26 February 2009

Surviving the Recession


Nature in its 19 February 2009; 457 (7232): 935-1046 issue has come up with a special on the current recession. There are seven commentaries and two book reviews. There have been other related items that have been published over the weeks and all are available at Recession Watch. But, I will concentrate on the nine in the concerned issue.

John Geanakoplos in his End the obsession with interest emphasiss on regulating leverage (the collateral a borrower needs to provide). His reference to Shakespeare's Mercahant of Venice where the collateral agreed between Shylock and Antonio was on a pound of flesh (not interest) if the latter reneged. The role of the authorities here is to see to it that it is "a pound of flesh, but not a drop of blood."

In her Cooperation must rule Noreena Hertz states that the crisis has led to a new socio-political environment where cooperation rather than selfish behaviour would be the rule of the game. For longer-term viability, the corporate leader should be the one who exhorts 'Co-op capitalism' as against 'Gucci capitalism'. I would add, talking lessons from Gift societies also implies that one should cultivate norms and conventions to make cooperation a dominant solution in a prisoner's dilemma setting.

The mantra by John Browning is to Cut costs and sell what you can. For this they have to identify and cut 'dark matter' and be 'flexible' in their thinking and be on the look out to cash on their existing products/expertise. My take is that all this is possible if what you are doing adds value in a fundamental (not superficial) way.

Atsushi Sunami and Kiyoshi Kurokawa invoke that this is No time for nationalism. Drawing up from Japan's lost decade of the 1990s where the escalating real estate prices had adverse impacts on the stock market and banking sector. A positive outcome of this was the coming together of policy makers and scientist and enhancing of research funding in subsequent years. The current scenario gives an opportunity for global research collaborations beyond national borders. No wonder, the success of Meiji restoration in 19th century Japan also relied on opening-up.

Work for the greater good says Eric Rauchway while drawing lessons from the Great Depression of the 1930s. In the New Deal policy makers looked up to scientists to come up with practical ideas for social progress. This brought about productivity improvements because of technological innovations. There is a need, lest we forget, to keep in mind that the scientist should be locally grounded in his sensibilities and understanding of the problem as also the meaning of progress. It need not be material alone.

Scientists, however, have to Learn to convince politicians to protect their research budgets says Ian Taylor. This requires research-industry collaboration, this requires recognizing that innovation entails uncertainty as opposed to quantifiable risks. It should fulfil demand and not fund supply. One need not be a Keynesian to say this. This is a challenge for scientists/researchers. If they are worth their salt then they have to come up with practical successes. The catch of course is that the politician also has to learn to distinguish rabble-rouser's babble from matters of substance. They should learn to read (not listen) between the lines.

The final commentary is Jeffrey Sachs' Boost the developing world. The crisis which originated in the United States and Europe has very serious implications for the developing world. Investing in the poorest of poor countries, he says, is a triple win because it would provide a stimulus for richer countries, develop poorer countries and bring about environmental sustainability for all. The world on the verge of a climate change and food crisis with increasing incidence of hunger, if unaddressed, would lead to rising violence, disease, population displacement and most of all shrinking markets. The lesson for countries like India is to extend this poorer regions and vulnerable groups. Increase capabilities of the people, harness on their inherent enterprising nature.

Investing in the environment is Gail Whiteman's review of Sustainable Investing: The Art of Long-Term Performance by Cary Krosinsky and Nick Robins, Earthscan: 2008. I liked the review's opening sentence. "Money can't buy love. But can it buy a more sustainable world?"

Bill Emmott in his Old lessons for a new economics review's The Return of Depression Economics and the Crisis of 2008 by Paul Krugman, W. W. Norton: 2008; also available in Penguin. The reviewer indicates that the book does invoke Keyenesian thinking to be the need of the hour under current circumstances. However, as the book was initially written by keeping the crisis of the 1990s in mind and padded up by adding 11 pages to the current crisis there is scope for further elaboration.

One gets reminded of Gandhi's quote: "There is enough for everyone's need, but not enough for even one person's greed."

23 February 2009

Jai Ho!


Kudos to AR Rahaman, Gulzar and Resul Pookutty getting Oscars aka Slumdog Millionaire. This is good news not only for Indian cinema and music but for everybody. The eight Oscars for the movie in the 81st Academy Awards is remarkable. A positive lesson from the movie is cooperation across the Globe, cooperation between Rahaman and Gulzar (including the beautiful rendition by Sukhvinder Singh, Tanvi Shah and Mahalaxmi Iyer) for the original song, and between Resul Pookutty, Ian Tapp and Richard Pryke for sound mixing. In the midst of a serious financial crisis the movie inspires hope (individuals fighting against all odds) as also the need for cooperation. Besides, the world was also perhaps looking to know something more about Mumbai and India after 26/11 and this came with Slumdog Millionaire.

Last night, the three of us at home (Nandini, my wife and Nerika, our four plus year old daughter) also sat down to see it in the television. The way the story was has been shown is different. I am not a movie buff but one gets the feeling that the movie is meant largely for for an international and not an Indian audience. True, it should not be compared with the Bollywod masala but one gets this feeling even when one compares with Richard Attenborough's Gandhi.

Though the purpose of Mumbai-Agra-Mumbai shift is more to show the Taj Mahal (also see in Wikipedia), yet one keeps wondering about its realm of impossibility. As a true patriot, one feels little upset by the real India versus the compassionate American comparison. The invoking of Amitabh Bachchan and its linking with the human excreta covered young Jamal has a very dramatic effect but definitely another extension of imagination. What triggered me out of my seat is Jamal not knowing who Mahatma Gandhi is? Maybe he just missed Lage Raho Munnabhai.

The most difficult part is that Jamal becomes a millionaire not because of any intelligence or hardwork, but then he did not cheat and did it against all odds. I cannot but agree, "it is written."

Before I sign off, cheers for the best short documentary, Smile Pinki. The icing in my view is the quotation from Rahaman's acceptance: "All my life I had two choices - between love and hate and I chose love." Jai Ho!

17 February 2009

Where is the 'Aam Aadmi'?


‘Business as usual is no longer an option’ has become a catchword with the current financial crisis, but was initially mooted by the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) that presented its synthesis report in April 2008. Despite being a signatory to it, despite the acknowledgement of the larger agrarian crisis that the country has been facing and despite the similarity in purpose envisaged in the ‘inclusive growth’ slogan of the Eleventh Five Year Plan and IAASTD’s emphasis on ‘the reduction of hunger and poverty, the improvement of rural livelihoods and human health, and facilitating equitable, socially, environmentally and economically sustainable development,’ one does not find much mention of it either in the current interim budget of 2009-10 or other recent relevant policy documents.

The initiatives and achievement under agriculture, keeping the welfare of the ‘Aam Aadmi’ in mind, increased the plan allocation for agriculture by 300 per cent between 2003-04 and 2008-09 and launched the Krishi Vikas Yojana in 2007-08 to increase growth rate of agriculture and allied sectors to four per cent during the Eleventh Plan period. A good initiative that requires bottom-up planning from village to taluka to District Agricultural Plans and aggregating to form State and National Plans. Its implementation is tardy and an imposition of a target from the top makes the approach self-defeating.

Keeping 2003-04 as base, the government announced a package of doubling agricultural credit in three years and actually achieved a three-fold increase of credit by 2007-08. The fact that the Government had to come up with the Agricultural Debt Waiver and Debt Relief Scheme in June 2008 is itself perhaps indicative that the ground work to make agriculture remunerative was not done which also means that appropriate project appraisals were not done by the banks while doubling/tripling of credit. The debt waiver is a book-keeping exercise. It does reduce the mental burden of the farmer and makes him eligible for fresh loans, but not a single rupee from this Rs.65,300 crore would lead to investments that is required to spruce up the agrarian economy.

On the one hand, the long overdue increase in the Minimum Support Prices (MSPs) in recent years is a bit of relief that would help improve the returns to agriculture. On the other hand, the Targeted Public Distribution System (TPDS) will ensure food security to those below poverty line. While talking of poverty, the Government should have updated the consumption-expenditure with appropriate nutritional measures, dealt on multi-dimensionality of poverty and on identification to avoid exclusion of the poor, of course, some of these go beyond the budget. Another matter of concern that remains is the huge subsidy bill on fertilizers, which largely goes to the industry and only indirectly to the farmers. There has been no increase in the fund allocated under Rural Infrastructure Development Fund (RIDF) when compared with the previous year.

Education, health and some other social sector initiatives are indicated. The question that one is haunted is, as indicated in the United Progressive Alliances (UPAs) Common Minimum Programme (CMP), whether the promise of doubling of public expenditure as a proportion of the Gross Domestic Product (GDP) achieved. A silence on this indicates that the answer is no.

Some of the notable initiatives in recent years have been the Right to Information and the National Rural Employment Guarantee Scheme (NREGS). Though there are hiccups, the efforts are indeed laudable. The need of the hour is to complement the wage-employment scheme with an equally comprehensive self-employment scheme. This requires revamping of the Sampoorna Gram Swarozgar Yojana (SGSY) through institutional innovation to help organize the poor, financial innovation to make required credit accessible and administrative innovation to improve facilitation. This is also very essential under the current financial crisis because it would encourage a large number of smaller players. Such an effort will also have its multiplier effects not only in stimulating the economy but more importantly in improving the livelihood of the poor and also help us in easing the load on agriculture.

The finance minister rightly quotes Professor Amartya Sen while emphasizing on the need for security during this down turn. But, note that this has nothing to do with increasing defense related expenditure. Rather, such protective security should also address the poor returns to farmers which on a per-capita per day basis is even lower then a liter of bottled water. Notwithstanding the increase in the revenue and fiscal deficits, one is left with the question, where is the ‘Aam Aadmi’?

A similar version has been published in the Financial Express, with the title Debt waiver is a book keeping exercise.

12 February 2009

Darwin 200


Variety for fitter life.
Not by eliminating others,
But, by letting them live.
The more, the merrier days.
How true, how true!
Dearest grand sire Charles,
This toast is for thee,
A birthday we cannot miss.

Today, is the 200th birthday of Charles Darwin, who in his book On The Origin of Species led the foundation for modern evolutionary theory. This year (to be precise, November 24) is also the 150th year of this important book. To know more, see events for his bicentenary celebrations as also the special in Nature.

The three principles underlying the process of natural selection are (1) variation or diversity in the population - a necessary prerequisite, (2) principle of heredity - off-springs have to resemble their parents more than other members of their species, and (3) better adapted individuals have more number of off-springs - the principle of the struggle for existence (survival of the fittest). Note that his principle of variability is very important. But, its importance is lost while giving greater prominence to the struggle for existence.

It means that if survival requires interaction then the existence of multiple groups is very essential. If they become extinct then interaction is not possible and as a result the fitter players will also become extinct. In the present economic crisis, a possible lesson is to encourage the existence of a large number of smaller players. Emphasizing on a few bigger players can be a recipe for furthering the disaster. It is for this that "Business as usual is not an option" (IAASTD) and Small is Beautiful.


06 February 2009

Convergence in Research



The February 2009 editorial in EMBO Reports on Convergence brings in interesting issues with regard to multidisciplinary or interdisciplinary research. It also espouses the importance of ethical, legal and social aspects (ELSA)of research that leads to convergence between life sciences or physical sciences with social sciences and humanities.

As the editorial concludes, "Research is, and should always be, ahead of its time, and convergence research is no exception. The potential of convergence in the development of new products and in public outreach is enormous and will provide valuable, diverse career options for those ... who are ready to expand their skills and knowledge into new domains. The old days of a single skill career are now behind us and we have to prepare for this new and complex environment."

Another interesting aspect under the Science & Society Series on Convergence Research is Genomics in School. A challenge is to introduce new topics without curricula overcrowding. It introduces the advantages of systems-thinking in biology. They are (i) being able to distinguish between the various level of organization-cell, organ, organism-and relate the various concepts to its specific organization, (ii) being able to inter-relate concepts at a specific level (horizontal coherence), (iii) being able to links concepts from different levels (vertical coherence), and (iv) being able to think between abstract visualization to real life phenomena.

03 February 2009

Agrarian Crisis In India




D. Narasimha Reddy and Srijit Mishra (eds.) Agrarian Crisis In India, Oxford University Press, New Delhi, 2009, pp.xxix+286, Rs.695, ISBN-13: 978-0-19-569595-3, ISBN-10: 569595-X.


Cover flap:
For more than a decade, Indian Agriculture has been marked by deceleration in growth and distress of farmers. This crisis is structural and institutional in nature, with farmers' suicides symptomatic of dee-seated maladies that have engulfed the agriculture sector. This book brings together for the first time a detailed analysis of this crisis in all its dimensions.

The complexity of the issues is unravelled by addressing both the macro context and the regional-level manifestations of the agrarian crisis. The macro dimensions include detailed analysis of structural, institutional and policy changes; institutional credit; and state of agricultural research. Case studies of five states-Maharashtra, Andhra Pradesh, Karnataka, Kerala, and Punjab, which experienced high and unusual incidence of farmers' suicides and agrarian distress-present the micro-perspectives. These case studies not only bring out the diversity of conditions prevalent in the states, but also highlight the common problem of failure of public support systems in agriculture. The methods used range from models of explanation based on data from national surveys to discussion of state-specific situations seen through farmer household surveys.

Providing a comprehensive picture of the state of Indian agriculture at eh turn of the twenty-first century, this book will be useful to researchers, policy makers, civil society organizations, and students of Indian economy, polity, and society.

Contents:
Foreword by R. Radhakrishna
1.Agriculture in the Reforms Regime by D. Narasimha Reddy and Srijit Mishra, pp.3-43.
2.Capital Formation in Indian Agriculture: National and State Level Analysis by Ramesh Chand, pp.44-60.
3.Agricultural Credit and Indebtedness: Ground Realities and Policy Perspectives by S. L. Shetty, pp.61-86.
4.Managing Vulnerability of Indian Agriculture: Implications for Research and Development by Suresh Pal, pp.87-106.
5.Farmers' Distress in Modernizing Agriculture-The Tragedy of the Upwardly Mobile: An Overview by V. M. Rao, pp.109-125.
6.Agrarian Distress and Farmers' Suicides in Maharashtra by Srijit Mishra, pp.126-163.
7.Farmers' Suicides and Unfolding Agrarian Crisis in Andhra Pradesh by S. Galab, E. Revathi, and P. Prudhvikar Reddy, pp.164-198.
8.Agrarian Transition and Farmers' Distress in Karnataka by R. S. Deshpande, pp.199-229.
9.Distress, Debt, and Suicides among Farmer Households: Findings from Village Studies in Kerala by K. N. Nair and Vineetha Menon, pp.230-260.
10.Agrarian Crisis in Punjab: High Indebtedness, Low Returns, and Farmers' Suicides by Karam Singh, pp.261-284.