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 - and estimates are now well below 1 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 inclusion of the poor in networks of productivity and exchange - that is to say, they embraced some form of market capitalism. Unqualified dismal of "capitalism" (almost never defined by critics), as some religious leaders are prone to do, should be challenged.

Source: World Bank - State of the Poor

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.

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. ...

 

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. ...

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. ...

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 at length because it is such a long article but I would higly recommend reading the whole thing. It highligts well the challenge of applying simplistic models (whether "more aid" or "more markets") of economic devolopment .

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 really is a fascinating chart but it is kind of 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 percentile of the world income distribution (All income is in inflation adjusted international dollars.)

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

Among other things we can see how much greater is the income inequality in emerging giants but their lines are very likely to mirror the USA line in 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. ...

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.

 

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.

–

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

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. ...

Measuring Global Poverty

Aid Watch: Don’t Cite Global Numbers Unless You Know They’re Trustworthy (They Usually Aren’t)

Precisely 1.419 billion live in extreme poverty in our world today. Oh, and it’s equally plausible that precisely 0.874 billion live in extreme poverty. Or maybe it’s 1.7517 billion.

Most development people confidently cite global statistics without knowing what they are based on. Sorry, that’s no longer allowed with today’s greater demands for transparency. Angus Deaton’s AEA Presidential Address just given at the AEA meetings will not let you ever trust the World Bank again on how many people in the world are in extreme poverty.Some nuggets:

1) “India has become poorer because India has become richer!”

The World Bank’s recent 40 percent upward revision of the global poverty number was based on an absurd procedure that led to the paradox in the quote.

To make a long story short, the World Bank decided to boot richer India out of the group of poorest countries used to determine the poverty line, which made the poverty line higher, which made Indian (and global) poverty higher – all because India was richer. This misguided revision of the poverty line, which accounted for virtually all of the upward revision, was not clear to virtually anyone until this new paper by Deaton.

Deaton doesn’t say this, but the World Bank behavior on calculation and publicity around this number was not exactly their finest hour.

2) Adjusting for purchasing power (how cheap the goods are) across countries is complex and probably impossible.

The details are as incredibly boring as they are hugely consequential.

As only one tiny example, the poverty count is sensitive to a mostly-made-up number that is incomparable across countries: the imputed rent to housing.

Then there is the “index number problem,” which only is of great fascination to 2 people, but unfortunately can change the ratio of US/Tajikstan incomes by a factor of 10. The trouble is that rich people and poor people consume very different things. For example, poor people may consume a lot of something that is cheap in the poor country, which is not consumed much and is expensive in the rich country. Similarly, rich people consume a lot of something else that is cheap in the rich country and expensive in the poor country.  If you use rich country prices, you exaggerate poor people’s consumption basket value (they are given a lot of credit for consuming a lot of something very expensive, but it isn’t that expensive in the poor country and if it were, they would consume a lot less of it). Conversely, if you use poor country prices, you exaggerate rich people’s consumption basket value. There are possible intermediate solutions but no complete solutions to this intractable problem.

Deaton muses: “perhaps we are aiming too high when we try to construct a real income scale on which every country in the world can be placed.” ...

Indian farmers adapt to shifting weather patterns

Reuters: Indian farmers adapt to shifting weather patterns

GORAKHPUR, India (Reuters) - As global leaders and top scientists in Copenhagen debate how to deal with climate change, farmers in flood-prone areas of northern India are taking it into their own hands to adapt to shifts in the weather.

For decades, people of Uttar Pradesh, whose population is more than half that of the United States, have been witnessing erratic weather, including increasingly intense rainfall over short periods of time.

The rain, combined with heavy mountain run-off from nearby Nepal, which is also seeing heavier-than-usual rains, has inundated villages, towns and cities in the region.

Such floods have destroyed homes, crops and livestock, highlighting the fact that the poorest in countries such as China and India are most at risk from climate change.

While world leaders in Copenhagen argue over who should cut carbon emissions and who should pay, experts say low-cost adaptation methods, partly based on existing community knowledge, could be used to help vulnerable farmers.

In the fields of Manoharchak village, where terms such as "global warming" are unknown, such experiments are bearing fruit, changing the lives of poor farmers who outsmart nature using simple but effective techniques to deal with rising climate variability.

"For the last three years, we have been trying to change our ways to cope with the changing weather," said Hooblal Chauhan, a farmer whose efforts have included diversifying production from wheat and rice to incorporate a wide variety of vegetables.

"I don't know what those big people in foreign countries can do about the weather, but we are doing what we can to help ourselves," said the 55-year-old from Manoharchak, situated 90 km (55 miles) north of the bustling city of Gorakhpur. ...

Widening Gap Between Global Rich and Poor? Think Again

TED: Hans Rosling: Asia's rise -- how and when

"Hans Rosling was a young guest student in India when he first realized that Asia had all the capacities to reclaim its place as the world's dominant economic force. At TEDIndia, he graphs global economic growth since 1858 and predicts the exact date that India and China will outstrip the US." (The Date? July 27, 2048)

India's Economy Shows Surprising Growth

Business Week: India's Economy Shows Surprising Growth

Spurred by an $80 billion stimulus package, the Indian economy grew by 7.9% in the third quarter as the nation's consumers displayed an appetite for spending.

India's $1.2 trillion economy may be among the world's first to come roaring out of the global recession, as government data showed it grew by 7.9% in the quarter ended on Sept. 30, the largest growth since the Indian government started releasing the figures in 1996. Industry grew 9.2%, compared with 5.1% in the year-earlier quarter. "These recent figures may well signal that the worst effects of the global financial crisis have passed for the economy," says Anuj Chande, head of the South Asia Group at Grant Thornton, which advises companies doing business in Asia.

The numbers, released on Nov. 30, have economists considering raising their estimates for full-year gross domestic product growth in India; the average estimate is currently about 6.5%. The government, meanwhile, has said it expects the Indian economy to grow by 7% to 8% by the end of the fiscal year in March 2010, and hit 9% the year after. "Our own 6.2% number for the current fiscal year is certainly looking on the low side," says Robert Prior-Wandesforde, Singapore-based Asia economist for HSBC (HBC).

It's an interesting turnaround by the Indian economy, which spent the period from October 2008 to March 2009 on government-sponsored life support—some $80 billion in tax cuts and other benefits in the form of a stimulus. Without the stimulus, growth in those two quarters would have been less than 1%; the stimulus pushed it to 5.8%. ...

Fighting poverty in emerging markets

Economist: Fighting poverty in emerging markets

Lessons from Brazil, China and India

... Between them, Brazil, China and India account for half the world’s poorest people and an even bigger share of those who have escaped poverty. In 1981, 84% of China’s population was below the poverty line of $1.25 a day (in 2005 prices); in 2005 the share was just 16% (see chart). This amounted to a 6.6% proportionate annual rate of poverty reduction—the difference between the growth rates of the number of poor and the total population.

Nobody did as well as China. Brazil’s share of those in poverty fell by half from 17% to 8%, an annual reduction of 3.2%. India did least well, cutting the share below the poverty line from 60% to 42% between 1981 and 2005. This implies an annual reduction of 1.5% a year, though there are problems with Indian statistics; using different consumption figures yields an annual reduction of 3%, comparable to Brazil’s.

As Mr Ravallion points out, these figures do not mirror growth rates. Brazil cut poverty by more than India despite much lower growth, just over 1% a year in 1993-2005, compared with India’s 5%. If you calculate the rate of poverty reduction for each unit of GDP growth per person, Brazil did even better than China: the ratio is 4.3 for Brazil, 0.8 for China and 0.4 for India (0.8 if you use the adjusted consumption figures). Per unit of growth, Brazil reduced its proportional poverty rate five times more than China or India did.

How did it do so well? The main explanation has to do with inequality. This (as measured by the Gini index, also marked on the chart) has fallen sharply in Brazil since 1993, while it has soared in China and risen in India. Greater inequality dampens the poverty-reducing effect of growth.

Government policy played a big role in reducing inequality. Brazil’s main cash-transfer programme, called Bolsa Familia, provides help to 11m families, or 60% of all those in the poorest tenth. In contrast, social security in China is still provided largely through the enterprise system (ie, companies), so it tends to bypass those not in work. And government interventions in India are extraordinarily perverse. People in the poorest fifth are the least likely to have any kind of ration card (the key to public handouts), whereas the richest fifth are the most likely to.

Mr Ravallion concludes with some useful lessons. In all three countries, economic stability made a big difference for the better. China cut poverty the most, but did best early on, when agriculture was growing fastest. As growth shifted towards the cities and manufacturing, inequality rose. It might have done even better with Brazilian-style “progressive” policies. India had both growth and social policies, yet did worst because its policies in fact did rather little to help the poor. With its caste system, and bad state schools, India may be a more unequal society than the numbers alone suggest. Both Asian countries could learn some lessons from Brazil. But Brazil, in turn, will not be able to match China’s record in reducing the number of poor people without higher growth.

Wealth of Opportunity: Microfinance in Person

Unitus: Wealth of Opportunity: Microfinance in Person

"We are pleased to present  the complete 15-minute film, Wealth of Opportunity: Microfinance in Person. The production, completed in the fall of 2009, features African and Indian borrowers whose lives and futures have been transformed through microfinance. The project is a co-production by Unitus and NonFiction Media."

Wealth of Opportunity: Microfinance in Person from Unitus on Vimeo.

How to Profit off the Poor… and Keep Your Soul

Tech Crunch: How to Profit off the Poor… and Keep Your Soul

DELHI, INDIA–“I’ll take you! I live there!” a small boy with a blue shirt and a perfect toothy grin said as he ran ahead of me. His quiet friend in yellow jogged beside him smiling shyly, his jet-black Elvis curl bobbing on his forehead. The boy in blue stopped a few yards in front of me turned around, beaming and added in Hindi, “I know computers quite well.”

These weren’t middle class kids on the well-trod, parent-driven Indian path to seats at IIT. These were Delhi slum kids, whose families likely live on less than $2 a day. And yet, for the last five years, they’ve spent several hours of their free time every day playing games and learning English, Math and Science on computers.

So how have they bridged the much-agonized-about digital divide without a hand out from a chip company, computer company or wealthy philanthropist? A for-profit Indian company called NIIT.

It started back in 1999 when Sugata Mitra, NIIT’s chief scientist, noticed his kid could learn how to use gadgets like a mobile phone far faster than tech-savvy adults could. At this time, most computer “labs” in Indian schools were one or two computers that were only to be used under the strict supervision of a teacher. The reasoning was computers were expensive and required training and supervision. As a result many kids only got to look at them from afar in the classroom.

Instead Mitra wondered what would happen if he left a computer out in the open for a group of children to discover. So he literally knocked a hole in the office wall to the slum on the other side.  He shoved a computer in the hole and set up a camera on a tree limb to record what happened. A 13-year-old, illiterate kid who’d never seen a computer wandered over tentatively, and soon realized he could move the cursor by moving a finger across the touch pad. Within four hours, a small group of kids had gathered. They had figured out how to open Internet Explorer and were playing a game on Disney’s Web site. “All of us were absolutely shocked watching that,” says Abhishek Gupta who heads the program now. Some expected the kids to break or even try to steal the computer.

A pilot project with the World Bank followed, and 22 of these “Hole in the Wall” kiosks were set up around the country from 2001 to 2005. The organization studied the results closely. The most obvious take-away was that kids left on their own will learn computers. The project also helped develop team-building and social skills—with 200 kids sometimes huddled around one screen. Whether the computers lead to more general academic improvement was less clear, but in many cases it was up measurably, Gupta says.

But interestingly when that partnership was over, NIIT didn’t take the project down the non-profit route. It’s not because the company is adverse to such things—it’s also opening a new high-end university that is run as a non-profit. But there’s a unique attitude in India that believes the way to eradicate poverty is to turn India’s scrappiest, free-market entrepreneurs on the problem, not to increase handouts. ...

Emerging Asian economies: On the rebound

Asia’s emerging economies are recovering much more quickly than economies in other parts of the world. Can they keep it up?

MORE green shoots have appeared in America in recent weeks, but they are nothing by comparison with the lush jungle sprouting in the East. Asia’s emerging economies probably grew at an average annualised rate of over 10% in the second quarter, while America’s GDP fell by 1%. In 2009 as a whole, recent forecasts suggest that emerging Asia could grow by at least 5%, while the G7 economies contract by 3.5%. The growth gap between the two has never been wider. How have these export-dependent economies managed to decouple from the developed world? And can their recovery last?

Average growth figures conceal big differences within Asia over the past year. China, India and Indonesia were among the few economies in the world that continued to expand throughout the global downturn (though China’s virtually stalled late last year). But the smaller, more open Asian economies were badly hit. Between September and March real GDP fell by an average annualised rate of 13% in Hong Kong, Malaysia, South Korea, Singapore, Taiwan and Thailand.

Yet the countries that have so far published second-quarter GDP figures show an impressive bounce. Comparing the second quarter with the first at an annualised rate, China’s GDP grew by 15%, South Korea’s by almost 10%, Singapore’s soared by 21% and Indonesia’s managed a respectable 5%. Other countries in the region are also likely to show a rebound. It is true that output in South Korea and Singapore was still lower than a year earlier, but quarterly changes are more useful for spotting turning points—and this is how growth rates are most commonly measured in America. ...

India's new antipoverty measure: national ID card

Christian Science Monitor: India's new antipoverty measure: national ID card

The card's introduction, one of the largest IT projects in the world, will eliminate a patchwork of local IDs and is meant to improve the delivery of social services to the poor.

New Delhi - Rasmu is happy she moved to New Delhi, where she and her five small children live in a tarpaulin-and-cardboard shack. Back home in rural Madhya Pradesh, central India, she was unemployed; in the Indian capital she has become a road-builder, earning 2,500 rupees ($52) a month.

Besides her parents, there is one thing she misses, however, from home: the cut-price rice, wheat, and oil she was entitled to there. Like millions of migrants to India's cities, Rasmu has found her identification documents mean nothing outside her native state. The Below Poverty Line (BPL) card that once helped her children eat is now just a scrap of paper.

It is cases like this that have led India's government to introduce an ambitious new project: a new national identity card that will be issued to every one of the billion-plus population.

Unlike India's other innumerable forms of ID – from birth certificates to tax codes – the new card will be recognized everywhere in the country. It will feature biometric details that will quickly enable identity checks. It will link to a vast database, accessible by numerous government agencies. And its introduction will constitute one of the world's biggest IT projects.

Unlike most government initiatives designed to tackle poverty, the ID card scheme has won near universal approval.

"This is long overdue and much, much, much needed to improve the delivery of public services, something we have been particularly deficient at," says Surjit Bhalla, an economist. ...

 

Emerging Economies: Decoupling 2.0

The Economist: Emerging Economies: Decoupling 2.0

The biggest emerging economies will recover faster than America.

REMEMBER the debate about decoupling? A year ago, many commentators—including this newspaper—argued that emerging economies had become more resilient to an American recession, thanks to their strong domestic markets and prudent macroeconomic policies. Naysayers claimed America’s weakness would fell the emerging world. Over the past six months the global slump seemed to prove the sceptics right. Emerging economies reeled and decoupling was ridiculed.

Yet perhaps the idea was dismissed too soon. Even if America’s output remains weak, there are signs that some of the larger emerging economies could see a decent rebound. China is exhibit A of this new decoupling: its economy began to accelerate again in the first four months of this year. Fixed investment is growing at its fastest pace since 2006 and consumption is holding up well. Despite debate over the accuracy of China’s GDP figures (see article), most economists agree that output will grow faster than seemed plausible only a few months ago. Growth this year could be close to 8%. Such optimism has fuelled commodity prices which have, in turn, brightened the outlook for Brazil and other commodity exporters.

That said, even the best performing countries will grow more slowly than they did between 2004 and 2007. Nor will the resilience be universal: eastern Europe’s indebted economies will suffer as global banks cut back, and emerging economies intertwined with America, such as Mexico, will continue to be hit hard. So will smaller, more trade-dependent countries. Decoupling 2.0 is a narrower phenomenon, confined to a few of the biggest, and least indebted, emerging economies. ...

India listens after a child bride says 'I won't.'

Christian Science Monitor: India listens after a child bride says 'I won't.'

Bararola, India - When Rekha Kalinda was nearing age 12, her parents told her they were planning to marry her off. Rekha's response would reverberate all the way up to the president of India: "No."

Nearly half of all Indian females get married before turning the legal minimum age of 18. The requirement has been in place for more than three decades, but centuries of custom don't change overnight – and that's especially true in Bararola, a land carved up into small farm plots and crisscrossed by dirt paths that takes at least a day's journey to reach from Calcutta. But even here, some people are taking a stand.

Many locals eke out a living making beedis, a leaf-wrapped Indian cigarette. Rekha was rolling beedis with her parents inside their mud-hut home when they broached her nuptials.

"I was very angry," says Rekha. "I told my father very clearly that this is my age of studying in school, and I didn't want to marry."

With the help of friends, teachers, and administrators, Rekha accomplished what the law alone has not. No child marriages have taken place in the surrounding villages where she and two other girls refused to marry last summer, and similar approaches are meeting some success in other regions.

"We have a strong law and we need to find the people who can advocate for [it]," says Sunayana Walia, a senior researcher at the Delhi office of the International Center for Research on Women. "All the [successful] interventions are tapping the girls ... so they are able to campaign on this issue, along with community participation." ...

India's Tata rolls out world's cheapest car

Yahoo!: India's Tata rolls out world's cheapest car

MUMBAI (AFP) – India's Tata Motors on Monday launched the world's cheapest car, the Nano, hoping to revolutionise travel for millions and buck a slump in auto sales caused by the global economic crisis.

Company boss Ratan Tata said the no-frills vehicle, slated to cost just 100,000 rupees (2,000 dollars) for the basic model, will get India's middle-class urban population off motorcycles and into safer, affordable cars.

"I think we are at the gates of offering a new form of transport to the people of India and later, I hope, other markets elsewhere in the world," he said, describing the launch as a "milestone."

"The present economic situation makes it somewhat... more attractive to the buying public," he told reporters in Mumbai ahead of a glitzy official unveiling ceremony at 7:30 pm (1400 GMT).

Potential owners of the car -- which is just over three metres (10 feet) long and has a top speed of 105 kilometres (65 miles) per hour -- can apply between April 9 and 25, Tata managing director Ravi Kant said. ...

China and India: Suddenly vulnerable

The Economist: China and India: Suddenly vulnerable

Asia’s two big beasts are shivering. India’s economy is weaker, but China’s leaders have more to fear.

THE speed with which clouds of economic gloom and even despair have gathered over the global economy has been startling everywhere. But the change has been especially sudden in the world’s two most populous countries: China and India. Until quite recently, the world’s fastest-growing big economies both felt themselves largely immune from the contagion afflicting the rich world. Optimists even hoped that these huge emerging markets might provide the engines that could pull the world out of recession. Now some fear the reverse: that the global downturn is going to drag China and India down with it, bringing massive unemployment to two countries that are, for all their success, still poor—India is home to some two-fifths of the world’s malnourished children.

The pessimism may be overdone. These are still the most dynamic parts of the world economy. But both countries face daunting economic and political difficulties. In India’s case, its newly positive self-image has suffered a double blow: from the economic buffeting, and from the bullets of the terrorists who attacked Mumbai last month. As our special report makes clear, India’s recent self-confidence had two roots. One was a sustained spurt in economic growth to a five-year annual average of 8.8%. The other was the concomitant rise in India’s global stature and influence. No longer, its politicians gloated, was India “hyphenated” with Pakistan as one half of a potential nuclear maelstrom. Rather it had become part of “Chindia”—a fast-growing success story. ...

India sees food crisis easing as plantings rise across the world

LiveMint.com: India sees food crisis easing as plantings rise across the world

Farmers from Australia to China have increased plantings of wheat, corn, rice and soya bean, helping stockpiles gain from 30-year lows.

Mumbai / New Delhi: A worldwide food crisis that sent wheat, corn and rice prices to records and sparked riots earlier this year may be over after farmers increased plantings, a top official at the ministry of consumer affairs, food and public distribution said.

“I don’t think there’s a crisis now,” said T. Nanda Kumar, food secretary, who is responsible for formulating food security policy in the world’s second most populous nation. “Food will be available.”

Farmers from Australia to China have increased plantings of wheat, corn, rice and soya bean, helping stockpiles gain from 30-year lows. An end to the crisis may help countries including India and Egypt ease trade barriers and cool inflation.

The global production outlook for wheat and soya bean is “very good,” while rice is still expensive, Kumar said on 18 August. “Rice is softening, but I don’t think it has softened adequately.”

Still, grain prices will remain higher than the average of the past five years even as production improves, he said. ...

Sulabh International Toilets

Defeating Global Poverty: Sulabh International Toilets

Dealing with human waste is still a challenge for many countries. Sulabh International, a NGO based in New Delhi, India has created an ingeniously simple latrine which costs $100 with the following characteristics:

• it first empties into one pit, and then, when it is full into a second pit
• it flushes with 2 litres of water vs. 10 litres required by a standard cistern toilet
• it takes 10 people two years to fill one pit, by which time the waste in the other has turned into composted manure, clean enough for growing vegetables.

Sulabh has built 1.2 million of these latrines across India. Along with this they have helped 60,000 manual scavengers (people who clean feces from streets/houses that lack flushing toilets.) ...

Reverse Outsourcing

Financial Times: Wipro plans to boost outsourcing to US

Wipro plans to open more centres in the US in a continuing trend of “reverse outsourcing”, as Indian information technology outsourcing companies recruit in the US and Europe.

Azim Premji, chairman of Wipro, India’s third-largest information technology outsourcing company, this week said it aimed to hire more than 1,000 people in the US to staff two new software development centres in Michigan and Atlanta.

Tata Consultancy Services, India’s leading outsourcing company, on Tuesday opened its first US centre near Cincinnati, Ohio, which has capacity for 1,000 employees.

The recruits for Wipro’s centres in Atlanta and Troy, Michigan, would be trained for three months in India before returning to the US for jobs in software development and project management.

Wipro also wants to ex-pand in Europe through acquisition, especially in Germany where Wipro has earmarked as much as $250m for a possible purchase. ...

What's holding India back?

The Economist: What's holding India back?

Failure to reform a bloated civil service is putting the country's huge economic achievements at risk.

“THE tiger is under grave threat,” India's finance minister, Palaniappan Chidambaram, intoned at one point in his budget speech on February 29th. He was referring to the stripy animals that prowl the country in declining numbers. But India's tigerish economy, which has grown by 9% a year on average over the past three years, is itself under threat.

In many ways India counts as one of liberalisation's greatest success stories. For years, it pottered along, weighed down by the regulations that made up the licence raj, producing only a feeble “Hindu” rate of growth. But over the past 15 years it has been transformed into a far more powerful beast. Its companies have become worldbeaters. Without India's strength, the world economy would have had far less to boast about.

Sadly, this achievement is more fragile than it looks. Many things restrain India's economy, from a government that depends on Communist support to the caste system, power cuts and rigid labour laws. But an enduring constraint is even more awkward: a state that makes a big claim on a poor country's resources but then uses them badly. ...

India's Christians: The cross they bear

The Economist: India's Christians: The cross they bear

Politics fuels religious violence.

THE blackened shell of a burnt car lies in the yard of Radha Bai's farm in this bucolic village of whitewashed houses and unhurried bullock carts in the central Indian state of Chhattisgarh. On January 16th, as she prayed with a large group of Christians, a mob of Hindu extremists arrived. They chased worshippers away, set fire to a car and ten motorcycles and, says Mrs Bai, threatened to cut her “into pieces”.

In recent weeks Hindu extremists in India's “tribal belt”—where missionaries have long sought to convert traditionally animist forest-dwellers—have stepped up a vicious anti-Christian campaign. Over Christmas in neighbouring Orissa mobs set fire to 55 churches and 600 houses. Asghar Ali Engineer, of the Centre for Study of Society and Secularism, a Mumbai think-tank, calls it the worst anti-Christian violence independent India has seen. ...