Tuesday, May 31, 2011

Karnam Malleswari and Miss India

This was written in October 2003

Karnam Malleswari became the first south Asian woman to win a medal at the Olympics in the year 2000.  She is also one of very few Indians who have won a medal in an individual sport. The medal capped a glorious career at the top of her sport, a career that she’d interrupted for a couple of years to get married.

Karnam Malleswari competes in an unglamourous sport, weightlifting. But weightlifting, like any other sport requires hard work. The field of sport is uncompromising. You have to perform well enough on the day to win. When you win often enough you gain respect as being amongst the best. When you lose, you just go back, work harder at getting better and come back on win. In many cases, even if you get  better, the better is not good enough. Athletes such as Sriram Singh ran the fastest race of their life (at the 1976 Olympics) and still didn’t win a medal. Competitive sport values performance.

Karnam Malleswari never features in programmes about excellence or leadership. No media or corporate house takes her to colleges to talk about her long road to the top of her sport - a saga a commitment, hard work, the bureaucracy of Indian sports federations and an unkind media. The same media that had portrayed her as fat and overweight due to an overdose of fried food and beer just weeks before the Olympics. Add mental tenacity to the list of Malleswari’s qualities.

If performance, viz., investment of time and money in promoting people like Malleswari, is an index, the Indian media and the public have failed.

Lets compare this to the media and publicity generated by another largely failure oriented industry – the movie business. 90% of Bollywood movies fail. Many young actors and actresses are already proclaimed stars and are extensively covered in the media even before the first release. Some of the stars of today have a long history of flops behind them. The industry itself has done little to establish some objective parameter of what constitutes a hit. Apparently, everyone is quite happy playing with perception including the public.

Beauty contestants who win the Miss India title, win on a matter of judgement. A few judges rank the contestants on fairly subjective criteria. A plebiscite on who is the most beautiful woman in India might well throw up Madhuri Dixit or some other name than a Miss India contestant, and it would all still be subjective.

Kalpana Chawla earned the right to be on the space shuttle as a result of a lifetime of devotion and commitment to her interest in flying. It took the tragedy of the space shuttle crash, for Indian public to get to hear about one of its heroes. And she is stale news already.

So should media not cover beauty contests or movie openings? Let the coverage continue. But can we have more coverage of the real heroes and heroines of our era. The Karnam Malleswaris and Kalpana Chawla’s of the world provide inspiration to the masses. Unfortunately, a very small fraction of our young will end up in glamourous professions like movies or modelling and even fewer will be able to make a successful living from such professions. Malleswaris and Chawlas tell us that with pure hard work and dedication, it is possible to be at the top of whatever your chosen interest is. As long as you keep performing you have a fair chance of being at the top of your chosen field.

The desire to compete is not there at the root of Indian psyche. At least while we live in India. This reflects in the way our institutions and society functions. On objective “cut-off” percentage for college admissions will be ruthlessly circumvented by high powered telephone calls. A college principal says that they can help such callers only if the cut-off percentage has been reached not even realizing that objectivity of selection has already been killed by such a statement. Political parties will routinely dismiss their rout in the polls to vague explanations like anti-incumbency rather that objectively assess if they have performed. In fact, parties rarely set themselves any objectives at all that are measurable! This in a country where there is no dearth of problems for its citizens.

The public mind needs to b exposed to people who live and succeed by competing on performance. Leander Paes may never win a singles title at a Grand Slam event, but he survives as a professional tennis player based on performance. Performance that will surpass his own abilities in certain circumstances – like when he represents India.

We can then spend time looking at pretty faces and handsome men and  hearing what they have to say. But when we shut off the TV or close the newspaper, we can start thinking about how to be the best at doing something we like – modelling or tennis or aeronautics.

The Villains from Blue Line

This was written in October 2003

Blue line buses could have killed about three people during the five minutes (certainly less than ten) that I was waiting at a red light at a traffic intersection yesterday. The intersection in question is the first off the flyover at IIT at Aurobindo market. All three people were drivers of cars that were crashing the red signal to U turn into the path of the oncoming green signal traffic, that the Blue Line buses were part off. There were five other jumpers during this period. The eight jumpers included two student age boys on bikes, one woman driver, three male owner driven cars, one chauffer driven (owner in the back seat) and one autorickshaw. All this at 5:30 pm on a Monday evening, mid-summer.

A conservative estimate would put the number of “jumpers” at about 20-25 an hour at the signal in question, virtually all through the day from 9 am to 11 pm. Assuming each jumper was fined a modest Rs 1000 for endangering a lot of lives including their own, the Aurobindo Market traffic intersection has revenue potential of about  Rs 300,000 per day. Such a revenue stream would justify permanent manning with remote controlled digital cameras with power back ups – the works.

Delhi has very high instances of road accidents and fatalities because of road accidents (over 2000 deaths a year). Traffic violation is a level playing field and completely secular sport in Delhi (I once travelled with a senior bureaucrat in his car, who instructed the driver to drive on the wrong side of a fairly busy road for about 200 metres). The only constraints to access on account of gender and caste is the ability to be in the driver’s seat of a vehicle (though you could be in back seat and instruct the driver). Under age kids and senior citizens participate with equal vigour.

As a dangerous sport (people die everyday), it is viewed with same restraint as mountaineering. Deaths and disabilities happen elsewhere, not here, to us.

However, three types of accidents bring about public outcry:

·         Night-time high impact crash featuring a truck/bus and high-profile passengers in a car. The villains here are, of course, the truck drivers who must have been driving rashly
·         High profile kids who drive badly after getting drunk at a party and kill street dwellers. This category provides exciting pixels for the electronic media including talk shows on “The Indian middle-class’s deteriorating values : is this because of globalization”
·         Blue Line buses

Rich spoilt kids and working class males (with no connections and political constituency on this count) make popular villains.

Of the three categories, Blue Line buses spend the most time commuting the road. The drivers function in an environment that encourages them to drive fast and increase passenger throughput. This is directly linked to the basis of their permits to operate services. (we’ll examine the schemes that encourage private operators to drive buses faster and with more passenger load at another time). Fixed route and time services that buses provide, means that buses spend more km and time on the road every day than any category of user. By this yardstick, buses should cause more accidents than any other type of vehicle on the Delhi roads. There is no statistical analysis that suggests that buses are more dangerous than other vehicles in Delhi given the relative km per day travelled. (airlines routinely track mortality risks on passenger km, not on number of aircrafts). My guess is that buses are no more culpable than other forms of transport. We’ve already established, albeit anecdotally, that there is a secular distribution of a “death wish” amongst Delhi’s road users.

The traffic police has and will lament about:

o   Shortage of staff to man every junction
o   Abuse of traffic cops powers by “connected” Delhi citizenry
o   Inadequate resources given the pressing needs for VIP movement

The government and will lament about:

o   Lack of fiscal resources to improve traffic enforcement
o   A few incidents should not be used to highlight bad traffic discipline

More ambitious politicians and civil society organizations will comment about the fiscal crunch being caused by anti-people policies of globalization, privatisation and liberalization promoted by the World Bank. For this group, if the Blue Lines at my neighbourhood intersection had notched up three more kills, we could just head straight to the World Bank office at Lodi Estate and arrest its senior executive.

Lets examine the traffic police laments. We’ve already established that given the level of traffic violations, traffic enforcement is a self-sustaining and profitable enterprise. In a country that can for the most part compile a census every ten years (of 1.2 billion people), and issue voter ID card to most of them within a year, lowering the boom on traffic violators and managing the logistics should be a walk in the park. Simply, the traffic police has to put together a business plan on traffic enforcement and borrow money from commercial banks to implement the plan. This would also help the banks who are running out of ideas on how to use all the money they have. Funding the traffic police would be more profitable than trying to telemarket the “nth no-collateral required” loan to the professional executive.

This also addresses the governments laments of funds. Though another win-win would be to tell the “blame the World Bank” gang to seek soft funding from the Bank for traffic improvement. This also gets the Bank off the hook for deteriorating traffic conditions in Delhi.

If there is a clear cut case of a business opportunity that will have good economic and social repercussions why isn’t it happening?

There are investment restrictions. The government (centre, state and civic) will have to agree as to who can invest if it isn’t them.
Pricing restrictions will be debated in the state legislature and Parliament. (Somehow Delhi’s woes merit Parliamentary debate from time-to-time as a national issue.)

Vested interests will oppose change.(This is sounding more and more like the economic reforms scenario).  Such vested interests include:

·         VIPs, who can claim unfair privileges and consider themselves above the traffic law,
·         Delhis affluent middle class, who feel free to reduce a four lane road into a single lane road, through gross double parking violations
·         Delhi’s youth, who like youth in many places, enjoy the thrill of breaking the law

All these categories have successfully negotiated their way out of spots
with the traffic beat cop and / or citizen concerned. Why deny themselves these several pleasurable moments of traffic violations (and getting ahead of the dumb law abiding idiots) for just a few incidents.

Those traffic cops who are corrupt, as the incremental revenue from proper enforcement will all go the government and not themselves. Better to keep traffic cops in short supply.

The Blue Line owners aren’t too worried. They run a business and cant afford to be distracted by such events. Plus, they know it’s a matter of time before some politician or his/ her alleged partner are murdered as part of some sleazy love triangle or business deal. Or better still the cricket team will get back on the road. They’re off the headlines then.

Enforcing traffic regulations will save lives, save several others from permanent disability, smoothen traffic flow and contribute to reducing pollution through better motor speeds and reduced traffic snarls. Enabling it to happen will require some reforms on the structures that are responsible for enforcement. The tools for enforcement in a transparent and legally acceptable manner already exist.

Well, its just another instance of a process of  reforms that have little to do with FDI, interest rates, WTO and globalization. It does have something to do with some elements of investments, pricing, management and technology.

But hey, why bother. Its easier to be able to influence and negotiate to identify contenders to take the blame, and gain a vote through the media than get into a fact based approach.

Lets get some more dope on the Blue Line drivers or better still, there’s this new sleazy story breaking in UP……. It sounds like more fun than trying to make Delhi’s roads safer for our families, friends and neighbours.  

The Rise of the Flyovers - Delhi

This was written in October 2003

The flyover network at the AIIMS junction in Delhi makes impressive viewing. As a child, I remember the photographs of the triple underpass in Dallas near the Texas Book Depository, made famous by the tragic assassination of a young American President. This site is just as impressive.

There are a lot of happy people in Delhi in recent years on account of the network of flyovers that have cropped up. Some, like those who stay in Greater Kailash II and Chittaranjan Park, have at last seen the sun set on the Savitri Bottleneck.

Some discussions and observations with a few others throw up some interesting points.

A frequent visitor to our house, changes bus at AIIMS. The flyover has lengthened her walk between bus stops at the intersection. Visual reconfirmation on the flyover network is that there is no footpath for pedestrians. Walkers take the narrow divider in centre of the road when walking across from AIIMS towards Safdarjung flyover. An extra 750 m of walking when the sun is 40 degrees C plus will throw up instant opportunities for refreshment counters at the ends of these flyovers. Pedestrians will use their own money to recover because of the publicly paid-for flyover.

These flyovers represent no particular joy for those commuting on their own motive power or those of animals. Cyclists, pushcarts, bullock-carts, cycle-rickshaws and pedestrians, not only have a longer walk, but must now climb uphill on what was earlier a flat track. So many instead chose to take the roads other than the flyover (and wait at the traffic light anyway).

Commuters in buses don’t really benefit from the flyovers since the buses have to halt every now and then for entry and exit of commuters. The pick up points are just off the flyover, before and after, where the deluge of buses clogs the traffic in any case. Some young friends who use contract buses don’t seem to experience any alteration in overall commuting time.

In the South Delhi area, the flyovers seem to have pushed the traffic problem to the next signal! In fact you can now speed off the IIT intersection flyover going towards Nehru Place and wait for a long time at the Panchsheel intersection.

Friends who work in Okhla Industrial Areas now have to plough through more signals to get in and out of work during peak hours.

So who have the flyovers really benefited if they haven’t really accelerated throughput for the bulk of road users and made things worse for pedestrians and users of public transport?

Immediate beneficiaries of flyovers are the owners of private transport vehicles and road users during off-peak hours. Peak hours in Delhi include morning office hours, evening office traffic and lunch time traffic. (try traveling around at 2 pm on most afternoons). Turns out these are the car-owning rich guys.

Flyovers don’t come cheap. In the city, they are paid for by the government (or by the citizens). It would be worthwhile evaluating (not just anecdotally like this article) the impact that flyovers have had on Delhi’s road users and the total costs of constructing these flyovers. We can then compare the cost of these flyovers with the cost of undertaking the following actions that could increase traffic flows:

1. Making residential areas and commercial areas on main roads find their own parking lots for their friends and customers. The Yusuf Sarai bottleneck is most often due to due to badly parked cars in addition to the almost two lanes of road on each side used up by parked vehicles. A similar situation exists on the stretch of road between Defence Colony and Kotla Mubarakpur and at Green Park market. This is use of public space (roads laid and maintained by the government) for a few private users, at no costs. This, in a city where real estate prices are extremely high. This is true for some residential areas as well.

2. Correcting errant drivers who cut across lanes, particularly at intersections. On perfectly symmetrical and wide roads at intersections, traffic throughput is almost disgracefully slow due to a few drivers who believe in following the shortest distant between two points, preventing other vehicles from going through.

3. Ensuring that proper and wide bus bays are built so that buses don’t end up clogging the road at bus stops. Enforcement of queuing of buses at these stops would help things further. We could factor in the costs of employing cops at major bus stops to enforce the rules.

4. Providing escalators to pedestrians on arterial roads and ensuring that pedestrians use them. Aggregate costs of such escalators could still work out cheaper than the flyovers.

5. Better quality studies of traffic flows and synchronizing lights on arterial roads to ensure smooth flows.

After we’ve costed this list and implemented them we can figure out where the flyovers are really needed. In the meanwhile, there are some categories of people who have definitely benefited from these flyovers : - the companies and contractors who won the bids to construct them and the subsequent contracts that will be handed out to maintain these flyovers. We can reasonably envisage a few corrupt civic officials also benefiting (they haven’t covered themselves with glory in recent times).

Another category that will benefit will be from amongst the poorest – Delhi’s homeless. Spaces under the flyover will provide shelter, atleast till some Union Minister of Urban development decides that such usage constitutes encroachment and is illegal. This will be lauded by many other citizens of Delhi. (At least one lady from an elite neighbourhood on nationally televised talk show suggesting we put up catchy posters at village bus stops and railway stations encouraging these people to stay at home.)

For car-borne commuters like me, well, we can safely park our cars on the main road and do our shopping.

Poor + Illiterate = Stupid + Selfish (the development legend)

This was written in September 2003

The poor don’t know what’s good for them.  They have an unnecessary number of children, then don’t send their children to school, make them work for less than minimum wages and then let them marry early to repeat the same cycle of life.

Child labour is an issue of significant debate in the media. Such child labour occurs in poorer countries like India. Some of the popular remedies suggested to treat this malaise are:

1.                  Make sure these children go to primary schools that should be set up in their area and be of a good quality
2.                  Have laws in place that penalize people who perpetrate the act
3.                  Make buyers of the products pay more for such produce, so that the producers who employ children can now employ adults.

In most cases, child labour is the result of parents who send their children off to work and don’t send them to school instead. If parents can’t send their children to school, then we must ensure that they go to school. It would appear that these parents in addition to being stupid (they don’t know what’s good for them) are heartless. Empirically, the world’s most stupid and heartless parents reside in poorer regions of the world – yes, just look at the statistics!

While we in Delhi prescribe and work on these talismanic solutions to children working in poorer regions in India, there are other doing the same to us in India.  People in poorer regions like India did not know:

  • Plastic is bad
  • Automobile pollution can kill people
  • Chemicals and pesticides can have harmful effects on people and the environment
  • We should not trade in hazardous wastes

So there are active environmental lobbies who have concluded that :

All the plastic that lines our canals and keeps the water flowing to areas that don’t have it are bad (plastic apparently does no good in poor countries only)
Our cars must be off the latest technology (doesn’t matter if we don’t have enough cars) that cannot be serviced anywhere but metropolitan India
Chemicals and pesticides must be banned – lets ignore the fact that they provide numerous benefits including increase farm output, kill germs, reduce water consumption for washing clothes etc. More people die for road and rail accidents than they do off these products, but lets worry about chemicals and pesticides instead.

We should be paying more attention to Climate Change, AIDs, the environment and pesticides than we should in making available clean drinking water, tackling malaria and dengue and finding ways and means to find jobs for our people. We would be leaving a permanently devasted world at some point in the next five thousand years if we did not pay attention to these things. Obviously, we off the developing world are stupid and there must be international laws, enforceable with or without our consent, that will set our priorities straight for our own good.

The summarized equation of a huge section of media, development theorists and sincere grassroot organizations who are perpetrators of such thought is thus:

Poor + Illiterate = Stupid + Selfish

If we sent the poor and illiterate to schools that taught them things we know, they’ll be better off.

Is that so?

Parents don’t send their children to school, because the education that the school offers has little or no practical relevance to their lives. Sitting round the corner from an office that I used to work in, in Delhi, is a graduate from a small town. He has completed his BA in History for which he had taken a three year break from his family profession. Before his college education and now after his education, he still sits at the same paan shop plying a successful little business. Another kid I know has also just graduated from college – his parents have worked very hard to put him through college. His mother, a fine and dedicated lady, sweeps floors of homes and offices while his father works hard at his job. He does not want to do what his parents are doing, because he is now educated. But it turns out his education is of no commercial value.

The annual circus around college admissions in Delhi is reminiscent of Wimbledon. People scrambling for tickets on a sell out tournament. Only a BA in History, or Sociology or several other disciplines on offer from India’s “finest” colleges for the most part don’t qualify you for anything in the job market. So India’s rich and educated are for the most part putting their children through three years of college to acquire a qualification, the only value of which is to qualify you to study “further”. Those who don’t, well, they pick up jobs that teach them everything from scratch anyway. It would seem that the poor, with their far meagre resources, have been pretty smart in rejecting education that is meaningless to their lives.

Parents who send their children to work in return for a monetary advance also achieve a couple of things. They have developed a longer term employment relationship with their employer for their children who can gradually earn more as they grow to being adults and generally contribute to the family income. 

By imposing rules that unilaterally preventing poor families from improving their future we are pushing them further into penury. The “poor” are looking for many of the things that everyone is looking for – income, security of income and life. By focussing our efforts on increasing their access to income and the pie of the income, we are enabling them to help themselves. A strong rule banning child labour will just push these children to other vocations that aren’t so fashionable to discuss. Instead of taking the head-on and emotional route, we could attempt to take a sensible one. Some of these questions could be:

  • Do administered prices of farm produce push down wages and hence encourage child labour (which is generally cheaper)?
  • Does the lack of freedom to trade affect prices?
  • Do these farms have best access to technologies that increase profits?
  • What other enterprises would be financial self-sustaining in the area, that would provide better income and employment conditions than farm work?

There are millions of children in our cities working as domestic help or employed in small tea stalls and enterprises. These children clean our homes, bring us tea, iron clothes, fix tyre punctures, work at mechanics etc. All of them are well within the reach of the law as compared to say, interior Telengana. These children somehow never seem to be the subject of national and international initiatives and trade sanctions.

When we adopt the “we know better” attitude, it is no different from that adopted by some in the developed world towards people in countries like ours. The solutions that we now want to force on them worked for us because of our circumstance. A circumstance that allows us to spend three years obtaining a useless college degree, which then qualifies us to do something that is of professional relevance.

The poor in any country are not stupid or heartless. Their poverty is of opportunity to sustainably improve their lives. When they see such opportunities, they also make an informed judgment that is relevant to their circumstance. 

Am I free to move for my livelihood?

This was written in August 2003

The other evening some passionate discussions took place at a friend’s (regulation snacks and drinks evening) on India’s favoured sons – international cricketers. Should Sehwag, Dravid etc have been permitted to play county cricket given that they only have a short break before the next stretch of international cricket?

It turns out that our cricketers are paid when selected for the team and when they play the game. They are not on a retainer or contract with the cricket board. The cricket board it turns out is a private entity that runs cricket like any other business. (It is not, for example, answerable in Parliament except under the common law applicable to anyone).

Cricketers are self-employed professionals. When Sachin Tendulkar hangs up his bat after what should be over two decades of international cricket, neither the cricket Board nor the cricket loving public will pay him a pension. It is another matter that Sachin probably has earned enough financially to see him and his family through this lifetime. Many other national cricketers do not have and will not have such a happy situation.

A software executive does not have to take permission from his employer to attend a training programme when he is on vacation. In fact, even the Prime Minister is quite free to keep working when he is on vacation.

But many of India’s cricket loving public believe that they should decide what Tendulkar, Ganguly and Co. should be doing with their time off. Some members of the media including several ex-cricketers also are in the fray on this debate.

Like every individual, cricketers should be free to move and seek gainful employment wherever they find it. (or indeed indulge in any law abiding activity they seek to do anywhere in the world). If it affects performance, they should be dropped and in the process lose their livelihood. They will work things out themselves.

Freedom of movement to earn a living is something that has been unrestricted, except for the past century.  A nation like America was built by people who got on board a ship and went there.  In fact, in an era of globalization, possibly the last frontier to break-down (if it ever will) will be when people are free to move and seek employment anywhere. At that point, the globe will once again be where it was for its entire life, except for the last century. It is this that has enabled ethnic Indians (they’ve been away for generations now) to become significant communities in countries as far different as Fiji, Mauritius, Zambia. Remember Idi Amin kicking out a huge ethnic Indian population from Uganda in the early seventies?

Restrictions on movement of people are generally due to economic reasons. Nations, cities, and regions prevent people from moving in to their areas of domicile to defend their economic prosperity. Other colours are given to such restrictions such as cultural fit, tradition, law and order etc. I don’t recollect any such deep discussions with native tribes in North and South America, Australia and Africa. Did European culture and values fit with those of the Sioux Indians when migrants shifted there?

Over the past century, restrictions on movement of people have taken the following steps:

Initially, a document of identification aka a passport was sufficient to let you pass. The USA and United Kingdom, popular destinations for Indian migrants, did not have any restrictions for Indian visitors till the last third of the twentieth century.

Next, came a document of identification and a visa : now you had to explain why you are travelling here. The visa now requires you to produce a plethora of documentation to evidence your bona fides and financial ability.

In general, more prosperous countries and regions have greater restrictions on inflows of people to their regions –with some exceptions.

In case you are wondering whether this is just a national phenomenon, it is not. Strong command and control regimes such as those of the former Soviet regime and in China, required “travel documents” for internal travel.
More close to home, in India, domestic help (mostly migrant labour) are being “verified” and have to carry identification of origin. Apparently, they represent a huge threat to middle class homes in a place like Delhi in terms of murder and theft.
There have been several attempts in the city of Mumbai to propose restriction on migration into the city through passport-visa equivalent documentation. These have been proposed not just by the Shiv Sena, but from time to time by other parties as well and crop up frequently as solutions to Mumbai’s woes in conversations in middle-class Mumbai homes.

The general theme is to get there, get rich and then shut the door for others who want to do the same.

At other times, national interest is cited by national governments to prevent people from moving out for employment. Hence, the Indian government has at various times attempted to make very difficult movement of Indian citizens for better employment opportunities abroad – ship staff in the late 80s, airline pilots a few years ago. Forcing them by law to work a lower than market wages was a better option than offering them higher wages. (Does this sound like rules similar to that applicable to slave labour in southern US plantations in the 19th century? Or more recently Saddam Hussein’s attempts at “locking in” (sic) scientists to help with the nuclear weapons programme?).

In India, we love to talk about the movement restrictions that affect our chances of “progress” in life. Despite good qualifications and skills we can’t take up jobs in various affluent countries around the world.  Many of this same group end up supporting regimes that restrict movement within India (the Mumbai example cited earlier). These groups will also discuss why our cricketers should not be allowed to go somewhere to earn a living or for whatever law abiding reason.

Freedom of movement of people is the fundamental grease to a global economy and united world. The economic argument is clearly that the most efficient person gets to do the job. The political argument is that it actually promotes a better world. Germany, France and Britain have successfully overcome centuries of bad blood because of wars by creating freedom of movement of people within their regions (at least of these countries!).

We have through a combination of petty politics, cultural chauvinism and “fright” mongers managed to deny this to the world’s poor over the past century. The world poor include denial of rights to Indians to move freely for work in the developed world as opposed to say an EU national or Australian. It also, unfortunately, includes the poor in our own country moving to more affluent regions and states.

Instead of curbing our cricketers rights to earn through slavery style rules, we must whole heartedly support their right to earn and their freedom to choose. If they perform inadequately representing our team, we should have the courage to drop them and not look for excuses.

Economic Reforms and Poverty Reduction

This was written in August 2003

Economic reforms aren’t poverty focussed. Multilateral and bi-lateral aid agencies therefore focus their efforts on “poverty” alleviation programmes. This would seem to imply that the national governments of countries in the developing world aren’t focussing on poverty reduction. So what’s a poverty focussed programme?

Poverty, using a calorific value definition, would imply that a person has no sustainable means of meeting his/her basic needs – food (lets ignore clothing, shelter, health care against basic diseases, etc). By this yardstick, the world’s poor must, in short time frames, have a 100% mortality rate. But apparently even without 2400 calories of food (and such other basic needs), the poor seem to live fairly longer than such a definition would suggest. Perhaps a wider definition of poverty would include food, clothing, shelter, health care and the means to access opportunities to improve one’s well being. This would imply that when a person generates some surplus above her basic needs, the person would have the ability to start accessing things needed to improve one’s well being. 

This doesn’t sound very different from suggesting that a person must be a profit making enterprise generating a surplus after meeting the costs of capital – basic needs of the human being. Looked at this way,  the building blocks of economic policy relating to helping enterprises thrive don’t need to be very different from the building blocks of a “poverty reduction” programme.

So what makes enterprise thrive. Principally the following:

The existence of an income earning opportunity. This opportunity comprises of a need and a willingness to pay. If the product / or service can be delivered within this price, there is an income earning opportunity. This holds true for all products and services – movies, sex, narcotics and education and is not dependent on the legal framework.

Access to inputs to exploit the opportunity. If you don’t have the money, you should be able to access it freely. The price of capital is a factor only relevant to the nature of the opportunity. So 15 years ago, enterprises in India borrowed at rates of nearly 18-20% and still ran profitable businesses. Indonesia’s economy grew rapidly during through the 1980s when interest rates were in the early 30s. In addition to capital, you must be able to bring together all the components that enable a product or service to be delivered – technology, people, raw materials etc

Predictability in the rules relating to the business. Some would use the expression rule of law. Entreprises thrive when they can with reasonable accuracy predict the costs of production and delivery and feel certain that they can collect revenues. Such certainty is provided with greater reliability by governments that can enforce the law. Such governments in many parts of the world include dictators and tyrants. In the absence of formal governments, informal governments run by warlords or gangsters provide this predictability. Here again, the scale of the profit opportunity  defines the costs that an enterprise can bear in assuring predictability. Hence, enterprises will bribe dictators or pay “protection money” to gangsters at levels that still render the business viable.

At this point, the “enterprise” oriented discussion will have to scale upwards to a larger economic environment. Economic policy is less concerned whether individual enterprises fail or not and more concerned with the aggregate result. Sustainability of an industry is enhanced when it is based on some specific competitive edge. Natural resources can be one such competitive edge. In other cases, the sustainability can be a function of successfully marketing concepts. Tourism is a classic case. There are thousands of spots around the world that can provide immense joy and relexation with views of verdant mountains,  beaches with clear marine life or just simply fantastic food and weather. However, some attract more traffic than others. There seems no reason why any country cannot replicate Thailand’s (or Goa’s) success as a tourist destination for international travellers.

Economic reforms that are oriented towards business and enterprise typically fight their largest battles on two fronts:

  • The cost of the predictable environment – where the cost of providing that becomes too high for business. The biggest enemy here is often the government (and its own institutions) through its myriad laws and opaque systems of functioning.
  • The predictable environment for business includes elimination of new competition. So those “in” and profiting will naturally fight to keep others “out”.

Governments seem to find it a lot easier to change rules that increase access to capital and inputs for business than to remove its own self as a high-cost or hindrance to a “predictable environment”. Business exists because the opportunity exists and which government does not have to spend time creating (even though they often seem to be). But real economic gains accrue when the cost of government hindrance is lowered and growth is allowed unfettered, not by protecting some.

But providing access to inputs and providing infrastructure does not create sustainable incomes. The fairly empty “technology” parks that have opened up in virtually every state capital that matters is testimony to this. Simply providing infrastructure and access can’t create an enterprise. The business opportunity must justify its creation.

The poor are deficient in capital and their ability to access other inputs. More importantly they are often victims of laws and rules that inhibit their ability to turn what they have into capital/inputs for a potentially sustainable business proposition. They have absolutely no ability to pay the high costs of government.

Envisage a scenario where a tribal community is permitted to bring in external investments to turns its forests into a tourism business. The biggest inhibitors would be laws that prevent them from chucking in their own forests as capital, a plethora of approval procedures (including environmental laws) that will prevent the forest from being used thus. Hence, while Kerala’s now growing tourism industry is based a lot in and around forest areas, tribal belts will not manage to do the same.

“Poverty focussed” programmes of government and development agencies often try to address the “inputs and capital” issue and some tinkering with the hindrance of government. I have spoken to countless development sector professionals who have described at length “income generation programmes” where along with some capital, training is imparted in carpentry or garment making etc. Most of these programmes fall apart, once the funding agency withdraws its support. . They almost completely ignore the issue of “sustainable income earning opportunity”.

The biggest problem for the world’s poor is their ability to identify and become part of an enterprise that has identified a sustainable opportunity. It is completely unreasonable to expect that just because you provide some capital  and training in one or two vocations, that a poor person will suddenly become an entrepreneur capable of generating surpluses to reinvest in himself.

Poverty focussed programmes must try to identify potentially sustainable business opportunities where the poor are and live; or at handshaking the poor into where such opportunities exist. The following examples are illustrative of each scenario:

The North Eastern states, despite their high literacy levels in many states, are short on economic growth. Cane and bamboo are abundantly grown here and a large market exists just across the border in China. Several laws, including those on free investment in these states prevent such an opportunity from being fully tested for sustainability. Concerns of “national security” are further used to suppress economic opportunity for the people of this region.

There are strong restriction on investments (and trade) in agriculture. Daily wage earners working on farms constitute a large section of the “poor” as we have broadly defined earlier in the note. Permitting enterprises to freely invest in agriculture will help identify where sustainable income generation opportunities lie. The tea and coffee plantation business over the past two decades in particular have become sustainable international businesses that don’t rely on development money and government subsidy to survive. The coffee industry has managed to alter the perception in global markets of Indian coffee – from one of poor quality relative to other countries to good quality coffee. 80% of Indian coffee is exported and more than 50% of tea produced. These industries employ an estimated 1 million people in a business where labour constitutes 60% of production costs, according to the industry’s own estimates. They have steadied incomes of farm workers who would otherwise be condemned to live as subsistence farmers or part time agricultural labour.

The building blocks of economic reform and poverty reduction programmes are the same. The emphasis and approach taken in the reform programme often creates an “anti-poor” perception. Much of the time and media space on the debate on economic reform centres around business, the institutions of government itself  and other vested interests. None of these constitute the poor. The emphasis on pro-poor reforms will have to be in a different area – removing needless costs of government to small enterprise and resource based enterprise and handshaking such small enterprise to business opportunities. This will create sustainable income opportunities.

How to identify ways of bringing opportunities to earn sustainable incomes to the poor will require innovative thinking and a different mind-set to the approaches currently practised. This note has touch upon a couple of such alternatives. Economic reforms that aim to reduce poverty and ignore the aspect of sustainable incomes in the context of the poor will always fail.

An Integrated Approach to Strategy

This article was written in late 2003

All organisations spend time on discussing STRATEGY. Strategy will provide the magic bullet that will get you ahead of the race, make your brand number 1 in the market, remove poverty and racial bias.

A key to the success of strategy, a word that is gaining airtime in recent years, is INTEGRATED strategy. Strategy prior to coining this term was disintegrated and that corporations became huge and successful, individuals became wealthy and famous and wars were won without such Integrated Strategy.

Integrated strategy often revolves around frameworks. Someone sits down and lists down all the ingredients of what constitutes integrated strategy. This checklist is put into a diagram with different polygons and lines, some with arrows. A quick huddle in a darkened meeting room around a projection screen powerpoint presentation and behold – the war is well on its way to being won.

In corporate business, integrated strategy will have inter alia the following components:

  • Market research
  • Competitor analysis
  • Technology
  • Information technology (this is a holy cow)
  • Quality systems
  • Human Resources Development
  • Finance

The people responsible for the above, who will be called functional heads, or business leaders, and carry titles like Vice-President or Director will then sit around a boardroom to discuss integrated strategy. The more bureaucratic an organization, the “heads” will conveniently arrive at a “consensus” on a budget that will be fought for with statements such as “market research is critical in the fast globalizing environment” and “people are our fundamental resource”. Organizations that are run more entrepreneurially (aka our lala companies) will have short meetings where the boss tells everyone what he plans to do and what each department/division is being allocated as resources. The more egalitarian will encourage everyone to take a shot at this plan (and resource allocation). In both cases, a buffer called the Strategic Planning department will provide the meat for the pack to chew on and allocate.

Some of the outcome of the integrated business strategy will reveal themselves through actions as under (these are all real life experiences of the writer):

Marketing head of a leading telecommunications infrastructure company wants to commission Market Research on the telecom sector in India. The key question he wants answered is when will the market explode? (Since when did a booming market present a problem?). For this, the research will go to consumers around the country to ask them if they will buy and use phones (which they’ve never done thus far) at a particular price line (they’ve been using call booths till now). Apparently nothing is wrong with business, but the approximately US $ 100,000 research is to arm the manager to fight for allocations internally. It does not matter that the lead time to financial closure and implementation of an infrastructure project is normally atleast 6 to 8 months even in telecom, the lead time that will allow equipment manufacturers to rally resources. But the research budget has already been sanctioned and must be utilized.

A leading socially oriented organization was going into retreats about aligning top management philosophy as part of its human resources focus. The “feel good” workshops and alignment took place while the organizations revenues were flat and it was defaulting on it external commitments (albeit not commercial ones).

A globally respected company with significant business interests in India prides itself on quality focus. Successive workshops on quality systems with awards and recognition systems. Only you probably have to follow up half a dozen times each year to ensure that your TDS certificates as an external vendor come to you at the right time and god help you if you move. The quality systems budgets didn’t include end of pipe readings vis-à-vis external customers as yet.

Another organization was running motivational workshops for its staff even while top management had given clear indications that the organization would be down-sizing upto half its staff over the coming few months. The names of chose facing the axe had not yet been announced. Its good to feel motivated while waiting to lose your job.

Yet another organization had completed with pride an organization wide ERP system. The information technology head was ecstatic. However, it turns out that a lot of routine information is still sought and retrieved through the old telephone call and manual file route. But the ERP project is cited with pride in the annual report and everyone has easy access to a PC on a network.

Development sector organizations face an even more complicated task. In addition to functional investments, they have to compete with far more potent sound bytes. Such politically correct sound bytes include environment, gender,  empowerment, advocacy, anti-poverty  etc. (Try answering the question : “So you don’t believe ------ is important? Raise eyebrows and pitch when asking question and substitute any of the above words in the blank provided in the question). Programmes of large scale are developed around each of these themes. At the end of the programming period everyone is happy about such a huge initiative that conducted several hundred workshops, provided training, motivated “advocacy”, invited women to participate and expanded the tree cover. Typical answers on the progress of the programme will be, “ we have completed 20% of the activities listed in the plan”. In many instances, the poor still remained poor and when programme withdraws everything falls like a pack of cards.

Wednesday, May 18, 2011

Cracking Heads

In a parking lot somewhere, the father-daughter duo conspire..........to do some eating at Pizza Hut! (or something original like that). But we have plenty of fun as you can tell from the faces in the picture!!
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