Kruse Kronicle

Trends in Extreme Poverty (Spoiler: The Poor Are Not Getting Poorer)

Globally, the number of people living in extreme poverty ($1.25 a day) is shrinking. The global poor are not getting poorer. The world population grew from 4.5 billion people in 1981 to 6.9 billion in 2010 - a 60% increase. The percentage of people living in extreme poverty in developing nations dropped from over 50% to 21%. (From about 1.95 bil. to 1.2 bil., estimates are now well below one bil. in 2015.)

That doesn't mean life just above the extreme poverty line is desirable. That doesn't mean there isn't a great deal more to do. But let's be honest about the trajectory. And let's also be honest that central to the decline in extreme poverty has been the inclusion of the poor in networks of productivity and exchange - that is to say, they embraced some form of market capitalism. Unqualified dismissal of "capitalism" (rarely defined by critics), as some religious leaders are prone to do, should be challenged.

Source: World Bank - State of the Poor

China and India Overtake Mexico for Inflow of Foreign-Born US Residents

Conversable Economist: China and India Overtake Mexico for Inflow of Foreign-Born US Residents

Economic Development Links

1. You Decide: Save the People or Save the Planet #StopTheMyth

2. New York Times: The End of the ‘Developing World’

BILL GATES, in his foundation’s annual letter, declared that “the terms ‘developing countries’ and ‘developed countries’ have outlived their usefulness.” He’s right. If we want to understand the modern global economy, we need a better vocabulary.

Mr. Gates was making a point about improvements in income and gross domestic product; unfortunately, these formal measures generate categories that tend to obscure obvious distinctions. Only when employing a crude “development” binary could anyone lump Mozambique and Mexico together.

It’s tough to pick a satisfying replacement. Talk of first, second and third worlds is passé, and it’s hard to bear the Dickensian awkwardness of “industrialized nations.” Forget, too, the more recent jargon about the “global south” and “global north.” It makes little sense to counterpose poor countries with “the West” when many of the biggest economic success stories in the past few decades have come from the East.

All of these antiquated terms imply that any given country is “developing” toward something, and that there is only one way to get there.

It’s time that we start describing the world as “fat” or “lean.” ...

3. Huffington Post: The Paradox of Africa's Growth

... So why is Africa's job growth so weak while its economic growth outlook is just fine, even robust? The reasons are structural in nature and three-fold.

First, much of that 'robust' economic growth in the past decade in Africa has been driven by export of commodities or natural resources. ...

... Second, while Africa needs investments in sectors such as infrastructure, technology and education, much of its finances keep leaking out to the rest of the world. ...

... Third, there is no industrialization, not even in agricultural production, taking place when it should. ...

4. The World Post: Amartya Sen: What India Can Learn From China

The implication of your most recent book is that while democracy, as in India, prevents the worst man-made famine such as we've seen in China during the Great Leap Forward, it does not do well at all in building "human capability" -- literacy, rights of women, basic health care or effective public services and infrastructure.

Both China and India are characterized by rapid GDP growth, widespread corruption, inequality and the princeling problem -- 30 percent of India's parliament members are "princelings"

Yet, as you point out, "China made enormous progress -- even before market reforms -- towards universal access to elementary education, health care and social security." After dismantling and then starting to rebuild its safety net, 95 percent of Chinese today are covered by a publicly funded health care system."

And none of this is to speak of physical infrastructure -- the energy grid, bullet trains, roads, Internet access, sewage systems, etc.

You conclude quite decisively that "Indian democratic practice has failed."

What is the key differentiating factor between India and China with respect to building "human capability?" ...

5. BBC: India's family firms modernise to stay in business

... The family is integral to Indian culture and business. Nearly 85% of all companies in the country are family businesses - and these include big conglomerates such as Tata, Reliance and the Wadia Group.

"In other businesses, what is important is competence and profit. That is the measure of success. But in family businesses it's different," says Mr Bahl.

"What is important is that you are together, that you're working together and living together.

"You care for the reputation, you care for the principles of your forefathers and success or profit or that kind of yardstick is not paramount." ...

6. NewJersey.com: Opinion: Muhammad Yunus reaveals social business as powerful weapon against poverty

Muhammad Yunus pioneered microcredit loans to the poor without requiring collateral, empowered poor women worldwide and won the 2006 Nobel Peace Prize in recognition. Through his newest innovation, social business, Yunus has declared all-out war on the nefarious blight that is poverty.

The objective of social business is to augment healthcare, housing and financial services for the poor, education and nutrition for malnourished children and safe drinking water for all, and introduce renewable energy, such as solar power, to the poor.

Yunus realized that, like cancer, poverty is a multi-layered systemic malady whose cure requires a holistic approach. Microcredit loans alone are not the panacea. To obliterate poverty, microcredit must be bolstered with multi-pronged assaults against all of its components.

Existing business models focus on making a profit and have failed to mitigate poverty. Free-market capitalism is thriving worldwide, yet half of the world’s population lives on $2 a day or less. Centuries of experience have demonstrated that government alone cannot eliminate poverty. Trickle-down economics practiced by charities administered through aid agencies and non-governmental organizations fails when the money supply dries up. International agencies, such as the World Bank, set up to assist developing nations, focus solely on economic growth as the antidote for poverty.

Mixed models that conflate a non-profit model with some profit are inherently antithetical. To those who say, “Why can’t social business investors take some profit, such as a 1 percent dividend?” Yunus’ response is: This is like someone trying to quit smoking asking, ‘Can I take just one puff occasionally?’” Yunus argues that someone willing to take a small profit can be persuaded to take zero profit.

Yunus concluded that poverty cannot be eliminated through economic growth or philanthropy; it has to be targeted exclusively. ...

7. Bloomberg: The Best Way to Spread Democracy Abroad? Welcome Foreign Students

... As it turns out, soft power may be far more effective. In particular, educating future leaders here in the U.S. could be one of the most powerful and cost-effective ways to spread democracy that we have. In 2008, about one in five of the 3.3 million foreign students enrolled worldwide were studying in the U.S., and while that’s still a tiny share of the planet’s 7 billion population, foreign-educated students have an outsize impact on their home countries. Not least, a lot of them end up in very important positions. As many as two-thirds of developing country leaders in the middle of the last decade had studied abroad. A few years ago, a State Department list of senior government officials worldwide who had studied in the U.S. included more than 40 presidents and about 30 prime ministers. The full total may be more than 200. ...

8. Business Insider: Two Simple Charts Show Why China Is Losing Business To Its Emerging Market Neighbors

9. Conversable Economist: Latin America: Modest Progress on Inequality

 

10. Associated Press: Mexico to Trump Japan as NO. 2 Car Exporter to US

CELAYA, Mexico (AP) — Mexico is on track to become the United States' No. 1 source of imported cars by the end of next year, overtaking Japan and Canada in a manufacturing boom that's turning the auto industry into a bigger source of dollars than money sent home by migrants. ...

11. "Immigration Myths Debunked" | LearnLiberty

12. Matt Ridley: William Easterly's new book explores the aid industry's autocratic instincts

... This book is not an attack on aid from rich to poor. It is an attack on the unthinking philosophy that guides so much of that aid from poor taxpayers in rich countries to rich leaders in poor countries, via outsiders with supposed expertise. Easterly is a distinguished economist and he insists there is another way, a path not taken, in development economics, based on liberation and the encouragement of spontaneous development through exchange. Most development economists do not even know they are taking the technocratic, planning route, just as most fish do not know they swim in a sea. ...

13. Mashable: 5 Organizations to Support on World Water Day

In honor of this year’s World Water Day, a number of organizations are working on forward-looking clean-water initiatives.

These initiatives are helping protect our planet's water supply in a variety of ways, from providing water-filtration systems to inventing dynamic clean-water technology. ...

14. Atlantic Cities: Air Pollution Now Linked to 1 out of Every 8 Deaths in the World

According to a new report by the World Health Organization, air pollution is the cause of 7 million deaths a year worldwide, and is the single largest environmental health risk in the world today.

The staggering number — one in eight of all deaths, globally — is more than double previous WHO estimates of those killed by air pollution. WHO says that there is a stronger link between pollution and cardiovascular diseases like stroke and heart disease, and between air pollution and cancer, than previously thought. ...

15. USA Today: Blindness rates plummet in developed countries

Blindness is not a thing of the past, but rates have plummeted in developed countries in the past two decades, thanks largely to the spread of cataract surgery, a new study shows.

Visual impairment that falls short of blindness also has become less common in places such as the USA, Canada, Western Europe, Australia and Japan, says the report published Monday by the British medical journal BMJ.

The international research review, which includes Eastern and Central

Europe, shows rates of blindness dropped 50%, and rates of moderate to severe visual impairment fell 38% overall from 1990 to 2010 in 50 countries. Declines in the USA and Canada have not been that big, but rates already were low by international standards in 1990, the analysis shows. ...

16. Huffington Post: This Invention That Uses Aquarium Pumps Could Save 178,000 Babies Each Year

A new invention uses fish tank aquarium pumps to save the lives of babies in the developing world.

In an effort to battle the high cost of medical equipment, a group of Rice University students developed an affordable machine to help premature babies breathe. Machines called bubble Continuous Positive Airway Pressure (bCPAP) devices help struggling babies born prematurely by breathing for them, but the machines cost thousands of dollars and are, therefore, too expensive for many hospitals in developing countries, according to Rice News.

The design team at Rice invented new bCPAP machines by using affordable aquarium pumps -- making them a fraction of the cost and easier to maintain than the traditional machines. The device costs about $350 to make, while the cost of traditional bCPAP machines used throughout hospitals today is about $6,000, according to CNN. ...

17. BBC: World now 80% polio free, World Health Organization says

The World Health Organization has declared its South East Asia region polio-free.

The certification is being hailed a "historic milestone" in the global fight to eradicate the deadly virus.

It comes after India officially recorded three years without a new case of polio.

The announcement means 80% of the world is now officially free of polio, although the disease is still endemic in Afghanistan, Nigeria and Pakistan. ...

18. Business Insider: Bill And Melinda Gates Think These Are The Most Important Charts In The World

 19. Applied Methodology: Thoughts About Norm Borlaug on the 100th Anniversary of His Birth

Norman Borlaug would have been 100 years old today.  He has been called "The Man Who Fed The World," and "The Father of The Green Revolution."  Norm Borlaug was the first plant pathologist to be awarded a Nobel Prize (1970) - for contributions to world peace. For all of use who are fellow plant pathologists, his work has been particularly inspiring. ...

Social Science and Culture Links

1. Business Insider:  Meaningful Work — Not Money — Makes People Happy

... Decades of research have boiled human happiness down to just three factors: genes, events, and values. About half of how happy you feel is hardwired into your genetic make up, according to the article. Meanwhile, one-off events like getting married or landing a big promotion can contribute up to 40% of your happiness, but tend to offer just a temporary boost that lasts a few months. ...

2. Atlantic Cities: The Hidden Beauty of a Walmart Store

[4 minute video] A short documentary follows an artist as he paints the inside of the supermarket chain.

3. Atlantic Cities:  The Paradox of Diverse Communities

... Their simulations of more than 20 million virtual “neighborhoods” demonstrate a troubling paradox: that community and diversity may be fundamentally incompatible goals. As the authors explain, integration “provides opportunities for intergroup contact that are necessary to promote respect for diversity, but may prevent the formation of dense interpersonal networks that are necessary to promote sense of community.” ...

... After 20 million-plus simulations, the authors found that the same basic answer kept coming back: The more diverse or integrated a neighborhood is, the less socially cohesive it becomes, while the more homogenous or segregated it is, the more socially cohesive. As they write, “The model suggests that when people form relationships with similar and nearby others, the contexts that offer opportunities to develop a respect for diversity are different from the contexts that foster a sense of community.” ...

4. Time: Globalization Isn’t Dead, It’s Only Just Beginning

Once upon a time, globalization simply meant the export of Western culture to the rest of the world. Now the world is turning the tables. ...

... In the past, globalization was to a great degree a one-way street — from the developed to the developing world. Money and technology flowed from the U.S. and Europe into China, India and other low-income countries, drawing them into the global trading system. The process was the same with ideas (democracy, capitalism, Marxism) and culture (popular music, social networking, fast food, Hollywood movies). Emerging nations had few connections between themselves, and limited influence over world politics and finance.

Now, though, the rise of China, India and other emerging economies is shifting that old, one-way globalization into a new, vibrant multilateral globalization, with major consequences for how our world works.

Look at what’s happening in the global economy these days. ...

5. The Interpreter: Unfriending: Japanese public opinion on China <http://www.lowyinterpreter.org/post/2013/01/22/Unfriending-Japanese-public-opinion-on-China.aspx?>

6. Atlantic: Countries With Higher Math Scores Have Unhappier Kids

Is there be a relationship between math and misery? Economist Justin Wolfers runs the math. The variation is pretty large (Eastern Europe seems egregiously unhappy, while southeastern Asian students seem to be having a unduly good time in class), but the correlation is statistically significant.

7. BBC:  Modern life 'turning people off sex'

A once-a-decade poll of 15,000 Britons found those aged 16-44 were having sex fewer than five times a month.

The figure compared with more than six times a month on the last two occasions when the official National Survey of Sexual Attitudes and Lifestyles was carried out, in 1990-91 and 1999-2001.

The study's authors say modern life may be having an impact on libidos. ...

8. Atlantic Cities: Across Europe, a Growing Sense That Legalized Prostitution Isn't Working

... France is not alone in its fresh efforts to curb prostitution. The move follows similar bans in Sweden and Norway, while other European countries are also scaling back laissez-faire prostitution policies. Germany is poised to change its liberal sex trade laws, while Ireland is also debating a measure similar to France's. Is the end of legal prostitution in Europe in sight?

It may partly depend on how well France's new laws work. Unlike historical prostitution bans that penalize sex workers, the new laws target customers, making the purchase of sex illegal rather than its sale. Anyone caught paying for sexual services in France will be subject to a fine of €1,500, rising to a maximum of €3,750 for repeat offenders. This follows a model established in Sweden in 1999, but no country as large as France has yet tried anything similar. ...

9. Atlantic: Modern Moms Aren't as Busy as 1960s Moms Were

Moms now spend more time on activities like TV and the computer than on housework, playing with kids, and exercising combined.

 

10. NPR: Forget Golf Courses: Subdivisions Draw Residents With Farms

When you picture a housing development in the suburbs, you might imagine golf courses, swimming pools, rows of identical houses.

But now, there's a new model springing up across the country that taps into the local food movement: Farms — complete with livestock, vegetables and fruit trees — are serving as the latest suburban amenity.

It's called development-supported agriculture, a more intimate version of community-supported agriculture — a farm-share program commonly known as CSA. In planning a new neighborhood, a developer includes some form of food production — a farm, community garden, orchard, livestock operation, edible park — that is meant to draw in new buyers, increase values and stitch neighbors together. ...

 11. Gallup:  Majority in U.S. Say Healthcare Not Gov't Responsibility

12. Business Insider: Americans Don't Trust Each Other Anymore

... These days, only one-third of Americans say most people can be trusted. Half felt that way in 1972, when the General Social Survey first asked the question.

Forty years later, a record high of nearly two-thirds say "you can't be too careful" in dealing with people. ...

13. Atlantic: Homelessness Is Up in New York City, But It's Down Everywhere Else

14. Archaeology: Top 10 Discoveries of 2013

15. Business Insider: 25 Books That Changed The Course Of History

Every reader knows that a book can change your life.

But what about the lives of an entire generation? Can a book change the future?

Miriam Tuliao, assistant director of central collection development at the New York Public Library, helped us come up with a list of 25 books that changed the course of history.

From the Torah to Orwell's "1984," these 25 titles have had a major impact (listed here in alphabetical order).

16. Seth's Blog: What do we get when we give to a good cause?

Why on earth would a rational person give money to charity--particularly a charity that supports strangers? What do they get?

A story. ...

... If people aren't donating to your cause, it's because you're not telling a story, or telling the wrong story to the wrong people (in the wrong way). Non-profits make change, and the way they do this is by letting us tell ourselves stories that nurture our best selves.

17. Also on the topic of giving, here is some practical advice. Forbes: How To Give Away Money When It Feels Like You Don't Have Any

Saturday Links

Pickings have been slim this week, and I'm late getting the links posted. Hopefully, we will get back on track this week.

1. Hidden environmentalists: India's waste pickers

In Pune, India, a city that suffered a waste disposal crisis in 2010, an alliance of waste pickers has established an inclusive, sustainable model for solid waste management that presents a potential blueprint for the future.

... They formed SWaCH – India's first wholly-owned cooperative of self-employed waste pickers. Since 2005, SWaCH has worked in partnership with city authorities, providing door-to-door collection for a small fee and – unlike other contractors that favor landfills and incineration units – recycling and composting the city's rubbish.

However, as Vishnu, head of operations, explains, it is an initiative driven primarily by social, rather than environmental forces. Before SWaCH, waste pickers rummaged through landfills to find scraps to sell. "They were not working in a clean area – there are snakes and pigs and dogs. And they were not getting enough sellables to sustain their families." By incorporating waste pickers into the municipal mechanism for waste collection and formalizing what had previously been a completely unregulated economy, SWaCH has provided increased economic security and social uplift for thousands of families in Pune. ...

2. Discover asks How Many People Ever Lived?

While I was writing The Cancer Chronicles, I came to a point, early on, where I wondered how many people had ever been alive in the world. The best answer I could find came from a study by an organization called the Population Reference Bureau: 108 billion.

I was stunned by the magnitude of the number. It is still common to hear that more people are alive today than have ever lived. Or an even more extreme claim: that 75 percent of everyone who ever walked the earth is living today. But that is not even close to being correct. By the Population Reference Bureau's reckoning, the proportion of living to dead is only about 6 percent. ...

3. The Rise Of The Renting And Sharing Economy Could Have Catastrophic Ripple Effects

... "The potential impacts of renting/leasing as a long-term trend, though, are worrisome: Renting and sharing could lead to lower home sales (and, subsequently lower home values and net worths), as well as lower auto and retail sales," write the strategists. "The ripple effects could also be catastrophic: Adjusting to a consumer who does not necessarily buy, but rather rents, would necessitate a shift in production, sales, and even employment structures. Everything interesting in economics happens at the margin, so if the nth consumer chooses to rent an apartment instead of buying a house or making do with a car-share program instead of purchasing a new vehicle, then demand for new houses and cars drops."...

4. Lawrence Berkeley National Labs: Solar Costs Continue To Fall

... Lawrence Berkeley National Labs (LBNL) recently released their report summarizing the trends in installed costs of solar installations from 1998 to 2012. They looked at over 92,000 installations over the past two years, and found that the cost dynamics continue to move strongly downward.

Some of the main findings:

Installations in the U.S. more than quadrupled from 2009 to 2012, going from 7,000 megawatts to 31,000.

Costs continue to fall at a healthy clip, with the most recent year-over-year declines of 14% for systems less than 10 kilowatts (kW), 13% for systems in the 10 – 100 kW range, and 6% for systems larger than 100 kW. Median installed prices were $5.3, $4.9, and $4.6 per watt respectively. LBNL attributes these declining U.S. prices mainly to falling module prices, which accounted for 80% of the total price drop.

The trend in 2013 appears to be continuing. The initial data available from the California Solar Initiative shows prices falling by 10-15% in the first six months of this year.

LBNL did note that the module prices appeared to be stabilizing in 2013, but the report also commented that experience from other countries suggests the price declines can and will continue. The median installed price of small residential PV systems last year (without tax) was $2.6 in Germany (fully half the price in the U.S.), $3.1 in Australia, and $3.1 per watt in Italy.

Many of these additional gains will come about as a result of reductions in soft costs, as permitting becomes streamlined, and companies develop more efficient customer acquisition and financing tools. ...

5. Germany Fights Population Drop

... In its most recent census, Germany discovered it had lost 1.5 million inhabitants. By 2060, experts say, the country could shrink by an additional 19 percent, to about 66 million. ...

... Germany, however, an island of prosperity, is spending heavily to find ways out of the doom-and-gloom predictions, and it would seem ideally placed to show the Continent the way. So far, though, even while spending $265 billion a year on family subsidies, Germany has proved only how hard it can be. That is in part because the solution lies in remaking values, customs and attitudes in a country that has a troubled history with accepting immigrants and where working women with children are still tagged with the label "raven mothers," implying neglectfulness.

If Germany is to avoid a major labor shortage, experts say, it will have to find ways to keep older workers in their jobs, after decades of pushing them toward early retirement, and it will have to attract immigrants and make them feel welcome enough to make a life here. It will also need to get more women into the work force while at the same time encouraging them to have more children, a difficult change for a country that has long glorified stay-at-home mothers....

... Demographers say that a far better investment would be to support women juggling motherhood and careers by expanding day care and after-school programs. They say recent data show that growth in fertility is more likely to come from them. ...

6. A Surprising Map of the World Shows Just How Big China's Population Is

In order to comprehend what it means for one country to have one-fifth of the world's population, this nifty map (from the indispensable @Amazing_Maps on Twitter) divides the world into five regions, each with the same population of China.

Saturday Links

1. Meaning Is Healthier Than Happiness

People who are happy but have little-to-no sense of meaning in their lives have the same gene expression patterns as people who are enduring chronic adversity.

2. Blacks, Hispanics more optimistic than whites

... After years of economic attitudes among whites, blacks and Hispanics following similar patterns, whites' confidence in their economic future has plummeted in the last decade, according to the analysis. Blacks and Hispanics, meanwhile, have sustained high levels of optimism despite being hit hard in the recent recession. ...

... The AP-NORC analysis of data from the General Social Survey, a long-running biannual survey conducted by NORC at the University of Chicago, found just 46 percent of whites say their family has a good chance of improving their living standard given the way things are in America, the lowest level in surveys conducted since 1987. In contrast, 71 percent of blacks and 73 percent of Hispanics express optimism of an improved life - the biggest gap with whites since the survey began asking. ...

3. The Book of Mormon: Why the world’s most capitalist religion breeds so many entrepreneurs

... The Mormon religion, however, stresses more than just self-reliance. Its emphasis on hard work, staying focused, and giving back to the Church also stirs entrepreneurial inclinations. The almost-mandatory missions carried out by its young men and women before they start their careers forge an ability to withstand rejection and disappointment while also fostering communication skills that help not only with sales jobs but also in starting companies. All the while, an unrelenting focus on the family means that Mormons are incentivized to “follow the rules” and earn money to feed many mouths, while maintaining a healthy work-life balance.

And so the US is riven with examples of what appears to be a disproportionately high number of business and entrepreneurial success stories to emerge from the Church of Jesus Christ of Latter-day Saints, whose members account for just 1.7 percent of the US population. ...

4. A Record Number Of Young Adults Are Still Hunkered Down With Mom And Dad

... In 2012, 21.6 million young adults aged 18-31 lived at home with their parents, up from 18.5 million just before the recession, according to a new Pew Research Center analysis. 

"This is the highest share in at least four decades and represents a slow but steady increase over the 32% of their same-aged counterparts who were living at home prior to the Great Recession in 2007 and the 34% doing so when it officially ended in 2009," the report says. ...

5. U.S. Marriage Rates Keep Declining

Marriage rates in America are at an all-time low. And the median age at which women say "I do" is the highest it's been in a century.

Charles Blow had these observations about Marriage and Minorities.

6. The Long-Term Effects Of Poverty Linger Even After People Become Wealthy

"Scientists find [people who grew up poor] are more prone to illness than those who were never poor. Becoming more affluent may lower the risk of disease by lessening the sense of helplessness and allowing greater access to healthful resources like exercise, more nutritious foods and greater social support; people are not absolutely condemned by their upbringing. But the effects of early-life stress also seem to linger, unfavorably molding our nervous systems and possibly even accelerating the rate at which we age."

7. The other killer. Hepatitis kills more people than HIV in most countries.

8. India’s Garment Industry Gets Respun

As cost increases in China and concerns over labor conditions in Bangladesh push manufacturing firms away, India is gearing up its own garment industry to try to capitalize on the opportunity and boost its faltering economy. India has so far failed to fully take advantage of its huge potential labor force living out in the countryside. This may soon change, with companies like Aravind Mills planning to open dormitories for workers. Additionally, the Indian government, taking a page from China’s development model, has plans to create textile parks, with space designated for worker housing. ...

9. The Missouri Table: A Response to Ethical Foodies From a ‘Factory Farmer’

... One caller to a radio show I appeared on recently desribed the people who patronize fast food restaurants as "sheeple." That kind of derision leads me to believe that the caller will only feel good about himself if he believes I eat hamburgers several times a month at a place with cheesy uniforms and kid’s meals. I’m happy to oblige, but it is hard for me to take him seriously. He’s not as interested in making the world better as he is in feeling superior to people who can’t afford to eat the diet he believes necessary to living an ethical and sustainable life. He’s not nearly as concerned about the future of the planet as he is at being noticed, approvingly, by the kind of people who worry about the proper way to boil lentils, raise a few heritage pigs in their backyard, and are always available to be interviewed by NPR and the New York Review of Books. ...

A little harsh but a lot true.

 10. The Slower Rise in Health Care Costs

The rate at which health care costs are rising had slowed down in recent years, and perhaps not unexpectedly, Obama's economic advisers have sought to draw the link that "As ACA Implementation Continues, Consumer Health Care Cost Growth Has Slowed." But an array of evidence suggests that something beyond that legislation--which after all, is mostly not yet implemented--is the cause.

1) The slowdown in the rise of health care spending was already being noted in newspaper articles back in early 2012. ...

2) The slowdown in rising health care costs since the recession is international, as a press release with the OECD Health Report 2013 explains. ...

3) There's some reason to be dubious as to whether the slower rate of growth in health care spending will persist. ...

11. ‘Saudi America’ was the world’s No. 1 petroleum producer in April for the 6th straight month

12. Efficiency Drove U.S. Emissions Decline, Not Natural Gas, Study Says

Aggressive energy efficiency efforts by households, companies and motorists led to the decline in carbon dioxide emissions from energy use in the United States, according to a recent report. The controversial finding contradicts recent studies that say the power sector's shift away from coal to cheap natural gas caused the bulk of reductions.

U.S. emissions last year fell by 205 million metric tons, or 4 percent, from 2011 levels. CO2 Scorecard Group, a small environmental research organization, says that nearly half the decline came from energy-saving measures such as retrofits and smarter appliances in homes and offices, as well as from Americans driving fewer miles, and using more fuel-efficient vehicles. 

Natural gas is responsible for only about one-quarter of last year's emissions drop, CO2 Scorecard Group asserts....

As the article notes, other reputable research disagrees, attributing most of the drop to shale.

13. Millennials and Leaving Church: Really?

... Before you either quote the reports or the responses to the reports, read Brad Wright’s book: Christians Are Hate-Filled Hypocrites…and Other Lies You’ve Been Told: A Sociologist Shatters Myths From the Secular and Christian Media.

Here are some highlights from Wright’s 3d chp, one asking if we (think we) are losing our youth.

Josh McDowell: “It is clear that we have all but lost our young people to a godless culture.” Josh’s statement is typical.

It’s also not in tune with good social-scientific data. For instance, there was a widely circulating rumor (I heard it) that said 4% of our evangelical youth will be evangelicals when they get older. Wright chased the number into bad stats. Here are some better ones:

1. Young adults are less religious, but what does this mean?
2. 12% in the 70s and 80s were unaffiliated; now 25% are. But this is the same number as with other age groups.
3. Currently, 22% of young adults are evangelicals; that’s up from 21% in the 70s but down from 25% in the 90s.
4. Negatively, unaffiliated has increased for young adults.
5. Positively, the number who are affiliated with churches has remained the same.
6. Those affiliated with Evangelicals, Black Prots, and RCC are the same as in the 70s. (Mainliners are down.)
7. No sign of cataclysmic or big changes....

 

Is India winning the war on poverty?

BBC: Is India winning the war on poverty?

Is India winning the battle against poverty? Going by the latest figures, yes.

The number of Indians living in extreme poverty has fallen from 37% to 22% in the past seven years, according to the latest official data from the Planning Commission.

The good news is that poverty in large swathes of dirt-poor northern India - states like Bihar, Madhya Pradesh, Orissa and Uttar Pradesh, which have been considered a drag on India's development - has fallen sharply.

Today there are more people living in extreme poverty in the economically prosperous western state of Gujarat (16.63%) than in the traditional northern laggard Rajasthan (14.71%). ...

... Despite the good tidings, India's war on poverty is far from over.

Remember, 270m Indians still live in extreme poverty. That is one in five Indians.

Putting waste to good use in India (Upcycling)

BBC: Putting waste to good use in India

"The amount of solid waste produced in India is still low compared to developed countries, but as the population grows it is becoming more of a problem.

So is upcycling, using rubbish to produce useful items, the answer to the country's waste management issues?

Shilpa Kannan reports."

 

The new middle class revolution: Facts and figures

BBC: The new middle class revolution: Facts and figures

U.N.: World population to reach 8.1B in 2025

USA Today: U.N.: World population to reach 8.1B in 2025

UNITED NATIONS (AP) — The United Nations forecast Thursday that the world's population will increase from 7.2 billion today to 8.1 billion in 2025, with most growth in developing countries and more than half in Africa. By 2050, it will reach 9.6 billion.

India's population is expected to surpass China's around 2028 when both countries will have populations of around 1.45 billion, according to the report on "World Population Prospects." While India's population is forecast to grow to around 1.6 billion and then slowly decline to 1.5 billion in 2100, China's is expected to start decreasing after 2030, possibly falling to 1.1 billion in 2100, it said.

The report found global fertility rates are falling rapidly, though not nearly fast enough to avoid a significant population jump over the next decades. In fact, the U.N. revised its population projection upward since its last report two years ago, mostly due to higher fertility projections in the countries with the most children per women. The previous projection had the global population reaching 9.3 billion people in 2050. ...

Saturday Links

 1. The High Calling published an article I wrote. I linked it earlier, but here it is again in an act of shameless self-promotion. It goes to some core issues I'm trying to put into a book. Six Ideas on How to Lead Congregations to Integrate Work and Discipleship

2. Should Pastors Know How Much Church Members Give?

A recent study found that churches where pastors know how much is donated and by whom were more likely to be doing well financially. However, only half of the 3,000 responding congregations (and only 39 percent of evangelical ones) told the Lake Institute on Faith and Giving that their pastors knew this information.

What experts said (starting with "yes" and moving to "no" ): ...

3. Model for megacities? Mexico City cleans up its air.

... With urbanization advancing, economies expanding, and climate change a concern, Mexico City has emerged as an unlikely environmental example for cities in developing countries suffering similar air quality issues.

Mexico City recorded only eight days with air quality considered "good" in 1992. That compares with 248 "good" air days in 2012, reflecting the success of initiatives to relocate industry, kick clunkers off the capital's streets, encourage cleaner technologies, and expand public transit and cycling options. ...

4. Unmanned Drones May Have Their Greatest Impact on Agriculture

Talk about beating swords into plowshares. The mention of drones may conjure up images of Star Wars-like spacecraft or hell-fire war machines. But the controversial technology may prove to have its greatest impact in a peaceful endeavor: farming. ...

... The market for agricultural drones lies in the technology's ability to provide farmers with a bird's-eye view of their land. Historically, farmers have walked their land to survey it—looking for areas that need more fertilizer or water. More recently many have begun using small passenger planes to look at their lots from the air. But since airplane rental and fuel costs can quickly run into five figures, there's strong demand for cheaper alternatives. ...

... "Eighty percent of the utilization, once we are allowed to have Unmanned Aircraft Systems in the national airspace, in the first 10 years is going to be in precision agriculture," said Michael Toscano, CEO of AUVSI. "You will have a situation where you can spray crops by a UAS that flies 2 or 3 feet above the plants. You can control the downwash because you can put the pesticides on the plants and not in the ground where it gets to the groundwater."

"It sounds trivial but those numbers really add up a lot," said Rory Paul of Volt Aerial Robotics. "If we could save farms 1 percent on inputs like herbicide and pesticide and increase their yields by 1 percent, you are looking at multibillion dollar savings."...

5. Fascinating piece about the The Historical Horror of Childbirth

... Such stories were not at all shocking, as a woman's chances of dying during childbirth were between one and two percent -for each birth. If a woman gave birth to eight or ten children, her chances of eventually dying in childbirth were pretty high. The infant mortality rate was even higher. The chances of a child dying before his fifth birthday were estimated to be around 20 percent, depending on the community (accurate records are scarce). In addition to the fear of death or the fear of the child dying, there was no pain relief during labor, except for whisky in some places. ...

6. "INDIA will soon have a fifth of the world's working-age population." India's moment

7. 'Late-life crisis' hits the over-60s

"Of the 33% who went through a crisis, bereavement was the most common trigger, followed by personal illness or injury."

8. Hispanic High School Graduates Pass Whites in Rate of College Enrollment

 

9. Atlantic Cities asks the question that has interested me for years: Why Do So Many People Think Gun Violence Is Getting Worse?

"Twenty years into this safer era, we still don't know quite how we got here. Perhaps in absence of a logical narrative, many Americans simply find it hard to believe this is true."

10. People Don't Wear A Shocking Amount Of Their Clothes.

"The average person only wears about 20% of the clothing in his or her closets. Most clothing goes unworn because it's the result of an impulse buy or doesn't fit correctly, Ray A. Smith at the Wall Street Journal reports."

11. This week was the 20th anniversary of the birth of the World Wide Web. The Day Distance Disappeared

12. Great piece! The Tech Trends to Fear the Most: It's Not All Good

13. The market 'bubble' you've never heard of: "Some economists are worried that farmland prices are nearing bubble territory. How bad can it be if no one's heard of it?"

14. Michael Barone says College Bubble Bursts After Decades of Extravagance

15. Whatever happened to these Fortune 500 companies? "Here are seven companies from the first Fortune 500 that have since been merged, split up, or put out to pasture."

16. Dwight Lee has a thought-provoking piece about The Two Moralities of Ebenezer Scrooge.

17. The global economy: Welcome to the post-BRIC world

18. Development finance in Africa

19. Toxic Waste Sites Take Toll on Millions in Poor Nations

New studies attempt to quantify just how harmful the rampant exposure to lead and other chemicals is in the developing world.

20. James Pethokoukis with a provocative article about income inequality: Why A Decline In Income Inequality Would Be Bad News

Why has income inequality been rising in advanced economies — it's not just the US, people — over the past few decades? The economic consensus mostly explains the phenomenon as a race between accelerating technological change and expanding education. And the rise of inequality shows, as JPMorgan economist Mike Feroli puts it in a new report, that the "pace of technological advance has outstripped the ability of the educational system to supply the human capital skills needed to utilize this technology, leading to out-sized earnings gains for those who have such skills (the so-called college wage premium)."...

Is It Crazy to Think We Can Eradicate Poverty?

New York Times: Is It Crazy to Think We Can Eradicate Poverty?

... Fortunately, this deadly and cyclical form of poverty [living on less than $1.25 a day] is already on its way toward obsolescence, and much faster than many development economists expected. The first Millennium Development Goal — to halve the proportion of the world population living in dire poverty by 2015 — was met five years early, as the rate fell to an estimated 21 percent in 2010, from 43 percent in 1990. Some economists had feared that the recession would arrest or even reverse the trend, given how interconnected the global economy is, but the improvement continued, unabated. Annual growth dipped for developing economies in 2009 but has since rebounded to about 5.3 percent a year, a figure dragged down by weaker peripheral European economies.

For much of the improvement, the world can thank one country: China, which alone accounts for about half of the decline in the extreme poverty rate worldwide. It has also driven significant gains across the region. In the early 1980s, East Asia had the highest extreme-poverty rate in the world, with more than three in four people living on less than $1.25 a day. By 2010, just one in eight were. But other middle-income countries, like Brazil, Nigeria and India, have experienced significant growth, too — in no small part because tens of millions of the very poor have moved from rural areas to cities, where they become richer, healthier and more productive for their economies....

... For the poor living in poor countries, particularly the profoundly unstable ones, gains have been harder-fought and slower, a trend that the World Bank’s own economists describe as worrisome. But that is not to play down the successes so far. In 2008, for the first time since the bank started measuring the statistics, the number of people living in dire poverty and the dire-poverty rate fell in every region around the world. Extreme poverty in sub-Saharan Africa has at last dipped below the 50 percent mark. Still, many within the development world doubt the ability of NGOs to cure the world’s most troubled nations of their woes. “I don’t think we have a recipe for fixing the Congo or South Sudan or Afghanistan,” says Birdsall, of the Center for Global Development. ....

 

 

Caste and entrepreneurship in India

BBC: Caste and entrepreneurship in India

The story of India's economic surge is dominated by two conflicting narratives.

... Delving into the relationship between caste and entrepreneurship, the researchers have found that scheduled castes and tribes, the most disadvantaged groups in Hinduism's hierarchy, owned very little businesses despite a decade of sprightly economic growth and a long history of affirmative action.

Mining information thrown up by the 2005 economic census covering more than 42 million enterprises, they found schedule castes owned only 9.8% of all enterprises in India in 2005, well below their 16.4% share of the total population.

The scheduled tribes owned only 3.7% of non-farm enterprises despite being 7.7% of the population.

However, ownership of business among OBC's - an acronym for Other Backward Castes or the "middle castes" who "neither suffering the extreme social and economic discrimination of the Scheduled Castes, nor enjoying the social privileges of the upper castes" - has grown.

OBCs comprise 41% of India's people. Their members owned 43.5% of all enterprises in 2005, and accounted for 40% of non-farm employment.

This is a remarkable achievement considering that affirmative action for this group was widely introduced only in the 1990s.

The pattern of dismally low ownership of businesses among the most disadvantaged groups, the researchers found, is not specific to any one region or state in India. ...

 

When it comes to world GDP, BRICS are carrying the load

Economist

Saturday Links

1. The new global top dog in international trade is China. China Eclipses U.S. as Biggest Trading Nation

"U.S. exports and imports of goods last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China's customs administration reported last month that the country's trade in goods in 2012 amounted to $3.87 trillion."

2. As U.S. birth rate drops, concern for the future mounts

The drop in U.S. births to their lowest level since 1920 is sounding alarms about the nation's ability to support its fast-growing elderly population.

As public concern mounts, a growing number of books, reports and columns are laying out challenges the United States will face because of this demographic upheaval: Fewer babies are being born while the wave of 78 million older Baby Boomers have only begun to retire (the oldest turn 67 this year). ...

3. Raising the minimum wage has become a hot topic once again. Jared Bernstein makes Obama's case in the Huffington Post, saying that numerous careful studies say raising the minimum wage does not have an impact on employment. While that is true, there are also many careful studies that suggest that it does have an impact. My perception is that raising the minimum wage helps some working poor who already have jobs but makes it more difficult for low-skilled unemployed workers, particularly minority men in urban contexts. It is interesting that 25 years ago, the New York Times came out in opposition to the minimum wage: New York Times Called To Abolish The Minimum Wage In 1987. Fiscal Times makes their case against the minimum wage hike: Raise the Minimum Wage and Get Minimum Jobs

4. Speaking of low-income workers, The 20 Companies With The Most Low-Wage Workers

5. Last week, I wrote a post that linked a Salon article that said we are often swayed toward liking policies we have previously disliked when a political figure we like adopts those policies. (See When liberals ignore injustice) A prime example of rationalizing this inconsistency is this article in the Atlantic: MSNBC Host: Trusting Obama More Than Bush Isn't Hypocritical. The willingness of Krystal Ball to alter the degree of power and discretion a president has based on personal affinity rather than on an impartial assessment of the office's role is disturbing (and this is true of left and right.)

6. Gleaming skyscrapers are springing up in major cities of many developing nations. Partly because of practical concerns and partly as status symbols. But not in India. Why India Keeps Its Cities So Short

7. Does the time of year you were born relative to the date that determines which year you start school have any impact on your life? How Birth Date Affects Future Success

8. This technology is pretty cool! Follow the self-made road: Incredible machine that lays out a carpet of bricks removing back-breaking hard work

9. Let us give thanks for the demise of this publishing niche. A Midcentury Travel Guide for African-American Drivers Navigating Jim Crow

10. My former professor at Palmer Theological Seminary is in the news again. Resigning From the AARP

"The AARP is a selfish lobby demanding things for seniors even though modest sacrifices would help us reduce the deficit and enable us to spend more on crucial things like better education for our children. In fact, John Rother (long-time chief lobbyist for the AARP) suggested that in 2011 and promptly lost his job. Selfish seniors protested loudly and the AARP quickly backpedalled."

(For the record, I have never joined AARP. I'm still in denial that I am old enough to join.)

11. There are only a few seconds left in the basketball game. Your team is up by three, but the other team is about to inbound the ball. Do you quickly foul to force two free throws, or do you simply play defense against any score? Yet another study about fouling when up 3

How Social Entrepreneurs Use Rice Husks to Power India

PBS: How Social Entrepreneurs Use Rice Husks to Power India

Some excerpts:

… FRED DE SAM LAZARO: Despite billions of dollars in new infrastructure, power interruptions are chronic in India. Consumers large and small rely on backup systems, at huge cost to both the environment and economy, says energy expert Kirit Parikh. He traces the problem to policies that never really took into account the cost of power and gave it away to some consumers.

KIRIT PARIKH, energy expert: We started out with saying that farmers should get cheap and free electricity. This was 30 years ago, when we wanted farmers to really adopt more modern technologies. It was considered a good way to promote green revolution.

FRED DE SAM LAZARO: Power was distributed cheaply or free to farmers and other groups whose votes politicians courted. Little effort was made to meter it. That prompted many people to hook themselves up illegally. Parikh says a third of all power is stolen off the grid. …

… FRED DE SAM LAZARO: … But to anywhere from a third to a half of them, it really didn't matter, because they have never been hooked up to the electric grid.

Vast swathes of rural India remain off the grid or get minimal, unpredictable service from it. …

FRED DE SAM LAZARO: Ratnesh Yadav has tried to tackle at least this part of the problem. He and a partner founded a company called Husk Power. Their idea? Village-based micro-grids.

At this one in the village of Patelli (ph) in the northeastern Bihar state, tractors arrive with rice husks, the byproduct of milling this region's staple crop. It is poured into a hopper, about 100 pounds per hour, and gassified to run a simple turbine. Each evening, 700 customers have access to power for five hours. …

… MAN (through translator): We used to work with a gas light. This is much cheaper. We used to stay open until 9:00 in the evening. Now we stay open until 10:00 or 10:30, so it's a benefit. …

… FRED DE SAM LAZARO: In five years, Husk Power has installed 75 of these simple plants. Their networks cover an area no bigger than a couple of square miles, with wires strung on poles made from bamboo, a renewable resource like the rice husk fuel.

RATNESH YADAV: The good thing about this rice husk is, it has no alternate uses. It doesn't burn easily, so you can't use it for cooking. You cannot feed it to cattle because it has high silica in it. So it is a waste. It has no value for anybody else. And that is why -- and it is in plenty. …

… ERIC BERKOWITZ, investor: As people increase income, which hopefully they will, that will create new livelihood opportunities, they will have opportunities to incrementally increase electricity that they will take from these kind of solutions, and maybe add maybe two lights, three lights, a radio, a TV, a refrigerator.

It's not the only solution. There's other solutions that involve solar technologies. And Husk Power is actually looking at those kind of solutions as well.

FRED DE SAM LAZARO: Renewable fuel plants also qualify for subsidies from India's government and possibly credits in a global carbon trade. Power expert Parikh appreciates what micro-plants can provide, but he doesn't see them as a long-term solution. …

Poor in India Starve as Politicians Steal $14.5B of Food

BloombergBusinessweek: Poor in India Starve as Politicians Steal $14.5B of Food

Ram Kishen, 52, half-blind and half- starved, holds in his gnarled hands the reason for his hunger: a tattered card entitling him to subsidized rations that now serves as a symbol of India’s biggest food heist.

Kishen has had nothing from the village shop for 15 months. Yet 20 minutes’ drive from Satnapur, past bone-dry fields and tiny hamlets where children with distended bellies play, a government storage facility five football fields long bulges with wheat and rice. By law, those 57,000 tons of food are meant for Kishen and the 105 other households in Satnapur with ration books. They’re meant for some of the 350 million families living below India’s poverty line of 50 cents a day.

Instead, as much as $14.5 billion in food was looted by corrupt politicians and their criminal syndicates over the past decade in Kishen’s home state of Uttar Pradesh alone, according to data compiled by Bloomberg. The theft blunted the country’s only weapon against widespread starvation -- a five-decade-old public distribution system that has failed to deliver record harvests to the plates of India’s hungriest.

“This is the most mean-spirited, ruthlessly executed corruption because it hits the poorest and most vulnerable in society,” said Naresh Saxena, who, as a commissioner to the nation’s Supreme Court, monitors hunger-based programs across the country. “What I find even more shocking is the lack of willingness in trying to stop it.”...

The Surprising Spending Habits of India's Rural Population

Atlantic Cities: The Surprising Spending Habits of India's Rural Population

... The Times of India reports that rural spending growth is outpacing urban spending for the first time since economic reforms took place two decades ago. Between 2009 and 2012, spending by the 69 percent of the Indian population living in rural areas increased by about $67 billion. For the 31 percent who are urban dwellers, spending increased by only about $54 billion.

Overall, the rural majority has been spending more than its urban counterparts for years. From 2004 to 2005, rural dwellers spent $52.2 trillion, about 57 percent of the $91.5 trillion spent nationally. Rural spending has been the majority every year since. But now, rural spending growth has outpaced urban growth as well. ...

... While we might associate rural areas with poor farmers and dusty fields, the rural economy in India is also shifting. Non-farm work is on the rise, especially in the form of construction jobs. Between 2005 and 2010, there was an 88 percent increase in rural construction jobs, many through government sponsored employment generation schemes. At the same time, farm jobs fell from 249 million to 229 million.

The other reason is that all those people who've moved to cities to make more money are actually sending a lot of that money back to the rural areas from which they've migrated. Rural family members back home suddenly find themselves with much greater discretionary incomes than ever before, and they're very happy to spend it. ...

Business Lessons From A Baby Elephant

Fast Company: Business Lessons From A Baby Elephant

What can an elephant's prosthetic leg teach us about innovation?

Vijay Govindarajan is the co-author, with Chris Trimble, of Reverse Innovation: Create Far From Home, Win Everywhere, which hits bookshelves on April 10. A professor at the Tuck School of Business at Dartmouth University, Govindarajan chatted with Fast Company about $2,000 heart surgery, elephant prostheses, and the need for American businesses to, in essence, study abroad.

What’s "reverse innovation"?

Historically, multinationals innovated in rich countries like the U.S. and sold products in poor countries like India. Reverse innovation is doing the exact opposite, about innovating in a poor country like India, and bringing products to the U.S. It’s completely counterintuitive, because it’s logical to see why a poor man would want a rich man’s product, but it’s not that logical to see why a rich man would want a poor man’s product.

Why would a rich man want a poor man’s product?

There are two components here. First, why do we need to innovate in India at all? Why not simply send products to India? Second, why would those innovations defy gravity and flow uphill? The answer to the first question is that customer requirements in poor countries are fundamentally different than in rich countries. The per capita income in India is $1,000 nominal dollars; in the U.S., it’s $50,000. No business model created for the American consumer can go and capture Middle India. You have to innovate. That’s the first part. The second part: Why do these products flow uphill? Here’s an example: There’s a hospital in India called called the Narayana Hrudayalaya Hospital, or N.H. Hospital, in Bangalore. This hospital does open-heart surgery for $2,000. In the U.S., open-heart surgery costs at least $20,000. Because they offer open-heart surgery for $2,000 does not mean the quality is bad; the quality is on par with U.S. quality. ...

... How does an American executive learn to think in these reverse-innovative ways?

If America is to be a great country in the future, we have to become as curious about the problems of poor countries as we are about customers in rich countries. We have a dominant logic in the U.S. based on serving rich customers; we need a new logic to really serve customers in poor countries, and the only way we can do that is by creating a “local growth team,” or a dedicated team to do innovation in India, or Thailand, or Africa. ...

An Indian Perspective on Business as Mission

Lausanne Global Conversation: An Indian Perspective on Business as Mission  by Daniel Devadatta

I believe the time has come for more Christians to unashamedly enter the realm of business in India. It is time for the larger Christian community to support, encourage and even challenge Christian business persons in terms of the influence they have and can have in the public square. How will the gospel shape business people in one of the most exhilarating periods in the history of our nation?

In my daily work I am an encourager of Christian business professionals. The market, the work place and the people who function in this realm are my parish.  This post reflects a personal narrative of what I have discovered in this journey amongst business persons.

First of all, it is my conviction that business is a moral and spiritual calling. It is an equally legitimate calling like all other callings; a task set by God who calls some for the sake of others.

In my engagement with those business persons who have this inner sense of calling to business, I have found a deep passion and determination. They do not merely enjoy what they do, they have the sense that this is what they were meant to do. They wake up each day to see how their business can actually do something worthwhile in society. They ask themselves: what does it mean to run a successful business where the vendors, customers, suppliers, government and bureaucratic officials, employees, etc., experience the love of God? Business for them is making a tangible difference in the lives of others, be it their customers or employees, or the myriad web of relationships that develop through business. They are called by God to serve Christ and others in and through their business.

There is an emerging world-wide network of such business persons. We are beginning to see it even here in India, Christian business people operating their business ‘as mission’.  However, much more work needs to be done by the church and Christian organizations to encourage business persons in their business calling, and provide resources that strengthen them in their primary place of influence. ...

Dire Poverty Falls Despite Global Slump, Report Finds

New York Times: Dire Poverty Falls Despite Global Slump, Report Finds

WASHINGTON — A World Bank report shows a broad reduction in extreme poverty — and indicates that the global recession, contrary to economists’ expectations, did not increase poverty in the developing world.

The report shows that for the first time the proportion of people living in extreme poverty — on less than $1.25 a day — fell in every developing region from 2005 to 2008. And the biggest recession since the Great Depression seems not to have thrown that trend off course, preliminary data from 2010 indicate.

The progress is so drastic that the world has met the United Nations’ Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline. ...

... The report contained a raft of statistics showing broad declines in poverty throughout the 2000s. For the first time since the World Bank started keeping statistics in 1981, poverty fell in every region of the world on a three-year timeframe. In sub-Saharan Africa, the proportion of the population living in extreme poverty fell below 50 percent for the first time. And between 1981 and 2008, poverty fell to just less than a quarter of the developing world’s population from more than half .

Much of the story was about China, which moved nearly 700 million people out of poverty between 1981 and 2008, with the proportion of its population living in extreme poverty falling to 13 percent from 84 percent during that period. The country’s annual pace of economic growth never dipped below 9 percent, even in 2009, when the world’s economy contracted.

But perhaps the most surprising success story is sub-Saharan Africa, where the proportion of people living in extreme poverty actually increased through the 1990s, before declining in the 2000s.

“People used to worry, ‘Is Africa going to be poor forever?’ ” said Mr. Kenny of the Center for Global Development. “Well, it doesn’t really look like it, does it?”

Extreme poverty in the Middle East and North Africa fell to just 2.7 percent in 2008 from 4.2 percent in 2002. And extreme poverty in sub-Saharan Africa fell to 47.5 percent in 2008 from 55.7 percent in 2002. ...

Is a Woman in Brazil Better Off than a Woman in the U.S.?

Time: Is a Woman in Brazil Better Off than a Woman in the U.S.?

Women overseas are reaching new heights professionally. Here's what we can learn from our emerging market counterpart.

The mention of women in emerging economies often evokes a picture of oppressed and poverty-stricken victims, relegated to the sidelines of male-dominated cultures. That’s the usual narrative, exemplified by the best-selling Half the Sky by Nicholas Kristof and Sheryl Wu Dunn. Yes, these problems are real and of critical importance. But educated women in Brazil, Russia, India and China — the BRIC economies which represent the four largest emerging markets — and the United Arab Emirates, are telling a different tale: one of agency and power.

Just as in the U.S. — where female college graduates now outnumber men — BRIC women are flooding into universities and graduate schools. They represent 65% of college graduates in the UAE, 60% in Brazil and 57% in Russia. These figures represent more than just a tiny elite: Between 15 and 25% of young women in the BRICs/UAE are now college-educated — a substantial number. And they’re not just earning degrees: They are bursting with the desire to use them.

Highly educated women the world over are ambitious, but ambition and aspiration among BRIC/UAE women is off the charts. New data from the Center for Work-Life Policy show that 85% of female college graduates in India and 92% in the UAE consider themselves very ambitious, compared to a paltry 36% in the U.S. In India, 86% of college-educated women are shooting for the top job, closely followed by their counterparts in Brazil (80%) and China (76%).

And turbo-charged ambition is paying off. In Brazil, 14% of the CEOs of large companies are female; in India, the figure is 11%. Meanwhile, the number of women who head up Fortune 500 corporations in the United States and FTSE 100 firms in the United Kingdom is stuck at less than 5%. What’s behind these startling numbers? Our study — which is based on rich, new data — describes opportunities and obstacles, which are surprisingly different from those in the West. ...

Decline in Neonatal Deaths

Economist: Good news, sort of

The number of deaths among babies is declining

THE first 28 days of life are among the most vulnerable in a human’s existence. In 2009 3.3m children died before they were four weeks old, down from 4.6m in 1990, according to a new paper from the World Health Organisation. The burden is not spread evenly. Five populous countries—India, Nigeria, Pakistan, China and the Congo—now account for more than half of all neonatal deaths. And though mortality rates for newborns are falling, progress is much faster in some regions than others. If current trends continue, neonatal mortality rates in Africa will not reach the rich world's levels until 2166.

Comparing Indian states and territories with countries

Economist: An Indian summary

Which countries match the GDP and population of India's states and territories?

How big is Uttar Pradesh, India’s most populous state? One way of answering the question is to take its total area: 95,000 square miles (246,000 sq km). Another way is to think of it as a country. If Uttar Pradesh were to declare independence, it would be the world’s fifth most populous country (as the map below shows, it has about the same number of residents as Brazil). Yet its economy would only be the size of Qatar, a tiny oil-rich state of fewer than 2m people. That makes it poor on a per person basis. Despite India’s two decades of rapid growth, Uttar Pradesh’s GDP per head is close to that of Kenya. The map below presents country equivalents for India’s states and territories in terms of GDP, GDP per person (in PPP terms) and population. Please play around with it and tell us what you think.

This is an interesting look into income disparities across the second largest nation in the world.

Fix aid delivery to India's poor

Christian Science Monitor: Fix aid delivery to India's poor

This article summarizes a new World Bank study highlighting the challenges posed by corrupt officials and middle men in targeting poverty reduction aid to the poor in India. To quote the NY Times,

"The World Bank on Wednesday recommended a radical overhaul of India’s social programs. “Marginal changes alone may not deliver the kind of safety net which a changing India needs for its poor and for its economy,” Mr. Blomquist wrote.
One of the primary problems, the World Bank said, was “leakages” — an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households."

The good news is 59% is lower than what many U.S charities grab in administrative fees!

So, how can the donor and the Indian poor "cut out the middlemen" and transact their transfer transaction? If the poor had direct deposits, then the donor could directly wire in the resources. I realize that the poor do not have bank accounts. An alternative would be if the Donor could "helicopter drop" the equivalent of "debit cards" that would have a fixed amount of $ on them and could be used for food purchases at any time. In both cases, improvements in technology allow the donor to connect with the poor without having to trust some government or middle man to distribute the food.

There could also be more randomized field audits to test for corruption in India and those who are caught could be punished in a high profile setting. Such "shock and awe" examples might deter some corruption and thus help the poor. ...

Multinational manufacturers: Moving back to America

Economist: Multinational manufacturers: Moving back to America

The dwindling allure of building factories offshore.

“WHEN clients are considering opening another manufacturing plant in China, I’ve started to urge them to consider alternative locations,” says Hal Sirkin of the Boston Consulting Group (BCG). “Have they thought about Vietnam, say? Or maybe [they could] even try Made in USA?” When clients are American firms looking to build factories to serve American customers, Mr Sirkin is increasingly likely to suggest they stay at home, not for patriotic reasons but because the economics of globalisation are changing fast.

Labour arbitrage—taking advantage of lower wages abroad, especially in poor countries—has never been the only force pushing multinationals to locate offshore, but it has certainly played a big part. Now, however, as emerging economies boom, wages there are rising. Pay for factory workers in China, for example, soared by 69% between 2005 and 2010. So the gains from labour arbitrage are starting to shrink, in some cases to the point of irrelevance, according to a new study by BCG.

“Sometime around 2015, manufacturers will be indifferent between locating in America or China for production for consumption in America,” says Mr Sirkin. That calculation assumes that wage growth will continue at around 17% a year in China but remain relatively slow in America, and that productivity growth will continue on current trends in both countries. It also assumes a modest appreciation of the yuan against the dollar. ...

... Many multinationals will continue to build most of their new factories in emerging markets, not to export stuff back home but because that is where demand is growing fastest. And companies from other rich countries will probably continue to enjoy the opportunity for labour arbitrage for longer than American ones, says Mr Sirkin. Their labour costs are higher than America’s and will remain so unless the euro falls sharply against the yuan. ...

More Than 1 Billion People Are Hungry in the World

Foreign Policy: More Than 1 Billion People Are Hungry in the World

An absolutely brilliant article. I've excerpted it at length because it is such a long article, but I highly recommend reading it. It highlights well the challenge of applying simplistic models (whether "more aid" or "more markets") of economic development.

But what if the experts are wrong?

… But what if the poor are not, in general, eating too little food? What if, instead, they are eating the wrong kinds of food, depriving them of nutrients needed to be successful, healthy adults? What if the poor aren't starving, but choosing to spend their money on other priorities? Development experts and policymakers would have to completely reimagine the way they think about hunger. And governments and aid agencies would need to stop pouring money into failed programs and focus instead on finding new ways to truly improve the lives of the world's poorest.

Consider India, one of the great puzzles in this age of food crises. The standard media story about the country, at least when it comes to food, is about the rapid rise of obesity and diabetes as the urban upper-middle class gets richer. Yet the real story of nutrition in India over the last quarter-century, as Princeton professor Angus Deaton and Jean Drèze, a professor at Allahabad University and a special advisor to the Indian government, have shown, is not that Indians are becoming fatter: It is that they are in fact eating less and less. Despite the country's rapid economic growth, per capita calorie consumption in India has declined; moreover, the consumption of all other nutrients except fat also appears to have gone down among all groups, even the poorest. Today, more than three-quarters of the population live in households whose per capita calorie consumption is less than 2,100 calories in urban areas and 2,400 in rural areas -- numbers that are often cited as "minimum requirements" in India for those engaged in manual labor. Richer people still eat more than poorer people. But at all levels of income, the share of the budget devoted to food has declined and people consume fewer calories.

What is going on? The change is not driven by declining incomes; by all accounts, Indians are making more money than ever before. Nor is it because of rising food prices -- between the early 1980s and 2005, food prices declined relative to the prices of other things, both in rural and urban India. Although food prices have increased again since 2005, Indians began eating less precisely when the price of food was going down.

So the poor, even those whom the FAO would classify as hungry on the basis of what they eat, do not seem to want to eat much more even when they can. Indeed, they seem to be eating less. What could explain this? Well, to start, let's assume that the poor know what they are doing. After all, they are the ones who eat and work. If they could be tremendously more productive and earn much more by eating more, then they probably would. So could it be that eating more doesn't actually make us particularly more productive, and as a result, there is no nutrition-based poverty trap?

One reason the poverty trap might not exist is that most people have enough to eat. We live in a world today that is theoretically capable of feeding every person on the planet. In 1996, the FAO estimated that world food production was enough to provide at least 2,700 calories per person per day. Starvation still exists, but only as a result of the way food gets shared among us. There is no absolute scarcity. Using price data from the Philippines, we calculated the cost of the cheapest diet sufficient to give 2,400 calories. It would cost only about 21 cents a day, very affordable even for the very poor (the worldwide poverty line is set at roughly a dollar per day). The catch is, it would involve eating only bananas and eggs, something no one would like to do day in, day out. But so long as people are prepared to eat bananas and eggs when they need to, we should find very few people stuck in poverty because they do not get enough to eat. Indian surveys bear this out: The percentage of people who say they do not have enough food has dropped dramatically over time, from 17 percent in 1983 to 2 percent in 2004. So, perhaps people eat less because they are less hungry.

And perhaps they are really less hungry, despite eating fewer calories. It could be that because of improvements in water and sanitation, they are leaking fewer calories in bouts of diarrhea and other ailments. Or maybe they are less hungry because of the decline of heavy physical work. With the availability of drinking water in villages, women do not need to carry heavy loads for long distances; improvements in transportation have reduced the need to travel on foot; in even the poorest villages, flour is now milled using a motorized mill, instead of women grinding it by hand. Using the average calorie requirements calculated by the Indian Council of Medical Research, Deaton and Drèze note that the decline in calorie consumption over the last quarter-century could be entirely explained by a modest decrease in the number of people engaged in heavy physical work.

Beyond India, one hidden assumption in our description of the poverty trap is that the poor eat as much as they can. …

… In Udaipur, India, for example, we find that the typical poor household could spend up to 30 percent more on food, if it completely cut expenditures on alcohol, tobacco, and festivals. The poor seem to have many choices, and they don't choose to spend as much as they can on food. Equally remarkable is that even the money that people do spend on food is not spent to maximize the intake of calories or micronutrients. Studies have shown that when very poor people get a chance to spend a little bit more on food, they don't put everything into getting more calories. Instead, they buy better-tasting, more expensive calories. …

… All told, many poor people might eat fewer calories than we -- or the FAO -- think is appropriate. But this does not seem to be because they have no other choice; rather, they are not hungry enough to seize every opportunity to eat more. So perhaps there aren't a billion "hungry" people in the world after all.

… Should we let it rest there, then? Can we assume that the poor, though they may be eating little, do eat as much as they need to?

That also does not seem plausible. While Indians may prefer to buy things other than food as they get richer, they and their children are certainly not well nourished by any objective standard. Anemia is rampant; body-mass indices are some of the lowest in the world; almost half of children under 5 are much too short for their age, and one-fifth are so skinny that they are considered to be "wasted."

And this is not without consequences. …

… The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim. We shouldn't forget, too, that other things may be more important in their lives than food. Poor people in the developing world spend large amounts on weddings, dowries, and christenings. Part of the reason is probably that they don't want to lose face, when the social custom is to spend a lot on those occasions. In South Africa, poor families often spend so lavishly on funerals that they skimp on food for months afterward.

And don't underestimate the power of factors like boredom. Life can be quite dull in a village. There is no movie theater, no concert hall. And not a lot of work, either. In rural Morocco, Oucha Mbarbk and his two neighbors told us they had worked about 70 days in agriculture and about 30 days in construction that year. Otherwise, they took care of their cattle and waited for jobs to materialize. All three men lived in small houses without water or sanitation. They struggled to find enough money to give their children a good education. But they each had a television, a parabolic antenna, a DVD player, and a cell phone. …

… We often see the world of the poor as a land of missed opportunities and wonder why they don't invest in what would really make their lives better. But the poor may well be more skeptical about supposed opportunities and the possibility of any radical change in their lives. They often behave as if they think that any change that is significant enough to be worth sacrificing for will simply take too long. This could explain why they focus on the here and now, on living their lives as pleasantly as possible and celebrating when occasion demands it. …

International Public Opinion on the Free Market

From the Economist

Where have India's baby girls gone?

Economist: India's sex ratio

NEW data from the 2011 Indian census show that there are now 914 girls aged 0-6 years old for every 1,000 boys of the same age, or 75.8m girls and 82.9m boys. A cultural preference for sons and the increasing availability of prenatal screening to determine a baby's sex have helped contribute to a worsening in the ratio (from 927 in the previous census in 2001), which has been deteriorating rapidly even as the ratio for the population as a whole has improved. ...

The state of the world's forests

The Economist: The state of the world's forests

THE Food & Agriculture Organisation, a UN body, estimates that the world's forests covered 4.03 billion hectares in 2010. Although the world as a whole continues to lose forests, the annual rate of deforestation in the past decade has fallen to 5.2m hectares, compared with 8.3m hectares a year between 1990 and 2000. Some large countries, including China and India, increased their forest cover between 2000 and 2010. China’s increased at an average annual rate of 1.6%, while India’s went up by 0.5% a year. Norway and Sweden have also added forests over the past decade. With forests covering nearly 70% of its area in 2010, Sweden is one of the world’s most sylvan countries. Nigeria, by contrast, has been chopping its forests down at a rate of 3.7% a year. By last year only one-tenth of its land remained forested.

The Haves and the Have-Nots

New York Times Economix: The Haves and the Have-Nots

This is a fascinating chart, but it is like one of those pictures with all the dots. You look at it long enough, and a dolphin appears.

Across the horizontal axis are ventiles (and no, they aren't related to Gentiles.) Each ventile is 1/20, or 5%, of the population, ranked from least to most income. The verticle axis is the percentile of the world income distribution (All income is in inflation-adjusted international dollars.)

So, the poorest ventile in the USA still receives more than 68% of the rest of the world. Brazil has a wide income disparity, with the bottom ventile at the bottom of the world distribution and the top ventile nearly on a par with the USA's top ventile. India's top ventile doesn't even make it the level of the lowest ventile in the USA.

Among other things, we can see how much greater the income inequality in emerging giants is, but their lines will likely mirror the USA line in the coming years.

 

Identifying a billion Indians

Economist: Identifying a billion Indians

Reliable identity numbers could create many opportunities for business.

IN A small village north-west of Bangalore, peasants queue for identities. Each man fills in a form with his name and rough date of birth, or gets someone who can read to do it for him. He places his fingertips on one scanner and stares at another. A photograph of his face is snapped. These images are uploaded to a computer. Within a few weeks he will have an identity number.

The Indian government is trying to give all 1.2 billion Indians something like an American Social Security number, but more secure. Because each “universal identity number” (UID) will be tied to biometric markers, it will prove beyond reasonable doubt that anyone who has one is who he says he is. In a country where hundreds of millions of people lack documents, addresses or even surnames, this will be rather useful. It should also boost a wide range of businesses.

So far the process has gone smoothly. More than 1m people have been enrolled since October, and the pace is accelerating. It needs to: 1m is less than 0.1% of the population. The scheme presents difficulties both for the people in charge, many of whom were recruited from software firms, and for the private contractors who are doing much of the work. How do you ensure that the data are accurate? How do you build a robust database containing biometric information about more people than any other? How do you deal with peasants whose fingerprints are unreadable after years of manual work? (Adding moisture to their fingertips helps.)

When an individual is enrolled, his biometric data must be compared with everyone else’s to ensure there is no duplication. Sometimes the workers who show people how to place their fingers on the scanner accidentally scan their own fingerprints. As enrolments hit a peak of about 1m a day, the system will need to carry out a staggering 14 billion matches per second.

This mighty task has been awarded to private contractors in an unusual way. There are three vendors: Accenture and L-1 Identity Solutions of America, plus Morpho of France. The firm that does the fastest, most accurate job gets 50% of the work; the others get 30% or 20%. This allocation is frequently reassessed, so if the second-best firm starts doing better, it picks up some work from the leading firm. This keeps everyone sharp.

One database, many possibilities

The government’s aim is to improve services and reduce corruption. A shocking two-thirds of the subsidised grain that the government allocates to the poor is either stolen or adulterated. When middlemen say they have delivered so many bags of rice to so many thousands of peasants, there is no way to tell if they are lying. But if each peasant has to scan her irises every time she picks up her ration, it will be harder to scam the system. Similar controls could be used to curb voter fraud.

A reliable way of identifying people would also smooth financial transactions. ...

Global Poverty Falls Below One Billion

The Brookings Institution: Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015

... How many poor people are there in the world and how many Are there likely to be in 2015?

To calculate the number of people in the world living in extreme poverty, we update the World Bank’s official $1.25 a day poverty estimates for 119 countries, which together account for 95 percent of the population of the developing world. To do this, we take the most recent household survey data for each country, and generate poverty estimates for the years 2005 to 2015 using historical and forecast estimates of per capita consumption growth, making the simplifying assumption that the income distribution in each country remains unchanged.

Global poverty figures are then calculated by adding together the number of poor from each country. (See the Appendix for a full account of our methodology.) Our results indicate that the world has seen a dramatic decrease in global poverty over the past six years, and that this trend is set to continue in the four years ahead. We estimate that between 2005 and 2010, the total number of poor people around the world fell by nearly half a billion people, from over 1.3 billion in 2005 to under 900 million in 2010. Looking ahead to 2015, extreme poverty could fall to under 600 million people—less than half the number regularly cited in describing the number of poor people in the world today. Poverty reduction of this magnitude is unparalleled in history: never before have so many people been lifted out of poverty over such a brief period of time.

When measured as a share of population, progress remains impressive, but is more in line with past trends. In the early 1980s, more than half of all people in developing countries lived in extreme poverty. By 2005, this was down to a quarter. According to our estimates, as of 2010 less than 16 percent remained in poverty, and fewer than 10 percent will likely be poor by 2015.

The first Millennium Development Goal defines a target (MDG1a) of halving the rate of global poverty by 2015 from its 1990 level. In an official report prepared for the U.N. MDG conference this past September, the World Bank stated that we are 80 percent of the way toward this target and are on track to meet it by 2015, though the Bank warned that “the economic crisis adds new risks to prospects for reaching the goal.”3

Our assessment is considerably more upbeat. We believe that the MDG1a target has already been met—approximately three years ago.4 Furthermore, by 2015, we will not only have halved the global poverty rate, as per MDG1a, but will have halved it again.

Over the past half century, the developing world, including many of the world’s poorest countries, have seen dramatic improvements in virtually all non-income measures of well-being: since 1960, global infant mortality has dropped by more than 50 percent, for example, and the share of the world’s children enrolled in primary school increased from less than half to nearly 90 percent between 1950 and today.5 Likewise there have been impressive gains in gender equality, access to justice and civil and political rights. Yet, through most of this period, the incomes of rich and poor countries diverged, and income poverty has proven a more persistent challenge than other measures of wellbeing.6 The rapid decline in global poverty now underway—and the early achievement of the MDG1a target—marks a break from these trends, and could come to be seen as a turning point in the history of global development. ...

Here are some interesting charts and graphs:

  

I particularly liked this graph:

Nigeria will soon have more poor people than India.

U.S. Schools Are Still Ahead—Way Ahead

Bloomberg: U.S. Schools Are Still Ahead—Way Ahead

...Meanwhile, the perception is that American children live a relatively easy life and coast their way through school. They don't do any more homework than they have to; they spend an extraordinary amount of time playing games, socializing on the Internet, text-messaging each other; they work part time to pay for their schooling and social habits. And they party. A lot. These stereotypes worry many Americans. They believe the American education system puts the country at a great disadvantage. But this is far from true.

The independence and social skills American children develop give them a huge advantage when they join the workforce. They learn to experiment, challenge norms, and take risks. They can think for themselves, and they can innovate. This is why America remains the world leader in innovation; why Chinese and Indians invest their life savings to send their children to expensive U.S. schools when they can. India and China are changing, and as the next generations of students become like American ones, they too are beginning to innovate. So far, their education systems have held them back.

My research team at Duke looked in depth at the engineering education of China and India. We documented that these countries now graduate four to seven times as many engineers as does the U.S.The quality of these engineers, however, is so poor that most are not fit to work as engineers; their system of rote learning handicaps those who do get jobs, so it takes two to three years for them to achieve the same productivity as fresh American graduates.As a result, significant proportions of China's engineering graduates end up working on factory floors and Indian industry has to spend large sums of money retraining its employees. After four or five years in the workforce, Indians do become innovative and produce, overall, at the same quality as Americans, but they lose a valuable two to three years in their retraining. ...

The lion kings?

Economist: The lion kings?

Africa is now one of the world’s fastest-growing regions.

MUCH has been written about the rise of the BRICs (Brazil, Russia, India and China) and the shift in economic power eastward as Asia outruns the rest of the world. But the surprising success story of the past decade lies elsewhere. An analysis by The Economist finds that over the ten years to 2010, no fewer than six of the world’s ten fastest-growing economies were in sub-Saharan Africa (see table).

The only BRIC country to make the top ten was China, in second place behind Angola. The other five African sprinters were Nigeria, Ethiopia, Chad, Mozambique and Rwanda, all with annual growth rates of around 8% or more. During the two decades to 2000 only one African economy (Uganda) made the top ten, against nine from Asia. On IMF forecasts Africa will grab seven of the top ten places over the next five years (our ranking excludes countries with a population of less than 10m as well as Iraq and Afghanistan, which could both rebound strongly in the years ahead). ...

Never enough

The Economist: Never enough

Emerging economies continue to drive energy demand

 

New method yields more rice with less water: Oxfam

Reuters: New method yields more rice with less water: Oxfam

(Reuters) - Rice farmers could boost their yields by 50 percent with a new method that uses less water Oxfam America said on Wednesday as climate change and drought threaten the staple crop.

Growing rice -- considered the major calorie source for about half the world's population -- is water-intensive, accounting for as much as one-third of the planet's annual freshwater use, said Oxfam, a development group.

Rice farmers normally rely on flooding their fields to keep seeds covered in water throughout the growing season.

But the new method, known as the System of Rice Intensification, or SRI, involves planting seedlings farther apart, keeping fields moist instead of flooding them, transplanting seedlings to fields earlier and weeding manually, Oxfam said in a report.

Farmers using SRI in parts of Africa, Southeast Asia and India have been able to produce as much as 50 percent more rice with less water, and often with less labor, said the report, written with U.S.-based nonprofit Africare and the Worldwide Fund for Nature. ...

India’s Smaller Cities Show Off Growing Wealth

New York Times: India’s Smaller Cities Show Off Growing Wealth

... Economists and government officials have long acclaimed India’s so-called second-tier cities as new founts of prosperity and incubators of India’s growing middle class. Cities like Pune, a manufacturing and information technology hub a few hours outside of Mumbai, and Ahmadabad, the biggest city in India’s wealthiest state, Gujarat, have shown that smaller cities can attract big business.

But now even smaller cities in some of India’s most prosperous states are booming, too. Coimbatore, a city of about one million in Tamil Nadu near India’s southern tip, has expanded from textile manufacturing to software development and making auto parts.

Aurangabad, with 1.2 million people and a stable base of automotive assembly plants, factories and agribusiness, has long attracted the attention of companies selling small appliances, cellphones and economy cars. But as the city’s fortunes have grown, and cultural mores that once made ostentatious spending unseemly have shifted, companies selling luxury goods are also seeking out these newly flush consumers. A sprawling new mall just opened here, as well as new multiplex theaters and luxury hotels.

“The story of Aurangabad is the story of India,” said Debashish Mitra, head of sales and marketing for Mercedes-Benz in India. “There are many cities like Aurangabad, where Indians have money but were not indulging in luxury; they were always in a saving mode. But now that is changing. People want to spend, and feel they deserve luxury.” ...

The Mystery of Economic Growth

New York Times: The Mystery of Economic Growth

...For all its temptations, however, the search for a policy toolkit toward development is fraught with pitfalls. Over the last 60 years or so, the international development community has come up with model after model, theory after theory, in search of just such a toolkit.

It has, at various times, promoted the benefits of huge, often conditional, inputs of foreign aid, the rigors of shock therapy, the virtues of free trade and the promise of the Washington Consensus (a set of policies prescribed and often imposed by agencies like the World Bank, the International Monetary Fund and the U.S. Treasury).

Yet for all the efforts to come up with a general theory of development, the truth is that economic growth remains something of a mystery. This is the conclusion of a recent anthology, “What Works in Development?”, published by the Brookings Institution. The essays lead to the conclusion that there is no clear way to ease poverty, and — as the editors, William Easterly and Jessica Cohen, state in their introduction — “no consensus on ‘what works’ for growth and development.”

Mr. Easterly, a former World Bank economist, has elsewhere shown that there is little correspondence between a nation’s economic growth and the extent to which it follows international development prescriptions. Analyzing data for 1980 to 2002, he found that countries that grew the fastest received considerably less foreign aid and spent less time under I.M.F. tutelage than those that grew the slowest. This doesn’t mean that following the orthodoxy harms development, but it does suggest that rapid growth is possible without international aid or advice.

Part of the problem, it turns out, may be the very attempt to follow a model. Progress — economic or otherwise — is a notoriously subjective phenomenon. It is context sensitive, and highly dependent on local conditions. It is, in particular, resistant to the uniformity implicit in even the most sophisticated models. ...

... Facts speak for themselves. It has become increasingly evident that many of the most successful growth stories have resulted not from slavishly following an external set of policy directives, but from pursuing u nconventional — and locally attuned — solutions.

The rise of Southeast Asia (and more recently China), for example, represented a repudiation of textbook views about the proper role of the government and of the relationship between markets and the state. ...

And I loved this part:

... Ultimately, it is this sensitivity, this ability to accommodate context and local detail, that works best in development. The type of grinding, sweaty work it implies — time in the field, in villages and on farms, learning about cultures and social structures — is certainly less glamorous than designing overarching theories to rid the world of poverty.

But poverty is an unglamorous business. It is only fitting that the most effective way to address it would be through small, low-key and often backbreaking interventions.

Amen.

 

The New World Order

Newsweek: The New World Order

Tribal ties—race, ethnicity, and religion—are becoming more important than borders. 

... Although tribal connections are as old as history, political upheaval and globalization are magnifying their impact. The world’s new contours began to emerge with the end of the Cold War. Maps designating separate blocs aligned to the United States or the Soviet Union were suddenly irrelevant. More recently, the notion of a united Third World has been supplanted by the rise of China and India. And newer concepts like the BRIC nations (Brazil, Russia, India, and China) are undermined by the fact that these countries have vastly different histories and cultures.

The borders of this new world will remain protean, subject to change over time. Some places do not fit easily into wide categories—take that peculiar place called France—so we’ve defined them as Stand-Alones. And there are the successors to the great city-states of the Renaissance—places like London and Singapore. What unites them all are ties defined by affinity, not geography. ...

India's surprising economic miracle

Economist: India's surprising economic miracle

The country’s state may be weak, but its private companies are strong.

... Or does it? Despite the headlines, India is doing rather well. Its economy is expected to expand by 8.5% this year. It has a long way to go before it is as rich as China—the Chinese economy is four times bigger—but its growth rate could overtake China’s by 2013, if not before (see article). Some economists think India will grow faster than any other large country over the next 25 years. Rapid growth in a country of 1.2 billion people is exciting, to put it mildly.

People power

There are two reasons why India will soon start to outpace China. One is demography. China’s workforce will shortly start ageing; in a few years’ time, it will start shrinking. That’s because of its one-child policy—an oppressive measure that no Indian government would get away with. Indira Gandhi tried something similar in the 1970s, when she called a state of emergency and introduced a forced-sterilisation programme. There was an uproar of protest. Democracy was restored and coercive population policies were abandoned. India is now blessed with a young and growing workforce. Its dependency ratio—the proportion of children and old people to working-age adults—is one of the best in the world and will remain so for a generation. India’s economy will benefit from this “demographic dividend”, which has powered many of Asia’s economic miracles.

The second reason for optimism is India’s much-derided democracy. The notion that democracy retards development in poor countries has gained currency in recent years. Certainly, it has its disadvantages. Elected governments bow to the demands of selfish factions and interest groups. Even the most urgent decisions are endlessly debated and delayed.

China does not have this problem. When its technocrats decide to dam a river, build a road or move a village, the dam goes up, the road goes down and the village disappears. The displaced villagers may be compensated, but they are not allowed to stand in the way of progress. China’s leaders make rational decisions that balance the needs of all citizens over the long term. This has led to rapid, sustained growth that has lifted hundreds of millions of people out of poverty. Small wonder that authoritarians everywhere cite China as their best excuse not to allow democracy just yet.

No doubt a strong central government would have given India a less chaotic Commonwealth games, but there is more to life than badminton and rhythmic gymnastics. India’s state may be weak, but its private companies are strong. Indian capitalism is driven by millions of entrepreneurs all furiously doing their own thing. Since the early 1990s, when India dismantled the “licence raj” and opened up to foreign trade, Indian business has boomed. The country now boasts legions of thriving small businesses and a fair number of world-class ones whose English-speaking bosses network confidently with the global elite. They are less dependent on state patronage than Chinese firms, and often more innovative: they have pioneered the $2,000 car, the ultra-cheap heart operation and some novel ways to make management more responsive to customers. Ideas flow easily around India, since it lacks China’s culture of secrecy and censorship. That, plus China’s rampant piracy, is why knowledge-based industries such as software love India but shun the Middle Kingdom.

India’s individualistic brand of capitalism may also be more robust than China’s state-directed sort. ...

... Given the choice between doing business in China or India, most foreign investors would probably pick China. The market is bigger, the government easier to deal with, and if your supply chain for manufactured goods does not pass through China your shareholders will demand to know why. But as the global economy becomes more knowledge-intensive, India’s advantage will grow. That is something to ponder while stuck in the Delhi traffic.

Global targets, local ingenuity

The Economist: Global targets, local ingenuity

In ten years, the living conditions of the poor have been improving—but not necessarily because of the UN’s goals. ...

... The United Nations reckons that in 2008 over a quarter of children in the developing world were underweight, a sixth of people lacked access to safe drinking water, and just under half used insanitary toilets or none at all. But while these figures are disquieting, a smaller fraction of people were affected than was the case two decades ago. So such data also indicate the world’s progress towards meeting the Millennium Development Goals (MDGs), a set of targets adopted by world leaders at the UN ten years ago. ...

 ... But few go as far as Ban Ki-Moon, the UN secretary-general, who recently called the goals “a milestone in international co-operation” that had helped “hundreds of millions of people around the world.” Talking up the MDGs is, of course, part of Mr Ban’s job. And there has indeed been progress on many fronts (see table 2). But it is hard to assign much credit to the exercise itself.

Take the goal of halving the poverty rate from its 1990 level by 2015. The World Bank reckons that in 1990 46% of the developing world’s population fell below the internationally accepted poverty line of $1.25 a day at purchasing-power parity. By 2005 the rate had fallen to 27% and, despite a slowdown in progress in the past couple of years, it is now probably lower still. A global halving by 2015 seems well within reach. Yet this “victory” is mainly due to a drop in China’s poverty rate from 60% in 1990 to 16% in 2005. Because China and India accounted for over 62% of the planet’s poor in 1990, changes to the world’s poverty rate depend heavily on their performance. A global goal is therefore a poor way to give the governments of smaller countries an incentive to tackle poverty....

... Too often, the goals are reduced to working out how much money is needed to meet a particular target and then berating governments for not spending enough. Yet the countries that have made most progress in cutting poverty have largely done so not by spending public money, but by encouraging faster economic growth. China is the most obvious example. The best performers in Africa, too, are those that have managed to speed up growth. As Shanta Devarajan, the World Bank’s chief economist for Africa, points out, growth does not just make more money available for social spending. It also increases the demand for such things as schooling, and thus helps meet other development goals. Yet the goals, as drawn up, made no mention of economic growth. ...

India Tries Using Cash Bonuses to Slow Birthrates

New York Times: India Tries Using Cash Bonuses to Slow Birthrates

SATARA, India — Sunita Laxman Jadhav is a door-to-door saleswoman who sells waiting. She sweeps along muddy village lanes in her nurse’s white sari, calling on newly married couples with an unblushing proposition: Wait two years before getting pregnant, and the government will thank you.

It also will pay you.

“I want to tell you about our honeymoon package,” began Ms. Jadhav, an auxiliary nurse, during a recent house call on a new bride in this farming region in the state of Maharashtra. Ms. Jadhav explained that the district government would pay 5,000 rupees, or about $106, if the couple waited to have children. Waiting, she promised, would allow them time to finish their schooling or to save money.

Waiting also would allow India more time to curb a rapidly growing population that threatens to turn its demography from a prized asset into a crippling burden. With almost 1.2 billion people, India is disproportionately young; roughly half the population is younger than 25. This “demographic dividend” is one reason some economists predict that India could surpass China in economic growth rates within five years. India will have a young, vast work force while a rapidly aging China will face the burden of supporting an older population.

But if youth is India’s advantage, the sheer size of its population poses looming pressures on resources and presents an enormous challenge for an already inefficient government to expand schooling and other services. In coming decades, India is projected to surpass China as the world’s most populous nation, and the critical uncertainty is just how populous it will be. Estimates range from 1.5 billion to 1.9 billion people, and Indian leaders recognize that that must be avoided....

Contest of the Century: China and India

The Economist: Contest of the Century: China and India

As China and India rise in tandem, their relationship will shape world politics. Shame they do not get on better.

A HUNDRED years ago it was perhaps already possible to discern the rising powers whose interaction and competition would shape the 20th century. The sun that shone on the British empire had passed midday. Vigorous new forces were flexing their muscles on the global stage, notably America, Japan and Germany. Their emergence brought undreamed-of prosperity; but also carnage on a scale hitherto unimaginable.

Now digest the main historical event of this week: China has officially become the world’s second-biggest economy, overtaking Japan. In the West this has prompted concerns about China overtaking the United States sooner than previously thought. But stand back a little farther, apply a more Asian perspective, and China’s longer-term contest is with that other recovering economic behemoth: India. These two Asian giants, which until 1800 used to make up half the world economy, are not, like Japan and Germany, mere nation states. In terms of size and population, each is a continent—and for all the glittering growth rates, a poor one....

... Globally, the rules-based system that the West set up in the second half of the 20th century brought huge benefits to emerging powers. But it reflects an out-of-date world order, not the current global balance, let alone a future one. China and India should be playing a bigger role in shaping the rules that will govern the 21st century. That requires concessions from the West. But it also requires commitment to a rules-based international order from China and India. A serious effort to solve their own disagreements is a good place to start.

Why is promising a right to food more politically appealing than delivering that food?

Aid Watch: Why is promising a right to food more politically appealing than delivering that food?

In India, the system that delivers subsidized food and fuel to the nation’s poor is badly broken. Many people who are supposed to receive the subsidized fuel and bags of grain do not, and “studies show that 70 percent of a roughly $12 billion budget is wasted, stolen, or absorbed by bureaucratic and transportation costs.”

This is according to a recent NYT article by Jim Yardley, which frames the current debate about what should be done as a struggle within the ruling Indian National Congress Party between Sonia Gandhi and her “left-leaning social allies” on one side, and “many economists and market advocates” on the other.

Sonia Gandhi wants to include a “right to food” in the Indian constitution, while expanding the reach of the existing distribution system to cover everyone, and increasing the level of benefits it provides. (For the moment, the Indian constitution directs the State to consider “raising the level of nutrition and the standard of living of its people” as “among its primary duties” but does not spell out a specific “right to food.”)

The economists and market advocates, on the other hand, are fed up and want to experiment with vouchers, food stamps, or cash instead of the notoriously leaky bags of grain.

We’ve hosted many heated discussions on this blog about the “rights-based approach” to development (see the end of the post for a list). I wonder if we can avoid rehashing these same debates and instead ask WHY it appears to be so much more popular for politicians to promise a “right to food” than to devise a system that might actually deliver that food to the starving and the malnourished. [Emphasis mine]

It’s true, we don’t know for sure that vouchers or food stamps would reduce the corruption in the system and make sure that the benefits get to more people who need them. So why not run some pilots and test several methods?

But it’s pretty certain what the people of India will get if their politicians vote to expand a broken system: More of a broken system, more injustice, and less food reaching the poor.

 

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Aid Watch posts on the rights-based approach to development: ...

$35 computer introduced in India

Christian Science Monitor: $35 computer introduced in India

$35 computer is targeted at school-age children and older in the rapidly developing nation.

It looks like an iPad, only it's 1/14th the cost: India has unveiled the prototype of a $35 basic touchscreen tablet aimed at students, which it hopes to bring into production by 2011.

If the government can find a manufacturer, the Linux operating system-based computer would be the latest in a string of "world's cheapest" innovations to hit the market out of India, which is home to the 100,000 rupee ($2,127) compact Nano car, the 749 rupees ($16) water purifier and the $2,000 open-heart surgery.

The tablet can be used for functions like word processing, web browsing and video-conferencing. It has a solar power option too — important for India's energy-starved hinterlands — though that add-on costs extra. ...

For want of a drink

Economist: For want of a drink

Finite, vital, much wanted, little understood, water looks unmanageable. But it needn’t be, argues John Grimond (interviewed here)

WHEN the word water appears in print these days, crisis is rarely far behind. Water, it is said, is the new oil: a resource long squandered, now growing expensive and soon to be overwhelmed by insatiable demand. Aquifers are falling, glaciers vanishing, reservoirs drying up and rivers no longer flowing to the sea. Climate change threatens to make the problems worse. Everyone must use less water if famine, pestilence and mass migration are not to sweep the globe. As it is, wars are about to break out between countries squabbling over dams and rivers. If the apocalypse is still a little way off, it is only because the four horsemen and their steeds have stopped to search for something to drink.

The language is often overblown, and the remedies sometimes ill conceived, but the basic message is not wrong. Water is indeed scarce in many places, and will grow scarcer. Bringing supply and demand into equilibrium will be painful, and political disputes may increase in number and intensify in their capacity to cause trouble. To carry on with present practices would indeed be to invite disaster.

Why? The difficulties start with the sheer number of people using the stuff. When, 60 years ago, the world’s population was about 2.5 billion, worries about water supply affected relatively few people. Both drought and hunger existed, as they have throughout history, but most people could be fed without irrigated farming. Then the green revolution, in an inspired combination of new crop breeds, fertilisers and water, made possible a huge rise in the population. The number of people on Earth rose to 6 billion in 2000, nearly 7 billion today, and is heading for 9 billion in 2050. The area under irrigation has doubled and the amount of water drawn for farming has tripled. The proportion of people living in countries chronically short of water, which stood at 8% (500m) at the turn of the 21st century, is set to rise to 45% (4 billion) by 2050. And already 1 billion people go to bed hungry each night, partly for lack of water to grow food.

People in temperate climates where the rain falls moderately all the year round may not realise how much water is needed for farming. In Britain, for example, farming takes only 3% of all water withdrawals. In the United States, by contrast, 41% goes for agriculture, almost all of it for irrigation. In China farming takes nearly 70%, and in India nearer 90%. For the world as a whole, agriculture accounts for almost 70%.

Farmers’ increasing demand for water is caused not only by the growing number of mouths to be fed but also by people’s desire for better-tasting, more interesting food. Unfortunately, it takes nearly twice as much water to grow a kilo of peanuts as a kilo of soyabeans, nearly four times as much to produce a kilo of beef as a kilo of chicken, and nearly five times as much to produce a glass of orange juice as a cup of tea. With 2 billion people around the world about to enter the middle class, the agricultural demands on water would increase even if the population stood still.

Industry, too, needs water. It takes about 22% of the world’s withdrawals. Domestic activities take the other 8%. Together, the demands of these two categories quadrupled in the second half of the 20th century, growing twice as fast as those of farming, and forecasters see nothing but further increases in demand on all fronts.

That’s your lot

Meeting that demand is a different task from meeting the demand for almost any other commodity. One reason is that the supply of water is finite. The world will have no more of it in 2025, or 2050, or when the cows come home, than it has today, or when it lapped at the sides of Noah’s ark. ...

... Many of these conceptual difficulties arise from other unusual aspects of water. It is a commodity whose value varies according to locality, purpose and circumstance. Take locality first. Water is not evenly distributed—just nine countries account for 60% of all available fresh supplies—and among them only Brazil, Canada, Colombia, Congo, Indonesia and Russia have an abundance. America is relatively well off, but China and India, with over a third of the world’s population between them, have less than 10% of its water. ...

... Scarce or plentiful, water is above all local. It is heavy—one cubic metre weighs a tonne—so expensive to move. If you are trying to manage it, you must first divide your area of concern into drainage basins. ...

... The 20m inhabitants of Mexico City and its surrounding area, for example, draw over 70% of their water from an aquifer that will run dry, at current extraction rates, within 200 years, maybe much sooner. Already the city is sinking as a result. In Bangkok, Buenos Aires and Jakarta, the aquifers are similarly overdrawn, polluted or contaminated by salt. Just as serious is the depletion of the aquifers on which farmers depend. In the Hai river basin in China, for example, deep-groundwater tables have dropped by up to 90 metres. ...

... Industrial use takes about 60% of water in rich countries and 10% in the rest. The difference in domestic use is much smaller, 11% and 8% respectively. Some of the variation is explained by capacious baths, power showers and flush lavatories in the rich world. All humans, however, need a basic minimum of two litres of water in food or drink each day, and for this there is no substitute. ...

John Grimond Interview

Maternal Deaths Decline Sharply Across the Globe

New York Times: Maternal Deaths Decline Sharply Across the Globe

For the first time in decades, researchers are reporting a significant drop worldwide in the number of women dying each year from pregnancy and childbirth, to about 342,900 in 2008 from 526,300 in 1980.

The findings, published in the medical journal The Lancet, challenge the prevailing view of maternal mortality as an intractable problem that has defied every effort to solve it.

“The overall message, for the first time in a generation, is one of persistent and welcome progress,” the journal’s editor, Dr. Richard Horton, wrote in a comment accompanying the article, published online on Monday.

The study cited a number of reasons for the improvement: lower pregnancy rates in some countries; higher income, which improves nutrition and access to health care; more education for women; and the increasing availability of “skilled attendants” — people with some medical training — to help women give birth. Improvements in large countries like India and China helped to drive down the overall death rates.

But some advocates for women’s health tried to pressure The Lancet into delaying publication of the new findings, fearing that good news would detract from the urgency of their cause, Dr. Horton said in a telephone interview.

“I think this is one of those instances when science and advocacy can conflict,” he said.

Dr. Horton said the advocates, whom he declined to name, wanted the new information held and released only after certain meetings about maternal and child health had already taken place. ...

Why Indian IT companies are outsourcing – to US

Christian Science Monitor: Why Indian IT companies are outsourcing – to US

Two decades after they began running US operations from Bangalore and other cities, Indian IT companies are hiring Americans to do work that was once outsourced. What gives?

On a top floor of an office building in Atlanta's posh and wooded Buckhead district, workers man a call center for a US healthcare company. Their computers' 'copy/paste' function and Internet browsers are disabled as they answer questions about plan benefits and handle personally sensitive data. Their manager watches from a glassy office.

Nearby, recent Georgia Tech and University of South Carolina graduates train in how to handle information-technology (IT) clients. Attitude is the most important part of working with customers, the trainer says. Hadn't they learned that from Donald Trump's "The Apprentice"?

These scenes are hardly out of the ordinary except for one thing: The managers and trainers are from India. So is the employer, outsourcing giant Wipro, which set up shop here in 2008. Just as Japanese automakers began manufacturing in the United States in the 1980s, Indian outsourcing companies are locating in the US to reap similar benefits. Wipro calls it "reverse outsourcing."

Some of the benefits are, surprisingly, economic.

"You can never compete [here] with an India cost model," says Suraj Prakash, vice president for global delivery organization at Atlanta Development Center (ADC), Wipro's American IT center. But as the company takes on more ambitious projects – working on a large software development project, for example – it spends more on travel to handle the intensive interaction with the client and sees higher costs from time delays in getting feedback and errors from not understanding the local business context. "You easily end up spending all of that money doing rework," Mr. Prakash says.

Other Indian outsourcing firms move in

That may be one reason why Wipro's two larger competitors in India are also locating in the US. Infosys is planning a subsidiary in Dallas that will hire locals and seek US government contracts. Tata Consultancy Services (TCS) has reportedly hired at least 300 at its new campus near Cincinnati.

Locating in the US "helps us and our customers reduce overall infrastructure and overhead costs" and better serves customers, writes Amar Naga, the head of TCS's US center, in an e-mail.

"These companies have gained so much experience that there's a process of maturation," says economics professor Usha Nair-Reichert, of the Georgia Institute of Technology. "They really are trying to become global players." ...

In India, rich and poor line up for $2,000 Nano

Christian Science Monitor: In India, rich and poor line up for $2,000 Nano

Ten months after India's $2,000 Nano was launched, carmaker Tata has sold more than 200,000 vehicles.

Months after buying the shiny silver car, farmer Satish Kumar still keeps the plastic wrap on the seats. Most days, his Tata Nano – his first car – sits in the front yard, proudly displayed between the brick pillars of a homemade carport. Tucked from sight are a couple of cows and a humble scooter that still is driven a lot more than the four-wheeled wonder.

The Kumars actually don’t much need a car: Mr. Kumar works in the fields around his house; Mrs. Kumar stays at home; and the kids go to school by bus. The car proves useful for those special occasions when the family wants to arrive together – and in style. “I’m mainly concentrating on using it socially – taking my whole family to weddings and other family functions,” he says.

For Tata, the Indian automaker, Kumar belongs to a new class of customer, thanks to the Nano’s price of just $2,000. But while the Nano spurred much chatter about what it allows the middle class to do, Kumar suggests the Indian consumer may be more smitten with what the car allows them to be. “I think the Nano is actually used as a signaling device,” says Sourabh Mishra, chief strategy officer at marketing firm Saatchi & Saatchi India. “It’s signaling, ‘I’m now part of a group who can afford a lifestyle that hitherto was not possible to me.’ ”

Some 10 months after Nano’s launch, Tata has booked sales of 206,703 cars; 17,000 Nanos have been delivered. Some 70 percent of bookings came from nonmetro areas. ...