Chhatisgarh, Not Vidarbha

April 22, 2009

Girish Shahane has a post up about how the Huffington Post is panicking over a mass suicide of 1500 farmers in Chhatisgarh:

So, the Belfast Telegraph, which presumably has no correspondents in India, picks up a news item from who knows where, and tacks on a misleading headline. The phrase ‘mass suicide’ gives the impression of a co-ordinated, cult-like act. Strangely, London’s Independent, which does have reporters based in this country, picks up the Belfast Telegraph piece. Then, Huffington Post links on its home page to the Independent’s coverage, and carries a blog post by Mallika Chopra, wellness-guru Deepak Chopra’s daughter, based on the unverified story.

(Shoot First, Mumble Later)

I think the figure of more than 1500 suicides comes from this India Together report, or the original statistics it refers:

“The figure is not only for this year, but Chhatisgarh has remained at the top of the list every year since its inception. 1593 farmers committed suicide in the state last year, according to the data provided by state police to the National Crime Records Bureau,” I said. It means 4 farmers die every day by committing suicide. Moreover, Durg is just behind Raipur, which tops the list amongst the districts of Chhatisgarh in this infamous list. Last year alone, 206 farmers committed suicide in Durg. 

(India Together)

So the over-1500 figure was the total number of suicides in a year. The sub-editor who wrote the headline at the Belfast Telegraph made it sound like a mass suicide, and the impression then spread over the internet. It’s his or her fault.

This is not the first time the Irish have made a mess of things. Last year, despite express instructions to deliver a bouquet of flowers on the 8th of October, they did so on the 6th of October.

Anyhow, returning to the point at hand – farmers dying in Chhatisgarh – the India Together report contains this depressing bit:

Santosh, sitting next to him, said “There is a case pending on my land so I can’t get a loan from the bank. I have taken a loan of Rs.13,000 from the moneylender. Lakhnu also borrowed from the moneylender because the land is still in his father Beturam’s name.So the bank did not give any loan to him this time”.

We pompous and heartless libertarians often talk about the right to property, how allowing farmers to sell their land will allow them to get credit, and why it is more important to create industrial employment than to force farmers to remain stuck in agriculture forever. And we have wishful dreams about how if only we could spread libertarian ideas among the people in power and reinstate the right to property things would be better.

Unfortunately, the bit I quoted just now shows that a policy change won’t be enough. Even if the right to property returned, and farmers could sell their land or mortgage it, you’d need a long hard grind of clearing land disputes, rationalising land registration, and making the rural economy independent enough of both agriculture and real estate development that land ownership doesn’t remain as high-stakes as it is. All these are happening, but none of them are happening as fast as is ideal. Whenever there is change, it’s either done on a large but uneffective scale by the government, or on an effective but tiny scale by some madly committed social entrepreneurs.

And then there was this:

He was worried about the loan of Rs.15,000 he had taken from the moneylender. There is an interest of Rs.5 per month on every Rs.100 and he was worried how he would repay it.

The interest rate of 5% a month sounds usurious and provides ammunition to anybody who wants to demonise moneylenders, but let’s look at this in perspective. Indian moneylenders in the Philippines charge 20% a week, and their customers aren’t driven to destitution. In Mexico, Compartamos customers pay an effective interest rate of 100% annually, and the customers are still pouring in and repaying. It’s about interest coverage and gearing, not about how low or high the interest is – look at the subprime borrowers who were defaulting on interest rates of 7 or 8% per annum.

The massive interest rates which the 5-6 Philippines moneylenders or Compartamos charge presumably don’t pinch that much because their customers are mostly urban, and their incomes can’t swing that much. And there’s always the ability to switch to some other sort of casual labour. But in Chhatisgarh, not so much. Not much industry, not much retail trade. 

On that note, I wonder if the lack of opportunities is due to the Naxal tactic of driving out all the “oppressor” employers. The hotspots for suicides – Vidarbha, Andhra Pradesh, and Chhatisgarh are also the ones with a Naxal problem.

So what we have is not just the single sorrow of dying farmers. It’s a tragedy of three wasted opportunities:

  1. The opportunity to enforce law and order and stop the Naxals from running amok
  2. The opportunity to reinstate the right to property, and back it up with a project to clear titles and free land sales and leasing
  3. The opportunity to create a rural financial system that worked

The UPA spent the last five years not giving a shit about any of these, and going by their manifestos and speeches, the NDA doesn’t give a shit either. As Abhishek Bachchan would say, इसे कहते हैं डिमोक्रेसी.

What an idea, sirji.

Microfinance in Pragati

September 2, 2008

I have an article in this month’s Pragati (PDF, 3.8 MB) about microfinance. I’ve written about how there’s more to microfinance than microlending, how broadening access to savings accounts and small insurance is much more important than lending, and how the most significant impact of microfinance so far is not necessarily the financial bits but the organisational bits.

If, as is likely, you find this incredibly dreary and boring, do read the issue anyway for Harsh Gupta’s excellent article on liberal solutions to protests in Kashmir.

Innovation in the Third World

January 21, 2008

This Boston Globe oped (free registration might be required) is astonishing. The author, somebody named Jeremy Kahn, has violated the Sominism-cheat-sheet and Neelakantan’s guide to writing about India left, right, and centre. He appears to have actually understood the nuances of what he’s writing about! And he doesn’t mention caste, growing inequality, pollution, or elephants on the road even once!

OK, that’s the sarcasm out of the way. Seriously, the oped is a very good read. It’s about how Third World conditions are forcing cellphone companies, banks, and Tata Motors to innovate and come up with low-cost technology, and how this means that design and innovation is now splitting up and being driven by two different things: luxury in the First World, and productivity and low costs in the Third World. In the bargain, First World and Third World innovation are both leading to high technology, and the Third World is now actually in a position to export technology to the First World.


This might seem like a classic example of the Third World struggling to catch up with the First. After all, people in the United States and Europe have been using ATM cards and the Internet for years to perform the simple banking tasks Das is only now able to do. But look again: The technology used to bring slum-dwellers like Das their first bank accounts is so advanced that it isn’t available to even the most tech-savvy Americans – at least not yet.

This represents a stunning reversal of the traditional flow of innovation. Until recently, consumers in the Third World also had to tolerate third-rate technology. Africa, India, and Latin America were dumping grounds for antiquated products and services. In a market in which some people still rode camels, a 50-year-old car engine was good enough. Innovation remained the exclusive domain of the developed world. Everyone else got hand-me-downs.

And as they do, companies are confronting the unique challenge of making high-tech products cheaply enough to make a profit. In some cases, this means shifting jobs for talented designers and engineers to the developing world – not just to save labor costs, but in order to better understand the markets they are now trying to reach.

“Developing markets offer the best opportunity for global firms to discover what is likely to be ‘next practice,’ as contrasted with today’s best practice,” Prahalad has written. “The low end is a new source of innovation.”

In a globalized world, people in emerging markets want first-class products – but at prices they can afford. Meeting that demand, particularly in countries where basic infrastructure is weak, requires more creativity than designing a product for a more advanced, affluent market.

Read, read. It’s worth the two-minutes it takes to register.