22 July 2011

Growth and Poverty-the great debate

CUTS-International has brought out a compilation of the various views on growth and poverty, sparked off  by Jagdish Bhagwati's lecture posted in the group forum in January. The discussion online did get quite heated and involved many noted economists, CUTS has made this available to everyone through their website - enjoy!

Some Reflections
I believe that the differences between Sen and Bhagwati are less substantive than what is popularly made out to be. On a variety of important policy matters, they use different languages but say very similar things. My only worry is that even on this Sen and Bhagwati will agree that I am wrong.
Kaushik Basu, Chief Economic Adviser, Ministry of Finance, Government of India
There is a case for land reforms that make the conversion of land into industrial use less fraught; there is a case wide-ranging educational reform which makes it easier for the poor to access quality education; and there is a case for revamping primary healthcare to make it much more functional.
Abhijit Banerjee, Department of Economics, Massachsetts Institute of Technology, US
Obviously, higher incomes are a necessary condition for better state-funded welfare, better jobs and so forth. This is simply not debatable. Indeed, only in India, do serious intellectuals dream of debating these issues.
Martin Wolf, Chief Economics Commentator, Financial Times, London

20 July 2011

Famine and food security

As the UN declares the first famine in Africa in three decades, Cambridge University has a whole section in its research page profiling food security looking at all aspects of food security, including the environment.
Whose fault is famine?What the world failed to learn from 1840s Ireland by David Nally makes the important point of 'structural violence':

a term used to describe how certain institutional arrangements can render entire communities vulnerable to famine and at the same time impede alternative reforms that nurture local resiliencies.  For Nally, the current emphasis on increasing food production through market integration and technological fixes, ignores the well-established fact that there is enough food to feed the world’s present population – in fact recent estimates suggest that there is 20 per cent more food than the world needs. The relationship between food supply and starvation has long been a contentious issue and the Irish Famine is no exception. Contemporary accounts describe ships carrying relief from England passing ships sailing out of Ireland with cargos of wheat and beef to be sold for prices out of reach to the starving population.
“In the analogous way,” Nally suggests, “Africa, a land synonymous with disease and starvation, is a major supplier of raw materials including diamonds, gold, oil, timber, food and biofuels that underpin the affluence of Western societies. The current focus on food availability and supply effectively masks how resources are unevenly distributed and consumed.”
“At present, the problem of ‘food insecurity’ – to adopt the modern, sanitised term for widespread starvation – is generally conceptualised as a scientific and technical matter: geneticists and plant scientists will engineer harvests that produce more efficient, more abundant crops that are more tolerant of climatic stress, more resistant to attacks by pathogens, and so on. This, we are told, will be the basis for ending global hunger. While the physical sciences do have an important role to play, it is wishful thinking to believe that hunger can be avoided by simply ‘turbocharging’ nature  – that we can, if you like, engineer our way out of scarcity,” he argues.

What is the future of the world when the solution of distribution of resources remains unresolved?

13 July 2011

Interoperability for financial inclusion

My article on interoperability in today's Hindu Business Line makes the point:
'Both banks and MNOs need to recognise that financial inclusion can be a win-win situation and learn to work together in an environment that is co-operative and competitive. While there will be stumbling blocks along the way, with regulators and governments across the developing world bent on achieving financial inclusion, such a scenario of what is termed ‘co-option' is not as improbable as it sounds' 

The point that telcos need to cooperate has been stressed in a speech by RBI Dy Gov  KC Chakrabarty 
'as regards MSPs (mobile service providers) acting as BCs reports reaching us still suggest that the true spirit of co operation is yet to stabilise with each still trying to destabilise the other. The entire world is looking at this experiment in India and I would urge all of you to get your acts together.'

Anecdotal evidence actually shows that the RBI was making the point rather mildly! Can telcos learn to share the space and infrastructure or will they have to be made to do so?