the following appeared on on oct 13, 2014 at

economist top 3 nations in GDP oct 2014isro women celebrate mangalyan sep 2014

The Nobel Peace Prize: was there more than meets the eye to Kailash Satyarthi’s selection?

Rajeev Srinivasan

Let me be quite up-front about a few things. One, I confess I had only vaguely heard about Kailash Satyarthi before the Nobel Peace Prize 2014 came looking for him. Two, I am as delighted as anyone else that global recognition has come to an Indian who’s involved in a good cause. Three, I do believe the issue of preventing child labor is as good a cause as it gets, especially as in dangerous occupations, and worse, in pedophilia.

Nevertheless, I have a few concerns about the award of the Nobel Prize to Kailash Satyarthi and Malala Yousufzai. First is the implied, and articulated, hyphenation between the two. Second is the overtly political nature of the prize. Third is the over-broad nature of assumptions made about what constitutes child labor. Fourth is the root cause of child labor and how to ameliorate it.

First, it has been a foregone conclusion that Malala Yousufzai would sooner or later get the Nobel Peace Prize, for her exceptional courage in the face of the oppression of women and girl-children in Pakistan. But how the prize committee suddenly chanced upon Kailash Satyarthi and decided to co-anoint him and to make a broad generalization about child labor and child protection is a bit mysterious.

It almost sounds as though the committee wanted to recognize Malala, and for good measure (two-for-one) decided to throw in a somewhat obscure Indian activist too. Not to diminish Satyarthi, but there is a decided feeling of “let’s now force-fit an Indian into this, so we can have some fearful symmetry”). For, there is a vast gulf between the concerns the two deal with. To say they both deal with children is banal; you might as well say they both deal with people: for gender is the big divide.

Perhaps the prize committee is ignorant of the fact that, despite the geographical proximity of India and Pakistan, the two countries are like chalk and cheese: we have almost nothing in common with each other. There is a western tendency to lump India with Pakistan (a hyphenation of India-Pakistan-equal-equal which annoys Indians because India is seven times larger, has ambitions to be one of the G3 of global powers, and is not a theocratic failing state and a military dictatorship as Pakistan is).

This hyphenation is about as absurd as hyphenating, say Cuba with the United States just because of geography.

Furthermore, the issues Kailash and Malala deal with are vastly different. Kailash Satyarthi has been working on the exploitation of children as domestic servants, in hazardous professions, in pedophilia, and in other ways robbing them of their childhood, their education, their health and their sense of self.

This, unfortunately, is a problem of poverty. Child labor happens everywhere where people have a hand-to-mouth existence, and in particular because an extra pair of hands in the field or the factory is economically rational because the marginal cost of feeding that extra mouth is minimal. It has nothing per se to do with India, or Hinduism for that matter.

On the other hand, what Malala was fighting against is a purely Islamic issue: the devaluation of women and girl-children. Her home area in Pakistan had come under the sway of fundamentalist and patriarchal Muslim clerics of the Taliban, who decreed that women, as per their interpretation of their religion, needed to be cloistered, and denied education.

In fact, this is a peculiarly Muslim problem, and there is no point in obfuscating it. Consider the women of Saudi Arabia who are not allowed to drive, or to work except in all-woman environments. Consider the endemic female genital mutilation in some Muslim cultures. Consider the Christian schoolgirls abducted as sex-slaves by Boko Haram in Nigeria. Consider the 4,000 Yazidi girls and women continually gang-raped by ISIS in Iraq.  Womens’ rights of various kinds are a problem in Muslim societies.

While it is true that there are many issues of exploitation of women in India, there is little justification for that based on religion, and Indian women are increasingly visible in all walks of life. One of the delightful photographs about Mangalyaan showed very traditional-looking, middle-aged, middle-class women aerospace engineers in mission control whooping it up! Now that is about as male a domain as it gets – rocket engineers; I don’t remember seeing photos of many women in NASA control rooms.

However, the Nobel committee’s citation explicitly hyphenated the two countries. This is a gross error of extrapolation, and is unfair to India. They said, and I quote, that the committee “regards it as an important point for a Hindu and a Muslim, an Indian and a Pakistani, to join in a common struggle for education and against extremism.”

Why are they bothered about the nationalities or religions of the two? So far as I know, when they offered the Peace Prize to Henry Kissinger and Le Duc Tho, they did not say how wonderful it was that “a Jew and a Buddhist”, formerly bitter adversaries as “an American and a Vietnamese” had worked together for a peace deal. When Yasser Arafat, Shimon Peres and Yitzhak Rabin were honored by another Peace Prize, they were never “a Muslim and two Jews” of warring “Palestine and Israel”.

Why, then, this special treatment for “Hindus and Muslims” and “Indians and Pakistanis”? This raises several questions – is the West attempting to interfere yet again in the Indian subcontinent? Especially as Malala called for both Nawaz Sharif and Narendra Modi to attend her prize ceremony? This could well be child-like and genuine on her part, but geopolitically, it is yet another, in the ad nauseam series of interventions that the West have made in the subcontinent, much to our detriment.

One clue is in the personalities in the Nobel Peace Prize committee. The chairman of the committee used to be the president, it turns out, of Socialist International, which is a worldwide grouping of far-left ideological groupings. No wonder it has made some baffling selections, such as Barack Obama (2009) and the European Union (2012), not to mention M Teresa (1979) and Henry Kissinger (1973). The Peace Prize has become overtly political, and it has deteriorated into geopolitical point-scoring rather than honoring a genuine achiever.

Furthermore, there are severe ethnocentric assumptions about exactly what constitutes ‘child labor’. Apparently, American children delivering newspapers or washing cars or mowing lawns or slinging burgers at McDonald’s doesn’t count as child labor. But an Indian child, son of a farmer, who helps his father while learning the craft of farming, is being forced into child labor? So there is ‘good’ child labor and ‘bad’ child labor? Is that like the ‘good Taliban’ and the ‘bad Taliban’?

It is not appropriate to use Western norms to judge what Indians might do. Western norms are not universal, as much as the West and their sepoys in the mainstream media (and other brown sahebs/sahebas) might claim they are. For instance, the transmission of a craft has traditionally been from parent to child. Traditionally, all craftsmen have passed on their craft using apprenticeships.

I accept that there are many egregious and illegal practices that go on in India regarding children. Some children are abducted, maimed and turned into beggars. Some are forced to be domestic servants or equivalent in restaurants, hotels and homes. Others work in dangerous jobs such as rag-pickers sifting through mounds of rubbish. Yet others have been forced into child prostitution. It is entirely laudable when Kailash Satyarthi and others focus on these terrible practices.

The problem is when blanket bans are imposed. For instance, on the face of it, the ‘Rugmark’ certification that no child labor went into carpets sounds like a good idea. But then what of weavers who are passing on their skills to their children? Are they violating some law? The issue of weavers is particularly galling based on historical wrongs, as we shall see in a minute.

It turns out that sometimes the imposition of a ban leads to even worse abuse. When children are forced out of work by ‘Rugmark’ and over-zealous inspectors, then the only avenue open to some of them becomes prostitution. Let us note in passing that the biggest customers for child prostitution and child pornography tend to be Westerners. Frying pan into the fire for the children?

There is a broad sociological question: given that Indians are among the most attentive and affectionate parents in the world, why on earth would they allow their children to be exploited? Survey after survey shows that Indian parents will sacrifice to great extents for their children. A recent example was Rural Postal Life Insurance. Even extremely poor people were willing to put aside their pitiful savings into life insurance if it helped ensure that their children would get an education even if they themselves died.

Why on earth would such parents – and perhaps this is an example of Indian exceptionalism in a world where increasingly the State is supposed to provide for children and later for elderly parents – condemn their children to a life of unfulfilled promise by forcing them into child labor? The only answer is poverty. As much as Kailash Satyarthi might disagree, poverty causes child labor (although I accept the reverse may also be true). I have plenty of anecdotal evidence to that effect, first hand observations in Kerala.

When I was a child and teenager, we used to have in our modest middle-class home an occasional live-in maid who herself was a teenager. Several of these girls were sent to live with us by their indigent parents, because they figured the girls would get to go to school, and get sufficient food. Interestingly some of them were from recently-converted SC families: they even retained their Hindu names, but went to church. And apparently the church lost interest in them as soon as they converted, so they were back in penury.

I am not sure if these girls considered themselves exploited. But the fact is that there are no such girls any more in Kerala. A perennial complaint housewives have is the lack of maids. The maids I see these days are all middle-aged, and no live-in service, thank you: they come for a couple of hours each day, and get paid fairly well on a per-hour basis. What has changed is that prosperity has come to Kerala, in the form of overseas remittances. As poverty disappeared, so did child labor.

Thus child labor is a symptom of an underlying disease: underdevelopment. Therefore the solution to it is development. To focus on child labor, a symptom, is to do premature optimization, which leads to unforeseen (and usually negative) consequences to the system. Granted, development doesn’t come overnight, but if you recognize poverty as the issue, it’s better to work on that.

And where did the poverty come from? Ironically, on the very same day as the Nobel was announced, The Economist magazine was kind enough to publish the following chart showing how the world’s top three economies fared in the past 2,000 years.

I have seen variants of this data from the economic historian Angus Maddison, and the sum and substance of it is that India was the world’s biggest economy throughout the history that Westerners recognize (not surprisingly, it is the Christian Era). Yes, the biggest, all the way from 1 CE  until 1700 CE except for a single blip when the Chinese overtook them in 1600 (possibly because the Muslim invasion had damaged India’s competence somewhat, especially because of lots of wars.)

In 1700, India was once again the biggest economy, but then look at what happened to it: the Battle of Plassey took place in 1757, and enabled Britain’s conquest of Bengal. India’s GDP plunged, and by 1900 it had disappeared altogether from the top 3, to be replaced by Britain! In fact, Britain, 2% of world GDP in 1700 and India, 27%, virtually swapped places. Thus, it was the Christian invasion that totally impoverished India, far more than the Muslims. Colonial looters destroyed India’s industrial capability and forced it to regress into a raw material supplier and a market into which they could dump goods. A simple reckoning suggests that they extracted $10 trillion from India, at current exchange rates.

In 1700, the world’s biggest centers of industry were four river deltas: the Brahmaputra and Kaveri in India, and the Pearl River and the Yangtze in China, which, together accounted for some 20% of global output in manufactured goods. In India, a large part of it was in high-quality textiles and other light manufacturing. The case of Dacca muslin is especially poignant.

The city of Dacca, the source of the finest fabric in the world, declined precipitously after the British systematically destroyed the weavers: legend has it that they cut off their thumbs. Perhaps more prosaically, the British forced Indians to buy Lancashire mill cloth made of Indian cotton, with a ruinous transfer price, extracting usurious profits and degrading the hitherto prosperous weavers from skilled artisans into unskilled labor, from which they have not recovered even now, three centuries later.

Thus, it is reasonable for Indians to feel a little queasy when that very same industry, weaving, is targeted by the very same imperial forces bent on maintaining their dominance. India lost its onetime stranglehold on fabric – just look at the plethora of Indian words (seersucker, paisley, chintz, calico, cashmere, madras) related to it – and has yet to recover.

Thus, while I am glad that Kailash Satyarthi has won an important prize, I cannot but feel that there is something slightly cynical and calculating about the way the prize was awarded and that it is not intended to help India at all.

2280 words, 12 Oct 2014

A version of the following appeared in DNA on June 1 at the following URL:

Here is a PDF version of the same; DNA provided an absolutely fabulous photograph to go with it! inclusion of the rural poor jun 1

Financial inclusion for the rural poor: Rural Postal Life Insurance reaches out

Rajeev Srinivasan

Experts agree that bringing financial services to the rural masses is generally desirable. Significant value can be generated (both for individuals and for the nation) through providing services to the disadvantaged – for instance, the World Bank’s Christine Qiang estimates that national GDP grows by 0.8% for every 10 percentage-point increase in mobile telephony in emerging economies. Similarly financial services, such as micro-finance, can have a multiplicative effect on the unbanked.

The definition of ‘financial inclusion’ concerns the provision of financial services at an affordable cost. Both State-mandated interventions and market-driven efforts by the banks themselves have been tried. However, this has still left many strata of society under-served: a 2004 survey showed that there were only 59 deposit accounts for every 100 adults in the population. This also masks regional differences – from 17 in Manipur to 187 in Goa.

Most policymakers like some sort of dole – pensions, subsidies, etc., with the latest example being the NREGS scheme which guarantees 100 days-worth of wages to poor laborers. But these schemes are riddled with leakage. Subsidies are not sustainable in the long term, being most appropriate for short-term emergencies; they do not deal with underlying problems. Besides, the public sector has a reputation for callousness.

This is why it is all the more amazing that an innovative public sector initiative has had the effect of reaching many of the previously excluded in a short time. A conversation with the India Post Board member who dreamt up the program, Dr. Uday Balakrishnan, revealed two intriguing facts – one, the ability of the public sector to re-invent itself, and two, the willingness of poor cohorts to marshal their small savings and engage themselves in financial markets. It makes for a fine case study.

India Post is an underutilized player for financial inclusion, because it has reach and credibility. Given the 500,000 employees stationed in 155,000 outlets around the country, it is well placed as a distribution channel; it is the main payment conduit for 50 million NREGS participants. There is also trust in the institution, so that people are willing to incorporate it into their financial planning. As many as 200 million people hold Post Office Savings Bank (POSB) accounts.

It appears that India Post has been offering rural life insurance since 1995, but never emphasized it as a major line of business. When it began to focus on it recently, the results have been impressive: they empowered employees to think creatively and to innovate. A change management effort that also streamlined processes has enabled them to meet stiff targets. It is heartening that even staid government entities, with proper motivation, can be nimble.

Within a few months, some 12 million rural people have taken policies, with a majority of them opting for micro-insurance – for instance, life insurance policies that insure for up to Rs. 10,000, at a very affordable premium of one rupee a day. Larger policies are available for the price of a pack of beedis (Rs. 6) a day. The Post Office has become the largest player in this segment, covering more than twice as many people as all the other insurance companies put together, adding a million-plus new insurants a month.

Why have people opted to buy this level of insurance? Interviews suggest that the best reason is that the poor are aware of the opportunities that exist for their children, if only they could afford a decent education – in other words, there is an aspiration out there that the next generation must do better, and people are willing to sacrifice today’s consumption for children’s education tomorrow.

What is remarkable is that people are voluntarily spending their own tiny savings to buy this social security mechanism. Most of us think the great Indian public looks to the maa-baap government for everything, and that therefore doles, loan forgiveness, etc. are inevitable. It turns out the masses are willing to invest their small savings for the guarantee that a death in the family does not stunt their children’s future.

Once they hold this basic, fungible (if not liquid) financial asset (a life insurance policy), they use it as collateral to get loans from banks; that is, they are included in the system, and they become credit-worthy. In fact, the next thing they want is crop insurance, medical insurance, etc. – they are acting as rational economic players.

Furthermore, as a result of the law of unintended consequences, they are players in the broader financial market. Part of the premium (a prudent percentage, but still 1000s of crores)fs is invested in the market, and, over time, this should bring them better returns than those from the government-securities market.

The late C K Prahalad would be proud of them. The three billion at his ‘Bottom of the Pyramid’ are at last clawing their way out of poverty.

816 words, May 26, 2010

This column is at

There is no point in my reposting it here (unless rediff had edited something out, which they don’t seem to have done.)

I have been intrigued by some of the comments on both parts of this column. Let me say that I was merely celebrating the 50th anniversary of the founding of the southern states. I wasn’t looking to put northern India down: if I were, I’d come straight out and say it, I wouldn’t beat about the bush and be coy. No, I was just observing that the southern states have managed to blunder along and now seem to have a teeny-weeny advantage in a globalized world.

As for language, I have mellowed a bit in my old age, but I have been quite um… shall we say, forceful, in the past on this topic. You can find four previous columns of mine here, and no, I am not going to rehash those arguments. You can believe whatever you want, and that’s fine with me, I am not trying to ‘convert’ anybody:

A small point of fact: there are nineteen or so national languages in India, every one that is printed on a rupee note. They are *all* defined as national languages in the Constitution.

Two languages get a special mention, as ‘official languages’. These are English and Hindi.

Anybody who is not convinced about the economic might of India should really read the voluminous tables in Angus Maddison’s book, which is available for free download on the Web.

Anyone who isn’t convinced of India’s tremendous contributions to intellectual property development should read an old column of mine and follow up on the links:

Stanford goes to India

October 31, 2006

The Stanford Business School and Engineering School have a program in January 2007. Here are the details. stanford1.pdf

The HAF lawsuit has produced an interesting result: one that allows all sites to claim victory on points. I suspect that is what the court was in fact trying to do: leave everybody with something that they could highlight to their supporters.

Having said this, the core issue, that of the impact of deliberate anti-Hindu propaganda, on sensitive Hindu children in the US, remains up in the air. The same textbooks that have the distortions in them will continue to be used by the school districts for the foreseeable future, although the court has rapped the CBE’s knuckles for poor procedure. And the court has dismissed the locus standi of the usual suspect rabble-rousers in this instance. Thus, as I said elsewhere, a half-victory.

What is entertaining in context is the fact that almost simultaneously, Chinese textbooks have dropped almost all references to the great Mao Tse-Tung. This, I suspect, is giving the leading lights of the Left in India sleepless nights, as their Great Leader is being declared as a god with clay feet by his own countrymen. What of the CPI-M which famously declared that Chairman Mao is “our Chairman”? The delicious irony is that the only places where Marxism still exists are:

  • Cuba (with the imminent demise of Fidel Castro this will change)
  • West Bengal
  • Kerala
  • Nepal
  • The Maoist corridor from Nepal to Andhra Pradesh
  • The BBC, and India’s ELM

That’s it!

Venezuela is not Marxist per se, merely anti-American and nationalist. And even though Marxism has become an expression of Chinese imperialism, and the rotting corpse of Mao is a ghoulish stop on trips to Beijing, China itself is declaring that it has outgrown the idiocies of this murderous ideology.

Marxism is now strictly for the consumption of others whom China hopes to dominate in its goal of world conquest, and this is where the “useful idiots” continue to be China’s storm-troopers.

“Do as we preach, not as we do” — says China now. In this, they have finally become the equal of the Americans, who have long been the champions of moralizing: they want all of us to listen to their rhetoric of free trade and so forth, but the moment we do free trade, they don’t like it because it gives them no advantage. Quite hypocritical, indeed.

Underground processes, Hostile academics
By Ari Saja