Added to that the EU has demanded that Greek politicians from both sides of the political aisle sign a pledge to implement cuts regardless of the outcome of the general election scheduled for April. Thus, even if the Greek people vote for an alternative to cuts the troika will insist on them.

But while the Greeks protested at this loss of sovereignty the financial markets have been surprisingly calm. While Greek politicians have been in the throes of austerity, negotiations the bond markets in Italy, Spain and Portugal have continued to recover and apart from a slight blip at the end of last week, euro-based risk assets have continued to rally. Added to this, those calling for the end of the euro have been frustrated by the resilience of the single currency.

So does this mean that the markets will have a delayed reaction to what is going on in Athens, or does Greece not matter anymore? I tend to lean towards the latter. That doesn’t mean that no one cares about Greece or her citizens – the pictures at the weekend were truly disturbing – it’s just that in terms of the euro zone crisis, what happens in Athens is not such an important part of the equation anymore.

A trader I know put it this way: rather than spook the markets, the current events in Greece may spur Italy, Portugal and Spain to act to meet fiscal targets and implement structural reform. After all, it shows just how harsh the Troika can be if you repeatedly fail to live up to expectations when it comes to fiscal consolidation.

An Italian tax crackdown has already yielded positive results. A recent article in the New York Times reported that Rome’s tax police swooped on a small workshop near the Vatican that sold religious souvenirs but failed to pay the Italian Revenue its share. Other arrests have been made in ski resorts and high profile nightclubs around the country. The warning is clear: if you live in Italy, drive a Ferrari and report earnings that could hardly pay for a Fiat Punto then the tax police are coming to get you.

Fraud in Italy is said to be worth 255-275 billion euros a year by some estimates. Thus, stories of raids on the rich and famous not only catch the public’s imagination, but are also a way for Italy to score brownie points from Germany.

Likewise, the new Spanish government announced far reaching labour market reforms in an attempt to cut the 50% unemployment rate for 18-24 year-olds. But the job was made slightly easier in Spain after a poll found that the majority of Spaniards said they would accept changes to their contracts even if it meant lower severance pay.

But while the periphery works at fixing its public finances, the core has problems of its own. In an unprecedented step, Angela Merkel has joined President Sarkozy on the campaign trail in France to try and help him get re-elected in elections that begin in April. The alternative Socialist candidate Francois Hollande must give Berlin nightmares. He wants to spend an extra 20 billion euros on public services if he gets elected, to be paid with higher taxes – hardly the reform sought by Merkel and co. So while Germany and France might be allies right now, a Socialist French President is unlikely to swallow Merkel’s message of austerity.

We are currently in a strange limbo whereby it looks increasingly likely that Greece could be cut loose and the euro zone would survive and maybe even thrive without the weight of supporting its weakest member. However, the glue that binds the union together is German austerity/ fiscal responsibility and if Sarkozy fails to secure a second term as President of France, the whole edifice of the union could unravel, and what makes this even more strange is that it may not be because of Greece.

All my adult life I have been and remain a Francophile. It is a perversion I can neither defend nor explain.

Having got that off my chest, I’ve a feeling my position is going to get more uncomfortable than ever over the next few weeks, as the French Presidential Election campaign gets going. Elections invariably expose the most unattractive aspects of any country, but with the National Front breathing down the neck of the incumbent, the immediate outlook for France is distinctly unappetising.

One common factor the French share with the Americans is a belief in their own exceptionalism, which in the current situation translates into a sort of deficit-denial syndrome, where either the fiscal balance is ignored altogether or the need to do anything about it is questioned. This delusion makes it possible for the French Socialist candidate to enjoy a 10%-plus lead in the polls in spite of running on an unreconstructed tax-and-spend platform for all the world as if it were still 1972 and the intervening decades were some kind of dreadful aberration. Not only does M. Hollande want to spend 20 billion euros or more on job creation schemes, he intends to pay for it by squeezing more tax out of the rich, which has to be good news for estate agents in Monaco and South Kensington. That should raise the French government’s share of national income, already one of the highest in Europe, to nearly 60%, and just to prove his insanity, he is also dead set on reversing the rise in the pension age from 60 to 62, a change which marked the highpoint of President Sarkozy’s timid reform programme.

Now it is often said that markets can only ever concentrate on one problem at a time. Certainly that was the way it looked, as for years they remained totally relaxed about the build-up of debt in the ClubMed countries, before suddenly waking up to the fact that Greece was barely months away from default. In recent weeks, they appear to have become calmer, either because they expect an eleventh hour agreement to save Greece or possibly because they have got so used to the endless sequence of last-chance deadlines that they are now reconciled to a disorderly default.

In the meantime, having moved on to worrying about Spain and the biggest borrower of all, Italy, they remain quite relaxed about France, presumably because they are still counting on President Sarkozy to save France from itself.

That confidence may yet turn out to be justified, because if he is able to win reelection against all the odds, he will be well placed to push through the reforms the country so desperately needs, and which he so predictably failed to deliver in his first term. But right now, the odds are stacked against him getting the chance.

The fact that the supposedly cautious Frau Merkel has weighed into the French campaign on behalf of the President tells you how much she thinks is as stake. Facing a general election herself, how on earth is she going to convince her voters to pay up and keep smiling in the name of the European ideal if she has a President Hollande next door embarking on a spending binge? Instead of a France able to make token contributions to the cost of bailing out ClubMed, she could be facing the ultimate nightmare of a France needing a handout from Germany – which would be an economic disaster with deafening historic resonances.

Consumers have always borrowed money from friends, neighbors and relatives. Merchants would not exist without credit; the habit of making debts on a “slate” in the local butcher or greengrocer was still common in the middle of the twentieth century. But the local merchant would normally offer credit only to a known, local customer; serial defaulters, or those deemed to be untrustworthy, would be refused business. In David Copperfield, Mr. Micawber’s failure to repay merchants required him to cadge off his friends.

But the modern idea of widespread consumer credit (in the form of national lenders, credit cards, etc.) really dates to the Industrial Age. A peasant’s income is unlikely to grow over the long term; at best, it will be highly variable, with bumper harvests in good years giving the peasant sufficient income to pay off debt incurred in bad years. But two or three bad harvests in a row could be ruinous.

This point illustrates a wider truth. The granting of a loan requires both the creditor and the debtor to be confident that the latter’s income will grow sufficiently to repay the debt. Think of a retailer that sells a washing machine, or television, in installments. Clearly the customer does not have the money now; otherwise he or she would pay upfront. Moreover, the overall bill, including interest, will be greater than the cash price. So the debtor must be confident that he will stay in employment to pay the larger sum. In addition, he or she will probably be confident that their future income will rise so as to offset the additional interest. A growing economy makes that calculation all the more likely.

The Industrial Revolution changed the pattern of human civilization. It allowed economic growth to expand at a much faster rate than ever seen before. This was probably down to the use of carbon-based fuels (wood, coal and, eventually, oil) to power technologies to replace human and animal labor. This resulted in a substantial increase in productivity.

Think of an economy as a business with inputs and outputs. An agrarian economy is often dubbed a subsistence economy; it takes all the energy of the workers (and their livestock) to produce the food necessary to live. A bull may plow a field, and reduce the effort of the farmer, but it takes a lot of land to feed the bull. The economy (business) does not produce a profit. Carbon-fuelled machines transform the situation. Initially, man naturally exploited those fuels that were easiest to reach; chopping down trees, getting coal nearest the surface and so on. So the output, in terms of goods and energy produced, was much greater than the effort put in.

The movement of people from the land to the new industrial cities also required an agrarian revolution. Those remaining on the land had now to produce a surplus, enough to feed the industrial workers as well as themselves. Fortunately, this happened, thanks to the consolidation of smallholdings, new farm machinery, crop rotation and a host of other small reforms. In turn, these improvements allowed the population to grow.

So we now had economic growth and population growth. The next stage emerged as workers gathered in factories. Initially, the conditions were terrible – long hours, low pay (albeit better than a farm laborer’s income) and non-existent safety standards. In the crowded towns, sanitation was poor, disease spread quickly and life expectancy was severely restricted. But factories made a big difference in that they grouped workers together and made it easier for them to organize in their own interest. That was very difficult for geographically dispersed agricultural workers. Steadily over the nineteenth century, trade unions grew in membership and workers flexed their muscles through strikes. Governments started to recognize their power and buy them off. Bismarck, a hard-headed pragmatist, introduced old-age pensions in Germany as a way of recruiting worker support for the Hohenzollern monarchy.

Competition for skilled workers also drove wages up, creating a new, more prosperous category within the working class. Those with skills and above-subsistence pay were more attractive to lenders.

At the same time, the Industrial Revolution was creating a greater need for credit. Arguably, it started with the farmers. Larger farms, new machinery, new crops – all this required investment, which in turn required borrowing. Farmers would take on this risk if the extra production was sufficient to offset the interest costs. But their calculations depended on modestly rising, or at least stable, commodity prices. It was falling commodity prices in the US in the late nineteenth century that created the support for William Jennings Bryan’s populist crusade.

Industrial workers also required credit. A house in town, however humble, required furniture – beds, tables and chairs. Few could afford the expense upfront. In his excellent history of US consumer credit, Lendol Calder dates the development of installment plans (or hire purchase) to the early years of the nineteenth century. Cowperthwaite & Sons, a New York furniture retailer, was one of the first to adopt the practice. The Singer sewing-machine company took up the idea with enthusiasm later in the century.

The idea of installment plans was far from new; John Law sold shares in the Mississippi Company in installment form. But a system based on regular payments was suited to an industrial age where workers received regular income. Installment selling greatly widened the potential market for a retailer’s goods, and the financing charges more than offset any bad debts. In practice, one wonders if the approach was really that much different from the old habit of allowing customers to buy “on the slate.” Presumably such retailers marked their prices higher to allow for both the time value of money and the occasional bad debts. Psychologically, however, it was an important step forward. Consumers liked the ability to get their goods upfront and found the prospect of a series of small payments easy to swallow, even though they ended up paying more for the goods in the end.

Installment credit had other advantages for the retailer, especially when compared with outright credit. On those occasions when they did default, buyers had usually made several payments, ensuring any loss was limited. In addition, the law made it clear that the seller retained the rights to the goods until all the installments were paid. For the same reason, buyers were reluctant to default, knowing as they did that they would lose both the goods and their cash.

In the twentieth century, manufacturers joined retailers in the installment credit club. The car industry led the way. Houses aside, a car would be most families’ biggest single purchase, and manufacturers would have limited their market had they sold only to those with ready cash. Selling cars via installments had two other advantages. People are naturally cautious when it comes to buying new products – they don’t want to be the family on the block that buys the unfashionable or unreliable model. They will thus pay careful attention to what their friends and neighbors buy. A manufacturer that offers easy purchasing terms may thus establish his product as the main brand; the first buyer will bring in imitators.

In addition, increased production will bring economies of scale. Lower costs can be passed on to consumers in the form of lower prices, allowing the market leader to undercut its competitors. One reason why the Ford motor company lost ground in the 1920s, despite the early success of its Model T, was that General Motors used installment selling to establish itself as the leading brand. A rival Ford plan which gave consumers the chance to save up to buy a car – a sort of “pay now, buy later” – proved to be a flop. Ford was eventually forced to follow GM’s lead and set up its own financing arm. The link between consumer finance and manufacturing was established, and has never gone away.

From the book Paper Promises: Debt, Money and the New World Order by Philip Coggan. Reprinted by arrangement with PublicAffairs (www.publicaffairsbooks.com), a member of the Perseus Books Group.  Copyright © 2012.

On the one hand, we hear bankers and their apologists arguing that their rewards are required to keep them from running off to sunnier climes, which prompts a number of questions. First, when bankers claim that they have to be paid a fortune in recognition of the size of the organizations they run, we may well ask: how many banks of this scale are there in the world today? How many are so hungry for skills like those of Britain’s bank bosses that they are willing and able to offer these sorts of rewards?

Three or four, maybe, at most – after all, several of the world’s largest banks are now owned by the Chinese Government, so they are unlikely to want a British boss any time soon, and the others do actually have a full management complement anyway. By definition, the number of vacancies at this level is extremely limited, so the danger of an exodus of top British bankers is much exaggerated.

In any case, does it really matter?

After all, even before the crash, there was quite a lot of sniping at high City payoffs and we were told at the time that the outrageous salaries and bonuses were needed to secure the services of people like (Sir) Fred Goodwin et al – and since then we have had ample opportunity to assess the true value of their high-price expertise.

Is it really being suggested now that the banks collapsed because pre-crisis pay rates were insufficient to attract competent CEO’s?

Or is the argument that, if they had paid less astronomic salaries, the banks would have lost even more money than they actually did in 2008-9?

Both propositions are totally implausible.

The truth is that bankers were able to pillage their institutions with impunity because of the total failure of corporate governance, which meant they effectively operated unrestrained by any meaningful shareholder oversight, leaving them free to pay themselves grotesque salaries and bonuses and, even more damaging, to build the bloated empires which could then be cited as justification for their inflated remuneration packages.

Much of the blame for this state of affairs lies with the largest shareholders, the investment institutions who sat on their hands while the banks leveraged themselves to the hilt so as feed the limitless egos of their senior managers. For example, it is hard to believe that the Royal Bank of Scotland’s institutional shareholders could not have exercised an effective veto on the bank’s fatal takeover bid for ABN-Amro, and indeed some hedge funds do appear to have indirectly voted against the deal by shorting RBS stock, but alas – too little, too late and too indirect.

(Note that it is typical of the EU’s regulators to pillory the hedge funds for their supposedly destructive role as short-sellers, when in fact they are guilty of being nowhere near bearish enough at the stage where shorting might have been able to head off disaster.)

Right now, there is one institution which has shareholdings big enough to give it overwhelming power in the UK banking sector. That institution is, of course, HMG, with its 82% share in RBS and 60% in Lloyds-HBOS , a fact which immediately begs the question: why on earth are they so nervous about exercising control, at least where executive salaries are concerned?

Since I am as committed as anyone could be to free market capitalism, I find state ownership of commercial banks highly unpalatable, and I cannot wait to see the Government selling off its shares in RBS and Lloyds-HBOS, ideally after breaking them up (though I realise the banks shot that particular fox long before the last election, in spite of support from no less a figure than the Governor of the Bank of England).

But, given that nationalisation has happened (and in circumstances which made it more or less inevitable), I want to see the Government behaving the way private sector shareholders should – that is to say, using their voting power as owners to ensure that management delivers maximum possible shareholder value, which involves minimising what economists call agency costs – excessive outlays of all kinds, unnecessary management perks, expenditure on empire-building etc. etc.

Instead, we have had a cynical tit-for-tat political confrontation.

On one side, the Government is shamelessly exploiting the harlot’s prerogative, using every power at its disposal to get the current RBS CEO to give up his bonus, while disclaiming any responsibility for the decision.

On the other side, the Opposition have turned from lambs into lions. Having fawned on the bankers for years before the crisis and been easily cowed into accepting business as usual after it, they are now baying for blood, even if it means overriding a contract to which they themselves were a party.

Whatever they imagine they are achieving for their own benefit, the politicians are managing to get the worst of both worlds for Britain, giving the impression of a country where the authorities are so capricious that even a signed contract counts for nothing. It is a deeply depressing spectacle.

The answer to anyone who says that bankers’ pay is outrageous is twofold.

First, it is an issue for shareholders alone, which means the Government on behalf of the public at large in the case of RBS and Lloyds-TSB, but in the case of the other banks, it means those who own the shares directly or indirectly. The fact that shareholder control has broken down is a problem which goes far wider than the banking sector, and one that needs addressing urgently, possibly by forcing the financial institutions, who own such a large proportion of the corporate sector, to consult their own shareholders before exercising their right to vote (or indeed to abstain) in ballots held by companies in which they have invested. As things stand, the relationship between big business and the investment institutions is far too cosy for the health of the economy, resulting in gross misallocation of resources, a disincentive to savers and widespread mistrust of the City, the corporate sector more generally and, in some quarters, of capitalism itself.

Second, excessive pay simply reinforces the argument for separating the investment banks from the deposit-taking institutions.  The former should be left free to pay as much as they like, but with the understanding that bailouts are ruled out, at least on anything other than confiscatory terms. That would leave the high-street banks smaller, less complex, less risky and easier to manage than they are today, all of which would mean that management would need far less spectacular rewards.

Those who oppose the break-up of the banks need to answer the following question: in a post-Vickers world, where a bank’s investment division is supposedly banned from exploiting its deposit-taking role in any way, how can there be any synergy between the two activities? Why would any bank want to retain both activities under the same ownership under this sort of restriction?

The obvious answer is that they can see very little difficulty in scaling, burrowing under and/or bypassing the Chinese walls between the two divisions. In fact, they have probably already worked out a number of schemes to do just that. In the past, this sort of operation to undermine regulatory defences served to inflate bank profits, justify bankers’ wage packets and ultimately to bring the financial system to the point of total collapse.

Readers may have the impression that I have wandered away from the point at issue: bankers’ salaries. And they are absolutely right. One of the most damaging aspects of the furore over the millions of pounds in bankers’ pay packets is that it has distracted attention from the billions and trillions at risk in global finance, where all the regulatory activism – stress tests, higher capital adequacy ratios and so on -  cannot hide the basic reality, which is that, in 2012, risk is far more concentrated than it was in 2007, the institutions which were deemed too big to fail then are in most cases even bigger today, and the resources available to deal with a new crisis have been drastically depleted in the last few years.

The key question is: how does bankers’ pay give them an incentive to avoid a rerun of 2007-8? Any other focus leaves us penny wise and pound foolish.

“Facebook was not originally created to be a company,” founder Mark Zuckerberg wrote in his letter to investors announcing the IPO of his already hugely successful and profitable company. “It was built to accomplish a social mission — to make the world more open and connected.”

Facebook has succeeded wildly, despite internal admonitions that its “journey” is only 1 percent finished. Journalists have latched onto Zuckerberg’s statement that Facebook wants to “rewire” the way the world works. In a world of thousands of self-anointed “social media experts,” only Zuckerberg can claim to have basically invented what the world thinks of as social media. He has etched himself into the timeline of human innovation.

Pity then, that Zuckerberg hasn’t turned his talents or attention toward Facebook’s financial underpinnings. After all, an IPO? How ho-hum can he get? If Mark really wants to accomplish his social mission with Facebook, he should share the company’s ownership with the people who helped him create it. Not just his Harvard contemporaries. Not just the programmers. Not even just the venture capitalists.

I’m talking about us. All of us. The users. Facebook should be a user-owned, user-managed company, run for the benefit of users. For the Facebook, by the Facebook. The company should be a cooperative.

Before I explain further, let me lay out the case in four simple points:

1. Facebook won’t necessarily get rich as a public company. LinkedIn, the grown-up social network, IPO’d last year, but is now down from its initial price after having had a big pop on its first days of trading. Zynga and Groupon, meanwhile, lost ground on their IPO prices as soon as they hit the markets. Tech journalism might work itself into a froth over a company’s earnings potential, but the broader market is still confused as to how to price these companies.

2. Distractions. Every story from now on is going to be less and less about Facebook’s incredible technology and more about how its stock is doing. Facebook’s social mission will be obscured by its profit motive.

3. Who’s being rewarded here? The whole point of an initial public offering is for a company to raise money by selling shares in the open market. An important secondary point is that the IPO provides liquidity to existing shareholders, making it far easier for them to trade and take profits (and losses) on what they own. Big banks underwrite IPOs -- they go get the high-rolling, qualified investors and get them to commit millions of dollars to buy into the offering, collecting copious fees for themselves in the process, not to mention getting first crack at shares for their own products and funds. In short, everyone in an IPO process gets their beak wet except for the people who give the company its profits -- its users. That might be fine for a car company, an iPhone company, or even a search engine company, but social media exists to connect users to companies and each other in unprecedented and previously impossible ways. Shouldn’t finance be one of them? That leads to...

4. Why not share the company itself? It’s fine to talk about technology’s power to change the world if you’re the one who’s going to profit from it. But this isn't really a change: In fact it looks like a highly conventional way to run what everyone says is supposed to be a very transformative company. Facebook needed a gestation period, and its incredible growth in that period made it very special. The moment its IPO is over, it becomes one of a herd.

That’s why it should become a nearly one-of-a-kind company for the technology sector: a co-op. Invented in England in the 1840s, the co-op is a company organizational structure where membership is voluntary but members have democratic control and economic participation and in turn are supposed to act with concern for their community -- in this case Facebook. Businesses of all kinds -- for-profit and otherwise -- are run through the co-op model, or variations of it.

• There is the Park Slope Food Coop, a crunchy place where 16,000 members (disclosure: I am one of them) buy groceries at just enough of a markup over wholesale to cover expenses (about 17 percent, making many items far cheaper than in other stores). They also run and staff the store, with the help of just a few paid employees.
• There is the San Remo, one of the most luxurious apartment buildings in Manhattan, where prices are in the tens of millions for a single apartment, and as in thousands of other co-op buildings, residents share the cost of maintenance and retain control over key property decisions.
• Then there is banking and insurance company USAA and mutual fund firm Vanguard, models for highly sophisticated financial services businesses that are run according to co-op principles and are highly successful and respected businesses.

But all of the businesses above use the co-op model’s social nature as secondary to their main business. For Facebook, social is the business.

Facebook wouldn’t be forgoing its fundraising if it abandoned its IPO and became a co-op. When I joined the Park Slope Coop, I had to pay a $25 membership fee and a $100 investment, the latter of which is refundable should I ever leave. In Facebook’s virtual community, its 845 million users could easily pay a small sum -- say $5 in the U.S. and some locally adjusted equivalent in other countries -- to become an owner. Some of that money would be used to buy out existing stock owners and set up the new management model -- it would still have Zuckerberg as CEO with a management team, but with the same one vote that every other member has. Over time, if Facebook’s owners keep the cost of becoming a member as low as possible without in any way starving the site for cash, Facebook could even become the world’s first trillion-dollar company -- just in a way no one has ever previously imagined.

Users who invested would earn the right to help govern the company. If it sounds unwieldy to let hundreds of millions of users govern a site, well, it may be at first. But as Zuckerberg himself will attest, his engineers are hard at work helping users connect to each other in ways previously impossible. Facebook already offers voting tools, organization pages, recommendation links, polling, etc. With the help of a management team and committee structure, it would be pretty easy to let members assign themselves to committees and shape Facebook into the community they want it to be. Besides, if there’s one person in the world not allowed to use the excuse that this undertaking would be too technically complex, it’s Mark Zuckerberg.

Zuckerberg may chafe at the idea that hundreds of millions of users are suddenly in control of his company, but think of a sample proposal. Say a user wants Facebook to give 10 percent of its income to charity.

1. She creates a new page and persuades her friends to follow it. The page holds the pro and con discussions of the proposal.
2. After hitting a certain threshold of followers, the page makes the Revenue Committee agenda, where a subcommittee is assigned to study its feasibility and write a summary about the proposal’s impact on Facebook, including how it would affect the bottom line.
3. The committee then votes on the summary -- if it’s approved, it goes into a general Facebook meeting, where the entire user base gets to vote. The beauty of this is twofold. First, only the best ideas percolate to the top; propose anything crazy, and it’s simply going to languish. Second, with Facebook’s technology, there need not be a formal meeting time -- the proposal exists just like any new Facebook alert. If a user feels strongly about a proposal, he can even buy a targeted demographic ad!

As the site’s leader, the famously controlling Zuckerberg would still retain quite a large chunk of control in that he’d have to implement the strategy and actually make it work, and one would think that if he explained why a given proposal wasn’t a great idea, his words would carry great weight.

But ultimately the site would belong to the users, not a tiny management team. When Zuckerberg eventually decides to hang up his keyboard and retire, the company would not face the cult of personality problems that Apple did during Steve Jobs’s protracted illness -- it would simply persevere.

In the meantime, Facebook would have plenty of capital to pay its engineers, thanks to its owners’ contributions. In good years, it could return dividends to members or explain to them that it was better to bank the money for future investment or rainy-day funds. In tough times, it could first ask members for low-interest loans before turning to the capital markets, perhaps using a Kickstarter-like platform to fund specific initiatives in the company. In other words, this is a model compatible with capitalism and competition, not a replacement for those things. The whole system fits almost perfectly with Zuckerberg’s investor letter saying that Facebook doesn’t "build services to make money; [it makes] money to build better services."

Facebook will probably never be governed this way. Too many early investors simply stand to get too rich. But if Facebook is not to be a co-op, that means social networking -- and all of the truly incredible tools, culture, community and change that its visionaries claim will change the way the world is wired -- will really just reinforce the highly stratified and imperfect way the world works today.

Mark, put your money where your mouth is; after all, you already have more of it than you will ever need. If Facebook was truly built to change the way people relate to their world, that change should begin with how people relate to Facebook.

PHOTO: An employee works on a computer at the new headquarters of Facebook in Menlo Park, California, January 11, 2012. REUTERS/Robert Galbraith

“Every country, every company in the world is looking for growth wherever they can find it,” Brooke said at a panel discussion (which I moderated) at Thomson Reuters headquarters in New York. “Where is the growth coming from? It’s coming from the emerging markets … We historically think of those emerging markets as India and China and many others. But it is clear that women are an emerging market.”

DeAnne Aguirre, senior vice-president at Booz & Company, said the concept of the “Third Billion” comes from the notion that if China and India each represent 1 billion emerging participants in the global marketplace, then a third billion is made up of women around the world whose economic lives have been “stunted, underleveraged or suppressed.”

The figure is based on a Booz & Company analysis of International Labor Organization data on women in the global workforce that showed some 860 million women were excluded for one reason or another, a number forecast to rise to 1 billion in the next decade. (Many of those women are in India and China, of course, so there is overlap with the first and second billions.)

La Pietra Coalition, the global alliance behind the campaign, has identified five factors that contribute to keeping women from playing a more productive role: access to finance; legal and social status; barriers to entrepreneurship; lack of education and training; and labor policy and practice.

The group wants to bring together corporations, governments, NGOs and institutions such as the World Bank to address each of those issues.

Among those that have already partnered with La Pietra are Coca Cola, Wal-Mart, Goldman Sachs and Standard Chartered Bank. Brooke, who is global vice-chair for public policy at Ernst & Young, said a key goal of the campaign is to enlist more big companies.

“It is good for their business,” she told Reuters. “They have women as consumers.  They have women as employees. Their supply chains could be filled with women entrepreneurs.”

“The point of "The Third Billion" is that they will have so much more of all of that in the next decade -- if they invest wisely,” she said. “The investment will add to their bottom line.”

For an audit and consulting firm like Ernst & Young, there’s a real possibility of payback. As Brooke says: “The entrepreneurs of today are our biggest and best clients of tomorrow.”

At the same time, threats to trade and travel -- whether from explosives hidden in a passenger’s clothing or inside a ship’s cargo, or from a natural disaster -- remind us of the need for security and resilience within the global supply chain. A vulnerability or gap in any part of the world has the ability to affect the flow of goods and people thousands of miles away. For instance, just three days after the earthquake, tsunami and nuclear tragedies struck Japan last March, U.S. automakers began cutting shifts and idling some plants at home. In the days that followed, they did the same at their factories in more than 10 countries around the world.

Ten years after the terrorist attacks of Sept. 11, 2001, we also continue to see the determination of individuals and groups to disrupt economies by targeting our transit and cargo systems. Understanding the seriousness of these threats underscores the need for a continued focus on protecting the global supply chain.

Just as important, we must move away from the outdated dichotomy that we have to choose between trade and travel efficiency, and trade and travel security. Security and efficiency must no longer be seen as mutually exclusive. It is possible to enhance security without increasing wait times, creating more paperwork and driving costs higher – and we are doing so already.

As I announced at the World Economic Forum in Davos this week, the United States released a National Strategy for Global Supply Chain Security, the product of more than two years of collaboration across the U.S. government, and with international and domestic public and private partners.

The National Strategy, created with the input of more than 60 subject matter experts and hundreds of supply chain stakeholders, takes a whole-of-nation approach to global supply chain systems, with two explicit goals: promoting the efficient and secure movement of goods; and fostering resiliency.

We will pursue this strategy in three main ways:

First, we will maximize resources and expertise from across the United States government to find smarter and more cost-effective ways to address security threats. This includes developing common standards, streamlining our processes and enhancing our information sharing.

Second, we will seek to foster an all-of-nation approach to leverage the critical roles played by domestic governmental and private-sector partners. The supply chain is vast and complex, touching points of manufacturing, assembly, consolidation, packaging, shipping, and warehousing, as well as supporting communications infrastructure and systems. All must play a role in its protection.

Because protecting the global supply chain is inherently an international challenge, it will take an international effort to meet it. The tremendous benefits we all reap from an interdependent global economy means that we are all stakeholders in the security of that system.

And third, we will continue to think globally, enhancing our coordination with the international community and international stakeholders who have key supply chain roles and responsibilities. We will seek to develop and implement global standards, strengthen detection, interdiction, and information-sharing capabilities, and promote end-to-end supply chain security efforts with the international community.

All nations have a stake in the supply chain’s success, and only through international cooperation will we all share in its benefits.

Over the next six months, U.S. government agencies, including the Department of Homeland Security, will reach out to a wide range of partners to implement the Strategy together, and to foster a secure, efficient and resilient global supply chain.

As globalization brings nations closer together, we need to jointly disprove and leave behind the notion that security and efficiency cannot coexist, and together build a security architecture that better uses information to assess risk. By taking a coordinated, strategic and thoughtful approach, we can expedite legitimate commerce while focusing our attention on that much smaller portion that poses harm. Security and confidence in the global supply chain enhance our collective economic strength, rather than impeding progress.

Our mutual understanding of this changed relationship will help us better secure the global supply chain, better promote trade and travel and ensure future economic growth. Together we can meet our shared goals, continue to build on our considerable progress, and strengthen the global supply chain to meet today’s challenges and tomorrow’s.

The world’s mighty are currently meeting in Davos, Switzerland to discuss the progress – or lack of progress in some cases – of the global economic recovery. The financial crisis and resulting recession has brought many of the world’s major economies into the same boat. Subsequent years have seen a shift towards collective policy making in order to aid recovery. Here in the UK there has been a major shift in economic policy during that time, as a result of both collective world policy and a regime change at home. But this refocusing of our economic policy has to be taken further.

The UK of the industrial revolution was renowned as the “workshop of the world”. Now, with the overwhelming focus on a world-leading services sector, the UK is barely a workshop at all. This has got to change if we are to meet the Government’s ambitious growth plans.

Britain needs to recalibrate its commercial offering and refocus on manufacturing in order to vastly grow the export sector. The government is making gestures to achieve this aim. Already they have set a target of 100,000 UK businesses entering the export market for the first time within the next five years.

We are already making progress. Exports to the EU – our primary market place – were up 18.3% year on year in May 2011. We are making gains in the emerging markets too, with exports to China up 43.7% and India 43.4% in the same time period.

However, the BRIC markets (Brazil, Russia, India, China), are now well established as market places for UK exports and, although these relationships must be kept , UK businesses would be wise to realign some of their focus onto the CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa).

The CIVETS are the emerging markets most widely tipped for sustained growth over the next decade. As a collective, these nations have shown excellent economic growth in recent years. They share in the opportunity presented by a young population and they all have increasing levels of personal wealth. As such, these countries are the ideal marketplace for commercial and consumer offerings from the UK.

Some of the CIVETS are – of course – more attractive than others. Indonesia is the fourth most populous country in the world, and saw economic growth of 6.1% in 2010. Columbia is currently the third largest supplier of oil to the USA and is reaping the benefits of having reinvested its wealth into infrastructure projects. Perhaps most importantly though, Turkey has spent the last ten years on economic and political reform which has put them in a strong position for acceptance into the EU. UK businesses should be giving serious consideration to these market places.

There can be no doubt that the UK needs to up the ante of its manufacturing and export offering in order to achieve the Government’s growth targets. The fact is that our current export market is in turmoil and the previous EM targets of China, India, Brazil and Russia are now well established. The focus must turn to the CIVETS as the next emerging market export opportunity. Let’s hope the wheels are put in motion in Davos this week.

By S. D. Shibulal, CEO of Infosys.

During the first day at the World Economic Forum yesterday, we witnessed delegates arriving with two things on their minds — how heavy the snowfall was and the realisation that new business models are needed to overcome global economic pressures. (It goes without saying that the mood at Davos hasn’t been helped by the IMF downgrading world growth targets). We all agree that we’re living in a volatile world and it cannot go ignored that there are many uncertainties we face, including currency volatility and high unemployment.

The euro zone crisis will undoubtedly be at the centre of the discussions concerning “uncertainty” but what the attending business leaders, governments and global organisations must understand and discuss, is what they can do together to put in place measures to transform and change, so we can better safeguard our future.

The discussions I had at Davos yesterday support my fundamental belief that corporations have a critical role to play in creating a future where opportunities are abundant and growth inclusive. Moreover, at the heart of the global macro-economic uncertainty is the crisis of trust. Leaders across businesses and governments alike need to work together to rebuild that trust. Creating jobs and fostering sustainable growth is the first step in this journey. While businesses will need to look at measures to manage their short term crises and be truly evolved, smart enterprises will have to balance their focus between “short term needs” and investing for “long term growth through innovation”. We must also recognise that the emerging  future is being shaped by global mega trends in business and society, along with changing demographic profiles.

In view of these trends and the events that led to the recent economic crisis, leaders have their work cut out. Balance the short term versus long term, create a frame of reference to drive growth and innovation, and envision and create a sustainable future. All the views that I shared above resonated strongly with the panel that debated the critical issue of “the role of the CEO” at the Infosys Lunch Panel discussion yesterday. The panel also concurred that talent, which will be at the centre of these strategies is in short supply. Organisations therefore, not only need to look at new hubs of talent but also at retraining and reskilling existing talent pools. Businesses increasingly need to work in partnership with governments and educational institutions to ensure the mobility of talent and the career development of generation Y so tomorrow’s workers are in line with business demand.  Finally, there was unanimous agreement that leadership by example, client centricity and healthy balance of choices are the need of the hour.

Image — A visitor walks past WEF logos at the venue of the World Economic Forum (WEF) in Davos, January 26, 2012. REUTERS/Christian Hartmann

And yet Saleh made it immediately clear that he intended to return to Yemen before the elections to lead his General People’s Congress party, which holds a majority of seats in parliament. This is, of course, somewhat reminiscent of the last time Saleh left Yemen for medical treatment in June 2011. Following a bomb attack on the presidential palace which left several senior government officials dead and Saleh and others seriously injured, he sought treatment in Saudi Arabia amid hopes he would step down from office. He returned to Sana’a as president at the end of September. While Saleh will not be able to hold this office again, his intention of continuing to play a major role in the future of Yemen taints the otherwise good news of his departure.

But now what? We’ve seen leaders who had desperately tried to hold on forced from power in Arab countries before. Zine al-Abidine Ben Ali was run out of Tunisia. Hosni Mubarak, under withering domestic and international pressure, stepped down from Egypt’s presidency. And Muammar Gaddafi wouldn't leave and was finally killed.

Yemen, though, is different. Its crisis goes much deeper than socioeconomic and political dissatisfaction. It has insurgencies to worry about.

There are two: the al-Houthi uprising in the north since 2004 and the increasingly secessionist rebellion in the south that, while tracing its origins back to the brief 1994 north-south civil war, has gained violent momentum from 2007 onwards. Both insurgencies are reactions to political marginalization and economic neglect by Sana’a.

But these insurgencies have telling differences. The situation in the north has been destabilized by past military operations against a Shi’ite rebellion that allegedly received support from Iran (doubtful as it may be in its significance). For years on-and-off fighting had seen little gain for either side until the government launched operation "Scorched Earth" in 2009. That push involved Saudi forces, but the insurgency, although reduced in strength, continued. To date, a number of ceasefire agreements have been signed, and broken, most recently in 2010.

In the south, meanwhile, a battle with secessionist forces is complicated by the significant and growing presence of al-Qaeda in the Arabian Peninsula (AQAP). This fight has garnered significant international attention, not least because of two failed international terrorist plots that originated in Yemen — the attempt to bring down airplanes with explosives hidden in printer toner cartridges in October 2010 and the Christmas Day bombing plot in 2009. The alliance between AQAP and the southern secessionists, however, is one of convenience above all else. The southern movement is deeply divided among different factions and has limited military capabilities. It thus relies to an extent on AQAP to challenge the regime without sharing the terrorist network’s religious fundamentalism or anti-Western agenda. For the regime, southern secession is unacceptable given that most of Yemen’s dwindling oil resources are located there. Internationally, too, there is broad support for Yemen’s unity and a fear that instability in the south will further enable and embolden AQAP.

Even without Saleh, these insurgencies will continue — and so will all of Yemen’s other ills. Economically, the country has struggled for years with declining oil reserves and serious water shortages, high unemployment, and the consequences of immigration, emigration, and transmigration. Social tensions between different segments of Yemen’s society overlap and cut across existing political, religious, geographical, tribal, and cultural divides, and are unlikely to decrease amid further political instability and economic decline. One also shouldn’t dismiss the danger that an already volatile security situation will escalate. Fears of an imminent civil war may be overstated, but the multiple threats from northern and southern insurgents and from AQAP must not be underestimated.

You try reaching an agreement on a new constitution with all that swirling around.

The key priorities for international engagement in support of Yemen, then, are threefold:

1. Work with all political forces in Yemen to prevent an outbreak of major violence as they compete for power and influence in the country.
2. Contain the threat of AQAP.
3. Initiate a process of economic stabilization and recovery.

Yemen’s prospects after Saleh’s departure from the presidency may have improved, but they are still far from good. The domestic and international management of Yemen’s crises needs to be realistic. Preventing further crisis escalation would already be a significant achievement. Yet such realism must not make us lose sight of the fact that it was the pro-democracy movement across an economically and politically disillusioned young generation in Yemen that forced Saleh from power.

Democracy is the best chance Yemen has to accommodate the demands of the insurgencies in the north and south of the country. This will require true leadership on the part of the new government, a readiness on all sides, including the insurgencies, to make serious compromises, and international support to stabilize the country and improve people’s lives. Democracy may not be a panacea for Yemen’s multiple crises, but a Yemen without democracy in its future will be no different than the Yemen of the recent past.