On a more positive note…. City Journal has a review of a fantastic new book chronicling the untold education successes in the 3rd world – “The Beautiful Tree“.

University of Newcastle professor James Tooley journeyed to Hyderabad, India in early 2000 at the behest of the World Bank, to study private schools there. Or, more specifically, to study familiar private schools–that is, those that served the children of middle-class and wealthy families.

But while on a sightseeing excursion to the city’s teeming slums, Tooley observed something peculiar: private schools were just as prevalent in these struggling areas as in the nicer neighborhoods. Everywhere he spotted hand-painted signs advertising locally run educational enterprises. “Why,” he wondered, “had no one I’d worked with in India told me about them?”

The reason no one had “told him about them” was because these private schools were non-chartered, private enterprises operating under the government’s radar — aka “unrecognized institutions.” Instead of the sometimes hundreds of dollars charged by yuppy private schools, these unrecognized institutions often charged as little as $1-$2 per child per month.

I suppose before we get into any other details about these schools, question #1 is – “so how good are they?” And it turns out they are astonishly good –

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Would you take financial advice from a 26-year-old whose book is called “I Will Teach You To Be Rich”? For the readers who helped blogger Ramit Sethi’s book climb onto The New York Times best-seller list and those who regularly visit his web site or pay to subscribe to his Scrooge Strategy newsletter, the answer is yes. You may have seen Sethi on TV news shows commenting on personal finance matters or read his answers at The Times “Your Money” column. Last week on ABC he elaborated on the differences between frugal and cheap. Continue reading →

It’s been pointed out that when it comes to capitalism, there are often many cases where the poor can teach the rich a thing or 2. In the past, we profiled private education available even in slums. A few weeks ago, the Economist had a great article about the innovative entrepreneurship that’s starting to deliver healthcare to millions of previous unserved desis.

As the patient was chatting away, Vivek Jawali and his team had nearly completed his complex heart bypass. Because such “beating heart” surgery causes little pain and does not require general anaesthesia or blood thinners, patients are back on their feet much faster than usual. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world.

This is just one of many innovations in health care that have been devised in India. Its entrepreneurs are channelling the country’s rich technological and medical talent towards frugal approaches that have much to teach the rich world’s bloated health-care systems.

There are hundreds of ways to slice and dice “innovation” but one of favorites buckets stuff into 2 broad categories – Continue reading →

On our shiny new news tab, someone posted a link to a Rush Limbaugh transcript, where Rushbo uses “slumdog” as something akin to an ethnic slur:

CALLER: Perseverance. America, you have to persevere, you have to be patient. … What really irks me is with corporate America, people saying, “Rush, can I get my job back? Are you going to be able to get my job back from something that’s been outsourced and the corporations are going all over, out of the country.” Why don’t these people invest in America, invest in corporate America, become stockholders. The CEOs and the boards of directors pay lip service to their shareholders. Invest in America and invest in yourself by investing in corporate America. Wouldn’t that help?

RUSH: It might. No question about it. But the whole thing about outsourcing, even President Obama slipped up. I love this, ’cause the teleprompter, that teleprompter sometimes sneaks things in there that are not in Obama’s best interests to say, but the teleprompter nevertheless makes him say them. Obama got a call during his virtual town meeting about outsourcing jobs, he said, “Look, those jobs aren’t coming back.” There’s a reason they aren’t coming back. They’re outsourced for a reason, an economic reason, and they’re not coming back. If you’re sitting out waiting for a job that’s now being done by a slumdog in India, and you’re waiting for that job to be canceled, for the slumdog to be thrown out of work, and you to get the job, it ain’t going to happen. It’s not the way economics works. Even Obama’s teleprompter got him to admit that. (link)

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I was recently talking to a financial consultant visiting from India about the state of the Indian economy (she recently married my cousin; congrats. P & S!). She seemed to think that, despite how gloomy the Indian television news analysts tend to be, the Indian economy is actually continuing to grow somewhat even as western economies are sliding into a deepening recession. A quick look at the Economist’s latest country data for India seem to confirm that outlook: India’s economy is still forecast to grow at a 5% rate this year. That’s down from 9-10% in the past few years, but growth is growth. (She suggested that Indian business news analysts might be channeling the gloom of their western counterparts, rather than using actual data particular to the Indian economy.) Have readers seen other data about the state of the Indian economy as a whole?

That might lead us to Amartya Sen. Sen has an essay re-appraising of the works of Adam Smith in light of the current global economic recession in a recent New York Review of Books. His basic point seems to be that Adam Smith was right, though perhaps hardcore free market types today tend to misread Smith as advocating unregulated free markets. Sen also notes that Keynes is currently more popular than ever, though he argues that Keynes’ contemporary at Cambridge, Arthur Cecil Pigou, might be more helpful to us today because of the latter’s work on the role of behavior in shaping markets (behavioral economics), as well as welfare economics.

In a discussion of the possible role that reforming health care might play in government-supported economic recovery programs, Sen makes an interesting side-note about health care in Kerala as compared to China:

A crisis not only presents an immediate challenge that has to be faced. It also provides an opportunity to address long-term problems when people are willing to reconsider established conventions. This is why the present crisis also makes it important to face the neglected long-term issues like conservation of the environment and national health care, as well as the need for public transport, which has been very badly neglected in the last few decades and is also so far sidelined—as I write this article—even in the initial policies announced by the Obama administration. Economic affordability is, of course, an issue, but as the example of the Indian state of Kerala shows, it is possible to have state-guaranteed health care for all at relatively little cost. Since the Chinese dropped universal health insurance in 1979, Kerala—which continues to have it—has very substantially overtaken China in average life expectancy and in indicators such as infant mortality, despite having a much lower level of per capita income. So there are opportunities for poor countries as well. (link)

Interesting that Sen singles out Kerala; I wonder where he got that information from. Also, I wonder what the differences are between Kerala’s current health care policy and that of other Indian states. (Or, is this just yet another case of “everything is better in Kerala”?)

Also see: Wikipedia on Health Care in India, Palliative Care in Kerala Continue reading →

One of the things Slumdog Millionaire does a great job of is implicitly portraying is the economic seachange in India over the past 20 years – a rising tide may not do it equally, but it does eventually lift all boats including Jamal Malik’s. Reason.tv dug into this a bit more & came away with lessons about India’s economy and hopefully ours as well –

“One IT company doesn’t just employ computer professionals,” says Dalmia. “It also needs landscaping services, cleaning services, and restaurants. There was this tremendous spillover effect that allowed people to lift themselves out of poverty.”

With politics & conventional wisdom in the US tipping towards equating deregulation with financial ruin (contrary to the the actual Bush legacy) it’s nice to see the gains from liberalizing markets celebrated elsewhere.

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SM enjoys occasionally keeping tabs on diaspora members worldwide and the brothers-in-arms in the Gulf are a particularly interesting, if occasionally sad case. Lured by much greater economic opportunity but often forced to deal with 2nd class citizen status (and worse) – their tales really help show the lengths some folks will go to to eke out a few bucks for the fam.

Fewer Lights in the Future?

Now, with the global collapse of the closely intertwined construction and finance industries, the Gulf has been particularly hard hit. An interesting leading indicator of sorts is the shape of traffic at the airport –

For many expatriate workers in Dubai it was the ultimate symbol of their tax-free wealth: a luxurious car that few could have afforded on the money they earned at home.

Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans.

Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition. Some had used-to-the-limit credit cards in the glove box. Others had notes of apology attached to the windscreen.

Not surprisingly, Desis are a large % of the folks fleeing–

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