In India, Size Does Matter

More ambiguous, waffly writing at Foreign Exchange. Promise to write something rich and conclusive this coming week. But for now, a slightly different take on the Indian microfinance mess:

First, a brief summary of the situation: In October, the government of Andhra Pradesh (AP), a state in the south of the country and home to A. all those call centers B. 30% of the country’s microloan industry, decided to blame microfinance institutions (MFIs) for a series of debtors’ suicides. [The relationship between poverty and suicide is not a new political subject in India: the left-wing newspaper The Hindu has made a business of chronicling in harrowing and tragic detail the suicides of bankrupt farmers in the last few years.] The suicides pointed to a growing trend, in AP and elsewhere, of over-indebted borrowers, many of whom had loans from multiple sources, a sign of the intense pressure that these mega-lenders put on loan officers to grow their portfolios. As others have noted, the ban also reflected the fact that the government oversees its own lending scheme, the Self-Help Groups (SHGs), and that the suicides presented a great opportunity to shut down competitors.

But the ‘pox on both their houses’ critique that has emerged from these facts is not helpful, not least because it doesn’t engage particular closely with what either MFIs or SHGs actually do.

…

Rather it seems to me that the whole sector got into trouble because it was insufficiently localized. As practiced in India, both the MFI and the SHG model have neglected the key piece that made microlending in Bangladesh work so well.

More here.

Thinking About Food

Latest at Foreign Exchange:

Lately, I’ve been perusing some new research into the global food crisis: the dramatic spike in prices in 2007 and 2008 and the price volatility, inflation, and hunger that has followed it in search of some cases to probe in longer-form.

It’s an issue whose significance did not come home to me until I was reporting on sugar shortages in Pakistan. It was clear that the shortages were a political risk for the government, and that they were indicative of a much wider spectrum of economic mismanagement. But at a more basic level, I got the sense that hunger, even more than poverty, was the index against which people measured their suffering. That’s when I started reading up food and water in earnest.

Here’s the thing: we in the business press have a tendency to cover commodities like these in two ways, first as fodder for this-or-that futures market, and secondly, as raw materials for biofuels. We don’t spend nearly enough time on food and water as the nuts and bolts of subsistence. And yet, to me, the most exciting thing about following wheat prices or sugar prices or water management is that these are data points that cut vertically and geographically across the global economy. It is one of the few things I’ve covered that feels like I’m scratching at the edge of something universal. I’m still looking for the story that will let me communicate that. But in the meantime, here’s the picture of the crisis I have so far:

For the details, read the whole thing.

A Very Quick Thought on Robert Kaplan

Crossposted from Foreign Exchange.

Robert Kaplan is a journalist and author whose work has had a huge influence on me, as someone with a background in history, and a particular passion for stories about Asia and Eastern Europe. But there is always a sense, at the end of his books, that something is missing.

He spins a great and colorful yarn and stuffs readers full of facts and anecdotes, but when he begins to articulate strategy, I often find myself raising my eyebrows. I know that Kaplan is widely regarded as a strategic thinker first and foremost, and so I’ve struggled to figure out why I dissent from that view.

While reading his latest offering, Monsoon, and some of the reviews of it, I’ve come to the following conclusion: the thing that makes Kaplan so compelling as a historian and journalist is his geographical determinism. Geography is a mostly fixed lens, a constant that lets you trace seamless stories across time. Kaplan’s approach allows him to cut through layers of information and show us The Way Things Are.

His fans like to think that this is also what makes him a great strategist: that geography can determine the way things will or should be. But the whole notion of strategic thinking is about choices, and options, and maneuvers; it is the opposite of determinism.

The result is that Kaplan’s ‘strategic’ conclusions are often too broad to be really useful, and one often feels as though the strategy has been stretched over what would otherwise be excellent travel writing. Shashi Tharoor makes this point best:

Shoehorning his travels into the book makes for an uneven effect, with some surprising inclusions and omissions, and one can’t help feeling that a country has been deemed to be important because he traveled there.

Ouch. That said, for a great story, you could do a lot worse.

India and Its Neighbors

I’ve got a piece in today’s Christian Science Monitor on India, China and the battle for South Asia.

China is certainly flexing its muscle. Last month, it sought to restrict exports of rare earth minerals to Japan, made overtures to a secession movement in southern Sudan, and wrestled with the G20 over its currency and trade imbalance.

Nowhere has China been more assertive than in South Asia. In a strategy it calls the “string of pearls,” China is building ports and infrastructure in Bangladesh and Pakistan; digging up minerals in Pakistan and Afghanistan; and refining hydropower in Nepal and Afghanistan.

According to the International Monetary Fund, China’s trade with India’s neighbors totaled $16 billion in 2008, growing at 14 percent annually. India’s regional trade was barely holding steady at $11 billion.

Yet China’s success in the Subcontinent reflects India’s own foreign policy blunders.

The takeaway: if India doesn’t improve its own regional relationships, it will not only lose South Asia to China, but it will be prevented from exercising power elsewhere. Don’t believe me? Read the whole piece.

Why BlackBerry Got Banned

A few weeks ago, I had a fascinating conversation with a journo friend about the moves by several governments–first the UAE, then Saudi Arabia, then India–to ban BlackBerry because its maker (Canadian company Research in Motion) would not grant these states unencrypted access to users’ correspondence. Citing the locations of BlackBerry servers (in Canada and the UK) they alleged that Western powers could use the technology to spy on the East. Both privacy hawks and businesspeople cried foul, even more so when RIM agreed to open one server center Saudi Arabia and prepared to negotiate a deal with India to keep its business alive.

My friend wanted to know what the story was really ‘about.’ Was it–as the bans’ promoters insisted–about how much data our governments in the West already have? Was it about the fact that BlackBerry IS encrypted in the first place when so much other data is not (something many consumers seemed not to know)? Was it about the fact that democratic India was following the pattern set by more draconian regimes? Or, he was asking me, was it about something else entirely? Here’s what I told him:

“To my mind, these bans represent a kind of clash between the technology community’s perception of itself as being essentially above governments and the reality that all international business is subject to and inextricable from international politics. What is especially remarkable about this is the degree to which tech firms–which are still heavily consolidated in the U.S.–gladly do business with the U.S. government, while maintaining the idea of being essentially above regulation. In particular, there is a cozy symbiosis between the Valley and the defense establishment, and it leads some in the developing world to think of all tech firms as proxies for the U.S. government. Given that, it is also a story about developing country governments demonstrating the regulatory muscle not to be talked down to by the West, about showing–mostly to their own public–that globalization does not mean colonization. It’s also important to keep in mind that while BlackBerry messaging IS encrypted, it’s not that governments elsewhere in the world are necessarily more comfortable with that than the countries issuing these bans. Rather is is that here in the West, governments can often subpoena for access to specific correspondence if it is necessary for a court case. In countries where that kind of subpoena power doesn’t exist, governments might try to hack systems extrajudicially, and then if that fails, proceed to shut down what they cannot penetrate.”

One thing this story is NOT about, however, as the above should indicate, is privacy: we lost that a long time ago.

ICapp Exclusive: Sherry Rehman Slams Punjab’s “Total Insanity”

In the wee hours of the morning, I got word that Pakistani politician Sherry Rehman was circulating an op-ed statement against the Government of Punjab, Pakistan’s largest and wealthiest province. Think of it as the Midwest (farms, mills, and traditional values) meets New England (history and culture and more tradition). It’s where the army recruits from, where the most federal funds go, and where the tourists want to visit. In other words, it’s the establishment.

China’s Pearl

My latest story is up, on Chinese investment in Balochistan, a Pakistani province that borders Afghanistan, Iran and the Persian Gulf. As others have reported, China is building up investments in Central and South Asia in a strategy it calls the “string of pearls,” in a way that contains/constrains India. My piece looks at how China goes about staking its claim and what the strategy, as applied in Pakistan, means for the United States.

In Favor of Results

I’ve been off the Pulitzer blog for a bit, I know, but I promise it’s because I’m chasing good stories and am totally overwhelmed by them. In any case, here’s the latest, on some nonprofits I’ve had the opportunity to look into.

His Name is Khan

This week, I saw My Name is Khan. Generally, I do not like Bollywood cinema. And Shahrukh Khan, Bollywood’s Alpha Male du jour, specializes in my least favorite Bollywood genre: the “masala,” a saccharine mix of romantic comedy, melodrama and musical. Yet there I was, in line to see his latest venture, my curiosity piqued by the political maelstrom the film has unleashed.

First, the plot: Rizvan Khan, an Indian Muslim with Asperger’s Syndrome, immigrates to America, becomes a beauty products salesman, marries a divorced Indian Hindu beautician, and adopts her son Samir. Then 9/11 happens. Locals boycott the Khans’ beauty salon. A neighbor dies in Afghanistan and his son blames Samir. Samir is killed in a fight between the boys at school, Rizvan’s wife throws him out in a fit of rage, and tells him not to come back till he has convinced America not to hate on Muslims. She says, “Tell the President of the United States, ‘My name is Khan, and I am not a terrorist.’” Autistic Rizvan takes her literally and runs off on a road trip across the country trying to convey his message to George W. Bush. At a presidential rally on a Los Angeles university campus, a social security operative overhears Rizvan shouting “terrorist” in the crowd, and has him arrested. A student journalist catches the incident on film and begins investigating, discovering just how harmless Rizvan is. When the story airs, disability rights groups begin phoning government offices, and Khan is released. Instead of going home to his wife, he continues his quest, but is derailed by a major hurricane that Washington is ignoring. [Sound familiar?] Khan takes charge of the relief effort in a small Georgia town, and becomes a national hero, again. By this time, Bush has been replaced by President Obama, who comes to Georgia to meet Khan on his release from the hospital, and the film (finally) ends.

There are no song and dance numbers and there are no long-lost cousins back from the dead. For Bollywood, that’s realistic, but to audiences unused to Indian cinema, the above should sound absurdly far-fetched. Many Indians had hoped that after Hollywood came to them via Slumdog Millionaire, their own work would have crossover appeal. But a plot like this is not going to appeal to American audiences.

Rather, I think MNIK’s merits lie in the conversations it can start inside India. It is these nerves touched that have invited all the outrage Read the rest of this entry »

Jaipur: Adventures in Time and Space

A few weeks ago, I took a weekend business-cum-pleasure trip down from Delhi to Jaipur. I was there to attend the Jaipur Literary Festival, a 5-day conference of writers, journalists and artists organized by Namita Gokhale (a great champion of Indian writers) and William Dalrymple (the dean of expats in India). But the Lit Fest has grown far beyond literature related to India into what might be the largest free gathering of its kind anywhere in the world.

I spent most of my time in newsy panels on everything from terrorism to regional politics to civil liberties, featuring such personal heros as Steve Coll, Lawrence Wright, Anne Applebaum, Asma Jahangir and Niall Ferguson. If 1% of their collective wisdom seeped into my brain, I’ll have done well. Read the rest of this entry »