While the magnitude of these numbers reflect Mumbai’s very high land values, the approach nevertheless highlights the potential to involve the private sector in profitably redeveloping a slum, while benefiting the slum dwellers and government.

For more than a decade, Mehta’s team has worked tirelessly to present their plans, get input and approval from the thousands of stakeholders involved. Last year they came very close but they have yet to conquer finally the political deadlock that stymies many good initiatives in India. Whether the advent of the new Modi government makes any difference remains to be seen.

Neverthless, the entrepreneurial energy of Dharavi and the creativity and commitment of Mehta’s team continue to shine through. There is a lot more energy in slums and hope for the long term future of their inhabitants, than I ever imagined.

 Posted by at 2:00 AM
Dec 082013
Samburu Village Elders Talking About Village Matters

Samburu Village Elders talk about matters over a game

“They have no electricity, no running water and no mobile phones, but they are the happiest people in the world”, our guide insisted. I was intrigued and dubious. Bumping along a dirt track, I was in the Samburu district of Northern Kenya with my elder son, heading towards a village of 25 families.

Our first glimpse of the village was not encouraging. Behind a thick fence of thornbush, to keep out lions and other predators, were houses, made from sticks tied together, with cow dung covered walls and scrap cardboard and plastic sheeting on the roof to keep out the rain. The peak height of these houses was about 4 feet and each was around 100 square feet in area.

A bit of plastic sheeting enhances the roof of a traditional house

A bit of plastic sheeting enhances the roof of a traditional house


Inside -The hearth in the foreground, parent's sleeping area in the background and cow dung covered walls

Inside -The hearth in the foreground, parent’s sleeping area in the background and cow dung covered walls

We were welcomed at the entrance by Fred, the Chief’s son. For an entry price of $20 each, Fred, who spoke remarkably good English, gave us a tour of the tiny village. We met the elders who were intently playing a game, during which they also discussed any village problems. We were given a brief welcome of songs and dances, before examining the small village.

Fred - the well educated chief's son, content with the ancient livestock herding life

Fred – the well educated chief’s son, content
with the ancient livestock herding life

The villagers were livestock herders, tending to cattle, goats and sheep and mainly consuming milk, blood and a little meat. Everyone looked remarkably healthy despite such an unbalanced diet. Apart from the plastic sheeting for the roofs and some tin cooking pots, there were no signs of modernity. To a large extent the villagers were pursuing a semi-nomadic lifestyle of herders as it had been pursued for thousands of years. That said, all the children attended a nearby school run by Catholic missionaries and proudly showed off their ability to count and their knowledge of the alphabet. And they did use money.

Fred too had been to the school and clearly had the education to pursue a more ambitious career. At the end of the visit we were exposed to a line-up of village women selling colourful trinkets. Fred showed an extraordinary combination of IQ and EQ in suggesting that a reasonable price for a handful of these trinkets was around $500. Even when I bargained him down to $100, I knew I was paying about 5 times the price compared to a street vendor, but somehow he made me feel good about it in terms of the positive impact on the lives of the villagers.  I hope that my much better educated son picked up some valuable life skills from Fred.

Kenya has many slums in Nairobi and other towns. They are filled with people from rural areas hoping to make a better life in the city. Fred could have used one of these as a stepping stone to something materially better. But  Fred was proud,and loved his life, of looking after cattle in the middle of the bush, surrounded by wild animals and exposed to the elements. It was a not dissimilar life to Nelson Mandela’s early childhood. And the hour or so that my son and I spent sitting with Fred in his family’s hut, trying to see the world from his eyes, was a valuable education.

Fred said few people ever left the village, despite having the option to do so. Indeed just 5 kilometres from the village were other villages which had better housing, with electricity and all that goes with it.

But did all this mean that the villagers were truly happy? Thinking about this made me realise how complex the whole topic of happiness is. I have little doubt that the villagers would rank highly under standard wellbeing questionnaires. They loved their work and there was a strong sense of supportive relationships within the tight-knit village. Their modest needs and close cooperation gave them a sense of security and they were connected to the natural world.

Hanging out in the village - content, but is this thriving?

Hanging out in the village – content, but is this thriving?

They were not exposed to tv programs illustrating the opulent lives of the rich and famous or promoting the American dream as the ultimate lifestyle. Nor were they exposed to a diet of thousands of daily advertisements, using inane celebrities to convince them how life could not be perfect without the right watch, handbag or other material thing.

No, here was a group whose conscious decision to continue to pursue a simple lifestyle, combined with a strong sense of family and community relationships, resulted in relatively high contentment.

But the wellbeing movement has also developed the concept of thriving. Is simple contentment the same as thriving?  It would be hard to argue that the  full potential of the young villagers to develop creatively, intellectually, culturally or economically was even close to being fulfilled. Did their ignorance of this mean that it did not matter?

I will let the reader contemplate and come to their own conclusions on this matter.

For me,  my insatiable thirst for knowledge, innovation and restlessness for ‘improving’ things, means that I could not be happy pursuing the lifestyle these villagers pursue.

A visit to a traditional Kenya village is invaluable for reminding one that thriving needs to be built on some very basic foundations: loving what you do, being part of a community of supportive relationships and being connected to nature. The paradox of the Western world is that while having the opportunity to build on this foundation, we can completely lose it. And for that a visit to Sambura village was worthwhile. Even if I paid too much for the trinkets.



 Posted by at 10:58 AM
Feb 232013

Harvard 2013 Bulletin No 2

Here’s my second bulletin summarising key takeaways from a recent week at Harvard Business School. The thoughts and views should be regarded as mine, unless otherwise attributed.

Picture: Martin LaMonica/CNET

Terrapower and the Energy Revolution

Not content with trying to foster an education revolution, Bill Gates is also trying to foster an energy revolution which he sees as key to the alleviation of poverty. A think tank that he put together to look at wind, solar, geothermal, tidal and nuclear came to the conclusion that nuclear was the only feasible option if the objective was to provide global access to efficient, affordable energy, while making a substantial difference in carbon emissions.

According to Gates, “If you want to improve the situation of the poorest two billion on the planet, having the price of energy go down substantially would be the best thing you could do for them. That along with the carbon constraint, is hugely important, partly because global warming makes tropical agriculture virtually impossible.”

That said, Gates was also concerned about the environmental risk of nuclear power and the threat of nuclear arms proliferation. So he commissioned research reviewing academic papers to see if there were better ways of doing nuclear power than present techniques. This led in 2008 to the formation of TerraPower, of which Gates is a foundation shareholder, to develop a safe, cost effective, sustainable nuclear reactor.

Specifically, TerraPower  uses a travelling wave reactor design. This system burns uranium rods much more efficiently and completely, which in theory means that it could actually be fuelled by existing ‘used’ nuclear waste rods. Far less waste is also produced and because the fuel rod actually burns for decades, it is far more difficult to access byproducts inside the reactor core for the purpose of making weapons. Modern technology also allows the reactor to close down automatically in the event of a major problem, unlike the older style reactor in Fukushima.

TerraPower’s aim is, via computer simulations, to develop a viable design for the new generation reactor and in due course to licence this to nuclear power operators. Significant progress had been made since 2008 in overcoming the technical issues, but TerraPower  projected that commercially proving the project could take another 10 years and $4billion.

Whether TerraPower succeeds or not remains to be seen, but what interested me in the case was the array of talent now being harnessed looking at new nuclear technologies.

At the same time there is ongoing research devoted to improving the extraction of energy from oil and gas fields. For example, another case involved a company called Foro Energy which has developed breakthrough laser technologies which if proven commercially, could reduce the cost and improve the speed of drilling deep wells for oil and gas considerably. It also has the ability to remove decommissioned wells much more easily and cheaply.

Looking at these and other cases, led me to feel much more optimistic about the long term energy outlook. Combined with developments in energy saving technologies as well as ongoing progress in solar energy research, I believe that there is every prospect that 10-15 years out our kids will continue to enjoy an abundance of energy, with much less reliance on oil.

And if Gates’ education and energy revolutions achieve their full potential, the impact on global poverty by 2030-40 could be substantial indeed.

Feb 112013



Thoughts from a stimulating week at the great Harvard Business School

 Harvard 2013 Bulletin No 1


At the start of each year I try and come to a one week leadership program at the Harvard Business School as part of my aim to keep up to date with some of the latest research ideas, how they will affect the world, our lives and ultimately our wellbeing. The program is intense, with classes starting straight after breakfast, finishing shortly before dinner and then group study classes meeting to discuss the course material and cases for a few hours after dinner. Over the coming week, I will post a series of bulletins which will summarise some of my key takeaways from the program. 

I should say that these takeaways incorporate my learnings from a number of sources, not just Harvard. So unless I attribute otherwise, the thoughts and views should be regarded as mine.

By far one of the most valuable cases was that of the Khan Academy, that is heralding the start of an education revolution

The Education Revoluton and the Khan Academy

The Khan Academy’s mission is simple as it is bold: “To [change] education for the better by providing a free world class education to anyone anywhere”.  Founded by Salman Khan, the  Academy is a YouTube based not for profit education business.  It has over 3,000 video tutorials on topics ranging from maths, to physics, history and finance and has attracted over 4 million unique viewers.

Salman Khan graduated from MIT with three degrees and then moved into the hedge funds management business. One of his cousins asked him to help tutor her in maths, which led him to post on YouTube various tutorials for her use in her own time.  Somehow other students stumbled across these. The enthusiastic and positive feedback that Salman received from these unexpected users, together with his discovery that he had a passion and talent for producing educational videos, led him to abandon his high paying hedge fund job, to launch the Khan Academy as a not-for profit. His growing realisation that what he was doing could revolutionise education, gave him a new sense of meaning and purpose.

The beauty of the system is its free availability to anyone at any time. Traditional classroom learning means that a certain amount of time is allocated to each topic, regardless of whether this is sufficient to gain mastery of the topic. Using the Khan Academy, students are able to work at their own pace, giving everyone the chance to achieve mastery, before moving on to the next topic. It is currently designed as a supplement to, rather than an alternative to school based learning. While users span the spectrum of age categories, most are high school or college students looking to supplement their classes with outside help.

Amongst disadvantaged students, particularly in poor countries, the Academy could of course become a primary source of education.

The Los Altos School District in California piloted a classroom based program with Khan to improve student engagement and provide more flexibility for students to work at their own pace. The success of this program led to it being rolled out more widely during the 2011-12 school year.

 Salman had the good fortune to be discovered by Bill Gates, who found his videos useful for teaching his daughters certain concepts. The Gates Foundation and Google, among others, have provided initial funding of around $10 million to the Academy, allowing it to expand its scope and reach, with a small but dedicated band of people, including some great computer programmers. There is a marvellous TED talk in which Gates MCs a presentation by Salman on the Academy:  Khan Ted talk.

But better still, if you just want to experience the site for yourself, or for your child, go to YouTube, type in ‘Khan Academy’ and you will see an array of videos arranged by different topics.

An even bigger revolution in education may  occur in the University sector. A term I heard often at Harvard was the rise in MOOCs – Massive Open Online Classrooms. Already there are a number of institutions offering a university education online. Even the major universities around the world are providing more and more content online.

Currently, the top universities are only able to accept a small percentage of the students who apply and have the abilty to perform well, because of the physical limitations of their buildings, accommodation etc. But imagine what is going to happen as some of these universities extend their courses online. There is theoretically no end to the number of students who could access the courses and interact with the material. Rather than restricting entry, in the online world, anyone may be allowed to enrol, but of course they would need to pass their initial courses to move on.

There are a number of issues that still need to be worked out, but the trend seems to be unstoppable and the implications for second and third tier universities is potentially grim. But for disadvantaged students around the world the rise in MOOCs could make a significant difference to their ability to close the education gap.

In the meantime, sample some online education for yourself. Find a topic that you are interested in and enjoy having Salman Khan help bring it to life




 Posted by at 9:49 AM
Sep 282012

With some of the impressive young prize winners and Jayne Godfrey the very accomplished Dean of the College of Business and Economics

Following my speech to its graduates last year, the Australian National University’s College of Business and Economics gave me the honour of addressing its Prize and Scholarship winners at a recent ceremony.  As I prepared my talk, I thought about my hopes and concerns for our students. The modern world offers them almost limitless possibilities. At the same time, will an excessively vocational and commercial focus reduce both their personal and societal achievements?  Do they have the courage to study for love and know that this can pay more dividends than just studying for money? Here are my thoughts – I would love to hear yours.

Speech to ANU College of Business and Economics Prize and Scholarship Ceremony 24 May 2012

Robert Kennedy said “All of us might wish at times that we lived in a more tranquil world, but we don’t. And if our times are difficult and perplexing, so are they challenging and filled with opportunity. “

In adding my warm congratulations to all of the winners today, it seems to me that the students being honoured here have more ability and potential to see opportunities in challenges. And this gives you more choices and potential to achieve things that are meaningful both personally and to the world.

But how do you make the most of this? From the research that I have done for my latest book, co-authored with Andrew Ford, How Much Is Enough?, and my personal experience, I want to share with you two key ideas that I think can make a difference.

First is about loving what you are doing and developing a sense of meaning and purpose to guide your choices. If you like, to have a sense of soul.

Second, is ensuring that your education has enough breadth to develop the creative elements of your brain, not just the analytical.

Upfront I want to alert you to two key conclusions. You are in fact more likely to make money, if your main focus in life is not about money. And money aside, you are more likely to emerge as a leader and make a difference in whatever field you choose, if the scope of your studies is broad, rather than narrow.

Let me bring this to life by sharing a bit of my experience. My family circumstances were such that I worked a 15-20 hour week in supermarkets from Year 10 in school and through my undergraduate years. Frankly, I yearned to be rich. But strangely, I never worried too much about employment in picking my courses. I was fortunate to discover early that I had a love of Economics, but I also had a general love of learning and curiosity about everything in the world. So I enrolled in this great course that the ANU offered combining Economics and Asian Studies degrees, majoring in Economics, Economic History, Southeast Asian Studies and Indonesian.

From an employment perspective, some might regard say, Accounting and Chinese to be more useful than Economic History and Indonesian. Now while these would have been fine choices, I let what I enjoyed learning, guide my choices. I also dropped into various classes which interested me, including Psychology. Even though I never enrolled in the course, I ended up doing much of the reading for Psychology 101.

Because I absolutely loved every subject I was studying, I did pretty well ending up with a first class honours degree. And this led to me landing a job in one of the research schools here, working on a project on Indonesian economic development. The job required both a strong background in economics, which I had along with lots of other people, but also required a knowledge of Indonesia and its language – well that helped to eliminate most of my competition. And the funny thing is that the job was better paying than joining Treasury as a graduate.

I really enjoyed what I was doing and could see how I could make a difference. And when you feel like that, you work with soul, and in turn this inspires others to help you, leading to some rich learning experiences. It meant that I was helped by some of the finest economists in this country, including people like Ross Garnaut and Fred Gruen, father of one of the Deputy Secretaries of the Treasury, David Gruen, who is here today and continuing a great family tradition. And some unlikely people took me under their wing.

One of the most extraordinary of these was Ann Dunham Sutoro, who gave me a home during my field trips to Indonesia. Ann was a white woman, born in Kansas, who had been twice married, first to an African and then to an Indonesian man and twice divorced. She was doing terrific practical work with the Ford Foundation to aid economic development, while she juggled the responsibilities of being a single mother and also doing a PhD thesis on the Indonesian blacksmith industry. She guided me with my field work, helping me get my hands dirty in going out and understanding the life of Indonesian farm workers and blacksmiths, so I had a practical understanding of what economic development was about. She was a woman with a lot of soul who inspired me.

Does her name sound familiar? Well 4 years ago, I discovered that she was the mother of Barack Obama. Sadly she died 10 years before his historic inauguration and I have yet to get an invitation to the White House, mainly because I never met her son. But you will appreciate that she was a pretty amazing mentor for a young person to have (see my separate story about this remarkable woman)

My more general point is that these amazing people helped me because they knew I was inspired by my work and wanted to help me make a difference to the world. Do you think I have would have had the same response if they felt that I was leading a life without passion and that the main focus of my studies was only to make money?

That said, I was becoming aware of the need to also secure myself financially and fortunately the rich array of experiences I had gave me the confidence, perhaps foolishly, to decide to launch my own business at the age of 24. A business called ipac securities that aimed to apply leading edge research that I had been exposed to at the ANU in globalisation, deregulation and demographic change, to revolutionise the wealth management industry.

Now I have a question for you: imagine that I approached you when I was 24, with some wild ideas and equally wild hair, on building a business competing with the giants in financial services.

I had no experience in the industry, all of 3 years work experience, mostly in Indonesian Economic Development and no business background of any sort. Oh, and by the way, I was asking you to give up your job, invest your life savings in the business and not receive any salary for a year.

Most people I spoke to on the campus very sensibly said no to my offer. But I did find four other similarly naïve, idealistic lunatics willing to join forces with me and we pooled our life savings, which amounted to around $20,000 each. Gosh we were naïve.

But here’s the amazing thing. Over the next 20 years, we built a mini empire with businesses in Australia, NZ, Ireland, South Africa and Taiwan. And even though we had to dilute our equity a lot, by bringing in outside shareholders, the size of the pie that we created was large. The value of these businesses when they were sold, was many hundreds of millions of dollars. In fact the companies that we started were amongst the most successful companies created from scratch in Australia during the past 30 years, outside the high tech and mining industries.

But of what relevance is this story to you? Well this brings me back to the start of my talk. The importance of doing something that gives you meaning and purpose and the importance of ensuring that your education combines breadth with depth.

We now know from behavioural research, that spending your time doing something that you love is the biggest driver of personal wellbeing. And if what you love doing gives you a sense of meaning and purpose, which means that your work has a positive effect on others, then, this has a multiplier effect on your level of wellbeing. In short what the research shows is that it is important for us to do work that matters.

In the case of ipac, loving what we did gave us the energy to work a lot harder than those who were simply doing it for the money. In fact for us, it never seemed like work. Also important was the fact that the company had a soul. We knew what we were doing mattered profoundly to the lives of our clients. By better understanding their needs and guiding them well, through the maze of financial markets and global economics, we could see the positive difference we were making to their lives.

Being concerned about what mattered to our clients was also key to our financial success, because it prevented us from being sucked in to the vortex of greed and fear that dominates the financial services industry. Notwithstanding the tremendous boom in financial services over the past 30 years, the majority of firms in fact have failed spectacularly. Interestingly, some of the most spectacular failures, such as Long Term Capital Management, have been headed by Nobel Prize winners in Economics.

Any idiot can lose money, It requires brilliance though, to lose a huge amount of money. We have seen this in the Global Financial Crisis during which time the extraordinary ways great companies were able to lose money could only have been invented by geniuses.

Fundamentally I believe the weakness with all these firms is that they lost a focus on what mattered – helping to improve the lives of their clients. By lacking a soul and focusing only on money, they lost perspective and common-sense.

As for breadth of learning and creativity, as an employer, a major problem that I have noticed is that Colleges like this are producing more and more students whose professional and technical qualifications are terrific. But whose breadth of education is narrow. And that’s because too many students choose their subjects based on an ill-informed perspective about employment prospects.

We all know that there is a greater demand for economists than there is for poets. So let’s say your particular interests are Actuarial Studies and Economics. It’s easy to then fall into the trap of saying let me also do Accounting or Business studies – these will be more useful to my employment than Economic History, and even more so than, Latin, Ancient History, Literature, Anthropology and so on.

But this is falling into the trap of thinking that the relationship between knowledge and career success is a simple linear one. It is not. It is a far richer equation. In fact there are diminishing returns for just developing one part of your brain, and increasing returns for adding some diversity. In the same way that our bodies need a balanced diet of different food types our brains need a diversity of sources of learning to develop fully.

Playful thinking, creative restlessness, perspective and an understanding of people are all important to success and the poetry of Shelley or Shakespeare, may provide more insights in this regard than an econometric equation.

I am convinced that the rigour and analytical depth of my Economics degree was critical to my success in business. But so was the broader education I received around my parents’ dinner table. They were not business people, but were creative in terms of their ablity to write and to appreciate the performing arts – my mother was trained as a classical dancer. Through them I had the chance to meet and spend time with Sri Lanka’s word acclaimed Chitrasena and Vajira Dance Co, the Autralian Ballet, photographer Mark Strizic. artist Asher Bilu, sitarist Ravi Shankar and a host of other creative geniuses in various fields. This helped to stimulate the creative side of my mind and more generally a life long sense of curiousity and interest in learning.

Adding to this breadth of education,  was my degree in Asian Studies and broader readings including Psychology, which I regard as being equally critical to my success.  And all I can say is that there is no finer university than the ANU to gain a broad based education, including an exposure to the arts.

To sum up, discover what you love, work out how you can make it matter to others while, making money from it yourself, but in seeking to make money do not lose your soul. Have confidence that done intelligently, it can pay to study what you love, both financially and in terms of improved wellbeing.

Finally, I would like to say the reason that I am honoured to accept these invitations to speak at the ANU is because so much of the source of my inspiration, knowledge and insight came from here. It’s a debt that I can never repay. The men and women who undertake research and teaching here are simply extraordinary human treasure.

Please never value more the achievement of people like me because I’ve made money, ahead of the achievement of people who have chosen a different path. Google Professor Warwick McKibbin or Professor Jayne Godfrey and you cannot help but be impressed by the breadth of their influence on many policy issues in economics and accounting respectively, as well as the jobs they do here. And they are just two of the examples of the remarkable academics in this University.

But to come back to the start, tonight is about recognising and celebrating the great achievements of the Prize and Scholarship winners. It is important in Australia that we recognise excellence and in this regard I would like to thank the sponsors and donors for their generosity and support that has made this evening possible.

And a very warm congratulations again to all of the winners.

I hope that in some small way this talk will help you to make better choices for yourselves. And that in making these choices, you will also use your potential to help make a better world.

Apr 282012


Cradle Mountain from the beautiful Dove Lake

 If you want to enhance your wellbeing by communing with nature and really experiencing the great outdoors, few places offer better options than the island of Tasmania. It’s off Australia’s southern tip and too often left off maps of Australia that just show the mainland. On a recent visit to Cradle Mountain, we discovered why this has become one of the island’s favourite and famed destinations.  The mountains are not especially high – Cradle Mountain being at its highest just over 5,000 feet. But their steepness, shape, distinct characteristics and the lakes which are dotted through the range, give the whole area a dramatic, picturesque quality.

Cradle Mountain from Marion’s Lookout
The whole area is dotted with great walks, which give very different aspects of Cradle Mountain and the surrounding terrain. A moderately steep, but rewarding walk is up to Marion’s Lookout

The Face Track from Dove Lake is a scramble

The most spectacular, but very steep, climb up to the base of Cradle Mountain, is via the Face Track, starting at Dove Lake and requiring pulling yourself up by chains towards the top.

The Face of Cradle Mountain

You get a completely different perspective of Cradle Mountain from the top of the Face Track

On the way to the Summit!
The track up to the Summit is pretty good, but involves some boulder hopping towards the top.

On top of Tasmania - Dove Lake and Hansen Peak on the right from Cradle Mountain

But the boulder hopping is worth it, if just for the views below which stretch out far into the horizon

The Twisted Lakes from Hansen Peak

Hanson Peak also offers another challenging, but rewarding climb, passing the Twisted Lakes and vistas of even more lakes beyond.
Pademelon at the front door
A scraping at the front door of our cabin turned out to be a pademelon wanting to come in and join us by the fire.

A final glimpse

Last but not least, the view of Cradle Mountain on the descent from Marion’s Lookout, with Lake Lilla in the foreground and Dove Lake below it. It’s hard not to be inspired. And not to be happy.
Jan 062012

At the ANU with my father – 2011

Recently I was asked to be the Guest Speaker at a graduation ceremony at my alma mater, the Australian National University in Canberra. As I joined the grand and very formal Chancellor’s procession, leading into the hall, I felt quite emotional. I remembered my own graduation 30 years ago, a great family day, attended by both of my parents. Now, I again had a very proud Dad in the audience, together with my two teenage sons and partner, but sadly it was not an event that my mother survived to be part of.

I remembered how my own graduation marked a major transition point in my life where I had both the joy and responsibility for my own future.

Sitting on the stage, I tried to gather my thoughts as I watched the new graduates walk past to collect their degrees. Their faces were hopeful, proud, happy and yet a little pensive as they contemplated this life transition for themselves. It was a wonderful moment to be part of and I wanted to deliver a speech to them that hopefully, they would find inspiring and maybe even a little liberating as they thought about how to forge their future life.

Maybe they, too, have dreams of trying to change the world, or at least,  just their little corner of it.

As I looked at proud and expecant faces of the graduates’ families in the audience, I realised how much of an honour it was to be asked to be the Guest Speaker. But it also highlighted that I had a challenge to ensure that I captured and did justice to the importance of the occasion. It was a 10 minute talk that took some days to prepare. This is the speech that I gave to these new graduates – I hope that you will share your thoughts with me:

Arun Abey – Conferring of Degrees Speech, ANU 15 December 2011

Some decades ago, I sat where you are sitting, waiting to get my degree. It was one the greatest days of my life. I had many happy years on the campus, but was looking forward to excellent job prospects, with Economics and Arts degrees from the ANU.

Like most of you, I had little money of my own and from high school I had spent many hours working in supermarkets to help pay my way. Working filling shelves involved long days moving tons of goods and my hands still have the callouses.

To be honest, at school my first career ambition was to become a checkout chick to save my hands and back. But funnily enough, in those days it was not a job guys were allowed to do. So I had to become an economist instead.

It is natural for graduates, and their very proud, but also long suffering parents to be sitting here and thinking great, I am now going to try and get a well paying job, secure myself financially, and that will be the key to being happy.

I want to share with you a radical thought. That based on my experience, as well as the latest behavioural research, you should, in fact, be thinking about the opposite.

The most important thing to be thinking about now is what will make you happy. This is the key to financial success. To put it simply, it’s not money that buys happiness, but happiness that gets you money.

Let me share with you why this is important and the research underpinning it.

Those of us with the good fortune to live in countries like Australia are amongst the first generation in history to have the potential to thrive.

What do I mean by thrive? Since the second world war, the steady improvements in technology, affluence and personal freedom, provide us with the opportunity to be authentic. To discover who we truly are, and to make life’s important decisions according to this. Earning a degree from this great university, only magnifies that potential.

So what stops us?

Because the paradox of living in the most affluent era of human history is that we have the highest recorded rates of stress, anxiety and depression. While income per head has tripled over the past 60 years, measured happiness has remained about the same. But far more seriously, the youth suicide rate has tripled.

Happiness aside, we do not seem to have converted affluence into financial security, with a majority of people, even those earning over $100,000 per year spending more than they earn. It’s easy a decade or so from graduation to find yourself on a treadmill, working harder and longer for ever more money, with a McMansion filled with stuff, but a mortgage to match. And lacking a clear sense of purpose, a nagging concern in the back of your mind that something is not quite right and asking the question How Much is Enough?

Why does this happen?

For most of our evolution, the focus of our minds had to be to survive, not thrive.

For our ancestors, a good day was finding lunch and not being lunch. A really good day was surviving to night time and having the chance to reproduce. Actually that still sounds like a typical day on the campus. Maybe nothing much has changed.

But our hard wired instincts for survival, while still invaluable, can also trip us up in the modern world of complex choices and decisions, because they cause us to lose perspective. We have a tendency to myopia, to placing more emphasis on the headlines and the immediate past, rather than weighing up all the data, and a tendency to unthinkingly follow the herd. These undermine our longer term wellbeing and wealth.

They stop us from thriving.

So how can loving what we do help us to overcome this? The research by people like Professor Martin Seligman shows that if you are really engaged in what you do – if it creates what the psychologists call a sense of flow when you are doing it – then this is a key to wellbeing. As our latest Nobel Prize winner, Professor Brian Schmidt said, he did not know what he wanted to become, but decided to do astronomy, because it’s what he would have done for free.

What work inspires a similar feeling in you?

In addition, the research shows that if your work also has a positive effect on others, then your sense of wellbeing doesn’t just increase, it is multiplied. You now awaken to a sense of meaning and purpose. Close relationships, a sense of accomplishment, as you have today, and a sprinkling of pleasures are what round off longer term wellbeing.

But how does loving what you are doing, help you financially?

I do not want you to believe for a moment that I have a romantic view that money doesn’t matter or will just turn up. I did not have the luxury of being born with a silver spoon in my mouth and I realise that you have to work hard to convert your passions into financial security. We came to Australia when I was very young because my father was employed by a Sri Lankan agency to promote tea in Australia.

Unfortunately the agency did not realise that the cost of living in Australia was about 5 times higher than in Sri Lanka in setting my father’s salary. My parents could only afford a public education, but the best public schools were in expensive suburbs. So we ended up in very posh Killara in Sydney’s North Shore, but living in a tiny one and a half bedroom flat, really a converted commercial office, on the Pacific Highway, opposite a pub and above a dog grooming salon.

I was embarrassed to invite friends home, I did not bother to participate in rep trials for my best sport – soccer, because we could never afford the boots, and many years later the first family car that we owned came from my supermarket earnings. I grew up with a desperate desire for money and financial independence.

But I was never so desperate that I was willing to commit to a career which did not inspire me, even if the money seemed great. And I had the good fortune at a young age to discover what I loved.

I loved economics, both for the richness of its ideas, the potential for it to reduce poverty in developing countries and for it to reduce my poverty by better investing in the stock market. That last bit did not work by the way.

My first job was in economic research at this university, working on Indonesian economic development. It was a wonderful experience. In the process though, I discovered that I did not just want to produce research ideas, but that I wanted to try and get my hands dirty in putting some of them into practice. I also needed to improve my financial position. And this would require me to take some risk.

So this led me to co-found my own business – ipac securities – a financial advisory and wealth management business, at the age of 24. My co-founders were about the same age and so we had little experience or money. But we all loved what we were doing and we were prepared to work really hard – except that it never felt like work.

Reflecting my interests, ipac is a strongly research based company. One of our ideas at ipac was to take the latest academic research and work out how to interpret it for personal clients. It’s an opportunity that still exists.

It took many years to establish the company with lots of ups and downs. I was stretched to learn many new skills, some of which were way out of my previous comfort zone. Today the company is known for its research, innovation, adaptation and resilience – all characteristics of people who love what they are doing and it has been a long term financial success, becoming one of the most valuable firms of its type in Australia and indeed in the world.

That said, one of my greatest pleasures has been building client relationships, some going back almost 30 years, through the ups and downs in the world economy, as well as in their own lives and seeing my work give them some sense of peace and security. It’s what’s given me a sense of meaning and purpose.

My more general point is that people who enjoy their jobs tend to work harder, to be more creative and innovative, and to have far greater resilience to endure the hard times that are a part of any career. And that’s what leads to more sustainable financial success.

So a question for each for each of you to think about is have you discovered what you love doing and have you got at least a sense of how to weave it into your career? And if not, how are you going to do this? It is a key to thriving.

In concluding, as a fellow graduate, I would like to pay a tribute to the ANU. Let me share three of the many things that I have learned here that have been of life-long benefit and helped me to thrive. The first is how to think in a rigorous way. This is not an easy University to graduate from and the College of Business and Economics is particularly demanding, but the quality of thinking that it instills is something you will call on everyday.

Second is the breadth of learning. Progress in your careers involves being able to see connections from many different disciplines. The ANU’s array of combined degrees are fantastic for this and if you haven’t done any subjects outside this College, I would strongly encourage you to explore some.

In my Asian Studies degree I was exposed to the discipline of anthropology and one of the tribes I studied had been head hunters. Of what use is this? Well, as you build a business, and you find yourself managing people, you realise that economics and accounting are not enough.

Understanding the anthropology, sociology and psychology of groups provide invaluable insights for effective leadership. In fact, as we have seen in the Global Financial Crisis, many financial services firms bore a remarkable resemblance to head hunting tribes.

Last, but not least, I learned the importance of having a sense of humanity. When I worked at the University, I was struck by the fact that it comprises an extraordinary collection of people who, though paid only moderately, are remarkably talented, dedicated and committed to making a positive difference to others, through the research and dissemination of ideas. It’s a very inspiring place to work and that desire to make a difference has stayed with me through my business career and in the philanthropic work that I do, focusing on microfinance and the education of the disadvantaged through The Smith Family.

But today is your day. Congratulations on a wonderful achievement. And congratulations, too, to your parents whose role I now have a better appreciation of. I hope that today marks an important step in a life which is rich in challenge, opportunity, meaning, and accomplishment, while also achieving financial security.

I hope that all of you will thrive.

With my mother at my own graduation from ANU – 1981

 Posted by at 11:55 AM

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