India, China, the US, and Trickle Down Growth

I know what you're thinking: Reaganomics...uggh. But just hear me out. Ask almost any slum dweller or villager in India, and they will confidently tell you that the IT boom and growth in India over the past 10 years has had no marked impact on their lives, except to raise prices. I think they're wrong on the first point - they just haven't noticed (or perhaps the 10 year horizon I gave them wasn't long enough).

To be sure, the slum parents I've spoken with aren't being recruited for call centers en masse. Heck, most of them have little to no education. However, every morning at 8:00am, women in colorful sarees flood into the gated community of one of my translators Manish, who works for an Indian firm that creates software for HP. His roommates create software for T-Mobile and Verizon. The women, who live in nearby pockets of slums, come to homes like Manish's to wash dishes, clean the bathroom, or look after the children.

Meanwhile, the added income allows their children to go to school. One man I met in a Mumbai slum was earning $140 per month for his family of four as a driver for a German company - the 7%+ annual growth and able workforce had obviously been part of the attraction to come to India. The income was enough to put his children in a private school, and the older son was speaking decent English in only grade 5. The father could only speak Hindi, but I could communicate mostly directly with the son. For India, like this family, it's one step at a time, and most people seem confident that their children will have a better life than they.

India needs to grow its knowledge and service sectors such as IT and cinema/media (e.g. Bollywood), which have the potential to employ many more people than the capital-intensive industrial revolution the country never had, but still seems to want. It might be okay for India to skip over Big Industry and focus on its knowledge and service sectors. In doing so, India would focus on growing its middle class, which even at the turn of the century was still less than 20% of the population. To focus on the middle class, as Gucharan Das puts it in India Unbound, "is to focus on prosperity, unlike in the past, when our focus has been on redistributing poverty." This doesn't mean you ignore the poor. Exactly the opposite: the primary purpose of the pro-business, pro-growth policies is to lift the poor into the middle class. Once the middle class expands, the country will have greater resources to work on a smaller group of poor people.

China and the US figure largely into this equation, but relations could be better. Indians think Obama is giving the nod to China, especially after his visit to Beijing and the joint statement that the two countries "would work together to promote peace, stability and development" in South Asia. This seems like a slap in the face to the democratic and English-speaking India, especially considering that China supports India's arch rival Pakistan, among other nefarious practices. To be sure, the fact that China holds over $800 billion in US debt has something to do with it, but to put it plainly, China is also the stronger country and better positioned for the future as of now. Just from my experience in the countries, China seems 10 or so years ahead of India.

India, China, and the US all need each other. Indians like Manjit, who works for Infosys and who I met on a flight from Kunming to Calcutta after he had finished up consulting for a Chinese company, need the other two countries as markets for its IT and BPO (business process outsourcing) sectors. Chinese like Zhuo Ma at Mei Xiang Yak Cheese need Americans to buy Western products like its cheese that are not yet suitable for the domestic population, or various goods in our Wal-Marts. You and I need these countries to buy our airplanes, drive our Fords and GMs (which are "cool" in India and China), or in the case of China, to finance our spending. For each of these countries I'm only providing half of the equation, but you get the idea. If we can grow together instead of bickering we might just be able to improve the lot of all three of our nations' poor, especially the enormous population in India. I'd love to hear your comments or criticism.

Donations, Emotions, and Sustainable Education

The raft of knowledge ferries the worst sinners to safety. – Bhagavand Gita

Since the last post, I have finished up my time in the poorest, most backward and corrupt state in India – Bihar. In Bodh Gaya, Bihar, where Buddha supposedly attained Enlightenment (I stood under the tree where it happened!), I was able to volunteer teach at the Lord Buddha Charitable School for four days. I don’t consider myself an overwhelmingly great teacher, but with such a short stint I was able to keep the energy high and classes fun – I bounced around the room on all four limbs shouting “Oo Oo Ah Ah” like a crazed moron at one point. They definitely remembered “monkey” after that. Abisek, a teacher, revealed on the last day, “The students have told me they like your study methods and want you to stay here.”

Overall, it was a pleasant experience and I gained as much as the children, but it made me think more deeply about the NGO model, especially relative to education. In Bodh Gaya, the only buildings more common than temples are charitable schools – some of them scams, others not. Regardless of their authenticity, schools like Lord Buddha in Bodh Gaya survive off the tourist industry. Competition is fierce. I was approached by no less than five different people wanting me to “see [their] school”. My host and worker for Lord Buddha, Dinu, guarded me like the Chinese on Tiananmen Square.

I did take up the offer of one of the competing schools. I saw something similar to Lord Buddha – a struggling school, in dire need of assets, doing a marginal job of educating the children. Both schools essentially begged me for help. Mahendra, director of Lord Buddha, had the audacity to say, “We expect you will help us, support us, to develop our project.” On top of my donation of $25 and four days of work, they wanted me to adopt an orphan, at the annual cost of over $500 for seven to eight years (clearly, they hadn’t seen my student loans). At both organizations I received all kinds of enticements from chai, free food to songs prepared by the children and leis around my neck. How is anyone supposed to make a rational investment in education when so much emotion is infused into the process? The emotional aspect has become one my primary annoyances with the NGO sector. Remember the commercials of starving African children covered with flies? Same idea. My point is, I think if we really want to do something about education inequality (or any problem for that matter) instead of just feeling good about ourselves, we need to donate or invest with our heads rather than our hearts. You wouldn’t invest your life savings in a company or mutual fund that “really needs the money, please”, would you?

Then how can education be done in a more sustainable way, without relying on sporadic donations or a five-month tourist season as in Bodh Gaya? A for-profit company in India, National Institute of Information Technology (NIIT), is making an attempt with computer education in the state of Tamil Nadu. Gucharan Das in India Unbound, which I just read, explains how NIIT is collaborating with the Tamil Nadu government. Tamil Nadu provides the school and real estate and NIIT providing the teachers and computers. As Das explains, “During the day children get practically free education, and after school hours it becomes a regular NIIT commercial center open to the town’s residents. Whatever profits NIIT loses during the day are made up between 4 pm and 11 pm.” The book was published in 2000, and since then it has shown to be successful, touching over a million students in just five years. And the profit incentive should attract other companies to try to do it better. This is just an example specific to computer education, but you can easily see the applications for general education.

What about private universities? Aren’t they the same? Haven’t donations been the successful model for them? Yes and no. Yes in that donations and grants are a huge part of how a university is funded. But no in that it is simply in another league – it has the scale to create an investment corpus that kicks off interest to fund the university. Rural schools in India don’t have this scale, so upon leaving the Lord Buddha school, I suggested Lord Buddha institute the other key difference between private universities and rural schools: income-generating activities. My alma mater, like other universities, brings in money through a variety of sources to fund itself: football games, classical music concerts, the campus bookstore, paying $20 for the ID you lost, and of course, tuition. I certainly didn’t suggest these specific activities to Lord Buddha, but rather this line of thinking. A women’s handicraft cooperative made up of the students’ mothers, with proceeds divided between the women and the school, could take some pressure off Dinu and Mahendra to gather all of the funding. Or, eco-tourism program where tourists visit the village where the students live, have a meal with a family, and teach at the school, could create a powerful experience that tourists would be willing to pay for, and then maybe donate. All proceeds would fund the school.

What I’ve just covered certainly isn’t a comprehensive depiction of the problems or answers of providing sustainable education, but hopefully it raises some new questions and makes you and me both think twice the next time we fill that coffer.

When NGOs Compete: Lessons in Fighting Poverty

I admit this post might be a lot to chew on, so grab a cup of coffee, maybe two, and a comfy chair. Recently, while perusing the internet for information on the Waghri and Sikligar – the tribes with which AIC works – I stumbled upon an organization called Ekta. The organization, coincidentally, works in Pune and focuses on health and education for – you guessed it – the Waghri and Sikligar tribes.

I asked Julia, the Austrian CEO of AIC to who I report, if she knew anything about Ekta. She gave me a sort of don’t-get-me-started response. She explained the organization was just being started by Daniel, who had been fired by AIC from his management position for taking AIC information to start Ekta, planning Ekta on paid-AIC time, and a number of other offenses. The other night he came over to the AIC house (caused some commotion), and just a few days after that I saw who I later realized was also him walking with a young Indian woman toward the Sikligar slum. The picture of the storm that was brewing started to become clearer.

This begs the question: What exactly happens when two similar NGOs (non-governmental or non-profit organizations) compete for the same target market? First, let’s think about what happens when two for-profit companies compete. In a completely hypothetical situation, we’ll take McDonald’s and Burger King competing in emerging eastern India cities. The fast-food chains compete on price and quality, whether quality means taste of food, speed of service, or dining atmosphere. In the end, the Indian consumers win because they get the best products at the best price. The winning company - we’ll say McDonald’s because you can't beat a McFlurry - is rewarded with profits, a higher stock price, and more investors. Burger King, the loser, will either die off if it is wholly inadequate in serving the Indian market or hold a smaller share of the market. Either way, the consumer is served, business benefits, and resources are utilized efficiently and effectively.

Now, what about traditional NGOs? AIC and Ekta are both of the traditional NGO mold: take money donated from the rich West, give it to the poor in the developing world. As such, they can't compete on price and instead solely on what free services they offer, and this can cause waste. For example, in addition to the healthcare AIC offers, Ekta offers dental care to lure the Waghri and Sikligar to its organization. AIC refuses to pay for dental because the problems are mostly self-inflicted (e.g. chewing tobacco). This is not efficient for anyone in the long-run – Ekta is flushing good money down the drain (donor funds used ineffectively), AIC becomes a non-factor in the development of these tribes, and most importantly, the Waghri and Sikligar aren't maximizing the long-run improvement in their lives. This certainly isn't the only possible outcome, but you can see how the result is ambiguous when it comes to efficiency and effectiveness. Some organizations might actually try to become more effective, but others might try to just throw more goodies at the target group.

Instead of competing to serve the markets, which we've seen works wonders for resource utilization in the business world, NGOs compete for donations. Certainly, competition for donations in and of itself is partly based on how well an NGO serves its purpose. However, because there is no industry-wide standard for showing results like there is in business, I propose that it's usually those NGOs which are best at advertising themselves - not at achieving a social purpose - that bring home the bacon. Many NGOs appeal to donors with unrepresentative hand-picked stories, selected statistics from a certain projects that may have been completed sometime during the Clinton administration, or an array of heart-rendering pictures with carefully-constructed captions.

I can speak from experience. With the NGO I started, Students for Students, I was constantly worried about “bankable statistics” or pictures we could put in flyers and newsletters. Our service, often times, became a photo shoot out of necessity. I feel comfortable estimating that SforS spent 30-40% of its time fundraising as opposed to providing service. But that’s the nature of the non-profit game. What could we have accomplished with 30-40% more time?

Currently I am in the state of Bihar, and the experience I am having lends itself to a continuation of this conversation in my next post. However, hopefully you are catching on that I feel competition between NGOs generally leads to a suboptimal outcome for everyone involved. Suboptimal certainly does not mean negative (even an NGO having the smallest impact is probably better than nothing), but what if the money channeled to less effective NGOs could be instead sent to the most effective organizations? How would this change the poverty landscape? And if competition between NGOs leads to this ambiguous and possibly wasteful outcome like I propose, is there a better way to approach development?

Housing the Poor: Talking with Ashoka Fellow Pratima Joshi, Pt. II

Prior to 1970 in Pune, the land policy was to just knock down slums to get rid of the illegal squatters. Pune soon learned, like most other cities, that they just come right back. A new approach has evolved. The city sees value in the land underlying the slums, which are generally one or two floors - a waste of space. The government has extended a market-based deal to developers and dwellers: destroy the slum, plan out organized housing units on half of the land, give the the homes for free to the poor at the developer's expense, and allow the developer free reign with the rest of the land. While construction is occurring, the developer provides temporary camps for the families. Efforts are just starting in Pune, but Bombay already has experience with this approach.

The downside, I feel, is that the poor are still concentrated together. Since the 1930's, the US has grappled with how to house the poor. The US government has settled on mixed-income housing using block grants and housing vouchers. The argument goes that the poor shouldn’t be concentrated together in a project, as Pune and SA are doing, because it concentrates the problem and creates a negative environment. I liken this negative environment to The Simpsons episode where the teacher brings Homer and Marge in to talk about Bart’s problems in school. She shows them a funnel with Bart’s desk representing the center and all other desks around him being pulled down the funnel by him.

In support of mixed housing, Pratima explains that when she first moved to Pune, she lived in a bungalow, behind which lived two servant families. She says, “They shared a special relationship with my husband's family which was almost symbiotic.” Fifteen years ago the bungalow was torn down, and the new development had no such servant quarters. She feels that changes like this in India have encouraged the polarization between the "haves" and have nots". “It’s always good to encourage mixed types of housing," but in defense of SA's housing projects, she says "I think people need to understand that they are not one big homogenous group.” However, there are certainly different income levels within a slum, and many people doing different trades, but the living conditions and problems are quite similar (for example, alcoholism among household heads is pervasive, consistently cited at around 50% by the local residents).

Then you have to wonder, if you did mixed housing, would there be a mass exodus of the rich, who don't want to live near the poor? (similar to the phenomenon of "white flight" to the suburbs, although it should be noted that whites were encouraged by FHA grants...it wasn't all racism). Economist Douglas Krupka finds that mixed-income communities aren't stable. The economic forces underlying business and residence decisions are simply too strong. For example, with mixing, travel distance to Harris Teeter might be very long for the wealthy if their ratio is too low in the community. Conversely, the poor might have to travel far to get to a lower end chain like Food Lion if their ratio is too low. Businesses want to locate near their target population, and people want to live near amenities to which they are accustomed. However, with government subsidies, who's to say it can't be done? It's simply a matter of how much we value diversity, I suppose. If mixed-income communities are in fact unsustainable, perhaps Pune and SA's strategy of concentration is on the right track.

And what’s next for SA? Pratima has a rule: “Anyone who has lived in Pune for more than three years is not in poverty. Because the cost of living is so high, if he is alive, he can’t be poor.” Thus, for the past 8 or 9 years, SA has been focusing its work more on smaller cities, like Sangli. It will be interesting to watch how their GIS mapping revolutionizes slum rehabilitation in India.

Housing the Poor: Talking with Ashoka Fellow Pratima Joshi, Pt. I

Recently I had the opportunity to pester Pratima Joshi, an Ahoka Fellow (awesome) and founder of Shelter Associates (SA) here in Pune, with a battery of questions. Shelter Associates is basically a bunch of architects who work on slum rehabilitation and help give the poor a voice in the city planning process. I’ve been going into the slums off and on over the past month, and I wanted the perspective of someone who has worked intimately in the busti for a long period of time (16 years to be exact).

My first, and most nagging question was, where are the slums? Statistics say 30-40% of the Pune population lives in slums, but I keep looking and not finding. As it turns out, what I am looking at is the slums, Pratima explains. When I first arrived, I was amazed at the number of satellite dishes popping off of the tops of these relatively clean concrete dwellings (a luxury in Dhaka). “Slums in Pune are much better than most slums…Most of them have electricity…Most of them [the slum dwellers] have mobile phones nowadays” she continued. She also cited that nearly 75% of the city's poor have their own water connection, which is quite high.

A question I ask every slum dweller I interview is “What are the 3 biggest obstacles in the way of improving your situation?” Invariably, government corruption or lack of government support is somewhere in the mix. One frustrated man I met near the train station charged, “For the last 15 [expletive] years, none of the [expletive] officials have helped us, and all of them have become [expletive] rich in the name of us.” Is the government really doing nothing?

Not exactly. In 2003-2004 the central government gave a grant of 50,000 rupees per “slum” family to convert their housing from kutcha (dried mud) to pucca (brick or concrete), giving them, in addition to improved housing, a sense of security. Also in the works is a government plan to distribute land titles to the poor. Explains Pratima, “They [the government] are trying, but they still need to try a lot harder. The PMC (Pune MunicipalCorporation) focuses mostly on infrastructure and housing." Housing is where SA is working.

But how to give a voice to people at the discussion table when most of them don’t even have documentation that they exist? Answer: Use Geographic Information Systems (GIS) mapping and Google Earth to map every slum and family in the city, and then show the government officials. This pioneering effort by SA is remarkable – try some examples here by clicking the thumbnails. To collect data ranging from income, to housing type, to person-to-latrine ratio, SA employs local youth who reside in the slums to go door-to-door. Then the data is mapped out on top of the Google map, allowing SA to see the crucial problems in different areas. Her approach is so novel that when asked how the Ashoka network has benefited her, she admitted that no one else is doing what she’s doing, so it’s almost been a non-factor.

Go Go Goa, Pt. 2

The next day we took it a bit easier, and I kicked off the morning with a run down the beach. The merchants in Goa, selling everything from knock-off sunglasses to Rastafarian bags, are probably some of the most aggressive I’ve ever encountered. Even as I’m sweating profusely, barreling down the road with no more than my running shorts on, I’ll hear, “Come take a look, just one minute” or “You want t-shirt? Very nice. Good quality.”

With no need for a shower, I went straight to the beach. As someone who has a problem sitting still, laying out and reading ended before it started. The girls I was with, of course, had no problem. A walk along the beach revealed an interesting spectacle: hundreds of Indian women, fully dressed in their colorful saris, splashing and battling the waves in the shallow ocean. At first glance it looks odd, but then I think about how I must look to Europeans, who are sporting Speedos that leave little to the imagination. Maybe. The evening brought shopping in the Calangute market, but first I found myself with time to kill, and decided to do some parasailing with a boatload of Indians (literally!). During what turned into a shopping marathon, my endurance petered out quicker than a Hollywood marriage, and I just hung out until the girls finished.

Since we had been drinking Kingfisher beer – the Bud Light of India – all month, I figured I was obligated to try the local Kingfish for dinner. Later we found ourselves at the trendy nightclub Mambo, where each guy had to bring a woman and pay 500 rupees. Felt like college frat parties all over again. Luckily, I had four girls with me, and a couple Indians paid my way in to use my friends as entrance tickets. There we danced (speaking in relative terms here) and chatted, with the high point being when some of the girls were pulled on the circular stage in the middle of the dance floor. I even got to ride a mechanical bull, and am proud to say that I set one of the best times of the night before an applauding crowd. Around 4 in the morning we finished up the night at Subway (so American).

On about four hours sleep, I got up and rented a scooter. $5 for all day…it was like stealing. Riding a scooter for your first time is one thing; riding a scooter for your first time without a helmet and in India is quite another. Half the time I thought I was going to die, and the other half I felt as cool as the other side of the pillow. I’d pull up to a juice bar, grab some fruit punch, tip the guy 10 cents and then hop back onto my Honda Activa, zipping off at 35 mph. I owned that town.

I took my hog to Lalbaugh Fort and the famous Anjuna and Vagator Beaches, the former of which I bargained hard for random local products, and the latter of which I lost an embarrassingly large sum of money gambling. I kept going, thinking I could dig myself out of the hole until I was down to just a couple rupees – not enough to buy gas for my empty scooter. I think that’s the sign of addiction. Luckily the fumes got me to an ATM, and I ended the expedition at the famous Tito’s Restaurant for Prawns Peri Peri. Back at the guesthouse, I had just enough time to squeeze in a 45 minute full-body massage before I raced off to my overnight bus a mountain of work that I had put off over the past three days.

Go Go Goa, Pt. 1

After an exhausting few weeks in the slums, researching nomadic tribes, surveying AIC’s Health Outreach participants, and basically trying to be everywhere at once, I decided to head to Goa for a well-deserved break with a few of the other volunteers. I generally feel pretty guilty about spending money on big leisure activities like this (even though past Keegan Fellows literally urged me to do so) but my mom was nice enough to cover the three days of madness as my Christmas present.

Goa is basically the Caribbean in India. The hippie hangout of the ‘70s (which still attracts many long-haired folks trying ‘relive the dream’) has incredible beaches, rave parties that blast into the morning, cheap alcohol, and a host of other sinful opportunities – I was offered ecstasy, cocaine, and ‘anything I wanted’ on at least three occasions, and it wasn’t more often only because I usually had my own driver at night.

We arrived in Goa after an overnight bus, on which I didn’t sleep a lick due to the fact that the bus driver must have thought we were headed to the core of the earth the way the AC was cranking. Just after 7am we found our abode – Raman Guesthouse, a collection of guesthouses tucked between palm trees, a swimming pool, and a carpet of sand, all of which opened up right onto the beach. We met some Lebanese, who were just headed out to a waterfall. Sounded cool, sleep could wait. To get to the waterfall we took a jeep through the jungle, where we were able to give bananas to the best-fed monkeys in the Indian sub-continent. To have some fun I sold our Lebanese friends the story that I was from Australia. Unfortunately, at that point I didn’t know we’d be hanging with them for the next three days. It was a tough one to keep up.

After swimming at the waterfall, we went to a spice plantation for a spice tour and buffet meal, which culminated in a sampling of some local cashew liquor. Then I got sprayed down by an elephant in an ‘elephant bath’ (who thinks these things up?). Once back at the hotel and cleaned up, we had dinner at the hotel’s beach restaurant before checking out a rave. While we all looked awkward and out of place next to shirtless, sweaty individuals who had clearly lost their minds (or were just finding them), two things struck me as odd. The first was that the place closed at 10pm. What kind of decent party even starts before 10? The second was that they give you a bottle of water with your entrance fee. Did I just get invited to do ecstasy?

Once that shindig shut down, we were off to Curlies, a bar/rave/party scene set on the beach that was crawling with expats. It MUST have been in Lonely Planet because it required a good trek to find this tucked away party oasis. The lights came on, our driver was sleepy, and we were sent home. And that was just the first day.

Article on BRAC Featured on NextBillion.net

Hey everyone!

I am honored to be a guest columnist for NextBillion.net, one of the flagship websites for Base of the Pyramid development initiatives and one of the few sites I actually visit regularly. My article on BRAC's Targeting the Ultra Poor program just went up yesterday. Here's the direct link to the article, or just go to the homepage.

Cheers,

Rob