Zoo Station

Weekend Infotainment: George Soros FT Lectures

2009-10-24T03:11:00.000-07:00

Mr Soros provides fantastic insight into global currencies, the renminbi peg, the great crisis, financial sector reform etc in these conversations with Chrystia Freeland, US managing editor of the Financial Times. You can find the lectures here: Part 1, Part 2, and Part 3.

Henry Markram on building an artificial brain

2009-10-19T13:16:00.000-07:00

One of my favourite talks at TED Global in Oxford just went live. Enjoy.

PJ du Jour

2009-10-12T14:03:00.001-07:00

(Via Martin)

Source

This is Jam Heaven

2009-10-12T04:12:00.000-07:00

Thom Yorke. Flea. Live. Need I say more?

A Wayback Machine for Manhattan

2009-09-07T22:39:00.000-07:00

(via Benku) I am a fan of the Wayback Machine. It should come as no surprise then that I am now addicted to the Mannahhatta Project (that's a pun, not a misspelling). The project explores Manhattan before it became Manhattan. What did the island look like? What sort of flora/fauna was native to the island?

It turns out that the concrete jungle of New York City was once a vast deciduous forest, home to bears, wolves, songbirds, and salamanders, with clear, clean waters jumping with fish. In fact, with over 55 different ecological communities, Mannahatta’s biodiversity per acre rivaled that of national parks like Yellowstone, Yosemite and the Great Smoky Mountains!

The project uses detailed maps of the island created by British Army cartographers in 1782 together with a knowledge of the ecology and species around at the time to create computer-generated 3D images of Manhattan in the 1780's. There is a full 3-D topography of the island complete with vegetation going back to 1609. Heck, you can even look up specific addresses and see what it looked like way back when. Incredibly fascinating, and not just if you're addicted to Manhattan.

The Great Firewall of China at Work

2009-09-07T22:20:00.000-07:00

I am in China to attend the World Economic Forum in the north-eastern port city of Dalian. The event starts this evening, so I spent the morning exploring the great firewall. First, I realized some search results were being filtered. I tried Facebook and my blog and found both were unavailable, as was Blogger itself. Here are some screen shots (FB and my blog, respectively).

Obviously, they aren't too serious about the filtering because I am using a very simple proxy to route around the block. In the meanwhile, on telly, there is the shocking spectacle of horrible Indian soaps dubbed into Chinese. This is just so goddamn wrong...

More Financial Ingenuity, Not Less

2009-08-31T12:16:00.000-07:00

I was invited by Matthew Bishop, the U.S. editor of The Economist and author of Philanthrocapitalism, to contribute a piece to an issue of Alliance Magazine that he's guest editing. The focus is on "discontinuous thinking for a crisis." Here is my piece on catalytic philanthropy in full.

With free markets in retreat, economic development risks losing one of its foremost drivers. People forget that economic growth in India and China alone, fostered by open markets, has lifted hundreds of millions out of absolute poverty over the past 15 years. A crisis is a terrible thing to waste, so this is a good time for capitalism's greatest beneficiaries to bring its sheen back. Philanthropy can play a pivotal role in catalysing markets and market-based solutions that promote inclusive economic growth in developing countries.

Developing countries are plagued by instances of mispriced risk, where the perception of risk is often far greater than the reality, which drives up the cost of capital. Though market clearance – in which supply is equal to demand so the market 'clears' – is a central tenet of free markets, a nudge is often required to kick-start markets. Philanthropic capital with a longer horizon can very effectively provide this stimulus, demonstrating a market opportunity into which commercial capital then flows.

Small and medium enterprises (SMEs) are traditionally an economy's largest job creator, so any developing country aiming for rapid and inclusive growth requires a robust SME sector. Contrary to popular opinion in venture capital circles, real investment opportunities may well lie in ‘bread and butter’ industries with a high or exponential correlation to GDP growth and huge social impact (waste management, for instance, or logistics and warehousing). The first true exit for a venture capital firm in India is likely to come next year in a business with a high social impact: microfinance. The bottom line in these businesses is that social and financial returns are not mutually exclusive.

There are several factors that retard the growth of SMEs, including lack of policy, limited knowledge networks and poor management skills, but availability of finance is key. Realizing this, the Soros Economic Development Fund, Omidyar Network and Google.org have set up the SONG[1] Fund at the Indian School of Business to invest in early-stage companies that will generate financial and social returns without compromising on either. There is enormous scope for long-term 'patient' capital to be deployed effectively. For instance, with 80 per cent of India's healthcare system in the private sector, our research reveals an opportunity to help build an asset management business around low-cost healthcare services.

Low-income housing is typically ignored in developing countries, and slums and shanties are a poor substitute. Market surveys in India have shown that there is a shortfall of 25 to 35 million houses in the $4,000 to $30,000 price segment. Our research shows that it is possible to generate internal rates of return of 40–60 per cent by building for the lowest end of the market. We have set up a for-profit housing company that will build houses for between $4,000 and $6,000, targeted at the working poor.

In doing so, we have identified several opportunities for catalytic philanthropic capital to play a role, besides the obvious as investors. There is a serious inability to access project finance, so anyone who can provide a first-loss guarantee can effectively catalyse the market and bring even smaller developers to the table. Similarly, end customers in the developing world can incur severe penalties for defaults and late payments arising from cyclical cashflow problems such as illness or unemployment. A payment protection insurance plan funded initially by philanthropists could offer incentives to mortgage providers and banks to offer loans.

The CARE Protected Note, developed by Derilab SA of Switzerland, offers investors the option to support a large low-income Pakistani school system that is based on a public-private partnership, and to participate in a structured product with capital protection at maturity. A yearly coupon will be paid to the CARE Foundation only if the school system grade average is greater than the regional average; if not, the coupon is returned to the investor. The CARE Protected Note offers the investor a tradable and liquid financial product, where investments in a liquid underlying asset generate positive returns. This mechanism not only provides incentives for all parties, and protection and returns to the investor, but also sources capital for charitable projects that is more sustainable than donations.

These three examples of innovations clearly show that the 'base of the pyramid' market segment needs more financial ingenuity, not less. Many more exist. Most just need a nudge from smart philanthropic capital to see the light of day.

Dr Reuben Abraham is a professor and executive director of the Centre for Emerging Markets Solutions at the Indian School of Business, Hyderabad.
1. SONG is an acronym for Soros, Omidyar Network and Google.

TED India Preview Video

2009-08-26T13:30:00.000-07:00

Laura Galloway just sent me this preview video for TED India. Enjoy.

Free Kian!

2009-08-25T12:53:00.000-07:00

My friend Asieh (who is Persian) sent me this story from the Fars News Agency. Apparently, my colleague from Soros/Open Society (and fellow Ph.D. from Columbia), Kian Tajbaksh, has been forced to confess after identifying him as an agent of the Soros network trying to "cause a velvet revolution" in Iran. According to Asieh, Kian is being used as a pawn to get to Khatami, to prove that he is in bed with mysterious foreign powers.

Ahmadinejad's government is getting nuttier by the day. In the meanwhile, I hope better sense will prevail and Kian will be released soon, especially since he was released from Evin prison just two years back after another brief spell of incarceration.

Quoted in the Wall Street Journal

2009-08-20T12:56:00.000-07:00

In between my crazed travel schedule, I forgot to link to this WSJ story which extensively quotes me. The story had originally appeared in Knowledge @ Wharton and was reprinted in the Journal. The story is titled "The Poor as Stakeholders: Can Inclusive Capitalism Thrive in India?" Here are the portions that quote me, though the entire story is worth a read.

Reuben Abraham, assistant professor and director of the Emerging Market Solutions Initiative [Ed Note: It should read Exec Director and Centre for Emerging Markets Solutions now] at the Hyderabad-based Indian School of Business (ISB), points out that business success must come first. "At its core, Fabindia is a sourcing business," he says. "Everything else that they do -- making weavers [into] shareholders, etc. -- is peripheral to their main activity."

"Capitalism at its core is basically agnostic," says Abraham of ISB. "It does not try to be inclusive or exclusive. Capitalism is about optimal allocation of resources. The more it is allowed to thrive, the higher the number of people who will be impacted positively by [its] growth. So, in that sense, being inclusive is perhaps a natural process. But for this to happen, what is really needed is more liberalization and fundamental reforms. For instance, until 1995 the fruits of telecom were not available to 95% of the country. Because of the reforms in this sector, [they are] now available to 50% of the country.... In this sector, capitalism has become a force for good. We could have the same thing happen over and over again in different sectors."

Corporations naturally go for high-margin customers in the beginning, Abraham notes, but given that there is a very small number of high-margin customers in India, they will have no option but to look at other segments of the population. "These are natural consequences of a well-regulated market at work. The problem really is: What is the optimal amount of regulation in a sector and who decides that? In my opinion, it is an iterative process. This is a journey that needs to be figured out by trial and error."

If regulatory reforms don't take place, "corporations will be forced to do inclusive capitalism [Ed Note: Not sure what this means]. Otherwise, there will be social unrest. The issue then will be about the level of commitment of the corporates given that they always have to walk the thin line between their responsibilities toward the shareholders and the society at large."

Reforms are the key, Abraham says. As an example, he notes that various studies show that urban slum dwellers are willing to spend as much as 30% of their household income on educating their children in private schools. "This means that demand clearly exists. The reason that supply does not exist to meet this demand is because of regulations that don't allow profit-making in education."

Lists Redux

2009-08-18T11:50:00.000-07:00

(Via Marginal Revolution) Since I am all about Paul Romer these days, I figured I need to link to Professor Romer's five favourite live rock recordings as well. Some interesting tips in there, including the Dead, Hendrix etc.

And while we're on the topic of lists, here are the top 20 movies made since 1992, according to Quentin Tarantino. Fabulous bunch of movies.

India's Energy Portfolio

2009-08-15T04:50:00.000-07:00

I am doing some research into the installed power generation capacity in India. As of May 2009, these are the numbers, with another 80,000 MW expected to come online in the next 18 months. What better way to share than with a chart?

As you can see, the share of coal is dropping and of renewables on the rise. The real increase, however, will be in nuclear as the nuclear agreement kicks in. For those of you who are curious, here are the all the numbers (rounded off).

Total installed capacity: 149,392 MW

Thermal -- 95,152 MW
Hydro -- 36,877 MW
Nuclear -- 4,120 MW
Renewables -- 13,242

Micro-finance bubbles and more

2009-08-15T01:14:00.000-07:00

I have argued on this blog against romanticizing micro-finance, especially the notion that MFI's create vast armies of entrepreneurs etc. If it wasn't bad enough that do-gooders cannot get enough of the hype, in recent times capital flows into the sector have led to a bubble building in the market. Sure, Sequoia will make a major exit next year via SKS, but I am not so sure about all the late-comers and insane valuations. The bubble has led to large-scale rollovers, higher levels of indebtedness and so on. I have meant to write about this (time has become an enemy), when I came across two pieces, one in the WSJ and the other in the Economist about the hype machine and the disconnected reality. First, the WSJ has an anecdotal piece from India about a credit bubble.

Today in India, some poor neighborhoods are being "carpet-bombed" with loans, says Rajalaxmi Kamath, a researcher at the Indian Institute of Management Bangalore who studies the issue. In India, microloans outstanding grew 72% in the year ended March 31, 2008, totaling $1.24 billion, according to Sa-Dhan, an industry association in New Delhi. "We fear a bubble," says Jacques Grivel of the Luxembourg-based Finethic, a $100 million investment fund that focuses on Latin America, Eastern Europe and Asia, though it has no exposure to India. "Too much money is chasing too few good candidates."

Here in Ramanagaram, a silk-making city in southern India, Zahreen Taj noticed the change. Suddenly, in the shantytown where she lives, lots of people wanted to loan her money. She borrowed $125 to invest in her husband's vegetable cart. Then she borrowed more. "I took from one bank to pay the previous one. And I did it again," says Ms. Taj, 46 years old. In four years, she took a total of four loans from two microlenders in progressively larger amounts -- two for $209, another for $293, and then $356.

At the height of her borrowing binge, she says, she bought a television set. The arrival of microfinance "increased our desires for things we didn't have," Ms. Taj says. "We all have dreams." Today her house is bare except for a floor mat and a pile of kitchen utensils. By selling her TV, appliances and jewelry, she cut her debt to $94. That's equal to about a fourth of her annual income.
[...]
Many of the problems in Indian microlending might sound familiar to students of the U.S. mortgage crisis, which was worsened by so-called "no-documentation" loans and by commission-paid brokers. Similarly in India, microlenders' field officers are often paid on commission, giving them financial incentive to issue more loans, according to Ms. Kamath. Lenders are aware that applicants often lie on their paperwork, says Ujjivan's founder, Samit Ghosh. In fact, he says, Ujjivan's field staffers often know the real story. But his organization maintained a policy of "relying on the information from the customer, rather than our own market intelligence."
[...]
It's tough to monitor how borrowers spend their money. Ujjivan used to perform regular "loan utilization checks," but stopped because it was so costly. Now it only checks in with people borrowing more than $310, Mr. Ghosh says.

The Economist piece is not anecdotal and busts a few myths about the "miraculous curing powers" of microfinance. Some background first.

Despite growing interest from private investors, 53% of the $11.7 billion that was committed to the microfinance industry in 2008 still came at below-market rates from aid agencies, multilateral banks and other donors. Given that there are other things that aid money could be spent on, and that the rationale for subsidising microcredit is its effectiveness as an anti-poverty tool, it is important for donors to know whether it has the advertised effects.
[..]
Two new papers* apply this idea to measure the effect of access to microcredit. Researchers from the Poverty Action Lab at the Massachusetts Institute of Technology (MIT) worked with an Indian microfinance firm to ensure that 52 randomly chosen slums in the city of Hyderabad were given access to microfinance, while 52 other slums, which were equally suitable and where the lender was also keen to expand, were denied it. This allowed the researchers to see clearly the effect of microcredit on an entire community. Dean Karlan of Yale University and Jonathan Zinman of Dartmouth College carried out a similar exercise in the Philippines, this time at the level of the individual borrower. They tweaked the credit-scoring software of a microfinance firm so that only a random subset of people with marginal credit histories were accepted as clients. These clients could then be compared with those who sought credit but were denied it.

Broadly speaking, neither study found that microcredit reduced poverty. There was no effect on average household consumption, at least within a year to 18 months of the experiment. The study in the Philippines also measured the probability of being under the poverty line and the quality of food that people ate, and again found no effects. Microcredit may not even be the most useful financial service for the majority of poor people. Only one in five loans in the Hyderabad study actually led to the creation of a new business. Providing people with safe places to store their (small) savings may help them more in the long run.

So, the next time you hear someone mouth off about how micro-finance is going to eradicate poverty, hit that pause button. If something sounds too good to be true, it probably is.

Andy Xie on China as a Ponzi scheme

2009-08-08T12:59:00.000-07:00

The Big Picture links to an excellent piece by Andy Xie on China's recovery building up to a Ponzi scheme. He first sets the scene with the dollar.

Like in the 1970s the Fed is denying the inflation risk due to its loose monetary policy. The longer the Fed waits, the higher the inflation will peak. When inflation starts to accelerate, it would cause panic in financial markets. To calm the markets, the Fed has to tighten aggressively, probably excessively, which would lead to a massive dollar rally. This would be the worst possible situation: a strong dollar and a weak US economy. China’s asset markets and the economy would almost surely go into a hard landing.

He then looks at the Chinese market today.

Chinese stock and property markets have bubbled up again. It was fueled by bank lending and inflation fear. I think that Chinese stocks and properties are 50-100% overvalued. The odds are that both will adjust in the fourth quarter. However, both might flare up again sometime next year. Fluctuating within a long bubble could be the dominant trend for the foreseeable future. The bursting will happen when the US dollar becomes strong again. The catalyst could be serious inflation that forces the Fed to raise interest rate.

Chinese asset markets have become a giant Ponzi scheme. The prices are supported by appreciation expectation. As more people and liquidity are sucked in, the resulting surging prices validate the expectation, which prompts more people to join the party. This sort of bubble ends when there isn’t enough liquidity to feed the beast.

Add demographics to this mix.

The most serious damage that a property bubble inflicts is in changing demographics. High property prices bring down birth rates. When property prices decline after a bubble bursts, the low birth rate culture cannot be changed. Hong Kong, Japan, Korea, and Taiwan all went through property bubbles during their development. Their birth rates dropped during the bubbles and didn’t recover afterwards despite government providing incentives. China’s one-child policy alone will lead to a demographic catastrophe in two decades. The property bubble makes the trend irreversible: when the government abandons the one-child policy, there wouldn’t be meaningful impact on birth rate.

The trouble is I see something very similar happening in India vis-a-vis asset bubbles. I think the current *recovery* in the equity markets and real estate is more likely to be linked to the weaker dollar rather than any fundamental change; corporate earnings, for example remain weak.

Paul Romer on Charter Cities

2009-08-08T11:12:00.000-07:00

Those of you on my Facebook feed know I was at TED Global in Oxford this year. As always, TED blew my mind and I am going to embed a few of my favourite talks on here. While I wait for Henry Markram's talk on the Blue Brain project to go online, here is the other talk that really grabbed my attention: Paul Romer on Charter Cities.

If you want to know more, go here.

Book Review: The Ascent of Money

2009-07-15T11:01:00.000-07:00

Here is a book review I wrote recently for Insight, an in-house publication at the ISB.

A good financial crisis is a terrible thing to waste. Especially for historians.

I don’t always like Niall Ferguson’s interpretations of history, especially his seeming high regard for imperialism, but the fact is he is one of the most influential historians of the last decade. From his perch at Harvard, this British historian has written about everything including World War I, the Rothschilds, the British empire and the savagery of war in the 20th century.

In the Ascent of Money: A Financial History of the World, Ferguson provides an easy to digest financial history of the world. The book is a romp through history from Babylonian credit systems to Pizarro’s search for El Dorado, to the birth of modern banking in Northern Italy, through to collateralized debt obligations and the spectacular collapse of the financial sector in the last year.

In the process, Ferguson introduces the reader to colourful characters and interesting historical episodes. We get to meet a Scottish outlaw and murderer named John Law, who Ferguson argues was partly responsible for the French revolution by unleashing a stock market bubble that ended up destroying the French financial system. Ferguson suggests that the Dutch prevailed over the Habsburgs because having the world’s first modern stock market (and access to a thriving bond market) was preferable to owing the world’s biggest silver mine. Most of us believe that it was the Duke of Wellington’s heroics that defeated Napoleon at Waterloo. Ferguson argues that Nathan Rothschild played an equally important part. Apparently, Rothschild used his experience as a gold smuggler to make vast quantities of continental gold available to the Duke of Wellington; paper money raised in Britain was of no use to Wellington to fight a continental battle. Possibly as a result, the Confederacy approached the Rothschilds for financing their campaign during the American Civil War. Was it a genuine distaste for slavery or was it that the confederacy was considered a huge credit risk by all investors?

Similarly, how did Great Britain, one of the safest countries on the planet, secure even from the vagaries of weather and geology, end up becoming the most insured country on the planet (12% of GDP spent on premiums)? Turns out the answer has something to do with the decline of the welfare state. Ferguson ends with a chapter on the interplay between the G2 or what he calls Chimerica, the two pre-eminent financial powers of today. In the latest version of globalization, the counter-intuitive flow of capital from east to west, i.e. Chinese savings to American spenders, may well have been responsible for the mortgage market crash.

Ferguson’s strength lies in being able to link the past with the present, though I wish he’d have spent a lot more time on the past. Will the current version of globalization end up the way the last version ended, in 1914? What, for instance, will happen to Chimerica if China raises a blue water navy and decides to take over Taiwan? Is history condemned to repeating itself?

At a time when finance has been taking a lot of flak, Ferguson provides a robust defence and ends with this coda: “financial markets are like the mirror of mankind, revealing every hour of every working day the way we value ourselves and the resources of the world around us. It is not the fault of the mirror if it reflects our blemishes as clearly as our beauty."

Doing Business in India Report 2009

2009-07-13T14:08:00.001-07:00

The World Bank's outstanding Doing Business sub-national report for India can be found here. It really is a must-read for anyone trying to understand the Indian business environment.

The difference between a cent and a dollar, according to Verizon

2009-03-10T12:06:00.001-07:00

Hat tip: Gaurav Sabnis

Young Global Leader 2009, courtesy of the World Economic Forum

2009-03-08T09:52:00.000-07:00

Some good news to share with y'all. The World Economic Forum in Davos has selected me as a Young Global Leader for 2009. According to the email I received, "this honour is bestowed by the World Economic Forum each year to recognize the two hundred most distinguished young leaders below the age of 40 from around the world." I have no idea who nominated me, but if it's one of you, thank you :)

This year, the nominees include Tiger Woods, Jessica Biel, Chris Martin, Michael Schumacher etc. The Indians on the list include Sachin Tendulkar, Mahesh Bhupathi, Kanimozhi Karunanidhi etc. As I was joking to my friends, I will learn to drive finally courtesy of Schumacher, learn to drive courtesy of Woods and perfect my falsetto with Chris Martin. And for those of you who made fun of me for being over the hill and an old fogie, I shall now have to refer you to the World Economic Forum.

In all seriousness though, I think this is a great honour and I look forward to working not just with the YGL's for 2009, but also with the WEF. I am also looking forward to the WEF gatherings, the first one of which is in May at the Dead Sea in Jordan.

T-Shirt du Jour

2009-02-22T03:12:00.001-08:00

The Upside of Long Layovers: Suicidal Bunny Rabbits

2009-02-22T02:41:00.000-08:00

I am writing this post from Brussels airport, waiting for a flight to Milan. I had to route myself this-a-ways because I was determined not to fly Alitalia and I figured Jet Airways/Brussels Airlines was a good way to make the connection to Milan. On the downside, the Jet flight landed at 8 am and my Milan flight is not until 2:50 pm. At first one resorts to all the usual tricks of handling long layovers, namely leisurely coffees and croissants, FT weekend edition etc. Eventually, one does get bored of the wait. So, I decided to poke around the book store and found a comicbook masterpiece called "The Bumper Book of Bunny Suicides." I haven't laughed so much in ages, watching cartoons of bunny rabbits cooking up ever more ingenious ways of committing suicide.

I looked up the book on Wikipedia and it seems like it's a cult phenomenon, albeit one I had never heard of. So, it is likely that many of you have already heard of the book, but if you haven't, do yourself a favour and grab a copy. To give you a taste of what to expect, here's a sample.

Joe Garner on Trust in the banking system

2009-02-20T12:16:00.001-08:00

(Via Salil) Whether you agree or disagree with the content of his speech, Joe Garner makes some very interesting points on trust as the necessary underlier within the banking system, as indeed in society as a whole. I do wish he had shed more light on the lack of trust between banks though. Watch it.

The end of Swiss banking as we know it?

2009-02-19T11:24:00.000-08:00

For long, Swiss banking has thrived because the banks have traditionally drawn a very thin line between tax fraud and tax avoidance. Tax avoidance is not a crime in Switzerland, unlike say in America, and that distinction allowed Swiss banking to flourish. Unfortunately, the distinction that made Switzerland awesomely rich also covered up some fairly dirty stuff. Every tin-pot dictator in the third world, for instance, found a way to squirrel money looted from tax-payers in Swiss banks. In fact, there are some reports that Indians alone have over $1.4 trillion stashed away in Swiss banks.

The IRS of the United States is not to be trifled with. In fact, one must never forget that Al Capone was not put away for murder, but for tax fraud. Swiss bankers, in particular those from UBS, found this out much to their chagrin earlier this week. UBS will have to reveal the names of Americans who have used Swiss banks to stash away their black money as part of a $780 million settlement. It is rumoured that the IRS is after 19,000 Americans who may have secret Swiss banking accounts. Of course, this move by UBS also probably means the end of banking secrecy in Switzerland or at least the end of the trust in the security of the Swiss banking system.

Keeping tab of Man Marries Dog

2009-02-19T11:07:00.001-08:00

Some of my friends refused to believe the story of a human being marrying a dog named Bullet somewhere near Calcutta. Ever since, I have kept tab of all the stories in India of dogs marrying humans. The last story I blogged was one Selvakumar's marriage to a dog named Selvi. Today's story would be equally funny if it weren't for the fact that it was a 2-year old boy being married off, to a dog called Jyoti. Of course, there's ALWAYS a reason.

The boy's father said such "marriages" were a tradition and would help ease the bad omen of the tooth rooted in Sagula's upper gum.
[...]
The "bride's" father, Parakrama Munda, said: "This is just a ceremony to please the tribal deity - in the great epic Mahabharat a dog helped the Pandavas reach heaven." He said it was a superstition, like wearing a stone or a talisman. One attending resident, Dushmant Rout, said the "bride" had spent a few hours at the "groom's" house "but not inside the room... she stayed on the verandah".

Well, at least they're admitting it's a superstition, I suppose.

Link du Jour: Lalu Yadav in the American

2009-02-15T13:05:00.000-08:00

Graeme Wood writes an interesting profile on India's railway king in the American. Besides obviously talking about the turnaround Lalu has wrought at the Indian Railways, Wood also talks about Sudhir Kumar, the civil servant who is probably as responsible for the turnaround as Lalu himself. It's long, but worth it. I just wish he had spent some more time talking about all the innovations Lalu brought in to increase revenues, or milk the cow to the fullest in Laluspeak.

Belated 200th, Charles Darwin

2009-02-13T11:53:00.000-08:00

On the 12th of this month, the world celebrated the 200th birthday of Charles Darwin, one of the greatest scientists ever and the father of the biological sciences as we know it. Contrary to what creationists would have you believe, Darwin's theories have actually gained strength the more we know and understand the natural world. Here is Nicholas Wade on the influence Darwin's work still carries, and Olivia Judson on Darwin the man.

At ISB, we celebrated by screening a TED Talk with Steven Pinker. Here's another relevant one -- James Watson on how he and Francis Crick discovered the structure of DNA.

Poem (of sorts) du Jour

2009-02-13T11:45:00.000-08:00

The baby bat
Screamed out in fright.
“Turn on the dark,
I’m afraid of the light!”

-- Shel Silverstein

Clive Crook takes on Krugman and Barro

2009-02-12T10:59:00.000-08:00

(Via Amit Varma) First, Clive Crook writes a very interesting piece on how the credibility of economics is being damaged by the influence of politics. Exhibit A being Paul Krugman and Exhibit B being Robert Barro.

Economics outside the academy has become the continuation of politics by other means. If you wish to know what Mr Krugman thinks on any policy question, do not read his scholarly writings; see which policies are advocated by the progressive wing of the Democratic party. Mr Krugman agrees with liberal Democrats about most things, and for the rest gives as much cover as the discipline of economics can provide – which, given its scientific limitations, is plenty. He does this even on matters where, if his scholarly work is any guide, the economics is firmly against his allies. Liberal Democrats are protectionists. Mr Krugman is not, but politics comes first.

The syndrome affects economists on the right as much as on the left. Just as there is a consensus among economists that protectionism should be opposed, most economists believe that a powerful fiscal stimulus is both possible and desirable in present circumstances, and that the best stimulus would include big increases in public spending. Yet recently, Robert Barro, a scholar with conservative sympathies, wrote in the Wall Street Journal that this view was an appeal to “magic”.

The problem is not that Mr Krugman questions the consensus on trade (if indeed he does), or that Mr Barro questions the consensus on fiscal policy (as he certainly does). It is that both set the consensus aside so carelessly. In doing so, these stars of the profession destroy the credibility of their own discipline. Mr Krugman gives liberals the economics they want. Mr Barro gives conservatives the same service. They narrow or deny the common ground. Why does this matter? Because the views of readers inclined to one side or the other are further polarised; and in the middle, those of no decided allegiance conclude that economics is bunk.

Krugman responds accusing Crook of hysterics.

Crook responds to both Krugman and Barro, reproducing an exchange with Barro as well.

Fantastic stuff!

Quick Links: Lloyd Blanfein in the Financial Times/WSJ India online

2009-02-11T11:45:00.000-08:00

The CEO of Goldman Sachs has a very interesting op-ed in the Financial Times titled Do not destroy the essential catalyst of risk.

While we wait for the WSJ to launch a facsimile edition in India, here's the online version of WSJ India. Most of the stories seem accessible.

How much power do Google data centers consume?

2009-02-11T10:09:00.001-08:00

From Portfolio.com

Quick Links from the BBC

2009-02-01T10:55:00.000-08:00

1. Iceland chooses Johanna Sigurdardottir as PM, the first openly gay leader in the world. Money quote:

"I don't think her sexual orientation matters. Our voters are pretty liberal, they don't care about any of that," Skuli Helgeson, Social Democratic Alliance's general secretary, told the BBC.

2. The remains of HMS Victory have been found.

America's most loathsome a.k.a so many insults, so little time

2009-02-01T03:16:00.000-08:00

The Beast has released its 2008 list list of the most loathsome people in America. The list spares noone and includes Barack Obama, the Clintons, Rush, GWB, O.J. Simpson and You. The insults have been seriously thought through and provide at least 30 mins worth of giggles. Unsurprisingly, the No: 1 position goes to Sarah Palin and here's the Beast's take on her.

Charges: If you want to know why the rest of the world is scared of Americans, consider the fact that after two terms of disastrous rule by a small-minded ignoramus, 46% of us apparently thought the problem was that he wasn’t quite stupid enough. Palin’s unending emissions of baffling, evasive incoherence should have disqualified her for any position that involved a desk, let alone placing her one erratic heartbeat from the presidency. The press strained mightily to feign respect for her, praising a debate performance that involved no debate, calling her a “great speaker” when her only speech was primarily a litany of insults to city-dwellers, echoing bogus sexism charges when a male Palin would have been boiled alive for the Couric interview alone, and lionizing her as she used her baby as a Pro-life stage prop before crowds who cooed when they should have been hurling polonium-tipped javelins. In the end, Palin had the beneficial effect of splitting her party between her admirers and people who can read.

Exhibit A: Waving her embryo-loving credentials, in the form of her Down syndrome baby, at "But ultimately what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy."

Sentence: Hand-to-hand combat with Vladimir Putin and a pack of wolves.

She split the party between her admirers and people who can read!! Heh.

Never Forget (a politician's promises)

2009-01-31T12:55:00.000-08:00

(Via Gautam Bastian) Here's one of the more interesting ideas I have come across in recent times. In India, politicians make all sorts of promises before an election and promptly forget all about it post-election, only to repeat the same rubbish come the next election. Of course, one wonders why voters buy the crap repeatedly and continue to vote for everything from free electricity to new roads, most of which never materialise. Neverforget.in is an attempt to keep track of these promises and hold the politicians accountable for these promises. It's very rudimentary and a work in progress, but it's definitely a good start and I wish the founders the very best.

Being Quoted in the Financial Times

2009-01-31T12:19:00.000-08:00

The Financial Times of London is carrying an interesting piece called "Charity Alone is Not the Answer" and it quotes from an interview Amy Yee did with me a long time back. The thrust of the piece is something that I've discussed on this blog several times, namely that international aid is a sub-optimal economic development tool. In particular, the article discusses the role business and philanthropy can play. Amy also mentions the SME fund that I helped set up with Soros, Google and Omidyar.

SMEs are an important engine for economic growth and job creation but are sorely lacking in India due, in part, to a lack of the financing needed to scale up. Reuben Abraham, senior adviser to the fund based in Hyderabad, met with George Soros in 2006 and said the billionaire financier “was intrigued by SMEs”.

The fund looks beyond India’s traditional investment sectors of IT and telecoms to invest between $500,000 and $3.5m in a variety of neglected but essential sectors, such as urban waste disposal and worker training for emerging industries such as retail, hospitality and healthcare. “Every inefficiency you see in the country is a potential way to make money,” said Mr Abraham.

Recommendation du Jour: Axis of Evil Comedy Tour

2009-01-29T11:30:00.000-08:00

My friend Audrey sent me a DVD of The Axis of Evil Comedy Tour. Featuring four Arab-American comedians, Dean Obeidallah, Ahmed Ahmed, Aron Kader and Maz Jobrani, this is the funniest stand-up I have seen in years. Think Russell Peters, but edgier and you have Axis. They're also on the lookout for a North Korean comic to join their act. You can find a preview of the show here. Get the DVD (or d/l the torrent), set aside an hour to watch some of the funniest, most politically incorrect humour you've ever watched.

Glasnost. In a different context.

2009-01-29T11:04:00.000-08:00

I am a bit torrent fan, especially since I moved to India. There is no real way one can watch the movies/TV shows one wants to, except using BT. So, it annoys the crap out of me when I hear of ISPs blocking/slowing BT usage. Thankfully, Google has just released a suite of broadband test tools called MeasurementLab. It includes a fantastic tool called Glasnost which tells you if your ISB is throttling or blocking your BitTorrent connections. I ran a test and found that ISB (my ISP, of sorts) is not messing with my connection at home. How about you?

World Trade: A picture speaks a thousand words

2009-01-28T13:00:00.000-08:00

Need I say more? (Source: Economist)

QDJ: H.L.Mencken

2009-01-28T12:54:00.000-08:00

The definition of wealth, according to Mencken: “is any income that is at least $100 more a year than the income of one’s wife’s sister’s husband.”

ISB makes it to Top-15 Global Business Schools

2009-01-26T10:30:00.000-08:00

The Financial Times ranking of the top 100 business schools in the world has just been released. The Indian School of Business, where I am faculty, is now ranked at No:15 globally, up from No:20 last year. The top spot is shared by Wharton and London Business School. ISB is ranked No:2 in Asia, behind CEIBS in Shanghai. Generally speaking, one can't help but notice a trend where the U.S. dominance of the top 20 schools is in decline with Asian and European business schools catching up.

I am not the biggest fan of rankings, but I really do think it's fantastic that ISB has done so well in just 7 years of existence, including jumping 5 places in the space of a year.

In Defence of Sonal Shah

2008-11-09T11:20:00.000-08:00

The term "crab mentality" is generally used to describe behaviour where one pulls down one's own if he/she is seen to be getting ahead in life. This may not be unique to us South Asians, but I have seen it often among South Asians. Apparently, the behaviour is named for the way crabs in a bucket pull down a crab that might actually be escaping the bucket/dinner table.

Sonal Shah was recently appointed to the Obama transition team as an adviser. As is always the case, the first reports from the Indian media were euphoric. It did not take much time for the storyline to change, with the flimsiest of evidence and fact check. The Hindustan Times and the Times of India were the first to allege that Sonal Shah was linked to the RSS and the extreme right-wing of the hindu fundamentalist movement. The Daily Times of Pakistan upped the ante by stating that she has been "part of a group believed to have been involved in the massacre of muslims in Gujarat." Apparently, all of these stories have been drawing inspiration from a Counterpunch article by Vijay Prashad titled "Obama's Indian: The Many Faces of Sonal Shah."

Now, I don't know Vijay Prashad, so I will not go there. However, unlike Mr Prashad, I actually know Sonal Shah. Very well. In fact, Sonal is a very dear friend of mine. To put it in the simplest terms, these allegations about her being communal are the most vile trash I have heard in recent times. Under normal circumstances, one would just ignore these stories since they typically die in less than one news cycle. Unfortunately, these allegations have been timed to cynical perfection with the aim to maximally embarrass her, and by extension, the transition team. So, I believe it is important for those of us who know her well to speak up for her.

I met Sonal about 4-5 years ago in New York. We first worked closely together when the 2004 tsunami struck. She and her organization, Indicorps, were doing remarkable work in the tsunami zone and I was coordinating some web-based relief efforts, including on this blog. Our professional collaboration continued, given our common interest in market-based solutions to promote economic development, something I have learnt a lot from her about. She moved from Goldman Sachs to Google.org to lead the global development team there. While at Google, she and I along with colleagues at the Soros Economic Development Fund and the Omidyar Network worked closely to put together an SME fund for India, aimed to provide early stage finance for SMEs in India. Our philosophy was that SMEs create huge amounts of employment at the bottom of the pyramid and therefore are vital to the economic development process. Given all of our belief in inclusive economic growth, we were betting that the promotion of the SME sector was one way to extend the growth miracle to India's excluded millions. Besides the SME fund, Sonal's focus at Google has been on the Inform and Empower initiative, giving people the information necessary to hold their governments accountable for their actions.

Let's also look at her track record before I knew her. While she was at Clinton's treasury department, she worked actively in Kosovo and Bosnia in setting up the central banking system and refloating the currency, both measures vital to the stability of the new states, and especially in preventing hyper-inflation. She also worked in Indonesia during the Asian financial crisis with Robert Rubin's team. Lest the irony be lost, all three countries are predominantly muslim, not exactly the natural home of the anti-muslim fundamentalist some of these news reports imply Sonal is.

For better or for worse, I was born an Indian Christian. Long-time readers of this blog know that nothing gets my goat more than religious fundamentalism and intolerance, be it Hindu, Christian, Muslim or whatever else in origin. I abhor fundamentalists and I abhor people who have anything to do with these lunatics. They are responsible for a great majority of the world's problems today. Given that I am an atheist and what I think of religious fundamentalism, does anyone think I would call Sonal a close friend if I had detected even the slightest amount of communalism in her? So, as I pointed out in a post to a mailing list, if Sonal is communal, then I am the Pope.

As a friend of mine said at the time, these people are doing to Sonal exactly what the right-wing loonies tried to do to Barack Obama with the Bill Ayers story, i.e., guilt by association. If you have made the mistake of being somewhere near Bill Ayers, by definition, you're "palling with the terrorists." This is vile. This is wrong. This is destructive. This is disgusting. And this is precisely the sort of vile politics that the United States needs a break from; the sort of politics the average person is tired of, if Obama's mandate is anything to go by. And if nothing else, I would expect so-called Obama supporters of the left to understand this.

And it's not just me who is willing to stand up for Sonal Shah. Here is what Fawzia Naqvi, Sonal's close friend, colleague, and a Pakistani muslim had to say:

I met Sonal in early 2006, we were on a panel together at a south asia women's conference. It took us all of 5 minutes to hit it off and we have become very close friends since then. Sonal is one of the most solid, level headed and intellectually sharp individuals I know. I have turned to her many times for personal and professional guidance and she has stood by me through all of it. Her integrity and honesty are her greatest assets. I am really horrified by the smear campaign which is being activated against her and it hurts to see her being dragged through this nonsense at a time when all of us South Asians should be celebrating her success and a recognition that one of us is indeed reaching for the stars. Sonal is an inspiration to me and to countless many other women I know. I am proud of her and proud to be her friend. As for the garbage being spread about her, I have not once experienced any word, any action from Sonal which would make me think for a second that she had any "right wing hindu" leanings or any extremist thinking whatsoever. If these allegations werent so serious and insidious they would be laughable.

In this post you have an Indian Christian and a Pakistani Muslim standing up for Sonal Shah. I hope that will give the practitioners of the politics of destruction some pause.

For newcomers to this blog, I am a professor at an Indian business school and my full bio is here.

MAJOR UPDATE: The following is a statement by Sonal Shah, Transition Board Member, for President-elect Barack Obama.

As an Indian-American who has lived in this country since the age of four, serving on the Obama-Biden transition team is a unique privilege for me. A presidential transition is always a time of excitement and, in some cases, of rumors and unfounded gossip. I'd like to set to rest a few baseless and silly reports that have been circulating on the Internet. First, my personal politics have nothing in common with the views espoused by the Vishwa Hindu Parishad (VHP), the Rashtriya Swayamsevak Sangh (RSS), or any such organization. I've never been involved in Indian politics, and never intend to do so. Second, I've always condemned any politics of division, of ethnic or religious hatred, of violence and intimidation as a political tool. Some factually inaccurate internet rumors have attempted to link me to Hindu Nationalist groups through a variety of tenuous connections: Relief work I'm proud to have helped coordinate following the Gujarati earthquake of 2001, or cultural and religious affiliations of some of my family members, or apolitical humanitarian work I've been privileged to do as a founder of the NGO Indicorps and as the Director of Global Development for Google.org. Finally, I do not subscribe to the views of such Hindu nationalist groups, and never have. Ridiculous tactics of guilt by association have been decisively repudiated by the American people. I am delighted with what the victory on November 4 says about my country, and about our place in the world. I look forward to serving our President-elect in this time of transition.

Sonal's denial of any links with the VHP/RSS is now appearing across multiple news outlets: Indian Express, Indiainfo, Outlook, Hindustan Times, NDTV, Sify, Deccan Herald, Rediff, MSN India. Most of them are carrying the PTI wire story, but at least they're carrying it.

GROWING DEFENCE: Prem Panicker is a name most of you are familiar with. One of India's best known journalists, Prem was also one of the founders of Rediff.com. Here is a fabulously well written piece on Sonal Shah and the politics of defamation. Prem's article was followed by this piece by Arun Venugopal of National Public Radio (NPR), and one of the mainstays of the South Asian Journalists Association (SAJA). It is titled Sonal Shah Joins the White House Transition Team, and Gets Smeared. Arun provides some history as well. Salil Tripathi writes in Mint that Sonal Shah should be judged by her resume and her deeds.

UPDATE: Since I wrote this post, several people have started coming out to defend Sonal and I am going to post them here.

Dr. Larry Brilliant needs no introduction, really. He ran the WHO team that eradicated small pox from the planet. He founded the Seva Foundation, which along with Aravind Eye Hospitals have given eye sight back to millions. With Stewart Brand, Dr Brilliant founded The Well. A TED Prize winner, he is now the Exec Director of Google.org, where he was responsible for hiring Sonal Shah. This is his take on Sonal:

I hired Sonal Shah at Google, actually Google.org, the philanthropic arm of Google after an exhaustive search to find someone with the sharpest mind and purest heart to help bring resources and technology to the poorest of the poor. She has done that magnificently and she has become a leader of Google.org and an inspiration to us.

For background: I'm a sort of wannabe Desi, having lived in India for more than 10 years working all over India as a medical officer on the WHO campaign which eradicated smallpox from India and all of South Asia, and later working on polio eradication in Uttar Pradesh. I started the Seva Foundation and along with our partner, Aravind Eye Hospital, we have been giving back sight to millions of blind people in India. Because of that background, I've had the honor of working with some of the best sons and daughters that India has given life to----J R D Tata was my mentor for many years; Dr. Govindappa Venkataswamy my teacher and partner in conquering blindness, India's Commissioner of Health, MID Sharma called me "son" until his death, and Karan Singh invited me to become an honorary Indian. Most important of all, Neem Karoli Baba became my guru in 1972 and I've been a chela ever since. Let me tell you straight away that as many wonderful people that the good Lord has allowed me to meet and work with, there is no finer person I have met than Sonal Shah. I've read the comments about her -- alleging "communal hatred" and they are beyond absurd. Sonal has not a bone, not a muscle, not a cell, not a strand of DNA with bigotry. She is one of the best, the brightest, the kindest, open minded and inclusive souls, and one of the most talented that my beloved India, my adopted homeland, has produced.

Please help stop the real bigots who are maligning her, stop circulating their venom. Remind them, please, that the path to heaven is closed for those who bear false witness against their neighbors. When I was working in India to eradicate smallpox, my associate Zafar Hussain and an imam in Lucknow "took me under their wings" and helped me study the Koran, to understand Islam better. I remember so vividly when they taught me about pul-e-sirat, the bridge from this world to heaven. The soul must cross this bridge, as narrow as a knife's edge, constantly pulled down by the sins of a lifetime. One of the worst sins, the worst obstacles to crossing pul-e-sirat into Heaven or Paradise was the sin of bearing false witness against a good person.

Sonal Shah is a credit to India, a credit to the Obama transition, a credit to America and a friend to all who know her. Let's rally around this remarkable woman and support her against false accusations and innuendos and let's pray for her success in helping create an Obama Administration that can help heal this broken and divided world. The stakes are too high for false divisiveness and petty fabrications. Sonal will help make "Hindi-Yankee bhai bhai" stronger and better and we all need to support her in building this friendship.

Larry Brilliant MD MPH FACPM D.Sc (hon) D.LH (hon)

UPDATE: This is from Manjeet Kripalani, veteran award-winning (Gerald Loeb, George Polk, Daniel Pearl awards) journalist and former Press Fellow, Council on Foreign Relations.

Sonal Shah is one of the most dedicated human beings I have met. She is super-bright, dedicated, kind, honest. We need more Indians like her to serve as role models for the world, not just for other Indians. India is proud of this daughter, and so is the US. Sonal is an advisor on the Obama team now, and for good reason - she has the abilities and the human qualities that the new administration is looking for. To those who seek to malign people like Sonal, I say - go find another target, you're wasting your time.

UPDATE: Here is Vishal Vasishth, MD of Clean Partners who was a Henry Crown Fellow at the Aspen Institute with Sonal.

I met Sonal in early 2006, when we were both selected to be part of the 2006 Henry Crown emerging leaders program at the Aspen Institute. During the last couple of years, I have come to know Sonal better, by working closely with her on two projects. The first project that we worked together was on launching an energy and environment innovation award in conjunction with the Aspen Institute and the National Geographic magazine. The second project is where I have signed up to lead an India-focused SME advisory firm Sonal helped put together. Through these experiences and other conversation, I find Sonal to be a smart, personable, level-headed, generous and a kind person. She is committed to making a difference in the world and helping others. I am shocked at all this propaganda and request people spreading it to do some homework. Instead of writing this nonsense, they should celebrate a fellow Indian/South Asian who through her dedication, hard work and intellect has been chosen to be part of Obama's transition team. This is a historic election that seems to show that a world beyond divisions is possible. Let's build on it and work together on solving critical problems that face our planet instead of propagating the age-old politics of division.

UPDATE: This is from Andrew McLaughlin, the head of global public policy and government affairs at Google, and Emeritus Fellow at the Berkman Center at Harvard.

Having seen Sonal in action at Google.org, I can confirm that she is a person of unmatched integrity, intelligence, and dedication to the public good. In her work to foster global economic development, she has been an inspiring leader with a clear vision, a tireless work ethic, and a pragmatist's devotion to data and real-world implementation. A widely-celebrated social entrepreneur, Sonal has never shown a shred of favor toward, or bias against, any religion or ethnic group. Sonal and her achievements merit recognition and applause, not fabricated insinuations of guilt-by-association.

UPDATE: Former U.S. congressional staffer, Kapil Sharma.

Professionally, I did not work with Sonal while she served in the Dept. of Treasury as I served in the US Congress for Congressman Frank Pallone and Senator Robert Torricelli. I did know her socially as we had many, many, common friends. We also shared a common interest - helping and supporting the Indian American community. Without question, Sonal is deeply committed to the betterment of the Indian American community - both politically and socially.

I had served on the selection committee that awarded Sonal the "India Abroad Person of the Year." As you know, Sonal beat Bobby Jindal that year (Gov. Jindal had narrowly lost his race for Louisiana governership, but had helped changed the perception of Indian Americans and public service to mainstream Americans). While reviewing the nominees, it was clear that Sonal and her family had started something special with Indicorps - and that Sonal's commitment to helping Indians in both India and the US was a selfless endeveavor. It was that selfless commitment to the community that the selection committee wanted to reward and quite frankly promote. We felt that Sonal (and Indicorps) would be a wonderful role model for community service - not only for the US but for the Indian diaspora worldwide. And if you go buy the feedback we received - we made the right choice! ;-)

UPDATE: Here is a blog post by Rish Sanghvi, who was an Indicorps fellow, in defence of Sonal.

UPDATE: From Ankur Shukla, an Indicorps fellow who now works with the Lok Satta movement in India.

As an Indicorps Fellow I worked with Sonal, as well as her siblings Roopal and Anand. I found each to be highly dedicated to service to the community, both in India and the US, and each has inspired me at different times in my work, which has involved empowering some of the most oppressed communities in India, as well as building an inclusive political culture in India.

During my Fellowship year, my colleagues and I worked to empower some of the poorest communities in the world, regardless of religion or caste. I personally spent a year in my native city, Kanpur, UP, teaching young men from slums how to start businesses, financial management skills, teamwork and community building through sports, and also worked with the local leaders to bring vocational training and sanitation infrastructure to the communities. My colleagues' projects were in the fields of communal harmony, empowering women, mentoring children, sanitation and so on. The communities we worked in included Hindus, Muslims, Dalits, remote Tribals and so on. The cadre of Indicorps Fellows has included members of various faiths, including Muslims, Hindus, Christians, non-believers, and so on.

My experience in Indicorps was a stepping stone for my subsequent work in a grass roots movement for a new political culture and improved governance in India -- Lok Satta (www.loksattamovement.org and www.loksatta.org). We at Lok Satta strive to provide dignity, opportunity and justice to ALL Indians. My Indicorps colleagues have gone on to serve society (both in India and in the US), to study at premier institutes for graduate/professional education, and to be outstanding professionals in various fields.

In response to:

"[Vijaya Prashad] asked people to be wary about [Sonal Shah's] organization, Indicorps."

I think it is critical that people know what Indicorps and its fellows do, and who we are.

I can personally attest to Sonal's (as well as Roopal's and Anand's) dedication to service to the community, irrespective of caste/creed, etc. My colleagues and I would not have been inspired by anything less.

UPDATE: Sonal's friend, Salim Ismail, who is an angel investor in the Valley and former VP of Yahoo, blogs about her appointment to the transition team.

UPDATE: Sepia Mutiny now has a post titled, what else, In Defense of Sonal Shah.

UPDATE FROM PAKISTAN: Bilaal Ahmed, the founder of IMPAK spoke up for Sonal today.

Pakistan Has a Friend in Sonal Shah.
Back in 2004, it was Sonal Shah who was my inspiration for starting a Pakistan volunteer program, later mentoring me to help make that vision a reality. Impak is now an active service corps program that addresses some of Pakistan's most pressing challenges, including relief following the 2005 South Asia earthquake.

Sonal, along with her brother Anand and sister Roopal, have always been available when we've had a question or requested a meeting. I remember her making time at cafe at midnight in Manhattan when a colleague and I were in driving from DC to Connecticut. When I would catch her in DC, often unannounced, she would take time out to listen to my challenges and concerns and consistently offer solid advice. She always gave more than I expected and encouraged me to tap into Indicorps's resources.

There has already been an outpouring of support from people of all backgrounds in support of Sonal. It is clear that the smears against her are baseless and contradict everything that she has worked for and believed in. As a Pakistani-American who has been dedicated to promoting development in Pakistan, I have always found a stalwart supporter in Sonal.

Let me be absolutely clear: Sonal Shah has wanted nothing but the best for Pakistan and its Muslims.

Her ideas and vision go beyond ethnic and religious divisions and instead puts emphasis on progress, development, and the power of the individual. The fact that President-Elect Obama has selected her speaks to his campaign of change, inclusiveness, and community. I believe that Sonal is a fantastic addition to the Obama transition team and someone that all South Asians can be especially proud of.

Congratulations, Sonal. We at Impak will support you as you have always supported us.

White Person's NYC Subway

2008-01-27T06:19:00.000-08:00

It's been a while since I blogged, but I could not resist posting this hilarious map I came across yesterday.

According to Jonathan Adams, this (click on thumbnail to enlarge) is what the NYC subway map ought to look like to a white person. Notice how the newly trendy parts of Brooklyn are marked as well, as are Yankee Stadium, Coney Island, and Forest Hills, for obvious reasons.

This map, though intended for white folks, can be used by people of color who live in the unmarked areas because the last stops on these lines should be where white people exit and seats are available for you to sit down. If they don’t get off, maybe you should remind them that they missed their last stop.

Truth be told though, I have seen white people above 86th Street on the west side, including at that university up there somewhere.

Facebook, Commercial Transactions, and Privacy

2007-11-17T03:44:00.001-08:00

Ethan Zuckerman has a must-read post on Facebook's new privacy violation. So, if you're on Facebook often and actually do care about your privacy, please do read the post. Ethan also points to a very useful tool that lets you opt-out of ad-tracking networks, rather than quit Facebook altogether (I cannot comment yet on its efficacy). I do understand why Facebook has come up with this idea (tracking your commercial transactions), but I find it a serious violation of privacy and I would urge all of you to read Ethan's post in full. David Weinberger also has an excellent piece up on Huffington Post on the same issue.

Man Bites Dog has nothing on Man Marries Dog

2007-11-13T13:31:00.000-08:00

Occasionally, one comes across a story so brilliant it needs to be blogged simply because noone would believe it otherwise. I remember a story about a dog named "Bullet" being married somewhere near Calcutta, but I obviously did not blog it. This dog is called "Selvi" and here's proof.

[pic courtesy BBC News]

An Indian man has married a female dog, believing the union will help him atone for stoning two other dogs to death. P Selvakumar, 33, said he had been cursed since the killings, suffering paralysis and a loss of hearing. The wedding took place at a Hindu temple in Tamil Nadu state. The "bride" wore an orange sari with a flower garland and was fed a bun to celebrate.
[...]
The "bride", who is called Selvi, was led to the temple in Manamudurai wearing a sari before vows were exchanged in a traditional Hindu ceremony.

A bun? WTF? That's all Selvi gets?

A relative of the groom who attended the wedding said he hoped Mr Selvakumar would now be cured. "Fifteen years back Selvakumar was physically fit. But, once he attacked a pair of dogs and thereafter Kumar could not move his limbs freely," the relative, Ramu, told the BBC. "He tried every cure for his ailment but could not be rid of his disability. "On the advice of an astrologer and others, he decided to marry a bitch to get cured. Then we arranged Selvakumar's marriage with a bitch."

Life's a bitch, and then you marry one, I guess?

Comrade Varma wins the Bastiat

2007-10-25T14:44:00.000-07:00

Last night, I attended the Bastiat Awards dinner with fellow bloggers, Prashant Kothari, Yazad Jal and Manish Vij. As regular readers know, our colleague and friend, Amit Varma, was one of the finalists for the Bastiat prize. Given that he was facing the likes of Clive Crook and Jonah Goldberg, it's fair to say the odds were against Amit.

So, imagine all of our collective surprise when Amit in fact won the Bastiat. We were all thrilled to bits for him. Amit won the award for his libertarian essays in Mint. True to form, Amit delivered a really funny acceptance speech extempore (pic above, courtesy Manish Vij). He was also gracious in acknowledging the Libertarian Cartel, and Niranjan Rajyadhaksha for his superb stewardship of the Mint op-ed pages.

Congratulations once again, Amit! Boy, you deserve it, and here's to a continued defence of Bastiat's ideas in the Indian media and blogosphere.

If you're wondering who won the prize last year, it was none other than Tim Harford. And Tim's out there somewhere raising a toast to Amit as well.

A Reminder of the Role of SME's in Job Creation

2007-10-20T19:55:00.000-07:00

On this blog and elsewhere, I have hammered away at the importance of the small and medium enterprise sector in job creation and employment, especially in fast-growing developing countries. A large proportion of new job creation in developed countries (let alone developing ones) has been in the SME sector. I was reminded of just how large this number is while reading the innovation special in the last issue of the Economist.

From 1980 to 2001, all of the net growth in American employment came from firms younger than five years old. Established firms lost many jobs over that period and dozens fell off the Fortune 500 list.

IPEG Happy Hour on Oct 25th

2007-10-20T19:51:00.001-07:00

This is very short notice, but hopefully many of you IPEG members will be able to make it to this short-notice happy hour.

Many IPEG members are in the process of successfully raising emerging markets focused funds, the latest example of which is Mike Hokenson’s successful closure of the $40 million fund with CDC. There are a bunch of other South Asia and Africa focused funds that are also in the process of being raised or being closed.

Come hear all about it and discuss other issues of interest, over drinks, with your colleagues this coming Thursday, on October 25th from 7:30 pm to 11 pm at Amsterdam Cafe on Amsterdam Avenue at 119th St. Amsterdam Cafe also has a decent food menu, so you can also have dinner there, if need be.

Discovering Jack the Dripper in You!

2007-10-20T12:37:00.000-07:00

Yes, I know it looks eerily like a Jackson Pollock painting. Not. However, you took can indulge your Jack the Dripper fantasies by heading over to www.jacksonpollock.org.

Global Social Venture Competition Asia Round

2007-10-15T20:33:00.000-07:00

The Global Social Venture Competition (GSVC) is the largest student-run business plan contest in the world, which provides mentoring, exposure and prizes for social ventures from around the world. GSVC started off at the Haas School of Business at Berkeley, and since then, Columbia Business School, Yale School of Management, London Business School and the Indian School of Business have joined as partner schools.

This year's Asia round for the GSVC will be held at the Indian School of Business (ISB) in Hyderabad, with the preliminary deadline for submission of plans being Nov 15, 2007. The Asia round finals will be held at the ISB this between the 8th and 10th of March 2008, and the global finals will be held at Berkeley on the 18th and 19th of April. So, if you're sitting on a business idea, model, concept or even an existing business which has a double or triple bottomline, and would like exposure and perhaps even seed/growth capital, head over to the ISB's GSVC Asia Round website, where you can find all the instructions necessary for submission of business plans and participation, including vital information and FAQ's for entrants.

I served as a judge for the 2007 finals, so i can give prospective participants some idea on what to expect. First of all, don't be flaky and keep in mind that there is no business that can meet a second or third bottom line without meeting the financial bottom line. The judges at the Asia Round tend to be very hard nosed and you can therefore expect the same questions that you'd expect if you were to pitch the plan to a venture capitalist. The higher the social impact without sacrificing your commercial viability, the higher your chances of getting through to the finals. Last year's top prize at the Asia finals went to a bio-technology company from China that had patented a technology to drastically improve crop productivity while the second place went to a Thai team that had developed a new dental technology (the Thai team went to place second at the global finals). One team was also chosen on the basis of their Social Return on Investment (SROI) Analysis.

I know there are several ZS readers out there who are budding entrepreneurs while being socially conscious, so here's your opportunity to make a difference and potentially get your business up and running. Questions, if any, should directed to the organizers. Needless to say, if you know of someone who might be interested, feel free to forward the information.

The Classic Rock Blinkers

2007-10-15T19:47:00.000-07:00

This post is a mea culpa. For most of my life in India, I, like most of my friends, listened to nothing but classic rock. That would be defined as music largely created before the time I was born. Typical of this category would be Pink Floyd, Led Zeppelin, The Beatles etc etc. Now, these bands are truly non-pareil in the annals of music and I still get an amazing rush from listening to Led Zep II for instance. However, the trouble with the classic rock business in India was/is that in the fervour of the classicism of rock bordering on puritanism, I missed out on a whole load of fantastic music. I, like everyone else I knew, also used to be extremely sarcastic towards anyone who stepped out of line with what was considered to be "good" music. I guess a good indication of this bias towards a certain kind of music could be seen at quiz contests where the audio round would consist of nothing but arcane facts about Floyd or the Stones or some such.

Now, what did I miss in the meanwhile? Well, top of the list would be Radiohead. I was literally bludgeoned by my buddy, Jaideep, to listen to Radiohead and when I did, I was almost instantly a convert. I also missed out on the most creative (IMHO) phase that U2 went through, post-Achtung Baby, because I thought they were veering from the true path. Of course, I missed the entire electronica scene in the 90's, so that would include everything from Aphex Twin to Orbital to Thunderball to Fatboy Slim. I have spent the last 8-9 years repenting and catching up on all the music I missed out in the late 80's and 90's.

So, why am I writing this? Well, I was reminded of everything I've said above when I first listened to the lush minimalism of the new Radiohead album, a sound that I would never even have heard if I had kept my classic rock blinkers on. Secondly, I suppose this post is aimed at ZS readers in India who continue to wear these blinkers (you just need to go to Pecos on any night to understand). The whole classic rock puritanism works the way any other kind of narrow mindedness does, which basically denies you the joy of discovering something amazing and new. So, if you're still hooked on classic rock, I'd say stop listening to "Roadhouse Blues" for the millionth time and try Kid A, or O.K.Computer or anything by Aphex Twin, or Zooropa or anything by the Flaming Lips or Vegas or Sounds from the Thievery Hi-Fi or anything by Kruder and Dorfmeister. You could also listen to sounds from the Asian Underground, like Saad Chisty (check out Manzoor in particular) and by now, everyone has at least heard of Karsh Kale, Midival Punditz, Jalebee Cartel etc. I am not saying you will like any/all of this, but at least give it a shot.

Financial Times Video Lectures

2007-10-15T19:40:00.000-07:00

The Financial Times is hosting a 5-part video lecture series called Exploring New Markets: The Base of the Pyramid. The introductory video lecture is done by me, followed by my colleague Ravi Bapna on mobile telephony in BOP markets, Shamika Ravi on the myths behind the microfinance industry, Harish Bijoor on marketing to the BOP and Mudit Kapoor on the sustainability of the Indian economic growth story. Only Ravi and I are online currently, but the other lectures will follow during the course of the week.

As for the nervousness and squinting in my segment, blame it on extempore lecturing, 3 hours of sleep, jetlag and bright sun and reflectors in the eye. Excuses, excuses, I know :)

Buy In Rainbows. Now.

2007-10-12T20:23:00.000-07:00

Back in 1999, at the Columbia Institute of Tele-Information, we did some research to unpack the economics of the music industry and especially of album sales. We found that typically the artist would get 1-15%, while overheads ate up the rest. It also became obvious why the recording industry preferred one-hit wonders, because they could squeeze the one-hit wonders on royalties much more than they could do to Elton John, Pink Floyd etc. Anyways, having been a Grateful Dead fan and knowing how much money could be made the Grateful Dead way (touring, merchandise etc), I wrote a paper saying that recording artists should use new technologies like the Internet to bypass intermediaries and reach out directly to fans. Since then, Napster happened, RIAA lawsuits happened, Napster shut down, Itunes happened. Etc. Etc.

I was therefore absolutely thrilled and stunned to hear of Radiohead's brilliant idea to sell their new album, In Rainbows, directly to fans since they were not tied to any record label. What was even more innovative was that they asked fans to pay whatever they liked for DRM-free music. I did some calculations on how much a label-free digital format would cost and paid $6 for the album. Radiohead was obviously betting on the fact that most of their fans would pay something for the music, rather than download it for free.

Initial reports suggest that Radiohead was spot on. 1.2 million downloads have been reported in the first day alone and the average fan was forking out $10 (I don't know what the median amount looks like). That's pretty damn amazing for an experiment. Mind you, other artists have tried giving music away, but not using Radiohead's pay-what-you-like strategy. More importantly, Radiohead is a massively influential band if not the most influential rock band today, much more so than Prince, Nine Inch Nails etc. News has already been filtering out that Nine Inch Nails, Madonna, Jamiroquai, Oasis are all re-considering their marketing model after the success of the Radiohead experiment.

Does this spell the end of the recording industry? Almost certainly not, but it will seriously cause a lot of bands to think twice about signing royalty agreements which enrich the fat cats and leave them with very little. In particular, one has to wonder whether a Radiohead fan is fundamentally different from those of other bands. For instance, do they belong to a higher income strata and therefore do not mind paying money, despite not being forced to? I have no answer to these questions, but there is no doubt the release of "In Rainbows" is a seminal event in the history of recorded music.
As for the album itself, I absolutely loved it. It's a very downtempo, electronica influenced album (not quite as much as Kid A though). I had heard most of the tracks through the live bootlegs that emerged from the Radiohead tour last year. Even so, I am amazed by what a beautifully crafted album "In Rainbows" is, so make sure you listen to it in whole, rather than as parts. "15 steps" has elements of trip-hop, but evolves into something that only Radiohead could do. "Bodysnatchers," which was my fave track from the live bootlegs is a really rocking track that you cannot but tap your feet to. However, the album really takes off from this point. "Nude" gives way to one of my favourite tracks, "Weird Fishes/Arpeggi" which is an absolutely gorgeous take on our being returned to the fishes, via the worms. "Reckoner" features the best percussion ever by Phil Selway, who probably has the most prominent role on the album besides Thom Yorke. My favourite songs after 48 hours of endless listening are "House of Cards" and "Videotape" (which I preferred the live version of, by a teeny bit). Videotape, of course, is just a beautiful little song about, what else, suicide! And above all of this hangs some really extraordinary piano and organ and Thom Yorke's signature whine. I think it would be apt to describe this album as somewhere between "O.K.Computer" and "Kid A."

I cannot possibly recommend this album enough. So, go to www.inrainbows.com and buy your copy now. If you're confused about how much to pay, my guess is that anything between $5 and $10 will be ideal. You could also download it for free and buy the CD at a higher bitrate as and when they hit the record stores.

Cartoon du Jour: Redefining William Blake

2007-10-10T13:52:00.000-07:00

While trawling the New Yorker's Cartoon Bank, I came across this gem by Mick Stevens. It made me laugh even harder than yesterday's cartoon.

If you cannot see the lines, here's what is says: "What immortal hand or eye could frame thy fearful symmetry?"

Cartoon du Jour

2007-10-09T22:14:00.001-07:00

One of the funniest cartoons I've seen in the New Yorker in recent times.

Back in New York

2007-09-27T19:25:00.000-07:00

Hello all. Just a quick post to let my New Yorker friends know I am back in town, primarily to attend the Clinton Global Initiative. CGI will be done tomorrow, so I am up for catching up with people etc. I hope to resume blogging as well after this weekend. See you soon.

A symbol of the turn-around in India-U.S. Relations

2007-09-11T06:13:00.000-07:00

I've been reading a lot about the military exercises involving India, the U.S., Japan and Australia, code-named "Malabar" in the Bay of Bengal. When one reads about the Kitty Hawk and the Seventh Fleet in the Bay of Bengal, one cannot but be amused. The last time the Seventh Fleet was in the Bay of Bengal was when Nixon ordered the fleet to steam in to try and intimidate Mrs. Gandhi (he really did pick the wrong person to try to intimidate) over the 1971 war. That move led to disastrous India-U.S. relations for the next 20 years. The same seventh fleet in now involved in war games with the Indian Navy, signaling the strengthening of a relationship that could potentially keep the straits of Malacca open, in addition to being a counter-weight to Chinese naval ambitions. The symbolism, however, is not lost on anyone.

A Must-Read Brief History of Indian Communism

2007-09-09T03:31:00.000-07:00

(Via Salil) A lot of left-leaning folks in India who justify the actions of the communists, be it about economic reform or nuclear deals, typically have no clue about the history of Indian communists. If they did, I doubt they would be as enthusiastic about the left. So, I was really glad when Salil posted this brief, yet reasonably comprehensive history of the Indian Communist movement.

I think it is important to mention here, as Salil did in his email, that the historian/writer, Rudrangshu Mukherjee, has absolutely nothing to do with the right-wing movement. So it's not as easy for left-leaners to dismiss his arguments the way an Arun Shourie, for instance, could be dismissed, because of Shourie's ties to the BJP. I hope the Telegraph (direct link to story) will forgive me for publishing the op-ed in full. I believe the whole thing needs to be read to really understand the hypocrisy that forms the backbone of Indian communism.

If nationalism, as the historian Jack Gallagher was fond of quipping, devours its parents, communism consumes its own ideology. Communism was born under the sign of internationalism. The project of world revolution did not recognize national boundaries. Thus, it is funny to see Indian communists today positioning themselves as great protectors of national sovereignty.

Indian communists have always had a very uncomfortable relationship with nationalism. Some of the major debates and divisions within the Communist Party of India have revolved around the question of nationalism and the national movement. And, if the truth be told, these debates do not exactly hold up the comrades in an edifying light. On the scorecard of nationalism, the performance of Indian communists is poor to say the least. (On internationalism, their score is irrelevant, since a world communist revolution is not even a pipe dream after the collapse of socialism and the exposure of the many crimes of the socialist regimes in Soviet Russia, in Eastern Europe, in China, in Albania, under Pol Pot in Cambodia and so on.)

To begin with the most notorious example that communists have never been able to live down: 1942. The CPI was officially against the Quit India movement. What needs to be emphasized here is that this decision of the CPI was not based on any understanding of the Indian situation by Indian communists. The opposition to the clarion call of 1942 was the outcome of a diktat emanating from Moscow. When Hitler attacked his erstwhile ally, the Soviet Union, in 1941, the fight against Nazism overnight became a People’s War for all communists. The directive from Moscow was carried by Achhar Singh Chinna, alias Larkin, who travelled from the Soviet Union to India with the full knowledge of the British authorities. In India, it meant communists had to isolate themselves from the mainstream of national life and politics and see British rule as a friendly force since the communists’ “fatherland”, Soviet Russia, was an ally of Britain. A critical decision affecting the strategic and the tactical line of the party was thus taken defying national interests at the behest of a foreign power, whose orders determined the positions and actions of the CPI.

In 1948, within a few months of India becoming independent, the CPI under the leadership of B.T. Randive launched the line that this freedom was fake (yeh azadi jhooti hai), and argued that the situation in India was ripe for an armed revolution. The Randive line led to the expulsion of P.C. Joshi, who believed that freedom from British rule was a substantial achievement and that, tactically, the communist movement would gain by supporting leaders like Jawaharlal Nehru who, Joshi said, represented a “progressive” trend within the Congress. Apart from the inner-party struggle, what needs to be noted here is that the Randive line, which completely misread the national mood, was the direct outgrowth of a policy formulated by the Comintern (or the Cominform, as it had renamed itself), in other words, Moscow. The directive of Moscow to the Indian communists was that Congress should be opposed since it was no more than a satellite of imperialism. The retreat from this line was also sounded from Moscow in the form of an editorial entitled, “For a Lasting Peace”, in the mouthpiece of the Cominform.

The defeat of Joshi in the inner- party struggle camouflaged an important and lasting tension within the CPI. This concerned the party’s ideological and tactical position regarding the Congress. Joshi represented a trend within the party that believed in closer ties with the Congress, especially Nehru. It argued that, given the incipient nature of the proletarian movement in India in the Forties and Fifties, it was necessary to seek an alliance with the Congress since it was the party that was closest to the masses and it had leaders who were favourably inclined to socialism and its global future. It was Joshi’s firm belief that the democratic revolution in India could be completed only through an alliance between the national bourgeoisie represented within the Congress and the CPI. While the opposite trend saw the Congress as a bourgeois party and therefore hostile to the interests of the working class and the communist movement. The Congress could not be trusted, a suspicion that was strengthened when the first communist government in Kerala led by E.M.S. Namboodiripad was dismissed by Nehru in the summer of 1959.

Three years later, in 1962, when the Sino-Indian border conflict occurred, a section of communists, among whom Namboodiripad was prominent, chose to uphold the cause of China and portrayed India as the aggressor. This was yet another occasion when the communist movement found itself isolated from the national mainstream. It led eventually to a split in the CPI with the pro-Chinese faction leaving the parent party to form the Communist Party of India (Marxist). A rump remained as the CPI — a party totally subservient to the Communist Party of the Soviet Union, and some would say even fully funded by it.

To these dates — 1942, 1948, and 1962 — when the communists chose not to serve Indian interests but to act at the behest of either Moscow or Peking (as it was then) can now be added another date: 2007. The communists are poised at the moment to withdraw support from the government led by Manmohan Singh unless the latter agrees to renegotiate the Indo-US nuclear treaty. The opposition of the communists is based not on substantial objections to the terms of the treaty, but to the fact that it brings India closer to the US. Prakash Karat, the general secretary of the CPI(M), made this clear in an article in People’s Democracy. He wrote, “The Left parties have been watching with disquiet the way the UPA government has gone about forging close strategic and military ties with the United States….The Left is clear that going ahead with the agreement will bind India to the United States in a manner that will seriously impair an independent foreign policy and our strategic autonomy.”

These, as anyone will recognize, are a series of ideological assertions and not rational arguments. The Left, since the Nineties, has lost all its ideological moorings: socialism is gone and China has turned to market capitalism; within India it has no political base anywhere save in West Bengal and Kerala. With no policies of its own, it has accepted economic reforms and begun to woo capital with some gusto in West Bengal. With everything gone, the Left clings to its anti-Americanism as a last ideological anchor. In the present context, however, the Left’s anti-US position echoes what the Chinese Communist Party is saying on the Indo-US nuclear deal. Karat, whether he likes it or not, is only parroting, like his predecessors did in 1942, 1947 and 1962, a political line coming out of a foreign country, in this case one that is hostile to India. The intensity of his opposition is a reflection of the enduring discomfort of the communists with a pro-Congress stance.

Given its track record, the Left’s attempt to see itself as a protector of India’s national sovereignty and autonomy is a disgrace. Communists in India have acted, at critical periods, at the behest of the Soviet Union or China. In so doing, communists have sacrificed India’s national interests. They are about to do the same now.

The history of Indian communism is the story of a series of historic blunders. The red flag has never fluttered because those who hold it aloft know only how to blunder. What is pathetic is that even the blunders of the communists are not their own!

Postcards from Switzerland

2007-09-02T16:27:00.000-07:00

Summer is just a wonderful time to be in Switzerland, unlike say summer in India. Anyone who doubts my theories about why seasons (especially extremes) are a bad idea need only come here in summer to see why. The days are sunny, the air is crisp, the alpine meadows are lush green, and the streams and lakes are just crystal clear. In short, the perfect weather to laze outside, have lots of cheese (raclette, fondue etc) and drink lots of wine. If you haven't done it yet, I recommend it very strongly, given the salutary effects on one's system. In the meanwhile, how about an, ermmm, blanket ban on winter in places like Switzerland? It just is so much better when the sun is out and it's warm.

Georgia on our Minds?

2007-08-29T12:55:00.000-07:00

Georgia is a fascinating country, which has been at the cross-roads of history for centuries. First came the Romans, then the Persians, Arabs, Turks and then the great waves of Mongols. The country then fell under the Ottomans and the Persians before finally being absorbed into the Russian empire and Soviet Union subsequently. Georgia became independent in 1991 and was then ruled by Gorbachev's foreign minister, Edouard Sheverdnadze and his incredibly corrupt government.

Georgia has had a great turnaround since the Rose Revolution of 2003 brought Mikhail Saakashvili's United National Movement to power. Since Saakashvili took over, Georgia's GDP has grown from $3 billion in 2003 to $8 billion today and is expected to double again in the next 3 years. Nonetheless, Georgia's GDP per capita in PPP terms remains on par with India at $3,800 which gives you an idea of the scope for growth, despite all the troubles the country faces, none more so than persistent Russian bullying.

I have been interested in Saakashvili since I read about him disbanding the entire Georgian police force to deal with persistent corruption. Since then, the new police force have winning plaudits from international observers for their non-corrupt ways. This interview with him appeared earlier this week in the Wall Street Journal and goes to show why Saakashvili is a remarkable politician of the sort that we do not find very often, and definitely not anymore in India. Here are a couple of excerpts from the interview:

A day or two later, at a dinner for Georgian businessmen, the president delivers a speech hammering home his well-honed message of self-help. "The government is going to help you in the best way possible, by doing nothing for you, by getting out of your way. Well, I exaggerate but you understand. Of course we will provide you with infrastructure, and help by getting rid of corruption, but you have all succeeded by your own initiative and enterprise, so you should congratulate yourselves."

Mr. Saakashvili's style of leadership feels like a permanent political campaign -- which it is, in a way. He seems determined to show citizens how it's being done, visibly to demonstrate accountability, transparency and political process, so they grow accustomed to the sight of politicians answering to them -- in short, to Western political habits. All the while, he's exhorting and explaining, striving to change attitudes ingrained through decades of Soviet rule and 15 years of stagnation, strife and corruption. "I keep telling people that this is not a process like some silver-backed gorilla leading them to new pastures. They must do it themselves, and they are."

Now if only more politicians would simply express the obvious and in plain language, like Saakashvili does.

A Modest Proposal: Vague but Exciting

2007-08-29T03:48:00.000-07:00

(Via Thomas) History, especially scientific history, is littered with under-statements. I guess the most famous of the lot was Watson and Crick writing at the end of their paper, "it has not escaped our notice that the specific pairing we have postulated immediately suggests a possible copying mechanism for the genetic material."

This image below is destined to join the ranks of famous understatements. A certain Tim Berners-Lee submitted a proposal for an information management system to Mike Sendall, his boss at CERN. Sendall read the proposal and wrote, "vague but exciting." Berners-Lee continued his research, became a saint, and the world as we knew it was changed forever.

Insane Travel Again

2007-08-25T15:54:00.001-07:00

Greetings to all from Lyon. I am on the road again, which is why the terribly delayed blog posts. In the next few weeks, I will be in London, Paris, Lyon, Geneva, possibly Zurich, Lausanne, Bombay, and Hyderabad before returning to New York in the end of September. If any of you are in these cities and would like to grab a drink, drop me a line. I hope regular posts can resume later in the week once I get to Switzerland and dependable Internet connections.

Indian Economy Blog Makes it the top 20 Economics Blogs

2007-08-20T15:02:00.000-07:00

Aaron Schiff has put together a list of the world's top economics blogs, based on Technorati rankings. Not much of a surprise that Freakonomics and Marginal Revolution are at No:1 and No:2 respectively. However, I must say I was really surprised to see that the Indian Economy Blog, which I co-founded with a couple of prominent Indian bloggers/libertarians has made it to the top 20, at No: 17, meaning that we're ranked above quite a few prominent global blogs. We're also the only Indian blog in the top 30. I think this is really cool, so congrats goes out to all my colleagues and co-writers at Indian Economy Blog.

What is it that aid advocates don't get?

2007-08-14T18:15:00.000-07:00

In case you missed it, Nick Kristof wrote yet another op-ed in the NYTimes that is either utterly confusing or reflective of the confusion that he himself feels about the aid issue. On the one hand, he admits that there is mounting evidence that aid either doesn't work, or worst case, it leads to negative outcomes. On the other hand, he wants more aid, not less.

A handful of recent books and studies suggest that aid is sometimes oversold, including the superb new work called “The Bottom Billion,” by Paul Collier, the World Bank’s former research economist (it’s the best nonfiction book so far this year). A forthcoming book, “Farewell to Alms,” by Gregory Clark, a University of California economist, even argues that conventional aid can leave African countries worse off than ever.

And a study by two economists formerly of the I.M.F., Raghuram Rajan and Arvind Subramanian, forthcoming in The Review of Economics and Statistics, concludes:

“We find little robust evidence of a positive (or negative) relationship between aid inflows into a country and its economic growth. We also find no evidence that aid works better in better policy or geographical environments, or that certain forms of aid work better than others. Our findings suggest that for aid to be effective in the future, the aid apparatus will have to be rethought.”

So does this mean we should give up on foreign aid?

No, not at all. On the contrary, I believe there is an urgent need for more aid. But this is an important discussion worth having, and the critics (though a minority of the experts) make some fair points. Plus, there’s no doubt that aid can be made more effective.

Is it just me that simply cannot understand Kristof in this piece? Paul Collier is no Milton Friedman and yet, the The Bottom Billion states the obvious in very polite terms. As for the call for aid to me made "more effective," I can't help get that deja vu feeling all over again (to paraphrase Yogi the Berra) given this is what every advocate of aid says every time more evidence emerges of the inefficacy of aid.

To me, it seems like Kristof is having a very hard time reconciling his very strong good-guy instincts with what is mounting evidence that contradicts his fundamental beliefs. Dan Drezner is a lot harsher than I am, when he poses this question: Is Nick Kristof insane?

Amit Varma Nominated for 2007 Bastiat Prize

2007-08-14T15:03:00.000-07:00

Some amazing news from the Indian blogosphere. My buddy, uber-blogger, and Indian Economy Blog co-blogger, Amit Varma, has been nominated for the 2007 Bastiat Prize for Journalism, named for the famed French liberal thinker, Claude Frédéric Bastiat. The Prize is awarded to writers for their promotion of free societies and defence of fundamental economics and social freedoms. Amit has been nominated for his work with Mint, India's finest business newspaper. Amit joins a fab set of nominees which includes Clive Crook of the Atlantic Monthly, Jonah Goldberg of the L.A.Times, and Dominic Lawson of The Independent. Previous winners include Tim Harford, Amity Shlaes (both from the FT) and Robert Guest of the Economist.

As you can tell, this is high honour, so congratulations Amit. You deserve it, and here's wishing you the very best for the final round.

F.A.Hayek on The Use of Knowledge in Society

2007-08-12T20:32:00.000-07:00

Very few economics papers have influenced my thinking as much as F.A.Hayek's brilliant, "The Use of Knowledge in Society." A friend of mine had asked for it earlier today, and while searching for it, I found that the entire paper is now available online for free at the Library for Economics and Liberty. I would still recommend that you read the print version at the American Economic Review (Sept 1945), if you can, and if not, read the paper online. To give you a taste of what to expect in the paper, here's a little bit extracted from my doctoral dissertation about the centrality of the price system to a market economy.

In his seminal paper, “The Use of Knowledge in Society,” Hayek (1945, 526, 527) writes that “in a system where the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.” He goes on, “the most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on, and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change.”

Hayek (1945, 528) drives home the point about the signaling and coordinating role of prices by quoting the great mathematician Alfred North Whitehead from his book “An introduction to Mathematics”:

It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they make speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number or important operations which we can perform without thinking about them.

419's Getting Desperate?

2007-08-12T20:18:00.000-07:00

I wonder what it means when 419 emails begin in this fashion.

DEAR FRIEND,
APPARENTLY, YOU MAY BE JUDGING THIS MAIL AS ONE OF THOSE SCAM MAILS THAT INUNDATE YOUR BULK MAILS, AND AS SUCH MAY NOT WANT TO ACCORD IT ITS DESERVED ATTENTION. PLEASE IT IS NOT, AT ALL.

On another note, why is it that GMail is so much better at sending this crap straight to spam than Yahoo Mail (we're not going to discuss Hotmail, AOL etc)?

First-Best Vs Second-Best Worlds

2007-08-11T18:27:00.000-07:00

On his blog, Dani Rodrik dives into why economists differ so much about so much. He thinks the answer lies in the fact that there are two genres of economists, economists who believe in a first-best world and economists who believe in a second-best world.

The gut instinct of the members of the first group is to apply a simple supply-demand framework to the question at hand. In this world, every tax has an economic deadweight loss, every restriction on individual behavior reduces the size of the economic pie, distribution and efficiency can be neatly separated, market failures are presumed non-existent unless proved otherwise (and to be addressed only by the appropriate Pigovian tax or subsidy), people are rational and forward-looking to the first order of approximation, demand curves always slope down (and supply curves up), and general-equilibrium interactions do not overturn partial-equilibrium logic. The First Fundamental Theorem of Welfare Economics is proof that unfettered markets work best. No matter how technical, complex, and full of surprises these economists' own research might be, their take on the issues of the day are driven by a straightforward, almost knee-jerk logic.
[...]
Those in the second group are inclined to see all kinds of complications, which make the textbook answers inappropriate. In their world, the economy is full of market imperfections (going well beyond environmental spillovers), distribution and efficiency cannot be neatly separated, people do not always behave rationally and they over-discount the future, some otherwise undesirable policy interventions can generate positive outcomes, and general-equilibrium complications render partial-equilibrium reasoning suspect. The First Fundamental Theorem of Welfare Economics is proof, in view of its long list of prerequisites, that market outcome can be improved by well-designed interventions. Since they have given up on the textbook model, members of this group have an almost-infinite variety of "models" to choose from as they think of public-policy issues.

The first group's instinct is always to apply the first-best reasoning to the case, ignoring market imperfections in related markets, while the second group almost always presumes some market imperfections in the system. I am over-simplifying a bit, but not a whole lot.

Who belongs in what category, you ask? Here is the surprising bit. According to Prof Rodrik, Gary Becker, Greg Mankiw, Brad deLong, Jagdish Bhagwati, and Tyler Cowen fall into the first category, while George Akerlof, Joe Stiglitz, Paul Krugman, Alan Blinder etc fall into the second category. Now, I can understand why he would think that way about Becker, Mankiw and Bhagwati, but I have always thought of Tyler Cowen and Brad as economists who really do take imperfections into account. It's an interesting read, though I very rarely agree with Prof Rodrik these days.

Quote du Jour: Adlai Stevenson

2007-08-11T09:24:00.000-07:00

Adlai Stevenson is one of my favourite politicians. I first came across him while reading about JFK's last visit to Dallas, but since then I've read much more about Adlai and the more I read about him, the more I like him.

To celebrate the current turmoil in the capital markets, here's a gem from Adlai.

"There was a time when a fool and his money were soon parted, but now it happens to everybody."

Google Ad Sense. Ahh!

2007-08-10T17:31:00.000-07:00

Here's what just appeared on my web page via Google Ads. Part outrage. Part irony. The first ad from Christian relief organization, World Vision, asks for your money claiming that there's a famine in India and that your $20 will help children escape lives of horror. Now, where this famine in India is, heaven only knows. To the best of my knowledge, India hasn't had a famine in quite a while, so clearly whoever is responsible for buying keywords for World Vision is being deceptive. Google Ad Sense also manages to serve a generous dose of irony in the same ad space. Watch the other ad in the picture. It says "Invest in India stocks." Not bad, Google.

The Productivity Stats

2007-08-10T17:19:00.000-07:00

The Economist has a comparison of productivity figures from around the world. I was surprised to learn that Norway topped the table for GDP per hour worked, and by quite a wide margin at that. My American friends should also take note that the French manage higher productivity despite the 35-hour work week. Fascinating.

The Battle at Kruger

2007-08-10T11:17:00.001-07:00

Kruger National Park. South Africa. A pride of lions attacks a young buffalo calf. Gets the calf. Falls into the river in the process. A huge crocodile wants a piece of the action. Crocodile drags calf one way. Lions drag the other way. Lions win the battle with the crocodile. Drag the calf ashore. Lunch is almost ready. The buffalo herd returns to attack the lions. A buffalo gores a lion and tosses it in the air. The buffalo attack saves the calf somehow. The calf gets up and walks away. A great win for family. Watch The Battle of Kruger!

As someone fresh from a safari, I can tell you how difficult it is to actually see a kill in the wild, leave alone a titanic battle like this. Dave Budzinski, who shot this video, can consider himself very, very lucky to have witnessed something even dedicated National Geographic movie-makers have seldom managed to capture on film.

There's Entrepreneurs and there's Entrepreneurs!

2007-08-08T22:00:00.000-07:00

One of the widely-circulated and key ideas in the international development arena of late is the celebration of entrepreneurship among the poor in developing countries. The assumption seems to be that the poor could successfully run these small micro-businesses, if only the slightest amount of help could be offered, especially financial help. The thinking goes like this: Nagamma would be able to buy two cows if she had access to $200, then she would be able to supply milk to the community, make money, repay the $200 at 25% p.a., and have money left over to scale the business to a point where she can buy more cows, make it a viable business etc. This is the sort of thinking that forms the basis for the current hype for micro-finance and social entrepreneurship, though one most also add that real-world practitioners of micro-finance (some of whom are very good friends of mine) typically are free of any such delusions. I must also confess that I personally flirted with the ideas around micro-entrepreneurship for a while, before thinking through the problem and arriving at a different conclusion.

I think the fundamental problem with the thought process is the conflation of real entrepreneurship with micro-entrepreneurship. Entrepreneurs of the Nagamma variety are forced into entrepreneurship because they have no other alternative. In other words, survival becomes entrepreneurship. That does not mean, however, that Nagamma possesses the skills required to be a real entrepreneur. True entrepreneurship is a specialized skill which requires a very high degree of risk-appetite, and I'd argue that less than 1% of the population have these skill sets and risk appetites. I should know, having been involved in two start-ups in the mid-90's. I was an entrepreneur because I don't really like taking orders from others and I have always lived for the thrill of doing something very new. I am also extremely well-networked to knowledge, capital and people with solid management skills. To compare an entrepreneur like me with Nagamma is a bit absurd, isn't it?

To people who meet me and doubt this, I typically take them to meet some of these so-called micro-entrepreneurs who are being celebrated in the beautiful stories you hear from time to time. Some of them run their businesses pretty close to the ISB. Typically, they're small stores, tea-vendors and the like. Speak to them, and you'll realize that their margins on their businesses are typically $40-60, if not lower. Arguably, this makes them better off than their lives in the villages, but speak to them a while longer and ask them what they'd really like to do, and they'll tell you they'd love to be cab drivers running cab services to the ISB or Microsoft or some such, for example. Cab drivers working at the ISB (for car companies) typically make $120-150 a month, with benefits and the base income is not variable. The attraction of cab driving becomes immediately obvious.

So, if you really wanted to make a difference through private business, the real target should not be micro-businesses, but SME's. In the case illustrated above, the two potentially highly profitable businesses that need to be seeded are skills training companies, which teach these chaps how to drive a car and speak a bit of English (micro-finance could have a real role here), and large cab companies that can hire these guys as drivers to cater to exploding demand in Hyderabad. There is no point imagining this small guy sitting outside is somehow going to become the Starbucks of the chai business in India. Miracles do happen, but not with the regularity required to solve the problem of employing the poor in India. In other words, what needs to grow is the formal sector, which alone has the scale to absorb people in large numbers with reasonably paid jobs. The celebration of the wrong kind of entrepreneurship simply expands the informal sector, which we can all agree is a second-best alternative at best.

How soon the international aid/Base-of-the-Pyramid/Social Entrepreneurship crowd will understand this very important distinction is the real question. And yes, I do belong to this crowd, so I am trying to affect some change of thinking from within. Whether my thinking on this gains any traction or not remains to be seen.

Steve Levitt wants you to get into the head of a terrorist!

2007-08-08T20:59:00.000-07:00

Steve Levitt is asking an interesting question at the New York Times: If you were a terrorist, how would you attack? The basic premise is quite simply wisdom of crowds, I guess. If you had posed the same question back in 2001, chances are that someone would have come up the idea of flying planes into buildings and maybe, it would not have come as such a shock to the system.

Levitt himself comes up with an idea that I agree could potentially be devastating for the simple reason that unpredictable small acts of terror are far more terrorizing than huge acts of terror like 9/11. Anyone who lives in Israel or in Delhi during the 80's will probably agree strongly.

The best terrorist plan I have heard is one that my father thought up after the D.C. snipers created havoc in 2002. The basic idea is to arm 20 terrorists with rifles and cars, and arrange to have them begin shooting randomly at pre-set times all across the country. Big cities, little cities, suburbs, etc. Have them move around a lot. No one will know when and where the next attack will be. The chaos would be unbelievable, especially considering how few resources it would require of the terrorists. It would also be extremely hard to catch these guys. The damage wouldn’t be as extreme as detonating a nuclear bomb in New York City, of course; but it sure would be a lot easier to obtain a handful of guns than a nuclear weapon.

As you can imagine, Levitt's piece has pissed off some of the usual flag-waving suspects, but some of the responses are rather intriguing and I bet Levitt will do a follow-up based on the feedback he's receiving. In the meanwhile, let's hope law enforcement authorities are looking at these ideas seriously since it may be the best way to prevent some of the ideas from coming to fruition just like reading Tom Clancy novels could have served as a warning before 9/11 or reading Forsyth could have served as warning on belt bomb wearing suicide bombers.

Given my past experience with overly sensitive readers, I ask you to actually read the Levitt piece and think about it before violently reacting to it, like some of the commenters on that blog have. For those who think this is a bad idea, I ask this: would you also consider not publishing a Tom Clancy or Frederick Forsyth novel, based on the assumption that it will give terrorists ideas?

Architecture and Cultural Touchstones

2007-08-05T23:52:00.000-07:00

I have, on this blog, lamented several times (including very recently) about the complete absence of architectural sensibilities in modern-day India. It almost seems like the pre-independence art deco movement was the last time anyone used their brain and imagination to build. This is very strange because India has such a rich architectural tradition, so to see these monstrosities all over is embarrassing. The trend in Hyderabad and Bangalore, for example, seems to be to build ugly-as-fuck sprawls with ugly-as-fuck buildings to go with the sprawl. Hopefully, there is an inflection point (in wealth terms) when people do pay more attention to design, planning etc.

Given these biases of mine, it was refreshing to read Shoba Narayan's piece in Mint which addressed some of the issues articulated above. Let's start at the bottom.

India has no dearth of builders, ranging from the Hiranandanis to the DLF Group. But without a single exception, most mass-market builders lack imagination. They loathe taking architectural risks and, as a result, the homes they build lack individuality. I should know; I live in one such flat.

Corporations, thankfully, are donning the patron mantle and encouraging architects who think outside the box. TCS has hired Carlos Ott to build its eco-friendly Chennai campus. The Ananda Group uses Hong Kong-based Indian architect, Chandu Chadda, for all its properties, including its newly opened resort in Mauritius. Infosys, thankfully, has continued its patronage of Indian architects even for its projects overseas.
[...]
Architects are (or can be) the barometers of a society’s aesthetic sensibilities. Good architecture can become a cultural and travel touchstone. After all, there are two ways for a city or country to get on the tourist map: You either have history or you make history. We, in India, are blessed with a 5,000-year-old architectural history that we perhaps take for granted. Unlike Dubai, which is building the “History Rising,” tower, we have history in spades. Our problem is how to channel all this into tourist income.
[...]
In my mind, cutting edge architecture is the one thing that can take an obscure location and turn it into an instant tourist destination. Consider: Had you heard of Bilbao before Frank Gehry put it on the map with his Guggenheim museum? Similarly, Cincinnati was hardly on the tourist circuit until the recent unveiling of the Rosenthal Museum—a tour de force by the staggeringly talented Iraqi architect, Zaha Hadid.

Using architecture as a tourist crowd-puller doesn’t always work. Kuala Lumpur, for instance, invested a lot when it hired Cesar Pelli to build what was then the tallest building in the world—or at least a contender. Even though Pelli inventively adapted the local minaret idiom in his Petronas Towers, KL never really became an architectural destination like Bilbao. In order to become a travel destination, the buildings have to have a certain insouciance, a certain star quality; and not all of them have that even if they were designed by world-class architects. Daniel Libeskind’s design for the World Trade Center memorial was perfectly respectable, even sincere, but it lacked the oomph factor that would elevate it from an important building into an icon.

TED Africa Goes Online

2007-08-03T18:37:00.000-07:00

As I've mentioned before, TED Africa was simply the best conference I've ever attended, and that's saying a lot coming from an academic who hates conferences by and large. And one of the best things about TED is how it puts all of this fantastic intellectual property online, free of charge. I've been a fan of TED Talks long before I ever attended the real thing; it just provided endless hours of thought-provoking stuff. Given how much I've been talking about TED Africa, several people have asked me when it would go online and I asked everyone to be patient based on what Emeka told me. The organizers have slowly started putting the Africa talks online and you can find the first installment here. I am also going to embed the videos here for the lazy ones.

TED Africa was opened, amazingly enough, by my good friend, Euvin Naidoo, and Euvin spoke about the investment opportunities in Africa and offered a different lens to view the continent through.

Long-time readers of this blog also know of my admiration for George Ayittey, who I have met several times now to understand Africa better, especially the political dynamics underpinning the economic ones. Here is his powerful and hard-hitting speech that pretty much lays out the fundamental problems on the continent and appeals to the "cheetah" generation to change the way things get done. You judge for yrself whether George is the right-winger he is often deemed to be.

Ngozi Okonjo-Iweala was the finance minister of Nigeria in the Obasanjo government. I have followed her closely in her government role and it was quite amazing how she shook up the political economy of Nigeria, which probably explains why she didn't last that long. It was, therefore, a great privilege to meet her and spend some time with her. Here is Dr Okonjo-Iweala explaining why it's not an either/or scenario.

As I said, this is just one of the many talks going online at TED, so watch this space and I'll continue to link to some of the better speeches I heard. For now, enjoy these three.

Google Knows It All!

2007-08-03T16:20:00.000-07:00

I know I am putting this picture in here at grave risk to myself, but I figured the least I can do for loyal ZS readers is to provide y'all with a bloody good weekend laugh. Now, here's what you all of you have really wanted to tell me in the months and years of knowing me. Google just did the job for you. Have a look at what Google Ads threw up on ZS a little while back. It really is too funny :)

Go Helium??? In the immortal words of the great poet Norman Cook, WTF?

HRD minister and Dowry?

2007-07-30T21:54:00.000-07:00

The Financial Times is reporting an amazing story out of India, which at least I have not read anyplace else. Apparently, the police have charged Arjun Singh (he of IIM quotas, private sector reservation etc) with making excessive demands for dowry from his grandson's bride. There you have it, the human resources minister of the country stands accused of harassing a young woman and her family over dowry.

Police in Moradabad, a town in the northern state of Uttar Pradesh, said a case had been registered against Mr Singh, his wife, son and grandson after the father of the bride alleged that his daughter had been the victim of harassment.

Prem Prakash, a senior police officer from Moradabad, told the Times Now television news channel: “It is a case of dowry harassment. There were demands for a Mercedes car and a flat. There was talk of Rs5.5m-Rs 6m ($135,000-$150,000, €90,000 -€109,000, £67,000-£73,000) as dowry during the wedding.”

Quote du Jour: Wernher Von Braun

2007-07-30T21:47:00.001-07:00

"We can lick gravity, but sometimes the paperwork is overwhelming."

Africa Fact du Jour

2007-07-30T21:34:00.000-07:00

Marginal Revolution and my buddy, Pablo Halkyard, provide the Africa fact du jour.

The entire market capitalization of the continent is $800 billion, of which $600 billion is from the South African market. As the Economist puts it, China could buy every single public company in Africa with its foreign exchange reserves [and still have more reserves than India does]. Amazing, but keep in mind that Africa is growing at 5% since 2001 (yet another fact that gets distorted by the usual stories), compared to a global average of 4.2%. Expect this anomaly to not last longer than 5 years, by which time I expect investments to start pouring in Africa barring any significant blow-up. The other underlying assumption, of course, is that other African exchanges (Lagos, Accra, Nairobi etc) will begin to become at least half as competitive as the Johannesburg market.

A Tall Green Building in India?

2007-07-29T11:21:00.000-07:00

One of my major cribs about the urban development in India has been the utter lack of thought given to architecture, design etc. Everything that I see going up are either cookie-cutter homes in ugly sprawls (like in Hyderabad and Bangalore) or uglier skyscrapers in Bombay and elsewhere. It almost seems like decent architecture in India stopped with the pre-independence art deco movement (Marine Drive being an excellent example). This is really a huge difference between Indian cities and the upcoming Chinese cities. The Chinese have clearly decided to invest heavily in path-breaking buildings and design and are contracting some of the world's best architects to help them along the way. That explains why Pudong has one of the most impressive skylines in the world.

So, I was surprised to come across this building on Indic View. It's called India Towers and is coming up on Marine Drive in Bombay.

Not only is it interesting architecture, but when completed, it will be, at 300 mts, the tallest green building in the world. Of course, I was wondering immediately how they got around FSI regulations and the like, but I am guessing some of the green practices (water recycling, in particular) may actually help? As Indic View points out, this building is clearly aimed at the super-rich, but at least it's a start and they're thinking down the right line. Here's hoping for more thought in urban planning, architecture etc even as India grows at break-neck speed.

Tyler Cowen has a Book

2007-07-28T23:09:00.000-07:00

Over the years, Marginal Revolution has become one of my absolute favourite blogs to read. In fact, given my crazy schedule, I've had to cut down on reading my RSS feeds diligently and yet, MR remains among my diet of 5-10 blogs I read everyday, no matter what. So, when I heard that Tyler had a new book (Discover Your Inner Economist, it's called) out, I could not wait to pre-order it out on Amazon. From what I can tell, it seems to carry on the noble, mathematics-free, curiosity-driven economics tradition of Steve Levitt, Tim Harford etc. No surprise if you've been a regular reader of MR, I guess.

If you've never read MR and are wondering what the fuss is all about, here is a link to a New York magazine profile/book review of Tyler Cowen.

Among this new crowd of economists, Cowen, a 45-year-old professor at George Mason University just outside D.C., is a cult hero, insofar as he co-runs an influential blog called marginalrevolution.com. You don’t need to be an economist to enjoy it. There are only a handful of posts a day, but the range of ideas is awe-inspiring. Cowen weighs in on everything from “wage compression”—when bosses give raises at a rate below productivity gains—to household pets, arguing that “if you must support the life of either a cat or a dog, choose the undervalued cat.” (Dogs’ friendly disposition increases the odds of their being well-cared for by other people, while the natural diffidence of cats makes them more susceptible to neglect).

What is most pleasurable about Marginal Revolution, though, is the heavy dose of cultural opinion and advice dispensed by Cowen. He is a world-class polymath who whips through graphic novels and 816-page bricks like Africa: A Biography of the Continent, listens to everything from Bach to Brazilian techno, searches out exotic cuisines all over the world, and still finds time to travel to remotest Mexico to update his collection of amate painting. For him, deep immersion in culture defines the good life, and his readers get the vicarious benefits.

Tyler also periodically puts out lists of his favourite things, which are a testament to his catholic tastes and amazing curiosity. Here is one of those lists. For me, one of the best finds in recent times thanks to Tyler has been the Brazilian electronica outfit, Suba. Their album, Sao Paulo Confessions, is some of the most amazing electronic music I've heard in recent times.

Cartoon du Jour

2007-07-28T22:57:00.000-07:00

This is one of the funniest Che Guevera cartoons I've comes across in recent times. Courtesy of the brilliant Matt Diffee at the New Yorker.

In the meanwhile, even the Village Voice thinks the movie is brilliant. You know what that means.

One for the Quizzers!

2007-07-28T18:21:00.000-07:00

I came across this gem on Marginal Revolution today. Next week, a doctoral candidate will submit his doctoral thesis in astrophysics at the Imperial College, London. The thesis is titled "Radial Velocities in the Zodiacal Dust Cloud" and is being defended by a 60-year old 'student' who had given up his doctoral work to pursue an alternative career. The question, obviously, is who?

Now, a lot of people have asked me over the years how a quizzer's mind works. I have maintained that a good quizzer is someone who has a solid base of knowledge and the ability to think laterally and imaginatively. A lot of people assume just the base of knowledge will do, and I disagree. This question posed above requires a combination of the two skills.

Clearly, one makes the assumption this person is famous (why else would it matter). He obviously left his doctoral work for the career which made him very famous, since the astrophysics profession isn't really known to create stars (pun unintended). Given these two assumptions, you then have to scan your base of knowledge to find out which celebrity was also a well-regarded amateur astronomer and chances are you have your answer right there.

Okay, I am done with the digression. The 60-year old doctoral candidate defending his thesis next week is Brian May, the legendary guitarist of the late, great Queen. Besides "Bohemian Rhapsody" and "We will Rock You," May also happens to be the author of "Bang: The Complete History of the Universe."

Dr Brian May. Ha!

Indian Telecom Sets a New Record

2007-07-26T17:15:00.000-07:00

I had made a post in May saying that Indian mobile numbers had dropped somewhat, mostly likely because of the customer verification drive. It seems like that dip was only temporary and the industry has rebounded with some pretty stunning numbers. According to the Economic Times, India added 7.34 million subscribers in June, which is the global record by a long margin and probably unlikely to be bested by any other country, unless the Indian telecoms firms themselves add more subscribers in the coming months (China has reached saturation levels). To put this in context, that is the equivalent of the entire population of Switzerland going mobile in one month.

The irony is that I still have to explain to some people (typically latte liberals in India and elsewhere) that well-regulated competition is a bloody good deal for the consumer.

SME Lending in India by U.S. banks?

2007-07-23T23:10:00.000-07:00

The SME sector in India has been a pet obsession of mine for years, and in fact is a key focus are of the BOP Learning Lab I have set up at the Indian School of Business. SME's are fundamentally the engines of a country's economy and well over 80% of the average country's job creation happens in the SME sector. Therefore, promotion of the sector is a key ingredient to sustainable economic growth. At the BOP Lab, we have identified a series of transactions costs that hold back the sector in India. To me, the key transaction cost is vis-a-vis access to finance, both debt and equity, but specifically equity. So, it took me by surprise to read this story in the Economic Times (therefore, need to take it with a pinch of salt). According to the story, U.S. banks are being encouraged to lend to Indian SME's.

The move comes at a time when India expects its trade with the US to double to $60 billion by 2009. US, which is India’s largest trading partner, accounted for 16.8% of the country’s exports and 6.3% imports in 2005. The first bank to come to Indian shores with an SME focus is New York-based M&T Bank. Its line of credit has US Exim Bank guarantee and does not require collateral — which most Indian banks insist on from SMEs. The other banks learnt to have partnered the US department of commerce’s trade promotion unit in this regard are AmSouth Bank, North Carolina-based Branch Banking & Trust Co, Atlanta-based Sun Trust Banks Inc and Bank of Oklahoma NA.
[...]
This could be for anything from starting a hospital or a renewable energy project to setting up a golf course. “The cost of borrowing works out to 7-8% as per the Libor rate,” M&T Bank’s administrative vice-president Clement Miller told ET. This is competitive compared to 10-12% rate at which domestic banks finance SMEs, that too with collateral. The credit is classified as external commercial borrowing (ECB) and the borrower requires RBI permission to avail it.

“Around 95% of industrial units in the country are SMEs and 40% of the value addition in the manufacturing sector takes place in the segment. They are the largest job creators in the country. Still, many of them cannot access credit because of the requirement of collateral by many domestic banks. The initiative bridges the gap,” KDB Associates managing partner Sumant Batra told ET quoting a 2002 survey of the ministry of small scale industries.

As I said, since this is the ET, it is better to be prudent and wait until there is confirmation and some real lending that takes place. Nonetheless, a very important and positive move, if true. If any of you has additional information, please let me know.

Bill Easterly's $0.02 on the Africa Debate

2007-07-23T23:02:00.000-07:00

I am way behind the curve in identifying the problems with the international aid industry, when compared with Bill Easterly. Easterly has been calling the bluff for years now and in this op-ed in the L.A.Times, he actually talks about the specific perception issue that I've been talking of since TED. It's called "What Bono doesn't say about Africa" and needs to be read in full. As always, a few excerpts:

It's a dark and scary picture of a helpless, backward continent that's being offered up to TV watchers and coffee drinkers. But in fact, the real Africa is quite a bit different. And the problem with all this Western stereotyping is that it manages to snatch defeat from the jaws of some current victories, fueling support for patronizing Western policies designed to rescue the allegedly helpless African people while often discouraging those policies that might actually help.

Let's begin with those rampaging Four Horsemen. Do they really explain Africa today? What percentage of the African population would you say dies in war every year? What share of male children, age 10 to 17, are child soldiers? How many Africans are afflicted by famine or died of AIDS last year or are living as refugees?

In each case, the answer is one-half of 1% of the population or less. In some cases it's much less; for example, annual war deaths have averaged 1 out of every 10,800 Africans for the last four decades. That doesn't lessen the tragedy, of course, of those who are such victims, and maybe there are things the West can do to help them. But the typical African is a long way from being a starving, AIDS-stricken refugee at the mercy of child soldiers.
[...]
The real Africa also has seen cellphone and Internet use double every year for the last seven years. Foreign private capital inflows into Africa hit $38 billion in 2006 — more than foreign aid. Africans are saving a higher percentage of their incomes than Americans are (so much for the "poverty trap" of being "too poor to save" endlessly repeated in aid reports). I agree that it's too soon to conclude that Africa is on a stable growth track, but why not celebrate what Africans have already achieved?
[...]
Why do aid organizations and their celebrity backers want to make African successes look like failures? One can only speculate, but it certainly helps aid agencies get more publicity and more money if problems seem greater than they are. As for the stars — well, could Africa be saving celebrity careers more than celebrities are saving Africa? In truth, Africans are and will be escaping poverty the same way everybody else did: through the efforts of resourceful entrepreneurs, democratic reformers and ordinary citizens at home, not through PR extravaganzas of ill-informed outsiders.

Easterly also points to the TED debate...

The real Africa needs increased trade from the West more than it needs more aid handouts. A respected Ugandan journalist, Andrew Mwenda, made this point at a recent African conference despite the fact that the world's most famous celebrity activist — Bono — was attempting to shout him down. Mwenda was suffering from too much reality for Bono's taste: "What man or nation has ever become rich by holding out a begging bowl?" asked Mwenda.

Perhaps Bono was grouchy because his celebrity-laden "Red" campaign to promote Western brands to finance begging bowls for Africa has spent $100 million on marketing and generated sales of only $18 million, according to a recent report. But the fact remains that the West shows a lot more interest in begging bowls than in, say, letting African cotton growers compete fairly in Western markets (see the recent collapse of world trade talks).

Jen Brea does some amazing TED follow-up

2007-07-23T22:43:00.000-07:00

I met Jennifer Brea, a freelance journalist when I was at TED Global. Now, she has done amazing writing on the conference and its aftermath. Her first piece was titled, "Africans to Bono: 'For God's sake, Please Stop!'" In my opinion, it is a must-read piece, but here are a few excerpts:

Africa has never loomed as large in the popular imagination of the West as it does today, thanks to the Jeffrey Sachs-Bono ambition to Make Poverty History, and of course to Angelina Jolie and Madonna's commitment to adopting African babies. Their message of hope is one that seems to deny Africans a role as agents of their own transformation. We can save Darfur. We can save Africans from disease. We can even save Africans from themselves. Africa can be saved if we just try hard enough.

It is true that from the villages of Darfur to the slums of Soweto, thousands of people on this continent die unnecessary deaths each day, but Africa is home to 900 million. Tragedy is a small part of a much larger and more complex story. Of the 47 countries that make up sub-Saharan Africa, only five-Sudan, Chad, Uganda, the Democratic Republic of the Congo, and Somalia-are home to active conflicts. Last year, Africa saw its highest growth in GDP in two decades. Sixteen African countries have favorable sovereign credit ratings. Botswana's is higher than Japan, yet it still struggles to attract investment.

For the thousands of foreign-educated lawyers, businessmen, and architects from the Diaspora who are leaving cushy corporate jobs to return home with their skills and their dynamism to open businesses, it's about creating wealth, not reducing poverty. Africa is not a victim in need of saving: it's a land of opportunity.
[...]
Aid not only crowds out local entrepreneurship, it makes governments lazy and deprives countries of the incentive to build effective institutions. Public revenue derived from taxes makes governments directly responsible to their citizens. Free money builds white elephants and bloated bureaucracies, it being far easier to create new government jobs than implement policies to fight unemployment, especially when someone else is footing the bill.

The perverse result is that many of Africa's best and brightest become bureaucrats or NGO workers when they should be scientists or entrepreneurs. Which is why some are wondering: why not just take the aid money and invest in local business? "If you make Africans rich, they'll be less poor," said Idriss Mohammed, a financier who wants to raise a private equity fund for Sub-Saharan Africa. "Forget making poverty history. I want to make Africans rich."
[...]
Here's a radical idea: if we really want to help, why not ask Africans, not their governments, how they perceive the challenges before them, the dreams they have for the future, and the resources they think they need to realize them? Instead, we let a well-intentioned Irish rock star, a Jewish-American economist, and their Hollywood cohort become the voice and face of Africa. And in the process, the story of the other Africa, the Africa that is dynamic, creative, and wants to work as a partner and the leader of its own future, is being drowned out by the clarion cry of the anti-poverty glitterati–and our own appetites for gripping, salacious headlines of war, poverty, and grief.

This is just one among the many stories Jen has written post-TED and each one is worth reading. In the meanwhile, she (and several others) pointed to a Nick Kristof op-ed, in which he actually talks about investment opportunities in Africa, written the week after my run-in with him about my TED round-up. Now, I am not vain enough to think that my piece was responsible for the positive story from Kristof, but if there was even the slightest impact, that's good enough for me.

Overheard in NYC: Last Night on the 1 Train

2007-07-21T11:39:00.000-07:00

Sometime in the dim and distant past, I had linked to the Overheard in NYC website. A lot of people think that the stuff in there is exaggerated, but anyone who has lived in New York long enough know every damn thing is either true or well within the realm of possibility. I was taking the subway home last night after drinks and a really disheveled hobo entered the train around 86th or 96th. He was about 60 years old, looked like he was about to keel over, but he was wearing a Morgan Stanley investment banking t-shirt. Clearly, this was a hobo that mattered.

He then started reeling off a bunch of jokes that had the entire compartment in splits. I can't remember all of them, but here's a sample that gives you some indication of how good the hobos of New York can actually be.

Q. Why does Michael Jackson prefer 28 year olds?
A. Because there's 20 of them.

Q. Why doesn't Osama Bin Laden have sex with his wife any more?
A. Because every time he takes the pants off, he sees Bush.

The best of the lot, and one that I would have been proud of cracking:

Q. Why did Freddy Krueger kill Martin Luther King?
A. Because he Had a Dream.

Needless to say, the guy probably made about $15 from my compartment alone. And yes, I know these jokes are prolly old, but the effect of an old NYC hobo wearing a Morgan Stanley t-shirt cracking them at 2 am has to be experienced to be believed.

Travel Madness Redux

2007-07-11T10:12:00.000-07:00

In October last year, I was complaining on the blog about my insane travel schedule and the need to slow it down a bit. Clearly, that's been very, very successful. Here's what the last few days have looked like.

Friday -- Paris
Weekend -- Reykjavik
Monday -- New York
Tuesday -- San Francisco

Thankfully, I have a few days in San Francisco, before returning to New York. However, this is not a lifestyle I would recommend to anyone. The inability to blog with any frequency is the least of your worries. On the upside, besides the miles, you get to see places like Reykjavik which is one of the most fascinating cities I've seen. By a bizarre coincidence former ZS blogger, Vinay Nair, was also in the Reykjavik the same weekend.

In Europe

2007-07-05T10:48:00.000-07:00

My recently inspired blogging is going to take a break for a few days, since I am now in Paris and the weekend in Reykjavik. But, as David Frost would say, there is just enough time though to tell you what a friend of mine remarked when he first saw the Eiffel Tower this morning. He said, "that looks like a giant transmission tower in suburban Bombay." After laughing uproariously for about 5 mins, I had to concede he may had a point. 110 V or 22O V? :)

My Response to Nick Kristof's piece

2007-07-03T21:31:00.000-07:00

As promised, here is my response to Nick Kristof's piece in the NYT that picked up from my post on TED.

Hi Nick,
Reuben Abraham from Zoo Station here. First of all, thanks for highlighting my/our side of the debate as well. Secondly, I have a great deal of respect for what you're doing in highlighting the problem in Sudan.

Don't get me wrong: I think you're absolutely right about highlighting the genocide in Darfur, and I'd dare say that without your coverage of the situation there, things might well be quite a bit worse. There's no other word for it besides a genocide. However, is Darfur all there is in a continent of 53 countries?

As someone who works regularly with investment professionals, I can testify to the fact that perception matters and the relentless coverage of the bad news does have a major impact. The trouble, as I see it, is that for most of the world, Africa is a country not a continent and the problems in Sudan somehow get attached to Namibia or Botswana and drives away potential investors.

So, when you see these amazing entrepreneurs struggling to raise capital for a generics pharma expansion (for example), because the providers of capital simply do not believe Africa is investment worthy, it's very frustrating.

Ultimately, the greatest poverty alleviation story in human history is going on currently in India and China as anything between 400-500 million people are being lifted out of absolute poverty. Similarly, a sizable chunk of Africa could potentially follow the same path, which makes inflows of capital absolutely necessary.

Does this mean Darfur is not a serious problem that requires the immediate attention of all the major powers? Absolutely not. However, people like you and Bono, who have a bully pulpit and an influential captive audience should, I believe, also be making a case for real investment (not aid) in Africa which is, IMHO, ultimately the way to ensure real economic development on the continent.

Let's look at Malaria, as a random example. There is a school of thought that believes that economic growth cannot happen without getting rid of problems like Malaria. I disagree. Are there any regions of the world that do not have Malaria and yet stagnate economically? Absolutely. Are there any countries that are high-income and yet are malarial? I can't think of a single one. Can you? The point I am driving here is that economic growth has the potential to solve a lot of seemingly intractable problems, but this will require massive investment, among a whole host of other enablers.

There is an entire generation (what George Ayittey calls the cheetahs, as opposed to the hippos of the earlier generation who are quite happy to keep themselves in power using western aid) of young Africans who are willing to call a spade a spade and do something to radically change the status quo. However, their cause is not helped at all by the consistent bad coverage in the media, which exacerbates the problem of them having no real say in the debate in the first place, thanks to a domination by well-meaning, yet misguided, westerners and the hippo generation.

If you would like to get in touch with some of the leaders of that crowd, I'd be happy to make the introductions. Thanks, and apologies for the long comment.

Nick Kristof responds in the New York Times

2007-07-02T09:49:00.001-07:00

Nick Kristof picked up on my post on TED Africa and wrote a short note about it in the New York Times (it's behind the wall, so don't bother). I reproduce it here in full.

July 1, 2007, 11:01 pm
Overdoing the African Negatives?

By Nicholas D. Kristof

The blog Zoo Station has an interesting post about aid and Africa, noting that at the recent TED conference a Ugandan journalist had attacked Bono and the foreign aid lobby. Bono was apparently rather taken aback, but it is indeed a point of view that you hear periodically from Africans. In Rwanda, President Kagame voiced a similar disquiet about aid to us, and Bill Easterly has taken it to great lengths in his book. I think the debate is useful but that more aid is still beneficial, and that health interventions in particular have a good record. To me, Paul Collier’s new book, “The Bottom Billion,” gets the balance exactly right.

Zoo Station also takes a swipe in passing at me, but I have a bit of sympathy for his point that the focus is so relentlessly on Africa’s problems that it becomes difficult to attract investment capital in the places that are succeeding. I don’t think the problem is to stop covering the problem places — in that case the death toll in Darfur now would be 1.5 million instead of a few hundred thousand — but it is a real problem that the image of Africa is saturated with negatives.

I have a response written up, but I will post it later tonight when I return from meetings.

Warren Buffet's Management Lessons

2007-07-01T13:55:00.000-07:00

The witticisms of Warren Buffet are legendary. Here's one I read recently, when Buffet was asked what advice he had to give managers. As is his wont, Buffet immediately broke out into a story.

This is the tale of a stranger in a small town. To get acquainted with folks, he went to the village square and saw an old-timer with kind of a mean-looking German Shepherd. He looked at the dog a little tentatively and asked, "Does your dog bite?" The old-timer said, "Nope." So, the stranger reached down to pet him and the dog lunged at him and practically took off his arm, and the stranger as he was repairing his shredded coat turned to the old-timer and said, "I thought you said your dog doesn't bite." The guy says, "Ain't my dog!"

Moral for managers: ASK THE RIGHT QUESTION

Soros Economic Development Fund

2007-07-01T13:42:00.001-07:00

Long-time readers of ZS know I have an enormous amount of respect for George Soros. So, I was thrilled when I was invited to a dinner with him in New Delhi last December. We had a wide-ranging chat about everything India, from human rights to the small/medium enterprise sector. However, the piece de resistance came a few weeks later when I was invited to join the board of the Soros Economic Development Fund (SEDF), a $140 million fund (in assets), dedicated to catalytic investments in emerging markets.

I formally joined the board in late-January and it's been an exciting ride since, with my SEDF colleagues Fawzia and Neal. We conducted a very useful SME workshop at the Indian School of Business, mostly to discuss financing issues bedeviling the SME sector. Based on the output of our various discussions in India, we are in the process of scouting some extremely exciting opportunities in India, the details of which I cannot reveal just yet, but will do so in the coming months. We are also exploring similar initiatives on the African continent, for which my TED adventure proved extremely useful.

Finally, I am in New York currently to attend the SEDF board meeting and structure the India initiative. I know I am missing a lot of people this time around, mostly because I am using my New York stay to slow down a bit. However, if any of you are in New York and would like to meet, email me and let's see if we can work something out. I will also be in Paris and Reykjavik this coming week and in the Bay Area the week after (week of the 9th), so if any of you would like to meet, give me a shout.

4 years of Zoo Station

2007-07-01T13:39:00.000-07:00

On June 25th this year, Zoo Station completed four years of existence, and I didn't even notice. I know the posting on ZS in the last year has been terribly erratic owing chiefly to my extraordinarily busy schedule and I don't know if things will improve much going forwards given that my schedule is only going to get busier from now on. Nonetheless, there aren't that many blogs that have remained in existence for four years and I feel good about that. Thanks much to all my readers who have been patient all these years :)

Magical TED Moment

2007-06-30T16:25:00.000-07:00

One of the best things about the way Emeka produced TED was the variety among the sessions, even though there was an underlying theme, namely turning a new chapter for Africa. One of my favourite sessions was the campfire, to celebrate the continent's glorious story-telling tradition. My favourite speaker at the session was Chris Abani who is a raconteur par excellence. He ended his beautiful, self-deprecatory talk, which covered everything from being in Nigerian prisons to tribal tensions, with this amazing poem by Yusef Komunyakaa called Ode to a Drum, and I reproduce it here in full.

Gazelle, I killed you
for your skin's exquisite
touch, for how easy it is
to be nailed to a board
weathered raw as white
butcher paper. Last night
I heard my daughter praying
for the meat here at my feet.
You know it wasn't anger
that made me stop my heart
till the hammer fell. Weeks
ago, I broke you as a woman
once shattered me into a song
beneath her weight, before
you slouched into that
grassy hush. But now
I'm tightening lashes,
shaping hide as if around
a ribcage, stretched
like five bowstrings.
Ghosts cannot slip back
inside the body's drum.
You've been seasoned
by wind, dusk & sunlight.
Pressure can make everything
whole again, brass nails
tacked into the ebony wood
your face has been carved
five times. I have to drive
trouble from the valley.
Trouble in the hills.
Trouble on the river
too. There's no kola nut,
palm wine, fish, salt,
or calabash. Kadoom.
Kadoom. Kadoom. Ka-
doooom. Kadoom. Now
I have beaten a song back into you,
rise & walk away like a panther.

This poem really needs to be heard, not read, so try and give it a listen.

As Chris Anderson later said, this was a TED moment.

Bono should be listening to George Ayittey more

2007-06-30T15:59:00.000-07:00

There is a voice in the wilderness that speaks to what the real problems of Africa might be, namely George Ayittey, prominent economist, head of the Free Africa Foundation and author of Africa Unchained. You would imagine that the most prominent voice on Africa would be an African one with experience on the ground and a real understanding of how these countries function. The very fact that it is instead an American economist with previous experience in Bolivia, Poland and Russia that everyone listens to is reflective of the paternalism that's built into the international aid business. For more fun and games, have a look at this PBS debate between Jeff Sachs and George. Anyways, to Bono's credit, he did spend some time talking to George (evidence below), but whether he will listen is a whole other question.

(pic courtesy: White African)

TED Global: An Update

2007-06-30T15:10:00.000-07:00

Of course, I am late as ever in posting the update from TED Global. At the very outset, let me say that it was the finest conference I have ever been to, and that is quite something coming from a conference-skeptic like me. Kudos go out to my buddy and IPEG compadre, Emeka Okafor who produced the conference with Chris Anderson. Like at every TED, there were a fair amount of big names sprinkled across the conference, from Bono to Larry Page to Jay Walker to President Kikwete himself.

For me, the highlight of the conference was clearly the redefining of the aid issue, which started with Ugandan journalist Andrew Mwenda's forceful attack on Bono, Sachs etc and on international aid in general. He dared anyone in the audience to point to a country that developed thanks to aid, which led to some pointless heckling by Bono who jumped up and said something about the potato famine in Ireland. Bono later tried to defend his point of view by referring to the Marshall Plan. Now, Bono seems incapable of understanding a fundamental difference: the Marshall Plan rebuilt countries like Germany which were among the richest countries on the planet before the great war. What was destroyed during the war was physical infrastructure, not human infrastructure. The presence of the latter meant that there was a great absorptive capacity in place for the large amounts of money flowing in. To compare post-war Germany with Uganda is really quite bizarre.

I think Mwenda really began to tear apart the aid scenario when he unpacked the Ugandan budget (which is largely dependent on aid) and showed how large a percentage of the budget went to paying salaries of government officials. Obviously, in such a scenario, the government officials (who are the types that Bono etc hobnob with) have every incentive to keep the status quo going.

Now, don't get me wrong. This blog is named after a U2 song, after all. I actually think Bono has his heart in the right place, but his understanding is too one-sided and since he lives in a bubble chamber, he does not hear/listen to other opinions. So, when so many Africans launched a ferocious attack on aid, he was clearly taken aback since he thinks what he does is universally good and the only people opposing it are unkind right-wingers in the west. Of course, the irony in all of this is that Bono was responsible for TED coming to Africa after an impassioned speech he gave at an earlier TED.

I think Bono, Jeff Sachs etc do not understand the damage they cause. They do not seem to understand that perception is reality and if the only reality people hear of Africa is disease, poverty and hunger, soon enough, that will be the only Africa there is. In fact, every place in East Africa I visited was the exact opposite of the public image of Africa. It reminded me of the press India used to get in the foreign media in the late 80's. Compare that with today and you understand why perception matters.

Else you could look at some hard facts: Botswana has an A+ bond rating and Egypt's stock market delivered 145% returns in the last financial year. The question then is why doesn't the money follow? Obviously, it's because it has become impossible to separate Botswana from Somalia and Africa is treated as a country, not a continent of 53 countries, each with its own problems AND investment opportunities. This perception problem clearly affects capital flows which are desperately needed for investment, and that's something Bono, Sachs, Nick Kristof etc don't seem to understand. It's the perception of India that has changed globally which had led to huge capital inflows. Similarly, the perception of African countries need to change and I'd advice anyone who has doubts to actually visit Africa, and not just the refugee camps. Nairobi, for instance, is one of the most vibrant cities I have seen and there is no reason to believe there aren't real investment opportunities there.

There was also some talk about Chinese imperialism, made by some American member of the audience. This stuff is damn rich coming from the citizen of a country that kept Mobutu in power for 32 years, and that's the tip of what happened on the continent during the Cold War. As Trevor Manuel said at a World Bank meeting, the Chinese never sent in an army into Africa to do business, and that ended all talk about the yellow peril.

It's true though that you can feel the Chinese presence everywhere in Africa, from a business and strategic standpoint. One obviously has to wonder then where on earth the Indians are. India has had long standing relations with most African countries and the Indian diaspora is everywhere on the continent, so why the Indian government doesn't play a much larger role in Africa is a bit strange. Africa will be the last frontier for investments, and the largest source of natural resources, so why would we simply let the Chinese have a free run of the place, especially when it's India that has the historical ties to leverage.

Okay, so this post has rambled much longer than I intended. Just wanted to post some nuggets from TED. I will follow up with any other thoughts I may have missed and pictures from my safari in Seringeti, which was really the best thing I've done to date. Truly magnificent. In the meanwhile, if you're interested in learning more about what happened at TED Global, tune in to Ethan Zuckerman's excellent coverage of the events. And if you want shallow and superficial coverage, there's always the Economist, which has almost nothing to say about the debate that dominated the conference.

Queen Hatshepsut: A Big Win for Egyptology

2007-06-30T14:46:00.000-07:00

In between all the news about U.K. terror bombings etc, there was an extraordinary piece of news that was almost completely buried. In what is being called the find of the century, Egyptologists claim to have identified the mummified remains (pic below) of Queen Hatshepsut, fifth pharaoh of the eighteenth dynasty of Egypt and possibly the first great female ruler in human history (she preceded Nefertiti and Cleopatra). If proven to be true (more testing to be done), this discovery probably rivals that of Tutankhamun's tomb. Interestingly enough, the mummy was discovered way back in 1903 by Howard Carter himself. Amazing really how the main newspapers seem to have passed up this story completely.

(pic: BBC News)

Name 'em. Fly 'em.

2007-06-26T22:36:00.000-07:00

Virgin Atlantic has a fab way of naming its airliners, none better than Tubular Belle, to recognize Branson's and Virgin's indebtedness to Mike Oldfield's record, which kept Virgin afloat for years. Now that Virgin America has been given permission to operate, they have opened the naming of VA's planes to the public. Fittingly enough, they offered the first name to Grace Slick and sure enough, Virgin America's first plane will be called "Jefferson Airplane", which is appropriate on so many levels.

In the meanwhile, I flew Virgin Upper Class from Nairobi to New York and I cannot recommend it enough (a masseuse and a bar on board..what more could you ask for). I would choose it over BA anyday. However, I also do think Jet Airways is on the verge of rewriting the rules on upper class flying once it opens up its New York service (advertised in a full-page colour ad in the NYT day before yesterday).

Anyway, good luck with trying to name a virgin or two. Seriously.

Mossberg Interview with Jobs and Gates

2007-06-26T16:44:00.001-07:00

I presume most of you have heard of this interview, but here are some excerpts anyway.