Executive Insight

A helping hand for families trying to escape the poverty trap in India

Kancheepuram, some 80 kilometres south-west of Chennai, is well known for its 500-year-old heavyweight silk sari tradition. But chances were that its ornate, intricate pieces were woven by children between the age of five and 13, working 12 to 16 hours a day and bonded to a master weaver until their parents’ debt was paid in full.

Since 2002, however, a charitable trust called Hand in Hand (HiH) has been working in Tamil Nadu with the aim of eradicating the chronic problem of child labor. When Kalpana Sankar took over the reins of the organization as chief executive officer in 2004, she realized that the issue cannot be addressed in isolation.

“We need the support of the local government and community. So we trained youths and sent them to the villages to educate parents about child rights and persuade them that productivity would be enhanced if their children were allowed to go to school and complete their education; that they are only looking at short-term gains if they sent their child to work now,” Sankar said.

To date, 385 villages are no longer involved in child labor and some 35,000 children are going back to school.

Children who leave the factories initially attend a bridge school which prepares them to go to a government school. “Within 18 months, the children have caught up with their peers. They are intelligent and given the right environment, they are motivated to work hard into the night so that they have the privilege to go to school,” says Sankar.

Towards poverty reduction

Child labor is both a reason for, and consequence of, poverty. To help families escape the poverty trap, HiH also set up a self-help group and microfinance program.

The only way to tackle the problem of child labor is via an integrated approach to poverty reduction, argues Sankar. “The principle is that we don’t give people fish; we train them to use a fishing rod and then lend them money to buy one. We provide a combination of microfinance and structured business training to support and motivate them to create their own enterprises.”

HiH equips the women involved by giving them not only training in running small businesses, but also by teaching them how to read and write, as well as the principles of saving and borrowing, and bookkeeping.

Bakiyam, Gajalakshmi and Amudhavalli are housewives and cattle-herders. Their families earn about 3,000 rupees ($60) a month. Without much education or business experience, they decided to join a self-help group and were given some enterprise training. They took a 65,000 rupee ($1,340) loan and set up a canteen in an engineering college just outside Chennai. Today, the canteen’s turnover is more than 10,000 rupees ($210) a day. The women have grown in confidence as entrepreneurs and talk of expansion plans.

As is the case in microfinance organizations elsewhere, Sankar says they only lend to women to ensure that the loans are used for investment and not consumption.

To achieve its aim of eradicating child labor and reducing poverty through education, employment and income generation, and the empowerment of women, HiH has also implemented a community development program that has five interconnected pillars covering child labor and education, microfinance, citizens’ centers, health, and the environment. 

Scientist turned social entrepreneur

Armed with a doctorate in theoretical nuclear physics, Sankar found that she had to leave her family in Tamil Nadu for the big cities up north if she wanted to work in her field of education.

To be closer to her family, she took up an assignment in 1992 with the government of Tamil Nadu that concentrated on microfinance and poverty reduction through the International Fund for Agricultural Development. Her involvement in developmental issues resulted in her getting another doctorate – this time in gender studies.

She joined HiH in 2004 because she “was particularly interested in the advisor Dr Percy Barnevik’s vision of a well-run non-governmental organization with a focus on efficient delivery of services needed by the poor without bypassing government institutions.”

At that time, HiH had 10 full-time and 20 part-time employees. Sankar revamped the organization, put processes in place and “revisited strategies.” She is now preparing a five-year plan. Today HiH employs 3,000 full-time staff and has an entire new outlook. She credits the board of trustees and the advisor for HiH’s growth and transformation.

Budget and revenue

HiH has an annual budget of $5.5 million, with $1.1 million set aside for tackling child labor and education. Some 85 per cent of its grants come from overseas.

In order to meet the demand for microloans in the communities, HiH now has its own for-profit non-banking finance company.

“Our microfinance operations will break even by 2010.  We hope to implement a social investment model through our non-banking finance company where our investors will agree to give some part of the profits to the HiH Trust. This, along with grants and donations, will help us keep our projects running and also help us to expand in the coming years,” says Sankar.

Goals

HiH’s medium-term goal for 2013-14 is to create 1.3 million jobs in India. In the long term, it aims to play a significant role in eliminating poverty by creating 10 million jobs worldwide by 2020.

“Our model has been very successful so far,” says Sankar. “We have created more than 200,000 enterprises, brought more than 30,000 children into school, taken solid waste management processes to more than 80,000 households, and educated more than 40,000 people in e-literacy. We have been invited to take our model to various countries across the world. We now work in Afghanistan, South Africa and Brazil, and will shortly move to four other Latin American  countries.”

Challenges

“With the creation of the non-banking finance company, we are in a crucial phase in our operations,” says Sankar. “The organization’s biggest challenge is to develop the strategic framework of the non-banking finance company in such a way that, while ensuring the sustainability of the banking operations, it can continue to reach out to the millions of poor women who directly benefit from our lending. This new dimension to how we deliver our promises comes with administrative and marketing challenges.”

Funding has become a challenge during the recession, although the organization has had very supportive donors in the past. It also has a dedicated team working to tap possible resources. 

“In addition, being a woman at the helm increases the challenges, as we always have to fight to establish ourselves in a man's world,” says Sankar.

 Source: Knowledge at Insead, September 8, 2009.

Why Is Facebook Attempting to Patent the Idea of Crowdsourced Translations for Social Networks?

Facebook submitted a patent in December 2008 to the U.S. Patent & Trademark Office for its "Translations" application that allowed it to go from 0 localized versions to 16 in less than 6 months. It's now up to 60 and counting.

The efficiency of what the Facebook team created is obvious. And with a user population that is larger than some countries (over 250 million and still growing), and with 70% of that population coming from outside of the U.S., this capability will have a huge impact once they eventually really monetize what they have created.

It makes sense for Facebook to try to protect the capability that has allowed them to localize so quickly, but there are other social networking sites (Hi5 and Meebo, for example) that were already using crowdsourcing to produce their own localized sites as far back as 2006. Now it's up to the U.S. Patent & Trademark Office to decide whether the Facebook application has merit.

Over the past month, LISA has been researching the business and technical aspects of crowdsourcing and its impact on the globalization business. It has done in-depth interviews with about 30 high-tech companies that are either implementing crowdsourcing vis-a-vis their globalization function, or seriously researching how to do so.

Here is what is surprising in the preliminary findings:

1. Companies are definitely not implementing crowdsourcing to reduce their costs

Rather, they're doing it principally for one or more of the following 3 reasons:

• To reach totally new markets
• To better serve markets that are currently under-served
• To increase the value of their global brand by further engaging their users

2. What Facebook and Second Life have done are just one "flavor" of applying the power of the crowd to reach more international customers

... and probably just the tip of the iceberg, according to almost everyone interviewed.

3. Language service providers don't view crowdsourcing as competition at all

Language service providers are busily working in the background to help educate their customers on how to apply crowdsourcing, at the same time that they're trying to figure out a business model to support their own support of the crowd. In other words, the smart providers aren't viewing crowdsourcing as a competitor, but rather as just one more service they can provide to customers on down the line.

4. It's a moral imperative to free content from its linguistic prison

There is a moral imperative that is seen by some businesspeople in all of this. They believe that we are way overdue in freeing content from its linguistic prison. Not providing critical (however you define it) content to as many people as possible in their local language keeps people in poverty and denies them opportunities that other communities take for granted.

5. Building local language content through crowdsourcing may be more important in the long run than localization

Several of the companies interviewed also see crowdsourcing as a way to build more local language content, and that to them, is more important in the long run to engaging their customers, providing better support, etc. than applying crowdsourcing to the localization process.

6. The biggest challenge that everyone sees?

Engaging, recruiting, motivating and rewarding the crowd for the long haul.

Source: LISA (The Localization Industry Standards Association); September 2009

India’s barefoot solar engineers fight climate change and poverty

The year 2009 marks the 10th anniversary of the ILO’s gender equality action plan, and the end of a year-long global ILO campaign on gender equality and the world of work. One of the themes of the campaign was the linkage between climate change and the role of women in the world of work. Mandy Cunningham, a freelance journalist, reports from Rajasthan, India where women are at the forefront of what the ILO calls Green Jobs; jobs which are created as a result of economies adapting to climate and environmental change.

RAJASTHAN, India – At first glance, the scene is no different than any other amid the deserts of western India.

There is a tent, made of brown sacking and held up by the branches of a tree.

Camels laze in the shade. The surrounding scrubland is dry, and unbearably hot.

Then you start to notice the differences.

A popular Bollywood tune wafts through the air. And you see a strange-looking device – a flat oblong panel – strapped onto the side of the tent.

Inside, listening to the music on a cassette player, sits a small, ragged looking boy, aged about 12. The tent is his home, shared with five brothers and sisters.

The boy, Rosanna, says their parents spend months away from home, traveling from village to village trying to earn a living by selling salt and chilies. So he and the other children are looked after by their grand-parents.

Life here, in the Indian state of Rajasthan, is tough. The heat in summer can reach 45 Centigrade. But the children recently acquired something which has made life easier, and placed them in a different category from other impoverished Indians in this area.

They have electricity.

They do not get it from the national grid – the grid does not reach this remote community. It comes from the sun. And it is free.

Rosanna says the simple, low-cost solar panel on the side of their tent has totally altered their lives. It generates enough power to run the cassette player, the light and a mobile phone charger.

“We used to have a kerosene lamp,” he said. “When there was wind there was no light, when there was rain there was no light. And it was dangerous. Now we can eat in the light, we used to eat in darkness. I can read and write in the light”.

This change has come because of one person - a local woman named Dipsika.

Dipsika teaches infants in the surrounding villages. But she has also trained to be a solar engineer. She can assemble and repair solar lanterns and install and maintain solar panels and batteries that offer power after dark.

Without meaning to Dipsika has become a pioneer, at the forefront of what the International Labour Organization (ILO) – the UN agency that deals with work and workplace issues – calls Green Jobs; jobs which are created as a result of economies adapting to climate and environmental change.

“Women are very vulnerable to the effects of climate change because they represent the majority of the world’s poor and are proportionally more dependent than men on threatened natural resources,” said Vincent Jugault, ILO Senior Specialist in Environment and Decent Work. “Green economic sectors that are getting support from the economic crisis stimulus packages, for example sustainable transport and construction, are largely male-dominated. That’s why locally-based initiatives like the training of barefoot solar engineers in remote or rural areas should be promoted and replicated. Green jobs can offer great opportunities for women by brining extra money to their families and communities.”

The Green Jobs concept received a boost from the ILO’s year-long Global Gender Campaign, which highlights the importance of gender in areas such as climate change, entrepreneurship, skills development and social security.

“The Global Gender Campaign shows how women and men are affected differently by existing approaches to a wide range of crucial work-related issues, such as access to rights, employment, social protection, entrepreneurship, climate change, and occupational safety and health;” said Jane Hodges, Director of the ILO’s Bureau of Gender Equality. “These differences are important because they prevent both men and women from fulfilling their potential. Changing this will require a change of attitudes at all levels – policy makers in governments, employers and workers. But the first step is to be aware of the problem”.

As a result of the work and entrepreneurialism of Dipsika 11 families in her local community have already installed the panels, which cost fifteen hundred rupees each (equivalent to 30 US dollars). Many others have solar lanterns.

Shanaaz Bhanu, another of the so-called barefoot solar engineers, stands next to a large round object, about 10 ft tall, shaped like a satellite dish. The surface is covered with hundreds of small mirrors. In front of it there is a small square metal box.

It’s a solar oven. The mirrors on the dish reflect the sun’s light and focus it onto the box where the food is cooked. What’s more, at the rear of the dish is a mechanism that keeps it slowly turning throughout the day and pointing towards the sun. This was assembled by local women from bicycle parts bought at the local market.

Shanaaz says the solar oven has many advantages. “It doesn’t cost anything to run, it doesn’t use up natural resources, like wood which is getting scarce, and unlike burning wood, it doesn’t cause any pollution,” she says.

This ability to build things using local materials and expertise is central to the philosophy of the institution that trained the two women, the Barefoot College in the Rajistani village of Tilonia. Their courses are based on the principle that answers to rural problems must come from within the community itself. The College has trained hundreds of women who have then gone back into their community to apply their skills.

The work of the College has now spread far beyond helping just its own community. With the green jobs solar technology, the idea is to spread the skills across the developing world. Villages in Afghanistan, Mali, Senegal, Cameroon, Bolivia and elsewhere now have solar power.

Currently the college is training a group of nearly forty women from Africa in the basics of solar engineering. The African trainees do not speak any of India’s many languages; their Indian tutors do not speak any African languages. They try to communicate through a mixture of sign language, pictures and broken English.

Nevertheless, the idea and the willpower are so strong that the message is getting across, loud and clear.

“My entire village chose me to come here,” said 27-year-old Aisatsoo Bangura from Sierra Leone. “When I go home, I am going to teach every village there about solar”.

Source: ILO; September 2009 

Indian outsourcer Infosys outsources to Brazil

Indian operations-outsourcing and software giant Infosys Technologies Ltd. plans to join its rivals by moving some of its business to Brazil, according to an Indian press report early Monday.

The new Brazilian software-development and back-office center is expected start operations within next the three to four months, with about 100 employees, the Economic Times reported, citing its interview with Infosys Chief Financial Officer V. Balakrishnan.

"Some of our U.S. customers asked for a center in Brazil, as the country falls in the same time zone," Balakrishnan was quoted as saying.

The Africa Competitiveness Report 2009

African businesses can become far more competitive, but African governments and their international partners will need to improve access to finance, resist pressure to erect trade barriers, upgrade infrastructure, improve healthcare and educational systems, and strengthen institutions.

The conclusions, released today at the launch of a major new report, The Africa Competitiveness Report 2009, reflect research efforts of three institutions – the World Economic Forum, the African Development Bank and the World Bank. Limited access to financial services remains a major obstacle for African enterprises, but underdeveloped infrastructure, limited healthcare and educational services, and poor institutional frameworks also make African countries less competitive in the global marketplace. The report also points to a number of success stories in the region that highlight steps countries can take to improve the business environment.

The report highlights two short-term and three longer term policy themes for improving the competitiveness of African economies.

The two short-term themes are:
1) Increasing access to finance through market-enabling policies.
2) Keeping markets open to trade.

The three longer term themes are:
3) Infrastructure remains one of the top constraints to businesses in Africa.
4) Inefficient basic education and healthcare systems constrain Africa’s productive potential.
5) More examples of good governance and strong and visionary leadership are needed. 

Read the Report

It's Our Turn to Eat: The Story of a Kenyan Whistleblower

In January 2003, Kenya—seen as the most stable country in Africa—was hailed as a model of democracy after the peaceful election of its new president, Mwai Kibaki. By appointing respected longtime reformer John Githongo as anticorruption czar, the new Kikuyu government signaled its determination to end the corrupt practices that had tainted the previous regime. Yet only two years later, Githongo himself was on the run, having discovered that the new administration was ruthlessly pillaging public funds.

"Under former President Moi, his Kalenjin tribesmen ate. Now it's our turn to eat," politicians and civil servants close to the president told Githongo. As a member of the government and the president's own Kikuyu tribe, Githongo was expected to cooperate. But he refused to be bound by ethnic loyalty. Githongo had secretly compiled evidence of official malfeasance and, at great personal risk, made the painful choice to go public. The result was Kenya's version of Watergate.

Michela Wrong's account of how a pillar of the establishment turned whistle-blower, becoming simultaneously one of the most hated and admired men in Kenya, reads like a political thriller. At the same time, by exploring the factors that continue to blight Africa—ethnic favoritism, government corruption, and the smug complacency of Western donor nations—It's Our Turn to Eat probes the very roots of the continent's predicament.

Read Matthew Hennessey's interview with the author:

MATTHEW HENNESSEY: You're pretty hard on Western governments and aid agencies, even people like Jeffrey Sachs whom you accuse of "wishful thinking" with regard to the current crop of African leaders and their commitment to governance. What is wrong with the Western approach to African development?

MICHELA WRONG: A Kenyan journalist once said to me, "Western governments need to lend to us more than we need to be lent to." There is such a western liberal guilt complex toward Africa. Our default position is to feel sorry for Africans, then to feel guilty, and then to throw money at the problem.

I don't think we should cut all aid. There are levels of aid that will always have to be there because they save lives and prevent people starving and dying of malaria. But I can't agree with the Jeffrey Sachs position, which is that what we need to fix things is essentially more aid, and more and more and more. This strikes me as a form of neo-colonial thinking which puts all the emphasis on Western intervention in order to save Africa from itself.

It's been said many times: countries are not built on aid. There are no examples. In our desire to keep lending to Africa I think we can do a great deal of harm. And I think we often do. In our desire to keep lending, it becomes irrelevant what effect that aid is having on Africa. It becomes irrelevant that it may be encouraging people like Mwai Kibaki to think he can rig Kenya's elections and we won't mind. Or that he can stage a massive $750 million scam to divert state funds into his reelection campaign and it won't really matter because the West will end up picking up the tab for the health system, and the education system, and the road building.

Aid can be damaging. But I'm not going to say that it's always damaging, and I certainly don't think it should be entirely switched off, but we do need to wise up.

MATTHEW HENNESSEY: What does the phrase, "You don't fight corruption by fighting corruption" mean?

MICHELA WRONG: That's a phrase I heard from Daniel Kaufmann, who is a former World Bank expert on corruption, and what he meant is that when Western donors to go into Africa looking to fight corruption, the first thing they find is that the police are incompetent and the judiciary is corrupt.

So what they do is set up an anti-corruption commission or a special investigation unit within the presidency or a special police unit to tackle high-level corruption. And then at the top of these units you'd have these very high profile individuals, people like John Githongo. It's kind of a silver bullet approach and Western donors are often willing to pay for these units and expect them to solve everything.

This is what we've seen in country after country after country. The story I tell in this book is not only Kenya's story. It has happened in Nigeria and South Africa. What you see is that the anti-corruption authority is subverted very quickly. They are either neutered, or they end up being staffed by people who are so clearly part of the corrupt establishment that it is laughable.

The point that Kaufmann is making is that there are tools that already exist in most African states—the police force, the civil service, the judiciary. You don't need new regulations or new codes of practices or new legislation passed. Although the West does like to make a big fuss about those types of things, what you really need are for those institutions which have been systemically eviscerated and hollowed out by the president of the day, you need those to be given back their impetus, their mojo.

That's a really hard job. That's really difficult to do. But that's where you should spend your money if you're a Western donor. You need to have a decent judiciary that is independent of the political process. You need to have policemen who have cars so that they can actually get to the scene of a crime instead of sitting in the office. It's ridiculous, but in Kenya, if you're robbed you actually have to go and get the police to come to your house because they don't have fuel and they don't have cars.

These organs already exist. Don't try and reinvent the wheel. Try to get the old wheel to work again.

MATTHEW HENNESSEY: There was some pretty serious violence during the last presidential election in Kenya which, I think it's fair to say, caught a lot of people off guard. What were we missing about Kenya?

MICHELA WRONG: Kenya's always had a kind of golden aura around it—an image of safaris and people with pith helmets. But Kenya has got vast disparities in wealth. The most squalid slums in Africa are in Nairobi. Journalists who were covering the story saw this but thought that the place would somehow muddle along, because that was what always happened in the past. What happened last year was suddenly the nation stopped muddling along and all those things coalesced into this really nasty explosion of violence.

The worrying thing is that everyone I speak to in Kenya is predicting a resumption of exactly that kind of violence before the next election. Only this time it will be worse because everyone has armed in preparation, and the weapons being handed out to ethnic militias are not just machetes or bows and arrows, but guns.

MATTHEW HENNESSEY: Where does that leave John Githongo, the corruption fighter who is the subject of your book? Didn't he recently return to Kenya?

MICHELA WRONG: Well, he's returned because he felt his country was facing a crisis and he had to be there. I think he's taking a risk, but he didn't want to be away any longer and I can understand that. If I were a Kenyan, I would want to be there too, because these are difficult times and if you stand back, you're sort of opting out. People with brains, and training, and experience need to go back and try and do what they can.

MATTHEW HENNESSEY: How has writing this book affected your own ability to live and work in Kenya?

MICHELA WRONG: I don't know, to be honest. I know I have trodden on a lot of toes and I will have become very unpopular in certain quarters. There's been a very strong reaction to the book. Much stronger than I would have expected, in fact, because a lot of the details of the scandal where already well known in Kenya.

I thought, "Well it's all old hat and nobody's going to get worked up about it." But there's been a huge amount of discussion about the book. People can't buy it locally. Booksellers refuse to sell it. So it's been pirated in electronic form. People are smuggling it in from neighboring states. There's been a huge fuss about it.

To a certain extent I'm happy just to let it happen and die away. Maybe then I'll go back and resume just being a normal reporter. I don't want to go back and be staging press conferences and giving speeches. John is there, this is his story. That's up to him.

MATTHEW HENNESSEY: Can you explain the role of the "tribe" in modern African life?

MICHELA WRONG: In the West it's become a politically incorrect word to use but most of African society and politics would be incomprehensible if you eliminated the tribe, or the ethnic concept from the equation. I think often you get some slanted and strange reporting on Africa because Western journalists fall over themselves trying to avoid using that word.

In Kenya, as in so many African states, your entire life's chances are based on which ethnic group you belong to. And there is this mentality spread across Kenyan society that once your tribe gets into power then state assets are yours to do with as you wish. And since the previous tenant had exactly the same approach, then of course you are completely justified to be very greedy to compensate for how your group was treated in the past.

So, "It's Our Turn to Eat" really means, "It's our community's turn at the trough."

MATTHEW HENNESSEY: Everyone knows that Barack Obama's father was Kenyan. Why isn't he visiting the country on his first presidential visit to Africa in July?

MICHELA WRONG: Africans regard Obama as one of their own who miraculously ended up in the White House. As far as they're concerned, he's not only U.S. president, he's also king of the world. There is enormous good will toward Obama, and it gives him leeway and influence that I don't believe any other American president has had in Africa. Although so far, he's been quite careful how he uses it.

If I were in his shoes I would probably do the same thing and bypass Kenya. Kenya is in political crisis mode at the moment, with a coalition government that was set up after the elections thanks to international pressure and the influence of Kofi Annan, which is very close to falling apart. If Obama goes there, the danger is that it gets read as a gesture of approval and support. The visit would get put to all sorts of political uses—most of them unhealthy.

Instead he's visiting Ghana, which recently had a very close election. But the ruling party there accepted its loss and stood down. So Obama is going there and implicitly expressing respect for the fact that the ruling party in Ghana did not go down the route that the Kenyans went down, tampering with the results when they saw they were losing.

Source: Policy Innovations

 

This article is licensed under a Creative Commons License.

Africa's investment climate

Ade Animashahun, Managing Director of Investec Asset Management, speaking at the World Economic Forum on Africa. Interesting and informative five minute video interview.

Bringing Quality Health Care to Poor Populations

Bringing quality health care to poor populations remains a huge challenge. Hear what Paul Farmer, founder of Partners in Health and subject of Tracy Kidder's Mountains Beyond Mountains,has learned about how to do it right.

Medical anthropologist and doctor Paul Farmer has spent most of his career providing healthcare to some of the world’s most destitute communities, through his organization Partners in Health, which he co-founded in 1987. In this podcast, Dr. Farmer speaks with McKinsey’s Mary Kuntz about his organization’s approach to treating chronic diseases such as HIV and tuberculosis in countries around the world such as Haiti, Peru, Russia, and Rwanda. He also discusses the medical and moral imperative for affluent nations to provide assistance, and the future of global health.

Source: McKinsey’s What Matters > download podcast > read transcript.

Squandering the Boom Years

“History will regard the Indian boom years of 2003-2008 as one big squandered fiscal opportunity” writes Peterson Institute for International Economics and Center for Global Development senior fellow Arvind Subramanian, in India’s Business Standard. He argues that India can learn from China’s strong public finances – a sound fiscal position is crucial for establishing international influence. “The lesson for superpower-aspiring India from superpower-arriving China is simple: A strong fiscal situation, undergirding the ability to respond to a crisis, is an essential ingredient for any global leadership role.”

“Even before this global crisis, China was building up its superpower credentials courtesy of its size, spectacular growth, and integration, not to mention its military might. The crisis has allowed these credentials to be consolidated further. China has moved beyond being the superpower-to-be. One important reason for this consolidation relates to China’s public-sector balance sheet…

“The one major country that has had the ability to take short-term action to offset the effects of crisis without remotely jeopardizing its long-run economic strength has been China. Its public debt will remain at close to 20 percent of GDP after the crisis while the corresponding number for the United States is estimated to be close to 75 percent of GDP. China seems to be the one fiscal safe haven even as all the other powers wobble under the weight of their fiscal burden. As the mighty fall, China is standing economically and fiscally tall…

“So when India goes through its next growth spurt, it should be mindful of avoiding the mistake of the previous one. Good boom-time fiscal management provides the firepower for times of bust. The reasons for doing so are and must be overwhelmingly domestic. But there may also be strategic, external benefits from doing so. Fixing the fiscal roof when the sun was shining was China’s way out of this crisis and way to solidifying its superpower status. That is a lesson that strategically minded Indian policymakers should take away from China’s experience in the crisis.” Adapted from Superpower Lessons by David Kampf. Source: China shows that strong public finances are important for global leadership by Arvind Subramanian.

How Corporate America Views Africa for Investment

A new survey by Baird’s CMC and the US Chamber of Commerce highlights key reasons for lack of US business interest in the second largest and most populous continent. These reasons include: The likely return is not commensurate with the risks; other continents, countries, and regions offer better investment options; and Africa is viewed as needing excessive work to be an attractive investment choice.

To make Africa more attractive to US investment, respondents sought:

• Investment in the health and education of the African people to create a large pool of skilled and productive human resources.

• Investment in and maintaining of infrastructure -- transportation, communications, electricity, and security -- so that there will be a reliable societies in which to operate.

• Building functioning legal systems to ensure the rule of law, transparency, and fair play.

• Creating a positive climate for foreign investments by reducing bureaucratic processes, eliminating corruption, and reforming tax systems, irrespective of country of origin.

• Ensuring stable political environments - that may or may not be based on western democratic principles - that work toward the common good of all stakeholders in society.

As a continent covering 20% of the world’s total land area, a population nearing 1 billion people speaking 1,000 languages across its 53 countries, such aspirations provide a generalized framework but transformation realities are clearly particularly complex and certainly situational. This being said the survey provides very interesting and credible insights to inform our thinking and shape future policy and  corporate, governmental and societal strategy. Source: The Conversation Behind Closed Doors - Inside the Boardroom: How Corporate America Really Views Africa; Baird’s CMC and the US Chamber of Commerce, May 2009.