The Intelligent Woman's Toyboy

THE FIFTH OF EUCLID

2012-02-12T07:54:00.000-08:00

THE FIFTH OF EUCLID

A 2-Pager by Ajit Chaudhuri – February 2012

Six months down the PhD road, and the only thing I can claim to have learnt is the unwelcome art of living alone. This is no minor matter for someone who is generally useless at all things that require an element of practicality and/or pragmatism. How have I survived? Well, I have someone coming in to clean and wash clothes, and I have outsourced all gastronomic requirements to the institution’s students’ mess. In fact, the only thing that I have had to actually learn is ironing clothes. And I have been spectacularly unsuccessful at this.

The reason for this is that I have yet to figure out two inter-related things – stuff that my semi-educated neighbourhood ironing-lady has probably known from childhood. One, how do you project a curved surface onto a flat space? And two, how can something that covers a three dimensional figure (like clothes for my upper body) be reduced into two dimensions?

Looking for answers has been a journey (conducted while supposedly studying public policy and local governance) through geometry and abstract mathematics that touches upon issues such as the philosophy of science, the possibility of a fourth, or fifth, or even an infinite number of dimensions, and the likely shape of the universe. And I have just begun! This note is an attempt to suss out some of this, and to share the wonder and bewilderment that I feel. And let me assure those of you on the verge of closing this, there are no mathematical equations, there are no formulas, there are no graphs, and this is in plain and simple English from beginning to end. So please don’t!

Let me begin with flat spaces, curvature, and the shape of the Earth. The ancient Greeks were the first to wonder about these matters without ascribing every mystery to the presence of God. They had figured out that the Earth’s surface was curved and had even worked out a possible circumference (on the assumption that it was a sphere) that has since proved stunningly accurate. They also drew maps, depicting the parts of the Earth’s surface that they knew on to two-dimensional charts. But there was no way of knowing the shape of the Earth – land and sea seemed to go on forever, in every direction. The Earth could have been shaped like a pear, or an idli (the equivalent would be a flying saucer), or an infinitely long dosa (cylinder) or a vada (doughnut) or even two vadas joined together as sometimes happens in the cooking pot before the chef cleaves them apart. And as for the maps, what happened when one went, say, beyond the top right hand corner? Did one fall off into infinity? Or come back on the bottom left hand (or another) corner?

Ferdinand Magellan’s expedition around the world, much later in 1519-22, showed that if one headed continuously in one direction one could ultimately return to where one started. So even if the Earth’s surface was continuous, it was also finite. But what did that say about the shape of the Earth? He could have made his journey around the narrow part of a pear-shaped object, or along the surface of the circular cross-section of a dosa, or around the inside ring of a vada. It was only with the advent of space travel, and therefore of man’s ability to move outside the boundaries of the Earth to look at it, that one could confidently say that it is a sphere with slightly flattened poles.

As my ironing lady knows, the simplicity of flat two-dimensional spaces does not apply in curved three-dimensional ones. There is nothing like a straight line connecting two points – lines curve as they move along the surface of the Earth. The shortest distance between two places is not as per the line connecting them on a map – it is along a curved line (called the geodesic) running along the circumference of an imaginary circle that touches the two places, whose centre is the centre of the Earth. Which is why, you would have noticed on planes in which one channel on your armchair TV displays route and location, inter-continental journeys take seemingly elliptical directions.

This leads to interesting controversies. For example, Islamic convention decrees that all mosques be built facing Mecca. Now, in which direction should a proposed mosque in New York be built? Would it be the southeast, the shortest distance on a map and the direction New Yorkers know Mecca to be? Or would it be the north, as per the geodesic connecting the two places?

Complicated? Let’s merely agree that the laws of geometry that we learnt in school tend not to apply when the two-dimensional plane we are working upon (such as a map, or my ironed clothes) is actually a depiction of the surface of a three-dimensional curved object (such as the Earth, or my body).

Let’s go back to the ancient Greeks for a bit, and to their search for answers to questions regarding the Earth. Scientists today are asking similar questions of the Universe. Does it continue forever, or is it finite? What is its shape? What lies beyond it? If we move in one direction continuously, for a long time, where will we end up – in some form of infinity, or back where we are now?

We are also trying to map it, just as the ancient Greeks did of the Earth, using accounts of our travels, our powers of observation, and our mathematics. But, in addition to our telescopes being seriously powerful and our mathematical tools considerably more developed, there is a critical difference. The Greeks mapped out the surface of the Earth, a three dimensional object, on to a two dimensional chart. And we are working one dimension higher, using a three dimensional space (a cube, or a shoebox) to map the surface of the Universe.

We are able to say, so far, that the Universe is a finite space that exists in multiple dimensions, and that it possibly expanded from one single point. The space that we know is possibly a curved three-dimensional surface of a four-dimensional Universe, much as the Earth’s surface is a curved two-dimensional boundary of a three-dimensional sphere. Parameters such as time, distance and speed become much more complicated when one moves from the three dimensions of a cube or shoebox (such as our map of the Universe) to a four-dimensional space with a curved three-dimensional surface (such as the Universe itself), just as they do on similar switching between two and three dimensions (as my ironing lady and I can confirm).

Most sciences, like our senses, can function in up to three dimensions. Abstract mathematics has no such limitation, and mathematicians have shown that there are limited possible shapes for curvaceous four-dimensional objects with a single point of origin, all of them being spherical in some way.

What does all this mean? I hesitate here – I am out of my depth. But I do know that it means something from recent churnings in the field of mathematics. One of mathematics’ greatest and longest unsolved problems, and the subject of a Millennium Prize (immense prestige plus $ 1 million), was the Poincare conjecture about multidimensional spheres, which is critical to speculation on the shape of the Universe. The conjecture was solved in 2003 by a reclusive Russian mathematician, Grigori Perelman, who just put his proof up on a public website on the Internet and left it there. It took three years and much controversy before the proof became accepted (some Chinese mathematicians tried to claim credit). Perelman was awarded the Fields Medal, the mathematical equivalent of the Nobel Prize, in 2006 for his work despite the facts that the proof was not published in a prestigious peer-reviewed mathematical journal as per rules and that the authorities knew that he would refuse it, which he duly did. He also refused the Millenium Prize (and the money) in 2010. Perelman’s proof of the Poincare Conjecture was honoured by the journal Science in 2006 as the breakthrough of the year, the first time ever that it has been bestowed upon the field of mathematics.

Why is this so important? It took 23 centuries from when the Greeks posed questions to when humankind became able to move out of the Earth, look at it, and confirm its shape. The recent ability of mathematics to make sense of possible shapes of curved four-dimensional objects, of which Perelman’s proof is a critical component, may just be an important step in obtaining confirmatory answers to similar questions regarding the Universe.

For those of you still here, I would like to conclude with something on the joys of mathematics. Mathematics, like single malt whisky, is an acquired taste – few of us are born with mathematical ability, and even fewer with an innate distaste for it. It is mostly that some of us are fortunate with our middle school maths teachers, and others are not. Mathematics is the only science that does not require expensive laboratories and complicated equipment to be able to practise – a pencil and paper, and a mind, are all one needs. And as for whether mathematics makes you a boring dullard – let’s look at some mathematicians. Pythagoras of the eponymous theorem fame was also the head honcho of a secretive spiritualist cult. Descartes, who built the foundation for understanding physical objects as algebraic equations, was a mercenary soldier who often fought both sides of the same war (depending on who was paying more money). Poincare was from a famous political family (his cousin, with the same surname, was a French Prime Minister), born with a silver spoon and a love for the good things in life. And, last but not least, Perelman himself is an unemployed bum who stays with his mother in a run-down St. Petersburg apartment and lives on her Soviet-era pension. It is entirely possible that he, too, would have difficulty ironing his clothes.

DUMB AND DUMBER

2011-12-05T07:06:00.000-08:00

DUMB AND DUMBER

A 2-Pager by Ajit Chaudhuri: December 2011

Introduction: We have all, dear readers, at one time or another, been party to some really stupid decisions. Those of us with championship pretensions on this score would find the following list, of some of the dumbest decisions ever taken, humbling. The purpose of this paper, however, is not only to help put your own stupidity into perspective – it is also to examine why groups of intelligent people sometimes take stupid decisions, and how to avoid this. For those of you uninterested in history, please go directly to the end of page 3.

Some Of The Dumbest Decisions Ever Taken (in chronological order)

By the Shah Of Khwarazm – killing Genghis Khan’s envoys – 1218:

Khwarazm, or Eastern Turkestan, was a large and prosperous empire that included much of today’s Iran, Afghanistan, eastern Azerbaijan, and Central Asia. Extreme deserts and high mountains separated the empire from the Chinese in the east and a burgeoning Mongol tribe further to the north. The Mongols, who were busy at that time fighting the Chinese, sent a trade mission to Khwarazm. A local Governor stopped the mission and confiscated its goods at Otrar (along the Syr Daria river in today’s Kazakhstan). Genghis sent three ambassadors to the Shah, asking for the goods and the mission to be released and the local Governor to be punished. The Shah executed the ambassadors and sent their heads back to Genghis.

The Mongols crossed the Syr Daria with 200,000 men, led by Genghis himself, in 1219 and proceeded to sack the empire. Samarkand, Bukhara, Tashkent, Bamiyan, all flourishing cities at the time, were destroyed. Populations were massacred, raped and enslaved (this is where the Mongols picked up a reputation that has survived 800 years). The offending local Governor was captured and then history is divided as to whether he was built alive into a wall or made to swallow molten gold. The Shah spent two years running and hiding, a fugitive in his own kingdom (the Mongols chased him right up to the Indus river, their southern most advance) before dying in some remote island in the Black Sea. And the land became a Mongol Khanate.

By Napoleon – invading Russia – 1812:

Most of Europe was under French rule in early 1812 – the Prussians had surrendered, England was on the other side of the channel, and, apart from a few annoying guerrilla wars in Spain, the French were well in charge. French military might and Napoleon’s charismatic leadership combined with the values of liberty, equality and fraternity to make for an irresistible force, making the many little kings in the region nervous about the spread of ideas questioning the legitimacy of monarchy within their own populations. And then, Napoleon invaded Russia!

Adam Zamoyski’s account of the invasion, entitled ‘1812’ , suggests that the invasion was meant to be a rap on Czar Alexander’s knuckles that went too far (the Czar had been employing renegade Prussian officers in the Russian Army and encouraging insurrection against the French by the aforementioned little kings). The Grande Armee crossed into Russia in June 1812 with 500,000 men and crossed out in December with 27,000. And the events of those intervening months marked the beginning of the end of French hegemony in anything (with the possible exception of culinary arts).

By the British – invading Afghanistan – 1839:

The British became the bosses of the world in the 19th century – Napoleon was defeated, India was conquered, the sun had difficulty setting on the empire, etcetera. The one blip was on the Raj’s western front, where Czarist Russia was trying to get a foothold in Afghanistan. The British Governor General in India, Lord Auckland, decided that the Afghan Emir was unreliable, and sent in British (i.e. mostly Indian) troops in 1839 to install a puppet Emir and a British representative.

The forces reached Kabul, but were unable to hold on there and therefore decided to return to Peshawar in January 1842. A British contingent of about 16,000 people left Kabul, of whom one person reached Jalalabad on the Indian border. To quote Rev. G.H Gleig, an Army Chaplain in Kabul, it was ‘a war begun for no wise purpose, carried out with a strange mixture of rashness and timidity, brought to a close after suffering and disaster, without much glory to anybody. Not one benefit, political or military, was acquired with this war.”

By Germany – invading USSR – 1941:

The Germans of the 1930s decided on a policy of lebensraum (literally “living space”) or the need for eastward expansion – killing, deporting, or enslaving inferior Slavic populations and replacing them with superior Germanic peoples. Hitler came to a deal with Stalin in 1939, called the ‘Molotov-Ribbentrop Non-Aggression Pact’, dividing up eastern and northern Europe between Germany and Russia and ensuring quiet there so that he could fight in the west. And then, 4.5 million Axis forces moved into the USSR along a 2900 km front in June 1941!

Hitler was not prepared for a long war and fully expected to be in Leningrad, Moscow and Baku (yes, he needed the oil! Sounds familiar?) before the onset of winter. Bolstering his confidence was Stalin’s recent purge of the Red Army’s leadership, and it’s disastrous conduct of the 1939 winter war in Finland. He (i.e. Hitler) is rumoured to have said, “We only have to kick in the door and the whole rotten structure will come crashing down.”

It didn’t! The invasion determined the outcome of World War II, with 95 percent of German casualties between 1941 and 1944 being suffered in Russia , and ended in May 1945 in the form of a German surrender in Berlin.

By the USSR – invading Afghanistan – 1979:

In the 1970s, the Soviet Union was at the height of its empire. Today, it doesn’t exist! The key reason is a decision taken by the Politburo to respond to the ‘request’ of the then Afghan government for military support – the Red Army crossed the Amu Darya river in December 1979 looking to create a 16th state, Afghan SSR. It crossed back in February 1989, a shadow of its former self and a danger only to itself. And the Soviet Union disbanded in 1991. In the words of the then US National Security Adviser Brzezinski, ‘the Soviets fell into the Afghan trap’.

By Real Madrid – allowing Samuel Eto to Barcelona – 2004:

Florentino Perez became President of the world’s most successful football club in 2000 with the promise that he would buy Luis Figo, which he did. He also bought Zidane and Ronaldo and won La Liga in 2001 and 2003, and the Champions’ League in 2000 and 2002. He then ushered in the first era of ‘Galacticos’ with the purchase of Beckham – a policy of playing the best attacking footballers in the world and a defensive philosophy of ‘we’ll let in three but score six’.

Real Madrid had also purchased the 16-year-old Samuel Eto in 1997, and loaned him out to various clubs before selling him to Real Mallorca in December 2000, albeit with a buy-back clause. Eto proceeded to create havoc every time he played against Real Madrid, most famously scoring two wonderful goals in a 2-3 win for Mallorca in the Bernabeu in the 2003-04 season. At the end of the season, Real Madrid chose not to exercise the buy-back saying that they already had the two best strikers in the world (Raul and Ronaldo) , and Eto went to Frank Rijkaard’s Barcelona.

Eto went on to score 108 goals in 145 appearances for Barcelona, winning La Liga in 2005, 2006 and 2009 and the Champions’ League in 2006 and 2009 and being in the forefront of a shift in the focus of Spanish football from Madrid to the Catalan region that is firmly cemented today. Real Madrid did not win anything for the next three years (and has yet to challenge again for the Champions’ League), and went on to disband the Galacticos and relieve Perez of the club Presidency. As a footnote, Perez is now back and has ushered in another Galacticos era to break Barcelona’s grip on La Liga.

Why Intelligent People Take Stupid Decisions

Conventional thinking had it that highly cohesive groups generated the best decisions, and generated them quickly and with little fallout. And then, in 1961, the Bay of Pigs incident happened. Allow me to describe this a little!

Castro had just taken over Cuba, and the Americans didn’t like it. A new President, JF Kennedy, approved a covert plan to invade Cuba with a bunch of CIA-supported renegades, and to unseat Castro. The invasion was beaten back in three days and merely served to achieve its opposite objectives – strengthen Castro’s regime and cement its alliance with the Soviet Union.

The Kennedy administration studied what went wrong. They found that the CIA had made many assumptions – on the weakness of Castro’s army, on the support the renegades would receive from the local populace – that proved unfounded, and that the administration had not critically assessed the plans (and did not have systems that enabled critical assessment), and had not discussed and evaluated alternative plans. Key reasons for the above were that decision-making groups within the administration were homogenous, they strongly believed in the morality of their plans, and they relied heavily upon consensual validation, leading to a loss of individual creativity and independent thinking. The research psychologist Irving Janis, who studied the Bay of Pigs incident, termed this as Groupthink (GT).

To those with a love for definitions, GT is a mode of thinking that people engage in when they are deeply involved in a cohesive group, when the members’ striving for unanimity override their motivation to appraise alternative courses of action (Janis, 1972).

Most of us, if we think about it, have seen GT in action in our professional lives. Take a look at these symptoms and see if you recognize them.

Symptom 1: Overestimation of the group’s morality and power: This includes that illusion of invulnerability that creates excessive optimism and encourages the ignoring of dangers and the taking of risks, and that unquestioned belief in the morality of the group and the rightness of its objectives that causes members to ignore the moral and ethical consequences of their actions.

Symptom 2: Close-mindedness: This includes the collective rationalization of warnings – by explaining away or discrediting evidence that contradicts the group’s beliefs – and the stereotyping of those opposed as weak, evil, stupid, impotent, etc. In the cases above, the German view of Slavs and the Russian and British view of Afghans illustrate the latter component of this symptom.

Symptom 3: Pressures towards uniformity: This has several aspects! Groups sometimes indulge in self-censorship of ideas that deviate from apparent group consensus, or have ‘mind-guards’ or self-appointed members who shield the group from dissenting or adverse information. And the group creates an illusion of unanimity among members by viewing silence as agreement, and applies pressure on members to conform by seeing disagreement as disloyalty or, to use a recent term, as being ‘off message’.

Symptom 4: Overbearing leadership: The boss makes his/her preferred choice of action overt while assigning a task to a group.

GT often results in bad decisions due to the following reasons –

• An incomplete appraisal of objectives
• An incomplete survey of alternatives
• Failure to examine the risks of the preferred choice of action
• Poor information search and selection bias in information collection
• Failure to work out plan B

Guarding against GT? Janis has the following recommendations –

1. Higher-ups should not express opinions when assigning a task to a group.
2. Each member of the group should be a ‘critical evaluator’, and the group should be open to dissenting opinions.
3. An organisation should set up several independent groups to work on the same problem.
4. Group members should discuss ideas outside, with ‘trusted outsiders’.
5. Groups should invite outside experts to sit in its meetings.
6. All effective alternative courses of action should be thoroughly examined.
7. One group member, on a rotational basis, should be assigned the role of ‘Devil’s Advocate’ – arguing for a diametrically opposite course of action.

To conclude: There are several criticisms of GT, both as a concept and as a villain – the many good decisions that have come about as a result of GT, the many other (probably more influential) causes of bad decisions, and the fact that hindsight is always 20/20. But, coming from an industry with a high GT index (especially the moral superiority and overbearing leadership aspects of it), the concept strikes a chord. I, for one, will organize task-force groups differently in future. And I will have a stronger refrain when I am next shat on for harbouring a dissenting opinion – ‘you buggers are indulging in GT!’

LOVE AND MARRIAGE

2011-10-19T22:57:00.000-07:00

LOVE, MARRIAGE, RIGHTS AND RESPONSIBILITIES!

A 2-Pager by Ajit Chaudhuri

Some of you may remember Art Buchwald’s column in the Washington Post. In one, he describes the basic difference between bachelors and married men as being that married men think that bachelors dine with fashion models (and get sex after that), and bachelors think that married men get a home cooked three-course dinner served with love and affection (and get sex after that) when in actuality both eat cold food in front of the TV every evening (and sleep after that) – it’s just that married men are more likely to use spoons.

Which brings me to some questions I occasionally ponder – is it correct for a man to expect a hot meal every evening, cooked by his wife’s own hands? Is a woman entitled to the expectation of ‘being provided for’ for life by virtue of getting married? Who decides these things? Do married people have a right to their respective expectations and a responsibility to fulfil their spouse’s? In an era wherein many marriages break up early because of mismatch of expectations and unwillingness to compromise, it may be useful to see what the great philosophers have to say on these mundane matters.

I recently read a fascinating paper outlining the disagreement between Kant and Hegel on the role of rights in marriage.
Kant saw marriage as a contract between two people for ‘lifelong reciprocal possession of their sexual facilities’ and said that, in sexual relations, one party in the contract uses the other as an object and vice versa. Now, using any human being to satisfy one’s desires is against basic laws of humanity (and renders the used as ‘irrational’, the ultimate crime). Marriage remedies this with the condition of reciprocity, wherein the used simultaneously uses the user and thus enables both parties to remain ‘rational’. Kant stressed the importance of equal and reciprocal rights and responsibilities in marriage so as to satisfy the fundamental test of respect for persons. Reciprocity requires monogamy, because polygamous systems of matrimony involve unequal amounts of giving and taking between parties.

Hegel adamantly repudiated the Kantian view of marriage as a purely contractual arrangement . Couples celebrate marriage not merely as a quid pro quo but in order to attain a union of desire, affection, interest and identity that goes beyond anything specified in a contract. He said that there is a world of difference between the Kantian ‘contract for reciprocal use’ and the ‘love, trust and common sharing of their existence as individuals’ that married couples commit themselves to. If marriage begins in an agreement, it is a contract to transcend the standpoint of contract.

After 19 years of marriage, I’m not sure which one I go with. But there is one aspect of Hegel’s critique of Kant that I would like to touch upon – that of reducing marriage into an array of legalistic rights and responsibilities. Hegel did not see a role for rights in marriage, saying that to stand on one’s rights is to distance oneself from those upon whom claims are made. It is to announce the opening of hostilities, and to acknowledge that warmer bonds of kinship, affection and intimacy can no longer hold. Conjugal rights, or the right to a partner’s fidelity, or to be freed from domestic chores, or to draw equally upon family income, or an equal right to pursue a career, are OK as expectations and as a natural outcome of mutual concern and respect. But to claim them as rights (that one party presses upon another) is a moral failing.

This broadens into a larger conflict between liberals and communitarians. Liberals see the bonds of social life as constituted primarily by the rights (and the rights-based relations) of individuals. Communitarians take their reference from the shared lives of people within the communities of which they are a part, and the informal and engaged (as opposed to impersonal and abstract) relationships between them. They take umbrage at liberal political philosophy for the way the desires and preferences of individuals have precedence over community, fraternity, and a shared social good. Liberals counter that communitarians dangerously underestimate the possibility of things going wrong between human beings, and the need for guarantees when they do.

Is this something that one needs an advanced degree in philosophy to understand, or do the concepts described apply easily to the real world? I am reminded, at this stage, of a visit to the state of Mizoram in the mid-1990s and a debate on whether Mizos (an indigenous community resident in the state) should revert to traditional tribal law. The move was opposed (and is still opposed) tooth and nail by the Mizo Women’s Association because traditional law sees women’s rights within an informal communitarian framework, without countervailing guarantees that could be relied upon when things went wrong. A formal system of marital rights that could be enforced in a court of law, they felt, is better for women. And Mizoram, don’t forget, is where 89.4 percent of the women (as per the 2011 census) are literate.

To conclude, we would all like that things in love, marriage, and relationships be perfect, and we also know that this is rarely the case. Some expectations are met, some are not, and one is expected to compromise! Beyond a point, one or both partners may choose to break the matrimonial bond and restructure their lives. There is nothing wrong in this! However, when this happens, community spirit and kinship ties may not be sufficient to provide continued care and security to partners and children. A formal legal framework that outlines rights and responsibilities, that partners know they can fall back upon if mutual affection fades, strengthens the institution of marriage. Put simply, there is nothing like having love, respect, and friendship within a marriage so that a mutual and fair understanding of who does what is achieved. And there is nothing like the cold language of rights and responsibilities to back this understanding up. The combination is a winner!

FAIR AND LOVELY

2011-08-27T06:22:00.000-07:00

FAIR AND LOVELY

A 2-Pager by Ajit Chaudhuri – August 2011

Most Indians’ first introduction to Britain is via the chapter on the freedom struggle in class 8 history. Some of us are fortunate to move on – to see Britain through the eyes of Goscinny and Uderzo in ‘Asterix in Britain’ and George Mikes in ‘How to be an Alien’, and to thereby gain an acquaintance with quirky British customs such as the conversations about the weather, the tea break, the love for one’s garden, the queue and the hot water bottle. My own introduction went a step or two further, via my 12 years in a British organisation, and let me state emphatically that I share with Asterix, Obelix and Mikes a wonderment at what I saw and learned in that time.

For example, the value of playing oneself down! In India, high status individuals make sure that they are recognizable by the presence of bowing and scraping minions, by visibly not observing rules and courtesies, and by conspicuous big talk. In the UK, they are not so easily discernable. The scruffy person standing next to you on the London tube could be a Nobel Prize winner, the rubenesque blonde you are trying to chat up at a bar could have a PhD in the classics, and the illegal-immigrant-looking fellow lining up behind you to watch the football game could be Real Madrid’s scout. It is best to reign in one’s initial assumptions. I, for one, remember visiting a pub in rural Scotland where I drank copious quantities of beer with someone looking like a daily wage labourer coming in straight after a day spent shovelling dung. It was only at about drink #5 that I got to know that he was the chief scientist in the “Dolly the cloned sheep” project. And I have many similar stories!

Or the appreciation of realistic reports! Some years into my job, I decided to unilaterally review the work done under my beat, and to do this with brutal honesty (as it was for my own information). The review report highlighted mistakes and bungles, and I did not come out smelling of roses. I sent this on to my boss in London fully expecting that he would trash it and cover up the failings, or else get rid of me. Instead, I was asked to present the findings to the board, then to write a paper for the industry magazine, and then to sit on a panel at an industry jamboree to discuss the realities of working in India. I learned that people there did not value rosy reports, and that I should always include what was not going well, and why, along with what was.

Or the general expectation of honesty and truthfulness! If an authority asks you who you are, you are not expected to corroborate your answer with some form of formal identification. If you put up a proposal for financial support, the claims made within are assumed to be factually correct. And if you submit a request for reimbursement of expenses, you don’t have to provide a hundred countersigned vouchers as proof. Quite unlike Indian systems, where the basic assumption is of dishonesty that has to be proven otherwise!

Or the issue of conflict of interest! We Indians would remember a minister who was found to have allotted a petrol pump under the ‘unemployed youth’ quota to his son, who upon query said, “So who’s son should I allot it to? Yours?” In Britain, he would have been joining the ranks of the unemployed very quickly.

The one quirk that I was particularly unable to apply to Indian conditions was that of ‘being fair’. Let me describe two instances where ‘fairness’ was called into question. We received too many proposals for financial support for our systems to handle, and were (therefore?) somewhat judgemental in disposing of them. And when we found dishonesty in our project partners we quickly and peremptorily closed the projects, without recourse to hearings, alternative viewpoints, and opportunities for the we-are-sorry-and-will-be-good-in-future syndrome to kick in. These were seen as ‘unfair’ by British standards (and therefore synonymous with high treason) even though the action taken was probably right. Similar handling of these issues in the Indian organisation that I simultaneously worked in was considered normal and unworthy of further explanation or justification. I was left feeling schizophrenic!

So, and here I come to the point of this paper, what is ‘being fair’? It is only now, as a ‘mature’ (ahem!) PhD candidate with an interest in policy issues relating to equity and justice, that I am able to read the philosopher John Rawls’ treatise on ‘justice as fairness’ . Fairness, to him, is about avoiding bias or the influence of vested interests, prejudices and personal priorities, and taking note of the concerns and interests of others . Here is a very brief synopsis of what he says about a ‘fair society’.

One, on the role of justice – it has to be the first virtue of all institutions of society. Laws and institutions, no matter how efficient and well arranged, must be reformed or abolished if they are unjust.

Two, on basic individual liberties – each person has to have an equal right to an adequate set of basic liberties that is compatible with a similar set of liberties for all. These basic liberties should be inviolable, not subject to political bargaining or the calculus of social interests. ‘Justice as fairness’ denies that loss of freedom for some is made right by a greater good shared by others. An injustice is tolerable only if it is to avoid a greater injustice.

Three, to identify a set of ‘principles of justice’ for assigning the rights and duties in the institutions of society, and for determining the benefits and burdens of social cooperation, there need to be two rules. There has to be equality of opportunity to gain the skills and inclinations that make for merit and capability. And inequality is acceptable only if it brings the greatest benefit to the least advantaged members of society.

Rawls goes on to identify a hypothetical ‘original position’ wherein the principles of justice in a society are agreed upon using the above three basic positions. The original position has members of society sitting together without taking account their respective social places, classes and positions, or their fortune in the distribution of natural assets and abilities, i.e. in a ‘veil of ignorance’. The fundamental agreements reached in this position, the principles of justice agreed to in this situation, can be considered ‘fair’.

Why is ‘justice as fairness’ important?

First, it moved the issue of justice out of the realm of economics and into that of political philosophy, where it provided a platform for subsequent thinkers such as Amartya Sen to develop their ideas. It provided an alternative to the then prevalent utilitarian beliefs that a society is just when its institutions are arranged to provide the most total satisfaction (summed for all individuals within), and that losses for some are compensated by greater gains for others.

Second, it brought the concept of ‘fairness’ into justice – that the violation of basic liberties of a few is not made right by the greater good shared by many. This would be well learnt in countries such as ours, where we suffer violations of all sorts in the name of security and economic growth (but actually for the greater benefit of our politician – bureaucrat – contractor nexus), so as to enable, inter alia, sensible policies on land acquisition, displacement of indigenous communities, and bestowing of mining and extractive rights.

Third, it provided a theoretical construct for developing ‘fair’ principles. The voluminous and occasionally legitimate, in my limited opinion, criticism that the concepts of ‘original position’ and ‘veil of ignorance’ have attracted do not take away from their importance as enabling constructs.

Finally, it provided a theoretical basis for the acceptance of inequality as being just – that a low-income household may be better off in a high income but unequal society than in a low income but egalitarian society. That we may not intuitively agree with this, again, does not take away from its importance.

To conclude, John Rawls has been like a ‘shaft of light’ (to quote Amartya Sen again, also on reading Rawls) on my dilemmas relating to equity, efficiency and justice. And yet, I hesitate to recommend his writings – they require time and/or greatly superior intelligence (and I have time). I also wonder what he would have made of the current British government’s expropriation of his ideas into the concept of a ‘Big Society’, and then using them to axe budgets and curtail basic services. Maybe he would have said, “It’s not fair!”

FOUR LITTLE PIGS

2011-07-23T21:34:00.000-07:00

FOUR LITTLE PIGS

A 2-Pager by Ajit Chaudhuri

Most of us, as toddlers fighting sleep (and subsequently as parents attempting to induce sleep into recalcitrant two-year-olds), have encountered the story of the three little pigs. Some of us have used the word ‘pigs’ as an adjective, usually in relation to attitudes to gender (and usually with a pejorative undertone – I humbly confess to having been an occasional recipient of this one) or to describe the behaviour of our bureaucrat-contractor-politician nexus towards the public exchequer. And now, the word has moved up in the hierarchy of the English lexicon – it has become a widely used acronym.

PIGS, for those of you who do not read the financial news, is a derogatory reference to troublesome economies in Europe – specifically Portugal, Ireland, Greece and Spain – who, by their errant behaviour, have endangered the very fundamentals of the Euro. The purpose of this paper is to understand how the PIGS have messed up, and to make sense of the rapidly increasing column inches on one or the other of this august group in the newspapers.

Let me begin with some housewife economics. If a household earns less than it spends, it has the following options –

1. Earn more

2. Spend less

3. Borrow money (and pay this back later)

4. Sell an asset

5. Get a handout from a rich relative

Option 5, on paper, seems pleasant! Unfortunately rich relatives tend to be few in number and can rarely be approached more than once, rendering this as non-tenable in the long term. Option 4, similarly, requires the existence of saleable assets and is rarely a long-term fix. Option 3 requires one to bet on future earnings being sufficient to generate a surplus (after meeting future expenditure) to pay this back – interest and all. Going wrong means drastically restructuring expenditure, losing assets, going broke, and probably committing suicide. Ultimately, it is options 1 and 2 that address the problem.

National budgets can be understood similarly, except – a government does not have the option of suicide when things go wrong. Anything more than restructuring, sale of assets and austerity measures leads to the possibility of a ‘failed state’. And a government has the following additional options –

6. It can print money, it can control the amount of money released by banks as loans, and it can set interest rates, i.e. it decides monetary policy.

7. It has some say over the value if its currency vis-à-vis other currencies. It can boost exports and spur tourism by allowing its currency to devalue (its products will be cheaper in other currency denominations). Alternatively, it can enable import-led growth by allowing its currency to appreciate.

So, what’s with the PIGS? Allow me to begin somewhat in the beginning. In 1999, a group of European countries came into a monetary union that included having a common currency, the Euro. The main advantage of a common currency is that it reduces transaction costs in trade. In the process, the members cede some control (basically those described in options 6 and 7) to a central authority – in this case the European Central Bank (ECB) in Frankfurt. Today, the Euro-zone consists of 17 members, all with different national attitudes and behavioural traits – the Teutonic Germanics, the circumspect Scandinavians, the profligate southern Europeans, the wannabe Scandinavian Baltic states, and the east Europeans who just want to be as far away from Russia as possible. The members are supposed to observe some basic rules, including that the difference between expenditure and income, also called the deficit, be 3 percent of expenditure or less (relating to options 1 and 2) and that sovereign debt (option 3) be not more than 60 percent of GDP. The members also agreed that there would be transfers to the poorer pockets within the Euro-zone (option 5) to enable them to ‘catch up’.

The first blip happened in, believe it or not, Germany. In the early 2000s, the German economy was in a sclerotic state – slow growth, high costs, and low employment. The then Chancellor sorted it out in a typically Germanic fashion; he cut taxes, made pensions and the dole less generous, and worked out a deal with the unions that held wages constant (thus enabling inflation to reduce the cost of labour over time). He also lost the next election, but the current health of the German economy is, in a large part, due to his actions.

The next blip began with the sub-prime crisis (late 2007) in the US. When Iceland fell, attention shifted from banks to the state of public finances of nations – and the PIGS were found wanting. Why the focus on PIGS? After all, they are (except Spain) not significant economies – Portugal is about the size of Malaysia, and Greece Thailand – and there are countries whose finances are in worse shape (Zimbabwe comes to mind). And the short answer is, though they are small and have different problems, each can trigger a collapse of the highly interconnected European monetary union.

Let me begin with Ireland! This country was called the ‘Celtic Tiger’ for its economic performance until 2007 and for its Anglo-Saxon attitudes. Corporate tax is low, the business environment is open, the population is skilled, and foreign direct investment poured in. The government was encouraging and circumspect, and maintained healthy public finances. Unfortunately, the Irish banks had too much money and too little oversight, and began lending to friends and relatives for dodgy projects. This was caught in the immediate aftermath of the sub-prime crisis. The Irish government now finds itself between a rock and a hard place. If it lets the banks fail, the financial system will collapse. If it rescues the banks, it would be tantamount to asking the ordinary tax payer to pay for the profligacy and bad conduct of a few (politically difficult) and would lead to the risk of moral hazard (If I know I’m going to be rescued, I will go ahead and make risky loans).

Portugal (along with Greece) should not have been a member of the Euro-zone in the first place – it is an economic backwater whose main basis for competitiveness were its low costs, which it lost by joining the Euro. Its pre-crisis growth was fuelled by option 5, handouts from the EU, and from remittances, and these did not lead to increases in either efficiency or competitiveness. I was amazed to find, in the UK, that Portuguese workers pretend to be Brazilian so that they can compete in the grey market for jobs (and therefore don’t have to be paid formal EU regulated wages), just as Brazilians pretend to be Portuguese so that they can be paid formal wages.

Greece is a complete basket case whose national attitude of ‘take them for what you can’ can only be understood if one recognises that it was ruled for centuries by Ottoman Turks and for four years, and in living memory, by Germans, and that neither rule was benevolent. It jumped on to the monetary union bandwagon by fudging its accounts, it then enabled public sector workers (the majority of its work force) to retire at 55 years with full state pensions, and it assumed that easy money (options 3 and 5) would always be available. Its economy is fundamentally uncompetitive, and its reaction to crisis (make some noises just before bail-out decisions rather than reform and restructure as per options 1, 2 and 4) has been based on its assumption of a continuing ability to threaten the larger financial system with default.

Spain is the only large (4th largest in the Euro-zone) economy among the PIGS, and therefore the one that can itself actually drag the monetary union down. Spain’s problem was that its growth and employment was centred on a single sector, real estate, which burst with the sub-prime crisis bubble.

Within Europe, the PIGS issue is seen as an outcome of south European love for siestas and Irish cronyism. Within the PIGS, there are murmurs of a north European plot to convert them into Germans and of a grand ‘destabilise the monetary union’ plan by Anglo-Saxon bond traders. Whatever the value of these assertions, everyone agrees that, as they say, ‘somethin’s gotta give.’

What can be done? The founders of the monetary union did not envisage a scenario in which a country would leave the union, but this is where the denouement of this particular Greek tragedy is heading. It will be politically difficult for northern European taxpayers to continue paying for Greece, just as it would be for Greece to undertake painful reforms to set public finances right (its current sovereign debt is at 170 percent of GDP and rising, meaning that the next two generations will have to live in austerity to pay it back). Going back to the drachma and allowing devaluation to enable competitiveness, for all its difficulties, may be the only long-term solution. For Portugal, it may be less painful to focus on reforms than to leave the union, if not for themselves than for all those banks that are heavily exposed there. Ireland needs to decide who should pay for its bad banks, the Irish taxpayer, the EU taxpayer, Ireland-based companies, or the banks themselves. Spain needs to work to broaden the base of its economy beyond housing. The EU needs to arm itself with teeth so that members adhere to the rules of membership. The ECB needs to work out ways to ring-fence troubled economies so that they do not threaten the larger financial system. And, in the long term, political union will need to follow monetary union. Simple!

LECHER'S GUIDE TO THE WOMEN'S WORLD CUP

2011-07-01T03:13:00.000-07:00

A LECHER’S GUIDE TO THE WOMEN’S WORLD CUP
By Ajit Chaudhuri

Alternative summers are a bleak time for football fans (except for the truly desperate who follow the Russian and/or Norwegian leagues). The Champion’s League final closes the season in end-May, and one has to wait until the next season’s kick-off in mid-August (unless it is a World Cup or European Championship, i.e. an even number, year) for a glimpse of football. Odd number years’ summers are usually spent catching up with friends and family and doing all those things that football normally provides you with an excuse not to do. But this year – something has changed! There is a Women’s World Cup on (26 June to 17 July) and it has a difference!

Those of us who love sports and women know that the twain do not meet, with the honourable exception of women’s volleyball, and that these loves are best not combined. I, for one, followed the Women’s World Cup in 1991 (won by Germany) and swore never to repeat the experience – the football was mediocre, and most of the players looked like prison guards in drag.

The first hint that things had changed was earlier this month when soccernet.com, an ESPN website for the serious football fan, alerted me to a film featuring three stars from the German junior women’s team of 2010 that was made for Playboy. The women (Selina Wagner, Julia Simic and Kristine Gessat – the film is on Youtube) were beautiful by any standards, they were professional footballers, and they said they were doing this to generate interest in the Women’s World Cup (WWC) that is being hosted by Germany. Well, to put it bluntly, my interest got generated!

And so, dear readers, I have been watching the action from the WWC. What follows is a list of 10 players who catch the eye for both looks and football skills. The list is in alphabetical order. Here’s hoping that this generates a subsequent interest in this oft-neglected sub-sect of football. Here goes!

Corine Franco, 28 years, defender, France: She’s just short of 6 feet, and she can play in the heart of the defence, in the Makalele, and as a deep lying playmaker a la Xabi Alonzo or Andrea Pirlo. She is also on covers of magazines that have nothing to do with football, for all the right reasons.

Desire Oparanozie, 18 years, forward, Nigeria: She caught the eye for her football skills and her looks at the 2010 junior world cup and has made a smooth transition to the senior Nigerian team. One of those for the future!

Fatmire Bajramaj, 23 years, midfielder, Germany: Her background as a Kosovan refugee from the Balkan Wars makes her the face of German multi-culturalism, a bit like Mesut Ozil and Sami Khedira for the men’s team. Like Ozil, she is a creative midfielder or a trequartista. Her transfer this year from Potsdam to Frankfurt is the most expensive in Bundesliga history.

Josefine Oqvist, 28 years, forward, Sweden: This beautiful blonde has appeared on the covers of racy Swedish girly magazines. She also has 11 goals in 49 appearances as a striker for the Swedish national team.

Kaylyn Kyle, 23 years, midfielder, Canada: Another glamorous blonde!

Louisa Necib, 24 years, midfielder, France: An up and coming French team whose creative lynchpin is of Algerian descent. Sounds like the le Bleu of the late 1990s? No, it’s the current French women’s team and its playmaker, a leggy beauty, makes the fashion and sports pages.

Mana Iwabuchi, 18 years, forward, Japan: This diminutive (155 cm) striker is the Asian youth player of the year and is being used as an impact substitute in the senior team. Another one for the future!

Natalie Garcia, 21, defender, Mexico: Long hair, sunny smile, and also the defensive pivot of a Mexican team that is looking to surprise.
Rachel Unitt, 29 years, defender, England: This left sided and left footed defender has twice been England’s player of the year. She plays her club football at Everton.

Saskia Bartusiak, 29 years, defender, Germany: This experienced defender is known as much for her shyness off the field as her crunching tackling on it.

GENIUSES AT THE GATE

2011-06-06T03:06:00.000-07:00

GENIUSES AT THE GATE

A 2-Pager by Ajit Chaudhuri

‘Professors – be good to your A students, for one day they will come back and make excellent faculty. Be good to your B students, for they are the mainstay of the graduate class. Be good to your C students, for one day they will come back and donate $100m for a new science building.’

I have long argued for the development sector attracting smarter people. Now – I am not so sure! Two recent papers make a convincing case for good old laziness, self-satisfaction and stupidity. Allow me to elaborate!

The first, “Wall Street Smarts” , takes a tongue in cheek look at investment banking and concludes that the havoc is all because smart people started going to Wall Street. If one looks at where the toppers of 30 years back are now, one finds that they are in government, or in research, or are university professors. It was the bottom third that went into banking – their families were already in banking, and they were blessed with pleasing personalities and good social skills. They were not greedy – they already had that second home and an ocean going boat. And they could never have come up with concepts such as derivatives or credit default swops – the maths was beyond them.

And then, the toppers started coming to Wall Street. Why? The author attributes the phenomenon to the rising cost of higher education, which had toppers postponing their moves to public service, fundamental research and PhD programmes to make some money and pay off loans, and then letting the big bucks cancel these altogether. These guys could (and did) come up with complicated schemes to make money and subvert checks and balances. Their bosses, of the previous paragraph, could not understand what was going on but were making serious money – and were therefore in no position to exercise control. And that, in essence, is the cause of the global economic crisis. The paper itself makes a powerful argument in a humorous way, and I recommend a read (you can google the title) in case you have missed it.

The second, “Giving in India” , provides a glimpse of what happens when the toppers dump investment banking (or vice versa) and hit the development sector. The authors, all of whom are specialised in equity research, spend a year studying the philanthropy industry in India, come to the conclusion that much that happens is wrong, and make a case for research and analysis guiding funding decisions. The serious reader would find the paper, despite its many positives (especially on the use of the public domain for intellectual property), underwhelming for three key reasons –

It plays ‘zap the bozos’: Communiqués from the intelligent to the unintelligent have two common indulgences. One, they make strong statements without bothering to effectively justify them. Two, they use technical terms incorrectly and/or inappropriately with confidence that they are unfamiliar to the reader. This paper is not an exception. I include a small addendum to provide reasons for these remarks without losing the flow of this note.

It doesn’t examine the antithesis: Is there a tiny possibility that people providing money for philanthropy are not idiots, and that their money is going into the correct places? And could it be that the Indian NGO sector is an unworthy recipient of money for philanthropy compared to, say, religious institutions or local government? The paper assumes not without question.

It doesn’t make a convincing case for research and analysis: The fact is that the number of NGOs in this country that are honest, capable, and have permission to receive money from foreign sources is not impossibly large. A few development conferences, a meeting or two with informed sources over drinks, and a Google session on a computer and you are likely to have an adequate list of possible NGOs to work with. The paper does not convince the reader that the additional benefits of rigorous analysis outweigh the costs.

If you are a topper, chances are that you are not as repelled by the development sector as you were last year. And if you are looking for an opportunity within, here is some unsolicited (but, I hope, constructive) advice.

Do something useful: Make more money available for social development, or enable benefits reach needy communities effectively. Please do not look to make the sector a new repository for ‘socially useless activities ’ now that the financial sector is clamping down – there are enough middlemen here!

Do not replicate blindly: Does it work in Scandinavia, or in Africa? Or Bangladesh? It does not mean it will work here. India is a graveyard for those looking to replicate successful ideas, policies, systems, programmes, etc. in social development from elsewhere – even from elsewhere within India.

Remember – beneficiaries are people: Control group experiments, randomised control trials and suchlike may sound fancy, may be the ‘gold standard of measurement’, and may enable rigorous attribution of effect to activity. But, when they are applied here, what they actually mean on the ground is the purposeful denial of services (such as immunisation, or a toilet) to a poor community (the control group). The ideas you concoct should pass a basic test – of treating beneficiaries as people and not mice in a lab.

Do not play God: Being poor is not so much the lack of this or that as it is the unequal relationship with others, the lack of voice, and the denial of rights. Handouts from philanthropists will not change this. The government can, however, and you may support or oppose but please do not look to replace.

Think out of boxes and silos: Social development is complicated and chaotic. Things don’t slot into nice little boxes and columns to make neat explanatory diagrams. And a successful education project requires work on a gamut of issues that seemingly have no connection to education, such as governance, health, livelihoods, et al – if it is only about education it is doomed to fail.

Let me leave you with two thoughts from the management guru Peter Drucker on the occasion of his birth centenary. He said that ‘cleverness is no substitute for knowledge’. He also said that the only reason they use the word ‘guru’ is because ‘charlatan’ is difficult to spell.

Addendum: The introductory section in chapter 1 says that ‘the evidence suggests that money is neither being allocated to the most important areas of social need, nor given to the most effective organisations’, and that ‘funding is dysfunctional’. The evidence that follows to substantiate the statements is vague and unconvincing through the paper . It goes on to say that this can be conceptualised as a ‘broken’ funding market. The term ‘broken market’ has a meaning – it describes a situation in which the chooser of the product does not purchase it and the purchaser of the product does not choose it – the market for school textbooks in the US, for example. It is difficult to think of the philanthropy industry as being a market at all, broken or not, in the absence of sellers, buyers and choice for the final users i.e. the benefiting community.

THE VALUE OF HIGHER EDUCATION

2011-05-16T06:30:00.000-07:00

THE VALUE OF HIGHER EDUCATION

A Two-Pager by Ajit Chaudhuri – May 2011

‘The enemy of truth is not the lie but the myth’

I would like to introduce you to Peter Thiel, one of the promoters of Paypal and more relevant to this paper also known for having predicted the dotcom and housing bubbles in the US. When is a price rise normal interplay between supply and demand, and when is it a bubble that needs policy intervention? According to Thiel , a true bubble is when something is both overvalued and intensely believed – and that belief, while rooted in truth, gets pushed to unhealthy levels. He says that the next big bubble to burst will be higher education, with its too high and rapidly rising costs, the onerous debt levels that its consumers acquire, and mounting evidence that the rewards are over-valued. This paper looks to examine this contention.

A typical bubble has buyers thinking that they are buying something that will appreciate in value and make them rich in the future. The product grows more and more expensive. The expense is off-shored by easy credit. An increasing numbers of buyers buy at increasing prices in the expectation that the value will continue to increase. At some point, Stein’s Law (‘if something cannot go on forever, it will stop’) kicks in and the bubble bursts. Buyers dry up, sellers proliferate, the product’s value drops abruptly, and those holding it are left with a mound of debt that surpasses the value of the product. Larger bubbles take down entire financial systems, which is why central banks are supposed to keep a close watch on irrational exuberance within the economy.

Can higher education be a bubble? This is controversial! The Bennett Hypothesis of 1987 first identified the possibility, observing that college rankings are partially driven by spending levels, that higher tuition prices are correlated with perceptions of prestige, and that it is in colleges’ best interests to increase prices as long as financial aid ensures an ability to pay. Coupled with this is the widespread belief that, no matter what the cost, education is necessary for future prosperity. The ingredients for a bubble exist.

Several recent papers look into the possibility, and examine the price of higher education in the US, the demand for it, the returns to it, and the level of debt incurred to obtain it. This is disturbing stuff! Tuition fees have gone up at well over inflation, and demand for higher education has behaved similarly. Average salaries for new bachelor degrees have dropped. And the class of 2011 is the most indebted ever, with outstanding student debt surpassing credit card debt for the first time ever in June 2010. In a rapidly de-leveraging US economy, this is the only category of debt that is increasing.

The premise that higher education equals future prosperity too is being subject to scrutiny. The economist Paul Krugman questions the belief that progress increases job opportunities for those who work with minds and hurts those who work with hands, and others point out that the trend may be the opposite and that demand for truck drivers and manual labourers is likely to outstrip that for low-end white collar jobs (which can easily be Bangalored).

But is this a bubble? Higher education is not a typical product in that the buyer cannot subsequently sell it (necessary for a bursting bubble), only rent it for wages. Also, most economists do not think that the returns to higher education are falling in the long term, and do think that demand supply corrections should sort out temporary imbalances. This has already begun, with an 11 percent decline in applications to law school this year, mainly because students see no sense in piling up debt to join the legion of unemployed lawyers. Mid-ranking business schools too are seeing a drop in demand, masked by them taking weaker candidates. And an economic recovery should see demand for college graduates pick up, and a subsequent return to business as usual for the system. But this is by no means certain.

Why is this debate important for us here in India? Higher education was seen to have a strong public good component, and the state therefore provided the service and contributed a significant proportion of the cost. This thinking is changing to it being seen as a commodity in which all the benefits accrue to the one undergoing higher education, and s/he should therefore bear a larger proportion of the (rapidly increasing) costs. The demand and supply, in the mean time, are increasing significantly and the debate regarding increased tuition fees is couched in terms such as institutional autonomy and the need to ensure that any capable but broke person should have access to student loans. Proponents of the Bennett Hypothesis would feel a sense of déjà vu.

BULLSHIT BINGO!

2010-08-30T05:08:00.000-07:00

BULLSHIT BINGO!
Ajit Chaudhuri – August 2010

Transparency
Indicators
Giving voice
Livelihood security
Gender variance
Civil society
People-centred
Distress migration
Social capital
Bottom-up development
Neo-liberal
Mobilisation
Sustainable
Accountable
Community
Participation
Gate-keeper
Activist
Capacity building
Globalisation
Micro-enterprise
Attribution
Programmatic
Impact
Empowerment
Appropriate technology

One of the requirements of a life in the development sector is the ability to sit through long and boring meetings. In my early years, I had the God-given gift of being able to sleep with my eyes wide open, scoring goals in world cup finals and acknowledging the cheers of crowds while people around me pontificated endlessly. This, combined with an inventory of three semi-intelligent things to say in case some dickhead suddenly went ‘So, Chaudhuri, what are your views on this?’ ensured survival. Later, when I moved up the food chain, I simply cut out attending meetings from my work profile. Things that go round come around, they say, and I am being punished for past misdemeanours by now having to a) attend more meetings (profile building, my bosses call it), and b) contribute to the discussion, i.e. no more sleeping.

This is where Bullshit Bingo comes in! For those of you who are uninitiated, the rules are that you prepare a list of 25 commonly used terms, put them 5 by 5 in a table as above in different orders, and then share these with like-minded participants to the meeting. When a speaker uses one of the terms, you cross it on your table. When you complete a column, row or diagonal of crosses, you get up and say something pre-ordained – it’s supposed to be a loud ‘BULLSHIT’ but, as that may not be appropriate to profile building or contribution, it can be something lighter like ‘I deeply regret my inability to agree with that last contention!’ Ditto with a full house! Needless to add, participants are not allowed to use any of the terms until after someone else.

Playing BB increases concentration powers and enables one to listen carefully to the most mundane of discussions. Be warned, though, that this requires the presence of somewhat like-minded participants to the meeting.

How does one identify them? Remember that ‘many a dumb blonde is actually a smart brunette’ and look for grey beards, khadi attire, and conspicuous commitment to poverty alleviation – these are invariably pointers to the most enthusiastic participants to BB. Stay away from the visiting card flashers, those who introduce themselves with their position (thank you, designation inflation!), and those who inform others of their presence at the pre-lunch post-tea session only because of multiple commitments and busy schedules.

Have a good game, oops sorry, meeting!

ON VARIOUS TRILEMMAS

2010-07-27T10:45:00.000-07:00

ON VARIOUS TRILEMMAS

A 2-Pager by Ajit Chaudhuri
July 2010

Most of us are familiar with the concept of a ‘trilemma’. I for one, in college, wanted to do well in studies, cavort with beautiful women and play football. I learned soon enough that, at best, I had to pick two out of three and by doing so I would forego the third (and my second division is a tribute to my choices). The gastronomic trilemma (good food, served quickly, easy on the pocket, choose any two) is another that we all commonly face. The Government of Delhi has faced an engineering trilemma (to specification, on time, within budget, choose any two) vis-à-vis the Commonwealth Games and is well on course to make an international shame of a billion Indians.

Which brings me to the policy trilemma that is so much in the news these days thanks to the coverage of the economic downturn. It goes like this – a nation’s economic policy makers would like to achieve three objectives.

The first is to have an independent monetary policy, which translates to the central bank being able to use tools such as interest rates and money supply to stabilise the nation’s economy (and thereby deal with inflation, bubbles, depressions, overheating, and whatnot).

The second is to maintain stability in the nation’s currency exchange rate, thereby making it easier for households and business to engage with the world economy and plan for the future.

The third is to have an open capital market that allows for international flows of money, thereby enabling citizens to diversify their holdings by investing abroad and encouraging foreign investors to bring in resources and expertise.

And herein lies the trilemma – policy makers can at best choose two of the three objectives – by doing so, they lose control of the third. If they decide on an independent monetary policy and a fixed exchange rate, like China, they have to control the flow of capital in and out of the country. If they decide on a stable exchange rate and an open capital market, they cannot use monetary policy to address economic disruptions – the example of countries within the European Union, and Argentina in 1991, come to mind. And if they decide on an independent monetary policy and free flow of capital, such as the US and the UK, the currency has to float.

This helps to explain certain things. An economic downturn combined with high public debt has different implications for the UK, who can inflate away their debt and also enable a cheaper currency to stir exports, compared with those for the PIGS (i.e. Portugal, Italy, Greece and Spain, for whom neither policy option is available and cutting public expenditure and begging for handouts from Germany are the only ways ahead). China is reluctant to let its currency float (despite considerable pressure from the US) because of its implications on monetary policy and controlled capital flows as well as on the more obvious exports competitiveness of its economy.

There are two criticisms to the policy trilemma . The first relates to the validity of the objectives. There are arguments in favour of including employment creation and inequality reduction as explicit policy objectives for central banks. There are also arguments against the free flow of capital as an objective, and examples (Chile, Malaysia) wherein capital controls are seen to have contributed to greater policy autonomy. The second relates to its ‘all or nothing’ approach, with arguments in favour of adopting intermediate options in the three policy domains, such as capital account management through selective controls and managed currency exchange rates.

Which brings me to the final trilemma of this paper – the donor trilemma. In this era of extra-ordinary donor power and domination within the Indian non-governmental development sector, I find that most of the better donors have three (not always explicit) objectives for their NGO funding policy.

• To work with and support NGOs that are excellent – that lead the way, that develop models for others to replicate, that have a single-minded focus on working with the poorest, that influence policy, etc.

• To work with NGOs that are honest – that put their (the NGOs) intended beneficiaries at the centre of their work, that reflect on efficacy and the change they actually bring about, that develop rigorous and transparent systems and procedures, that are accountable to their stakeholders, etc.

• To get their NGO partners to do what they (the donors) want and/or think is right – on what is done, how, where, who for, and why.

The donor trilemma is that any NGO that meets two of the objectives is thereby unable to meet the third. Excellent and honest NGOs are genetically incapable of being driven primarily by donor priorities, and there is only so much that they will do to meet donor demands. Honest butt-kissers will at best be mediocre in their work. And excellent NGOs that also kowtow around to their donors will have difficulty in being true to themselves.

Development funding agencies would do well to understand the implications of the donor trilemma. One, no NGO partner can meet all three objectives. Two, the choice of which objective you are willing to let go should be critical to your choice of NGO partners. And three, any NGO that adheres to your every command is compromising on either excellence or on honesty.

GET RICH GUIDE

2009-09-08T01:14:00.000-07:00

THE GET RICH GUIDE FOR THE DEVELOPMENT SECTOR
A 2-Pager by Ajit Chaudhuri

People looking to make big bucks quickly and easily generally tend to avoid the development sector – their preferred career choices are investment banking, government service and spiritualism. They are making a mistake! Do not be misled by talks of sacrifice and penury, there is plenty of money to be made in poverty eradication. Here’s how it’s done!

Start your own NGO: The Trusts Act is structured so that the NGO and all its assets are in effect the property of its owner (in legal parlance, the settler) – which is why no matter how many UN jobs with tax free dollar salaries are dangled in front of their faces, NGO bosses never leave. There is little point in working your way up the hierarchy – no. 2s are synonymous with peons. So don’t waste time – start your own NGO, and then work to multiply its assets and infrastructure. Be sure to pack the governing body with friends and relatives. Have one ‘name’ there as well – someone from within the sector who sits in a lot of governing boards and contributes to none of them. Get a pliable statutory auditor – like the ‘name’, they too are a dime a dozen. Get one of your adult children in as second line management cum inheritor of the organisation, and ensure that s/he uses a different surname – Kumar is the surname of choice for boss’ children cum Deputy Directors.

Work the donor circuit: Speak English, practise that wearied sigh that combines exasperation and hope, and focus conversation on the misdeeds of the government. Nod appreciatively when donors describe their philosophies and policies, and commend their wisdom. Be suitably obsequious, and do not hesitate to equate their views with those of Einstein and/or Keynes. Ply them with bullshit about having followed your inner calling to work with the poor instead of joining the corporate sector. Do not ever get drawn into topics such as – if you have spent twenty years working here (and used lots of money in the process), why is it that the tribal/dalit/woman/child/farmer/whatever is in the same situation as when you began. And do not forget – these people tend to equate tailoring and table manners with intelligence and integrity.

Once you own an NGO and get the money, you need to ensure that it goes where it is supposed to go. The best ways of ensuring this are –

Overstate and underpay salaries: Most grants have money for salaries. Have fictitious employees earning fat salaries (who taught this to Satyam?), pay those who do exist less than the amount budgeted and pocket the differential, and hey presto, about 70 percent of the salary component of the grant can be in your pocket. If you are queried, say that it was towards a staff welfare fund that will enable the organisation to pay salaries when project funds are not available. Or, that you are forced to pay ‘tax’ to the Maoists. Some staff members are vocal about not liking it? Kick them out!

Get into revolving funds: This money is given to you to pass on as loans to beneficiaries who pay it back so that it can be passed on as loans again to a new set of people and so on, therefore revolving. Sell the concept to donors as enabling the money to ‘macro-benefit’. The beauty of this is that, when it is first returned, it can revolve into your pocket. You can even apply the concept to all money provided for activities. For example, you have raised funds to provide goats to people. Buy the goats, and thereby book the expenditure, but pass them on as a loan or at half payment. Ensure that the beneficiaries are willing colluders so that, when the donor comes, there are goats, grateful faces and no mention of payment or loans. If caught, make an argument combining concepts of neo-liberalism, community institution building, and the enhanced value people ascribe to a product when they pay something for it.

Use multiple funds: Get many donors to support the same thing. That community water tank could have been bought with X’s money or Y’s, who is to know. Vouchers can be easily relocated from one donor’s file to another (you have to ensure that you avoid the practise of marking the voucher as pertaining to a particular donor). And temporary signage expressing the community’s gratefulness to X can be easily organised. The donor wants permanent signage, such as a marble slab built into the wall? Express your concern at the trend of donors acquiring cheap publicity for themselves.

Enable over-invoicing via empowerment: This business of schools, hospitals, water tanks, goats, etc., requires someone to do some work. The beauty of the ‘rights mode’ approach is that nobody has to do anything – you merely have to organise people to demand services from the government by having meetings. Budgeting for meetings is easy, so many people into so much per person for food, transportation, and lodging. There is no way for the donor to check whether you actually held the meetings and, if you did, how many people actually came and how much was actually spent on food. Ensure that you maintain a book containing unintelligible minutes in some local language followed by a series of thumbprints. And don’t worry, this is not expected to show results – nobody seriously believes that the government does things because some NGO organises people.

Get your assets to work for you: You have (oops, read as ‘your NGO has’) a nice SUV, office and training centre. Get these to generate funds by hiring them out to projects at a price that, as both the client and the service provider, you decide. And yes, build in a fat budget within the grant for training hall hire and transportation. Take this concept a step further by building in a huge consulting fee for experts and use this to pay yourself. You are caught? Say that you are not paid a salary from the project, but as it does absorb considerable amounts of your time and draws on your expertise you do need to be compensated in some way, and at a rate that the UN would have paid had they sent you to New York to take over as Secretary General.

Take up pimping: When you get tired of all the small time wheeling and dealing described above, you can consider the next stage in the hierarchy – the middleman. Donors want to work in poor areas, but don’t have the ability and the systems to do so. Offer services as a ‘resource organisation’, wherein your NGO does the unpleasant work of identifying NGOs and projects, monitoring them, providing training and expertise, and enabling the work to synergise at the district/state/national level. Ensure that this involves the pleasant work of receiving the funds and routing it to small time operators at a 25 percent operational charge and an additional bottom-up kickback.

Become a Guru! How long can this last? There is a saying – you can fool one person all the time, or you can fool all the people once, but you can’t fool all the people all the time. The development sector does not provide an exception. But herein lies the beauty of the system. Once you are revealed for what you are, with nice cars, jazzy properties, kids in expensive schools and colleges, latest communication equipment, etc., while undertaking poverty alleviation work on a token salary so as to ‘feel the pain of the poor’ – donors will flock to you for more of the same. You can increase the above activities fourfold while hitting the development conference circuit as a motivational speaker and receiving awards for your services to the poor.

Let me add that this is not everyone’s cup of tea. The same requirements for making big money everywhere else – of vision, intelligence, diligence, ruthlessness and a zero sense of ethics – are required here. If you don’t combine these, the development sector can be a cruel place in the long term and you may be better off trying to actually do good work for the poor.

Married But Available

2009-08-12T02:33:00.000-07:00

MARRIED BUT AVAILABLE
A 2-Pager by Ajit Chaudhuri

Are you an MBA? The correct answer to this one depends upon what MBA stands for – there are imbeciles around who claim that it is an acronym for ‘married but available’ and replying in the affirmative raises a few cackles among them. But others, who do equate it with a Masters in Business Administration, are also asking – what does an MBA stand for? Today’s economic quagmire has many villains – investment banks, big business, credit rating agencies – and one among the institutions that society has lost confidence in is the business school. Is it a mere coincidence that so many of the greedy bastards that screwed the world are products of these places, or is there something deeply flawed with the B-School as an institution of learning? What is it about management education that has led people to believe that B-Schools foster self-interested, unethical and even illegal behaviour? Why are MBAs considered part of the problem rather than the solution?

A recent article in the Harvard Business Review addresses some of these questions. Joel Podolny, its author, was the Dean at Yale School of Management and, before that, a Professor at Harvard Business School and Stanford Graduate School of Business – and therefore his views are those of an insider. This paper summarises his views on what is wrong and what needs to be done to address the problems at B-Schools, and then tries to apply the learnings to the Indian B-School environment.

He makes several observations. The first is that B-Schools pay little attention to ethics and to the teaching of value based leadership. The second is on the way B-Schools teach management, carving up the subject into disciplinary silos that leave MBAs without a holistic appreciation for the challenges that they will confront. The third is that many academics at B-Schools are not curious as to what really goes on in companies, and prefer to develop theoretical models that obscure rather than clarify the way organisations work.

About 50 years ago, a study of business education in the US (by, among others, the Ford Foundation) concluded that the quality of scholarship was quote terrible unquote and recommended hiring academics trained in traditional disciplines that emphasise quantitative methods. Today, faculty relying on mathematical models and whatnot outnumber those emphasising qualitative techniques. This has produced greater rigour – but also fragmented the study of management challenges as problems were carved up to fit academics’ areas of expertise. This has had two consequences –

One, B-Schools ignored the study of values and ethics. Those who do teach ethics (and there was a move towards this after the Enron and WorldCom fiascos) do so in a vacuum. And one of the consequences of this is that many MBA students regard right and wrong as defined by the norm, i.e. if many others are doing it then it is right. And yes, there are surveys to back this up.

Two, leadership and ethics courses are flawed, with faculty and students regarding them as ‘soft’ subjects that do not require detailed analysis. And the manner of teaching these subjects is such that students are allowed to regard the moral consequences of their actions as mere afterthoughts.

Doesn’t the case study methodology, with its emphasis on context, help overcome these problems? No, says Prof. Podolny! Cases can be a source of inter-disciplinary integration and a way to focus on various dimensions of leadership, but they rarely are. Faculty from the same discipline usually write a case, and the cases end up being function specific. And when students must read a dozen cases a week, they tend to believe that each one deals with an entirely separate issue. And the case methodology does not teach that being consistent in different situations and continuously paying attention to detail are among the most challenging aspects of leadership.

Another issue is rankings! These drive the competition for B-School students – not bad in itself, as market pressures should force Deans to keep improving curricula and teaching methods. But these factors influence rankings only in the long run, and curricula changes require faculty cooperation and time to iron out wrinkles. Deans therefore tend to focus on influencing the measures that change rankings quickly, such as getting graduates to place themselves in higher paying jobs. This means admitting students with more experience, who command higher starting salaries, and preparing them for higher paying industries such as consulting and financial services. It also means bringing in consultants to help students perform better at interviews, and thereby boosting the number of job offers each receives. Again, on the surface, nothing wrong! But when B-Schools use rankings and starting salaries as the basis by which to attract students, they lend credibility to students’ claims that a B-School’s primary goal is to get them a high paying job.

What do B-Schools need to do? First, accept that people don’t simply lack trust in B-Schools, they actively distrust them (and there is a huge difference). Second, show that they value what society values, that principles, ethics and attention to detail are important components of leadership, and they need to place emphasis on leaders’ responsibilities and not just their rewards. Third, foster greater integration among disciplines (possibly through the appointment of teaching teams rather than single faculty courses) and link analysis with values. Fourth, encourage qualitative research. Fifth, stop competing on rankings. Sixth, set up a code of conduct for MBAs (learn from other professions, lawyers, doctors) and revoke degrees of those who violate this.

Though obviously based upon the American experience, there is much that B-Schools in India can take from this article. We too have a mushrooming of institutions that provide an MBA, and students here too have a single expectation – that a two-year stint will increase their value in the job market by a factor of ten. Many spend a lot of money on their MBAs, and have borrowed to do so (and have to pay the money back with interest), and see the degree in pure return on investment terms – and B-Schools have cashed in on this. This is not an environment that encourages talk about ethics and values.

At the same time, the need for a focus on these matters, and on responsible leadership, is probably more in India where we see affronts in front of us every day of our lives and where the conflicts of interest that an MBA student has to deal with in the future are more basic. We do need a moral compass to guide us on difficult choices, and a B-School does need to play a role in providing us with the tools to formulate one.

I would like, at this stage, to hark back to Dr. Verghese Kurien – the founder of, among many institutions, the Institute of Rural Management in Anand (IRMA) where I did two years of swotting for an MBA back in the late 1980s and where I am privileged to occasionally visit now. I didn’t think too highly of him then – there is something off-putting about having someone’s photograph in every room while the person is still alive. But there was a sharp and clear focus on values within IRMA and a deep belief that this provided a cutting edge to its graduates. This has been eroded along with his loss of influence in the boardroom, and the absence of a vision for the institution is discernable.

There is a saying ‘never waste a disaster’! The same applies to economic downturns. This is a time for B-Schools to look at basics again – and to ask themselves a question. What does an MBA stand for?

The Real Football Fan

2009-08-09T04:20:00.001-07:00

THE REAL FOOTBALL FAN
By Ajit Chaudhuri

Football has become popular, and everyone and their aunts consider themselves a fan. How do you sift the genuine article from the bozos that are floating around in red t-shirts with ‘RONALDO’ emblazoned across the back? Here are some ways.

1. The real fan thinks that his/her baby’s first words were not ‘Mama’ or ‘Papa’ but a footballer’s name? Those first ‘mmmboo’s would have been mistaken for Emil Mboo Mboo, the midfielder from the Indomitable Lions of 1990 and 1994
2. The real fan does not associate the name ‘Schumacher’ with size, beauty or cars, but would instead think of a German goalkeeper who should have gone to jail for his assault on Patrick Battiston in the 1982 semi-final. Similarly, Socrates is not a philosopher, Wagner is not a musician, and Kiss is not a rock group.
3. The real fan cannot stand the German or Austrian national teams, even that winning German one of 1990 (grudging admiration, perhaps, at best). S/he always supports their opponents and is happy when they are kicked out of tournaments (Lechkov’s header in the 1994 quarter final was a particularly sweet moment, as was the ball dropping out of Kahn’s hands and on to Ronaldo’s feet in 2002). S/he would never, ever, forgive them for that fixed match they played in 1982 to keep Algeria out.
4. The real fan would associate the name ‘Bernd Schuster’ with that brilliant creative midfielder who refused to be part of the German team featured in point 3 above. Yes, he did go on to do other things.
5. The real fan knows that Diego Maradona is the best footballer that could ever have been. The mind does not change because he is not in a suit pimping for his country as a world cup destination or coaching some fancy team. He took two very ordinary teams to the world cup final (can you name any other player from either of those teams?), where he won one and lost one. Which other candidate for the ‘best ever’ tag did anything without brilliance all around in support. Pele in 1958 and 1970? Cruyff in 1974? The only one coming anywhere in the vicinity is Zidane in 2006.
6. The real fan watches women’s football for the football and not the women, and did not even consider a peek when Brandi Chastain took off her shirt to celebrate the USA’s victory in 1999. And yes, s/he loves Marta and Sun Wen.
7. The real fan follows the fortunes of teams out of the top four in the English and the top two in the Spanish leagues. S/he knows of Zenit St. Petersburg, Stadt Rennes, FC Tromso, Ruben Kazan and Almeria, and knows why teams don’t like to play away against FC Rosenborg in the Champions League in November.
8. The real fan does cry – but on select occasions such as when Cameroon lost that quarterfinal in 1990, or when Andres Escobar was murdered.
9. The real fan watches Indian football, and tries to do so in the stadium whenever possible.
10. The real fan starts smirking when the discussion turns to whether Cristiano Ronaldo has taken the best free kick ever. S/he has seen Michel Platini and Roberto Falcao take free kicks.

A GUIDELINE FOR THE MELTDOWN

2009-01-08T20:22:00.001-08:00

A GUIDELINE FOR THE MELTDOWN
By Ajit Chaudhuri

‘Kuchh baat hai, ki hasti mit-thi nahin hamarin.
Sadiyon rahaa hai dushman, daurey zamaa hamara .’

In the beginning, it was pretty good fun! The TV pictures of stockbrokers returning their Porches and the billionaires contemplating an existence with only a few hundred million – one could believe there was a God after all. But the meltdown has spread, and those at the lower end of the chain have begun to feel the pain. Organisations are not hiring, people are not buying, profit margins are dropping, and there is a general sense of pessimism contributing to a downward spiral. World over, the following trends are visible –

• Economic growth rates are dipping and the D word is being mentioned.
• Currencies are fluctuating, as are oil and commodity prices.
• Food is becoming more expensive.
• People are less worried about the HIV/AIDS situation in Africa and more worried about whether they will receive a salary at the end of the month.

What does this mean for the Indian NGO sector, and what does it mean for that globalised category within, the FCRA -wallah?
The past decade has been a good one for the FCRA-wallah. Money has been plentiful, organisations have grown in number and size (people employed, assets owned, projects undertaken, money spent) if not in significance, the development sector has professionalised to some extent, and a fairly large ancillary industry (consultants, evaluators, middlemen, etc.) has developed. Is this a bubble, like the sub-prime credit market, which is going to burst? Or are the fundamentals of the sector strong, and is the crisis likely to leave us better off for the discipline required to survive. It is difficult, at this very early stage, to make credible predictions – so let me stick to pointing to possible trends.

Funds for NGOs from abroad originate primarily from three sources. The first is the individual donor – directly, or via charitable organisations (the Actionaids, Oxfams, etc.), or via religious institutions. This has been dropping for some time, and most foreign charities are more dependent upon being part of the long sub-contracting chain linking taxpayers’ money with development activities . It is likely to drop significantly further, as household budgets tighten and a generation that considered giving as an obligation goes into retirement.

The second source is the overseas development budgets of western governments and multilateral agencies. With economic growth in rich countries likely to be negative in 2009 and with budgets strained with fiscal stimulation packages for the local economy, funding Indian NGOs and the huge inverted pyramid of consultants and support organisations that accompany them is unlikely to be a high priority in the near future.

The third source is private and corporate foundations. An interview with the bosses of Carnegie Foundation and Hewlett Foundation is telling – both are large grant making organisations whose assets have depreciated sharply in the meltdown and, while they will stick with plans for 2009, the chances are that there will be major cuts in 2010. Salary freezes are already on, construction plans are deferred, and worst of all everyone has to travel economy class. Other Foundations have started cutbacks and layoffs and there is also plenty of news of reneging on funding commitments made.

And therefore, if you are dependent upon foreign sources for your money, chances are that you are going to have a difficult few years ahead.

What do NGOs need to do to survive? Here is a list of suggestions!

1. Be calm and confident! NGOs have survived bigger things, and fund crunches are nothing new. It is these times that separate men from boys.
2. Get back to the basics! Return to your core values! Cut out activities that have origins in vanity – that expansion into the neighbouring district/state, whatever. And if the main reason for your organisation to exist (be honest here) is because it exists, close down.
3. As the old saying goes – never waste a crisis! Sort out governance issues! Get a board in place that meets the needs of a modern organisation – that provides oversight and strategic vision. Push through a separation of ownership from management. Get those friends and relatives out, get those whose presence is for tokenism purposes out, get the disinterested out. Get in people who are going to add value. And get a real auditor.
4. Be nice to your existing donors, and work to keep them! Especially those donors you earlier disrespected and/or accorded low priority to because they don’t pester you and inflict their presence on you continuously and regularly. Send your reports on time and without the need for reminders, and work to convince them that their money is being spent correctly and effectively. Be sure that they too are facing a crunch, and are deciding which relationships are worth keeping and which are not.
5. Get Indian money! Most FCRA-wallahs have a disdain for Indian money, no doubt having experienced that Indians tend not to have a proclivity to confuse khadi attire and fluency in English with integrity and intelligence. The Indian money is there! It is plentiful! Giving money for good causes is recession proof . It does not come to you for good reasons, not because Indians are idiots who just don’t get it. Address those reasons!
6. Recruit sensibly! You won’t have the usual rejects coming to you for jobs –the intelligent and well-qualified are more willing to work in the development sector in these times, when opportunities elsewhere have dried up. Work to get good people into the sector and to keep them there.
7. Focus on results! The world does not owe you an existence for your values and self-sacrifice. And these days, people are even less likely to be dazzled by your impassioned rhetoric on the conference/workshop circuit. Demonstrating that your organisation’s work is bringing about real change is the most effective way of raising money and winning support.
8. Try and deal directly with your donors! Every in between layer takes 20 percent of the budget. Yesterday was yesterday! Today, there is not enough for the fat cats – the various nodal organisations, resource organisations and whatever that were representing your interests to others – and for you. Work ruthlessly to eliminate them from your relationships.
9. Collaborate more with your peer organisations! Share back office functions where possible. And collude with them on 8 above.
10. Explore new and recession resistant sources of funds! Many Universities have a requirement for students to spend a semester in the field and are willing to pay organisations that enable this. Getting on to the indigenous tourism circuit can be lucrative, as can providing a base for volunteerism. And, of course, begin couching your activities in climate change terms – that is the one topic that has not gone off the agenda in the meltdown.

MORE ON TERROR

2008-12-12T19:34:00.000-08:00

OH NO! NOT MORE ON TERROR!
A 2-Pager by Ajit Chaudhuri
‘Hagney jad aavey tho loto ro yaad aavey’

These days, I am at the receiving end of everyone’s outpourings on terror. Our PM is talking about a federal agency to deal with the scourge, our opposition about bashing Pakis, our chatterati about bashing politicians, and our media (and no doubt our phone companies) about sending messages in support of or against this that and the other. Some are linking the above average post-terrorist-strike noise with the fact that the English speaking elite got hit instead of the usual migrants from Bihar, others with elections being around the corner. And I am increasingly being reminded of the old Marwari saying featured above. And I too would like to add my piece to the rhetoric.
In sum, I would like to say what I have yet to hear – that we will have to live with terrorism until and unless we deal with corruption. And we will have corruption as long as our political system depends upon black money. And in all the rhetoric, there has been no mention of the need to address this and get the state to fund elections. This is because, for our political system, terrorism is a small price to pay for the spoils of office that high corruption allows, more so because the spoils accrue to the neta-babu-thekedar nexus and the price is paid by the aam aadmi. And expecting the nexus to change the rules in favour of honest and transparent governance is the equivalent of expecting Al-Qaeda to formulate rules for the US for better inland security. So – are you lukewarm about corruption? Do you think of it as an ‘enabler’? Do you see it as a wheel of the economy? If yes, do not crib about terrorism. You, like Lashkar-e-Toiba, are part of the problem. And yes, I do realise that my argument rests upon the link between terrorism and corruption, and this is what this paper is about. Please read on!
Allow me to take you back to class 6, when we learnt that fire required three ingredients – oxygen, fuel and a spark. A fire cannot begin without the presence of all three, and can be doused by removing any one of these. Terrorism too requires three ingredients to thrive. The first is the existence of a large number of very angry and aggrieved people in the general population. The second is the existence of organisations with the ability to motivate a core group of desperate young people into doing anything. The third is the ability to move people, weapons and explosives.
Much has been made of the fact that the US and the UK, unlike India, have dealt with that one terrorist attack in such a way as to ensure that there have been no others. Well, there are large numbers of people majorly pissed with the US and plenty of organisations willing to work on terrorist strikes against it – but they are all sitting in Pakistan, Afghanistan, the Middle East and North Africa. We have them next door, in every direction, and even within. The UK too has angry people and organisations – many sitting within, but procuring and moving weapons and explosives is so difficult that they find it easier to go to Pakistan and Afghanistan to vent.
It is the existence of all the ingredients that makes India particularly vulnerable. With politicians who should be in jail for crimes against humanity legitimately occupying high office, with a sclerotic legal system, and with opportunities available only to a miniscule minority, I think it is safe to say that we can be certain of large numbers of angry and aggrieved people in the foreseeable future. And as the old saying goes – you can fight history but you can’t fight geography – and we are stuck with the neighbours we have. As long as they remain chaotic basket cases for failed states, there will be space for non-state actors to go about their business of motivating and training disaffected youth and coordinating terrorist strikes. And they too will remain so in the foreseeable future. And our not seeing Pakistani, Bangladeshi and Nepali stability and prosperity as being in India’s strategic interest does not help the situation. It is the last piece of the triumvirate that can be worked upon – that it is so easy to procure and move weapons and explosives, to create identities, to establish safe houses and to generally go about the mundane activities that are necessary for intent to be converted into action. And this is where corruption is a critical factor.
Terrorist operations do not build logistical chains – these are usually too complicated. They merely adapt existing ones for their requirements, chains that have been built up for the illegal movement of drugs, hooch, contraband, and people (prostitutes, child labour, etc.). And these chains have political connections and police protection, if not ownership. They cannot operate without these. And if you look back at any terrorist act and dissect it, you will see the role of corruption as a critical enabler at every stage. Yes, the same corruption that we see around us all the time!
If I have convinced on the link between corruption and terrorism, let me take the argument a step further. There is no way of separating corruption relating to terrorism from corruption relating to crime, politics, extortion and speed money. If you want to curb one, you have to curb all. And curbing corruption is our only way of realistically preventing further terrorist attacks. However, curbing corruption is not easy. It is naïve to expect that individual citizens can do this by standing up and saying no – refusing to accept bribes and refusing to pay them – or by signing on to some media website. The root of the problem is that a politician does not have the option of honesty – s/he has to generate funds to pay for elections. And if the person at the top of the food chain has to generate a slush fund, there is no way of preventing lesser minnows doing the same. And the only way around this is to have the state meet the election expenses of all major political parties, thereby removing the top persons’ need for corruption. Unfortunately, this requires statesmanship – not a quality associated with our political establishment. It is easier to talk about creating more bureaucracy in the form of another agency, and of Paki bashing, and of uniting people against terror. And then to just forget about the whole thing! Until the next terrorist attack! And then do the same again! And again! As has been the case so far!
Acronyms etc.:
Aam-Aadmi Ordinary Person
Neta-Babu-Thekedar Politician-Bureaucrat-Contractor
PM Prime Minister

AN ICY WIND

2008-10-15T21:45:00.000-07:00

AN ICY BREEZE
A 2-Pager by Ajit Chaudhuri

Introduction: Readers of my generation may remember the novel “Running Blind” by Desmond Bagley – a good book made better for its introducing the reader to a small island nation nestling just under the Arctic Circle. Iceland occasionally popped up in the news after that – from its location as somewhat in between Moscow and Washington and therefore a good place to hold contentious discussions during the cold war years to the exploits of the singer Bjork. Readers of human development indexes would know Iceland as a country that combines wealth with equity , travel addicts for its mountainous and volcanic interior and for whale watching, and scientists for its energy policy and research on genetics . And hardcore Olympics watchers this August, such as yours truly, would have followed the country’s men’s handball team trying to win its first every gold medal (they lost in the final and settled for silver).

Iceland burst into the news again last week as the first nation-casualty of the current financial crisis! Its banking system has broken down, its currency is in free fall, and it has moved from being a wonderful example to a horrible warning – all in one week. What happened? Why? And what are the lessons to be had?

What happened? The first indication that it was not only banks going under and that an entire nation was in deep s--- was on 7th October, when the Icelandic government made three announcements –

1. That it was abandoning its efforts to peg the Icelandic Krona at 131 to a Euro.
2. That it would nationalize the country’s three largest banks – Kaupthing, Landsbanki and Glitnir.
3. That it was in the process of obtaining a loan of Euro 4 billion from Russia.

The British were the first to react! Upon not getting a guarantee protecting British deposits in the banks, Gordon Brown announced the freezing of Icelandic assets in Britain on 8th October and used anti-terrorist legislation to do so. Other countries with a significant Icelandic banking presence followed suit. The Icelandic Krona dropped in a day to 340 to a Euro and then went into free fall. There was no sign of any money from Russia, and Iceland’s Prime Minister Geir Haarde backtracked to say that the loan was still being negotiated.

Why? How did a country fall so far so fast? Iceland had traditionally been dependent upon fishing – its location and lack of neighbours give it a natural advantage in this field. Somewhere in the 1990s, the government decided to liberalize the economy – starting with the banking sector. Banking prospered, and soon found that Iceland’s demographics did not match the banks’ growth ambitions. Aggressive expansion followed – into the UK, the USA, the Netherlands and Scandinavia. Deposits were attracted by high interest rates , which were in turn forced up by Iceland’s high inflation – about 14 percent in the 12 months up to September 2008. They were successful! IceSave, an Internet banking subsidiary of Landsbanki, had about 300,000 depositors (about Iceland’s population) in the UK. Landsbanki’s owner, Bjorgolfur Gudmundsson, became a billionaire and Iceland’s second richest man (after his son) and went on to indulge in typical billionaire stuff like buying an English football team.

And then, the sub-prime crisis happened and banks stopped lending to each other. Icelandic Banks, like other banks, were unable to roll over their loans – and with a combined foreign debt of about seven times Iceland’s GDP, a falling currency (thereby increasing the value of foreign debt in Icelandic Kronur), and a high inflation rate (thereby adding momentum to the falling currency), they were particularly exposed. This is normally where a central bank would step in and play the role of a lender of last resort – but this was not possible here with the debt being so much more than the size of the national economy.

What’s going to happen? Difficult to say, with events still unfolding every day! Can the USA play guarantor, as it has chosen to do with its own banking system? Possible, but it does relegate Iceland to Puerto Rican status. Can the European Union? In the long run, Iceland may see value in joining the Euro – but not right now, Iceland’s current ruling party and opposition are both anti-EU and anyway the EU is unlikely to be interested. On the other hand, the fundamentals for Iceland are intact – the fish haven’t gone anywhere, there are still no aggressive neighbours, and its human capital remains among the best in the world. Its currency was considered the world’s most overvalued and could do with a correction. The tourism industry is already benefiting from Iceland being a less expensive place to visit. I would bet on a large loan (from Russia?), a circumspect recovery, less flirtation with neo-liberal concepts, and, for the West Ham United fans among you, Mr. Zola not getting funds for a major expansion this January.

What are the lessons here? The first is a sobering note for all the insurgent elements in India who are looking to break away – running a small country requires more than the ability to fire an AK-47 and suck up to fringes in the Pakistani and Bangladeshi armies. You have to run an airline, maintain a central bank and a currency, and develop a football team for world cup qualifiers. And when large fish decide to screw you, you have to lie down and take it – witness Geir Haarde’s comment when Gordon Brown used anti-terrorist legislation to send Iceland into a tailspin, a mere ‘this is not a friendly act’. Iceland may be the richest, whitest and most progressive country on the planet, but when the fertilizer hits the fan who cares – the world can afford it to fail.

The second is more worrisome in the Indian context. Policy makers choose between enabling growth and fighting inflation. Policies that enable growth, such as low interest rates, more circulation of money and larger fiscal deficits, tend to be inflationary and to reduce the rupee’s value. And policies that fight inflation, such as high interest rates, squeezed money supply and circumspect government spending tend to curtail growth. It is an interesting tightrope walk and one that is not so much of an issue in times of high growth and low inflation – this was the case over the past few years but is not the case now. The Indian government had reacted to the difficulties faced by people because of rapidly rising prices by taking anti-inflationary measures. The priorities appear to have u-turned in the aftermath of the financial crisis, and all hands are now on the pump that looks to maintain high economic growth and protect the integrity of the country’s financial systems. In effect, they have chosen the interests of those with businesses, jobs and bank accounts over those who use a significant proportion of their earnings to buy food. Given the number of elections scheduled over the next year, I am yet to decide whether this is brave or foolhardy.

Football and Life

2008-07-11T00:42:00.000-07:00

FOOTBALL AND LIFE
A 2-Pager by Ajit Chaudhuri
‘Football is not a matter of life and death – it’s a lot more important than that’[1]

Introduction: I have been at the receiving end of lectures on the evils of football for a long time (some of my dear readers – do you recognise yourselves?). There is a pattern to this. The crescendo is highest during a World Cup or a Euro and during my (increasingly frequent) injury breaks. The troughs occur when I am listless, pale and crabby, when it is pretty obvious that I am ‘not getting enough’. I have learnt to accept them with equanimity – along with the comments about the need to focus on the important things in life and the observations that it is just ‘22 morons in perms chasing a ball’. I was also recently witness to a friend’s 15 year old son getting one of these from his father – something along the lines of ‘what do you learn from sitting up every night to watch Euro 2008?’[2]. Having also been awake every night for three weeks in June, I am reasonably qualified to address this question for my friend and similar sceptics. But first –

Why football? Many people consider two things important to growing up – playing a team game, and having a dog. The former teaches you about group dynamics, supporting each other, winning, losing, and rejection. The latter provides you with love that is pure and non-judgemental while teaching you about authority and responsibility. I don’t have any specific recommendation for football – most team games (basketball, hockey, etc.) are just as good, cricket possibly minutely less so being an individual game that is played in a team, rugby possibly more so except for the higher chances of your body parts being severed. A deeper analysis of the specific benefits of football is available in my blog theintelligentwomanstoyboy.blogspot.com in a paper entitled ‘Alive and Kicking’.

Lessons in life from Euro 2008: Much has been written about the successes of Euro 2008. As a neutral football lover, the quality of football on display was, for the most part, brilliant. The best team actually won. And, with no British teams playing, we could watch with the volume on and not have to cringe at the moaning, griping, whining English commentary[3]. But were these lessons in life? Nope – these follow!

TTMO: There is an old joke that goes – what is the similarity between dying and taking a crap? The answer – when you gotta go, you gotta go! Unfortunately, some teams had players who should have taken their walk into the sunset earlier, and these teams did badly. Particularly at fault were the French and Italians, where many were playing a tournament (or two) too many – particularly criminal for the French because they had the young talent available. The Swedes were the oldest team of the tournament and they were huffing and puffing in the second half of their games. The Greeks brought in the same personnel and tactics that won them the tournament in 2004 only to find that the same legs were four years older and the world had moved on. The tournament was better for these teams packing their bags at the earliest possible stage[4]. In contrast, the youngest team (Russia) had a run into the semi-finals, demolishing the tournament favourites on the way, and losing only to the second youngest team – who went on to become champions. It was different with managers – the oldest won the tournament, and two other oldies reached the semi-finals with teams that set the tournament alight.

What can be discerned from this? First, glorious comebacks do not happen – you have to be Zidane to do this gracefully, and none of us are. If you should go – go! And when you go, don’t turn around! And second, there is a time when you should be moving on to new challenges, and when you get that TTMO[5] (time to move on) feeling, you will not be doing yourself and your career favours by choosing comfort and stagnation over hunger and achievement. Past achievements are nice, but life has to be lived in the future.

Hype vs. Substance: The two most hyped players on the planet (or at least the English Premier League) were there – chocolate looks, silken skills and all. How did they fare? Cristiano Ronaldo had all the lesser lights flabbergasted by his stepovers but went missing at the first sign of real opposition (when Portugal played Germany). Fernando Torres was substituted in every game that Spain played, but he also decided the tournament with his only significant contribution to the team – a goal that was marvellous for its intent, aggression and power – no chocolate here. Football lovers were blindsided by Russia and Turkey, who reached the last four from nowhere. With the advantage of hindsight, Russia was a pretty obvious candidate for success, with one of football’s most brilliant tacticians managing them, and a Russian team just winning the UEFA Cup. But, no pushy PR agent behind them! So – real success is defined by performance on the ground – not by who your godfather is, not by how you look, not by what you (and others) say, and not by the weight of your wallet. And there are no short cuts for this!

Screw-ups happen: The lights went out in Vienna (an electrical storm, we were informed), disrupting the coverage of the semi-final between Germany and Turkey in Basle for viewers across the world. Yes, apparently this happens outside India. Bihar State Electricity Board – it looks like you have competition.

The lightness of nationalism: The Swiss team had three Turks. The Portuguese were, as usual, overloaded with Brazilians. The Turks had a Brazilian and an Englishman, the Germans had Poles, the Poles had a South American and even Spain had a Brazilian. The team lists were pragmatic reflections of ability and availability rather than national pride and honour. Even Spain lacked the usual sub-nationalist tensions within the team, and seemed better off for it. It was left to the Swiss authorities to indulge in jingoism, playing a pre-world war II national anthem for a Germany game – supposedly a mistake, but one that pissed German fans off big time.

The myth of the free market: The English Premier League is the best football league in the world. It is also the richest. It is also the one most guided by free market principles. You may dispute the first statement (though you would be on thin ice with four English clubs making it into the last eight of the Champions League in 2008, three into the last four and two into the final), but there is no disputing the second and third. The players are the best paid, the clubs have the money to buy the best players, and ticket prices are the highest. Anybody with money can own an English club – Russian oligarchs, Thai politicians, sheikhs from Dubai, Indian steel tycoons, US business magnates – anybody! In fact, the English Premier League was the league with the second-highest number of players at Euro 2008 (after the Bundesliga) – without any British team having qualified.

What was that again – England did not qualify? Yes, the national team was not good enough to be among the sixteen best teams in Europe. A cursory analysis suggests that this was an aberration caused by a bozo of a manager. A deeper one points to the fact that players are not coming through the lower divisions into the Premier League any more – better players are available cheaper from South America and eastern Europe. Great for the clubs, which sometimes play eleven foreigners, great for the quality of the league, but is it good for the national team and for the larger interests of English football?

Substitute companies for clubs, economic growth for the premier league and broader national interest for the national team and you revisit the debate about whether an unfettered free market is in the best interests of a nation.

It isn’t over till the fat lady sings: Watching Turkey play must have had Turkish heart patients dropping like flies. In the league, they lost to Portugal, were one down against Switzerland and scored twice (including once in the last minute) to win, and were two down in the must-win against Czech Republic before scoring three times in the last 15 minutes to go through to the quarters. Croatia scored in the last minute of extra time (the 119th minute of the game), only to see the Turks equalise in the 122nd minute, take the game to penalties and win it comprehensively there. Turkey had only 11 eligible players against mighty Germany (the rest were injured or carded), but came out and played as if they were the favourites for the game – ultimately losing the semi-final 2-3. What a team! And what a lesson on not giving up until the absolute end!

In conclusion: A relationship with football is akin to love – it gives pleasure, it gives pain, and it gives a lot more. If your child loves football, get used to it. Get used to the smell of sweat in his/her room, to the TV being on at odd hours once in two years, and to weekend football being more important than parties. Don’t fight it! If it dies, it will do so on its own. If it doesn’t, s/he will probably one day be just short of 45, confined to the home with a foot injury, writing about love. Like I am right now! Life could be worse!
[1] The statement is attributed to Bill Shankly, a legendary football manager.
[2] Coincidentally, I had also been witness to the same friend getting a similar lecture from his father back in the early 1980s.
[3] No offence meant – they are good commentators when they are neutral, and they are not neutral when a British team is playing. For the experienced viewer, it brought back memories of the last tournament with good English commentary – the 1994 World Cup.
[4] Yes, yes, before the Pundits among you bombard me with email beginning with ‘Are you aware’, the exception was Italy, which lost in the quarterfinals.
[5] I thank Shampa Kamath, my colleague at India Today, for introducing me to this term some years ago.

Alive and Kicking

2008-07-08T22:43:00.000-07:00

ALIVE AND KICKING
By Ajit Chaudhuri
Written in December 2003
Published in Simply Delhi of January-March 2004

Are you one of those who is bleary eyed at work every four years in June with your body clock adjusted to the time in some faraway country? For whom the World Cup brings about images of men in yellow rather than blue? Who, if invited by Aishwarya Rai to her home for a cosy dinner for two, would check if she has ESPN before accepting? If you are, then join the growing tribe of football fans in Delhi.

A love affair with football used to be painful for the urbane Delhi-ite. Play in school, and get yelled at by your parents on the need to “focus your energy on your future”. Play on in college and watch the cricketers, basketballers, badminton players and even the chess players get the girls. Join a job and that used to be it.

Initially Delhi had only two football tournaments, the DCM and the Durand. Though it was fun to watch JCT Mills play a Bengali or Goan team, the football was mediocre. You had to skip work to watch the game. And there was always the risk of being tear-gassed if some local team lost by a contentious goal. The only real options were to switch to golf or some racquet game, or to give it up all together. Either way, there was a void in life.

But not any more! Football renaissance is evident everywhere. Quality football from around the world can be viewed week in and week out. There is also an abundance of playing options available to the recreational footballer. The football facilities at the Siri Fort sports complex and the practice grounds outside the Nehru Stadium are hotbeds of activity. Tournaments for children and working people have started to catch on. Informal teams have sprung up. Corporate firms too have begun supporting players.

What is it that makes grown men become willing to bear the aches and pains, the prospect of serious injury, early mornings and a nagging wife to play the game? To play, despite being too fat, too old or too slow, even if it is more impressive at cocktail parties to say “I play golf”. It may not be logical, but the only reason is that they love this game. It is a love that cuts through age, gender, race, religion, ethnicity and nationality. It is a love that you either have or you don’t, and if you don’t you will never understand.

If you share the obsession and venture out on to a football field, there are some fringe benefits. The first is that football has a certain therapeutic value. Much of the frustration of staying in Delhi – driving in traffic, dealing with rude people, struggling with power cuts and water scarcity – get drained out of you in that weekly hour on the football field.

Second, the game itself is physically demanding and playing regularly ensures a certain level of physical fitness. In addition, the realisation that some daily exercise can reduce the chances of you making a fool of yourself at the weekend inevitably dawns, and one begins to wake up early and do some jogging and toe touching.

Third, the football field is still a man’s space. In a world in which women are coming into bars, cricket stadiums and late-night movie shows, there is a dearth of places where a man can be a man without being politically incorrect. On the football field, there is no one to impress with your metrosexual sensitivity or your sweet nature.

Fourth, you make new friends. Delhi, as we all know, is a place where friends (as opposed to acquaintances and contacts) are not easily made. And the phrase ‘come over sometime’ means don’t come at all. But your football team is a group that you meet regularly. There is no pretence, and your mates know a side of you that even your family is unfamiliar with.

Fifth, you impress chicks. Telling beautiful women that your interests include football, and that you play over the weekend, conjures up images of a David Beckham-like character. They don’t need to know that you are part of a group of middle-aged beer-bellied men kicking a ball around. However, it is advisable not to be too generous with this information – requests to come and watch you play are not easy to refuse and can be euphemisms for ‘I want to marry you and make you go vegetable shopping on weekends for the rest of your life’.

Lastly, you impress your children and their friends. There is nothing like taking your children for your football game and letting them see their old man doing the same things that are on ESPN, albeit at a slightly different level. If they are a little older, they can even play along with you. It is these memories that they will carry of you into the long-term future, not the fact that you grouched about their results and were miserly with their pocket money.

If, by some chance, you are now convinced about making that move from the seat in front of your TV to the ground in front of your house, there are a few things you should know. The first is that football is a contact sport, and you will have severe aches and pains until your body is used to the strain. This takes time. You will also be injured occasionally in places that you won’t remember from your schoolboy playing days, and you will take longer to recover. Playing on Sunday will mean walking into office on Monday and probably Tuesday looking as if you have an exotic sexual disease. The second is that should you continue playing, there might be marital strife in the offing. Football takes up free time – the game itself, and then the time rendered immobile with injuries, time that could have been devoted to the family and to socialising.

So just focus on going out and doing it! Find a team, or form one, start playing, and fall in love again. You will never be the same.

The Assumptions We Make!

2008-06-17T02:59:00.000-07:00

THE ASSUMPTIONS WE MAKE!
A 2-Pager by Ajit Chaudhuri
June 2008

Introduction: I have a habit, when travelling by train, of scouring the passenger list for a profile of my fellow travellers. This is a residue from the many long journeys undertaken in teenage years, when the purpose was to locate the F 15 to 20s in the carriage. Recently, while travelling from Allahabad to Delhi, I read from the list that I was sharing a coupe with a middle-aged Muslim man. Sure enough, he turned out to have a long beard and a prayer cap, and I braced myself for one of those nose-in-my-book journeys that are particularly unpleasant when one does not have a good book. The guy turned out to be a Professor in Computer Engineering with a PhD from UCLA, and was in Allahabad to take the viva-voce for PhD students at the local university. We discovered a common passion for teaching and football, and the journey was as pleasant as it gets.

But this paper is not about him – it is about the assumptions that we make. As students of economics learn in the torture chambers of first-year college, your assumptions are critical to your model. This paper looks into the robustness of some of the assumptions that shape our models of work, love and life.

Your savings are safe in a bank: We all know of the hit the banking system is taking from the sub-prime crisis in the USA – but what does it have to do with our savings in our local banks? I was in the UK in September 2007 and saw the run on Northern Rock through the eyes of retired relatives, all of whom had substantial savings that were going to disappear into thin air. Much has been written about the causes of the crisis and the role that globalisation, diabolical bankers and lax regulatory systems played. Deep within the layers of hyperbole is one simple fact – that the line between ‘commercial’ banking (the business of looking after ordinary people’s savings, which is subject to heavy regulation and is protected by governments) and ‘investment’ banking (the business of investing money, which is subject to higher risks, higher returns and less regulation) has been erased. Banks have been indulging in risk taking with money that has been given to them for safe keeping rather than high returns – great when the going is good, but a social and economic disaster when not so good. And governments are baulking at providing statutory protection for speculation, rightly claiming that this is a heads-you-win-tails-I-lose situation for the taxpayer that has a ‘moral hazard’ dimension. The lesson to learn is that if your money is in a bank, the bank should be big enough to rock financial systems if it sinks – like Bear Stearns or Northern Rock. And if the only option is a cooperative bank owned by a relative of our current President, you are well advised to make some space in your mattress.

Thin is beautiful: What constitutes beauty? Probably ranked along with ‘what is love’, ‘how do I make more money’, and ‘how do I get my free kicks to swerve and dip simultaneously’ in the list of life’s eternal questions! This paper is not the place to attempt an answer, and I merely look to address two assumptions about beauty (and no, none of that crap about inner beauty being much more important, so please do read on). The first is the female assumption that thin is beautiful. Ladies, if beauty is about being attractive to men, the fashion industry is wrong – most men prefer rubenesque women. Please see models for the clotheshorses that they are and spare yourself the anorexia nervosa. The second is the male assumption that beautiful women are dumb[1]. Guys, you are missing amazing talent at science conventions, technical seminars, and in libraries.

Economic growth will trickle down: This assumption forms the moral justification for a school of thought that propagates economic growth above all else. It has resulted in extreme concentrations of wealth, rising socio-economic inequality, and a three-monkeys attitude (if you don’t see, hear and acknowledge them, they don’t exist) to those missing out. The previous elections were lost on this issue, but the policies continue with a few sops in the form of NREGS. There is a growing realisation that the trickle down is not happening or, if it is, its pace is too glacial to be politically acceptable. But, bandying about of new jargon such as ‘inclusive growth’ apart, little is being done to change policies to ensure a real trickle down. And now, with high inflation being added to the cocktail, what can I say except that we are going to be living in interesting times.

Children are safest in their families: Some of you may be familiar with the Siberian dilemma. It goes like this – if you are ice fishing with a friend on a lake in the Siberian winter (this constitutes making a hole in the ice and putting a fishing line through) and the friend falls through the hole into the water, what should you do? Leave her/him there and s/he freezes to death in 30 seconds! Pull her/him out and s/he freezes to death in 15 seconds! I feel a similar dilemma when I see children in distress – which I do on railway platforms, on the streets, in dhabas, in brothels, and yes, as servants in the homes of some of my relatives and friends. Blow the whistle, and come up against a sclerotic and corrupt system that at best results in repatriation to the same family that was a party to the child being in the situation in the first place. And then blow the same whistle again, thousands and thousands of times over. Ignore it, and see a life that will not achieve its potential. And then keep your eyes closed – until you cannot bring yourself to look into a mirror.

Strong NGOs means better communities: I remember a meeting in Lunkaransar (a sub-district town in western Rajasthan) in the mid-nineties that looked into the impact of ten years of the Urmul Trust (a local NGO) on the region. After the meeting, a representative of Urmul’s donor agency made an acerbic comment that he was unable to gauge whether the beneficiary communities had gained, but it was crystal clear that Urmul itself had significantly benefited[2]. The assumption that NGOs are the best vehicles for work against poverty and development problems, and that therefore support to NGOs translates to less poverty and a better social development status, has been a lucrative one for the NGO sector. While this is sometimes the case, the opposite scenario of large, resource rich NGOs working with communities that are in the same state they were in when the NGO started out is more common. And this may not be because NGOs are corrupt and inefficient (though they often are), but merely because they are not so important in the scheme of things. And until this pervades through, the show goes on.

[1] Put mathematically, it would go as Brains x Beauty = k.
[2]The person is on this reading list – Vinay Raj, will you please confirm. Others, be careful what you say to me – it may backfire on you a decade plus later.

Adverse Selection and Moral Hazard

2008-04-25T05:58:00.000-07:00

ADVERSE SELECTION AND MORAL HAZARD
A 2-Pager by Ajit Chaudhuri, April 2008

During my post-graduate studies, a group of us used to frequent a restaurant in Baroda that offered an inexpensive non-vegetarian buffet. As repeat customers, we should have got warmer welcomes every time we went – but no, they were increasingly icy after the first time until, fortunately towards the end of our course, the sight of us descending from our motorcycles had them scurrying for cover, desperately looking for reasons not to let us in. No, we were not the Gujarat chapter of Hell’s Angels – the reasons for their behaviour were twofold. First, we were all young men with voracious appetites (anyone familiar with Vijaynidhi, Somnath Sen, Mathew John, Dinshaw Irani, Rajvinder Kohli, et al, in those days would sympathise with any restaurant they walked into). And second, we eschewed the soups, breads, salads, etc. (all the cheap stuff put out to take up stomach space), and concentrated our efforts on the mutton and chicken. And this little example illustrates the two phenomena that are the subject of this paper.

Adverse selection occurs when policies encourage the selection of ‘bad’ customers. The restaurant featured above priced its buffet based upon the average eater, but the ‘all you can eat for one price’ policy discouraged the plate-pickers and encouraged the gluttons. As they say, ‘everyone can’t be above average’, and I suspect that that buffet scheme did not survive us. The concept of adverse selection originates from the insurance industry and is used to describe the problem of insurance being purchased only by those most in need, such as life by the old and health by the sick, and the subsequent likelihood of the insurance firm going bust. Adverse selection is prevented by various means, such as reducing the information asymmetry between buyer and seller and ensuring that those at higher risk pay higher premiums (finding out, for example, whether there is a history of heart ailments in the purchaser’s family) and laws requiring everyone to have insurance.

Adverse selection also explains why my old school’s annual alumni reunion is such good fun (for the likes of me and my friends) – it is a glitzy event in a 5-star hotel for which the alumni association charges Rs. 1,000 per person with as much booze and food as you can imbibe thrown in. And while some seedha-saadha types do land up out of patriotic feeling, most of us, men and women alike, are there to have a wild time (nobody brings their spouse unless s/he is also an alumni) and proceed to do exactly that.

Moral hazard relates to the changes in behaviour that policies, especially those that insulate a party from risk, bring about. In the introductory example, it was the sticking to mutton and chicken when we would normally have balanced our intake with vegetables, rotis and stuff. In insurance, moral hazard happens in two ways to increase costs to the insurer. The first relates to the way a person with full health insurance seeks treatment for the most trivial of ailments, or the way someone with full cover vehicle insurance is careless about locking the car. The second relates to the lack of ethics in the medical profession – the way doctors and hospitals find out how much a patient can pay and then find ways to extract precisely that much. If you have cover or can pay, you will find yourself going through meaningless tests and treatments. If you can not, you can die like a dog on the road – like the lady in Kanpur just yesterday[1]. With India being the most privatised health system in the world[2], and with health expenditure being the single most significant cause of families falling below the poverty line[3], the combination of moral hazard, medical ethics and a government health policy that mouths platitudes about universal coverage while encouraging a rapacious health system spells disaster for us all.

Moral hazard relates to finance as well – financial bailouts of lending institutions can encourage risky lending in the future if risk-takers believe that they are protected from the burden of losses – the case of Bear Stearns comes to mind. It applies to borrowers as well, as the hue and cry over the effect of the decision to forgive agricultural debt on the long term credit climate will testify to. It applies to management – when top management is shielded from the consequences of poor decisions, or when funding for projects is independent of success. It applies to sociology – the way the powerful are especially susceptible to disrespecting the law of the land, the way men behave around women in skimpy clothes on the assumption that they are ‘asking for it’, and the way private bus drivers drive when they have paid an ‘all-purpose’ hafta to the traffic police.

Are adverse selection and moral hazard applicable to the development sector as well?

By working two jobs, one with an Indian donor agency and one with a British one, I see adverse selection at its starkest every day. Care Today can fund anybody it chooses to, and we have thus worked with and funded a variety of organisations including UNDP, Actionaid (whoever heard of an Indian funding agency funding the UN or a foreign funding agency – but we have) and the Indian Army. The Paul Hamlyn Foundation, like all foreign donors in India, can fund only FCRA-registered NGOs – a much smaller universe of the good, the bad and the ugly with the one commonality that development requirements have to balance with organisational perpetuity concerns.

A recent case of moral hazard that I saw was in the Paul Hamlyn Foundation’s work with an NGO. PHF normally supports for one year and then, if suitable, another three years. In this case, we at PHF decided to approve three years support, enough for the NGO to do all that it saw as required, in one go. This would enable growth with stability, I had argued to my bosses. Monitoring systems revealed that money for salaries and infrastructure was being absorbed effectively, but none of the activities that the NGO had so effectively communicated as critical for meeting its objectives were being done. Enquiries revealed that the NGO had been utilising its time and resources in undertaking sub-contracting assignments for one-time short-term donors. The NGO, seeing assured and stable support, had downgraded the priority of the PHF-supported activities and adopted an ‘incremental’ approach to further activities and funding. Needless to add, I am rethinking the basics of the relationship.
[1] Many news channels and newspapers covered this. For the sake of convenience, I will cite just one – ‘Woman who gave birth by roadside dies, 8 doctors suspended’ in the Indian Express of 25th April 2008.
[2] According to WHO Statistical Information System: Core Health Indicators, India’s health care system is 83% privately funded in 2004.
[3] According to the WHO, 24 percent of the families of all Indians hospitalized fall below the poverty line as a direct result of hospitalization. This is from Devadasan, Van Damme, Ransom and Criel, “Community Health Insurance in India: An Overview”, Economic and Political Weekly of 10-16 July 2004.

Home Work

2008-03-20T20:31:00.001-07:00

HOMEWORK
By Ajit Chaudhuri

‘Rows and flows of angel hair, and ice cream castles in the air
And feathered canyons everywhere, I’ve looked at clouds that way.
But now they only block the sun, they rain and snow on everyone
So many things I would have done, but clouds got in my way’[1]

The issue of work-life balance has finally hit the politically correct workplace. Options such as flexi-hours, working from home, and part-time work can now be taken without saying good-bye to your job – or so the bosses say. Of these, looking to work flexi-hours can be realistically got away with only if you have troublesome children, dying relatives, or clients in a different time zone. And part-time work brings about the vexing combination of having to meet full-time expectations on part-time wages. It is working from home that has serious attractions – a laptop, phone and Internet connection makes one productive wherever and obviates the need to commute, put up with the shitty coffee and have your finger on the abort key and your mind over the shoulder every time you play a game on the computer. But – will this actually work for you, and are there some pitfalls that you should be aware of in this seemingly win-win option? Is there something in those rats’ maze-like workspaces that makes work productive and fun? Are there downsides to peace and quiet and a TV and fridge within easy reach?

I have had an office in a large organisation as well as the right to work from home for the past nine years. Before that, I had stints working in an office and stints working from home. And before that, I worked completely from office. Here are the views of an expert!

When I first began to work from home, it was like a dream come true. No dressing up in the morning, no commute, no disturbances – I got a lot of work done in that initial month. The fringe benefits were great as well. I was able to watch Tendulkar bat on my large colour TV instead of having to sneak off to the small B&W at the nearby shop. My lunch was hot, and my tea as I liked it. And the guilt-free afternoon siesta … ah!

But then, I started getting on my wife’s nerves – I am still to figure out whether it was my mere presence or the frequent raids on the refrigerator. And the cleaning lady, ironing maid and dog walker began to think that I was unemployed, and even began returning change. Relatives began to drop in whenever they felt like, assuming that I was free and available to chat and do odd jobs. And I was very, very happy to go back to working from office, commute, shoes and tie, fresh shave and all. I now follow a middle of the road path, working from office for some days of the week and from home for some. And (while I do occasionally wake up in the morning and decide to slob out for the day) working from home does mean getting into work clothes, sitting down at a desk at a fixed time, and putting in the same hours with the same intensity.

For those planning a similar option, here is some advice.

First, go for this only if you are self-disciplined. Many of us need the structure that an office provides to be productive, and the business of getting up, ready and out of the house is necessary for its own sake. Those with a proclivity to slob out should beware! If the TV programme starts gaining in importance, or if you find yourself deciding to put things off until you are more ‘in the mood’ later in the day, get back to office.

Second, go for this only if you have a specifically demarcated workspace within your home and you are able to insulate yourself from incessant demands from the family on your time. The spouse will be unlikely to appreciate the fact that your presence will not reduce his/her burdens on shopping, cooking and housekeeping, and children tend to think that if an adult is at home, the sole purpose is to entertain them and do their homework. If you can’t handle it (and you will be shocked at the stuff they teach in schools these days – I for one am way out of my depth with my 11-year-old’s syllabus), you are safer in office. No spouse and no children? Not to worry, relatives, courier boys and salesmen will do an effective job if you are willing to be disturbed.

Third, keep a space in office functional if you have the option. A surprising amount of work gets done because of being around. The boss and colleagues can walk by for a chat, you can feel the pressures, you can figure out the politics, you can see the breakdowns and burn outs, and you can take timely action. Retaining a space is sometimes difficult – an office’s relationship with an under-utilised workspace is somewhat akin to nature’s with vacuum. If you don’t visibly occupy it, beware of covetous colleagues, it will be taken over – more so if it is the corner one with windows overlooking the park.

Fourth, watch out for danger signals. If you are losing your ability to focus on matters that are important in the long term because of the demands of a more immediate nature, get back to office before it all blows up on you. If you are graduating from watching only the football on TV during the day to the football and the afternoon weepies to these and the talk shows to anything at all, you are in trouble. And if you are being by-passed in decision-making chains, you are unlikely to get that next promotion smoothly.

Fifth, don’t see this as a long (or even maybe medium) term option unless you are willing to leave the fast track. You will notice that the boss does not work from home, except on weekends. While you may effectively meet your targets and do the stuff written into your job profile, doing the other things that are necessary to rise will be difficult – mentoring younger colleagues, supporting mentors in their battles, or dealing with that scum-sucking underling who has an eye on your job. And the chances of you being around to take charge when the fertiliser hits the fan are limited. And getting back on to the fast track, or on to any track at all, is surprisingly difficult once you are off.

And so, ladies and gentlemen, I would advise against jumping at working from home if the option were available. It works for some, but it is not everybody’s cup of tea. If it’s not yours, recognise it, resist the temptation, and stick to office.
[1] This is the beginning of that old Joni Mitchell number ‘Both Sides Now’.

TRENDS

2008-02-29T04:50:00.000-08:00

TRENDS
A 2-Pager by Ajit Chaudhuri – February 2008

‘Time ….. I’ve been passing time, watching trains go by
All of my life ….. Lying on the sand, watching seabirds fly’[1]

Introduction: What does the future hold for us? What’s hot, what’s not, what’s going to be in, what out, what’s moving up, what down – we are subject to a kaleidoscope of punditry on trends. As a laid back observer to life, I have my own views. The following paper contains my take on five trends that will shape life in the medium-term future.

Changing agriculture: There has been much lamenting on the travails of Indian agriculture, especially with farmer suicides and a growth rate that has, for the first time since the 1960s, fallen below the rate of increase of population. But it looks like one of the (many) causes of this situation – that food is cheap – is going to change. Worldwide, food prices in grain markets fell by three-quarters in real terms between 1974 and 2005, they have jumped 75 percent since despite good harvests, and the indication is that this trend is likely to continue[2].

What does more expensive food really mean in India? It could mean an opportunity to re-vitalise agriculture, wean rich farmers off subsidies, and reduce rural-urban inequalities. It could mean that the economic rationale for converting agricultural land into SEZs and producing for bio-fuels may require rethinking. It will certainly mean an inflationary threat and trouble for urban consumers and landless labourers. There will be pressure upon governments to get the public distribution system working, and temptation to indulge in price controls to wave off a political backlash.

A sociological phenomenon: ‘Where are the nice men?’ is an increasingly common refrain. Unattached women tend to think that all the good men are already taken. And most married women, deep inside, think of their husbands as assholes[3]. And while this does cast aspersions on the male half of humanity, this is not the purpose of this paper. I would instead like to draw your attention to two observations. One, that the number of unattached women in most metros has increased significantly, especially so in the above-35 age group[4], thus possibly rendering the refrain as more to with the laws of supply and demand than with any male disorder. Two, that these women are not unattached for the traditional reasons of being ugly, broke, been dumped or having sacrificed their chances to look after an ageing relative – many combine beauty, intelligence and success.

So how has this state of affairs come about? I see three prime causes. The first is that serious careers require focussed concentration from the initial years onwards, and while men can get away with focussing and maintaining a relationship, women have more difficulty with their balancing acts. The second is that these women have high standards, and the pool of men meeting them is not significant. And the third is that early courtship rituals tend to be demeaning for women with a modicum of intelligence, and these ones chose not to hang around in bars or allow some idiot to be masterful in their youth.

What’s going to happen? As they approach an age that brings on biological barriers and a need for companionship, these ladies are looking around – and dropping their standards while doing so. And if you age the characters a little in that obnoxious Axe-effect advertisement, you depict the real-life situation of unattached forty-plus men. There aren’t nearly enough of them to go around (and as they are having such a ball they are loathe to change their status). There are good times ahead for the otherwise unsuitable – the married, the toy boys, the lotus-eaters and the greedy.

The rise and rise of the extreme left: They had their highs in the sixties and seventies! They were dormant for a long time after that, and restricted to pockets. They are back, and they are different! And they have finally been recognised for the threat that they are, what with the PM identifying naxalism as India’s biggest challenge, with coverage in the mainstream media[5], and with rapidly expanding geographical reach. Who are these people, and why are they sitting in jungles and blowing up police stations? On the first, those of you who have been lamenting about the youth – career-minded, mercenary, self-oriented, desperate to get to the USA, where are the one’s who want to make the world a better place and end poverty – well, this is where some of them are. As to the second, I can cite the usual reasons – economic policies whose basis is that the rich are not rich enough and the poor are too rich, corruption and injustice at levels that make people numb with anger, a political system that is a pyramid of family businesses, and tools of the state whose sole purpose is to enable the few to have a good time. And some of those at the receiving end have not lain down and died or hung around to live off the crumbs.

Where is this going to lead? It is unlikely that the causes that have led to their rise will abate – all indications are the opposite. The state sees them as problems rather than symptoms, and policy veers towards exterminating them rather than addressing the issues creating them. I see them extending beyond their traditional bastions, and into Karnataka and Delhi in the medium term future. Will this die out, like last time? This lot are not from the elite and will be unable to integrate back into the corporate sector, government, and academia when they get bored. We might just have to learn to live with them.

The growing irrelevance of NGOs: I have written about this several times and would prefer to avoid the temptation of regurgitating. Organisations that survive the purge of irrelevance will require combinations of the following virtues. One, they will need to be well governed – in that ownership is separate from management, a second (and third) line of leadership exists, and the tenements of honesty, answerability, transparency, rigour and adherence to systems are internalised. Two, they will need to have a base in the community within which they work. Three, they will need to move beyond the foreign institutional donor and begin to attract financial support from within India and from people who have earned their money. And four, they will need to identify tomorrow’s problems and gear up to work on these rather than those of yesterday. The rest? They can run their parallel tourism industries, they can cut ‘HIV/AIDS’ and paste ‘Climate Change’, they can continue pontificating at seminars in Lutyens Delhi – but – they will die. And the space will be claimed by private sector social responsibility initiatives.

Travel: My generation would remember sending telegrams to make onward journey reservations, spending time in general compartments, and indulging in slimy practices to sleep on a train[6]. Things have changed for travellers, and inshallah our children will never see the inside of a general compartment toilet (let alone have to sleep in one with four other people). Some changes have been well documented; the movement of the railway platform crowd into airport waiting rooms, the increased use of private vehicles for inter-city travel, and the use of the Internet to enhance convenience. Others have escaped attention, such as the segregation of dhabas[7] and the movement of the highway prostitution industry on to bypasses[8].

One key trend I see is that the airline industry will consolidate and the very cheap fares will be a thing of the past. Those indulging in landing up at airports and purchasing tickets on current will not get the great deals that they used to, and will need to start planning their journeys. Those for whom airfares are elastic will return to the railways and will be pleasantly surprised. Another is that we will have many more road accidents – driving habits show no signs of change, the on-road numbers have increased exponentially (this will continue with the Nano), and public transport remains the pits.

[1] I can’t quite remember the 1980s movie with Richard Gere and Debra Winger (“An Officer and a Gentleman”?) that had this as a soundtrack.
[2] “The End of Cheap Food”, The Economist issue of December 8-14, 2007.
[3] Please be honest here, ladies, and if you actually don’t please get back to me – I’ve got to meet the guy and get a few tips.
[4] This may, of course, be because of biases in the direction of my observation.
[5] I have recently seen front page headline coverage in the Indian Express and India Today, as well as read the book ‘Red Sun’ by Sudeep Chakravarthy.
[6] My favourite was to pick up sweets from the station and then get into a compartment with plenty of children and start plying them with the sweets. Small children would have a berth of their own, but would always sleep with their Mothers. I was usually very nicely told to use the free berth.
[7] The one’s catering to middle class travellers looking for an experience, with chairs, toilets, potato chips and refrigerators are quite different to the one’s at which truck drivers eat, sleep and wash their underwear.
[8] The deal is that you can pick up the lady at one end of the bypass and drop her at the other. And if you need more time, you will notice many motels on the bypass that charge on an hourly basis. But – if you choose to exercise the latter option – you might find that you are a star in a Pallika Bazaar CD.

The Heat Is On!

2007-11-26T00:13:00.000-08:00

THE HEAT IS ON!
A 2-Pager by Ajit Chaudhuri

Introduction: In development, as in life and love, some lessons are learnt only the hard way. One that I particularly remember – anything given free has no value to the recipient – was learnt while running a medical services programme in western Rajasthan. Another – that as long as something affects only the poor, nothing will be done about it – the moment it starts affecting the middle classes and the rich, even in a minor way, and you can be sure that it will move up priority lists, resources will be made available, and action will be taken. And there will subsequently be little need for the Ajit Chaudhuris of the world, the small fry of development, to worry their little heads and/or waste their meagre intellectual, financial and emotional resources in looking at meaningful interventions. Look at action on air pollution as against on basic education services as an example.

And therefore, ladies and gentlemen, I find myself in an interesting conundrum vis-à-vis climate change. I was, until recently, unworried! Sure, the world is warming up – apparently saying that it isn’t is today’s equivalent of holocaust denial. So what? The developed world is going to be affected. And even if this is in a miniscule proportion to the rest of us, fact of life number two has already begun applying. Hit films have been made, Nobel Prizes (for peace??) have been won, and we have to lace our project proposals with a new buzzword to get approvals from the international donor community. And then, a lecture by Sir Nick Stern[1] gave me something to think about.

A Stern Warning: Stern first explained the phenomenon by likening the earth’s atmosphere to a giant warehouse in which there were inflows and outflows of greenhouse gases, and a resultant stock of carbon in the atmosphere. An increase in this stock has led to the phenomenon of global warming – a gradual heating of the atmosphere and climate change. This in turn is changing (and will change) lives through rising temperatures and water – more drought and floods in more extreme forms, changed rain patterns, etc.

Stern says that global warming is a different phenomenon because it is –
· Global – so it cannot be addressed by local action, unlike, say, pollution in Delhi (addressable by converting public transport to CNG through legislation) or vehicle congestion in London (addressable by a congestion charge).
· Long term and irreversible – the last significant global warming phenomenon was experienced when the ice age changed over to today’s climate.
· Uncertain – nobody quite understands the phenomenon, how it works and what the precise consequences will be. The past ten years have seen events on a scale that have never happened before. We know that average temperatures have increased by 0.8 centigrade over the past 50 years, and the pace is increasing. At a 3-centigrade increase, the earth will lose half its species. At a 5-centigrade increase, human settlements will have to move to higher latitudes[2]. If no action is taken – the ‘business as usual’ approach – temperatures will be 5-centigrade higher by the next century.
· The scale is gigantic – if we take strong action, the world could stabilise at a 3-centigrade increase in temperature at a cost of one percent of global GDP. This is considerably less than the cost of inaction, estimated at five percent of global GDP.

Though India is not the source of the problem (and is the only major world economy that has a lower per capita carbon emission average than that necessary to stabilise the temperature at a 3-centigrade increase), it is extremely vulnerable to global warming. We are seeing, and are likely to see –
· Extreme rainfall events
· Retreat of glaciers and snow
· Increased droughts and floods, in more severe forms
· Water scarcity in the long run because of reduced inflows into our river systems
· The effect on the monsoon is not yet understood

Some issues: Stern weakens when he talks about what needs to be done – he speaks of a vague ‘new global deal’ with a key role for India within it. He speaks of the need for developed nations to double aid flows (the standard western response to any problem) to 0.7 percent of their respective GDPs (hey, wasn’t this supposed to be for things unconnected with climate change, like basic health and basic education?) to developing countries (have you heard of the 85 percent corruption out here, Sir Nick? And what happens to poor countries that are not carbon criminals?). He says that carbon emissions do not have a connection with economic growth, which belies all available evidence[3].

So what? We all know that averages mean nothing in this country, and a later Greenpeace report pointed out that Indian families earning over Rs. 30,000 per month are among the most prolific sources of carbon emissions in the world. As long as we have sufficient numbers of poor people who are unable to contribute to global warming, we will get pats on our backs as a nation. And as long as global warming affects only those on the fringes, who contribute least to it, and leaves the fat cats in Delhi and state capitals alone, there will be little incentive for the bureaucrat-politician-contractor nexus (or what is euphemistically called the government – the key player for India in Stern’s global new deal) to do anything other than absorb the increased aid flows and swell bank accounts.

In the short run, we in the development sector will have to adjust to this latest fashion as we have adjusted to previous ones – by cutting ‘HIV/AIDS’ from earlier project proposals and pasting ‘global warming’. The slightly more sincere can indulge in some ‘majboori ka naam Mahatma Gandhi[4]’ and organise carbon credits for tribal farmers we work with, and subsequently convert them into money in the various new carbon exchange mechanisms that have come up and are gradually increasing in sophistication.

But – in the long run – we will as a nation need to choose between the currently in vogue high consumption high growth economic model and one that is based upon more temperance. How many poor people will die before hard choices are made? Your guess is as good as mine! As a sector, if we work towards these choices being made earlier rather than later, we may be able to save more than a few lives.
[1] Sir Nick Stern is the author of the Stern Report that guided the British Government’s policy towards climate change. He is now at the London School of Economics, and spoke to LSE alumni at the British Council during a visit to Delhi last month.
[2] The change from the ice age to today’s climate was a 5-centigrade change. Before this, all human settlements were in the tropics.
[3] The possible reason for Stern saying this would be political. The consequence of saying that economic development is a cause of global warming would be the opening of cans of worms along the us vs. them lines of ‘you cause it and we bear the consequences’, ‘you screwed the earth in enabling your economic development, now why can’t we’ and questioning one of the most basic tenements of the World Bank/IMF cabal that economic growth is the answer to all evils.
[4] This roughly translates to making a virtue out of necessity.

The Billionaires

2007-10-10T01:22:00.000-07:00

THE BILLIONAIRES
A 2-Pager by Ajit Chaudhuri
October 2007

I had promised myself that, when I made my first billion, I would buy myself a football team – Olympique Marseille was my target at the time (its owner was broke and incarcerated), but any top class side would have done. My dreams of kicking about with Maradona, Platini, et al (I would include their current equivalents if I thought they had any) have yet to fructify, but I notice that others have been treading in my imagined trails twenty or so years later. Yes, according to Forbes.com[1], there are 946 dollar billionaires in the world (178 qualified in the past year[2]) and they are buying things from submarines to football teams. They are also putting money into development philanthropy.

What’s new about this? The Rockefellers and Carnegies had done this long ago. My own employer, the late Paul Hamlyn, put GBP 400m of his personal wealth into philanthropy. In India, the Tata Trusts have been major players in development funding. Is it just the amounts – the $30b plus that the Gates put into the Gates Foundation, Warren Buffet’s $37b addition to it in 2006, and the subsequent scramble among billionaires to give and be seen to give significantly – or is there something more to this phenomenon? I was fortunate to attend a talk by Mathew Bishop, Editor of The Economist, at the Association of Charitable Foundations meeting in London last month on the subject “What’s New About New Philanthropy?” that touched upon these matters.

To make sense of new philanthropy, according to him, it would be useful to understand new philanthropists. Many of today’s billionaires are self-made –highly successful, arrogant, and with a scale of ambition for their philanthropy that matches that of their businesses. They expect their philanthropy to have a global impact, and they transfer their attitudes on business to philanthropy. Interestingly, they do not think that they have much money! They therefore see themselves as innovators and look to use their efforts to leverage resources from governments and MNCs. They are uninterested in approaches that do not have the potential to scale up significantly. They are interested in for-profit ways of addressing social problems because of the possibility of attracting serious resources (brains and money) to the problems. New philanthropists see the need to build quality organisations around the problems they look to address, and they understand the requirement of a long-term perspective. And even though many have made their money by acquisitions, they prefer to build their respective Foundations from scratch rather than to acquire existing organisations. They see old philanthropy as being all about making grants rather than addressing problems, and they are determined not to go down that road.

Why is this of any interest whatsoever? One – because the effects of new philanthropy within the Indian development sector are becoming visible. I work (via the Paul Hamlyn Foundation) along with other ‘old philanthropy’ types[3] with an NGO in Jaipur to universalise elementary education within the city – dealing with governmental capacity constraints, political issues and red tape at every stage and slowly and steadily moving forward. Along comes the Airtel Foundation, which says it will do what it takes to ensure this – set up as many schools as required, manage (and pay all costs for) them, ensure quality, and all of this into the long term – the government just has to give the land for the schools and manage the likely freaking out of the government teachers’ unions. Wow!!

Two, there is something exciting about this whole approach – to identify a serious problem and then work to address it at a district, state or national level – none of these islands-of-excellence-in-ten-villages stuff any more. To bring in the best brains, the latest technology, serious money and a long-term perspective to addressing problems. To develop models that work, and scale up across regions, and excite governments, and attract more resources. This is refreshing when compared with the rather cynical attitudes that currently prevail on most matters relating to the social development sector.

Three, where does this leave the good old NGO? Where does this leave the traditional grant-making organisation? Where does this leave old philanthropy? And, last but not least, where does this leave me? Are we part of the solution in this paradigm, or part of the problem? Are we ants to be crushed, or deadwood to be ignored, or irritants to be brushed aside, or sheep to be co-opted? I am not too sure as yet.

Are there grounds for cynicism? I have read of the times, in the 1950s, when humankind had just gone into space, when cures for TB and malaria had been discovered, and when we were going to eradicate disease, misery and poverty. TB and malaria continue to be major killers fifty years later, and the less said about misery and poverty the better. What will happen when the billionaires get bored, or when they discover that some problems defy solution, or when they die and their successors show signs typical of second-generation wealth? And, let us not forget, some of these billionaires have reasons for getting into philanthropy that are not exactly philanthropic. There are significant tax breaks involved. And I remember the aftermath of the Kutch earthquake, when the Ambanis grandly announced to the world that they would be rebuilding Anjar town. They then made a quiet request to the Gujarat government for permission to build a private port in the vicinity as well. No port, no philanthropy! Neither happened!

To conclude! There is certainly something exciting happening in the Indian development sector courtesy the billionaires, and it is happening away from the usual terrain of NGOs, panchayats, donors and government. I for one see huge potential here, and want to engage and take advantage of the resources – human, technical and financial – that are available. How much will I have to change, in skills and attitude, to be able to do so? I am not too sure. And will I be able to? Maybe not! But the younger generations in the sector will. At the least, new philanthropy will provide a space for and the ability to absorb the brilliant and committed. For this in itself, I welcome the billionaires!
[1] This is in a special report by Luisa Kroll and Alison Fass on 3rd August 2007.
[2] Some among us will be proud to note that India is the land of the fastest rising number of billionaires, 36 in total of whom 14 joined in the past year, and the most in Asia (Japan comes next with 24).
[3] These include the Aga Khan Foundation, the American India Foundation and the Bunyan Tree Foundation. I am not sure whether AIF would qualify as ‘old philanthropy’, and as they are on this reading list I hope that they will enlighten me on this matter.

LONG LIVE THE KING!

2007-08-09T05:09:00.000-07:00

LONG LIVE THE KING!

A 2-Pager by Ajit Chaudhuri: August 2007

Regime changes are rarely pleasant – ask the Iraqis and Afghans. This applies in organisations as well – a change of Big Boss has consequences for those down the line. Especially so for those directly reporting to her/him, but please do not feel that you will be spared the reverberations by virtue of being lower down the organisational food chain. Your career will now depend upon the views of a person you may not know, and your history of success and failures may not count for much. Stories of what happens to executive teams during CEO transitions are not comforting – firings, cancelled strategies, organisational reshuffles, and abrupt and unwelcome career changes for senior managers.

So if you are not working for an African dictatorship or a local NGO, chances are that you will have to survive a regime change or two in the course of your career. At these times, you will be faced with three questions – how worried should I be, what will happen to me if I get pushed out, and how do I maximise my chances of prospering under the new Big Boss. A recent article in the HBR entitled “Surviving Your New CEO” [1] has some answers pertaining to managers in large firms in the US. Despite difficulties in translating the implications to the Indian scenario, there are some interesting pointers to those of us who are facing, will face, or have faced a regime change. Please read on!

How worried should you be? Very worried! A typical firm has a 16 percent turnover of managers every year, of which 8.5 percent is voluntary (retirement, or health/family issues) and 7.5 percent is involuntary (including firings and unplanned early retirements). When a new CEO is in place and has been promoted internally, involuntary turnover increases to 12.5 percent and combined turnover is about 1 in 5. When a new CEO has been brought in from outside, involuntary turnover increases to 24 percent in mid and 31 percent in poor performing firms. To put it bluntly, if you are a senior manager in a sub-par performing firm, you have a 40 percent chance of leaving if the CEO changes and a new one has been brought from outside.

What will happen if you get pushed out? Some people think that losing their job would be the best thing that could happen to them – they could get out of the rat race and do all those things they’ve been dying to do; spend more time with the kids, explore an alternative career, shift to the rural wilderness, write a book, whatever. Such transformations are rarely successful. Competent people also assume that, if they are asked to leave, they will find a better or at least equal job elsewhere – and they are relaxed about their fate under their new Big Boss. Beware! The data does not support this optimistic outlook. Only 4 percent of managers leaving due to a regime change get a better job, and another 28 percent experience lateral movement. Only 3 percent accept significantly worse jobs in similar-sized firms. 22 percent leave to join a much smaller firm or start a small business of their own, and 43 percent disappear from the source database altogether (a euphemism, I suspect, for ending their careers). Given these outcomes, sweetening up the new Big Boss is an advisable strategy.

How to prosper under a new CEO? New CEOs have certain characteristics. They are under tremendous pressure, as their own survival on the job is heavily dependent upon the firm’s performance in their first year. They therefore tend to make people decisions quickly, even when they have publicly vowed to take their time. They do not seek inputs from their predecessors, and place little weight on the inputs that they do receive – so do not expect your good relationship with the ex-Big Boss and the professional respect s/he accorded you to continue on momentum. They tend to rely on their instincts, and early impressions count significantly. And finally, they tend not to have restrictions from their Boards on changing management teams. Assuming no force majeure that makes your exit inevitable (you are a CFO and the new CEO brings his/her own CFO, for example), a good first impression is critical to your chances of survival and success.

The authors have interviewed successful CEOs and asked them to look back at the earliest days of their new jobs – what did executives do to turn negative impressions into positive ones? Did otherwise smart people do, or fail to do, something that brought about their downfall? Here is a summary of their recommendations.
1. Show your goodwill
a. It may be tempting to adopt a wait and see policy rather than taking the initiative to talk about your role and responsibilities with the new CEO, but many executives doomed themselves by failing to demonstrate eagerness and willingness to be part of the new team early.
b. It is dangerous to assume that your new CEO already understands that you want to cooperate. Those who oppose the new agenda do not announce their opposition, and new leaders do not equate silence with agreement.
c. If you plan to stay on, let the new CEO know proactively but without being sycophantic, and follow up with actions that demonstrate your willingness.
2. Leave your baggage at the door
a. Do not talk about salary issues, even if you were grossly mistreated by the previous regime. The new CEO does not want to deal with these as yet.
b. Do not talk about your own long term plans with the firm. The new CEO has not yet decided whether you still have a career here.
c. Do not raise issues of difficulties you are having with your colleagues.
d. Get your spouse to be diplomatic – anything s/he says will filter back and be construed as a reflection of your real views.
3. Study the new CEO’s working style – how approachable and participatory s/he is in functioning, how comfortable s/he is with dissent, how rigid s/he is on ethical or behavioural matters, etc. Opinions are divided on whether you should contact your counterparts in the new CEO’s former division or firm to enquire into these matters.
4. Understand the new CEO’s agenda. S/he is under tremendous pressure to perform. 75 percent of new CEOs whose stock performance rose in their first year of tenure were still in place two years later, and 83 percent whose stock fell were gone by that time. S/he will be looking for constructive suggestions and realistic and honest game plans. Offer objective options and explanations, and do not come across as self-serving.
5. Be on your ‘A’ game
a. Show positive results, and soon! You cannot afford to let things slip into paralysis because of confusion caused by the regime change. It is critical to demonstrate that you are active and competent.
b. Show political awareness during the ‘honeymoon weeks’. Do not assume that you are invaluable – be available to the new Big Boss, and cancel that long-planned vacation if it coincides with his/her joining. S/he will not have the time to coach you or even to warn you that you are going wrong.

To conclude: Regime changes are stressful for everyone. The danger of being pushed out is real, and the difficulty of landing on your feet is severe. However, opportunities to invigorate your career are real too; others find fulfilment away from the professional world. You need to make your own decision as to whether the new Big Boss’s style, vision and business practices are ones you want to live with. Then commit or get out! Otherwise, everyone’s life will be hell – and the result will be the same anyway.

Acronyms:
CEO Chief Executive Officer
HBR Harvard Business Review
NGO Non-Governmental Organisation
[1] “Surviving Your New CEO”, Kevin and Edward Coyne, HBR of May 2007.

Are Things Getting Better?

2007-07-18T01:20:00.000-07:00

ARE THINGS GETTING BETTER?
by
Ajit Chaudhuri

Written in 1996 in response to a question posed to me by my Father
Published in Lokayan Journal (Bulletin 13, 1997)

I am constantly asked the question - are things in India getting better? The temptation would be to give a resounding yes in reply. After all, there are more cars on the roads, owned by a wider variety of people and looking increasingly (but not yet quite) what our role models in the west are driving. The shops have their shelves full, the variety available is far wider than, say, ten years back, and people are buying. Most homes have TVs, and the choice of what to watch is huge. The various indicators of progress such as GDP and Per Capita Income, when compared over time (though not with the figures for other countries) also point towards change for the better. Why, then, does one not feel completely comfortable with the answer.

To Indians of my generation and background, there are four pillars that have formed the India that we have lived and been brought up in. They are democracy, socialism, secularism and non-alignment *. It would be interesting to see how these have changed in the recent past, and how this change has affected the well-being of the vast majority of people in India.

Non alignment is dead. The less said about it the better. Suffice to say that it did not bother the ordinary person then, and the lack of it does not bother him/her now. Secularism is in the process of dying. People are dividing themselves into caste and communal lines, with a gradual erosion of the middle ground which is so necessary for one side to be able to talk to the other. The resultant social turmoil is taking place, along with a hardening of views and respectabilization (for want of a better word) of the likes of Thakeray and Singhal. This says a lot for the manner in which things have changed.

Democracy - it is without doubt still vibrant. Most people, of all castes, creeds and educational backgrounds, believe in it. Major changes, however, have taken place in India’s democratic process, most noticeable being the need for money and muscle to fight elections. And while money is available from several places, there is only one source for muscle - criminals. Criminalization of politics has led to a deterioration in the quality of politicians, who today have questionable antecedents and motives. It can safely be said that a majority of those sitting in the country’s parliament and legislative assemblies should actually be sitting in the country’s jails. And these are the people to whom have been entrusted the right to represent the people and decide the course of India’s future.

Socialism - this has been demolished over the course of the recent past in a systematic manner under the auspices of the New Economic Policy and the Structural Adjustment Programme. The NEP and the SAP were formulated by economists in the government and IMF/World Bank at a time when India was going through a budgetary crisis, its aims were to boost industrial production and exports, control trade deficits and revitalize the economy. The measures adopted were trade liberalization, devaluation, privatization and cutbacks in government expenditure.

A word about IMF advocated structural adjustment programmes in general - they are known not to succeed because the underlying philosophy behind them is that the rich are not rich enough and the poor are too rich and because the austerity measures are too harsh for too long to too many. In India the cutbacks have taken place in health and education and have come in tandem with privatization. The constitution still maintains that it is the government’s responsibility to provide basic health and education services to citizens, and the government still mouths this, but the fact is that while Apollo hospitals are coming up with top quality facilities for those who can pay, the majority of us have to go to understaffed, ill equipped Primary Health Centers where the quality of care, if available at all, is pathetic and rapidly deteriorating.

This has two inherent dangers. Firstly, people will naturally enquire as to why two percent of the country’s population should have these facilities while they go without (and this is already under way), and once this achieves a critical mass it is likely to boomerang into a movement. This may take a political form, leading to a change towards more equitable distribution of the resources and facilities available in the country through law and policy making institutions in India. On the other hand, given the poor quality of politicians and their inability to represent people, it is likely that such a movement will form outside of the political system leading to large scale social turmoil, increased crime, or terrorism. Some parts of the country have preceded others along these lines and the results are there for all to see.

The second danger is as serious - withdrawal of government responsibilities in an area such as health and privatization of the health care system would lead to a concentration on curative facilities and less attention to prevention, such as public health, immunization, etc. TB, the single largest killer in India and one which fifty percent of Indians are carriers to, costs approximately Rs. 6,000/- to cure in medicine alone. Can a country where forty percent of the population earn at levels below the minimum needed for survival afford a private health care system? And can a private health care system deal with malaria or TB in epidemic proportions? If the trend of a deteriorating government health system continues, we are all (and I mean all) likely to see a resurgence of such diseases in the country.

The accent on privatization has changed social systems within the country. While earlier there were strong community norms governing most activities, this has gradually broken down in favour of individualism. This has its good points - people are able to rise beyond the restrictions of caste, creed and community. The shit cleaner’s son can become a collector (though not yet vice-versa). It also has its negative ones - it is the powerful, the rich and the educated who are able to grab the benefits on offer, with nothing for those left out. An example at the family level is the breaking down of the joint family system. This leaves no mechanism for the care of the aged, widows, disabled and orphans. The conversion of common lands in villages into private property is another case in point - the poor are much more dependant upon common lands for their household fodder, fuel and water requirements, and these lands are getting less and less because of land grabs by the powerful (or the giving of these lands to institutions/industry by the government). Strong community norms acted as a restraint upon crimes and a judicial mechanism in case of disputes. Reduction of these norms has led to the need for people to turn to police and courts, both of which (as they are also ‘privatized’) are beyond the reach of the poor and the weak.

Have incomes really risen under NEP and SAP? Do people have better purchasing power than they had? Undoubtedly some people have gained. But what about others? What about small and marginal farmers, who are not able to derive the benefits of the country’s massive investments in irrigation and subsidized power and fertilizers, and are gradually selling their lands to large farmers, thereby becoming wage labourers without any assets of their own. What about traditional artisans and craftsmen, weavers and entertainers, whose markets have been eroded and who do not have the skills to change occupations. What about tribals, whose forest habitat, upon which they have traditionally been dependant for survival, is being destroyed in the name of development. What about migrant cattle herders, for whom common grazing pastures are being encroached upon by large farmers. What about unskilled labourers, who have migrated into urban areas and stay in shanty towns without basic sanitation, living on the wrong side of the laws of supply and demand. Have they gained in the recent past? Absolutely not. And are they some small minority who can be ignored in the name of general progress? No, they are only over eighty percent of India’s population.

Increased levels of awareness (different from education) undoubtedly exist, thanks to the spread of media. Aspirations have changed. But the means to realize these aspirations are still closed to those without education or capital, except in the areas of sports, films and crime. And entry level barriers are high in the former two.

To conclude! Change is a fact of life. Some gain more, some gain less, and some do not gain at all. It is beyond the purview of this paper to suggest remedies for the problems cited above. But it is necessary for some emphasis on the part of the government towards enabling people to withstand change, or to use change to their advantage. And this is not served by it ducking its responsibilities on the fronts of health and education. Or encouraging differentials in society through policies decided behind closed doors by people whose credentials are debatable.
* An article by Prof. T.K Ray in the India Today of May 15, 1996

A Neo Perspective

2007-06-29T20:00:00.000-07:00

A NEO PERSPECTIVE

“A little knowledge is a dangerous thing, drink deep, or taste not the Pierian spring.”[1]

Economics, let’s face it, has a soporific effect on most of us – recent attempts by the likes of Thomas Friedman[2], Paul Krugman[3] and Steven Levitt[4] to sex up the subject notwithstanding. It is, however, difficult to avoid – we all deal with inflation, we face globalisation, and when revenues do not match expenditure we are in deep s***. It is equally difficult to get information that makes sense on economic issues – does, for example, growth matter more and lead to a trickle-down a la CII, or are the comrades right in demanding a focus on equity – and this results in debates that are high on rhetoric and low on substance, and viewpoints that invariably become a dominion of scoundrels.

Strong? Here are some scattered examples of this from my personal experience in the development sector.

A colleague of mine went on a tour of Europe about seven years ago with a group of Indian farmers – they were brought by national farmers’ associations of European countries to protest and demonstrate at some EU summit. I enquired further, and it was obvious that the policies they were brought to protest against were actually in the interests of Indian farmers, and that these guys were just pawns in a retrograde agenda.

A meeting on tsunami relief in Sri Lanka in 2005 degenerated into a harangue against neo-liberalism. What was neo-liberalism? I did not know, so I asked the others. Nobody in the meeting could tell me, but they did know that it was an official villain. What did they think of its direct opposite, neo-conservatism? The invariable answer – ‘Neo-what?’

Back in my days in Rajasthan in the early 1990s, many of my colleagues did not drink Coke or Pepsi. Why? They did not want to contribute to the profits of American companies. And they were sincere about this – it wasn’t a health campaign in disguise. The same colleagues were using Windows on their computers and had no objection to American aid contributing to the financial health of their respective institutions.

It was therefore illuminating to read an article on economic growth by Shankar Acharya[5] (SA) that, among other things, explained those much-reviled terms neo-liberalism and the Washington Consensus to the layman. SA begins with a short history of economic growth, and says that it is a recent phenomenon. Global GDP per capita did not change much between 1000 and 1800 AD, and increased by about 200 and 900 percent in the 19th and 20th centuries respectively. In 1820, income inequality was within countries – there was little difference in average incomes between countries. By 1950, there was massive disparity in average incomes across countries.

Growth per capita in advanced countries was steady (with exceptions during the world wars and a few busts and booms), and gains in living standards came from prolonged and sustained growth and not from occasional bursts of rapid growth. The growth experience of developing countries, however, has been varied, with the sustained growth over decades required to raise living standards being rare.

In the 1950s, development thinking favoured government-led import substituting industrialisation. It had its effects – in India, the Hindu growth rate of 3.5[6] percent per annum between 1950 and 1980 was much more than the 0.8 percent annual growth of the last 50 years of British rule. But, over time, problems arising from this approach mounted. These included –
· South Asian growth was plagued by foreign exchange scarcity.
· In Latin America, growth halted with a series of debt crises in the 1980s.
· East Asia, with outward looking foreign trade policies, enjoyed ‘miracle growth’.
· There were increasing incidences of government failure.

The resultant disillusionment led to the evolution of the Washington Consensus, which was driven by neo-liberals with the backing of the World Bank and the International Monetary Fund. Its tenements were stabilisation, deregulation, liberalisation and privatisation, and it drove ten policies down the throats of client nations. These were –
1. Fiscal discipline
2. Reordering public investment towards economic, health and education infrastructure
3. Tax reform
4. Financial liberalisation
5. Competitive exchange rates
6. Trade liberalisation
7. Liberalisation of foreign direct investment
8. Privatisation
9. Deregulation
10. Property rights

Cracks in the consensus appeared when it was obvious that countries that took the reforms in full had modest growth and those that did not, such as China and India, had high growth. A newer view accepts that the uniform prescription along ten fronts for everybody does not work. Property rights, rule of law, market-oriented incentives, sound money and sustainable public finances are desirable factors everywhere in driving growth, and the others (such as, for example, privatisation and liberalisation of trade and FDI) need to be adjusted for the specific circumstances of the country.

The article goes into other interesting matters, such as the relationship between growth, poverty, employment and equity and the importance of economic policies to spur and sustain economic growth. SA makes two important points –
· Rapid and sustained growth is the most effective way of reducing poverty – that, on average, growth of income among the poor is very similar to growth of mean income.
· There is substantial variation around this average. Economic growth can be more or less pro-poor, and the policy environment is a key determinant to this.

I am not going to dwell on these matters, and would like to return to the issue of neo-liberalism. As mentioned earlier, it is considered an official villain within NGO circles. Why exactly this is so is not clear to me – the various analyses that I have been subjected to appear to have been developed in some donor agency’s boardroom, possibly with Africa and Latin America in mind. Theories with a global perspective, as we all know (and, for us in foreign donor agencies, as we constantly and invariably unsuccessfully try to communicate to our masters) do not apply very well to the Indian situation. And many of us who profess a deep antipathy to neo-liberalism can be seen in actuality to be proponents of its principles, as the popularity of user-fees for NGO-provided development services (even though, in most cases, some donor is meeting the costs in full) and other widely practised neo-liberal tenements indicate. There is clearly a need for clarity on this matter – is neo-liberalism a good thing, a bad one, a necessary evil, what?

Why so? For one, because crumbling public services are a fact of life! Creating demand for services and pressure upon the state to undertake its constitutional responsibility and provide them a la the ‘rights mode’ approach has not resulted in improvement[7] – the Indian state is good at resisting pressure to perform. It is unlikely, in my lifetime, that I will see an acceptable quality of service in health and education for the poor, and that the taxes and cesses that we pay will aim to provide this rather than contribute to our politicians’, bureaucrats’ and contractors’ personal wealth. People looking to by-pass the state and set up parallel systems for today’s sick and today’s children have a point.

And yet, by creating parallel outlets for the demand, we contribute to a vicious circle of reduced pressure on public systems, poorer public services and governance, increased donor dependence, and zero options for those unable to pay. It is one thing to have toll taxes every 20 km.s on every road (as does Gujarat, where I write this) and quite another to have the most privatised health system in the world (which India does) when health expenditure is the single largest cause of households slipping below the poverty line.

I do not claim to have answers – I would merely like to see good information and an educated and non-partisan debate on these matters. In my lifetime? I certainly hope so!

Acronyms:
CII Confederation of Indian Industry
EPW Economic and Political Weekly
EU European Union
FDI Foreign Direct Investment
GDP Gross Domestic Product
[1] From “An Essay on Criticism” by Alexander Pope in 1709
[2] Famous for finding the world flat!
[3] Famous for being a one-handed economist – he is not constantly saying ‘on the other hand’.
[4] He achieved the impossible by writing a popular best seller about Economics, the book “Freakonomics”.
[5] “Economic Growth: Some Reflections” by Shankar Acharya in the EPW of 4th November 2006.
[6] Apparently the term’s origin is in the similarity of 3.5 to the symbol for ‘Om’.
[7] Anyone doubting this is welcome to look at DFID’s recent evaluation of its work in India.

INTRODUCTION

2007-06-17T08:05:00.000-07:00

INTRODUCTION - WRITTEN IN MARCH 2004

Dear Friends and Colleagues,

As some of you know, I turned forty last year and am thus facing the usual conundrum of men hitting the middle ages – of wondering how (and whether) to change my life. The simple stuff has already been initiated – of avoiding social evenings in which the food is not great and/or the women not beautiful, of cutting out vegetables from the daily diet, and of upping my football sessions to twice (and maybe thrice, family permitting) a week. But the monumental changes that mark the watershed of one’s life haven’t happened. My wife still looks pretty good to me, and I have no intention of dumping her for some anorexic 22 year old (maybe fifty is a better time to implement this one). I still enjoy my work, so not much point in taking off to some lonely spot to do organic farming. And my reading habits, puerile though they are, will be inhibited by my lack of time, poor concentration and deep disinterest to take a sudden inclination towards Kafka or the classics. And therefore, there is this grave void in my life that requires fulfillment.

Well so what, I can hear you all saying, and how does this concern you?

Well, so I have decided that I will write a monthly paper on some topic of my professional interest and foist it on to all of you to read. And my request to you would be – please do read it. And, if you have something to add, subtract, multiply or divide, please do respond.

In the process, I make the following promises to you. First, that each paper will be no longer than two pages. Second, that it will be ready and circulated on the 15th of every month. Third, that I will stay away from my usual interests, which I have already been published on, such as herding goats in cold desert regions and football.

Love me, hate me, but please don’t ignore me!

With best wishes,

Ajit Chaudhuri

Return of the Jedi

2007-05-30T09:06:00.000-07:00

THE RETURN OF THE JEDI
A Two-Pager by Ajit Chaudhuri

Introduction: Some of you know that I had recently spent three months as a Visiting Fellow at the Institute of Rural Management (IRMA) in Anand, Gujarat. IRMA is an institution that I owe big time – for two wonderful football-filled years in the late 1980s, for a piece of paper that says that I am a post-graduate, for some lifelong friends, and for that lovely lady I met there who wakes up next to me every morning – yet I have been back only once since leaving and that was in 1999. And so, when Neelima Khetan (the Director of IRMA until very recently) popped the question, I agreed with an alacrity that must have made her think I was desperate. Luckily for me, she (and IRMA) followed through, my various bosses came around, and there I was with a car full of wife, children, maid, dog and 3 months necessities driving into the familiar campus in beginning November 2007. This paper looks to describe what it was like to return to the alma mater.

Jurassic Park: Early impressions were that not much had changed – the buildings and campus layout were the same except for an ugly monstrosity in front of the office building that belted out ‘Saare Jahaan se Achcha’ in chimes and, come sundown, transformed into a (very) poor man’s aurora borealis. The debates brought out a sense of déjà vu – I hadn’t heard ‘sector versus non-sector’ for 17 plus years, and it was nice to know that there is still a corner of the country where cooperatives are seen in a positive light. But – there were many more female students and ‘B’ block, where I stayed, is now a Ladies residence. And Jagnath is not a hub of activity any more – Dawoodbhai’s shop was burnt down in the 2002 riots, and there is now a shorter route into Anand town. And the students’ mess did not serve Kentucky Fried Chicken on Sunday nights.

The Students: As a student, I did not realise how central we were to IRMA. I came in this time when both batches were off campus – the senior batch was at their management-training segment and would return only in January, and the junior batch was at fieldwork and would return in December. Faculty and staff alike roamed around with long faces and desultory attitudes for my whole first month, brightening up only one Sunday late in November and saying ‘They’re back!!’ The whole place changed! It was almost like the relationship between the garden and the children in the old folk tale ‘The Selfish Giant’.

I have heard many people from the NGO sector, including IRMAns of my generation, bleating on about young people not being sufficiently dedicated, motivated and committed, blah, blah, blah, to make a career in development. My time spent with the students here was an eye-opener. They are completely different from our times, and they face different pressures. Most of them are older, and with work experience[1], and they don’t ask their parents to shell out the now considerable fees and living expenses – and so most of them have a never-never on their heads as soon as they walk out of the institute. The salary differentials between the development sector and the other places from where they get job offers is now huge, unlike the late 1980s when the starting differentials were minimal[2]. And the non-financial attractions of the development sector are not as apparent to current students as they were to us – they see NGOs as being unaccountable fiefdoms that do very little and spend a lot of aid money doing it, and their experiences during their fieldwork segment at IRMA do not contradict this viewpoint. Are they lacking in social values? No – the senior batch ran a slum development programme on their own time and money (both of which, as all postgraduate students in professional courses will know, are scarce commodities), the same slum outside the campus that our generation of students used to pass but chose not to notice. Current students are looking to make a difference to society through modern means, such as making the Internet work for the poor, or getting financial services to reach the needy, and not by joining NGOs and starving.

As I hope is obvious to the reader, I enjoyed my interaction with the students very much, both the formal interaction in the classrooms and the informal ones in my office, at the mess, and over cigarettes. They were challenging and stimulating and occasionally exasperating (especially so on Monday at 0900). I learnt a lot from them, and I will never listen to cribbing about young people’s lack of value systems and greed for money again.

The Faculty: IRMA was in a state of flux during my stay, mostly from the aftermath of an internecine struggle for control within the board of directors. One bunch of professors had just left the institute, another bunch was in the process of leaving, and there was a bit of an atmosphere of whispers, cliques and coteries that I wanted none of. I avoided the faculty lounges as a result, and had my tea, cigarettes and gossip sessions at the common facilities. I found, 3 months later, that I had really interacted with very few of my colleagues and, looking back, I wish that I had got to know some of them better.

Comparing from my time as a student, the professors now were mostly PhD-types whereas in the 1980s they were mostly fellows from management institutes. There was the usual mix of those who were liked, those who were respected, and a few who were liked and respected. I didn’t get the impression that anybody was disliked and/or disrespected, unlike our time when there were candidates for both, including the combination. Though old timers said that the earlier interaction between professors and students was closer, I did not personally notice this.

What did I do? Looking back, I seem to have spent a lot of time during work hours smoking, drinking coffee and discussing life with Professors DPM and Jayapadma, who were great company. In between that, I managed to take a few sessions with the senior batch on looking at project proposals and setting up monitoring and evaluation systems.

One of the projects I initiated was to get IRMAns of 15-20 years vintage to come back to IRMA and talk to the current students about their own careers – this was to address common fears that an IRMA degree is not sufficient to make it in life, and to get students to look ahead and think careers rather than jobs. The key fringe benefit was that I met some old friends again, Sinha, Gouthami, Chadha. I did one of the talks myself. I was very happy to learn that IRMA is planning to continue the ‘Journeys’ project.

I also did a research on the sort of contact IRMA had with the organisations it interacts with. The conclusions provided a bit of shock value – IRMA had an all-round long-term relationship with few organisations and one-off contact with many. If IRMA were a woman, I would want to know her. I still wonder what the policy makers made of that.

There were other things. Some were hatchet jobs that were passed on to me, I suspect, because of the duration of my tenure and therefore my lack of a need to invest in the long-term goodwill of my colleagues in the faculty. Some were the tasks of sitting on committees of various sorts. I think I came away with an appreciation of the difficulties of getting work done in a flat organisation structure.

My Family: My family joined me for two of the three months. IRMA made us very welcome, and made it as easy as possible to adjust. Accommodation was ready and liveable upon our arrival, with even many of the small things (linen, towels, cutlery) provided for with care and thought. Everyone made allowances for my noisy children and boisterous dog. Washing, cleaning and cooking support was organised almost immediately. IRMA even provided my wife with ‘visiting scholar’ status, and with it an office, computer and Internet. We have much to be grateful for to Professor DPM, who was coordinating the visiting fellows programme, the administration team of Mr.s Patnaik and Solanki, and Mr. BC Patel from the estates department. If there were any cribs, it was that one toilet was too few for all of us (if any of you are planning something similar, negotiate a B-type residence), and that the local school (yes, the much acclaimed Anandalaya) was pathetic – we pulled the kids out in the second week.

The Highlights: Three months in Gujarat, no booze or football, not much flesh in the diet, not exactly an ornithologist’s paradise, how on earth did I survive?
· The students, and the interaction with them that I have already described.
· My colleagues Gazala and Akhil coming over from Ahmedabad on our first Sunday in Anand with two bottles of whisky and huge quantities of mutton.
· My Dad, sister, brother, brother-in-law and nephew congregating here from Bangalore and Delhi, all seeing IRMA for the first time. The accommodation at the guesthouse was great, and we had a wonderful time. We took an expedition to Lothal, the Indus valley civilisation site just about 100 km away.
· I finally managed to take my family to Kutch, and to see the bird sanctuary in the wetlands around the rann. Winter was the perfect time for this – we saw the cranes, and the staying facilities at the indigenous tourism project at Hodka were great.
· The students had a festival for the alumni towards the end of January. I got to hear Indian Ocean play live in a near-perfect setting – the IRMA lawns – and I participated in, completed, and finished creditably in the Anand Run (a 5 kilometre road race).
· Professor Jayapadma’s daughter, Karuna, who had my wife and me seeing first hand what we were missing by not having a little girl in the house.
[1] Though the admissions policy of having a few Delhi babes straight from university to brighten the place up continues.
[2] ITC and ICICI start people at Rs. 50,000 per month. NGOs start at about Rs. 12-15,000. In the late 1980s, the hot NDDB job started at Rs. 2,700 and the NGOs at about Rs. 2,000.

Money For Nothing!

2007-04-28T04:31:00.000-07:00

MONEY FOR NOTHING!

A 2-pager by Ajit Chaudhuri
April 2007

“Those who forget the past are doomed to repeat it!”[1]

It was just a little while back that the word ‘aid fatigue’ had crept into our lexicon – the result of the perception that all that money and effort for so long was not doing very much. The starving children and crying women were still there and in numbers, their leaders were living better and better and fighting each other more and more, and NGOs and the Swiss banking system were flourishing. ‘Screw the whole bloody lot of them!’ the givers seemed to be saying, ‘They’re not getting any more of our money!’

And then, quite suddenly, the scenario changed – and aid became fashionable again. There appear to have been three drivers. The first was Afghanistan, where first-world living rooms saw the consequences to them of a failed state. The second was Mrs. and Mr. Gates jumping a stage in Maslow’s hierarchy of needs[2]. And the third was the Millennium Declaration – a desperate effort by the UN to sex aid up and reduce problems down into easily understandable goals, targets and indicators.

Are things going to be different this time around, I wonder, and will we see real change? Or is it going to be more of the same – the bloody conflicts, pathetic women and children, and that tired but pretty blonde lady from some INGO or the other telling us on TV that ‘there is so much more to be done’ – you know the scenario – with more hot air in conferences on trade vs. aid, teaching people to fish and that %*# EU agriculture subsidy.

It was therefore a pleasant surprise to read an insightful paper questioning the holy cows of trade and aid and looking at how to really help poor countries. This is by Nancy Birdsall, Dani Rodrik and Arvind Subramanian, was published in the Journal of Foreign Affairs of July/August 2005, and is imaginatively entitled ‘How to Help Poor Countries’.

The paper begins by saying that the key areas of thrust in the current international development scenario – the MDGs, the focus on increasing rich countries’ aid outflows to 0.7 percent of GDP, and the attempts in global trade circles to open first-world markets to exports from developing countries – make two implicit assumptions. First, that rich countries can shape development in poor countries. Second, that the key requirements for this are money and trading opportunities. These assumptions, the paper says, ignore some key lessons of the past four decades; that poor countries themselves largely determine their development status, and that financial aid and opening of rich countries’ markets have a limited ability to trigger growth, especially in the poorest countries. And therefore, that energy and political capital concentrated on these efforts should not draw attention away from other methods by which ‘rich countries can do less harm’.

Lets have a look at some examples –
· The two current darlings of development are India and China. Both have prospered and reduced poverty without benefit from trade preferences and without much aid[3]. Sub-Saharan Africa, on the other hand, received on average 12 percent of GDP in aid in the 1990s, a period when per capita growth declined by 0.6 percent every year.
· Nicaragua and Vietnam are poor countries with primarily agricultural economies, and both have benefited from substantial foreign aid. Yet, only Vietnam has experienced steady growth and poverty reduction, despite not being a member of WTO and Nicaragua having loans written off and having preferential access to US markets.

Global Trade: There is little doubt that the international trade system is iniquitous.
· Rich countries place highest tariffs on imports that are important to developing countries, such as garments and agricultural produce.
· Tariffs escalate as the level of processing increases, discouraging industrialization.
· Trade negotiations lack transparency and exclude poor countries.
· Using WTO procedures require money and technical expertise.
And yet, there are remarkable success stories; China and Vietnam in manufactured goods, India in services, Chile in wines, and many more. It is therefore useful to understand the effect of tariffs, subsidies and barriers in rich countries on poverty in poor countries.

Suppose, for example, the much-reviled agricultural subsidy in the EU was reduced and there was a rise in world agricultural prices. The big gainers would be large agricultural exporting nations such as the US, Canada and Argentina, and possibly EU citizens (less taxes but increased food prices). Poor countries, however, are usually net importers of food, and their urban poor will be hugely negatively affected. Net poverty may reduce because of gains to local farmers, but this is complicated to ascertain[4]. Agricultural liberalization may or may not reduce poverty, but its net impact either way is limited. And a reduction in trade barriers in rich countries may well leave poor countries worse off – many enjoy favorable conditions of access under preferential trade arrangements.

More Aid: International aid has done many things – eradicated small pox, reduced infant mortality rates, restored peace and order after conflict, etc. – more so when it has been targeted at specific objectives and when recipient countries have had leadership and capacity and done the right things. But aid has not been associated with sustained growth.

There are many reasons for this! Primarily, on the donors’ side, there has been a multiplicity of donors pursuing many, often inconsistent, objectives, disbursing to innumerable projects and imposing onerous conditions. On the recipients’ side, those that are most in need have been least able to use aid well due to institutional deficiencies.

The paper goes on into how rich countries can do less harm – interesting, maybe useful, and also easily accessible on the net via a google search on ‘birdsall help poor countries’.

To conclude: Many of us already know that aid money is not a driver of economic growth and poverty alleviation – certainly not in India. But we do tend to adhere to mantras on the benefits of freer trade and the evils of first-world protectionism. I have myself had arguments with European counterparts along the lines of ‘if you were serious about ending poverty and hunger you would dismantle your common agricultural policy instead of creating the problems first and then throwing a few lollipops around’[5]. The viewpoint expressed here, not ‘trade or aid’ or ‘trade and aid’ but ‘neither trade nor aid’, does provide food for thought. I am not sure if I subscribe completely as yet and, if I did, what invective would be thrown at me. Neo-liberal? Neo-conservative? Neo-classical?

Acronyms / Jargon Watch
DFID Department for International Development, the Government of UK
EU European Union
GDP Gross Domestic Product
INGO International NGO
MDG Millennium Development Goal
NGO Non-governmental Organization
TRIPS Trade related aspects of intellectual property rights
UN United Nations
WTO World Trade Organization
[1] This is credited to the Spanish-American intellectual George Santayana, though various versions have appeared in different places including in William Shirer’s ‘Rise and Fall of the Third Reich’.
[2] Management students would remember Maslow and the movement from basic needs to self-actualization.
[3] According to DFID, assistance to India stands at about 0.2 percent of GDP. China’s would be even less.
[4] Factors such as the extent of skew in landholdings, the effect of higher prices on agricultural wages, the ability of the agricultural sector to drive the economy, inter alia, would be critical here.
[5] One of these, incidentally, at the WTO headquarters in Geneva, where I had spent a day in 2001 as part of the Chevening Gurukul scholarship.

Time Out

2007-03-29T04:19:00.000-07:00

TIME OUT
A 2-Pager by Ajit Chaudhuri
March 2007

Most of us do not have smooth career paths. There are negative slopes, dotted lines and blank spaces in our achievement versus time graphs, and periods when cynicism levels are high, when completing sudoku puzzles become a major objective, and when we are particularly susceptible to proposals from friends to walk across the Himalayas. Some of us have dropped out completely or moved off-track to do something different, and some have searched for stimulation through extra-marital misadventures or other self-destructive behaviour. Such are the effects of the ‘outs’.

Those of us plodding away within an organization are familiar with the ‘outs’, we see them often enough and experience them occasionally. Frozen out when stylistic idiosyncrasies clash with a superior’s personality or an organization’s culture. Burned out by the toxic triad of an overwhelming workload, the inability to see the positive impacts of one’s labours, and the failure to achieve one’s career ambitions. Psyched out by biological or psychological changes that trigger a midlife crisis. Flaming out from a fundamental incompatibility between one’s abilities and the requirements of the job.

There are some alpha plus types, one had always assumed, who do not have these problems – who have a smooth, short and inexorable rise to the top, whose career graphs turn sharply upwards from their late twenties and plateau out only in the stratosphere – the supercharged ones who exult in winning, in mastering new skills and in surpassing previous benchmarks of excellence. It was therefore interesting to read an article in a recent HBR[1] of a problem that is exclusive to these types that the authors have called the Summit Syndrome (SS – with due apologies to Adolf). Interesting because it says something about the career paths of the highly successful, and interesting because it explains the gaps we sometimes see between perceived potential and actual achievement.

The first point the authors make is that a successful career is not a straight line to the top; it is more like a series of northeast pointing S-curves with each S representing a job or task. Stage 1 at the bottom of the S represents the beginning of a new role, of assessing and assembling the requirements for the climb (building a new network, forming relationships with one’s team, developing a strategy, etc.). Stage 2 represents the ascent up the slope, a period of learning and adapting to the role, of developing the appropriate levels of skill and proficiency, of figuring out how to navigate the organizational territory and the external competitive environment. Stage 3 represents the approach to the summit, which is when the onset of SS occurs – mastering the work triggers discomfort and is the harbinger of a crisis. Stage 4 represents the plateau, when the challenge has been conquered and the requirement is to coast along until the next task – super-achievers have difficulty in negotiating flat terrain and this is a time of inner turmoil and mounting confusion about career direction. Stage 5 represents the descent and is characterized by an obvious drop in performance and career-limiting behaviour.

SUMMIT PHASE
INTERNAL SYMPTOMS
EXTERNAL SYMPTOMS
Approaching
· Low level discontent
· “What happened to the excitement?”
· Subtle loss of edge
· Emerging distractions
o Hobby obsessions
o Heightened appetite for stimulation
o Daydreaming
· Attraction to unsolicited offers
Plateauing
· Loss of enthusiasm
· Fearing loss of career momentum and legacy
· ‘What happened to my goals?”
· Working harder to do the basics
· More serious distractions
o Fancier adventures
o Curiosity about alternate lifestyles
o More vacations
· Unorthodox career choices attract disproportionate consideration
Descending
· Feeling lost
· Cynicism, anger, frustration are near the surface
· “What happened to my career?”
· Working harder to conceal disengagement
· Severe distractions
o Substance abuse
o Sexual indiscretions
o Unconscious career sabotage
· Bailing out

SS is quite unlike the other “outs”. This is not a once-in-a-lifetime event like a mid-life crisis. Those in the initial phases of SS have not been frozen out or marginalized – they reside in the inner circles. They rarely burn out – they see the impact of their work and welcome big demands. Their capabilities are not merely aligned with organizational purpose, they are admired and celebrated by superiors, peers and subordinates alike. In short, they are the superstars – they do not have the insecurity and inferiority complexes of the victims of the “outs”. And SS is more profound for the more proficient – it causes superstars to leave the fast track, drift from one job to another, and ultimately be among those highly promising men and women who never manage to achieve the positions and goals that friends and colleagues had assumed they would. For their organizations, this uncharacteristic behaviour from those least expected to disappoint comes as a shock. Getting them back in the saddle is expensive in terms of lost contribution, organization disruption and the price of counseling – but that’s the best-case scenario. The worst is surprise departures that rob organizations of their most promising talents.

The rest of the article is about recognizing and handling SS. I am going to move from the international corporate sector to the Indian development sector, as usual. We need to attract good people in and retain them to survive. Getting them in is comparatively easy – a nice pep talk about motivation, commitment, the need to give back to the country, etc., etc., tends to suffice. Retaining them is much more difficult, organizations in the sector have little knowledge of the frustrations such people face and are constantly and continuously surprised by the sudden departures of their prodigies. Making do with the ordinary is not enough – we need to engage with the brilliant to keep this sector vibrant and in tune with the challenges faced. Bleating on about their fickle nature, their capriciousness and their turbo-charged ambition is pointless. Maybe we can learn from those with experience in dealing with them, such as the international corporate sector.

I would like to conclude by returning to the subject of the ‘outs’. There is little understanding of this phenomenon within the development sector, especially the ‘outs’ faced by the brilliant. The first ‘outs’ occur before they actually land up at the NGO’s doorstep. Their parents freak out, and they contemplate a life out of pocket. Nothing new with the former, plenty with the latter! Salary differentials, even at entry levels, between the development sector and outside are now humungous. And today’s youth do not ask Mom and Dad for money, they prefer a bank loan for their post-graduation. And yet, despite poor salaries, despite EMIs, despite parental, peer and to-be-spouse pressure, and despite plenty of options, some brilliant people do come into the sector.

The mismatch between the organization’s requirements and the individual’s abilities invariably occurs from the beginning. A best-case scenario is when the recruit is given responsibilities that include the hurly-burly of dealing with communities (something that no post-graduate degree prepares one for), forcing her/him to sink or swim. If s/he sinks – good riddance! If not, you have somebody worth keeping. The worst is when the organization dumps all its English-writing requirements (proposals, reports, blah, blah, blah!) on this person – a quick flame out happens. Bosses, such people have not come to be glorified translators and candy floss for donor visits. The disservice you do to the sector far outweighs the immediate relief from meeting writing deadlines.

Empirical evidence points to the first burn out happening 2 to 3 years after the person joins. And while the results of our work are right in front of us, the other elements of the toxic triad are joined by a third – that city kids working in the boondocks miss the lights, sound and action and feel that life is passing them by. Cynicism and faultfinding set in, and they pick the wrong fights and create tension. What should the organization do? One, recognize it for what it is – a burnout and not some fundamental deficiency in either the individual or the organization. Two, provide space for introspective thinking (facilitate long term training, for example). Three, if it comes to losing the person, make sure that the process is pleasant and positive. Use your contacts within the sector to place the person suitably and ensure that your recommendations are not coloured by the recent past. And four, maintain the relationship – the brilliant will always rise in the world.

The most dangerous of the ‘outs’ happens to the brilliant in mid-life, because those that have stayed in the sector are now leaders and policy-makers. Many re-evaluate their objectives at this stage, weigh them up against financial and physical security concerns[2], and get psyched out. Organizations lose their way when this happens to the boss – the bricks and mortar, vehicles and salaries become more important than the communities served and problems addressed. The donors become kings, and others within the organization, especially the other brilliant, become threats. Everything works to enable this one person to stay in position. Vision, mission and values turn into more jargon.

Some survive the ‘outs’ and go on to do their best work later in their careers. But the unrealized potential and overall loss to the sector of those who don’t is huge. It would be useful for development organizations to work out ways of dealing with the ‘outs’.

[1] “Crisis at the Summit”, George Parsons and Richard Pascale, Harvard Business Review of March 2007
2. An old saying goes - men, when they turn 40, rethink the value of honesty, and women of virtue.

A Business Trip

2007-03-14T01:48:00.000-07:00

A BUSINESS TRIP

A 2-Pager by Ajit Chaudhuri

Introduction: An article in a management journal that does not leave you with a headache! Development writing in a management journal! Something on the development scene in the US of A being relevant to India! The paper “Should Non-Profits Seek Profits” by William Foster and Jeffrey Bradach in the Harvard Business Review of February 2005 was all these things, and would qualify as a must-read to those like me who have never seen an NGO run a successful income generating venture and wonder why this is so, and why so many continue to want to do so.

The Situation: Apparently, today it is routine for non-profit organizations (read NGOs) to run a business venture and most believe that earned income will play an important role in bolstering an organization’s future revenues. Revenue generating initiatives are being launched or considered in almost every non-profit domain, and a flood of publications, events and experts have sprung up, including how-to books with titles like “Selling Social Change (Without Selling Out)”. The Yale School of Management, in a paper entitled “Enterprising Non-Profits: Revenue Generation in the Non-Profit Sector” reports that half to two-thirds of the ventures they examined were profitable or breaking even – a claim that Foster and Bradach viciously trash by casting doubts on the sampling and enquiry methodology and the analysis – have inter-university rivalries replaced the cold war?

Why is this so? First, the obvious – given the way philanthropy (i.e. funding) is practiced today, mostly small short-lived grants restricted to specific uses that are hard and frustrating to attract, the allure of earned income is understandable because it comes with no strings attached. Second, the general enthusiasm for business in the booming 1990s percolated into the non-profit sector, with managers wanting to be active entrepreneurs rather than passive bureaucrats and with organizations keen to be viewed as disciplined, businesslike and innovative to stakeholders. And third, financial self-sufficiency is a goal to non-profits and earned income is a means to attaining ‘sustainability’.

Skepticism! Foster and Bradach claim that there are reasons for skepticism; that few ventures actually make money, that most ventures are badly evaluated, with potential financial returns exaggerated and challenges routinely discounted, and that commercial ventures can distract non-profit managers from their core social missions, and even subvert those missions. Earned income ventures, they say, have a role in the non-profit sector, but unrealistic expectations are distorting decisions, wasting precious resources and leaving important social needs unmet. They conducted a survey (and a fair bit of effort goes into explaining how their sampling methodology, etc., unlike Yale’s, is correct and the results therefore applicable) that indicated that 71 percent of ventures were unprofitable, 24 percent profitable and 5 percent breaking even. Of the profitable, half did not fully account for indirect costs. “Simply put,” they conclude, “there is every reason to believe that the lion’s share of earned income ventures do not succeed in generating revenues beyond their costs.”

The disadvantages of non-profits: Running a business is challenging under the best of circumstances, and only 39 percent of small businesses are profitable. The odds are stacked even higher against non-profits because –
· Conflicting priorities – non-profits focus on both financial and non-financial concerns, such as paying a ‘living wage’ (I think this means not squeezing your employees sufficiently), hiring from some disadvantaged pool of people, pricing products lower so that they are affordable to low-income groups, or offering products that are ‘better’ or ‘healthier’ than market norms – all appropriate social objectives, but they put non-profits at a disadvantage in a highly competitive market.
· Lack of business perspective – non-profits tend to overlook the difference between revenues and profits, unremarkable when revenues are in the form of grants that have a negligible cost attached to raising them but critical in the viability of a business venture. They also invariably do not include the cost of holding inventory, or indirect costs, or overheads, or top management time, in their costing structure. Start-up costs, too, tend to be overlooked as these are invariably met from philanthropic funding and thus leave the organization without investors clamouring for returns.
· Philanthropic capital and escalation of commitment – when they realize that a venture is unprofitable, managers rarely pull the plug and instead opt to throw good money after bad in the hope of turning the venture around and thus avoiding the embarrassment of failure.

A question of mission: A cold look at any venture will conclude that it won’t yield any real revenues – does this mean that all should be abandoned? Foster and Bradach feel that a venture can be attractive without breaking even if it contributes to the core mission of the organization (the example they give is of a catering operation for an organization that works on training the unemployed, in which the primary objective is to provide valuable on-the-job training). Research reveals that many ventures fail the mission as well as the financial test (often the two compete with each other), and the lure of potential profits tend to distort an impartial evaluation of a venture’s mission contribution. A good assessment of a venture’s mission contribution would return the non-profit sector to its fundamental principles, as non-profits are non-profits because the marketplace does not take adequate care of the needs they address.

In conclusion: The situation in India is, no doubt, different. There are donor organizations with a long-term perspective and an interest in seeing a non-profit organization develop. Many Indian non-profits, too, are highly capable organizations with a clear sense of mission and an ability to understand what contributes to this and what does not. And yet, successful income generating ventures in the NGO sector are few (I have yet to see one) for the reasons outlined above and some more – an inability to distinguish between money to the community and money to the organization and an ability to attract only people like me who are genetically unable to do business (else they would!) come to mind. Happily, many do pass the mission test.

Acronyms / Jargon Watch
HBR Harvard Business Review
Mission Core objectives of an organization
Non-profits The equivalent of non-governmental organizations

References:
“Should Non-Profits Seek Profits”, William Foster and Jeffrey Bradach, Harvard Business Review of February 2005
“Enterprising Non-Profits: Revenue Generation in the Non-Profit Sector”, Cynthia Massarski and Samantha Beinhacker, The Yale School of Management - The Goldman Sachs Foundation partnership on Non-profit Ventures

Decline & Fall of the NGO

2007-03-14T01:47:00.000-07:00

THE DECLINE AND FALL OF THE INDIAN NGO[i]
A 2-pager by Ajit Chaudhuri

Back in the early 1990s, the Indian non-governmental development sector (referred to hereafter as the NGO sector) was a source of pride to me. In most underdeveloped countries, international donor agencies would have to set up their own implementing operations; this meant that plans were formulated in London, New York, Geneva, Stockholm, etc., that significant sums were spent on expatriate staff and administration, and that local communities were reduced to the status of recipients. Not in India! Here, there was a small, vibrant and independent NGO sector that linked donors and communities, carried the aspirations and requirements of one to the other, and was cost effective in its operations. Here, donors did not work directly.

They still, for the most part, don’t. And it is a strange time to be talking of the NGO sector in terms such as decline and fall – the sector receives Rs. 7,000 crore annually in grants from abroad, a number that has been shooting up rapidly in the recent past, and the number of organizations with governmental permission to receive foreign funds (what is called the FCRA) stands at about 35,000[ii]. The sector continues to be a prime customer of vehicle manufacturers and the international travel industry, as well as to occupy some great real estate and provide employment to a large number of otherwise unemployable people (such as me). So what’s the problem?

I’m not too sure, but I do see some disquieting trends.

The first is that I have not come across any great new ideas from the NGO sector for a long time. The business of creating buzz in development is back with the government, with exciting initiatives such as the NREGA and Panchayati Raj that a) have the ability to address root causes of problems and b) have no or at best peripheral roles for NGOs. The NGO sector is not driving the nation’s development agenda or the debate on poverty any more – it is in ‘business as usual’ mode.

The second is that brilliant young people are not coming into the NGO sector. The developmentally inclined among them see NGOs as part of the problem, not a solution, and are looking at other forms of organizations and activities to address matters including for-profits and financial services. The mediocre young, to whom development is a career option rather than a calling, are more inclined towards the various layers of touting organizations in the sector because they are based in cities and salaries are higher.

The third is that, like ideas, I have not come across too many great young NGOs[iii] for a long time as well – and I am in the business of looking. It seems that good new organizations dealing with development, like people, are taking new forms such as for-profits, Internet start-ups and non-banking financial companies. And those NGOs that are being set up tend to have the limited ambition of emulating their role models in the NGO sector – which are either the public service contractors, the fancy infrastructure, lifestyle and talk-wallahs seen making loud sucking sounds in the corridors of power, or the downright venal and corrupt. Nothing original here!

The fourth is that the skeletons in the NGO sector’s collective cupboard – the dirt, corruption and the egregious practices – are finally hitting the public space[iv]. At the same time, the inability of anyone within to see, hear, or speak of wrongdoing (what I refer to as the 3-Monkeys Syndrome) continues unabated. While there has been some cursory action from within the sector[v], it seems a case of too little too late. Nobody in the NGO sector, it appears, is willing to take a strong stand. The government has no such compunctions, however, and we are slowly seeing a tightening of regulations that address some of these issues but make it difficult for the honest (and silent) minority.

The fifth is that the role of mobilizing people and providing a forum for opposition and protest has moved from the NGO sector to the extreme right and left. A look at the movements against land acquisition for SEZs, or the one against mining in Vth Schedule areas, all of which seem obvious cases for NGO action, and they are conspicuous by their absence. Those that should have been in the forefront, who claim to speak for small farmers and tribals, appear to be on the side of the corporates involved. I wonder why!

These trends point to larger problems within the NGO sector, and while there is much ranting and raving about the obvious ones, government corruption, the lack of dedicated, motivated, etc., people coming in, the lure of the Mammon and so on, some critical internal issues are being papered over, including –

The individuals and organizations that blazed a trail in the 70s and 80s are ageing, and neither is being replaced. The old bosses continue to rule their empires, with cynicism and self-aggrandizement replacing fire and zeal. They also make it impossible for second lines to develop (unless it is their progeny) while simultaneously lamenting the lack of committed and capable people who can ‘stay on to take over’. Most of their organizations are sad and tired, and exist because they exist and not so as to address critical problems of the poor and marginalized. Yet, such individuals are effective at protecting their own short-term interests to the general detriment of their organizations and the NGO sector.

The role and importance of touts within the NGO sector, in the form of resource organizations, nodal NGOs, training institutions, research and documentation setups, development consulting businesses, etc., has increased considerably. There are now layers upon layers of these between the donor and the NGO that actually uses the money, sitting in Delhi and state capitals, knowing donorspeak, writing proposals to formulas, and providing a variety of services to donors on a 20 (or whatever) percent commission. They are the new patrons of the Indian NGO and now claim to speak for and on behalf of the NGO sector[vi]. I have yet to see evidence of a mandate for them for this role.

With a now widespread belief in the mainstream that NGOs are irrelevant combined with little evidence to show that NGOs have been more effective than the state (for all its inefficiency and corruption) in providing development, there is a growing move to scuttle the NGO sector through restrictions and controls and let it sink in its own quagmire. But, before you start saying ‘to hell with the whole bloody lot of them’ and before, if you are a young professional within, you start retraining and looking around for opportunities, take a minute to think of the consequences to the country of a dormant NGO sector.

First, NGOs form an important component of civil society and thereby a forum for debate and action that is out of government circles. Without NGOs, the state would become much more powerful. Non-state opposition would move to the fringes. We are already seeing this with the government and the private sector cozying up to the detriment of vulnerable sections of society. And the extreme left groups that are now active in more than 100 districts in the country have an agenda that is similar to that of NGOs (other than the violence and overthrow of the state). Not coincidentally, the parts of the country facing the problem of insurgency are also the parts with little genuine NGO activity.

And second, who will focus on the very poor, the marginalized, etc.? The government? The new genre of development organizations? In both cases, unlikely! The state can pass high-minded laws, but would always require grassroots support and pressure to implement them effectively. And the new guys would be lost in a world without Internet connectivity, where proposed beneficiaries have little education and no marketable skills.

To conclude – most people would agree that NGOs are in a state of decline despite some glitzy statistics on foreign contributions. It is my contention that it is not in the country’s interest that they die out. Can we, on the inside, do something? As a beginning, and at the very least, we need to give less respect to a bunch of has-beens and touts who have built empires on public money raised in the name of poor people. And we need to stop behaving like the 3 monkeys – there is little disconnect between others’ bad practice and our own futures. The impetus for reform has to come from within – let us not merely react to government and public scrutiny. Or else, better brush up those CVs.

Acronyms / Jargon watch
Vth Schedule Areas Areas that have a tribal majority
Donorspeak That peculiar language of donor organizations
FCRA Foreign Contribution (Regulation) Act
NGO Non-governmental Organization
NREGA National Rural Employment Guarantee Act
SEZ Special Economic Zone
[i] With apologies to Edward Gibbon
[ii] “The Noose Tightens”, an article by Neeraj Mishra in India Today issue of 29th January 2007
[iii] I should protect myself here by mentioning that there are exceptions
[iv] There have been three articles I have read in the past month in the mainstream press with headlines combining the words corruption and NGOs.
[v] One such is the formation of the Credibility Alliance – purely voluntary with no checking system in place and no means of expelling members who are not complying with the standards.
[vi] A recent example is a meeting that a group of these touts had on behalf of the NGO sector with the Home Minister on the new FCRA bill. They had not done Mr. Shivraj Patil the courtesy of reading the new bill – so when he asked them specifically which passages were objectionable to NGOs there was a flummoxed silence followed by hemming and hawing. You can be sure that the NGO sector’s purpose was not served.

Health for Sum

2007-03-14T01:46:00.000-07:00

THE NEXT BIG IDEA by Ajit Chaudhuri

This two-pager is the result of a series of coincidences. Buried away in a pompous piece in India Today on ways to make our country a better place was a tiny, completely unsubstantiated but yet interesting statistic - that a health insurance scheme for the poor would cost Rs. 248 per poor family per year (way number 13, for the superstitious). A little before this, EPW had one article outlining community health insurance in general and another detailing the CHI scheme managed by an NGO in southern India. Somewhere in-between was the request made to me by India Today’s watchman, a daily wager called Hira Lal, for a loan to help meet the costs of his brother’s son’s operation in AIIMS – connecting the articles to a problem faced by a real person.

We all know a Hira Lal, and we all know the financial problems caused by serious illness within the family. We all know that identifying the poorest ten percent in any community is simply a matter of finding the women headed households and those which have or had a long term illness within the family. We all see that the public health system has collapsed, and is now accessible only to government servants, politicians (the lower ones on the pecking order, who can’t leverage the public exchequer to push off to the US) and their friends and relatives. We all see that most private hospitals would give leeches and bloodsuckers an inferiority complex. We all see that the poor avoid getting healthcare and, when they do, go broke in trying to pay for it – in fact, the families of 24 percent of all Indians hospitalized fall below the poverty line as a direct result of hospitalization, and expenditure on healthcare is the single biggest cause for a non-BPL household to go BPL. There is a need for radical new ideas in the field of healthcare for the poor.

What is CHI? The definition, for the definitionally inclined, is: any not-for-profit insurance scheme that is aimed primarily at the informal sector and is formed on the collective pooling of health risks in which members participate in its management. CHI schemes (should) aim to provide low cost healthcare, protect participants from high hospitalization costs and encourage participation by communities in their own healthcare. A CHI scheme has three basic stakeholders - the community, the insurer and the health maintenance organization or healthcare provider. The former EPW article studied 12 existing CHI schemes in India and identified three basic designs –
· HMO-led, where an NGO/hospital provides healthcare, purchases insurance from an insurance company and runs the insurance programme, i.e. generates awareness within the community, collects premium, submits claims, manages reimbursements and monitors for fraud.
· Insurer-led, where an NGO is the insurer, runs the insurance programme and purchases healthcare from independent providers.
· Intermediate, where the NGO runs the programme and plays the role of an agent, purchasing healthcare from providers and insurance from insurance companies.

Some of the characteristics of the CHI schemes studied were –
· The communities insured included tribal populations, dalits, farmers, women SHG members, self-employed women, etc. Some used existing CBOs to piggyback the scheme upon, such as SHGs, unions, cooperatives, etc. In some the unit of enrollment was individual and membership in the scheme voluntary and in others, enrollment was in groups or families and membership mandatory. Enrollment ranged from 1000 to 17 lakh members. Premiums per person per annum were always under Rs. 100.
· Many schemes had important exclusions such as pre-existing illnesses, self-inflicted injuries, chronic ailments, TB, HIV, pregnancies. Most reimbursed the direct cost of treatment, while some reimbursed the loss of wages as well. Some, especially the HMO-led ones, were cashless, while others had the patients paying bills and getting compensated later. Most schemes had a fixed upper limit ranging from Rs. 1250 to Rs. 1 lakh per person per annum.
· The problem of adverse selection (only the old/sick enrolling in the scheme) could be prevented by mandatory enrollment or having a larger enrollment unit. The problem of moral hazard (the health provider sticking you for as much as they can) could be prevented by capping fee structures and ensuring standard treatment guidelines.
· The subscription rates to CHI schemes varied from 10 to 50 percent of the target community when enrollment was voluntary. The reasons for this being low were – no immediate benefit perceived, premium too high, family size too high, confidence in own well-being and the source of healthcare too far.
· Utilisation rates ranged from 1.4/1000 to 240/1000. The low rates were usually because of non-financial barriers to accessing health care (hospital too far, loss of wages), while adverse selection caused the high rates.
· Some were run purely from premiums raised from the community, some relied completely upon external resources such as government or donors, and most supplemented local resources with external ones.

In the authors’ opinion, good CHI schemes protect the community by covering 100 percent of the direct cost of illness and some of the indirect one’s as well. They cover all illnesses and provide the financial benefit at the source of healthcare, thus ensuring that there are no waiting periods which patients have to cover. In addition, the premium needs to be affordable, the NGO and CBO credible and the administrative load of the scheme minimal. The insurer has to be involved hands-on. The main pitfall is the lack of good providers as the Indian private healthcare sector is unregulated and unaccountable.

The second article was of particular interest to me because it described the efforts of Ashwini, an NGO that I visit about once a year, in the field of CHI and it was to Dr. Nandakumar Menon of Ashwini, one of the authors of the paper, that I was able to address specific questions on the practicalities. He said that, in addition to all the above, CHI is viable only when all stakeholders to the scheme have an interest in reduced costs, and this is possible only in an HMO-led design in which preventive health care and a decentralized outreach programme are part of the package. Including all costs, i.e. in-patient, referral and community outreach, a CHI would come to Rs. 150 per person per annum or about 15 lakhs a year for a population of 10,000.

There is a gradual realization that access to healthcare is a serious problem, that access to medical insurance is available only to the middle class and above, that platitudes about the importance of public sector health care remain what they are, and that something needs to be done. Community health insurance schemes could be the next big idea.

References
Point 13, “57 Ways to Make a Better Place”, India Today issue of August 23 2004
Devadasan, Van Damme, Ransom and Criel, “Community Health Insurance in India: An Overview”, Economic and Political Weekly of 10-16 July 2004.
Devadasan, Manoharan, Menon, et al, “Accord Community Health Insurance: Increasing Access to Hospital Care”, Economic and Political Weekly of 10-16 July 2004.

Acronyms
BPL Below the Poverty Line
CBO Community Based Organisation
CHI Community Health Insurance
EPW Economic and Political Weekly
HMO Health Maintenance Organization
NGO Non-governmental Organization
WHO World Health Organization

Here Come the BRICs

2007-03-14T01:45:00.000-07:00

Here Come The BRICs

By Ajit Chaudhuri

Goldman Sachs, a Wall Street broking and investment firm, came out with a report in October 2003 entitled “Dreaming with BRICs: The Path to 2050” (Global Economics Paper No: 99 by Dominic Wilson and Roopa Purushothaman). This said that Brazil, Russia, India and China (the BRICs) would be among the world’s largest economies by 2050 and the drivers behind world economic growth over the next 30 years. The report did not really catch my attention, apart from wondering how the acronym would look had it been Paraguay or Pakistan instead of Brazil, until it was heavily quoted during the testosterone-filled initial election campaign of the then ruling party in India earlier this year. Are these guys (Goldman Sachs) serious, I remember wondering at the time, or is it another of those 3 monkey reports (see no problems, hear of no problems, speak of no problems) that ultimately aim to sell something to suckers. What does the report say, and what does it not say? What follows is my take on this.

What does the report say? In a nutshell, that the BRICs would be a much larger force in the world economy over the next 50 years. Today, the BRICs are 15 percent of the G6 (US, Japan, Germany, UK, France and Italy) in dollar terms. By 2025, they are likely to be more than 50 percent of the G6, and will overtake the G6 by 2039. Of the G6, only the US and Japan will be among the 6 largest economies in the world in 2050. China will be the second largest economy in the world in 2016 and will overtake the US in 2041. India will be the third largest economy in 2050, and will be about four times larger than the fourth largest, Japan. The attached table lists the world’s large economies in 2050.

The rise in GDP in the BRICs will be most dramatic over the next thirty years before tapering off. The main drivers of the increase will be real growth (accounting for about 67 percent of the increase), capital accumulation and appreciation in currency as real exchange rates converge on the purchasing power parity rates. India will be the only significantly growing economy of the ten in 2050, with GDP growth projected at more than 3 percent at the time. It will also be the only country in which working age population will continue to increase. Per Capita Income (PCY) in the BRICs will still be significantly lower than the G6 countries (see the attached table) with the exception of Russia. India’s PCY will be by far the lowest, about half of China’s and 20 percent of the US’s (which will be by far the richest).

The BRICs will therefore emerge as an engine for economic growth, demand growth and spending power over the next thirty years, and will offset the impact of low growth and ageing populations in advanced countries. In 2050, the largest economies (by GDP) will not be the richest (by PCY), thus making strategic choices for firms more complex.

These predictions are made using demographic projections and a model of capital accumulation that are explained in the paper but are unintelligible to the likes of me, and I am unable to question the mathematics of it all. The key assumptions are that the BRICs will maintain policies that are supportive of growth, i.e. stable monetary and fiscal policies (low inflation, low deficits), fostering of institutions such as legal systems, markets, financial institutions, health and education systems, and openness to trade and FDI. Interestingly, the report attributes an additional 0.3 percent of annual GDP growth over a thirty-year period to every additional year of schooling for the average citizen.

What does the report not say? My feelings upon having read the report are that it is certainly a bold one whose predictions grab attention - the BRICs, with the possible exception of China, don’t look like global economic superpowers of the future today. The predictions come across in the report as more or less inevitable. Are these actually so? Professor Paul Kennedy, a historian from Yale University, was talking about the report at the India Today Conclave earlier this year and was asked what the main threats to the predicted scenario in 2050 would be. He listed three. The first, he said, was that of maintaining social cohesion in a high growth environment. The second was the temptations of superpowerhood that high growth would bring, especially that of increasing expenditure in unproductive areas such as defense. And the third was his doubt whether the Earth’s ecology and environment would be able to handle 3 billion Chinese and Indians having lifestyles and consumption patterns similar to that of Americans today, cars for every two people and all.

The other matter that the report throws little light upon is the nature of spread of GDP within the BRIC societies. The PCY is an average – for India, for example, it gives no indication as to whether we are going to be a nation of 50 or 100 million very rich and a very large number of very poor, or a more egalitarian society. What would the social, economic and geographical fault lines look like during this period of growth? And would the pursuit of policies that spread wealth negate policies that create it? Maybe there are a few things about the India of 2050 that are still open to today’s influence.

Country
GDP in 2050 (2003 US$ b)
PCY in 2050 (2003 US$)
China
45,000
31,000
US
35,000
84,000
India
28,000
17,000
Japan
7,000
67,000
Brazil
6,000
27,000
Russia
6,000
50,000
UK
4,000
59,000
Germany
4,000
49,000
France
3,000
53,000
Italy
2,000
41,000

Acronyms
BRICs Brazil, Russia, India and China
FDI Foreign Direct Investment
G6 US, UK, Japan, Italy, Germany and France
GDP Gross Domestic Product
PCY Per Capita Income

Islands in the Sun

2007-03-14T01:44:00.000-07:00

ISLANDS IN THE SUN

A 2-pager by Ajit Chaudhuri

Introduction: One of the (admittedly minor) effects of the tsunami was that I visited a part of our country that I had never seen before – an increasingly rare occurrence in a career spent roaming around at other people’s expense. The Andaman and Nicobar Islands is a chain of 562 islands in the Bay of Bengal, in which the population of about 362,000 inhabit 38. Port Blair, its headquarters, is about 2 hours by flight east from Chennai or alternatively about 60 hours by ship. The Nicobar islands are quite distinct from those in the Andamans and are separated from them by the ten-degree channel, they have a population of about 40,000 consisting mainly of Nicobarese tribes, government servants and Tamil settlers. The Andamans consist mainly of settlers from Tamil Nadu, Andhra Pradesh and Bengal, descendants of prisoners who settled here and ‘primitive’ tribes such as the Jarawa, the Onge and the Sentinelese. What follows are my observations from the twenty or so days I spent in the state.

The Place: A region, in my opinion, should be judged on three indicators only – the visual appeal of the place, the beauty of its women, and the quality of its cuisine – all else is unimportant. A&N scores a 911! The islands are astoundingly beautiful from any angle, many of them just green forested circles with a continuous yellow ring of beach around them. The sea is also multicoloured, with light green and then aquamarine rings around the islands giving way to deep blue as one moves further out. About the women, suffice to say that your eyes won’t be under strain here! A young lady reporter (with looks like the hero’s sister in Hindi films, who has to say “Bhaiya” a few times and heat his food when he returns from his nocturnal adventures) from the Telegraph had come down from Kolkata and was given Aishwarya Rai like treatment. Not much scope for the likes of me, you would think, except that we happened to sleep together on a ship between Hut Bay and Port Blair (as my wife, mother and father also read these 2-pagers I will reluctantly mention that the Reuters correspondent and the Deputy Director of the Shipping Department were sleeping in between us) and shared a comfortable friendship and several evenings together thereafter, to the consternation of the blades of Port Blair.

The Distances: The distances in A&N hit you. All internal journeys have to be done on ship (except for the favoured few who have helicopters at their disposal) and travel times are massive. The journey from Kamorta Island in the middle Nicobars to Port Blair in the southern Andamans took me 48 hours – all of which was spent on the deck because no cabins were available (only for babus) and the bunks were full of puke. This wasn’t particularly unpleasant, nights under the stars and all, except for crossing the rough ten-degree channel that had the ship rocking and rolling (apparently Bernoulli’s Principle applies here) and the likes of me contemplating life at the wrong end of the food chain in these shark infested waters. The shorter journeys in smaller ships across open and rough sea were much worse, especially when one travelled against the waves, as were the journeys on boats to get from the ships on to land because the jetties were destroyed.

The 26th of December: What actually happened? First, the earthquake! I was on Kachal on the 24th of January when an earthquake of 6.2 centered in Sumatra hit the island (there have been more than 100 earthquakes over 5 in the past few weeks) and can only imagine what a 9 must have been like. People came out of their houses, and, a few minutes later, saw the sea recede. Those who ran for their lives away from the sea and on to the central higher ground are alive today – those who were curious, or stopped to pick up belongings, or to pray, or to help others, did not make it. The police inspector in Kapanga tried to do his duty by shepherding others to safety (dead), another settlement of 1050 people in West Bay held a community prayer after the earthquake (4 are alive today). In Little Andamans, much further to the north, there were a series of four waves with about ten minute gaps in between, of which the third and the fourth were particularly vicious, twenty meter walls of water arriving at you at the speed a plane takes off.

The Ban: The Nancowry division, consisting of the islands Chowra, Kachal, Kamorta, Nancowry, Teresa and Trinket, is off limits to outsiders unless the government issues you a tribal area permit. I got one by hanging around government officers in Port Blair, meeting the Lt. Governor and kissing a lot of backside, nobody else did. A ban on media and NGOs after the tsunami is being strictly enforced. The reasons are not being articulated and rumours are rife – that the government is mismanaging relief, that the bodies are much more than the official figures, that there is something to hide, etc. There has been controversy over the numbers here, mainly because a large number of Tamil labourers had been illegally brought in by contractors and settled in coastal hamlets, and there is no record of who these people are, how many, and how many have died. Certainly, the numbers don’t match! The relief, too, is being mismanaged in this region, with the relief camps getting enough food and water but little else, with the whole area still looking like the tsunami had hit yesterday, with bodies still coming in with the tide and with huge quantities of everything on earth lying around in Port Blair but very little making its way here. But this would be the result of a media ban and not the cause of it.

More likely is the fact that the Nicobars sit at the head of the Mallacca Straits, the busiest shipping lane in the world, and are thus of strategic importance in the great game being played between China, the US and India. About 90 percent of China’s external trade passes through here, and thus we have a hold that counters any aggression in the Himalayas. The mandarins simply don’t want people poking around in this region.

The Taipans: Life must have been nice here! The Nicobarese tribals on these tiny islands lived in little settlements along with their school, church and football field, with all financial requirements being met by coconut plantations that were plentiful. They are governed through a system of elected village captains who deal with the outside world and managed government schemes. My quest for institutions through which to implement relief and rehabilitation activities on the islands led me to the tribal federations and the cooperative marketing federations that buy and sell the copra – all these turned out to be fronts for trading empires a la some of James Clavell’s novels. There is a constant game of chess between the Gujarati Jadwets, the Kamorta-based Rasheeds and the Tamils, all trying to outmaneuver each other with their ships, their fronts, their alliances and their patronage systems. They are now competing for the rehabilitation cake.

Infrastructure and Accommodation: Interestingly, no buildings in the state were destroyed in the earthquake – it was the tsunami that caused all the destruction to infrastructure. A local wag said that this was because the state public works department did all construction and they made their money by over-invoicing and not by under-constructing. The destruction of infrastructure was complete in the Nicobars, where all the jetties and all buildings on the coast, schools, churches, hospitals, police stations, government quarters, don’t exist any more. The temple left standing on Kachal had settlers of a certain mentality feeling that ‘mine is bigger (oops, better!) than yours’.

A list of places to stay across Nancowry division would begin and end with the PWD Guest House in Kamorta, fabulously located on a hill that overlooks the harbour and having a running kitchen, well worth being on the right side of the local Assistant Commissioner who controls the right to stay here. Kachal was the pits, with severe food, water, electricity and accommodation shortages. The poor head of administration there, an IAS officer from Delhi who was sent there for relief duty and turned out to be a friend of my batchmate Amir, is staying along with five others in a two-room office where they also work, eat, and do everything else. An army Colonel and his men and a 19-member relief team from Sirsa in Haryana were putting up in the church in the high center of the island, to the consternation of my namesake Father Ajit Ekka and his staff. He tried to get them to leave by bringing in a batch of trainee nuns from Jharkhand, but I suspect it had the opposite effect.

Will the Place Recover? Difficult to say! Jetties take a long time to rebuild, and all supplies depend upon the jetties. Coconut trees take seven to ten years to grow back, what will the Nicobarese do until then? The banking system has been washed away, and no records exist either with the account holders or with the bank, what will people do for their immediate cash requirements? 79 children on Kachal are supposed to be sitting for their class X and XII, how that will happen with all schools on the coastlines, and all their teachers, washed away. Earthquakes are hitting the Nicobars every day, undermining the little remaining confidence. Most of the village captains are dead and there is a serious leadership vaccum. On the other hand, time is a great healer. And other disaster areas in India have, in the long run, become better places for those who survived with the huge investment in infrastructure. A&N may not be an exception.

North by North West - 1

2007-03-14T01:43:00.000-07:00

NORTH BY NORTH WEST – 1
Are Scandinavians Sanctimonious??

A 2-pager by Ajit Chaudhuri

Introduction: Most of my readers would be familiar with the previous government’s decision to request bilateral aid agencies, except for a select few, to pack up. If you are not, it is only the reasons that are interesting and relevant to this paper (the policy itself is likely to be rescinded a la the Governor of Tamil Nadu), and it is these that I will try to enumerate. The official reasons for this were that the previous government saw India as a soon-to-be developed country and wanted to signal a change in status from aid recipient to aid giver, that overseas development assistance was not very much anyway in per capita terms and as a percentage of GDP, and that the amount of bilateral aid the government received was not worth the effort the government put into receiving it. The unofficial reason was that India was at the receiving end of opprobrium from some of the donor countries in the aftermath of the 1998 nuclear blasts, and the government did not feel that providing tiny quantities of money gave a small country the right to question India on security issues. And, that dealing with these countries, especially the Scandinavians, was trying because they were sanctimonious.

This paper attempts to address this last point. Many of us in the development business have had to deal with Scandinavians – they have a plethora of aid agencies operating in India and a mafia-like hold over international recruitment in the UN system. Whether they are sanctimonious or not is a matter of perception. Do they have the right to be sanctimonious? This paper has a short introduction to Scandinavians in general and a longer treatise on their treatment of minorities that concludes that they are not very different from anybody else - just quieter and more systematic.

Scandinavia and Scandinavians: The popular perception of Scandinavia is one of a giant refrigerator populated by tall, blonde and socialistically inclined men and women who look alike, think alike, and, except for a brief period in history when they were busy looting and pillaging the rest of Europe and discovering America, want to make the world a better place in which everyone uses cellular phones. In fact, Scandinavia consists of the countries Denmark, Faroe Islands, Finland, Iceland, Norway and Sweden. They are all small, especially Faroe Islands, a protectorate of Denmark, and Iceland, population 295,000, which is often the subject of discussions on the viability of small countries who have to maintain a central bank, an airline, a national football team with aspirations of qualifying for the World Cup Finals, and other such trappings. Their histories are intertwined – Norway won freedom from Sweden only in 1905, Finland was a grand duchy within Sweden before being annexed by Russia and winning independence only in 1917, Sweden and Iceland were part of Denmark, etc., etc. Today, Norway and Iceland are not part of the EU but are part of the EEA, Sweden and Denmark are part of the EU and the EEA but not the Euro zone, while Finland is a member of all three entities. They all speak different dialects with Germanic roots except Finland whose language is Finno-Ugric in origin.

The Stereotypes: A Danish friend of mine once said that understanding Scandinavians is quite easy – the Danes are the bosses and keep Iceland, Greenland and the Faroe Islands alive with their financial aid. Norway is a mountainous country and its people are constantly disappearing into their hunting lodges, drinking too much akvavit and then mistaking their fellow hunters for moose and shooting them. The Swedes are the businesslike ones, the only time they are not thinking about money is when they are passed out on the streets of Copenhagen which, because of its cheaper alcohol, is to Swedes what Daman and Diu are to Gujaratis. Finland is a predominantly rural country, and Finns are basically inward-looking villagers with a closed mentality that is more Russian than western. While this is not quite true (Iceland has long ceased to depend upon Danish aid), it is quite a helpful understanding of stereotypes in Scandinavia.

Minority Rights in Scandinavia - The Saami: The far north of Scandinavia was originally inhabited by an indigenous community called the Saami, who converted from a hunter-gatherer society into one dependent upon fishing (specifically those along the coastline) and, with the domestication of the reindeer, reindeer husbandry. Land was held on a communal basis. There were no international boundaries in this region at that time, and thus few restrictions to the movement of herds. The Saami practiced a way of life that emphasized a close linkage between their livelihood, their social and cultural systems, and the harsh natural environment of the far north. Today, there are about 75,000 Saami of whom most are in Norway.

They gradually came into the contact of explorers and adventurers from the south (about the 13th century), who were followed by missionaries and traders and finally by arms of the states of Norway, Sweden and Russia who made informal agreements on borderlines and taxation rights in the Saami area. It was also a period when southerners began to settle in the area and practice fishing and settled agriculture and thus compete for natural resources with the Saami. Churches and businesses regulating the Saami's access to the fur trade were gradually set up. The process of colonization thus began.

This was formalized with the signing of the Lapp Codicil in 1751 that divided out the Saami area by defining national boundaries in the far north. It rendered the Norwegian Saami as separate from the Swedish, Finn and Russian Saami and restricted the movement of reindeer herds across national boundaries. At the same time stress was given to rational agriculture, thus encouraging settlers from the south to fence and 'individualise' the land and block access to Saami reindeer herders for whom land was a communally held property. Norwegian, Swedish and Finn policy towards the Saami differed in some aspects, but all were aimed at colonizing the far north. I will concentrate upon events in Norway, which has the most significant Saami population.

The first signs of a backlash to this process appeared in the 1840s with the beginning of a Saami revivalist movement under the leadership of Lars Levi Laestidius that culminated in the Kautokeino rebellion of 1852. The Laestidian sect attacked the local merchant-cum-sheriff, the local liquor dealer and the local vicar - the authorities subdued the rebellion and 2 leaders were subsequently beheaded. A process of rapid Norwegianisation followed. In the 1850s, the Saami lost the right to be educated in their own language with a decree enforcing the teaching of only Norwegian in schools. In 1902, the Land Act stipulated that land could be transferred only to Norwegian citizens who could speak, read and write Norwegian. Social Darwinist thinking provided ideological legitimacy to the process with the claim that the Saami would fall prey to evolution and natural selection. There was a simultaneous increase in interest of mainstream populations in Saami territories due to the discovery of ores and national security considerations. All these served to legitimize the assimilation policy of the state and provide little space to ethnic diversity and cultural differences.

In Norway, although the official assimilation policy ended in 1948, attitudes to the Saami did not change. Additionally, disadvantages suffered by the Saami in the process of assimilation did not disappear - language, tradition, culture and perceptions of history and identity are values that are difficult to regain. A large number of committees and organizations were set up to facilitate development in Saami regions between 1950 and 1975, Norway's political parties tried to include Saami aspirations within their manifestos, much effort was made to devolve power, but nothing reached the roots of Saami identity issues until the Alta Dam agitation.

The Alta Dam – The Narmada of the North: The Norwegian Water Resources and Energy Administration issued comprehensive plans in the 1970s to develop the Alta-Kautokeino water system on the Finnmark plateau, including a dam that would inundate the Saami community at Masi. The plans also involved the construction of a road across reindeer grazing land and calving areas. The reindeer owners who were affected by this and the Norwegian Society for the Conservation of Nature took the state to court to prevent the development in 1979. The case gained symbolic value, with Saami and environmentalist interests joining forces in demonstrations and acts of civil disobedience. Demonstrations were staged at the construction site and Saami activists started a hunger strike in front of the Storting in Oslo. The dam was completed but this issue dominated the debate about Saami politics throughout the 1970s. The Saami's situation received public attention across Scandinavia and many claim that it cleared the air for a better climate for Saami politics in the 1980s. The Alta Dam provided a new life to the Saami movement for recognition of their rights and identity, in Norway and across the region.

Conclusion: It is difficult to escape the conclusion that if you want to screw a community completely and in a sustainable manner, this is the way to go about it. Move over, Idi Amin, Stalin, Saddam Hussain, Australians and Gujaratis, there is a clear champion.

References:
Chaudhuri, Ajit, “EU-Russia Relations and the Role of Small Regional Formations”, a dissertation at the London School of Economics in 2001
Minde, Henry, 'The Saami Movement, the Norwegian Labour Party and Saami Rights', on the internet
Rassmussen, Paul Nyrup, “The Danish Way”, a presentation by the then PM at the London School of Economics in November 2001
Saxena NC, “The New Government Policy on Bilateral Aid to India”, commissioned by the Embassy of Sweden, October 2003
“Small but Perfectly Formed”, The Economist issue of 1st January 1998

Acronyms / Jargon Watch:
Bilateral Aid Agencies: These are aid agencies of foreign governments, such as Swedish International Development Agency (SIDA), Department for International Development (DfID of the British government) or Norwegian Aid (Norad). They spend their country’s tax revenue, are answerable to their respective parliaments and are usually part of their country’s foreign policy.
EC, EEA, EU: European Community, European Economic Area, European Union
GDP: Gross Domestic Product
GoI: Government of India

Oh No More on Kashmir - 1

2007-03-14T01:38:00.000-07:00

OH NO! YAWN! MORE ON KASHMIR??

By Ajit Chaudhuri

Actually, no, this is a paper on South Tyrol (patience, those of you going ‘where?’ under your breaths) and may not add to our collective ‘Kashmir fatigue’! But let me first get the Kashmir bit out of the way. Most Indians tend to be vague on Kashmir – we know that there is a problem, but not quite what it is and don’t really care as long as the ‘troubles’ don’t extend beyond the valley and into our lives. Those who do know a bit more tend to find the situation depressing; they feel that the problem has historic roots that can not be undone, that Kashmir will always be a source of contention between India and Pakistan, that Muslim Kashmiris will always face an identity problem in our country, that there is no solution, and that we are forever stuck with the Indian Army pointing guns at Kashmiris to make them Indian. The point I am going to make in this paper is that it does not have to be this way, that solutions are possible, and that there are places that have moved from similar situations towards lasting peace. I give you the case of South Tyrol!

The Summer of 2004: I spent my summer vacation this year in South Tyrol in the Italian Alps. For those interested in the vacation possibilities – if you like walking about 20 km a day on soft ground in hilly terrain with a little weight on your back and eating cheese and ham and drinking red wine in copious quantities, South Tyrol would be heaven for you. If not, it would resemble a Siberian prison camp – very very naturally beautiful and blah, blah, blah but cold from when you wake up to when you go to sleep, even in May. There are no opportunities to socialize and the youngest and prettiest woman I met (by far) was my own Mother. South Tyrol consists of a low and narrow valley into which are squeezed a river (the Eisach), an autostrada, a normal road and a railway line, with the mountains going up another 2000 meters on either side. Its main town is Bozen/Bolzano, and it is separated from Austria by the famous Brenner Pass across which Hannibal had brought elephants to raid Rome eons ago. Much like our own hill areas, the men drink a lot and the women do all the hard work, everyone is very religious, the economic mainstay is tourism, maintaining goats and sheep and small farming, and the young people all get the hell out of there as soon as they can. I stayed in a farmhouse in the vicinity of the village of Klobenstein/Collalbo in the region Ritten/Rennon, about 50 km from B/B. Why these double names, I remember thinking, and how come the locals are blonde haired and blue eyed and, while willing to converse in Italian, speak German in their homes. An enquiry into these questions brought me to the South Tyrol issue, which is seen as a model for the protection of regional and cultural minorities.

A historical perspective: The Austro-Hungarian Empire ruled Tyrol, which consists of today’s Austrian province of North Tyrol and the Italian provinces of South Tyrol and Trentino, from Vienna until the end of WW1. The first two were predominantly German speaking, the last predominantly Italian, and Tyrol itself (89 percent German, 4 percent Italian and 7 percent others in 1900) was seen as a borderland between German and Italian cultures, joined rather than divided by the Brenner. The whole of South Tyrol was ceded to Italy (Peace Treaty of St. Germain, 1919) as per assurances made by the British and the French to the Italians in 1915 in return for Italy’s participation on the allied side in WW1, and in complete contradiction to the principle of self-determination advocated at the time by US President Woodrow Wilson. It is indeed interesting to note how many of today’s territorial disputes have their roots in British and French shenanigans in the first half of the 20th century.

The fascists came to power in Italy in 1922 and embarked on a programme of sustained Italianisation in South Tyrol. The German presence and influence in cultural, political and economic life was repressed, Italian became the official language and those officials not fluent in it were dismissed, schooling, public inscriptions and place names were made solely in Italian, and names of people were Italianised. The government also set up industries and encouraged the movement of people from southern Italy into the region. In 1939, Italians were 24 percent of South Tyrol’s population but in other aspects the policy achieved the opposite of its intentions – by creating a Tyrolean identity that disassociated rather than integrated with Italy. Mussolini finally accepted that he couldn’t convert 220,000 German speakers into Italians and, along with Hitler (who was looking for Italian support for his ambitions at the time), came to the conclusion that a radical solution was required – that South Tyroleans had to choose between Germany, or emigration, and Italy, or assimilation. 86 percent opted to move to Germany, and did not due to the advent of WW2 that gave both Germany and Italy other matters to think about.

In 1943, German troops occupied South Tyrol and, glad to be ‘liberated’ from the Italians, the locals collaborated with the Nazis. This subsequently became an obstacle to South Tyrol rejoining Austria after WW2, with the Allied powers rejecting both their claims in favour of Italy who had ended the war on the side of the Allies. However, Italy and Austria were obliged to come to a political settlement over South Tyrol, and both countries’ foreign ministers assured equal rights for Tyroleans and Italians in a vaguely worded First Autonomy Statute that raised more issues than it resolved. Tyrolean politicians from both sides of the Brenner repeatedly claimed that autonomy was temporary and self-determination was the ultimate objective. The Italian government reacted by passing restrictive laws that it applied restrictively, and lumping South Tyrol with the Italian province of Trentino to form one Italian-majority region. A South Tyrol People’s Party (SVP) was formed to represent German speaker interests and obtained a sufficient majority among them to obtain de-facto rights to negotiate with Italy. Austria’s sovereignty was fully restored in 1955 and it began to seek a role in the South Tyrol issue, which Italy treated as an internal matter and refused to have any official negotiations. The issue became hotter and hotter.

An insurgency begins: The bomb blasts began in 1956 on symbols of Italian rule; government offices, police stations and power plants. Italy sent 15,000 soldiers in, and Italian right wing radicals responded by carrying out bombings of their own, including in Austria. The issue escalated and internationalized – Austria brought the South Tyrol question into the UN in 1960, which confirmed that Austria had a say. Italy continued to refuse to talk meaningfully with Austria, who took it to the UN again in 1961, who in turn re-affirmed the 1960 resolution. Italy relented and began talking to Austrians and to South Tyroleans, the latter for the first time. A settlement package was approved by the SVP in 1969 and subsequently by the Italian and Austrian governments, coming into force as the New Autonomy Statute in 1972.

A few years of relative peace resulted, before two factors intervened. The first was ‘Italian slowness’, or the tortoise-like pace at which the Italian government worked, which created a concern among the German-speakers that Rome was trying to slime out of implementing the autonomy measures fully. This gave cause to German hardliners of the ‘Ein Tyrol’ ideology. The second was that the Italian speakers, up to now a mollycoddled bunch, did not react well to losing their special privileges and began voting for far-right Italian political parties. The atmosphere deteriorated again, with sporadic bombings and whatnot, and this continued until the late 1980s.

Working towards a solution: It was only in 1988 that some of the more contentious points on the Autonomy Statute, such as equal status for the German language in the police force and in court, were passed and implemented by the Italian legislature and this led to de-escalation in tension. After this, there was considerable urgency by the Italian government to get this whole thing over with, and the final points on the statute were implemented in 1992. The SVP approved the packet with an overwhelming majority and a Conflict Settlement Declaration was handed over to the UN Chief by the Italian and Austrian governments.

Managed but not resolved: Since 1992, South Tyrol has been enriched by new legal and administrative competencies and now has far-reaching territorial autonomy within the Italian state. It has also become an economically prosperous region, with low unemployment and high per capita income. However, there is a sort of voluntary apartheid in the region, with the Germans not distinguishing between Italians from South Tyrol (who have been there for several generations) and other Italians. Most institutions of civil society are mono-ethnic; schools, political parties, trade unions, clubs, churches and even kindergartens. About the only exception is the Green Party. The Italians are concentrated in the bigger towns, the Germans in homesteads in the mountains. The Germans generally eschew public employment (the tourism business is more lucrative) and most officials are Italian. This is all a bit weird, and it is clear to the casual observer (which I was for 10 days) that there is a fair amount of mistrust between the two communities who do however make a genuine effort to put the past behind them. The expected negative outcomes for the Germans of remaining within Italy, such as being swamped by southern Italians in search of economic opportunities, did not materialize – in fact the proportion of Italian speakers dropped a bit after 1992. There is also confidence that the future of South Tyrol’s autonomy is not subject to the whims and fancies of the Italian state as it is internationally guaranteed and the Austrian government is a keen observer.

Conclusion: Well, such is the case of South Tyrol! There are some parts that must be pretty familiar for those of us who read local newspapers, and also parts that are not. These do not require enumeration. To go back to the beginning of this paper, conflict can be managed (if not resolved) and it is possible to have lasting peace in areas that have deep-rooted problems of ethnicity, identity, sub-nationalism and nationalism, even when two or more nations are involved. Things don’t have to go the way of Nagorno-Karabakh, or Kosovo, or Chechnya. There are positive models as well, and I sincerely hope that South Tyrol gives some cause for optimism in this depressing business.

References:
· Kager, Thomas, “South Tyrol: Mitigated but not Resolved” in the Online Journal of Peace and Conflict Resolution.

Acronyms/Jargon watch
Autostrada Italian for autobahn
Ein Tyrol One Tyrol
SVP SudTyrolischer Volkspartei
WW1 World War 1
WW2 World War 2

Oh No More On Kashmir - 2

2007-03-14T01:34:00.000-07:00

OH NO! NOT ANOTHER ON KASHMIR!! Part 2
A short note by Ajit Chaudhuri

Since the earthquake of October 2005, I have traveled to Kashmir several times – specifically to Srinagar town and Baramullah and Kupwara districts. When I mention this to people, I get a strange look along with the question ‘how is it?’ or ‘what’s it like?’ I am never too sure what to say – are they asking about the scenery, the food, the women, or the militancy? What follows is a general introduction to Kashmir for those with an interest in going beyond the stuff in the news and films, and those considering a visit.

The first thing that strikes one about J&K state is its size and diversity – it is a huge area consisting of plains, mountains, valleys, passes, deserts and plateaus, and of Muslim, Hindu, Sikh and Buddhist communities. Both size and diversity were much more so before 1947 when it stretched from Tibet in the east to the Northwest Frontier in the west, and from the plains in the south to the Wakhan corridor, a narrow stretch of Afghanistan created to separate the British and Russian empires, in the north. It then consisted of the Jammu region, the Kashmir valley (including the Pakistani-administered bits of it), Ladakh, what the Pakis call their Northern Areas – Baltistan (which was originally part of Ladakh) and Dardistan – and Aksai Chin, the area India conceded in 1962 to China. I will restrict this paper to the Indian part of the Kashmir valley.

The Kashmir valley is a fairly small part of this vast region, but it is the part that is heavily populated. Most of the residents are ethnic Kashmiris – they are Kashmiri speaking, rich, educated and traditionally dominant, with what was an 80:20 mix of Sunni Muslims and Kashmiri Pandits (KPs) changing to about 99:1 because of the militancy and the subsequent out-migration of Hindus. Minorities include the Pahadis, who are tall and broad and claim to be Rajputs brought as mercenaries by the Dogra kings, and the nomadic Gujjars and Bakharwals. The minorities are less educated, speak a dialect of Punjabi, and stay in the mountains surrounding the valley – they tend not to speak Kashmiri, and are looked down upon by Kashmiris (and don’t like it – both the terms ‘Pahadi’ and ‘Kashmiri’ have a slightly derogatory connotation when used by the other). The earthquake-affected areas of Uri and Tangdhar are Pahadi and Gujjar dominated, and the Sikh officer accompanying me from Border Roads Organization (BRO) on one of my journeys was much more comfortable with the community than his Kashmiri superintendent. Most of the Muslims are converts from Hinduism and, in the villages, retain their caste identities and hierarchies – Bhats, for example, are Brahmin converts and consider themselves superior to others. The Rajput and Jat converts tend to disagree.

What is the militancy about? One of my friends, a conflict expert[1], said that unfriendly neighbours can fan insurgent movements but root causes always lie within. The Kashmiri people were actively pro-India in its conflicts with Pakistan in 1947, 1965 and 1971, which gives lie to the view that the cause of the problem is in the way the region acceded to India. In my view, poor governance and high corruption levels enabled a very small group to gain at everyone else’s cost, and the resultant backlash has taken the form of a movement against the state. The movement has a broad spectrum, with some strands that are Islamic in nature, some that are pro-independence, some that are pro-Pakistan, and some that are mere extortion rackets. Most people, with the exception of the KPs, are pro-independence and most are also quite happy to see the back of the KPs who dominated government employment and were seen to gain disproportionately from corruption.

Who are the militants? The BRO guys gave me an interesting take on this. A brief word first on the BRO – it builds and maintains roads in the border areas of the country, and is responsible for most roads in Kashmir. It is scattered in remote outposts across militant dominated areas without protection, and yet rarely gets attacked. Its formula is fairly simple. First, neither its camps nor its vehicles ever carry weapons, and this is known to one and all. Groups therefore never attack it so as to re-stock their weapons inventory. Second, the roads it builds are critical links for remote villages, and it is often the most important employer in the communities where it works. There is therefore considerable pressure from people on the militancy to enable BRO to work unimpeded. And third, and not least, it does not hesitate to make strategic use of its liquor rations. The BRO boss in Uri said that when he gets a call from the Hizb area commander asking for five men to be employed for five days, he could be sure that five men will land up and will actually work for five days. When LeT or JeM area commanders ring up asking for the same, it is usually just money they are looking for. He attributes this to the fact that the Hizb is a Kashmiri group, has a vision for what it wants Kashmir to be and sees BRO’s work as an important part of that, and the others are Pakistanis with only one thought on their mind. Kashmiris themselves are fairly wary of the Paki groups and of Pakistan itself – many have visited Pakistani Kashmir and seen for themselves the effects of Punjabi imperial attitudes and military rule. This was re-enforced in October 2005 by the positive role the Indian Army played in earthquake relief, which was in sharp contrast to their Pakistani counterparts who walked through the affected region without looking left or right to secure their borders – a fact all Kashmiris are aware of.

So what is the fight between India and Pakistan over Kashmir actually about? Is it that the land is worth the conflict? Or that Pakistan is desperate to repay India over Bangladesh 1971? Or even that the Pakistanis feel for their Kashmiri brethren, as is often touted to be the case? There is a more cynical and basic explanation in some quarters[2] – that it is neither about land, nor egos, and not even religion – it is about water. More than 90 percent of Pakistan’s fresh water comes from India through, from the north southwards, the Indus, the Jhelum, the Chenab, the Ravi, the Beas and the Sutlej rivers. According to the Indus Water Treaty of 1960, India has the right to treat the southern three rivers catchments and has to let the northern three, all of which are through J&K, flow unimpeded into Pakistan. However, fresh water requirements in both countries have grown astronomically and are projected to grow even more astronomically in the future. India has begun treating the northern three rivers as well, thus effecting Pakistan’s real strategic interests. The Chinese have not helped the situation by considering the same on the three large Indian river systems that originate in their territory, the Indus, Sutlej and Brahmaputra, to divert water to their parched northern provinces. As someone said – the wars of the future will be fought over water, not oil.

So much for all this background! What’s Kashmir actually like? Well, for one, it’s as beautiful as advertised – the chinars along the Jhelum, the houseboats on Dal lake, Nishat Bagh, Sonmarg, etc. The roads are excellent. The food is tasty – with rice a staple and various kinds of meat such as Rishta, Gojtaba and Tabak Maaz to go with it in a distinct style of cooking called Waazwaan. And the women are stunning! Preventing heavenhood are the Kashmiris themselves, who though highly educated and well spoken are not straightforward (your tourist tout in Connaught Place is a fairly typical example), the ubiquitous guns of the security forces and last but most, the reason for these guns.

A word about the Army – this is one lot of people you really feel sorry for. They are cooped up inside barricaded areas all the time, going outside only under heavy security (despite which they are constantly being shot at), and with no scope for normal interaction with anybody. I had to stay 3 days in the BRO mess in Srinagar, which is not under particularly high security compared with the Army camps, and yet could not go out anywhere and had to maintain hierarchy and formality 24 hours a day. Imagine doing it for three years? No wonder they have to deal with so many psycho cases these days.

Traveling within Kashmir is stressful! Civilian vehicles are stopped and checked every twenty or so kilometers. I once had the experience of traveling at night from Kupwara to Srinagar, where the vehicle was stopped and powerful lights shined upon it, blinding one completely. With the lights was a medium machine gun, which was pointed at the vehicle. Three soldiers came out, of whom two would stay a little back with their fingers on their AK-47 triggers, again all pointed at the vehicle, and one would come up to the car and ask for papers. The moment they are sure that you are no threat (being from the plains and having an India Today identity card help that along), there is a visible easing of tension and their demeanor is almost welcoming while letting you through. But until that point, even a small twitch can lead to a massacre. And this was repeated every twenty kilometers. After that, I made sure that all movement was done in daylight.

Kashmiris tend to be two-faced, thinking one thing and telling you another. And yet, hospitality norms have not been eroded by the many years of militancy, and once you have come to a deal with a vehicle or hotel you will usually be pleasantly surprised at the quality of service. Everyone speaks very well and is politically aware, and good discussions are sometimes possible. But scratch below the surface and there will be several areas of argument, such as the misdeeds of the Army and India the imperial monster. The effect of many of these is that I turn into an unashamed nationalist as soon as I enter Kashmir (the sort who would make me blanche anywhere else), taking examples of misdeeds of the militancy and asking why it is that the Army’s misdeeds can be questioned, but these cannot. And questioning Kashmir’s ability to survive without the Indian taxpayer subsidizing it – to which the response usually is that that problem is for them and not the Indian taxpayer to worry about. All in a very civilized vein, of course.

Would you be safe if you visited? Yes! The militancy is fairly well organized and you are a target only if you are a target – a few random incidents notwithstanding. My advice is not to be dumb and organize security unless you actually are a target (in which case, don’t visit) because the mere presence of security attracts militant operations. And if you leave by air, budget 45 minutes for the journey from the airport gate to the check-in area.

This paper may not read like a J&K Tourism brochure, but I would like to conclude along similar lines. Most people who travel to Kashmir come back with the view that it was, net net, a great experience. And while you may not return quoting Mohamed Iqbal (who, upon seeing Kashmir, said ‘if there is heaven on earth, it is this, it is this, it is this’), it will still be worth the time, money and effort. If you are considering a visit, do go ahead.

Acronyms:
BRO Border Roads Organization
Hizb Hizbul Mujahedin
J&K Jammu and Kashmir
JeM Jaish-e-Mohamed
KP Kashmiri Pandits
LeT Lashkar-e-Toiba

Additional Reading Material for the very enthusiastic:
‘Jummoo and Kashmir Territories’ by Frederic Drew, the then Governor of Kashmir, published in 1893.
‘Shalimar the Clown’ by Salman Rushdie
[1] Dr. Sunil Kaul, currently with The Ant, an NGO in Assam.
[2] Gleaned from discussions with Col. Talwar in Srinagar over long and cold winter evenings.

The Empire Strikes Back

2007-03-14T00:17:00.000-07:00

THE EMPIRE STIKES BACK – I

A 2-Pager by Ajit Chaudhuri

The development sector, when I drifted in to it, was still a space occupied by people looking to work in the farthest possible place and do something ‘different’. The decision to work in ‘an NGO’ guaranteed long-term penury, pity tinged with scorn from one’s peers from post-graduation, a low priority in the Darwinian marriage markets, and a life of conflict with the authorities. Somewhere along the way, while I was still avoiding the dreaded ‘what do you do?’ question at social occasions, development became mainstream. The government acknowledged that it was not doing, and was not capable of doing, enough to address the problems of poverty and hunger and began looking to NGOs to provide answers on the ground. Money began to flow in, people in immaculate khadis began stalking the corridors of power, development became a respectable career option, and all sorts of NGOs sprang up; quangos, gongos, dongos, development contractors, resource NGOs, etc., etc. The new lords of poverty had arrived, and NGOs are now a major employer and development a multi-million dollar industry.

There have been recent indications that things are going to change, and this two-pager looks at one of these indications, the FCMC, in some detail. No, this is not a short form of bi-lingual abuse – it stands for Foreign Contribution (Management and Control) Bill 2005. Foreign funding for NGOs is currently governed under the Foreign Contribution (Regulation) Act of 1976, or the FCRA, and the government proposes to replace this with the FCMC over the next one or two years. Accountaid, an organization that provides accounting support and advice to NGOs, has studied the FCMC, its differences from FCRA, and its implications, and published this in the newsletter Accountable (volumes 106-109), from which I have prepared this synopsis.

FCRA
FCMC
History: The FCRA seeks to ensure that foreign funding does not affect Indian elections. It was originally targeted at political parties, and NGOs were included as a safety measure. NGOs were asked to register under the FCRA so as to receive foreign funds in 1984, and about 30,000 have registered so far. The FCRA department now spends all its time registering and monitoring NGOs.

Since FCRA was not designed for NGOs, its implementation has created some problems. For example, an organization can receive all foreign contributions only in one designated bank account, and it has to be spent from this bank account. NGOs with activities in multiple locations have to either carry cash around or break the law. The FCRA is also vague on interest on foreign contributions, and on income from foreign contributions.

On registration: NGOs have to apply for registration under FCRA. There is no provision for renewal.

If an NGO is refused registration, reasons are not given.

The FCRA is centralized in Delhi. This causes major problems for NGOs located in remote areas.

No fees.

There is no provision for cancellation of registration.

There is a provision for prior permission to receive foreign funds in case an NGO has a willing foreign contributor but no FCRA registration, in which the department is to respond in a maximum of 120 days.

As of 1996, FCRA registration can be frozen if fifty percent or more of the governing body members change. This leads to NGOs avoiding elections.

If fellowships/scholarships/stipends to individuals are being provided from foreign funds, payments above Rs. 36,000 per annum have to be reported.

The government’s only prohibitory power is that it can direct that a specific person or NGO requires prior permission to receive future foreign contributions.

Organizations of a political nature can receive foreign funds after getting prior permission on a case-by-case basis.
The FCMC shifts focus from politics to anti-national activities, and is targeted primarily at NGOs. While anti-national activities are not legally defined, ten activities are listed (terrorism is not one).

Foreign contribution can be accepted into only one designated bank account, but can be shifted to other bank accounts (as long as these are used exclusively for foreign funds) according to operational needs. These bank accounts can only be in scheduled banks.

Interest on foreign contribution is foreign contribution. Income from foreign contribution is still vague.

NGOs will have to apply for registration under FCMC, and renew the registration every five years.

The grounds for refusal of registration have been officially listed, and the grounds for rejection will be conveyed in writing.

It appears that the FCMC registration and administration will be decentralized.

NGOs will pay fees for registration, renewal of certificates, appeals, etc.

The government can prescribe the percentage of foreign contribution an NGO can spend on administration.

The FCMC lays down a provision for cancellation of registration. All foreign funds with the NGO at the time of cancellation become the government’s.

The provision for prior permission continues, without mention of time limits.

There is no mention of this.

There is no such requirement.

The role of banks has increased. Banks are prohibited from allowing credit to or withdrawal from foreign contribution accounts unless the concerned NGO has FCMC registration or prior permission.

The government has considerable prohibitory power. It can put onto a prior permission list an entire class of people or NGOs, a geographical area, any specific purpose, or any specific source.

Organizations of a political nature cannot receive foreign funds at all.

Other points to note are –
· The FCRA will be withdrawn once the FCMC Bill is passed in parliament.
· NGOs registered under FCRA will not get automatic registration under FCMC. They will have to register under FCMC within two years of the Bill becoming law.
· In that window period, FC returns have to be filed in new formats and the new provisions will govern transactions.
· Registering 30,000 existing FCRA holders in this two-year period is likely to be a bureaucratic nightmare.

The FCMC’s potential for bureaucratic harassment should be generating concern in the NGO sector – yet there is not a peep from a sector that has an opinion on most things. Perhaps this is because it is the fourth attempt to straighten out the FCRA since 1988; the other three did not see the light of day because of changes in the government before the bill could become law.

Genghis Khan and Management

2007-03-14T00:15:00.000-07:00

THE GENGHIS KHAN SCHOOL OF MANAGEMENT

A 2-Pager by Ajit Chaudhuri

“History is written by the winners”??

Readers with an interest in nomadic cultures and communities would hark back to the times, in the 12th and 13th centuries, when there was a genuine clash of civilizations rather than the sexed up stuff peddled by Huntingdon that is so much in the news these days. Those were times when a small group of nomadic people called the Mongols united under Genghis Khan, moved out in all directions from their base in Karakorum (somewhere in Mongolia) and set about attacking the civilized city states and settled agriculturist communities that were dominant at the time. At its height, the Mongol empire was the largest the world has ever seen – stretching from the Black Sea deep in Europe to the Pacific Ocean in the east, from Moscow and Siberia in the north to the Himalayas and the Persian Gulf in the south. The three or four centuries that they were in power is mostly described as a dark time in history, when mankind was under attack from the scourge of an evil and cruel people, when the relentless pressure of barbaric nomads laid civilization low, when agricultural land was subsumed and converted into free ranges. And yet, it was a time of unprecedented exchange between east and west, a time when it was possible to travel overland from Italy to Beijing (can one do it today?), a time when established interests across the known world were broken and it was possible for ordinary people to make their mark. The old adage of history being written by winners could be changed to ‘history is written by those who can write’.

What was it about this small group of unlettered nomads that enabled them to rule the world? What enabled them to fight and win battles as far away as Leignitz (in 1241, a particularly interesting one because it was the Mongols western-most battle and the only one fought against the Teutonic Knights – more about this later) in today’s Poland, and in Myanmar, and around Baghdad, and in the outskirts of Vienna, exercises in logistics that must have been mind-boggling? How did they achieve such military domination, especially as this was achieved without larger numbers, superior weapons or a better economic base? How did such few people (at their height, there were about 700,000 Mongols) administrate such a vast empire? How did the empire last so long after the military dominance was lost? These questions are difficult to address because the Mongols themselves left no records, and one is thus dependent for information upon the educated elite among the civilized communities who were at the receiving end during this period. What I discovered during my inquiry into the Mongols of 1167 to 1552, especially the earlier part of this period, is relevant to any leader and manager today, and this is as follows.

Have core values, and enforce them: The Mongols, in keeping with their nomadic culture, placed a high value on simple things such as loyalty, honesty, generosity and an acceptance of the beliefs and way of life of others. They hated theft, and traitors were put to death horribly, even if they were betraying their rulers to the advantage of the Mongols. Apart from some core values, the Mongols did not impose upon those they ruled over – so much so that it was difficult for their enemies to rally around religion, both Muslim and Christian, race or ethnicity against them. The intense loyalty that they inspired enabled them to rule for far longer than their military dominance lasted – for example, the Russian princelings around Nyiznhi Novgorod and Moscow fought amongst themselves but all were scrupulously loyal to the Khan in Kazan and it was only in the 1550s that Ivan the Terrible smashed the Mongols by taking Kazan and Astrakhan. A common civil code called the Yasa was made applicable by Genghis Khan to the Mongols that was remarkably gender sensitive for the time – it outlawed adultery and the kidnapping of women (common practise in that day and age), required a woman’s consent for marriage, and made all children legitimate irrespective of the nature of relationship between the Mother and Father.

Get the best people into leadership positions, and ensure that good people rise: The Mongol empire was the first (and last??) genuine meritocracy in the history of mankind – unlike the armies of the day in which noble birth and connections enabled a person to get ahead, there was only one way by which to get command in a Mongol army – proven competence. They were indifferent to your birth, they were indifferent to whether you were a Mongol or not, and they were even indifferent to whether your abilities had been demonstrated against them – in fact, many of their commanders were from armies that had fought against the Mongols, and one of Genghis Khan’s most trusted generals had earlier shot Genghis’s horse from under him as an enemy foot soldier. Mongol armies were therefore much better led than their opponents, enabling their smaller forces to take on much larger armies and win. The meritocracy transferred on to civil life as well – administrators in the empire were also chosen and promoted on the basis of ability.

Be realistic, encourage subordinates to be frank and to speak their minds: Genghis Khan was one of those rare leaders who did not encourage flattery and was not afraid to listen to stuff that he did not like to hear. As a result, his generals gave him realistic assessments and, in turn, were given realistic assessments by their subordinates. This percolated across the empire and, again, was in sharp contrast to other armies of the day.

Understand your advantages and use them: The typical Mongol soldier was an expert horseman and could shoot an arrow accurately over a long distance, even while riding in the other direction. Each soldier would ride with three or four horses, and could change horses while riding at speed. This enabled a Mongol army to travel far larger distances much faster than other armies of the day. It also enabled them to maneuver nimbly in battle, change battle plans effectively and retreat quickly.

Know your adversary: The western armies of the day, and especially elite cavalry forces such as the Teutonic Knights, were huge men with heavy armour mounted on large horses and were formidable opponents who were able to smash their way through opposing forces. The Mongols simply shot their horses – the same Knight on the ground was a sitting duck. Similarly, western armies had a culture in which the commander had to be and be seen to be in the thick of the fighting setting an example to his troops, and was thus easily identifiable in battle. The Mongols would identify and kill the commander and thus render their opponents confused and not very sure who was giving the orders. Mongol commanders, on the other hand, were not easy to identify in battle. Western armies also saw retreat as a loss, and when their opponents retreated they would charge in with their cavalry to mow them down. The Mongols thus used the retreat to draw their opponents into traps by pretending disarray, turning around and fleeing, and thus inviting the enemy into a cavalry charge that invariably led to a massacre at a place of the Mongols’ choosing. This was later called the ‘steppes retreat’, a battle tactic that the Russians would use very effectively against Napolean in 1812.

What you are matters, not what you look like: A Mongol army going into battle looked like a horde descending, they did not appear to have any order or formation and there were no sounds of drums and trumpets. In actual fact, the Mongols were highly disciplined and tightly organized troops and used the decimal formation of platoons of ten, units of hundred, divisions of thousand and armies of ten thousand, who used visual tools to coordinate and communicate with each other in battle.

Use information technology effectively: Like other great IT innovations, the courier system (the Mongols, incidentally, were its inventors) was initially developed for military purposes. Mongol armies would have daily courier services running between them – it enabled them to know exactly where each other were, and if they planned to converge at a certain time and place they were usually able to do it to the day. The courier system also invariably enabled them to know exactly where their opponents were, and thus to choose the place and time of battle. The Journal of Military History, in its description of the battle of Leignitz, is instructive on this matter – it says that Henry the Pious of Silesia was expecting to join forces with the King of Bohemia to take on the Mongols but did not know where these forces were and when they would be able to join up. The Mongol generals Batu Khan and Subatai Khan, on the other hand, knew exactly where the Bohemian forces were (about four days away) and were keen to enforce the battle before their opponents joined forces. They did so and won the battle with a far smaller force.

Use PR as a weapon: Massacres, loot, rape and pillage were not Mongol inventions, though they used them as a means of subduing opposing populations and avoiding battles. When the Mongols did go into battle against a city-state and win, they would systematically destroy, rape and kill. They would then send survivors out to tell other city-states about what had happened – those that were opting to fight rather than pay the Mongols a tribute would invariably rethink their options. It is interesting to note those who were not killed in the city-states the Mongols conquered – the interpreters, the doctors and the engineers – the army used them for their further campaigns.

To conclude: It is certainly not possible for most of us to display the leadership qualities of Genghis Khan, even though many of us have his blood (according to Oxford University, about one out of every six people on earth today are descended from him and he has been nominated the ‘most successful alpha male’ ever). However, the Mongols are of some contemporary interest because it is only now, 777 years after Genghis’s death, that a similar world military domination by one power is being seen.

Worst of the Worst of the Worst

2007-03-14T00:14:00.000-07:00

THE WORST OF THE WORST OF THE WORST
By Ajit Chaudhuri

In this time of ‘India Shining’, it is possibly a politically incorrect time to draw attention to the absolutely worst parts of our country. However, many of us do spend time thinking about which these places are, and why, and what can be done about it. The Planning Commission brings out a ‘Worst 100 Districts’ listing (last in 1997) to remind policy makers of the existence of parts of the country. Some, but not many, aid agencies use the need of the area as a criteria for where they should target their resources – I remember, for example, the British charity Actionaid first undertaking such an exercise in the early 1990s, more than twenty years after they had begun working in India, to the deep distress of the NGOs they supported in the non-BIMAROU states.

An article entitled ‘India’s Worst’ by Shankar Aiyar in the India Today issue of 25th August 2003 touches upon this issue in some detail. It describes a report by two well-known economists, Bibek Debroy and Laveesh Bhandari, entitled ‘District-Level Deprivation in the New Millennium’ that lists out 69 of the worst districts in this country. A listing, for information, is appended.

The listing has a few, but not many, surprises. Most of the worst districts lie in, no prizes for guessing, Bihar (26 of the state’s 37 districts), Jharkhand (10 of 22) and Orissa (10 of 30). UP (13 of 70) and MP (6 of 45) are the other noteworthy contributors to the list, signifying a socio-economic fault line just east of Kanpur running south east across the country. There are two outliers, one district in the southern state of Karnataka (Gulbarga) and three in the northeastern corner of Arunachal Pradesh.

A word on the methodology! Debroy and Bhandari take the official statistics for six different indicators; percent population below the poverty line, percent of households going hungry, infant mortality rate, percent children getting complete immunization, literacy rate and gross enrolment ratio at the elementary level, and then rank all India’s districts for each indicator. They then address scale and scope issues for identifying the worst districts, for example, to what extent should it be among the worst in any indicator (bottom half, bottom quarter, bottom five percent?), and in how many indicators should it be among the worst. A listing of 437 districts were identified with the criteria defined as being in the bottom half of at least two indicators, and only 2 with the most stringent criteria of being in the bottom five percent in at least four indicators. Finally, the authors decided that a criteria of being in the bottom quarter in at least four indicators would lead to a sensible number of 69 districts, and they have thus selected this criteria. The attached table denotes the number of districts that each setting of criteria brings about.

Lowest __ percent of districts
Minimum number of heads under which district is deprived
2 3 4 5 6
5
38
11
2
0
0
10
80
27
8
0
0
25
245
145
69
14
0
33
308
211
129
44
2
50
437
334
234
149
42

The two obvious weaknesses in methodology are a) several of the indicators measure the same thing and b) government data collection, especially in the remote, backward districts, is open to question on the issue of rigour. This does not, however, take away from the most useful part of the work - the listing of the worst districts. The rest of the report, an analysis of why, comes across as academic and rather obvious.

For the developmentally inclined, some matters that come to mind from the report are –

Plotting the worst districts onto a map of India reveals that, in addition to the socio-economic fault line east of Kanpur, worst districts appear to come in clusters. Gaps in the clusters are usually districts that are bad but not in the worst 69. Poor governance, undeveloped institutions, poor economic resources, poor communications, and recurrent disasters such as floods (but not drought, except in some outlier districts) come across as major factors in the causes column. Political leadership is another matter, with many of these districts being VIP constituencies. MP’s CM Uma Bharati is from Tikamgarh, Laloo Prasad, who is from Gopalganj, traditionally slugs it out with Sharad Yadav in Madhepura, George Fernandes has made a habit out of winning from Muzaffarpur without visiting the district, etc, etc. Nonentities represent others. Common to the VIPs and the nonentities is their inability to address the very serious issues that cause backwardness and poverty in these regions. Whether they want to is a separate issue.

Much of MP’s Bundelkhand region comes into this listing (Tikamgarh, Chatarpur, Panna), while none of UP’s Bundelkhand districts are there. This was surprising considering the bad press Banda, Mauranipur, Chitrakoot, etc. receive, but was borne out by me during a visit to the region earlier this year, when a clear distinction between UP’s and MP’s Bundelkhand regions could be observed on the road from Jhansi to Panna that criss-crosses the two states – the UP Bundelkhand was a hub of activity while MP was a barren and remote landscape. People here agreed with the listing and said that the main reason could be the UP Bundelkhand’s participation in the national freedom struggle and the subsequent flourishing of civil society institutions in the region. MP’s Bundelkhand, they said, was under Indian rulers who did not let civil society prosper with immense consequences for the region – there are few institutions, people are largely unaware of their rights and responsibilities as citizens, and all the resources are appropriated by a very small minority entirely consisting of the ex-ruling class.

Many of the districts, especially those in Orissa and Jharkhand, face the additional problem of insurgency within. Whether this is a cause of their presence on the list or a consequence of it is debatable. Doing something about addressing the problems becomes a much more difficult task once insurgency spreads in a district, for the administration, for business, for NGOs.

Finally, the listing had me wondering how much of my work was being undertaken in India’s worst districts. The answer, apart from the developmentally sexy KBK belt in Orissa and the tribal districts in MP that adjoin Gujarat, is – not much. Getting there is annoying, staying there is unpleasant, and traveling within is difficult. What about you?

References:
Aiyar, Shankar, “India’s Worst”, India Today issue of 25th August 2003
Debroy, Bibek and Bhandari, Laveesh, “District-Level Deprivation in the New Millennium” brought out by the Rajiv Gandhi Institute of Contemporary Studies

The Worst 69
Changlang Ar.P
Lohit
Tirap

Araria Bihar
Banka
Begusarai
Darbhanga
Gopalganj
Jamui
Kaimur (Bhabhua)
Khagaria
Kishanganj
Lakhisarai
Madhepura
Muzaffarpur
Nalanda
Nawada
East Champaran
West Champaran
Purnia
Saharsa
Samastipur
Saran
Sheikhpura

Sheohar Bihar
Sitamarhi
Siwan
Supaul
Vaishali

Chatra Jharkhand
Dumka
Garhwa
Giridih
Godda
Gumla
Kodarma
Palamu
West Singhbhum
Sahebganj

Gulbarga Karnataka

Chatarpur M.P
Damoh
Dhar
Jhabua
Panna
Tikamgarh

Bolangir Orissa
Gajapati
Kalahandi
Kandhamal
Koraput
Mayurbhanj
Nabarangapur
Naupada
Rayagada
Sundargarh

Barabank U.P
Basti
Bijnor
Budaun
Fatehpur
Jyotiba Phule Nagar
Maharajganj
Moradabad
Pilibhit
Rae Bareli
Sant Kabir Nagar
Sitapur
Unnao

Acronyms, Jargon watch

BIMAROU Bihar, MP, Rajasthan, Orissa and UP
CM Chief Minister
KBK Koraput, Bolangir, Kalahandi
MP Madhya Pradesh
NGO Non-Governmental Organisation
UP Uttar Pradesh

2007-03-14T00:13:00.000-07:00

WOMEN, WORK AND WOE

A 2-Pager by Ajit Chaudhuri

Tucked away in a corner of my local library, vying for my attention with “What is Sustainable Development” in Environment and “Be Her Ultimate Sex Toy: No Batteries Required” in Men’s Health, was an article entitled “Off-Ramps and On-Ramps: Keeping Talented Women on the Road to Success” in the Harvard Business Review. And somewhere in the Internet was an article entitled “French Enlightenment: The 35-Hour Working Week”. And finally, some weeks ago I read about the formation of a feminist political party in Sweden. To paraphrase James Bond - Once is an incident! Twice is coincidence! And finding three articles on career issues of highly qualified women, while not quite enemy action, points to something churning on this rather different subject. Different because these women are not traditional fodder for gender writing – nobody is beating or trafficking them, they have the right to vote, they are not being raped by landlords while toiling in the fields – nothing pathetic about these ladies. And different because, while the settings are in the US of A, France and Sweden respectively, the points made could well have been about my home and, I am sure, yours. Please read on!

The HBR article identifies it as the ‘opt-out revolution’ and the ‘new brain-drain’, i.e. the phenomenon of large numbers of highly-qualified women (HQW, and the acronym is due to my reluctance to repeatedly type the words and not an attempt by HBR to typify them) dropping out of mainstream careers. It says that snippets of data on this have been available for some time – that 57 percent of the women graduates of Stanford University’s Class of 1981 have left the workforce, and that one in three white women with MBAs is not working full-time, compared with one in twenty men, but that there is no systematic data on this exodus until now. It uses a Center for Work-Life Policy multi-year research to look into what proportion of HQW opt out (go off-ramp), whether they are pushed or pulled, which sectors of the economy are the most affected by this, how many years do HQW spend off-ramp, how easy is it to return on-ramp, and what policies and practices help HQW return to work. It takes a stand that companies that tap into their female talent pool over the long haul will enjoy a substantial competitive advantage, but provides no information as to whether this is actually the case and why it should be so.

And they do opt out - 37 percent of them have voluntarily left work at some point of time in their careers (women with children – 43 percent, men – 24 percent and the reasons are different). The pull factors were caring for children, then for a parent or someone else in the family, and then personal health issues. Off-ramping is higher among the ‘sandwich generation’, women with growing children and elderly parents. Men, by contrast, off-ramp to reposition their careers – to switch careers, to go for additional training or further studies, or to start a business. And, ahem, 40 percent of HQW with spouses “felt that their husbands create more work around the house than they perform”.

Among push factors – 17 percent left because the job was not satisfying or meaningful. These and the lack of opportunity were larger problems than overwork or the job being too demanding. Push factors were particularly powerful in the business sector. And most HQW dealt with a combination of push and pull factors, those hemmed in by rigid policies or a glass ceiling were more likely to respond to the pull of the family.

About 93 percent of HQW currently off-ramp want to get back on. Financial reasons are the main ones – the difficulties of shortfalls in family incomes, the need for an independent source of income, the discomfort at having to ask their spouses for money. But also, to regain the enjoyment and satisfaction they enjoy from their careers, to regain “power and status” in their professions, and to contribute back to society. Professional identities remain primary identities for off-ramp HQW.

Going off-ramp is one thing, getting back on quite another – only 74 percent wanting to do so manage to do it, and most underestimated how hard it would be at the time of going off-ramp. HQW lose 18 percent of their earning power by taking an off-ramp, in the business sector it is 28 percent, and when it is three or more years, it is 37 percent.

Most HQW do not follow the conventional career strategy long established by successful men – of a steep gradient in the 30s and steady progress thereafter. Work-life strategies for HQW include telecommuting, working part-time, and working exclusively or partly from home. When looking back over their careers, 36 percent HQW say they have worked part time to balance professional and personal lives. 25 percent have reduced their work hours in a fulltime job. 16 percent have declined promotion. 38 percent have deliberately chosen a position with fewer responsibilities and lower compensation than they were qualified for because of responsibilities at home.

This is about where the article itself goes off-ramp. The section on reversing the brain drain says all the usual trite stuff – ‘employers can no longer pretend that treating women as men in skirts will fix the retention problem”, etc. It says that employers should create reduced hour jobs, provide flexibility in the day, provide flexibility in the ‘career arc’ (have a ramp-up ramp-down approach and not the up-or-out one currently in vogue), and remove the stigma attached to non-standard work arrangements.

This is where the second article becomes relevant. The French are different from the Anglo-Saxons and combine the world’s best health care, a robust education system, the longest vacations, the highest birth rate in Europe (after Ireland) and, last but not least, the world’s highest per capita wine consumption with the highest GDP per worker (after the US) and more multinational companies in the world’s top 200 than any other European country. French HQW, too, are different – almost all (97 percent) work, most (88 percent) work full time and a majority have several children (68 percent of HQW over 30 years have an average of 2.2 children). Most cite professional success as their top priority. The disadvantages they face are the usual ones. They typically spend a few years balancing work and babies, and when they return to refocus on their careers, organizations have already identified the high-potentials and distributed the plum jobs and the important developmental opportunities. Their careers are thus effectively derailed. And French statistics on women at the top of the professional hierarchy are similar to other European countries, not very good.

A recent French innovation was the introduction of a 35-hour workweek (in 1998, became applicable in January 2000) to deal with unemployment, labour market rigidity and low productivity. It is unclear whether it has addressed these issues, and there is already a move to withdraw it on the logic that those who want to work more and earn more should be able to do so. But what the 35-hour workweek has done is help dual career couples balance their lives – women manage to do a full time job and undertake their additional responsibilities, and men have much more time to help with these responsibilities. Thus, both can be committed, full time workers and involved, egalitarian parents. And, most importantly, the 35-hour workweek levels the career playing field for women – men cannot work more hours, do more, earn more and rise faster.

The article then indulges in a bit of French Rah! Rah! Rah! The Anglo-Saxon model, it says, promotes equality between men and women by ignoring the fact that women have children. And Germany is still stuck in the kinder kirsche kuche (children, church, kitchen) model with no claims to equality, to the dismay of all the highly accomplished women from the other side of the wall who discovered the downsides of freedom. It is not enough to get women into the building and expect that some will eventually clamber into the corner office – we need new buildings, new models and new architects. And the 35-hour workweek is a new model. And finally, the article advises Europe against importing the 500 million workers it needs over the next decade and suggests that, before doing this, a glance could be cast “at the talent on the other side of the kitchen table.” The Swedish article merely adds the point that these issues require political expression, and that a political party was formed in Sweden for expressly this purpose.

I have no data on the Indian situation, and no conclusions to draw. We would be fooling ourselves if we took the attitude that this is a western phenomenon, or that these women are from the elite strata of society and thus their problems do not require our thought. This juggling of many conflicting demands, these derailed careers and this huge unrealized potential is in our own homes. What are we going to do about it?

References:
1. “French Enlightenment: The 35-Hour Working Week” by Avivah Wittenberg-Cox in www.ebfonline.com/main_feat/trends/trends.asp?id=558
2. “Off-Ramps and On-Ramps: Keeping Talented Women on the Road to Success” by Sylvia Ann Hewlett and Carolyn Buck Luce in Harvard Business Review of March 2005.
3. “Sweden’s New Women’s Party”, The Economist of 14th April 2005.

Acronyms / Jargon watch
EBF European Business Forum
HBR Harvard Business Review
HQW Highly Qualified Women

2007-03-14T00:07:00.000-07:00

WELCOME, FRESHERS!!

“S/he who follows another’s footsteps leaves no footprints”*

Despite not (yet) having achieved gurudom, I am occasionally asked for advice about joining the development sector. Most of those enquiring can be slotted into two categories. The first are well-spoken but mediocre people who are getting nowhere in their chosen professions and have (therefore?) developed a social conscience. Their impression of the sector is as a place where the effort to returns ratio is second only to the spirituality business. The second are those whose short-term career objective is to join Kofi Annan in New York, and their impression of the sector is as a place where one hops on to intercontinental flights with the same regularity that you and I used the local public transport system in our student days. But occasionally, very occasionally, some young person approaches me with intent in his or her eyes, not knowing what ‘development’ is, with this vague idea of working with people in some faraway place and dirtying their hands, firm only about using their good qualifications and skills to do something different. I never know what to tell the former types – whether to play up their fantasies or to give them a reality check. As to the latter, this is what I have to say.

First, to address the basic questions:
Is there scope for good people here? The development sector needs bright people coming in as much, if not more, than other sectors of the economy. The array of problems that the sector addresses is mind-boggling in its variety, intensity and complexity and, should you decide to make a career here, you will require all the skills and drive that you think you possess. The sector also offers the opportunity to make one’s mark, and leave one’s footprints, in ways that are not possible elsewhere. So please rid yourself of the notion that this is a sinecure for the mediocre, the retired, the idle rich and the infirm.

Is long-term financial survival possible here? All of us have nightmares about being middle-aged, washed out and broke. Whether this sector provides more scope for such a turn of events than others is debatable. Most people here, as elsewhere, manage to get by, build their houses, educate their children, etc., etc. It is possible, and quite easy if you are good, to move to more lucrative segments within the development sector at some stage in your career. But – you will have to deal with the ass kissing, red tape and white domination that often go with the money. Anyway, by that time you will be aware of the pros and cons of the decisions you take. If money is important in the short term, however, then forget about coming here – you will be better off peddling soap or consulting or doing whatever it is that you are alternatively qualified to do.

What to do? Where to go? You need to figure out some basic questions before you start looking, such as rural or urban setting, in which part of the country, in an activist or a welfarist set up, and how close to the community you want to work. Finding organizations to work in that suit these settings is fairly simple after that, and good organizations are always looking for good people. Donor organizations are good places to enquire about these matters.

And now for my personal advice on what you should do:
Start out doing a field job – one that involves living and working directly with a community. The community consists of a large number of people who don’t have to say yes sir or yes ma’am to you and don’t care which fancy institution you did your post-graduation from – you have to earn your spurs from scratch, throw management theory out of the window and prepare to be surprised and tested every single day. You will discover that the class 5 pass man working with you is much better at the job than you will ever be, or that the supposedly pathetic women your activities are directed towards have much more guts than the modern, educated babes back home. Doing something here involves stress, fun and serious learning, and it is this part of your life that will stay on with you wherever you go. Spend a good amount of time here, ensure that you are not stuck with the report and proposal writing jobs and ayah-duty (i.e. escorting funding agency wallahs into the field) that you will be passed on because of your English-speaking skills, and see that you leave something intangible behind when you go. Later in life, when you are dealing with NGOs from a funding or consulting perspective, you will have plenty of NGO-wallahs giving you the what-would-you-know-you-city-asshole vibes – watch their tunes change once you let slip that you were once in their position.

Do the above with a good NGO – be careful about this because, though there are many good NGOs, they are still a small proportion of the total number of NGOs around. Good NGOs, in my opinion, are honest, secular and transparent. They formulate their plans and activities on the basis of the needs of the community they work with and are answerable to them for this. So be careful about this – you would not want your CV littered with associations with family businesses, feudal empires, pimping and middlemen set-ups, money laundering operations, touts, donor puppets, crooks, etc., masquerading as NGOs.

Become an expert – by the time you have put in 2-3 years in the field, there should be some topic relating to your work that you know more about than anybody else in the world. This means relating what you do on the ground to the larger picture, to what is happening elsewhere in the world and to the latest academic debate on the subject. Keep up to date, keep writing, and write to publish. This is easier said than done, field people have an innate distaste and little time for serious writing, but it is this that will separate those who will later go on to effect policy from those who will remain community organizers all their lives.

Eschew jargon – people in the development sector, like the IT sector and several others, have a peculiar predilection towards using jargon. The problem with this is that it serves to exclude people whom you would wish to include and include people whom you would probably want to exclude. Words like participatory, empowerment and sustainable, which you will find bandied about like toffees on a domestic flight, actually mean different things to different people and very often don’t mean anything at all. And when an organization wants to recruit dedicated, motivated and committed people, it usually means that they want to pay less for more work and therefore only suckers need apply. So don’t get caught up in this bullshit, learn the art of communicating exactly what you mean in a simple and understandable way.

Be humble and be nice – nothing like these qualities, even if put on, to enable you to get along. Having said that, don’t put up with nonsense beyond a point that even fake humility and pleasantness can’t handle. People and organizations that cross the line should end up spitting out teeth with their blood, so to speak.

Watch your love life – you will find yourself working closely with members of the opposite sex, often in very intense situations, and you will find yourself liking some of them and vice versa. Have your fun! But, my advice is, don’t find yourself marrying and/or having children with anyone you would not have done so with had things been different. The fiery young activist can end up a leach of a middle-aged man, worrying more about what is happening in Red Square than in the well-being of his immediate family and quite happy to leave you with all the responsibilities while he gabs on about revolution. And the passionate free-spirited feminist is unlikely, later in life, to have a hot cup of tea ready for you when you come home after a hard day at the office. And you will be shocked at how easy it is to forget people once they are out of context.

Should you take the plunge into the sector, you will find yourself interacting with a wide variety of people. Watch out for the following types –

People with halos – you will find a number of people claiming to be doing a favour to humanity by working in this sector, especially at the higher echelons. Many of them have active PR machineries supporting their claims to sainthood, and some even believe in their own hype. You can be sure that, like everywhere else, being hardworking, intelligent and capable are not enough to reach and stay at the very top – you also have to be ruthless and slimy. There are no exceptions to this. So, whenever you hear or read the words ‘S/he/I could have been rolling in it in any other line but chose to sacrifice her/him/myself to the cause of the poor/destitute/vulnerable blah, blah, blah” be warned of the existence of yet another hypocrite in the world.

Emperors – they are the lords of all they survey, and don’t distinguish between their personal assets and their organization’s resources, and this usually includes its women employees. Yes, most, but not all, emperors are males.

Pompous employees of donor agencies – donors have an inexplicable penchant for recruiting morons. They do sometimes go wrong, and you find yourself dealing with someone who knows his or her job and who is able to have a positive effect on your and your organization’s work. But you do often have to deal with someone who thinks s/he has arrived because s/he represents the money, and/or someone to whom development is about budgets and utilizations more than people. While there is no known cure for stupidity, sometimes it helps to let the former type know that they have their nice air-conditioned offices and fancy credit cards because people like you are willing to slog in the sun for peanuts. Don’t take crap from them and, much more importantly, don’t become like them if and when you are in their position at some later stage in your life.

Development tourists – these people travel the world to conferences and seminars on money that is meant for the poor. They are the self-appointed spokespersons for India’s (and sometimes the entire third world’s) poor in Geneva, Stockholm and such places. Their slick presentations, that have audiences thanking God for having created them in this tumultuous world, invariably disguise the fact that they last did something on the ground about twenty years ago – they have since been too busy traveling. Don’t make the mistake of getting impressed by these parasites. And don’t join them expecting to see the world; you will be lucky to have more than a Bangladesh visa stamped on your passport.

If you are still planning to join the sector – a very hearty welcome to you!
* A Confucian saying after having undergone a gender audit

2007-03-13T23:59:00.000-07:00

THE SHIT SANDWICH
“Life is a big shit sandwich – bite into it, or starve!!”[i]
A 2-pager by Ajit Chaudhuri

In an era of evanescent buzzwords, the concept of a ‘long tail’ may prove to be of long-term interest. The term has traditionally been used in statistics to refer to a feature of power-law distributions such as the frequency with which different words are used in the English language – a few common words used a lot and a long tail of obscure words used less often – and was brought into the limelight by Chris Anderson in 2005 in an article in Wired[ii] magazine that looked into business possibilities in the Internet age.

He says that the Internet makes previously unprofitable transactions profitable, and this enables a shift from mass to niche markets. For example, book sales! There are a small number of very popular books and a long tail of less popular ones. A real world shop can stock only so many titles, so it holds only those most likely to sell, i.e. at the head of the curve. But the money made from the sale of one book is about the same, whether it is popular or not. An on-line store with unlimited shelf space can offer a far wider range and open up new markets further down the long tail. B&N[iii] carries only 130,000 titles, and a third of Amazon’s[iv] sales are from outside its top 130,000 titles. The collective demand for obscure items is large, is growing, and can be aggregated over the Internet so that selling obscure movies, books and CDs could prove just as lucrative as selling hits.

This has implications on business and popular culture. Opening up previously unexplored niches will increase aggregate demand and shift demand away from hits. Content providers can be less discriminating – instead of guessing what people want, they can put it all out there and discover unanticipated demand. Collaborative filtering (a chain of ‘if you liked this, you could try one of these’, or ‘people who liked this also liked these’) can enable people to find content they want that is buried down the tail. Hits will be less important – companies that prosper will be those that switch out of the lowest common denominator model and figure out how to address niches. Goodbye, Britney Spears!

The Economist, in a subsequent article[v], pointed out that, though useful, the concept might not be able to break beyond books, movies, CDs and related items. I am not so sure, and feel that understanding this would be useful in spheres beyond the obvious.

In the development business in India, those of us working to support local NGOs face a few well-funded, well-managed and effective NGOs (or various combinations of these attributes) and a (very) long tail of NGOs that exist, but do not do very much. From a funding perspective, dealing with the fat cats has its advantages – they can talk and write reports in donorspeak[vi], they can absorb larger quantities of money and thereby enable you to have a smaller portfolio for the same bucks, and they can say all the right things when your bosses come visiting. But – they are few, and you and everybody else with money to hand out is running behind them. And the places in which they are operational tend to be slightly better (because of them?), with a semblance of civil society institutions, law and order and connectivity. If you are committed to working in areas of extreme backwardness, chances are that you will have to deal with the long tail.

Who are the NGOs in the long tail? A recent visit to Latehar, Garhwa and Palamu districts of Jharkhand with Satish Girija of NBJK[vii], wherein we met many of the better local NGOs, was an eye-opener for me. My notes from the visit reveal –
· Though many NGOs came up from student agitations in the 1970s, they seem to have lost their purpose and fire with age. The NGOs I met had no agenda of their own, and their main ambition was to be development contractors at the lowest end of the chain.
· Corruption levels are high. There is considerable tolerance for small-time dishonesty, which is seen as normal. Funding from the state is obtainable only upon paying bribes, and cooking up accounts (over-invoicing, paying for events such as trainings, meetings, etc., which have not happened) is seen as necessary to recoup these costs.
· NGOs are poorly governed. One person (Managing Trustee, Secretary) typically controls everything, and friends and relatives are in positions of power. Systems and structures are weak. Professionalism is absent. Staff members are insecure and unmotivated – few have employment letters formalizing their status within the organization, salaries are meager and irregular, and basic benefits non-existent.
· The boss spends most of his/her time attending meetings and trainings organized at state or district headquarters, and very little in the field with the community.
· Most NGOs are upper class/caste entities (as are their staff). They thereby have a paternalistic approach to the tribals and lower castes that they are working for/with.
· The difference between the good and bad organizations here is in the levels rather than the existence and non-existence of the above qualities.

I can hear you say ‘Well, then don’t work with them!’ But is that the answer? All three districts fall into the ‘worst-districts’ category – they are poor, they are backward, land distribution and access to whatever facilities exist are extremely skewed, food is scarce. Khurki block of Garhwa district is famous for the feudal lord having the right to the first night with the bride in all weddings within his fiefdom, a practice that was stopped only with the advent of the Maoist Communist Center. If we don’t work here, where should we work? Delhi and Mumbai? And if we work here, it has to be with these organizations.

My employers[viii] have policies in keeping with their (and my) values. We will work only with ‘good’ organizations – those that are honest and have self-formulated and implemented policies on openness and transparency. That define what they want to do based on the needs of their operational areas and their own skills and preferences, and then do it. That deal with donors as equal partners in the development process. Fine thoughts! But such organizations do not exist in Khurki, or Manika, or Daltonganj.

How do other donor-types work in these regions? My observations during the visit were –
· They eschew direct relationships with implementing NGOs and prefer to sub-contract out the jobs of identification, monitoring, training and reporting to nodal NGOs at the block/district/state levels. There are therefore usually several layers between the implementer and the donor, and also substantial expenditure on these layers.
· Programmes are centrally formulated and sharply defined. There is no space for the skills and preferences of the individual implementing NGO or the specific situation of the area in which it operates.
· There is tolerance for bad practices up to a certain level.
· The relationships between donors, nodal NGOs and implementers are not equal.

And so, ladies and gentlemen, this is my shit sandwich. Do we change our policies (and values) and work with the long tail, or do we stick to them and restrict ourselves to the head of the curve. I have no answers! Do you have any advice?
[i] Graffiti in the SRCC hostel toilet in the early 1980s
[ii] “The Long Tail” by Chris Anderson, issue 12.10 of Wired on October 2004, www.wired.com
[iii] Barnes and Noble, a popular bookstore chain
[iv] A popular internet bookstore
[v] ‘Profiting from Obscurity’, the Economist of 5th May 2005
[vi] The development business’ equivalent of bureacratese
[vii] Navbharat Jagriti Kendra, a large Hazaribagh-based NGO
[viii] The Paul Hamlyn Foundation, a UK based donor organization