Purpose statement

This blog will provide a record of my activities while participating in the Pacific Century Fellows program; starting up Kuleana Micro-Lending; assisting Rep. Jessica Wooley, Common Cause Hawai'i and Voter Owned Hawai'i in their legislative initiatives; and working with the Clarence T.C. Ching PUEO (Partnerships in Unlimited Educational Opportunities) program. I've also included excerpts from books and magazines I've read, along with presentations and lectures I've attended that address relevant topics and issues.


Not everyone can be famous, but everyone can be great because everyone has the capacity to serve.
— MLK

Monday, January 31, 2011

PCF— Economic Development Day, part 2

The next part of our day consisted of a panel comprised of Mike Wright from Alexander Baldwin, Mitch D'Olier from Kaneohe Ranch, Jan Yokota from General Growth Properties, and Cathy Camp from Kamehameha Schools. All four examined the state of development and construction in Hawaii.

Cathy Camp started off talking about KS's $8.3 billion endowment and explained how that might sound like a lot of money, but it's not when one considers that it must exist in perpetuity, as outlined in the Princess' will. Right now KS has 45,000 learners among its three main campuses and DOE partners. On their property management side, they have 15,000 acres in active management including several shopping centers at the Royal Hawaiian, Kahala Mall, and Pearl Ridge; much of the industrial area around Kalihi, and most of the North Shore of O'ahu. Some of the challenges they face are:
— keeping tenants happy
— impact fees
— gap housing (high exactions)
— adjoining propoerties
— easements
— full urban standard
— lack of housing
— lack of population growth
— the economic downturn
— unwillingness of lenders to take risks
— the permitting process/bureaucracy
— high cost of construction
— " " " land
— infrastructure capacity.
And the gorilla in the room that will affect all of this is the proposed rail system.


Mitch D'Olier explained the controversy surrounding Kaneohe Ranch's proposed redevelopment of Kailua's commercial area. They plan to engage the community first— 18 month process with 6 public meetings to come up with a pedestrian plan that maintains Kailua's eclectic identity and "Hawaiianess". That will be a challenge given the amount of resistance they are getting from the residents.

Mike Wright touched on A & B's (holidng company comprised of Matson navigation, A & B Properties, HC & S Sugar) philosophy to redevelop the urban core; encourage live/work/play environments; take cars off the road; and avoid suburban sprawl. (Sounds like another argument for rail.) He argues that development is multiplier in that it provides immediate and deep economic stimulus and job creation that keeps money at home to benefit many in the community.

Jan Yokota spoke for Commonwealth REIT (Real Estate Investment Trust) that holds $18 billion in real estate investments (mostly office and industrial space) in 34 states. In Hawai'i they control most of Mapunapuna and Sand Island along with Campbell Industrial Park. Their Hawaii properties comprise 11% of their entire portfolio.

PCF— Economic Development Day, part I

The day began at Oceanit an engineering consulting, aerospace and defense, life sciences, and information technology company located on Fort Street Mall in downtown Honolulu. Founded in 1985 by Dr. Pat Sullivan and employing over 160 employess, they are at the cutting edge of innovation in various fields. They see themselves as a think tank/idea factory/incubator— a blank canvas with only legal and moral boundaries.

The Oceanit philosophy, as explained by Ian Kitajima, focuses on certain beliefs represented by a concentric circles emanating out from a core:
At the center of the diagram is pain as opportunity— the bigger the pain the greater the opportunity, solutions to problems, chaos as a good thing.
Next they look to their people and the values and character they bring to the organization. Many of their employees are found at community service events and they must be flexible and comfortable with ambiguity.
Then capital which comes from venture capitalists, city/state/federal governments, and partners.
Finally, they in "letting go," not holding onto the past so that they can be open to new perspectives, ideas, and funding streams.
The specific challenges they face in Hawai'i is getting non-federal funding so that they can productize their discoveries.

We then heard from Glenn Nakafuiji about his particular story going from Kalani high school to various other innovative technology ventures and then back to Hawaii and Oceanit. We witnessed specific breakthroughs the company has achieved in defense related challenges, nano-technology and materials, medical technologies (Hoana Medical, Life Gurney), synergies with natural systems, and rail security and infrastructure vulnerability.

Dr. pat Sullivan himself graced us with some of his very valuable time to share even more insights into their guiding philosophies:
— Take ideas out of the ether and turn them into solutions.
— The biggest impediment is ourselves.
— Innovations are about differences, not similarities.
— Don't race to the bottom to compete with the Chinese on low-cost manufacturing...innovate!!!
— We must be techno-warriors and connect our hearts with our heads.
— Lack of domain expertise allows for greater creativity (lack of Beltway thinking).

All in all an amazing examination of a truly groundbreaking organization that chooses to locate its headquarters in Hawaii when it could be located anywhere in the world.

Friday, January 28, 2011

Hawai'i 2011: State of the Community Report

Hawaii Business magazine put together a breakfast function at the Hawaii Prince Hotel on Wednesday, Jan. 26 titled "The Way We Live." The essential purpose of the event was to asses the quality of life indicators assessed in their State of the Community Report.

Dr. Sylvia Yuen from the UH Center on the Family in the College of Tropical Agriculture and Human Resources spoke with another colleague about the six main indicators of quality of life:
— Economy
— Education
— Health
— Housing
— Crime and Communities
— Environment

Economy:
Dr. Yuen highlighted Hawaii's per capita is currently $42,078 ($45,205 in the City and County of Honolulu; $31,978 in Big Island County; $37,521 in Maui County; and $36,093 in Kaua'i County). Disturbingly, the top five job with the most openings for Hawaii workers are:
1) waiters and waitresses
2) retail
3) cashiers
4) food prep (i.e. fast food)
5) teachers (elementary and special education)

With the exception of the teaching positions, the other four offer wages in the $20,000-$29,000 range. This wage is not enough to survive comfortably in Hawaii ("comfortably" meaning paying rent, getting enough to eat, using public transportation — no car) which requires approximately $60,000 per year in earnings.

Education:
Of 100 9th graders entering high school this year:
— 65 will graduate high school
— 30 will enter college
— 22 will stay after sophomore year
— 15 (check on this number) will graduate in six years

Only 7.3% of Kindergarten teachers report at least 75% of their students enter their classrooms prepared to learn. "Prepared" is also a but ambiguous but I gathered the bar was pretty low— knowing how to hold a book, knowing how a book works, recognizing numbers and counting to five, etc.

Health
Compared to the national averages, Hawaii is better than average in:
— life expectancy
— infant mortality
— cardiovascular disease
— cancer death rates
— diabetes death rates
— obesity
— smoking
but the trends for all these areas are going higher since 2000.

Housing
Hawaii is worse than the national average in:
— rental cost burden
— ownership cost burden
— home ownership
— overcrowded dwellings
— homelessness
No surprises there.

Crime and Communities
Hawaii is better than the national average in:
— violent crime
— neglect and domestic violence

but we are worse in:
— property crime (a result of ice epidemic?)
— idle youth (19.3% of youth 16-24 years not in school or employed)

Environment
Surface water advisory days are up 213% and solid waste generation is also up.
energy consumption is down and recycling is up.

Moving Forward, Dr. Yuen stressed that prevention is better than intervention and transformative is better than unidimensional.

We must stress:
— interconnectedness
— integrative approaches focused on communication, innovation, and partnerships

She offered a great quote from Emerson in challenging all the attending business people and community leaders:
"It is one of the beautiful compensations of this life that no one can sincerely try to help another without helping himself."

The event continued with a panel discussion featuring:
• Micah Kane— Kamehameha School trustee, former head of Dept. of Hawaiian Homelands
• Punky Playden-Cross: Hale Kipa, Hawaii Youth Services
• Liz Chun— Good Beginnings Alliance
• Susan Au Doyle— Aloha United Way

Micah Kane started off by discussing where Hawaii falls the farthest behind the rst of the nation— housing. Right off the bat he established some harsh truth: things are not going to get any better any time soon. It comes down to basic supply and demand issues and there is no silver bullet that will solve our housing problems. Challenges such as land costs, off-site infrastructure costs, labor costs, energy costs, and transportation challenges/costs will always work against us. To alleviate some of those challenges he had two recommendations:
1) build homes that minimize costs by going for higher density— less land, less energy, close to work
2) meet each other half way— choose one segment of housing (low income, moderate income) and go for it instead of trying to do everything for everybody, at least initially.
He stressed how when he was at DHHL that his job evolved from building homes to building homeowners. There became a big job training and social services component to getting someone to be a viable homeowner. (That's something to keep in mind as we move forward with Kuleana Micro-Lending.) To achieve those objectives he partnered with other agencies such as Salvation Army to maximize synergies.

Liz Chun then spoke about the idea of prevention of a lot of societal ills through early childhood education. Only 3% of state resources go to children age 0-5, yet that is when 85% of brain development occurs. As a result we get a large number of "gap kids" that result in higher high school drop-out rates, drug abuse, crime, teen pregnancy. For every once dollar invested in early childhood development the government saves $4.20 in return by not having to combat these other challenges. She challenged the business community to grow the work force and be a voice for children at Be My Voice Hawaii.

Punky Playden-Cross jumped right into blasting our current political system as not lending itself to good social policy because during times of economic stagnation and budget shortfalls the first area to be cut is social services, especially for troubled teens. He reiterated the point made by Liz Chun because his organizationnis the one that deals with these kids that have been underserved.

Ultimately, the underlying message to the entire audience is that our quality of life depends on the efforts of everybody to work together through the business community, the government, the non-profit sector, the education system. Everyone must find a way to do our part and help out in achieving these goals because inaction will only undermine our own quality of life as well in at least one of those areas, if not more.

Monday, January 24, 2011

'Microfinance and the New International Division of Debt'

I attended a lecture at UH Geography Department by Stephen Young from the University of Washington. The purpose of the talk, in addition to breaking down micro-lending into its component parts and then looking at the larger implications of its outcomes, was to address the controversy brought on partly by a recent New York Times article, "Microlenders, Honored with Nobel Are Struggling", higlighting the negative outcomes of some micro-lending programs. (Here's another article which addresses many of these concerns: "Micro-credit: Remedy for Poverty or Opportunity for Abuse.")

Professor Young started off by showing that there are two contrasting images of microfinance: the first-world connected to third-model attributed to Kiva, and the reality showcased in the above articles that is becoming more and more prevalent. Based on his research of archives and conducting interviews in Seattle, Hyderabad, and coastal Andrha he arrived at the following conclusion: "In spite of the growth of online lending sites such as KIVA, microloans in India do not simply produce 'virtuous cycles' of prosperity and empowerment at the click of a mouse button. There is a need to focus on how microfinance markets are linked to wider political-economic geographies of: Interconnection, Disconnection, Reconnection, and Re-negotiation."

I. Interconnection: State-civil society initiatives to develop connections with transnational flows of capital and knowledge.

II. Disconnection: This is linked to ongoing forms of disconnection [from credit flows], dispossessions [of agricultural land], and disempowerment [in social reproduction] in many places.

III. Reconnection: Accelerating the rollout of microfinance programs is increasingly a means of reconnecting some populations. These efforts bring together another transnational networks of advisors, auditors and investors.

IV. Re-negotiation: These processes are being reworked in multiple ways 'on the ground' in Andrha Pradesh. This includes practices that have deepened, as well as resisted, the trend toward commercialization of microfinance.

Microfinance started as an opportunity for groups that had been marginalized. The 1990s saw a huge surge in MFIs— 10,000 in 1994 to 365,000 in 2001. These self-help groups (SHGs) got frustrated with state governments and the World Bank so they started registering themselves as non-banking financial companies in order to generate funds from private entities. From there the securitization of microfinance loans— essentially bundling them and selling them off— was seen as the most effective way of getting market capital to the poor and pulling them out of poverty.

Along the way, the microfinance industry had a significant social impact. For young men it lead to "changing masculinities" as they became more mobile and adept at handling technology through their jobs with these MFIs. This fostered "a sense of connection with a larger social and economic domain." In contrast, for women the lack of mobility was seen as a plus; there was a fear that clients would take the money and run, so the loans were only made to married women.

Finally, the commercialization of micro-loans led to widespread protest (as shown in the NY Times article) due to the unethical profit-driven practices that made MFIs look like their supposedly distant cousins in the first world that started the global financial crisis. In fact, as a result of these practices, not only were the traditional money lenders (who supposedly were usurious and unethical) not eradicated, but they saw their business actually increase because some borrowers were forced to go to them in order to make their payments to the MFIs. Sad irony, that.

I had a chance to ask Prof. Young if he thought micro-lending could work in a place like Hawaii. He first replied that he was not an expert on the situation in Hawaii, but generally speaking as long as micro-loans are used for their most effective purposes— building savings, access to credit to encourage entrepreneurship— and not for its less effective ends— compensation for loss of land or public benefits (i.e. not a rescue measure)— then they could work when combined with other social support systems. Micro-loans work best when diversification of income occurs, so it is essential to encourage the virtuous cycle rather than simply trying to pull people out of debt.

He didnt say they wouldn't work in Hawai'i, and that's good enough for me!

Wednesday, January 19, 2011

Hawai'i State Legislature— Opening Day

House of Representatives

Representative Jessica Wooley, with whom I hope to work on some projects during the legislative session, hooked me up with a ticket for advanced seating to the open day ceremony. Good thing because the place was packed two to three deep at the top of the seating area. (Perhaps it was the prospect of seeing the Moanalua String Ensemble or Sean Na'auao, both of which were really awesome for the entertainment in between the proceedings.)

Amid the ill-fitting suits and gaudy lei, the who's who of Hawai'i's political scene showed up to witness the festivities. Some of the people I recognized were DJ Mailer, Kamehameha Schools; David Henkin, Earth Justice and Lt. Governor candidate in 2006; Chief Justice Mark Rechtenwald; Gov. Linda Lingle; former Rep. Charles Djou. (Djou and Lingle had a long conversation about who knows what. They're both out of a job so maybe they were asking if either one of them was planning on challenging Sen. Akaka in two years. I couldn't make out if either one of them said the word "Palin.")

After a chant by Kainoa Daines all the reps were introduced. I counted nineteen women and thirty-one men of the fifty (out of fifty-one) reps in attendance— not too bad for diversity. (I'll have to look up how that compares with other states.) Seventeen reps from the Neighbor Islands and thirty-three from O'ahu.

We then sang the national anthem and Hawai'i Pono'i and recited the Pledge of Allegiance. The pule by Kamaki Kanahele was a serious calling out of the Legislature and the gallery: "...our heavenly father, your house is in shambles.."; "that was the saddest Hawai'i Pono'i I have ever heard..." That's what they/we needed to hear. We'll see if it has any effect.

After the Chief Justice administered the oath of office, Governor Abercrombie, Lt. Governor Schatz and the entire Executive Branch made their way into the floor seats. Blake Oshiro then gave his opening remarks for the majority (big time forty-three out of fifty-one). After introducing the four new Democratic members he touched on three themes of being a legislator: 1) politician (such as when they're campaigning), 2) legislator (such as when they're doing their jobs of governing), and finally 3) statesman/woman (looking out for the best interests of the entire state and not just those of the particular constituents or supporters). Rep. Oshiro said the last one is the most important of the three (no surprise there). The main challenge the legislature faces this year is an $800 million dollar budget deficit (as compared to $2.1 billion in 2009 and $1.2 billion in 2010). We hope that we hit rock-bottom and now we're starting to claw our way back to recovery.

Rep. Oshiro pointed out some positive signs: tourism numbers and spending are up. But the main job to focus on is protecting jobs and that means construction needs to ramp up (sustainable? hmmm...). If the private sector cannot generate enough activity to put all those construction workers on a job, then the public sector must step in, so the rail project should be the type of stimulus that will lift us out of this recession for good. (That got gov. Abercombie out of his seat for rousing applause. I know what Panos would have to say about that— the road to serfdom.) He continued with the usual paeans to diversification (high tech? bio-tech? film? etc.) and then made a reference to the Arizona shootings to highlight the need for humility. He finally concluded by addressing "the elephant in the room", civil unions and called for an honest and open debate that "would be just, guided by truth and reason."

Gene Ward made the opening remarks for the eight-representative strong Republicans. "The people's house" will be a "marketplace of ideas" to rehabilitate the economy and seek better educational governance. The core values he espoused are: not to raise taxes, fiscal discipline, promoting local small businesses, open and accountable government, and educational excellence. He talked a lot about green jobs and thanked Gov. Linda Lingle for her leadership in enacting the Hawai'i Clean Energy Initiative. We must Think Big!

Overall I have to say that I walked away from the opening day ceremonies convinced once again that I live in a wonderful place with wonderful people with unique customs and a distinct way of life. The Canadian couple sitting next to me shared their thoughts with me about how different Hawai'i is from the "rest of the states" while still possessing all the good parts of the American system. I didn't need any more convincing but it was still nice to hear. Lucky we live Hawai'i Nei!