Category Archives: Economics

Smacksourcing

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Taut, tested arguments falling into place at long last are beautiful to behold. Like any good debater, Nandan Nilekani, CEO of Infosys, has finally got his case down. First, talk smack about India’s place in the world:

Q. Are you worried about the outcry over outsourcing in America?

A. What’s happening is pretty fundamental. If you go back to the 1830’s, India and China were 50 percent of the world’s G.D.P., and then they missed the entire revolution of industry. So if you take a long view of this game, it’s just part of the process. [Link]

That ‘missed the revolution’ turn of phrase is a nice little euphemism for the Gothic horror of the British Raj.

Second, deftly position the inevitable outsourcing question as non-unique, overheated arm-flapping:

Q. What do you say to people who think that globalization will inevitably harm the United States work force?

A. Every time Wal-Mart replaces a person at a checkout counter with an automatic machine they’re eliminating thousands of jobs. This is one more facet of that, except it’s more emotional because instead of a checkout counter machine replacing Steve Smith, some kid in Bangalore is replacing Steve Smith. You can point to that kid and say, “He took my job.” [Link]

If you go back to the 1830’s, India and China were 50 percent of the world’s GDPFinally, remind Americans of their own core values:

Q. Does it feel odd to find yourself lecturing Americans on the joys of capitalism?

A. You guys told us for so many years to cut out this socialist rubbish and go to free markets. We came to free markets and now you’re telling us, “Stop, don’t come…” [Link]

This guy is better at jawboning than the politicians. Next step: mayor of New York?

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Transglobal Trade Transparency

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Isn’t that title just thrillingly trillable? So is the notion that consumers can use information to purchase products supporting their tastes in environmentalism and social justice. “October is Free Trade Month,” a billboard reminded me at the Berkeley BART station–also reminding me that dhaavak owes me a tip on a Rajasthani fair trade NGO.  Taking up where the beloved Cicatrix left off, let us examine the possibilities for a mutiny of the wallet.

Cotton is crucial: ever since Megasthenes told Seleucus of  “there being trees on which wool grows” in Indika, it’s been one of the subcontinent’s great exports.  For many diasporic desi dads, soft cotton wifebeaters are a must-not-forget purchase on trips back to the homeland. From Gandhi’s spinning days, the ties between social justice and khadi are apparently enshrined in a requirement that the Indian Flag be made only from khadi. Socially conscientious clothing is a constant work in progress, at home and abroad:  ETC India.org  and Dutch development group Solidaridad have announced that they will collaborate to create a Fair Trade Organic Cotton Supply Chain, connecting individual farmers, mills, clothing factories, and markets:

So far, 405 farmers have been enrolled in the programme, who are producing organic cotton in an extent of 1,352 acres of land spread over five rainfed districts in the Telangana region of Andhra Pradesh and two rainfed districts in the Vidharbha region of Maharashtra. . .He said that Rajalakshmi Mills of Kolkata was currently supporting farmers by purchasing cotton and marketing it in the US and Europe. Last fiscal, over 100 tonnes of lint cotton was sold at a premium of Rs 200 to Rs 250 per tonne over the prevailing market rates. (Link)

It’s the kind of support that’s vitally necessary to small famers whose plight has been highlighted by a plague of suicides.

Raise your hands if your parents usually have a giant bag of rice sitting in the kitchen. Basmati is a key ingredient in making our home away from home, and TransFairUSA now certifies fair traded rice from India, Thailand, and Egypt,:

Traditionally, these farmers have sold their rice to local middlemen rather than developing relationships with exporters. The low prices they receive often do not cover their costs of production, leaving them unable to repay the loans they need to buy seeds and fertilizer and further impoverishing their families. Fair Trade certification ensures that rice farmers receive a fair price for their harvest, creates direct trade links between farmers and buyers, and provides access to affordable credit. Through Fair Trade, farmers and their families are earning a better income for their hard work – allowing them to hold on to their land, keep their kids in school, and invest in the quality of their harvest.

There are three licensed west coast distributors of this fair trade rice, including this supplier of organic basmati rice. Consider taking contact information to your local grocer next time you go shopping.

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Harriet the Pious

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Harriet Miers, the latest SCOTUS nominee, is involved with a Texas-based missionary church which trolls for souls in Madhya Pradesh (via SAJA):

… [Harriet Miers’] longtime congregation [is] Valley View Christian Church in Dallas… She also served on the missions committee and took a deep interest in its programs in central India, according to minister Barry McCarty, inviting him and an Indian mission director to lunch at the White House last March. Miers also served on the board of Pioneer Bible Translators, which has missions worldwide… [Link]

McCarty serves on the board of Central India Christian Mission, which was meeting in Washington, D.C., in March. Miers knew of the meeting, and hosted McCarty and missionary Ajai Lall for lunch at the White House. [Link]

The Central India Christian Mission is part of the Texan-xtian nexus:

The primary task of the mission is evangelism and church planting… It is the need of the hour to train the native leaders in India as much as possible. The Mission Center… is located on about 15 acres of land in Damoh District of Central Province [Madhya Pradesh], India. [Link]

The missionaries, Indu and Ajai Lall and their Bible college-trained brood, are apparently the Johnny Appleseeds of Indian churches

Over 400 churches have been planted in central and northern India, in the country of Nepal and along the northeast India/Bhutan border. [Link – PDF]

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Cabbie hartal in Naya York

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NYC cabbies, the majority of whom are probably desi, threatened to strike over rising gas prices and GPS tracking at a rally on Monday:

Both groups claim drivers are paying upwards of $20 more per day for fuel. Drivers at the rally, who called yesterday for the ouster of TLC chairman Matthew W. Daus, complain that the spike in gasoline prices have chipped at savings and forced delayed vacations… “We want to be prudent,” Daus said. “These guys just got a fare increase — the biggest ever… They’re still making a lot more money based upon our data than before the fare increase.”

In one positive sign for advocates of the surcharge, Daus said he has talked with representatives from several cities where fares are tied to gas prices. [Link]

You run into this problem regularly with government-mandated price caps — the price doesn’t keep pace with real-world costs, and you’re stuck waiting for slow bureaucrats to recognize the new cost structure. A dynamic fare component which tracks fuel prices is an obvious solution.

Drivers wanted
[GPS tracking] eliminated, charging it would be used to track MuslimsBut the more interesting complaint is about mandatory GPS tracking:

Drivers say they don’t want to be tracked and do not need the expense (estimates range from $3,000 to $5,000 per vehicle) of installation. They also claim the devices could be used to monitor speeding and other activities, violating their rights… The commission maintains that the tracking equipment would help drivers navigate traffic, provide efficient routes, and help passengers recover lost property. [Link]

… representatives of the New York Taxi Workers’ Alliance, a union of more than 6,500 New York taxi drivers, decried the monitors as a tool for the state to spy on them… [Link]

… drivers also wanted the GPS plan eliminated, charging it would be used to track Muslims, [Bhairavi] Desai said. [Link – PDF]

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Bhutan’s Gross National Happiness

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Many countries look at their Gross Domestic Product (GDP) as a measure of how strong their economy is and whether it’s expanding or contracting, but also to give an idea as to the standard of living in the country:

GDP is defined as the total value of final goods and services produced within a territory during a specified period (or, if not specified, annually, so that “the UK GDP” is the UK’s annual product). GDP differs from gross national product (GNP) in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it…

The most common approach to measuring and understanding GDP is the expenditure method:

GDP = consumption + investment + exports – imports… [Link]

Blah Bla Bla Blah Blah.  I’m not freakin’ Alan Greenspan and I’ve never taken an economics course in my life.  What else you got?  The New York Times reports on Bhutan’s economic indicator of choice.  It is a measure that in my opinion is ready for export.  The GNH, or Gross National Happiness:

What is happiness? In the United States and in many other industrialized countries, it is often equated with money.

Economists measure consumer confidence on the assumption that the resulting figure says something about progress and public welfare. The gross domestic product, or G.D.P., is routinely used as shorthand for the well-being of a nation.

But the small Himalayan kingdom of Bhutan has been trying out a different idea.

In 1972, concerned about the problems afflicting other developing countries that focused only on economic growth, Bhutan’s newly crowned leader, King Jigme Singye Wangchuck, decided to make his nation’s priority not its G.D.P. but its G.N.H., or gross national happiness.

Bhutan, the king said, needed to ensure that prosperity was shared across society and that it was balanced against preserving cultural traditions, protecting the environment and maintaining a responsive government. The king, now 49, has been instituting policies aimed at accomplishing these goals.

Their economic theory isn’t that far out is it?  I am not naive enough to think that they’ll get the prize later this week and am not ready to declare that I am moving to Bhutan, but why not consider the merits of this idea?  Every economic statistic thrown at you about a given country might tell you that the population as a whole is becoming wealthier.  That doesn’t mean that the lives of individuals are any better in terms of quality or happiness does it?

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Hey Ram, the world is repetitive

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NYT columnist Tom Friedman continues to whip it:

Some Singapore schools have adopted a math teaching program started in Chennai… some Singapore schools have adopted a math teaching program called HeyMath, which was started four years ago in Chennai, India, by two young Indian bankers… If you were a parent anywhere in the world and you noticed that Singapore kids, or Indian kids or Chinese kids, were doing really well in math, wouldn’t you like to see the best textbooks… HeyMath… which has been adopted by 35 of Singapore’s 165 schools, also provides an online tutor, based in India, to answer questions from students stuck on homework. [Link]

That’s right: instead of sending your kids to Exeter, you import mean Miss Thomas. I can tell you what’ll cure your innumeracy: six by six multiplication drills for five-year-olds. It’s joy inchoate.

Previous posts: ek, do, teen, cuatro, cinco, catorce

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1-800-INSOMNIA

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Tomorrow night, PBS stations in the U.S. are airing a documentary on the human impact of outsourcing on call center workers (via SAJA):

1-800-INDIA
Tuesday, September 13 at 9 P.M.

… “1-800-INDIA” explores the experience of young Indian men and women who have been recruited into these new jobs requiring long hours, night shifts, and westernized work habits. The film reveals the human and cultural impact of a sweeping global trend, exploring its effect on Indian family life, on the evolving landscape of Indian cities and towns, and on the aspirations and daily lives of young Indians, especially women, entering the workforce.

Blogger Daniel Drezner penned an introduction:

Ironically, India itself now has some other pressing concerns because of the expansion of the global market for outsourcing services. Wage rates in Bangalore are starting to rise dramatically, and India has bottlenecks in its educational infrastructure that will limit the growth of the labor force. So other countries — the Philippines, Indonesia, Ghana — are beginning to compete. Nowadays you can even find Europeans and Americans working — if only temporarily — in India. Backpackers hiking through India stop off in Bangalore and work in call centers for a few weeks to pay their way…

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‘Don’t Stand So Close to Me’

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Here’s yet another story, this time in the NYT, about Malayalees tutoring American juvenile delinquents using porncams instant messaging and headphones. Where’s the fire button in this game? It ain’t real until desi teachers can simulate stabbing you in the head with a pencil. It’s not the Montessori method, it’s the belan method:

Greeshma Salin swiveled her chair to face the computer, slipped on her headset and said in faintly accented English, “Hello, Daniela.” Seconds later she heard the response, “Hello, Greeshma.” … Ms. Salin, 22, was in Cochin, a city in coastal southern India, and her student, Daniela Marinaro, 13, was at her home in Malibu, Calif…

They must go through two weeks of technical, accent and cultural training that includes familiarization with the differences between British English, widely used in India, and American English… “They learn to use ‘eraser’ instead of its Indian equivalent, ‘rubber,’ and understand that ‘I need a pit stop’ could mean ‘I need to go to the loo…’ ”

… she was “floored at first when 10-year old American students addressed me as Leela. All my teaching life in India, my students addressed me as Ma’am,” she said.

Fussy Americans, we shall school your haraam zaday spawn in ye olde English:

Dr. Marinaro said that he had misgivings when he first considered enrolling his daughters for English tutoring. “I thought, how could somebody from India teach them English?”

There’s something very reverse colonialist about this. Now instead of wealthy families importing teachers to provide a proper English education, we have… wealthy families importing teachers to provide a proper education in English. I can just hear the anti-Macaulay bruting about over Skype: ‘Your native culture is worthless! Jonathan Safran Foer, I spit on him! You sawdust-for-brains natives– read Rushdie, Roy, Khushwant Singh if you want to be proper Indian gentlemen.’

This part is actually true — we probably get more 1st gen – 2nd gen interaction on this blog than face-to-face, because it’s in text and only the essence remains:

Eliminating factors such as skin color, appearance, gender and accent made the Internet “more egalitarian than most classrooms,” he said.

Previous post here.

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Babu hell

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Sooner or later, just like the world’s first day
Sooner or later, we learn to throw the past away
History will teach us nothing…

— Sting, ‘History Will Teach Us Nothing‘

India’s coalition government, the United Progressive Alliance, has pushed a quasi-socialist employment guarantee through Parliament:

Parliament on Wednesday night approved the historic Bill for providing employment guarantee to all rural households in the country with Rajya Sabha passing the legislation by a voice vote. [Link]

The National Rural Employment Guarantee Bill, 2004 promises wage employment to every rural household, in which adult members volunteer to do unskilled manual work. Through this Bill the government, aims at removing poverty by assuring at least 100 days’ employment. [Link]

Like most government handouts, the entitlement was expanded from its original means-tested form to include all rural households, even the relatively prosperous. India needs to build plenty of infrastructure, her villages are very poor, and so I’m all for the UPA’s WPA for a limited period of time. But you do that by first fixing which roads, flyovers and airports you want to build and then figuring out manpower requirements. What you don’t do is guarantee a paycheck regardless of the availability of work, able-bodied individuals in a household or the individual worker’s performance.

The Congress returned to power in last year’s general election largely on its promises of giving the country’s economic reforms a human face and making the process more inclusive so that it benefited the poor in rural areas…

“This bill has been tabled in Parliament without proper preparation. The government does not know the exact number of unemployed people. There were six such schemes earlier, but they all failed due to the same reason,” said Singh, who is chairman of the Parliament’s standing committee on rural development. The bill, when enacted, will cover all rural households, not just those below poverty line, as had been provided earlier. [Link]

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Tête-à-tête with ‘Mano-a-mano’

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Former McKinsey chief Rajat Gupta interviews the man in the perenially blue turban in the McKinsey Quarterly (registration required). I bet he pronounces the name right. It’s two free-marketers talking to each other, the benefit of having an economist occupying 7 Race Course Road.

Singh says his top priority isn’t high tech or special export zones, it’s electrifying villages. He’s talking about the basic heavy lifting of a long-delayed national bootstrap:

We have, for the next four to five years, a very ambitious plan to expand… the availability of electricity to all of our villages…

When I look at countries like South Korea, all children who are of secondary-school-going age are in school; our children drop out even before they complete primary school… we are making, for the first time, the most determined effort to ensure that all our children… in the next four or five years have the benefit of minimum primary schooling.

Beyond upgrading airports, his administration is also spending on ports and railroads:

We are working with the Japanese government to draw up a program in which the freight corridors between Mumbai-Delhi, Mumbai-Chennai, and Delhi-Kolkata can be modernized. Our estimate is that that will cost about 25 thousand crore of rupees [$5.7 billion], and that’s our high priority as far as the railway system is concerned… We also are now in the process of modernizing our seaports.

The Indian government’s policy naming schemes are an odd hangover cocktail of faceless socialist, stymied bureaucrat and shudh Hindi or Sanskrit:

The Common Minimum Program, which is the benchmark for us to assess where we want to go, talks about the navratnas. These navratnas are companies essentially in the oil sectors, the power sectors, which are doing really well…

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