Profits from Poverty

CK Prahlad is getting it wrong again (last time was when he sang euologies for Enron in Leading the Change). His new thesis, described in his book, The Fortune at the Bottom of the Pyramid (read the article), focuses on the 4-5bn people on earth who subsist on less than $2/day - or the $13trillion market!

With all noble intentions, CKP argues that this mass should be viewed not as victims or a burden, but as value-driven consumers, whose life can be made better, if large corporations design and focus their offerings to them, change their life-styles, and even help them with micro-credits to enable them to consume the goodies of life.

There are three biases which jar me, and which actually permeate the whole contemporary management literature:

1. that masses are primarily consumers, and not producers. Thus, their life becomes better, if they get to consume more, and not if they produce more. Compare Lijjat and, say, any biscuit manufacturer which targets the rural market - both focus on BOP, but with very different concepts of "making life better."

2. how much profit you make is more important than how you make that profit. CKP, like most management theorists, does not differentiate profits generated from, for example, selling more cigarretes/coke/candies, from those generated from selling milk/medicines/education.... I mean, a more profitable Playboy or mafia does not really make them more value-adding than maybe less profitable Amul, does it?

3. wealth-creation is same as making profits. Somehow, in management literature and theories, the concept of wealth has got reduced to just money. Rest - e.g., the community or the environment - have just become resources which need to be "exploited"...

but, well... some companies, even with their profit-motives, would end up, more by default than by design, creating wealth for people they serve. Two examples which come to mind are ITC e-Choupal, which not only is a channel for sales, but also for procurement of farmers' produce and for disseminating information; and Reliance Infocomm, which targetted the BOP profitably, but has also enabled people in that segment to be more productive...

The Two Paradigms: The Child Soldier & Army Soldier

Sometime back I had made a posting on this blog, how the current global conflicts (from "Civilized World" vs. Al-Qaida to RIAA vs. P2P) are all manifestations of a clash of two competing paradigms.

Today, while reading this news-item in Telegraph, this idea of "the clash of paradigms" became more visible:

Struggling to lift a Kalashnikov, a 12-year-old with the Mahdi army militia said he could do anything in battle except fly a helicopter.

"Last night I fired a rocket-propelled grenade against a tank," he said. "The Americans are weak. They fight for money and status and squeal like pigs when they die.

"But we will kill the unbelievers because faith is the most powerful weapon."

The boy called himself Moqtada, styled after the rebel cleric whose ranks he joined a month ago having travelled to Najaf from the Shia slum of Sadr City in Baghdad. He said that he hopes for a glorious death.

Compare this belief-driven warrier to those who opt for a career as a soldier. If one reads monetary benefits, educational facilties, healthcare and timeoff, which The GoArmy.com site describes to attract "job applicants", it becomes so easy to understand the two different worlds - each with its own motivations, expectations, understanding of what the war is all about, etc. - from which the two sides of Iraq-War III are coming from (I used the term "Iraq-War III" because the last one got over a year back!)

One can also see parallels in the two "worlds" in which warring parties (e.g., Windows vs. Linux; World Economic Forum vs. the grass-root movements, etc.) live...

Yeh Mera India!

Eight years back in 1996, on this very day – 15th August – the then Prime Minister, HP Deve Gowda delivered the traditional Independence Day Address to the Nation from the Red Fort. Like his previous eight predecessors in last 49 years, he delivered this traditional speech in the ‘national’ language – Hindi.

There was a change, though - Deve Gowda hailed from Karnataka, and did not know or understood Hindi – and so, his Hindi speech had to be written in his native Kannada script… and was telecasted across the nation to an audience, more than 60% of whom also did not understand Hindi!!!

Yeh Mera India! ….

…where else in the world – but in India -can this happen?!!… the Chief Executive of a nation makes an address in a language which he does not understand, and to a people who also do not know that language!!!… (the 1961 census reported 1549 “mother tongues”!!!)

In my mind, that fascinating, but much neglected, event in the 49th year of the history of India is also the metaphor of what India is:

…its diversity weaved into a unity, a myth which became (is becoming?) a reality… the belief in a ‘concept’ of India which perhaps exists (and is taking roots) only in the minds of its people, a contradiction which is internally consistent… a belief, which is simultaneously ridiculous and sincere.

… Or the only oxymoron encapsulated in a single word – India!!

It seems so easy to say now that “India” became independent on August 15th, 1947… almost a trite statement in any history book.

But it always seemed a miracle, actually…. that we have something called “India”…

India is perhaps the only country in the world, where we have 18 scheduled “official” languages (and some 2,200 dialects) – and yet not one single language which everyone shares and can use to converse with others….

So how does this nation exist as an entity, when its members can’t even understand each other’s language?…

(And just to mention the obvious: though English is often touted as the cosmopolitan uniting language, but even then… as one of the largest English-speaking countries in the world, barely 30mn – or 3% - of Indian population can really speak, write and read English… in rest of the India, English is Hinglish: roadside dhabas who put up sign-boards announcing “Snakes served here”, or liquor shops where “Child Bear” is available, etc…. that’s how you can find “snacks” to have with your “chilled beer”!! )

Almost – or perhaps more than – a hundred years back, when Gopal Krishna Gokhle and Justice Ranade described India as a “Nation-in-Making”, I guess this is what must have been in their mind… that India is a process, a state of mind, and not an entity…

It is so easy to talk about “India” now – and know what one is referring to – but back in 1947, it must have been a faith-based shot in the mystical dark….

In 1957 – 10 years after “India” became “independent” - a research team from Jamia Milia did a survey across 4 north-central states of India, covering 150 villages. The findings:

around 10% people did not know – after 10 years of “independence” – that the British no longer ruled the country; and,

about 17-18% did not know the name of their own country!!! – of course they knew “Bharat” aka India (since they had heard people shouting “Bharat Mata Ki Jai”), but they did not know what this “Bharat” was.

If a common message, understanding, language, communication network, etc., is what is needed to unite and create a common identity as a nation, this is what we had around that time in mid-50s:

1.5mn radios for a population of 400mn

a circulation of 3mn newspapers for 400mn people (of which only 18% could read and write)

40k “community village radios” for 500k villages

80% of Indians lived at least 20 miles far from motorable roads

0.4mn telephones for 400mn people… etc.

And yet, now, we do have a “Bharat”, which people know about and understand (even if it is not the same as the “India” which “shines”)…. At least we know what we are talking about….

…which is a miracle of sorts!

There were other miracles as well in the journey of this “Nation-in-Making”:

Just till a few months before August, 1947, 40% of the land mass belonged to 562 princely states – each with its own rules, customs – and even currency.

In a country with 83% rural population, dependent on agriculture, 70% of the cultivated land was owned by handful of landlords and moneylenders.

We adapted “jana gana mana…” as the national anthem – a song written as a salutation to the “Bharat Bhagya Vidhata” - King George the V of England on the occasion of his visit in 1911.

We even adapted a name – India… a name given by non-native imperial forces to refer to the land on this side of river Indus (which does not flow through modern India!)

etc. etc….

… and yet, now we have an “India” to talk about…

… and to be proud of:

In 1947, we had a population of 30crore and 15% literacy. Today we have more than a billion population and around 50% literacy. In real numbers, India, in a span of two generations, created a literate mass almost one-and-a-half times the size of current US population.

Back then, we depended on PL-480 wheat aid, (and the Prime Minister of India appealed to the nation to keep fast for one evening a week – so that the hungry could be fed)… today we are a food-surplus country.

From a country with just 7 engineering colleges (2200 students), 9 agriculture colleges (3000 students) and less than 10 medical colleges in 1947 – now we can be proud of having the 2nd or 3rd largest technically qualified manpower in the world.

India is among the 3 countries in the world, which built its own super-computer– and among the 6 which developed its own indigenous space technology.

In spite of its diversity, dissensions and communal conflicts, the democracy, and the culture of assimilation, survives – a “Hindu” nation elects an “Italian” to become the Prime Minister, who refuses, but in turn proposes a minority representative (a Sikh) for the post, and gets an OK from another Minority (Muslim) representative of the society, who is the President of this country.
etc. etc….

It has been a long journey, and we have come a long way…

…and yet India still remains a “Nation-In-Making”… a contradiction in its own way..

In a food-surplus country, approx. 5—7 farmers commit suicide every day due to poverty…

The top 10% of the society own 48% of the nation’s assets – while the bottom 10% own just 1%…

The 90% of “unorganized” labor force do not feature in the statistics – and therefore, have no rights…

The financial capital of the country also boasts of housing the largest slum of Asia…

The market goes down – and loses thousands of crores in value – when the country democratically elects a new governments

The Super-Malls come up along with the slums….
...

… as India enters its 58th year as an “independent” sovereign nation (hopefully, we will mentally retire from being a colonial country in a year), one realizes that we all live in our own “India”… that there are many Indias - each different, and yet connected – and open to assimilate these differences and contradictions…

…perhaps that is what makes it such a fascinating place…
well, …Yeh Mera India!! – this is my India:

http://f1.pg.photos.yahoo.com/ph/madhukar_shukla/album?.dir=/4fe8&.src=ph
or try:
http://tinyurl.com/4a28g

A Very Happy Independence Day to You!