From rock stars to palm readers: Why certainty is expensive, uncertainty is painful but not always bad, and roadblocks can help us find new paths.
There is a myth about a Chinese curse whereby somebody wishes to somebody else to “live in interesting times”. It is easy to see why that could be considered a curse. We live in interesting times, with recent painful memories of multiple shocks (including floods and droughts, an earthquake, a pandemic and a global energy crisis), and uncertainty about the future. Living in interesting times is not fun.
I read recently that the human brain processes uncertainty similarly to pain, and we crave certainty in the same way that we crave food. So much so, that we are ready to spend a lot of efforts, time and money to have some sense of certainty. Just in the US, last year people paid palm readers $2.2 billion dollars to divine the future[iii], and another $28.5 billion to analysts to forecast which direction the stock market will go. Whether that reveals the future, I will leave that to you to decide. In any case, craving certainty is an expensive thing.
Maybe we should focus less on seeking certainty and more on sustainability and resilience
While certainty is difficult to get, sustainability is very much up to us. We cannot fabricate rain (at least not yet), but we can use responsibly the water available. We can’t avoid the fact that technology is making many jobs redundant, but we can revamp education so that students acquire relevant skills that prepare them for more complex, but better paid jobs. We can’t wish away climate change, but we can adapt agriculture to different weather patterns and use that as an opportunity to improve production processes. We can’t eliminate the risk of pandemics, but we can strengthen healthcare systems and hospitals. We can’t predict when the next financial crisis will happen, but we can try to reduce our debts to avoid being exposed to high interest rates. We can’t prevent or event predict when earthquakes will happen, but we can be prepared to mitigate their impact and respond rapidly when they happen. We can’t even foresee what new risks lay ahead of us that we are not even aware that they exist; but we can put systems in place to respond rapidly and decisively when risks materialize, and we can be judicious on how we spend our money and, as our grandparents would say, “save for a rainy day”. We are taking this approach at heart and acting on that. Here is how.
Uncertainty is not always bad: how an obstacle on your path can help you find a better path
I recently heard the story of a music producer that liked to create uncertainty. He did that by bringing a deck of cards to the recording studio that randomly instructed players to do unexpected things like improvising chords, changing instruments (putting the lead guitar guy on the drums and the other way around) and other unexpected things. They all hated it! The name of the producer is Brian Eno and the result was some of the most iconic albums of all times by artists including U2, David Bowie and Coldplay. It seems that putting artists in unexpected and often uncomfortable situations made them more alert and more creative and able to find better paths. Ok, but probably you say, that’s a thing for rock stars, not for commoners like you and me. Well, not really. There’s research that shows that many people facing difficulties in their daily commute (like having a road closed) find better ways to get to their destination that they would not have found otherwise. Sometimes we need a roadblock to find a better path.
At the World Bank, in our own way (very far from rock stars and award-winning albums), we are harnessing the uncertainty of climate change to bring new approaches to how we deal with old and new challenges. Working together with the Ministry of Agriculture we are using climate change as the source of urgency to adopt new climate resilient agriculture processes and irrigation that not only deal with rain uncertainty, but also create better paid jobs and more high value exports. We are also harnessing technological change to bring more financing to the agriculture sector (a sector that receives less than 3% of bank credit but accounts for around 30% of jobs and roughly 20% of exports). Without climate change and technological disruption, we probably would be content enough with more traditional approaches that probably would lead to only modest results. We are finding better paths.
Similarly, as we know, the healthcare sector in Albania was impacted by two back-to-back shocks. The earthquake in 2019 affected many hospitals and the subsequent pandemic stressed the capacity of the remaining facilities. At that time, we had an ongoing project with the Ministry of Health and Social Protection. We restructured that project and mobilized additional funding to focus on reconstructing damaged hospitals, improving the facilities of non-damaged ones, and acquiring ambulances and equipment (x-rays, MRIs). Renovating a hospital in the middle of a pandemic was like changing the engines of a plane while it is flying. But it worked! Now, we are not only better prepared to deal with shocks, but service is much improved for more than 500,000 beneficiaries. And with this momentum, we will be renovating five more hospitals within the next two years. A few days ago I attended the opening of the hospital for infectious diseases at Mother Teresa University Medical Center. A very emotional ceremony that was a good opportunity to thank again doctors and nurses for all their efforts and care. Collectively, we can look back and see that we were not paralyzed by shocks, but rather, energized to do more, faster and better.
We had a very dry autumn in Albania, which was bad news for energy generation, as it depends highly on hydropower. So, we prayed for rain. And we had it. It came in November 12 to 20. So much of it that it created floods and closed bridges and roads. With climate change floods will likely become more frequent, so together with the Ministry of Infrastructure and Energy we will be rebuilding the bridges that are most at risk of collapse in case of floods and earthquakes and we are improving local and regional roads. This means not only stronger infrastructure, but also safer roads, easier access to markets and more competitiveness. We are also supporting actions that will enhance the resilience of the energy sector through improving diversification of green energy sources (to be less dependent on rain), reducing energy losses and enhancing energy efficiency. We are harnessing the urgency of these risks that we hate, to not only find, but literally build, better paths.
For things to remain the same, everything must change
The most basic form of certainty is for things to remain the same. We want to keep what we value most. We want our family to always be there. We want the youth to stay in the country. We want the amazing natural beauty of Albania to remain for the next generations. We want to have employment certainty. During COVID lockdown, we understood how much we value our “normal life” and we wanted to have it back. But for all of those things to stay the same, things will have to change.
We want Albania’s natural beauty to remain. So, we are working with the Ministry of Tourism and Environment to deal with pollution in the Vjosa valley and the Vlora region. We will start by cleaning these areas, but most importantly, we will work to avoid that further pollution reaches the river and the sea. But we will need your help. If we want Vjosa and Vlora (and the rest of the country) to stay for future generations, we all need to change and be more responsible about how much trash we generate and how we deal with it.
I want to end this note by sharing a small secret: I don’t really like conferences very much. I feel that a lot of time is spent talking and frequently there’s no clear output or next steps. However, I enjoyed a recent conference on green financing – which, I’d define as investing responsibly, focusing not only on making money, but also on creating space for nature and avoiding negative impact on environment (I’m sure there is a better definition somewhere). What I liked is that there was a shared understanding among financial institutions, authorities and development partners that green financing and green investing cannot remain a niche. Financing cannot be detached from sustainability. Sustainability needs to be at the core of investment decisions. To me this was refreshing, because a few years ago green financing was seen as a ‘cute thing to do’, but not really serious. Recognizing this as a core objective means that financial services need to evolve and we all need to change how we approach them so that investments are green and support growth that is sustainable. If we want things to stay the same, everything will have to change.
Originally published in the Panorama daily newspaper (Panorama.al) on December 3, 2022.