Saturday, December 30, 2006

Saddam Executed for Criminal Complicity with US

Saddam Hussain was executed this morning for a crime that he had committed back in 1980s, in complicity with, what has now become, the United States of Amnesia.

In December 1983, during the 8-year Iraq-Iran war, US President Ronald Reagan dispatched his special Middle East envoy, Donald Rumsfeld to Baghdad with a hand-written letter to Hussein. Rumsfeld had served in various positions in the Nixon and Ford administrations, including as President Ford's defense secretary, and at this time headed the multinational pharmaceutical company G.D. Searle & Co.

On January 1, 1984, Washington Post reported that the US “in a shift in policy, has informed friendly Persian Gulf nations that the defeat of Iraq in the 3-year-old war with Iran would be ’contrary to US interests’ and has made several moves to prevent that result”.

Three months later, Rumsfeld was back in Baghdad for meetings with then-Iraqi foreign minister Tariq Aziz. United Press International reported on March 24, 1984, that “mustard gas laced with a nerve agent has been used on Iranian soldiers in the 43-month Persian Gulf War between Iran and Iraq, a team of UN experts has concluded... Meanwhile, in the Iraqi capital of Baghdad, US presidential envoy Donald Rumsfeld held talks with foreign minister Tariq Aziz on the Gulf war before leaving for an unspecified destination”.

In fact, even prior to Rumsfeld's visit, in May 1983, in a letter to the Iraqi Foreign Minister Tariq Aziz, US Secretary of State George Shultz had mentioned about the "very important common interests" between the two countries, and had noted that:
    "...Clearly, international terrorism is not only a parallel menace to our two contries, it also appears that at least the inspiration for certain terrorist acts against Iraq and again's the US emanates at times from the same sources.By working together to combat terrorism, our efforts should be more effective"

In November 1984, US resumed normal diplomatic ties with Iraq.

As I had posted long time back:

    During the eighties, the UN was concerned with Saddam Hussein's use of chemcal weapons. On March 21st, 1986, the Security Council President, "speaking on behalf of the Security Council," stated that the Council members were

    "profoundly concerned by the unanimous conclusion of the specialists that chemical weapons on many occasions have been used by Iraqi forces against Iranian troops...[and] the members of the Council strongly condemn this continued use of chemical weapons in clear violation of the Geneva Protocol of 1925 which prohibits the use in war of chemical weapons"

    The United States was the only country to vote AGAINST the issuance of this statement!!!.

In any case, Saddam is now dead and gone, killed by a form of "justice" which is paradoxical. A few months back, an article in New York Times (May 21, 2006), noted about the court proceedings in Iraq:
    "The American influence has been undeniably pervasive, with about 90 percent of the $145 million in annual costs for the court and associated investigations paid for by the United States Justice Department, and lawyers sent by Washington acting as advisers."

Commenting on the execution of Saddam, Robert Scheer observed:
    "It is a very frightening precedent that the United States can invade a country on false pretenses, depose its leader and summarily execute him without an international trial or appeals process. This is about vengeance, not justice, for if it were the latter the existing international norms would have been observed. The trial should have been overseen by the World Court, in a country that could have guaranteed the safety of defense lawyers, who, in this case, were killed or otherwise intimidated.... This rush to execute him had the feel of a gangster silencing the key witness to a crime."

So today, besides all his cruel deeds, Saddam finally paid for two of his costliest mistakes:

1. He did not choose his friends wisely, and
2. He did not learn from his past experiences with his "Best of Enemies"

Other Sources:
National Security Archives
(this contains links to some of the de-classified documents from State Dept)
The Saddam in Rumsfeld’s Closet
Who should pay for Saddam's Crimes?

Friday, December 29, 2006

An "Invisible" Revolution... 400 Poor Women/ Hour!!!

"Invisible" people create revolutions that too remain invisible from the sight of most - specially the MSM...

The following is a glimpse into one such revolution, which is happening in India.

Perhaps the best introduction to this phenomenon is this desciption from the preface of The Lights and Shades Study:

    "I recall a time in Jharkhand, India in the forest town of Chandwa, sitting with a self-help group under a mahua tree. We ate the mahua’s large raisin-like berries, soon to be turned intocountry alcohol, while a few of the women recounted their story. A well-meaning organization (WMO) had come to empower this self-help group, which had formed on its own about a year earlier. The WMO advised the group that its members would have moremoney if they were to pickle and pack their garden harvests to sell to customers in Calcutta. The organization helped the group with recipes, with bottling and labeling. For several weeks the WMO and the women applied themselves day and night to the task. Somewhere along the way, the WMO lost the group’s savings and never did find a market for the chutney. The women pointed to a houseful of jars as evidence.

    Invincible, the group forged ahead, without the benefit of the WMO. Group members met each week, deposited cash savings into a box, then lent the cash to one another for emergency needs. The group fund began to accumulate once again. Some members had helped other newgroups form in the village and they too began to increase their savings. A few groups had linked to a local bank for more credit. Women members were checking into benefits they might receive by connecting to a government programme.

    I asked the women what activity might have been more lucrative than chutney production. Several said they preferred to work on their own, not in a group business. Working alone, except for harvesting activities, was less risky than putting all their eggs – their hours - into one basket. Yet they did cite one exception, an enterprise which they found to be most promising if undertaken as a collective. On occasion, together in the night after the children had fallen asleep, they would gather at the railway tracks to remove coal from the parked cars of the local freight train. Several women would stand guard while the others skimmed the goods. The next day they would sell the coal to nearby shops. There was no cash-outlay, justtheir time as a cost. They laughed as they confided their secrets.

    Empowerment seemed less like a quaint watercolor of women pickling fruits and vegetables in the countryside, thanks to the benevolence of an empowering NGO, and more like guerrilla survival in a setting where self-help meant fending off assistance whenever possible. This group was pure inspiration – entrepreneurial, full of humor, immune to whatever good intentions might come its way...."

This Self-Help Group (SHG) is only one among the 2.6mn SHGs that spread across Indian villages.

What are SHGs?
Self Help Groups (SHGs) are informal associations of up to 20 women (their average size is 14) who meet regularly, usually once a month, to save small amounts (typically Rs 10 to 50) a month. While they are formed with the encouragement of NGOs and other self-help promoting agencies (SHPAs) such as government agencies and the banks, they are expected to select their own members, and are therefore sometimes called affinity groups. After saving regularly for a minimum of six months, and using the funds to lend small amounts to each other for interest, which is ploughed back into group funds, and satisfactorily maintaining prescribed records and accounts, they become eligible to be "linked" by the local bank branch under a NABARD-sponsored programme called the SHG-Bank Linkage Programme.... On-time loan repayment to the banks has been very high, above 90 percent, and there have been no defaults so far.

Some facts:

  • Started as a pilot project of 500 SHGs, by Nabard in 1992, they grew slowly. In last 5 years, they have grown 10-fold.

  • Now, they reach 31mn rural households (out of the 191mn total Indian households).

  • Of these, about 14mn households are linked to bank credit though SHGs

  • According to The Lights and Shade Study, overall, 51% of SHG members fall below the poverty line; another 32% are ‘borderline’ (above the poverty line but vulnerable to risk). Scheduled Castes (SC) and Scheduled Tribes (STs), recognised as structurally poor, are 55% of members. Widows, also a vulnerable and under-privileged group, were found to be 10% of SHG members.

  • , 38% of SHG members work as casual labourers - 29% work in own agriculture, and 17% are engaged in a non-farm enterprise.

  • 74% have no schooling, 11% have some adult education to become ‘neo-literate’, 15% have some schooling (mainly at primary level).

    SHGs also represent an antidote to the "Access Denied!!!" phenomenon...

    And perhaps also explain the fact that:

    In India, there are 400 women, who join an SHG every hour!!!

  • Monday, December 25, 2006

    ...on Building a "Global" B-School Brand

    In her book, No Logo, Naomi Klein describes how during the last few decades, "brands" have acquired a life and identity of their own, independent of the "product" they are supposed to represent.

    The phenomenon is part of the contemporary zeitgeist, where

    - the 'labels' one wears significantly contibute to one's self-worth
    - the 'address' one lives in replaces the experience of 'home'
    - the 'lifestyle' becomes a substitute for personal identity
    ... Broadly, the the 'form' and 'style' in life become more important than it's substance.

    This article, Grabbing at a Chimera by Santosh Desai (The Week, Dec 17, 2006) is quite illustative of this trend...
    (and oh, yes, while the author mentions IIMs, but the same can be said for any B-School in India!!!)

      Last week, I attended the first pan-IIM meeting in which the subject under discussion was 'How to build the IIMs as a global brand'. As a subject, it is broadly indicative of the mood of the country for the very next day I was at another seminar where 'Marketing India to the world' was the topic being debated. Usually these discussions follow a typical India-is-ready-to-take-on-the-world-in-everything-except-cricket pattern and can be safely slept through.

      The interesting thing about the IIM discussion was that the enthusiasm of the alumni for the subject was not shared by the directors and senior professors of the IIMs. Their consensus was that the IIMs had a very long way to go before being considered world-class. They pointed out the abysmal salaries that faculty draws in India, spoke frankly about the absence of any research emanating out of these elite institutions and the inability to attract meaningful number of foreign students, given the absence of infrastructure. Add to this the distortions caused by constant governmental interference and the picture looked anything but promising.

      There are two aspects of this debate that have larger ramifications. The first is that we discussed this subject at all. Given the pitiful number of seats that elite educational institutions in India account for and the pressure on these from reservations for the socially backward, one could argue that globalising the IIMs should be the last thing on our minds. And as the professors pointed out, if not in so many words, that if one looked at the ground realities, this question walked the thin line between fantasy and insanity. The need for a globally respected IIM brand came from its alumni to bolster their credentials retrospectively.

      This is symptomatic of the current trend towards a sense of hyperbolic euphoria that borders on drunken megalomania. As a nation, we seem to have interpreted an ability to walk as a sign of an impending Olympic sprint medal. Our ambition has catapulted from being a participant in the world order to leading it with fanfare blaring. We want Bollywood to cross over, we want Mumbai to metamorphose into Shanghai, we want everything that we do to be acknowledged by an adoring world, by which, of course, we mean the west. We hate our cricket team because they make our desires look silly. And we can mount our fantasies on flimsy foundations - that IIM students get salaries we cannot comprehend is evidence enough of their global credentials.

      The 'we' in question is of course a small minority that has appropriated for itself the mantle of India. Which brings me to the second larger dimension of the IIM debate. The divergence in the view of those running these institutions and the exuberance of its alumni is a graphic reminder of the divide between the residents of a New India and others.

      IIM graduates today have a good chance of starting at salaries higher than what their teachers can hope to make. Like luxury liners, these students cast off from their dilapidated docks into the New World. The irony is that the air of excellence that surrounds our elite institutions has less to do with their intrinsic quality and much more to do with their scarcity. In a country of India's size, the access to quality education is so limited that anyone who 'gets through' is assured of a passport to New India. This is not a sign of our coming of age globally but of the distance we have to travel in making opportunities accessible to all.

      If teachers of India's most elite institutions can be thought of as citizens of the lesser India, then the divide between the two Indias is a very real one. The desire to become instantly respected globally will only intensify this division. Our priority is to do well by our citizens and fulfil their aspirations. This does not rule out global ambitions, but calls for a hardheaded look at where these ambitions are legitimate. With our limited resources, we cannot fritter away our energy on endeavours that are designed to inflate the ego of a few. The focus of our efforts cannot be outer-directed; we cannot care so much about what the world thinks of us. What matters is the nature of the new reality we are able to create for ourselves. For all of us, not merely a few.

    Update 1: er... forgot to mention that the author of the above article is himself, a graduate of IIMA - used to be the Head of the ad agency McCann-Erickson, before he joined the Biyani's.

    Update 2: I think must add this. I got a mail from a friend this evening:
      I have to agree... even though I am an IIM-A alumnus myself. The reason for being far away from World Class is not because of low staff salaries alone either. In my view it is the lack of academia-industry partnership as well as the lack of rigor about research and learning. The case method which is followed in most IIMs as the main method of teaching is only as good as the research with which it is backed. And that is a big questionmark.

      The other factor that creates this fantasy about being global is the hype with regard to the placement and salaries that a few of the toppers are able to get. Don't ask me the logic behind paying more to a fresh MBA graduate than most companies will pay a manager with 20 years of hands-on experience. In my view it commoditizes education and reduces it to something that can be measured on the basis of a salary that one kid can get. What value can a fresh graduate add to the company that is worth the money that some of them are paid? I am a graduate from the same system and have since taught in the IIMs and other B-schools and can tell you that in my view there is no justification at all to pay a fresh graduate the ridiculous salaries that we periodically hear about. No wonder that the alumni tend to feel that the sun shines because of them. It also produces a know-it-all attitude that banks more on image than on substance to get ahead in life and so the life expectancy of the graduate in his first job is less than 2 years. What a waste of an education!!

      I was invited to deliver the key-note speech at a conference of all the MBA colleges in Andhra Pradesh and began by asking the faculty and students what their purpose was in teaching business. They said it was to teach students to become businessmen and women. I then asked the students if anyone had a business of their own. They all looked at me blankly. I then asked the faculty if any of them had a business of their own. They also looked at me blankly. I then asked them how possible for people who had never actually done business to teach others how to do business without any practical experience in the training? I made a lot of people very uncomfortable but I drove home the point by recommending that B-Schools must scrap Placement Cells. Business School graduates must be taught to create businesses so that they can go out and create employment for others. Not become another statistic in the begging line for jobs. Or another highly paid paper pusher who now does it on a laptop.

    Tuesday, December 19, 2006

    The "Hidden Hand" of Free-Market Corporate Subsidy

    This a continuation of two earlier posts on

  • Subsidized Global "Free Trade" - I (Farm and Agriculture)
  • Subsidized Global "Free Trade" - II (Industry)

    The current zeitgeist is that
  • the business of business is business (i.e., make profits for the shareholders, and serve the customers)

    Fair enough!... That is what all that "free-market" doctrine is all about - i.e., let the business have a free-hand, let it focus on what it is supposed to do, and prosperity (and political freedom) will follow, etc...

    ...till one looks at the "internals" of how this "free" market is achieved... And this one is from the land/country that champions "free market", "free trade", "hidden hand of the market", "globalisation", etc.

    [for the time being, we will not go into the dynamics how the the "hidden hand" worldwide needs a "hidden fist" to maintain the "free market" afloat, as described by the flat-earther, Thomas Friedman... To quote:
    "The hidden hand of the market will never work without the hidden fist — McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps."]

    Coming back to the "free hand" thingie, one way of "doing business"/making profit is by evading taxes by the companies (or, in other words, making citizens pay for their profits)

    A study covering 275 profitable Fortune 500 corporations by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP) found that:
    ("right click/save" to download)

    • Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003. Many of them enjoyed multiple no-tax years. In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion. These companies’ “negative tax rates” meant that they made more money after taxes than before taxes in those no-tax years.

    • Twenty-eight corporations enjoyed negative federal income tax rates over the entire 2001-03 period. These companies, whose pretax U.S. profits totaled $44.9 billion over the three years, included, among others: Pepco Holdings (–59.6% tax rate), Prudential Financial (–46.2%), ITT Industries (–22.3%), Boeing (–18.8%), Unisys (–16.0%), Fluor (–9.2%) and CSX (–7.5%), the company previously headed by our current Secretary of the Treasury.

    • In 2003 alone, 46 companies paid zero or less in federal income taxes. These 46 companies, one out of six of the companies in the study, told their shareholders they earned U.S. pretax profits in 2003 of $42.6 billion, yet received tax rebates totaling $5.4 billion. In 2002, almost as many companies, 42, paid no tax, reporting $43.5 billion in pretax profits, but $4.9 billion in tax rebates. From 2001 to 2003, the number of no-tax companies jumped from 33 to 46, an increase of 40 percent.

    • After 2001, the average effective rate for all 275 companies dropped by a fifth, from 21.4 percent in 2001 to 17.2 percent in 2002 and 2003, less than half the statutory 35 percent corporate tax rate that corporations ostensibly are supposed to pay.

    Here is the list of top-25 "tax negative" companies (figures mentioned are in "mn US$"):
    Image and video hosting by TinyPic

    If one thinks that these "incentive" (i.e., tax breaks) would lead to more capital investments by the companies, the data shows a different picture:

    • The 25 companies in the study who reported the largest tax savings from accelerated depreciation — garnering two-thirds of the total depreciation benefits for all 275 companies over the three years — cut their total property, plant and equipment investments by 27 percent from 2001 to 2003.

    • In contrast, the remaining 250 companies reduced their investments by only 8 percent.

    • Overall, the 275 companies in the study reported that their capital investments fell by 15 percent from 2001 to 2003.

    The study concludes that:
      Most of the loopholes and tax dodges that corporations use to slash their taxes may be technically ‘legal’ in the sense that the tax law allows them. But remember that these subsidies got into the tax code because corporations lobbied to put them there. Saying something is ‘legal’ doesn’t mean that it’s right....The sharp increase in the number of tax-avoiding companies reflects the results of aggressive corporate lobbying and a White House and a Congress eager to do the lobbyists’ bidding."

    The losers from widespread corporate tax avoidance include:

    • The general public, who must pay higher taxes, lose public services, or be responsible for big future debt burdens.

    • Relatively disadvantaged industries and companies that will find it harder to compete for investment capital with tax-favored corporations.

    • The U.S. economy, which is harmed by the distortions that corporate subsidies produce.

    • State governments and state taxpayers, which see their corporate tax systems erode along with the federal system.

    • The integrity and sustainability of the tax system as a whole.

    The report, unfortunately, misses out mentioning that one of the largest set of losers are the industries in developing nations, who have to compete against these subsidised corporate gaints!!!

  • Sunday, December 17, 2006

    Dispencible People: Singur is only a Metaphor...

    A few days back, I had made a posting on "Government as Real-Estate Broker". Given the recency of happenings in Singur over the land-acquisition, it was naturally a comment on the role of govt.

    However, the post was not about Singur only.... But, first one must look at this news item:

    'No Consent for Acquiring 411 Acres of Land'

      KOLKATA: The Buddhadeb Bhattacharjee government has published a status report on land acquisition in Singur saying that out of a total 997.11 acres of land, the government got prior consent from farmers for 586 acres only on the day it fenced up the land. Another 34 acres is vested land.

      Government figures reveal that the administration didn't have consent for acquiring 411.11 acres which constitutes 41.22% of the land acquired — a plausible ground for unrest among peasants and the government's clamping of Section 144 of the CrPC in Singur... (Going by the admission of local administration), the government got consent from the landowners for another 370 acres days within the area was brought under Section 144.

      The sudden spurt in giving consent by the farmers seems intriguing because the administration has been negotiating with political parties and panchayats at various levels since May, but without much success. The status report reveals that nine meetings were held at the DM's bungalow in the three-month period between the first meeting held on May 27 and the ninth meeting on September 21, with no progress. Later in mid-September, the meeting venue was shifted to Kolkata but nothing transpired in the meet.

    The admission by the government came under pressure from petitioners. Two petitioners are quoted in the same news item:

    • "It is clear that there are no details of the project, its cost and benefits, provided also to the gram panchayat and consent of the gram panchayat is also not sought..."

    • "In reply to my petition at the Calcutta High Court under the Right to Information Act, the government replied that the West Bengal Industrial Development Corporation has requisitioned for the land and there was no mention of the Tata small car project, forget the details. But this shouldn't have been the case. Because the WBIDC has taken loans from the West Bengal Finance Corporation, a government organisation and the people have the right to know where his money is being spent and the details thereof."

    Singur, however, is merely a metaphor of what is happening on a large scale in the country. Here is a very small slice of other similar well-known examples:

  • Delhi New Master Plan to allow housing on 27,000 hectares of land
    Delhi's New Master Plan "will have provisions to permit putting up of dwelling units on 27,000 hectare agricultural land that Delhi has in its possession and also provide for easier and relaxed floor area ratio norms for city’s vertical development with necessary no objection certificate from water and power authorities..." (according to State Minister for Urban Development Mr Ajay Maken) "the Delhi’s Master plan will have provisions to allow builders to make multi storied buildings in the agricultural land of Delhi to accommodate the growing needs of housing

  • Power grows from the dust of the land
    A few months back, the UP govt's acquisition of 2,500 acre of agricultural land a power project by a private business led to massive protests by farmers at Dadri, and eventually to police action on protesters.

  • Police Firing a Kalinganagar
    Earlier this year, the protests of Kalinganagar - and the death of people in police firing - over the acquisition of 13000 acres of tribal/rural land by the Industrial Devt Corp of Orissa took place.

  • 60000 Acres, 5 Townships Govt’s Plan for Crumbling Bangalore
    Karnataka govt is planning to acquire 60,691 acres land to hand over to 32 private consortia to build a cluster of five privately built satellite townships around Bangalore. The news reports: "Chief Minister H D Kumaraswamy, who is personally pitching for the estimated Rs 30,000-crore townships project, has sent out the message that the government will not allow any obstacle to stall the project or allow it to go the Bangalore Mysore Infrastructure Corridor way."

    The list can go on... SEZs, Slum-clearance, Express-Ways, Outer Ring Roads, Mega Dams, etc, etc.

    Singur, is just a metaphor... of...

    ...of "Dispencible People" !!!

  • Saturday, December 09, 2006

    Indian History Trivia (6): India's 1st 5-Star Hotel

    Long time since I came back to this series...

    One more trivia:

    This was back in 1956... India was a young country, and the passion to build India - to bring it to the world forum - was at its peak.

    In 1955, in a UNESCO forum in Paris, the Prime Minister, Jawaharlal Nehru extended the invitation to hold the summit in India in 1956. The invitation was promptly accepted by the organisers.

    But India had neither a hotel of any standard nor a convention centre at that time. When his advisors reminded Nehru about the lack of facilities in New Delhi, he decided to build a hotel and a convention centre.

    In a period of 15 months, India built its 1st 5-star hotel. This was a colossal edifice representing the country's post-independence-instilled Revivalist architecture with the rose-pink walls of Kota stone, with Moghul style arches, and the Natraj Suite, the Kashmir Suite, the Rajput Suite and the Presidential Suite, all representing the diversity of the country.

    Starting with a 3 story grand building, it grew into a hotel with 550 rooms and 111 suites, spread across 25 acres of land. Nehru used to come and personally supervise the construction.

    The cost of such a construction for India was huge at that time - Rs. 3 crores (Rs 30mn). Dr Karan Singh, then the Sadar-i-Riyasat of Kashmir State, and who later became the Minister of Tourism in '60s recalls:

    "Panditji said the princes should contribute money to make a good hotel in Delhi. We have nothing to count. He said I will give you land but will you all put in your money? And so we did," (The state of Kashmir along with two more states contributed funds to construct the hotel, but soon the funds shared out for it went dry) "We spent about 10 to 20 lakhs and then ran out of money. We went back to Panditji and the government had to chip in."

    And that is how India's first 5-star hotel - Hotel Ashok - came up. And so did Vigyan Bhawan - Asia's First Convention Center!

    ... Those were the days when govt and business were not inimical (the issue was not about capitalism vs. socialism, as it is now - but about how does one contribute to building a nation). The staff of the Hotel Ashok got trained by the existing Oberoi Maiden staff (just as the initial training of SAIL technical staff happened at TISCO)

    In years to come, this place also became the platform for many well-known pubic personalities including Yamini Krishnamurti, Raja Radha Reddy, Hema Malini, Meenakshi Sheshadri and Pt Uday Shankar. It hosted Queen Elizabeth II, Marshall Tito, Margaret Thatcher, Prince Aga Khan, Fidel Castro and innumerable heads of states who came to India (During . Sometime in the late '70s nearly 40 heads of states stayed in the hotel at the same time... And a Saudi Arabian ambassador who stayed in the hotel's presidential suite for three years and held his daughter's marriage reception in the hotel).

    Hotel Ashok got a bad reputation when in 1982-83, Zubin Mehta and his team walked out the hotel because of a cockoach!

    This year, Hotel Ashok celebated its Golden Jubilee anniversary. According to one obsevation:

    "The hotel, at 50 B in New Delhi's Chanakyapuri overlooking the posh Diplomatic Enclave, has plodded through as many as 50 years of life since then, but en route, has not only lost the sparkle of 1956 but also defeated its great history. Sad that no Indian heart today turns fonder at the mention of The Ashok, no heads of state check in there anymore. Like any other state-run establishment, it has long reeled under the weight of demands for free sarkari service from the politicians and their minions, red tape and a fading semblance of maintenance. At least that is the general idea on the street."

    A personal note - another trivia - about the "general idea on the street":
    I had a chance of attending two conferences - one in Hotel Ashok and the other in another up-market 5-star hotel on Sadar Patel Marg in New Delhi last month. Purely a personal obsevation, but I found that 'Ashok' vs. 'this hotel' was like a comparison between 'class' vs. 'commodity'. Interstingly, the two conferences - one on micro-finance and the other a sort of annual jamboree of functional practitioners of a certain corporate 'discipline' - also reflected this distinction.

    Earlier Posts in the Series:
    1. The Story of Junagadh
    2. The Foundations of "Nehruvian Socialism"
    3. A "Nation-in-Making"
    4. Legacy of "The Raj"

    1st govt-owned 5-star hotel turns 50
    In celebration of a legacy

    Wednesday, December 06, 2006

    Government as Real-Estate Broker

    Good and bad news for all the fans of Milton Friedman.

    The good news is that Govt (Govt of India, GOI, to be precise) is no longer in-charge of the state of affairs (or rather, the affairs of state).

    The bad news is that GOI is still relevant to business/ free-market economy.

    Just when everyone - in corporates, media, urban intelligentia - had given up about the relevance of GOI in the booming liberalised economic scenario, the GOI has found a new role for itself... has become the middleman for the land deals for corporates!!

    The need for such a role lies in The Paradox of the Present Model of Growth and Development, viz:

    In order to grow (SEZs, Express Highways, Mega-dams, Infrastructure, new ventures, etc.), the 'free-market' enterprises need to own land/ private property in convenient locations (the "convenient location" is also the reason why most projects are located on fertile land, while the wasteland remains untouched). However, if the companies have to pay the 'free-market' price for others' 'private property'/land, their projects will become financially unviable (more so, since market-forces shoot up the land prices, once a project gets announced).

    And therein lies the paradox:
    In order for the free-market enterprises to grow in the liberalised economy, they need to be shielded from the forces of free market!!!

    GOI/State Govts provide a way out of this paradox because they have access to a legacy (competitive advantage!!?) - the Land Acquisition Act of 1894, enacted by the British - that none others have, but need its protection.

    This is how this arrangement works:

  • 1. According to the Land Acquisition Act (1894), the GOI/State Govts have the right to acquire land from private owners for any "public purpose".

  • 2. To acquire the land - at the behest of any party - GOI needs to give/publish a 'Notification of Acquisition' to the owners of property, e.g., farmers. (This will be published in the gazette and at least two local daily newspapers)

  • 3. The owners of the property can file an objection within a month of the notification.

  • 4. The "concerned authority" - normally the Distt Collector or Dy. Commissioner - needs to deal with these 'objections' within a year, hold an enquiry, and then "award" the acquisition. The Award, i.e., transfer of property, can be done within 2 years of Notification.

  • 5. The Land Acquisition Act does not define the meaning of "public purpose" - that is the discretion of the "concerned authority"... Someone's "private property" can be acquired to build a school, a road, clear a slum, a hospital, etc.... Or to hand over to a corporation as its "private property" for "public purpose".

  • 6. The original owner is, of course, entitled to compensation for loss of his "private property". The compensation is calculated as per the market value of the land at the time of the Notification. The valuation is done by the "concerned authority", not by any independent agency.

  • 7. After acquiring the land, the Govt sells (or leases out) the land to the private corporate party. The sales/lease price is calculated according to the MOU or as per the market value of land at the time of selling.

  • 8. The Corporates get the land at below the market rates. This makes their projects viable.

  • 9. The GOI/state govts pocket to difference between the "acquistion" and the "sales" price... This adds to revenue earning in the state budget. Govt also gains by transfering the agricutural land to industy, since now it can be taxed as the 'corporatised' land - agriculture income is non-taxable in India.

  • 10. This is a mutually win-win arrangement between the GOI and corporates...."development" happens... Industrialisation, GDP, Sensex - or whatever - zooms up...

    Some, however, lose in bargain.... These are the "victims of development who sacifice for the larger good" of the economy.

    Land Acquisition by Government
    Land Grab and "Development" Fraud in India
    One-Sided Law on Land Acquisition

  • Wednesday, November 29, 2006

    Manufacturing Illegality

    Liberalisation - i.e., freedom from license-raj, quota system, state controls on ownership and entrepreneurship, etc. - apparently, is a selective animal. It is partial to some, and provides them with the legal freedom to make choices and live a life as they want. For others, it remains an elusive dream, denies them choices and, in the process, "manufactures illegality" of their status.

    Consider, for instance, if you are resident of the Capital of this country.

  • you can buy as many cars, trucks, vans, scooters, mobikes, etc., in Delhi/NCR as you can afford.
  • you can buy only one cycle-rickshaw, by law. Just like other vehicles, you need to have a license to own it. Delhi's municipal law stipulates that "No person will be granted more than one such license."

  • the law also does not bar you from renting out or lending your car, truck, van, scooter, mobike, etc., to anyone who owns a driving license
  • you can legally pull a cycle-rickshaw only if you own it yourself. Delhi Municipal Corporation Act of 1957 stipulates that "No person shall keep or ply or hire a cycle-rickshaw in Delhi unless he himself is the owner thereof and holds a license granted in that behalf by the Commissioner on payment of the fee..." etc.

  • Delhi government is also quite liberal for those who can afford to buy a car, truck, van, scooter, mobike, etc. If you buy one of these, and can afford to pay, you automatically, and legally, get a license to own it.
  • Delhi govt has a limit of sanctioned quota of 99,000 licenses that it will/can grant to the cycle-rickshaw pullers. Given the fact that there are about 500,000 cycle-rickshaw pullers in Delhi (some estimates give a number of 1mn), almost 80% of them "illegal".

    The reasons for these laws for the cycle-rickshaw pullers are apparently out of the most benign intentions. For instance, the May '06 judgement by the Delhi High Court, (which passed an order directing the Municipal Corporation of Delhi "not to grant any licenses in future for plying Cycle Rickshaws on Delhi roads") noted that:

  • "in spite of various orders passed by this court, plying of cycle rickshaws on the main roads, narrow roads and congested roads has become a horrible experience."
  • "that plying of cycle rickshaws on Delhi roads by poor rickshaw puller is against human dignity and its result in exploitation of the poor people who as last resort take upon themselves the work of rickshaw pullers at the mercy of influential people owning such cycle rickshaws."

    Clearly, from the "legal view-point", the above two observations - congestion of traffic, and exploitation by owners - do not apply to owners of cars, truck, van, scooter, mobike, etc...

    The above is only an example. Similar rules and laws exist in other cities about street-hawkers, small-shop owners, vendors, slum-dwellers, etc...

    Wheels of misfortune
    Delhi’s graveyard of rickshaws
    ITDP's Position on Delhi High Court Decision

  • Tuesday, November 14, 2006

    India's "Demographic Dividend": Have we BECOME a "Young" Country?

    For a long time, I used to believe that the demographics of India have radically changed during last decade or so - and that India has "become" a young country, with a majority of its population below 25yrs, or in the 15-35yrs bracket.

    This belief about India's "demographic dividend" was also reinforced by the media hype about the emergence of Genext, and even some serious studies about the changing demographics in 21st century India.

    For instance:

  • a scholarly book, Twenty-first Century India: Population, Economy, Human Development, and the Environment edited by Tim Dyson, Robert Cassen and Leela Visaria, (Oxford University Press), highlighted that a demographically "young India" (median age 22) is, as The Hindu pointed out is "envied".

  • an article in Harvard Public Health Review says:
    "With a median age of 33, China's population is edging toward middle age, while India, with a median age of just 25, is still relatively youthful. The ratio of workers to dependents in China.... will likely peak at 2.6 in 2010, then decline, leaving ever smaller numbers of workers born of the country's one-child policy to support a vast aging population. In India, meanwhile, the demographic transformation will be less sharp but longer lived; the ratio of workers to dependents will peak at 2.2, but not until 2035, suggesting that the potential economic gains from India's demographic dividend are still to come..."

  • the Time Magazine carried an article - India's Real Growth Rate - noting that:
    "Indian politicians at the summit expressed confidence that the country will eventually catch up?not because the government will necessarily get its act together, but because of a long-term trend known as India's "demographic dividend." With 1.3 billion citizens, China is the world's most populous country; India is second with a population of 1.1 billion. But because of Beijing's long-standing one-child policy, China's working-age population will begin to decline in the next 10 years. Meanwhile, India's youthfulness - 350 million of its citizens are under age 15 - ensures its workforce will expand for decades, potentially enabling it to outstrip China's economic pace through sheer weight of numbers. "This is a key thing," said Kamal Nath, India's Minister for Commerce and Industry. "China is aging faster than any other country in history. It is growing old before it has grown rich.""

  • In another article - Incredeible Young India Inside - Arun Maira, the Indian CEO of BCG, noted:
    "There comes a tide in the affairs of nations which taken at the flood can lead to fortune... This pattern is unfolding again. The growth paradigm of western economies requires another kind of fuel - knowledge workers and skilled professionals. In the next two decades developed countries will face a shortfall of fuel (skilled professionals) and will once again have to look towards the developing countries to meet the shortfall.... Development, in almost all countries, has been invariably accompanied by a gradual decline in the proportion of working age people to total population as birth rates decline and life expectancy also goes up. Projections show that by 2020 all developed countries will be short of working age people. Even China, which had forced a decline in its birth rates, will experiencea shortfall in the proportion of working age people by 2020. However, India will have a huge surpluse of 47 million people."

    Etc., etc...

    Indeed, India's "demographic dividends" was such a deceptive and "feel-good" idea that it is not difficult to beleve it.... But...

    Apparently, I was wrong...

    The data (which I have generously borrowed from Dilip D'Souza's blog posting), actually shows that there has been no significant change in the age-profile of Indian population since last 4 census.

    Apparently, demographically, India was always a YOUNG country!!!

    So what has changed - if anything?

  • Think young
  • Frames 2006: What Do They Think Of Young India
  • With median age at 22, India is young and envied
  • India will be 'youngest' nation by '10: Study
    Census Data:
  • Percentage distribution of Population by age-groups 1971 and 1981 Census
  • Distribution of Population by Age and Sex 1991
  • Distribution of Population by Age 2001

  • Friday, November 10, 2006

    Our very own "indigenous apartheid"

    This is a long overdue post... Ever since had I discovered this must-watch video "I am Dalit. How are You" on Shivam Vij's blog a month or two back.

    ("Right click/save" to download the .wmv file of this 11 minute 22mb clip)

    Even though one was "aware"(?) of these 'facts', but its sheer rawness is numbing, and it is difficult not to choke... specially, the last two minutes...

    Dalits - the Broken People - the Untouchables, the Outcastes, or the Harijans, as Gandhi called them. There are some 250mn of them in the world. Out of which 160mn live in India... Or one in every six Indian belongs to this "non-category"... "non-category" because they are not even part of the social classification...

    According to an article in the National Geographic:

    "Embedded in Indian culture for the past 1,500 years, the caste system follows a basic precept: All men are created unequal. The ranks in Hindu society come from a legend in which the main groupings, or varnas, emerge from a primordial being. From the mouth come the Brahmans — the priests and teachers. From the arms come the Kshatriyas — the rulers and soldiers. From the thighs come the Vaisyas — merchants and traders. From the feet come the Sudras — laborers. Each varna in turn contains hundreds of hereditary castes and subcastes with their own pecking orders.

    A fifth group describes the people who are achuta, or untouchable. The primordial being does not claim them. Untouchables are outcasts—people considered too impure, too polluted, to rank as worthy beings... Untouchables are shunned, insulted, banned from temples and higher caste homes, made to eat and drink from separate utensils in public places, and, in extreme but not uncommon cases, are raped, burned, lynched, and gunned down."

    And though the MSM did pick up the "Kherlanji Massacre" - though about a month after it had happened - the discrimination, violence, and exclusion has remained a part of the Indian society.

    Incidences of killing, rape and violence, of course, stand out as isolated happenings. In some ways - or at least technically - they can be checked by the legal system.... The more frightening aspect of this phenomenon are its invisible and subliminal manifestations.

    Here are some examples:

  • 6 weeks after the 2001 Gujarat earthquake that killed about 30,000 people, the Human Rights Watch team visited the some of the most devastated areas. In all places it found that Dalits and upper-caste Hindus were living in separate relief camps.

  • After the Tsunami hit the Indian coast in December 2005, the Dalits and other lower class were shunted into their own camps, separated from the 'exclusive' camp of the more dominant community. Moreover, they even got discriminated in getting the relief aid, shelter, water, etc.

  • In the aftermath of a 2001 earthquake in Gujarat, relief agencies were forced to mark their supplies of blood with the caste of the person it came from, or else people would not use them.

  • A UN report reads: "Untouchability is still very alive, especially in the countryside and can be seen in the segregation of housing, the Dalits having to live at least 1/4 of a mile from the other inhabitants and are forbidden the access to the well which is the common source of water. Moreover, segregation also exists in schools, services and public places (hairdressers, shops, transports; in restaurants, the crockery is sometimes separated between that for Dalits and that for upper casts)."

    Sources & Other Readings:
  • India's Hidden Apartheid
  • Even Govt divides survivors on caste, says it’s practical
  • Tsunami Opens Fault Lines in Old Caste System
  • Broken People, Broken Promises
  • Situation of the Dalits in India
  • India's Shame (Frontline Magazine)

  • Monday, November 06, 2006

    ...the single most important thing to impact business in India!!

    In July '06, Knowledge@Wharton carried an in interview with KV Kamath, CEO ICICI Bank - India's 2nd largest bank, and the largest private-sector bank. The inteview was about ICICI Bank's rural foray...

    The last question & answer in the interview:
    Question: As you look ahead over five years, many things can go wrong. What do you most fear in the Indian economy and the global economy that could derail your plans?

    Kamath: I guess in the Indian context, I would say something that is unforeseen, like social strife, because we are living in a world of haves and have nots. And there is a divide. Now is this going to be something that could bother us? To me, this is the single most important thing which could impact business.

    ... needless to say, this was a hopeful comment - finally someone from this side acknowledged the ground realities of the 'other side'....

    Monday, October 23, 2006

    India: Starving on a Mountain of Grains

    pThis is an extension of Dilip's post on How the Other Half Lives - and the ensuing discussions....

    According to the Global Hunger Report, India is ranked 96th out of the 119 countries surveyed (GHR does not include the North American, Western European countries, and Australia, since it assumes that there is no hunger in these countries, and evething is hunky dory!)... More importantly, in terms of child malnutrition, India ranks 117/119 (we beat Nepal and Bangladesh on this count)

    In 50s and 60s, India did not produce enough grains to feed its population, and we were dependent on foreign food aid (Lal Bahadur Shastry, India’s 2nd Prime Minister, even made an appeal to people to keep fast for one meal a week as a solution - and bizzaire though it may appear to people now, but a large number of Indians actually followed that appeal).

    Here is a Govt Ad of that time
    Image and video hosting by TinyPic

    And a news headline
    Image and video hosting by TinyPic

    Then, during the 60s and 70s, we had the ‘green revolution’, growth in fertilizer industry, etc… In any case, by 80s, India had become a food surplus nation - and has remained so. We are world’s 2nd largest exporter of rice, 5th largest exporter of wheat, 2nd largest producer of vegetables and largest producer of milk, etc. etc.

    The Global Hunger Report also shows that between 1981 and 1992, the India score fell down from 41 to 32, and then to 25 by 1997. Since then, there has been no change (a low score shows less hunger)… So actually, it is during the last decade or so, that India has stopped making any progress in feeding its poor.

    One of the reasons for this paradox that - despite being a food surplus nation, India figures among the most hungry nation - is the change in Govt policy around ‘92 or so. At that time, Govt of India (GOI) decided to increase the price (or decrease the ’subsidy’)of grains and commodities in the Public Distribution System (PDS - the ‘ration shops’).

    This resulted in two things - good and bad:
  • it made making the food out of reach of the poor, and
  • it increased country food surplus, since those who need it can no longer afford it.

    One easy intellectual trap in trying to understand this paradox is to reduce it to a discussion about the relative virtues of ’socialism’ or ‘capitalism’. This black/white - socialism vs. capitalism - kind of world-view, in any case, is too opaque to bring forth the nuances of an issue into focus (There are a wide variety of socialist and capitalist systems across the world - some are good for people and some are a disaster).

    The Global Hunger Report rankings essentially implies that inspite of having all the ‘feel good’ statistics about India (GDP, Exports, BIC Report, etc.)... they don't add up to the building up of a sustainable society.

    Perhaps, it is more meaningful to focus on the specific Govt. policies, and the implications they have on people and sustainability of socio-economic growth.

    For instance:
    Ealier this year, the Govt (in this case following Capitalist policies) opened up the grain-procurement market to private sector traders/MNCs (e.g.,Cargill, HLL, Reliance, Continental, etc.), and the buying prices shot up beyond the limits that FCI (Food Corporation of India, which procures grains for the PDS) has... FCI did not procure much grains from famers.

    Since the prices of grains shot up, the Govt (in this case following Socialist policies) imported wheat to keep the prices down in the 'subsidised' open market

    By conventional logic, the farmers would have benefitted by the high prices they got from the private player... And some - the bigger ones - did, it is true.

    But the policy ignores a fact that 65% of consumers of food-grains are also its producers. These are the small and marginal farmers with less than a hectare or 2-4 hectare of land... Given the tiny quantity of their produce, they are not a part of the supply-chain of the big MNCs, and since the govt brought down the prices in the open market/mandis, they can't sell their produce at a higher price.

    So, if you happen to be a small/marginal farmer:

  • when you go to the local mandi to sell your produce, you find the prices low, since the GOI has imported grains to keep the prices low (socialist subsidy)

  • when you go to buy grains to supplement your subsistance produce, you find the prices beyond your budget, because the GOI has opened the market to private players (competitive capitalism)

    Not that it would matter to the small/marginal farmer... but perhaps - for some of us (the 15mn Indians who read/write blogs) - it provides an intellectually satisfying explanation about why in a food-surplus land, we have starvation deaths and farmer suicides...!!!!

  • Thursday, October 19, 2006

    Access Denied!!!

    A few years back, an American Prof had visited the institute where I teach, and had given an interesting talk about the unmentioned issues in globalisation of business. Giving an example of "non-tarrif barriers", he narrated an interesting incident of a US company which had applied to set up business in South Korea.... It received a 60-page questionnaire from the South Korean government, with detailed questions in Korean language, to be answered - in Korean language - and returned in 7 days.

    It was an amusing anecdote...

    ...and, then one realises that such "denial of access" is pervasive across all boundaries - not just between countries, but also within segments of a society.

    Here is an example:

    State Bank of India offers "Crop Loan" (i.e., the much needed "Financial assistance to meet cultivation expenses for various crops"). The loan amount is upto Rs.100,000/- - and more, upto Rs.2,500,000/- for certain crops (tobacco, sugarcane, etc.). The interest rates and payment conditions are extremely reasonable (interest rates range from 8.5% to 12.75% depending on the amount and whether the farmer repays back within 3 years or more).

    Considering that 60% of Indian farmers are marginal (less than 2 Hectares) or Small (2-4 Hectare), this is an extremely supportive loan policy.

    The SBI website lists the documents requried to avail this loan:

  • 1. Land records to ascertain cultivation rights.
  • 2. Acreage under different crops
  • 3. Sources of other borrowings eg. Co-operative Societies and Banks.

    This may look simple and innocuous, but, in practice, this is what the farmer will have to submit:

    1. Land records to ascertain cultivation rights.
    certificates for
    - land record (i.e., ownership of the land)
    - record of all revenue paid
    - no dues from the government
    - land valuation certificate (specially if the loan is for more than 50k, since in that case the land is mortgaged to SBI)

    2. Acreage under different crops
    I am not sure how this would be certified, but surely, it will not be based on farmer's own statement. Some government official or maybe the bank officer him/herself will need to testify this.

    3. Sources of other borrowings eg. Credit Co-operative Societies and Banks.
    If the farmer has borrowed and paid to others, well and good, but suppose he has never borrowed from them. How can he prove that?... well, he will have to get No-objection/ No-dues certificates from all the banks and credit co-ops in the area.

    Till we have farmers carrying briefcase/plastic-folios, it is difficult to imagine such loans reaching where they are needed.

    Perhaps this also explains:

  • why we have a little suicide in our food, and
  • why farmland in India is becoming the "Sur-Real" Estate Market

  • Sunday, October 15, 2006

    Power of an Idea

    30 years back, a young professor of economics went for a walk in a village adjoing his university in Chittagong (Bangladesh). While there, he met a poor widow, Sufiya Begum, who tried to make a living by constructing and selling bamboo stools. She worked hard the whole day, and yet her daily net earning was just $0.02 (2 cents).

    Why?... because she had to take a daily loan for buying bamboos from the local moneylender, who charged exhorbitant interest, and whose lending condition was that she sells her produce to him at a price decided by him!!!

    She was poor - not because she lacked skills, or because she was lazy - but becasue she did not have access to her own working capital. All she needed was $0.27 (27cents) to get out of this vicious cycle of:

    Low income => No working capital => High interest loan => Low income

    The professor gave her 27 cents... but then, also went on to find out how many others in the village lived on an income of less than $1/day. To his amazement - and dismay - he found that there were 42 such able-bodied skilled working people, whose cumulative requirement to end their poverty was just $27!

    He gave them that sum as loan, which they could use to break out of the cycle of poverty... and they returned the loan in due course.

    It was such a simple solution to end the poverty. Poverty, the professor realised, is not caused by people; it is caused by the system. Much later, he described his first insight through an analogy:

    "You take the best seed of the tallest tree from the most fertile forest, and plant it in a small flower-pot. The seed does not grow into the tall tree..." not because the seed was bad, but because it got planted in the wrong place.

    Academically, this simple insight had a simple solution. Get the banks to give loans to the poors.

    But the banks refused: how can you give loans to people who have no collaterals to offer? what if they default? and since they own nothing, you can't take back anything from them, can you?

    Failing to convince the regular commercial banks to lend money, the professor decided to become the "guaranteer" for their loans with the bank. If they default, he would pay the banks - but they did not default!

    But this experience led to the second insight:

    The commercial banking system works on a premise that the more you have (i.e., as collaterals), the more you get; the less you have, the less you get... and of course, if you don't happen to own anything, that you are forever condemned out of the banking/credit system.

    ...Like the local moneylender, the commercial banking system imposes its own conditionalities in which the rich become richer - and the poor become poorer.

    And thus the the third insight: Create a bank for the poors!

    This simple idea led to the establishment of Grameen Bank - the "barefoot bank" - in 1983. The professor of economics, you guessed, was Professor Muhammad Yunus, who was awarded the Nobel Peace Prize 2006 this week... The rest, as they say, is history...

    Today, the Grameen Bank:

  • has 6.6mn borrowers ("poorest of the poor" - including beggars), of which 97% are women

  • has 2,226 branches operating in more than 71,000 villages of Bangladesh, supported by a staff of around 18,000.

  • is owned 94% by the borrowers (the rest 6% is with the government)

  • offers loan without any collaterals, legal instrument, group-guarantee or joint liability

  • has provided loans of about $5.7bn since its inception

  • provides loans for micro enterprises, housing, education, scholorships, life insurance and pension funds for the borrowers, disaster loan funds, etc.

  • has remained profitable all through its existance, except for 3 years (1983, 1991 and 1992)

  • does not rely on external funding or donations since 1995 (has paid back its loans since then)

  • has helped about 58% of its borrowers to cross the poverty line

  • and has a loan recovery rate of 98.85% (the other 1.15% constitute the defaulters on deadlines of payment - not on payment itself)

    Perhaps more importantly, the contribution of Prof Yunus was The Power of the Idea:

  • that the poor are "credit-worthy" (or the reverse: the commercial banking establishment is not "people worthy")

  • that poverty eradication does happen by handing out "doles" through the top-down subsidies, donations, grants or investments (by govt/IMF/WB, etc.)... In an article in WSJ (Oct 14,'06), he noted:
    " of our most successful tools for rebuilding businesses is not government handouts, but rather, small loans packaged with practical business and social advice.... very little of the cash so generously given ever gets all the way down to the very poor. There are too many "professionals" ahead of them in line, highly skilled at diverting funds into their own pockets. This is particularly regrettable because very poor people need only a little money to set up a business that can make a dramatic difference in the quality of their lives."

    Instead, eradicating poverty requires innovating systems for economic empowerment... By giving the poor that elusive access to the "first dollar that gets you the next dollar."

  • that there is another "bottom-up" model of development that is far superior to the "trickle-down" economic model... That perhaps "the rising tide will lift all the boats" is a merely a myth in the minds of the owners of those few boats who have "access rights" to the tide!

    It was this power of idea, that has mobilised a global movement for providing "access to credit" to the poor during last 30 years. There are now:

  • about 3,100 MFIs worldwide

  • who service 92mn clients and

  • about 330mn people from the "poorest of the poor" families

  • across more than 100 nations

    ... and are growing in numbers, and innovating new solutions.

    Cross-posted at:

  • Thursday, October 12, 2006

    The Price of a Cauliflower interesting example of the difference between the "physical" and "economic opportunity" distance.

    - From where I stay, if I drive a couple of Kms towards the local private airport in the evenings, just before the airport, I find people - mostly farmers from nearby areas - sitting on the roadside. They are the small farmers who come from the other side of Swarnarekha river, sit on the roadside and sell vegetables that they have produced. I can buy a cauliflower from them for around Rs.2/- or less (if I negotiate, I can even get 4 for Rs.3/-)

    - Past the airport, I take the right turning, and after about 0.5Km, is the Gudari Bazaar, which in the evenings, becomes a sort of large vegetable mandi. The price of the cauliflower there ranges between Rs.5/- to 7/-.

    - The place from where I buy vegetables is Dhatkidih, which is slightly tangential to the above, but within a range of a couple of Kms. I, and others, buy vegetable from the shops, and pay Rs.12-15/- for a cauliflower.

    The guy sitting on the roadside before the airport does not have 'access' to mandi - or to customers who will pay Rs.5/- (or Rs.12-15/-) for the cauliflowers without a second thought...

    even though
    ...he is within a range of a couple of Km from both the mandi and Dhatkidih shops, and

    ...he is the person, who used his land, time and toil to produce the cauliflower in the first place!!!

    (cross-posted at Inspired-Pragmatism)

    Friday, September 29, 2006

    Beware!...SEZs Ahead!!!

    Ahead in time, that is!

    SEZs (or Special Economic Zones) is an interesting - and frightening - phenomenon happening in India....

    ....and an apt example of "secession of the successful"... to quote: "those who are successful tend to retreat into a totally private world. They use private electricity. They attend private schools and colleges. They live in private colonies, manned by private security guards. They socialise at private clubs, use only private transport and thus they cease to have any stake at all in the ‘public realm’ or in the public world. In our country, of course, even the public realm is often ‘privatised’."

    Here is a primer for the late-comers - and for those who may be concerned:

  • SEZs are considered to be "foreign territories" as far as trade, tarriffs and duties are considered. They can source raw material and capital goods without paying any duty or license... and they have free complete access to domestic markets. Incidentally, if you buy material from an SEZ, then You will be paying the import duty.

  • There is also no bar on developers (e.g., an Ambani, or Tatas, or DLF, or Mahindras or Sahara, etc.) not to shift their existing facilities inside the SEZs.

  • Only 35% of the land needs to be used for the core purpose... rest can be used for real estate, shopping malls, multiplexes, residential and commercial property, etc. (The Ministry of Commerce has the option to reduce this 35% to 25%, as according to its wisdom)

  • Labour laws are not applicable within SEZs, and the projects in SEZs are exempt from environmental impact assessment.

  • 100% of profits from FDI in manufactuing can be repatriated freely.

  • 100% tax exemption on exports for first 5 years, and 50% for the next. The SEZ developers get 10 years of tax holiday.

  • The investments going into developing these SEZs are estimated to be Rs 100,000 crores, and the loss to the exchequer will be around Rs 90,000 crore.

  • About the job-creation promise, one will have to wait and see. The past record of the EPZs was that they all together created just 100,000 jobs (and till 1998 they had generated around Rs 4700 crores in Forex at the cost of around Rs 7500 crores as forgone customs duties)

    The only "redeeming" feature of this modern day avatar of "robber barron" scheme is that the cost to the exchequer for all this will be coming from the tax-payers' pocket (i.e, from those who can afford to pay tax in India - i.e., about 5-10% of its population)...

    ...and so for the first time, the middle-class urban India - and not just those unwary victims of development for "the larger good" - will also get an opportunity (and taste) of contributing to the "economic development"/GDP-growth/FDIs as compared to China, etc. - or whatever feeds their self-worth) - of the country...

  • Tuesday, September 26, 2006

    India in Numbers

    NOTE: 1 crore = 10mn; 1 lac = 0.1mn; $1 = about Rs.45

  • India is world's 2nd largest exporter of rice, and world's 5th largest exporter of wheat

  • Over past 5 years, on average 15,000 farmers have committed suicide every year (i.e., 4-5/day) due to poverty and indebtness. An Indian farmer household has an average debt of Rs 12,585 - 82% farmer households in Andhra Pradesh, 74.5% in Tamil Nadu, 65.4% in Punjab, 61.1% in Karnataka, 54.8% in Maharashtra, etc. live in debt.

  • India is world's 2nd largest fruit and vegetables producer, and the largest producer of milk

  • One third of India’s population goes hungry to bed everyday.

  • India is world’s largest producer of tea accounting for 30% of global produce, and 25% of spices produced globally.

  • 1/3rd of world’s population without adequate water-supply lives in India.

  • Agriculture accounts for 14-15% of country's exports

  • 600mn Indians depend on agriculture for subsistence. 60% of farmers are small/medium farmers with holdings of up to 0.4 hectare plot. The average farm holding in India is 1.4 hectare, and only 15% farmers have plots larger than 10 hectare. Of the 455mn acre cultivable land, less than 5mn is with rural poor.

  • India is world’s largest producer of mica, 3rd largest producer of coal & lignite, 2nd largest producer of cement.

  • India has around 400-410mn employable workforce, of which about 377mn are employed. Only 7% of India's employed work in "organised" sector.

  • 44% of India’s workforce is illiterate, and 23% has education up to primary level. More than 90% rural workforce, and more than 80% of urban workforce has no “marketable” skill (e.g, typing, brick-laying, fishing, driving, basket-making, carpentry, tailoring, etc.).

  • India is among the 3 countries (US and Japan being the other two), who have built its own indigenous 4th generation super computer.

  • 80% of India’s public health problems are due to water-borne diseases; 1 in 4 persons dying from a water-borne disease is an Indian.

  • India is among the 6 countries worldwide, who have developed its own space technology (23 satellite in orbit and 14 geo-stationary satellites). It has not only launched its own satellite, but also for countries like Germany, Korea and Belgium. ISRO/Antrix Corp.'s clientele include the European Commission (for agriculture and forestry), Japan (volcanic activity), US (telephone network mapping, rail alignments, Wal-Mart, airlines) and Thailand (information). Its images are distributed by Space Imaging Inc and Euromap.

  • The official definition of poverty in India is: a monthly income of less than Rs.329(or $7)/month (rural) and Rs.457(or $10)/month (urban); 33.6% (rural) and 28.5% (urban) of Indian population - i.e., around 280mn Indians - lives below poverty line. Of India’s poor, 40% are landless labours, 45% small/marginal farmers, and 7.5% rural artisans.

  • India has one of the world’s largest technically qualified manpower, comprising of 15mn doctors, engineers and scientists. There are about 30mn graduates, post-graduates and doctorates in India.

  • India has around 0.6mn primary schools – out of which around 60% have a single teacher (for class I-V), 59% have no drinking water, and 85% have no toilets. As for teaching aids, 26% have no blackboard, 59% have no access to maps and charts, and 77% have no library.

  • India is world’s largest producer of sponge iron.

  • India hosts 1/3rd of world’s leprosy patients

  • India's real estate investment market is estimated to be $50bn, and is predicted to grow to $180bn by 2020. During last 4 years, the average return on investment has been of around 50%.

  • India is estimated to have 50mn DIDs (Development-Induced-Displaced "oustees") - excluding the displaced landless labours, fishermen, and the rural artisans, who are not counted for compensation and rehabilitation.

  • There are close to 0.8mn HNWIs ("high net worth individuals") in India, whose net worth is more than $1mn. The number of HNWIs in India is growing twice the global rate, and their cumulative liquid wealth is moe than $200bn.

  • Between 1951-90, 26mn were DIDs due to development of dams and canals, mining, new industries, etc.; According to Govt of India, in 1995, 75% of them were still “awaiting rehabilitation”. 40% of DIDs are tribal who constitute 8% of India’s population.

  • Indian pharmaceutical industry ranks 4th in the world in terms of volumes, and 13th in terms of value. Indian Pharma industry has the highest number of plants approved by US FDA outside US. Indian drug companies also topped the drug filing with FDA, accounting for 20% of all drugs coming into US market.

  • For a country with 3/4th of population in villages, India has 20% hospital beds in villages.

  • India is world's largest center for diamond cutting and polishing. 9 out of 10 diamonds sold anywhere in the world pass through India.

  • In rural India (comprising of 3/4th of population), only 7.3% have a monthly income of more than Rs.775/month; In urban India, only 7.8% earn of more than Rs.1500/month. Only 15% of India’s 190mn households have an family income of more than Rs.2.5 lacs/ annum; only 4% of India’s population earns more than Rs.4 lacs/annum.

  • Moser Baer is the world's 3rd largest optical media manufacturer and lowest cost manufacturer of CD-recorders. It supplies to 7 of the world's top 10 CD-R manufacturers.

  • About 0.5mn people in India die from TB every year

  • Bharat Forge is world's 2nd largest maker of forged vehicle component, and has the world's largest single-location facilility of 1.2 lkh tonnes/annum. Its client list includes Toyota, Honda, Volvo, Cummins, Daimler Chrysler. Exports account for 3/4 of its earnings.

  • 1.5mn infants die from diarrhoea in India every year – i.e., 1 out of every 4 infants worldwide. 68/1,000 Indian babies die before their first birthday.

  • Hero Honda is the world's largest manufacturer of motorcycles (annual production 1.7mn)

  • There are about 3crore legal cases pending in Indian courts, and there is a shortage of about 3,000 judges.

  • Asian Paints has production facilities in 22 countries spread across five continents. Acquisition of Berger International gave it access to 11 countries; it also acquired SCIB Chemical SAE in Egypt. Asian Paints is the market leader in 11 of the 22 countries in which it is present, including India.

  • About 285-290mn Indians live in urban India. Of these, 21% live in slums, and 60% work in unorganised sector without any social security.

  • Hindustan Inks has the world’s largest single stream, fully integrated ink plant, of 1 lakh tonnes per annum capacity, at Vapi, Gujarat. It has a manufacturing plant and a 100 per cent subsidiary in the US. It has another 100 per cent subsidiary in Austria.

  • About 66% of India’s 640,000 villages have a population of less than 1,000 – and without connectivity to the rest of the world; only 2.3% have a population of more than 5,000.

  • Essel Propack is the world’s largest laminated tube manufacturer. It has a manufacturing presence in 11 countries including China, a global manufacturing share of 25 per cent, and caters to all of P&G’s laminated tube requirements in the US, and 40 per cent of Unilever’s.

  • For every 100 girls enrolled in rural India, only 40 reach class IV, 9 reach class IX and only 1 reaches class XII.

  • Ajanta is the world's largest clocks manufacturer, which exports to more than 60 countries.

    India, as the cliché goes, is a land of contrasts!

  • Saturday, September 23, 2006

    Alternative Perspective is 4-Year Old

    I guess in this ever-shifting world - and a somewhat not-so-routine personal life - to sustain an effort for 4 years, does call for taking a note...

    I just realised that today (Sept 23rd) happens to be the 4th anniversary of the Alternative Perspective... And so, please allow me to reminiscence a bit...

    Though, Alternative Perspective is now a blog, but it had actually started as a weekly (and sometime fortnightly) "Newsletter" in Sept 2002; each issue came with 5-6 items, and posted to the Alternative Perspective yahoogroup...
    The past issues of the Newsletter are archived here

    However, 2 years and 50 issues later (the 50th issue came on its 2nd anniversary - Sept 23rd, 2004), I started finding that 'creating' an issue of the Newsletter was becoming a drag. Besides taking time, it was also not allowing me to synthesize my own understanding of issues. In the last few issues of the AltP Newsletter I tried to do that by making them 'theme-based', but it was not very satisfying....

    ...After all, the raisen daitre of Alternative Perspective was my attempt (and need) to understand and make sense of social/political/economic issues. Even before starting the AltP Newsletter, I had started keying some articles (as an attempt to 'sense-making' of a turbulent chaotic world) on my website, e.g.,

  • it all began
  • Anatomy of Collateral Damage
  • Why You Can't Buy Mauritanian Camel Cheese in Europe

    Meanwhile blogs were becoming common, and I had already created this blog in March 2003. So, the Newsletter merged with the blog, and AlternativePerspective became a blog (it is still connected to the yahoogroup, and each posting gets posted to its 400-odd members.

    Personally, this 4-year old venture has been quite a learning and growing-up experience for me, and it has remained one central and unifying personal platform (or graffitti board;0).

    The fact that there is also a readership has made it worthwhile and made this into something more than just solipsistic musings. So thanks to you all, who read these scribblings, visit the blog, leave comments, get connected, share insights and stories...

    In the meanwhile, life has moved on, and my interests have also widened... The latest love-affair is with Social Entrepreneurship (and therefore, a new course & a new parallel blog;)...

  • Saturday, September 16, 2006

    Some News is not "Newsworthy"...

    When "news" becomes a "story" - as it has increasingly become these days - then has to follow a predictable course.

    A good story has a story-line, and its unfolding must fit into the "plot". If some facts, do not support the story-line, then they need to be ignored or underplayed.

    And therefore, some news does not remain "newsworthy".

    Here are some examples:

    IAEA Protests "Erroneous" U.S. Report on Iran
    VIENNA (Reuters) Thu Sep 14, 5:51 AM ET:
    U.N. inspectors have protested to the U.S. government and a Congressional committee about a report on Iran's nuclear work, calling parts of it "outrageous and dishonest," according to a letter obtained by Reuters... The letter recalled clashes between the IAEA and the Bush administration before the 2003 Iraq war over findings cited by Washington about Iraqi weapons of mass destruction that proved false, and underlined continued tensions over Iran's dossier.

    US Paid Anti-Cuba Journalists
    BBC, Friday, 8 September 2006:
    At least 10 Florida-based journalists were paid by the US government to contribute to anti-Cuba propaganda broadcasts, the Miami Herald says... Three writers have been sacked by the Miami Herald newspaper group for an alleged conflict of interest...
    ...Mr Cao has now admitted being paid by the US government, the Herald reports... "There is nothing suspect in this," he said. "I would do it for free. But the regulations don't allow it. I charge symbolically, below market prices."

    US Moves to Scuttle Arab Plan for International Peace Conference
    Sep. 14, 2006 21:55:
    The US is trying to block attempts by Arab countries to turn the UN Security Council into a key player in the Israeli-Palestinian conflict during the upcoming General Assembly opening next week.

    In discussions among Israeli and US officials over the past few days, it was agreed that the US will use its diplomatic power to sideline the Arab League initiative, which intends to use the Security Council as the main vehicle for convening an international peace conference to deal with the conflict.

    When Rockets and Phosphorous Cluster
    Haaretz: Fri., September 15, 2006 Elul 22, 5766
    "In Lebanon, we covered entire villages with cluster bombs, what we did there was crazy and monstrous," testifies a commander in the Israel Defense Forces' MLRS (Multiple Launch Rocket System) unit. Quoting his battalion commander, he said the IDF fired some 1,800 cluster rockets on Lebanon during the war and they contained over 1.2 million cluster bombs. The IDF also used cluster shells fired by 155 mm artillery cannons, so the number of cluster bombs fired on Lebanon is even higher. At the same time, soldiers in the artillery corps testified that the IDF used phosphorous shells, which many experts say is prohibited by international law.... The commander asserted that there was massive use of MLRS rockets despite the fact that they are known to be very inaccurate - the rockets' deviation from the target reaches to around 1,200 meters - and that a substantial percentage do not explode and become mines... The percentage of duds among the rockets fired by the U.S. army in Iraq reached 30 percent and the United Nations' land mine removal team in Lebanon claims that the percentage of duds among the rockets fired by the IDF reaches some 40 percent.... According to the commander, in order to compensate for the rockets' imprecision, the order was to "flood" the area with them....

    Former Soviet Republics Give Up Nukes; US Objects
    September 14, 2006
    The Bush administration is objecting to a groundbreaking treaty that set up a nuclear weapon-free zone in Central Asia.

    Under the treaty signed Friday, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan committed themselves not to produce, buy, or allow the deployment of nuclear weapons on their soil.

    But the United States, along with Britain and France, refused to attend the signing ceremony in the Kazakh capital... "The reason that many of us suspect the U.S. is opposed to this is more fundamental," the independent Arms Control Association's Daryl G. Kimball told OneWorld. "This is a very strategic region. The U.S. is reticent to give up the option of deploying nuclear weapons in this region in the future."

    Sunday, September 10, 2006

    On the eve of 9/11: Reality is weirder than... er, reality

    I recall an old joke about a news in newspaper. It read:

    "As our readers know, we always bring you the news before the other newspaper. Yesterday, for instance, we were to first to report that the President of the country was found to have links with an underworld don. Today, we are the first newspaper to tell you that that news was wrong."

    And so, last week - after more than 3 years of ravaging a country, and after getting as many US soldiers killed in Iraq, as were killed in the 9/11 WTC attack (not to mention the uncounted tens of thousands of Iraqis), the US Senate Intelligence announced that there was no link between Al-Qaida and Saddam Hussein, and that "Saddam Hussein rejected overtures from al-Qaida and believed Islamic extremists were a threat to his regime...."

    Thanks! that is really revealing finding... Very intriguing too!!!... since:

  • more than 2 years back, in June 2004, even the Sept 11 commission had reached the same conclusion. As BBC had reported then: "The US national commission examining the 11 September 2001 attacks has found no "credible evidence" that Iraq helped al-Qaeda militants carry them out."

  • In fact, a month before Iraq invasion, in Feb 2003, bin Laden had called Saddam Hussein an "infidel" and had called on Iaqis to rise up and overthrow the "socialist" dictator (ironically, the same appeal was also made by GW Bush!!)

  • MSNBC had covered Osama bin Laden's taped message: "At the same time, the message also called on Iraqis to rise up and oust Iraqi President Saddam Hussein, who is a secular leader.".... Of course, the channel soon scrubbed out it in favour of the Ministry of Truth!!!


  • "War on Terror", "9/11", "Osama bin Laden", "Democratisation of Middle-East", etc., have lost their "brand value"... And so a new term has got added to US foreign policy - "Islamofascism". An article in Newsweek reports:
    "Last fall White House aides were grappling with a seemingly simple question that had eluded them for years: what should the president, in his many speeches on the war on terror, call the enemy? They were searching for a single clean phrase that could both define the foe and reassure Americans who were confused by a conflict that had grown much bigger than Osama bin Laden. But the answer was anything but simple. Some academics preferred the term "Islamism," but the aides thought that sounded too much as if America were fighting the entire religion. Another option: jihadism. But to many Muslims, it's a positive word that doesn't necessarily evoke bloodshed. Some preferred the conservative buzzword "Islamofascism," which was catchy and tied neatly into Bush's historical view of the struggle."

  • Last week, GW Bush acknowledged that "One of the hardest parts of my job is to connect Iraq to the war on terror"

  • ...and also acknowledged that CIA prisons exist across the globe. According to one news report:
    "President Bush finally confirmed that we have been running secret CIA prisons abroad since 2001, where detainees have been routinely tortured... Two of those tortured souls were the sole source for Secretary of State Colin Powell's 2003 statements before the United Nations on Iraq's connection with al-Qaida and Iraq's possession of WMDs. Both men have since recanted those statements. One was obtained when the CIA was doing a "mock burial" - i.e., burying him alive!"

    Now, just in case, all this reminds you of a certain country in western Europe in 1930s-40s... of course, not!!... we are now living in civilised times, with a UN and an international community to safeguard against revival of those barbaric acts...

    Reality, after all, cannot be weirder than reality.... or can it be?

  • Friday, August 18, 2006

    ...Merely "Irrelevant" Questions !??

    ...these are some examples of the 14-15 MCQs (out of 100) that were asked in the Gujarat Public Service Commission (GPSC) recruitment examination for Ayurvedic doctors earlier this month:

  • Which date is observed as 'black day' by minorities, but as 'victory day' by the Sangh Parivar?
    (a) September 11
    (b) July 2
    (c) January 26
    (d) December 6

  • Who can destablise the UPA government.
    (a) CPI(M) leaders Jyoti Basu, Prakash Karat
    (b) Tamil Nadu CM M Karunanidhi
    (c) Railways Minister Lalu Prasad Yadav

  • Who has said that Christians have the right to convert others?
    (a) the Pope,
    (b) UPA
    (c) chairperson Sonia Gandhi,
    (d) Sister Nirmala and Father Cedric Prakash

  • After whom has Narendra Modi named India's biggest gas project on the Krishna Godavari basin?
    (a) Maharana Pratap
    (b) Dr Hedgewar
    (c) Syama Prasad Mookerjee
    (d) Pandit Deendayal Upadhyay

    No! I don't think/believe that the Chief Minister of the State would have insisted that these questions be asked for recruitment to a government job...

    ...which is what makes it even more scary!!!

  • ... someone must have formed these questions
  • ... they must have gone though a scrutiny by a committee of educated aware people
  • ... some body/agency must have finally approved them to be included in the paper

    ... as if the cancer has spread far and wide

    It was only after the hue and cry fom the media and activists, that the Gujarat Public Service Commission secretary admitted "that certain questions were 'irrelevant'"

    just "irrelvant"??

    Who's for conversion, Sonia or the Pope?
    It’s a test of beliefs in Modi land

  • Tuesday, August 15, 2006

    One Single Vote!... that's India's Democracy is all about!

    Most of us, born and brought up in the Independent India, take the "democracy" as a part and parcel of living. In fact, there are some, I know of, who even crib that we have "too much of democracy"... (though, I am not sure what that exactly means, since democracy - the right to voice your choice - is either/or; it is not a matter of degree...)

    But the fact that India remained a democratic country - the largest democracy, in fact - is something of a wonder/miracle. The only post-colonial country that could maintain this record in the world...

    ...Back then, there were many who always remained sceptical about India's will to remain a democratic country. In 1960s, Selig Harrison, an American scholor-journalist had predicted:

    "The odds are wholly against suvival of freedom and ... the issue is, in fact, whether the Indian state can survive at all."

    India did!

    In 1967, The Time carried out a series of articles entitled "India's Disintegrating Democracy" authored by one Neville Maxwell. A quote:

    "The great experiment of developing India within a democratic framework has failed."

    And yet, the India, as a democratic country, almost 4 decades on, has trudged along... Perhaps not very efficiently. But in spite of all its complexities, failures (and successes), ups-and-downs. After all it was a democratic process in 1977, that ended a dictatorial era of the "Emergency", - and it was the same process that enabled a party, which got 2 seats in parliament in 1985, to form a government in mid-90s, and then get replaced by the "original incumbent" in 2004...

    All these instance are a homage to the spirit of a people...

    Often, what gets missed in the mind-space of the common man (and the educated intelligentia and the middle-class) is the logistical nightmare that goes into keeping the country "democratic".

    The last national elections in 2004:

  • 675mn eligible voters (er.. that was 10%+ of global population)

  • more than 5000 candidates

  • 40+ political parties + more than 1000 "independent" candidates
    (there were so many "Independent" candidates that the Election Commission ran out of the 128 symbols - those tiny line-drawings of everything from apples, to lanterns, to bangles, boats, pillows, combs, bananas, and computers... - in a country largely populated by people who can't read and write, the "election symbol" - a picture - is the only mode of making a choice)

  • around 850,000 polling booths
    (that spread across more that 640,000 villages, including the 35 in Andaman-Nicobar Islands that spread across some 600 sq miles)

    But this was also the 1st National Election, anywhere in the world, that was

  • at a scale that is staggering - effectively, it was the vote of 10% of global population exercing their enfanchise!!

  • directly representative (not though electoral votes), and

  • done on indeginously electronic voting machines (and without any controversy, unlike the Diebold)

    In its typical modern-primitive ways, this is how the Electronic Voting Machines were transported to different polling booths across the sub-continent:

    Image and video hosting by TinyPic

    But perhaps, the greatest insight I ever got about why and how Indian Democracy survived (and will continue to do so) was this small news item that I picked up from a local newspaper... I scanned it, and cherish it:

    Image and video hosting by TinyPic

    We live in a critical time in history, when the "indigenous" democracy is getting usurped/arm-twisted by the "exported" one..

    But nevertheless...

    A Very Happy Independence Day to All!!!