Archive for the ‘Rural Development and Economic Growth’ Category

Dr. Jhunjhunwala’s Scorecard for IT in rural India

January 1, 2008

a take away from this IIT-Madras analysis is that Internet access infrastructure and basic apps are *not* the biggest problem in rural India today — the real gap is in apps for creating higher paying jobs, connecting buyers to sellers, and enabling financial transactions for rural economic growth. that’s where we need the heavy lifting.

for decades Professor Jhunjhunwala (IIT-Madras) has been leading a R&D center focused on rural access for wireless voice + Internet and economic development in India. his slide deck which gives an overview of rural information and communications technology (ICT) including cell phones, fiber backbones, Internet kiosks, voice technologies — with examples of rural apps like financial services, remote teaching, telemedicine, e-choupal, weather, etc. his “dream” is to double the GDP of $140 billion for 700 million rural Indians from $200 to $400 per person annually. on slide 21 he asks “where are we?” and he rates today’s services in the rural areas on a scale of 0-5.

Jhunjhunwala’s Scorecard:

Infrastructure for ICT

  • 4 — rural fiber backbone
  • 3+ — broadband access (> 100 kbps)
  • 3+ PCs/Software/Power

Capacity Building for ICT

  • 2+ — selection/training of operators, marketing of services

End to End Services using ICT

  • 4 — Basic Services (email, browsing, games, DTP, astrology, matrimonial, photography)
  • 3 — Communication Services (3 VoIP, 2+ Mobile)
  • 3+ — Education
  • 2+ — Micro-franchise
  • 2+ — ITeS
  • 2+ — Telemedicine
  • 2- — Agriculture
  • 2- — Financial Services
  • 0 — Jobs
  • 1- — Buying and Selling
  • 1+ — E-governance
  • 0+ — Micro-enterprise
  • 0 — Online Games

the slides are from http://www.comminit.com/en/node/243350 (2005)

here is a more recent video Q&A with him (2007)

there are some interesting perspectives at Microsoft’s site “Unlimited Potential” site, but the ideas are mostly PC/net centric. i didn’t find much in terms of actually connecting rural villagers to higher paying economic local opportunities

also see interview with CK Prahalad “bottom of the pyramid”

How do people fall into poverty in India and Africa?

December 30, 2007

this weekend after reading Dr. Krishna’s papers (Duke University) i feel even more confident that large scale rural poverty in India can be solved, but that it is certainly not going to be solved the way we have been going about it historically. if we want to make a dent in the numbers, the survey data clearly indicate that poor villagers simply need make more money to afford basic needs like food and health care sustainably year after year. information services catering to mainstream agricultural needs are not enough to do this. we need new information services that can *connect* villagers to new local and regional economic opportunities/markets beyond agriculture. roughly, the total market for agriculture is limited to perhaps $100B or $200B annually and crop yields are at the mercy of weather, droughts, and so on. they need to somehow find 10x that. see my earlier post “India’s 450 million.” that got me thinking about all of this.

these papers show several commonly held assumptions are wrong. the survey teams talked to many thousands of families in 36 villages in each of Rajasthan, Andhra Pradesh, and Gujurat in which poverty rates are 25-65% and vary a lot from village to village (http://www.pubpol.duke.edu/krishna/communities.htm). they also conducted parallel studies in Kenya/Uganda and in all cases found several similar patterns across india and Africa.

take education. it is a commonly held belief that villagers don’t want to send their kids to school. but that doesn’t seem to hold up against the data. even then, nor has primary education played significant role in which large numbers of families have risen or fallen out of poverty.

in the surveys they asked what villagers consider to be the poverty threshold, in order of priority. there is some variation among the states, but within each state they found universal agreement on villagers’ priorities which define the point at which they consider a family to be poor — only after this cutoff, villagers opinions diverged in each state.

Rajasthan — food, primary education, clothes, paying off debt

Gujurat — food, clothes, primary education, paying off debt, patching leaky roofs, farming a small plot of land (sharecropping)

Andhra Pradesh — food, patching leaky roofs, paying off debt, clothes

with the exception of AP, primary education was high up on the list only after food. why not in AP? the reason in AP is “not because parents care less about educating children, but because primary education is almost universally provided here and it is no longer something that is out of reach of even very poor households. All but a miniscule number of primary school-age children attend primary schools in these 36 villages, and annual fees for government-run primary schools are a pittance, easily within reach of even very poor households.”

across all three states, there were similar patterns in how families fell into poverty or rose out of poverty over 25 years. The number of families rising out of poverty (11% in Rajasthan, 10% in Gujurat, and 14% in Andhra) has been almost counteracted by the rate of falling into poverty (8% in Rajasthan, 6% in Gujurat, 12% in Andhra) for a net poverty reduction of only 2-4%.

in all three states, the most common pattern for 60-80% of villagers who fell into poverty was nearly identical — inability to afford the heavy costs for health care in chronic and life threatening illnesses, costs of social functions like death ceremonies and marriage functions, which in turn leads these families to take on high interest rate debt from local loan sharks (~3% per month). factors like laziness/drunkenness were identified in single digit percentages and not a major factor.

in the other direction, in almost all cases the only way families have risen and managed to stay out of poverty is simple: making more money by getting out of agriculture and diversifying their income sources so they can afford health care, support a family/social life, get a roof over their head, and repay their debt. they have done this by getting a better job in a city or accessing a new urban market through a contact/friend, farming very different more profitable crops, or getting a government job. it turns out primary education played a relatively minor role compared to other factors — so why push education on them if they will send their kids to school anyways, once they make enough money to eat?

migration to cities and government jobs can work for a limited number of families, and can only go so far and is not scalable. there needs to be a way to enable small-scale entrepreneurs with specialized skills to gain access to local markets to build up their own villages/regions by supplying higher value-add services/goods where the need is greatest and so the price is highest (long tail) — just like how AdWords/AdSense, EBay, and Amazon are enabling all sorts of small businesses in the US to gain access to markets they couldn’t otherwise reach before.

how can we do this in india? Internet access via kiosks and rugged laptops for kids (OLPC) is only part of the equation. perhaps one way to get started would be to create a service for villagers to input classified ads via the web and browse/search them the same way (like craig’s list) — keeps it simple to setup/operate, and easier to focus on getting the content right with categories tailored to rural economy’s needs such as electrical repair work, ads for doctors/hospitals/specialists, tractor repair needs, water purification, dramas/skits/performances, new shop/business openings, bicycles for sale, animal care, and so forth. the list is endless, unpredictable, and long-tail. the important thing is should be derived directly from demand/supply in the regional rural economy and can be extended to incorporate literally anything if a user needs to include it. if the site enables broader distribution not otherwise possible, the early users would be entrepreneurial buyers who want to get lower prices and entrepreneurial suppliers who will “do what it takes” to gain a competitive edge by connecting supply to demand.

for the foreseeable future, my understanding is that Internet/web terminal penetration will remain much lower than cell phones. Internet kiosks are mostly limited to larger population centers, but still within a day’s travel reach of most villagers. cell phones can reach a larger audience anywhere in the villages on a daily basis, and this can be combined with less frequent access to kiosks in larger centers. as site usage grows, it could justify supporting other access methods — which requires additional software development. a rural user could be given the capability to subscribe to “alerts” on a cell phone (txt message, voice mail), even via an interactive voice interface on a cell phone, or via the web itself at an Internet terminal. for instance, a worker who is skilled in electrical work may want to be notified by cell phone when an ad shows up within a radius of 20 miles of his village — once he gets a notification, he can request more details on his cell phone or otherwise go check at the nearest Internet terminal to see more details of the job requirements. replace “electrical work” with “bharata natyam” dance performance and you have a local cultural network.

‘One Laptop’ a hit in Peruvian village

December 27, 2007

‘One Laptop’ a hit in Peruvian village

The children of Arahuay prove One Laptop’s transformative conceit: that you can revolutionize education and democratize the Internet by giving a simple, durable, power-stingy but feature-packed laptop to the worlds’ poorest kids.

“Some tell me that they don’t want to be like their parents, working in the fields,” first-grade teacher Erica Velasco says of her pupils. She had just sent them to the Internet to seek out photos of invertebrates — animals without backbones.

Antony, 12, wants to become an accountant. Alex, 7, aspires to be a lawyer. Kevin, 9, wants to play trumpet. Saida, 10, is already a promising videographer, judging from her artful recording of the town’s recent Fiesta de la Virgen.

India’s 450 million

November 30, 2007

Summary: Most of India lives in villages, and 450 million people live on less than $1.50 per day. Rural Indians need to tap into new markets to raise their economic output into the trillions. My hunch is that finding ways to help rural Indians to diversify beyond agriculture may be the only way to improve their standard of living to $10/day, because the total agricultural market is top limited to perhaps $100 or $200 billion and that will not be sufficient for everyone to afford integrated package of education, health care, water, food, public works etc. Lifting the constraints of distribution (geography, information flow) using the Internet to create online markets for small scale goods/services tailored to the rural economy can tap into “long tail” of demand. Read below to find out how I arrive at this conclusion.

I got to attend a Stanford conference sponsored by the Freeman Spogli Institute for International Studies a few weeks ago discussing issues that are of relevance to all of us. See Conference explores nexus of development, global warming, nuclear proliferation. Audio transcripts are available here.

Warren Christopher, former Secretary of State, has begun a commission with Baker to examine the presidential perrogative to go to war, how to conduct a war, and how to terminate it. This is inspired by current events involving the tensions between Congress and the President in the Iraq War.

Former defense secretary Perry noted that every month 1000 US military personnell are killed, maimed, or wounded. Security is moving in the wrong direction. The top threats he sees are:

  1. Terrorist nuclear weapon
  2. New Cold War (China/Russia)
  3. Environmental Disaster
  4. Radical Fundamentalists Gaining in Influence

In the Day After conference he organized, they considered the possibility that terroroists could threaten multiple terrorist nuclear attacks (say 1 every month) until they get what they want. We have no way to defend or deter this, and confidence in the US government would evaporate if DC were to be attacked. In terms of solutins to carbon emissions there are hybrids, wind, solar, and nuclear power. There is a conflict between the need for power and the ability to prevent terrorists to get their hands on fissile material. There is also a lack of political will to get ride of nuclear weapons. It took one third of Perry’s time as defense secretary to reduce nuclear weapons, and getting rid of them completeley per the bi-partisan proposal will require even greater time commitment from future administrations.

Scott Sagan discussed Pakistani nuclear weapons expressing many of the views for which he is quoted in this WaPo article “Calculating the Risks in Pakistan.”. Prior to 2001, Stanford scholars visited Pakistan and found very little security. So Stanford scientists started working with them to institute various best practices including psychological screening. See recent article the the Wall Street Journal on Pakistan’s Personell Reliability Programs and other security measures for their nuclear weapons program. The US government officially got involved in helping Pakistan secure their nuclear weapons after 9/11, which are currently secured through physical separation, not devices known as PALs.

Rosamond L. Naylor described the Millenium Development Goals to reduce the number of people living in chronic hunger by 1/2 by 2015, using a 1990-1992 baseline. People in hunger will either find a way to live, end up with long term disability, or die. The human security report points out the number of people that die from various causes:

  1. Terrorism: 3000
  2. Battle: 20,000
  3. Conflict (Genocide): 50,000-100,000
  4. Collateral damage: 500,000-1,000,000
  5. Hunger/malnutrition: 6-8.4 million

Kofi Annan’s list of risks to human security are hunger, infectious disease, resource depletion, civil conflict, and climate change. 15% of people live on $1/day and 50% live on less than $2/day. In sub-saharan Africa most people live on less than $0.60 per day.

Shashi Tharoor talked about his new book called The elephant, the tiger, and the cell phone and he pointed out there are three ways to get what you want, sticks, carrots, and soft power. He discussed at length how India’s soft power is rising with culture, political values (when it lives up to them), foreign policies, movies, art, cuisine, fashion, etc. India’s economic growth is also enabling this. There are 8.5 million cell phones sold per month in India, and the average bill is $4 / month. Quoting the US ambassador to India from an earlier session, he points out that while 450 million people in India live on $1.50 per day, 260 million of them live on less than $0.30 per day (Indian poverty line). 540 million of the Indian population is under 25 years old, and 165 out of 602 districts have Maoist insurgencies.

My question to Shashi during the Q&A was what was India doing in comparison to China for the children who grow up in these $1.50 per day environments, because quite literally they really the future of India? His answer had to do with education, which in turn requires health care, and food to feed hungry children. He pointed out that the government is making room for NGOs (non-profits) to help here. This reminded me of the list of principles for universal health care by Paul Farmer which includes food security, water, education and so on. Human development all comes back to the same “package” of human security needs that need to be provided for in a functioning economy.

Putting all this together, my thoughts are that handouts provided by the government or NGOs may succeed in patches but will fail in scale. The only solution that makes sense for the bottom 450 million people is economic development to increase their wages so they can afford food, water, health care, education, housing, and security from crime and the natural disasters.

Indians need to find ways of getting out of agriculture into new diversified economic activities –giving loans/handouts to farmers (see microcredit) or using the internet optimize the agricultural supply chain (E-Choupal) will only work for the same old agrarian market which is top-limited ($100-200B annually?). they will need access to new larger markets (local or international) if things are going to change for them. three generations ago, my family was completely in farming and today my cousins are all in IT/medical/etc – many in the US. that model of migration or outsourcing will never scale to most of india.

The growth of ITC’s E-Choupal initiative is impressive, focused on agricultural trading and supply chain automation. on the other hand it its scope is limited to the top economic activity, so no avenue to buy/sell other goods/services like craig’s list. There are also barriers to usage – it relies on training/access by one farmer in each village, does not allow open/self registration like most web 2.0 sites, and appears to be in english not local languages. in seven years they have reached 31,000 villages through 5200 kiosks – in total 3.5 million farmers. across india there are half a million villages and 450 million people, so large scale initiatives need to reach 10-100x of E-Choupal.

Launched in June 2000, ‘e-Choupal’, has already become the largest initiative among all Internet-based interventions in rural India. ‘e-Choupal’ services today reach out to more than 3.5 million farmers growing a range of crops – soyabean, coffee, wheat, rice, pulses, shrimp – in over 31,000 villages through 5200 kiosks across six states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra and Rajasthan) The problems encountered while setting up and managing these ‘e-Choupals’ are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.

the agrarian economy can still continue to grow year on year, but how far can that go towards changing the majority of Indians’ daily wages from $1-3 per day? see “Field of greens: India is undergoing a second agricultural revolution – building the infrastructure that connects farm to supermarket.” if we are to hope to multiply daily wages by 10x, we need a local solution (maybe like Craig’s list) to connect buyers to sellers in new ways, not just agriculture.

Amartya Sen’s work on famines suggests that the bottleneck to economic growth at these levels is distribution – which in turns is limited by geography and information flow. From wikipedia…

In 1981, Sen published Poverty and Famines: An Essay on Entitlement and Deprivation, [read it here] a book in which he demonstrated that famine occurs not only from a lack of food, but from inequalities built into mechanisms for distributing food. Sen’s interest in famine stemmed from personal experience. As a nine-year-old boy, he witnessed the Bengal famine of 1943, in which three million people perished. This staggering loss of life was unnecessary, Sen later concluded. He believed that there was an adequate food supply in India at the time, but that its distribution was hindered because particular groups of people—in this case rural labourers—lost their jobs and therefore their ability to purchase the food. In his book Poverty and Famines: An Essay on Entitlement and Deprivation (1981), Sen revealed that in many cases of famine, food supplies were not significantly reduced. In Bengal, for example, food production, while down on the previous year, was higher than in previous non-famine years. Thus, Sen points to a number of social and economic factors, such as declining wages, unemployment, rising food prices, and poor food-distribution systems.

We are talking about vast numbers of people. There has to be a long tail stretching out in this demand curve. Until their net worth improves they are not going to have credit cards anytime soon, so transaction-oriented sites like ebay won’t reach them in ten years at least. one possibility is mobile banking for these 450 million people to participate in online transactions (instead of credit cards). See

Craig’s list in India. http://geo.craigslist.org/iso/in. here are the cities in India… only the very biggest ones are covered (ahmedabad, Bangalore, Chennai, delhi, goa, Hyderabad, kerala, Kolkata, Mumbai, pune). they are all in English with the same US-centric categories (personals, jobs, housing, etc). not aware of any similar site in india.

www.babajob.com is a fee-based job board site kind of like monster.com, except they use social networking among high-income people and paid referrals to find jobs for low wage workers who make up the majority of the indian population. here is a podcast by their founder/CEO Blagsvedt (formerly at Microsoft Research) who explain’s the company model/strategy… babalife is a social network to attract wealthy folks who automatically get signed up for babajobs – the site for jobseekers.

there is a nice article in the NYT about them and how they stumbled on their ideas. “In India, Poverty Inspires Technology Workers to Altruism”. babajobs also has an interesting slide deck/pitch contrasting US social networking sites to low income Indians’ needs, including internet vs cell phone subs – unlike US people making < $250 per month are the vast majority of the population. in india,

  • 18% on mobile, virtually all on SMS

  • 3% on mobile internet

  • 0.25% has broadband via PC

  • 4-7% shared network connection

towards the end of this presentation they have a section on how low-income workers find jobs in india… word of mouth (multiple hops). using the babajobs site workers can pay Rs 100 of their 1st months’ salary to “connectors” to locate jobs. for < rs 300 they issue payments in mobile minutes, for more than Rs 300 they send a State Bank of India check.

what would happen to the cost of distribution in india if a free information network/service/billboard was made accessible indians, modeled after craig’s list:

1. at the village, town level (also metro, district, state, and national levels)

2. in local vernacular (hindi, telugu, etc) and in multiple interfaces including web-based and cell phones to the extent possible

3. with categories customized to both agricultural and urban indian markets? crop prices, labor needs, equipment leases, services, etc?

internet-enabled computers kiosks are not everywhere, but there are enough around to reach a sizeable fraction of the population under $1.50 per day in cities and some villages.

Universal Health Care in Rwanda

November 11, 2007

Dr. Paul Farmer spoke today at Stanford University about “scaling up” health care in Rwanda based on the health care delivery models that his organization “Partners in Health” developed in Haiti. Minus the funny anecdotes and striking visual examples he showed on his slides, a good summary of his talk can be seen in this newsletter in

Rwanda Scales Up PIH Model and also here.

The challenge is how to provide uniformly high quality health care across the entire nations. The government of Rwanda is basing their efforts on a set of ten principles listed in the link.

     

  1. High quality health care requires a truly comprehensive and integrated approach at all levels
  2. A comprehensive supply chain and procurement system should be in place for drugs, diagnostics and other commodities
  3. Patients should be able to access healthcare without regard to their ability to pay
  4. Healthcare workers should be highly trained and compensated fairly
  5. All health centers should have decent basic infrastructure and functional equipment to support the services they provide
  6. Community health workers are a vital component of the health system
  7. Nutrition is an essential element of any comprehensive health care service
  8. Information and communication technology should be integrated into existing health systems to improve the delivery of health care
  9. Health institutions should be held to the highest standards of care
  10. Comprehensive rural health care must go beyond the purely clinical by providing socio-economic support as well
  11.  

Point 7 is simple — the best cure for hunger is food because patients can’t recover without proper nutrition. In his slides, Farmer mentioned that point 10 includes education, drinking water, jobs, and other essentials needed for living a decent, productive life. He did not mention microcredit or microlending. When I asked him about that he said they do microlending already, and it should probably be mentioned.

For point 8, he mentioned that the remote hospitals are equipped with satellite uplinks powered by solar panels and generators to communicate back to the PIH center in Boston.

Personally, I would add access to information and communication (the Internet) to this list in point 10 in addition to microcredit.

The common thread that emerged listening to him was the basic human need for “security” in the broadest sense of the word — health security, food security, water security, security from crime, national security, access to information, financial security, job security, personal safety, and so on. A functioning national economy is supposed to provide all this for most if not all of its people. Farmer talked about health security being a “right” versus a “commodity” — in some developed countries a small fraction of the population doesn’t have health security and in other developing countries most of the population doesn’t. I think the idea of listing all these things that together define “human” security needs would help us clarify what can be done to achieve them.

update on feb 13, 2009: compare to Clinics in the US, Expansion of Clinics Shapes Bush Legacy

NASHVILLE — Although the number of uninsured and the cost of coverage have ballooned under his watch, President Bush leaves office with a health care legacy in bricks and mortar: he has doubled federal financing for community health centers, enabling the creation or expansion of 1,297 clinics in medically underserved areas.

Emergent India Conference… and cell phones

October 1, 2007

The conference took place at MIT with experts, scholars, and industrialists from India to discuss issues including energy, public health, poverty, and market trends, … here is a writeup. From reading about it, I was surprised to learn that Adi Gordrej is an MIT graduate (from the 1960s). He says that while rapid cell phone adoption is an equalizing force (7 million new cell phones a month), India maintains the largest illiterate population in the world that the private sector should help address this issue.

For an examination of the politics and economics driving this divide, see India’s Democratic Challenge in India by Ahutosh Varshney in the March/April 2007 issue of Foreign Affairs. On page 98, he points out that it’s mostly the middle class of 200-250 million who are buying these cell phones along with five-star hotel rooms and oversold flights while a fourth of the 1 billion population lives below the poverty line of $1 per day mostly in rural areas.

This may be changing. With the urban cell phone markets are saturated, cellular operators in India are expanding their networks to target these rural poor consumers with cell service. One provider Bharati is deploying 20,000 new towers in rural areas to complement their existing network of 50,000 towers mostly in urban areas.

In India, Rural Poor Are Key To Cellular Firm’s Expansion: Heat, High Costs Pose Problems for Towers; Mr. Price’s Innovations

By ERIC BELLMAN; September 24, 2007; Page A1; Wall Street Journal

“We are all human beings”

September 30, 2007

Some people believe that there is enough money and resources available to deliver basic health care effectively on a global scale, so the problem is how to do it. Earlier this year, Laurie Garret wrote about “The Challenge of Global Health” in Foreign Affairs. Her mains points are:

  1. success should be defined and measured in terms of (increasing) life expectancy and (reducing) maternal mortality rather than reducing specific disease rates.

  2. there is more govt/charity money than ever for health care in developing countries (several billions of $$s). spending is focused on political or donor-centric initiatives like AIDS, not on what’s needed to reduce mortality in patients in these countries

  3. this leads to contradictions like money being available to treat aids in HIV-positive mothers, but no money being available to address the most important causes of infant mortality and maternal mortality in terms of numbers of deaths.

This controversial article touched off a string of counterpoints by several leaders on global health advocates including Jeffery Sachs, Paul Farmer, Alex de Waal and a counter-counterpoint by Garret. They are all worth reading.

In particular, the untiring work of Dr. Paul Farmer (Harvard) on public health in Haiti is one of the most inspiring stories in service to the poor who don’t have access to the most basic health care made possible by modern science and technology. In addition to being a medical doctor, he is a Ph.D. in anthropology which he uses as a tool to be a more effective health care leader/provider in Haiti where belief in voodoo medicine can be a barrier. Self-described as “I’m an action kind of guy,” his life story is described in a book by Tracy Kidder called “Mountains Beyond Mountains: Healing the World: The quest of doctor Paul Farmer” that is guaranteed to break you down as it exposes you to the kind of public health conditions that exist in Haiti and what Farmer’s efforts have been able to do to change that. I’m about half way through it, and one of the most striking lines in this book is when a Hatian expecting mother and her baby die because she is refused access to blood for a transfusion and her sister remarks, “We are all human beings.”