Monday, February 10, 2014

Are you part of the top 1%? 

Fascinating factoids from World Bank economist, Branko Milanovic: You need an annual income of just $34,000 a year to be in the richest 1% of the world. To be in the top half of the globe you need to earn just $1,225 a year. For the top 20%, it's $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000. Something to ponder next time we rage about the top 1% :)

Sunday, February 09, 2014

Ambedkar vs Gandhi on village empowerment 

Swami Aiyar channels Ambedkar in his criticism of well-meaning village empowerment, a subject made topical by the AAP party's moves towards decentralization to the mohalla level. 

Arun Shourie's Wincott lecture from 2008 

Weekend long read 2: Arun Shourie delivers a masterclass on the political economy of reforms. A must read for anyone interested in why it is so difficult to do the manifestly obvious. 

Car dependency in the US vs Europe 

Nine reasons why the U.S. ended up more car dependant. 

The consequences of equal marriages 

Weekend read 1: A very thoughtful New York Times magazine story. Long, but worth reading to the end. 

Saturday, January 25, 2014

Middle class revolutions 

Vivek Dehejia on middle class revolutions in the context of the recent AAP party win in New Delhi and the confusion that followed. 

Letters and more letters 

First Bill Gates wrote his 2014 Gates Letter. Bill Easterly responded in the Financial Times. And Chris Blattman graded the original letter

Thursday, December 12, 2013

One Uber to rule them all? 

And another dimension of urbanization, and the role Uber may play in this. An Amazon for urban transport and logistics?

Policing and Cities 

Paul Romer discusses with Bill Bratton at perhaps the single most important issue in a fast urbanizing world, especially in the developing world.

Sunday, November 03, 2013

A reason to visit Zwolle 

This is brilliant use of historical space; an old cathedral that's been converted into an amazing book shop. I have been to Zwolle before, but clearly I need to visit again. 

Tuesday, October 22, 2013

Why growth matters: A panel discussion at AEI 

Arvind Panagariya and Jagdish Bhagwati discuss why growth matters with Sadanand Dhume and Pravin Krishna. Arvind, as always, is compelling with the data.

Sunday, September 29, 2013

Ray Dalio on the Economic Machine 

Ray Dalio, founder of the world's largest hedge fund, presents an interesting and easy to understand lecture on the economy as machine.

Saturday, September 28, 2013

Weekend reading 

Excellent profile of Raghuram Rajan in Caravan Magazine. Strangely, no mention of the Fischer Black...

Sunday, September 15, 2013

Hello again, Julian Simon 

Overpopulation is not the problem, says Erle Ellis.

Monday, September 09, 2013

Traveling Salesman, meet Algorithm 

Fantastic read. Unhappy Truckers and Other Algorithmic Problems. (Via Marginal Revolution)

Sunday, September 08, 2013

Book Review: The Idealist 

Seems like The Idealist is a must read book for anyone in the development business. The sub-title reads "Jeffrey Sachs and the Quest to End Poverty." And here is a review by James Traub

Nerds and Humour 

These have to be among the most high-brow jokes in the world.

Sample 1:  The barman says: “We don't serve faster-than-light particles here.” A tachyon enters a bar.

Sample 2. How many surrealists does it take to screw in a light bulb? 
A fish.

Friday, September 06, 2013

Cynicism, thank god! 

Dalibor Rohac makes an eloquent defence of cynicism.

Wednesday, September 04, 2013

Sweden as a model of economic recovery 

Fred Bergsten on Sweden. Money quote: "The country’s guiding principle is that a successful social welfare society must be fiscally conservative and administratively efficient."

Tuesday, August 27, 2013

A documentary on Rush 

Blast from the past. Rush featured in an excellent documentary called Rush: Beyond the Light

Wednesday, August 21, 2013

Private capital in public projects 

Isher Ahluwalia thinks Hyderabad shows the way. 

Tuesday, August 20, 2013

What is public transit worth? 

A lot more than you might think, according to Atlantic Cities. The original paper is here

Sunday, July 21, 2013

Measuring Malnutrition 

My op-ed, defending Arvind Panagariya's EPW paper on malnutrition (link) appeared in Mint last week. I am also reproducing the full text here.

Read more »

Saturday, October 24, 2009

Weekend Infotainment: George Soros FT Lectures 

Mr Soros provides fantastic insight into global currencies, the renminbi peg, the great crisis, financial sector reform etc in these conversations with Chrystia Freeland, US managing editor of the Financial Times. You can find the lectures here: Part 1, Part 2, and Part 3.

Monday, October 19, 2009

Henry Markram on building an artificial brain 

One of my favourite talks at TED Global in Oxford just went live. Enjoy.

Monday, October 12, 2009

PJ du Jour 

(Via Martin)


This is Jam Heaven 

Thom Yorke. Flea. Live. Need I say more?

Monday, September 07, 2009

A Wayback Machine for Manhattan 

(via Benku) I am a fan of the Wayback Machine. It should come as no surprise then that I am now addicted to the Mannahhatta Project (that's a pun, not a misspelling). The project explores Manhattan before it became Manhattan. What did the island look like? What sort of flora/fauna was native to the island?
It turns out that the concrete jungle of New York City was once a vast deciduous forest, home to bears, wolves, songbirds, and salamanders, with clear, clean waters jumping with fish. In fact, with over 55 different ecological communities, Mannahatta’s biodiversity per acre rivaled that of national parks like Yellowstone, Yosemite and the Great Smoky Mountains!
The project uses detailed maps of the island created by British Army cartographers in 1782 together with a knowledge of the ecology and species around at the time to create computer-generated 3D images of Manhattan in the 1780's. There is a full 3-D topography of the island complete with vegetation going back to 1609. Heck, you can even look up specific addresses and see what it looked like way back when. Incredibly fascinating, and not just if you're addicted to Manhattan.

The Great Firewall of China at Work 

I am in China to attend the World Economic Forum in the north-eastern port city of Dalian. The event starts this evening, so I spent the morning exploring the great firewall. First, I realized some search results were being filtered. I tried Facebook and my blog and found both were unavailable, as was Blogger itself. Here are some screen shots (FB and my blog, respectively).

Obviously, they aren't too serious about the filtering because I am using a very simple proxy to route around the block. In the meanwhile, on telly, there is the shocking spectacle of horrible Indian soaps dubbed into Chinese. This is just so goddamn wrong...

Monday, August 31, 2009

More Financial Ingenuity, Not Less 

I was invited by Matthew Bishop, the U.S. editor of The Economist and author of Philanthrocapitalism, to contribute a piece to an issue of Alliance Magazine that he's guest editing. The focus is on "discontinuous thinking for a crisis." Here is my piece on catalytic philanthropy in full.
With free markets in retreat, economic development risks losing one of its foremost drivers. People forget that economic growth in India and China alone, fostered by open markets, has lifted hundreds of millions out of absolute poverty over the past 15 years. A crisis is a terrible thing to waste, so this is a good time for capitalism's greatest beneficiaries to bring its sheen back. Philanthropy can play a pivotal role in catalysing markets and market-based solutions that promote inclusive economic growth in developing countries.

Developing countries are plagued by instances of mispriced risk, where the perception of risk is often far greater than the reality, which drives up the cost of capital. Though market clearance – in which supply is equal to demand so the market 'clears' – is a central tenet of free markets, a nudge is often required to kick-start markets. Philanthropic capital with a longer horizon can very effectively provide this stimulus, demonstrating a market opportunity into which commercial capital then flows.

Small and medium enterprises (SMEs) are traditionally an economy's largest job creator, so any developing country aiming for rapid and inclusive growth requires a robust SME sector. Contrary to popular opinion in venture capital circles, real investment opportunities may well lie in ‘bread and butter’ industries with a high or exponential correlation to GDP growth and huge social impact (waste management, for instance, or logistics and warehousing). The first true exit for a venture capital firm in India is likely to come next year in a business with a high social impact: microfinance. The bottom line in these businesses is that social and financial returns are not mutually exclusive.

There are several factors that retard the growth of SMEs, including lack of policy, limited knowledge networks and poor management skills, but availability of finance is key. Realizing this, the Soros Economic Development Fund, Omidyar Network and Google.org have set up the SONG[1] Fund at the Indian School of Business to invest in early-stage companies that will generate financial and social returns without compromising on either. There is enormous scope for long-term 'patient' capital to be deployed effectively. For instance, with 80 per cent of India's healthcare system in the private sector, our research reveals an opportunity to help build an asset management business around low-cost healthcare services.

Low-income housing is typically ignored in developing countries, and slums and shanties are a poor substitute. Market surveys in India have shown that there is a shortfall of 25 to 35 million houses in the $4,000 to $30,000 price segment. Our research shows that it is possible to generate internal rates of return of 40–60 per cent by building for the lowest end of the market. We have set up a for-profit housing company that will build houses for between $4,000 and $6,000, targeted at the working poor.

In doing so, we have identified several opportunities for catalytic philanthropic capital to play a role, besides the obvious as investors. There is a serious inability to access project finance, so anyone who can provide a first-loss guarantee can effectively catalyse the market and bring even smaller developers to the table. Similarly, end customers in the developing world can incur severe penalties for defaults and late payments arising from cyclical cashflow problems such as illness or unemployment. A payment protection insurance plan funded initially by philanthropists could offer incentives to mortgage providers and banks to offer loans.

The CARE Protected Note, developed by Derilab SA of Switzerland, offers investors the option to support a large low-income Pakistani school system that is based on a public-private partnership, and to participate in a structured product with capital protection at maturity. A yearly coupon will be paid to the CARE Foundation only if the school system grade average is greater than the regional average; if not, the coupon is returned to the investor. The CARE Protected Note offers the investor a tradable and liquid financial product, where investments in a liquid underlying asset generate positive returns. This mechanism not only provides incentives for all parties, and protection and returns to the investor, but also sources capital for charitable projects that is more sustainable than donations.

These three examples of innovations clearly show that the 'base of the pyramid' market segment needs more financial ingenuity, not less. Many more exist. Most just need a nudge from smart philanthropic capital to see the light of day.
Dr Reuben Abraham is a professor and executive director of the Centre for Emerging Markets Solutions at the Indian School of Business, Hyderabad.
1. SONG is an acronym for Soros, Omidyar Network and Google.