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.
Friday, April 25, 2008
Friday, March 21, 2008
Home Work
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’.
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’.
Friday, February 29, 2008
TRENDS
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.
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.
Monday, November 26, 2007
The Heat Is On!
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.
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.
Wednesday, October 10, 2007
The Billionaires
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.
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.
Thursday, August 9, 2007
LONG LIVE THE KING!
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.
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.
Wednesday, July 18, 2007
Are Things Getting Better?
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
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
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