Tuesday, October 31, 2006

Hype, Semi-Hype, and Reality in "ICT for Development"

Vietnam will soon have 13 new telecenters in 10 provinces. The Saigon Times said,
Farmers in some of the country’s least developed provinces now have instant access to pricing and market information through a new telecenter initiative developed by the agriculture ministry, Intel and UNDP.
The Economist, on the other hand, was more interested in mobile phones, both on political issues,
Chroniclers of cellular people power identify two big landmarks: the rallies that toppled President Joseph Estrada of the Philippines in 2001, and South Korea's presidential election a year later, when text messages among the young brought a surge of support for President Roh Moo-hyun.
and economic issues:
About half a million South Africans now use their mobile phones as a bank. Besides sending money to relatives and paying for goods, they can check balances, buy mobile airtime and settle utility bills. Traditional banks offer mobile banking as an added service to existing customers, most of whom are quite well off. But [some banks] are chasing another market: the 16m South Africans, over half of the adult population, with no bank account. Significantly, 30% of these people do have mobile phones.
The Office of Data and Information in Sinjai, South Sulawesi, on the other hand, is more interested in the power of interactive radio broadcasting.

By facilitating a two-way information flow, the head of the office, Andi Grandyanto Asapa, enables checks and balances between the people and the government.

His public radio "Sinjai Bersatu" receives from the people at least 40 phone calls and 100 SMS per day, most about complaints and suggestions for the government. Pak Grandyanto's staff then types those messages and forwards them to the district head (Bupati). Later, his reporters go to the field to check whether the government has handled the reported complaints.

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Monday, October 30, 2006

Capitalism for the Poor, Socialism for the Rich

The phrase "making capitalism work for the poor" shows that capitalism, in its current form, has not worked for the poor. But Nobelaureate Muhammad Yunus and his Grameen Bank has proved that it can.

Bolivian President Evo Morales, on the other hand, is trying to prove that socialism can work for the rich too. The nationalization of Bolivia's gas and oil sector means that multinational companies are not getting as good a deal as they had before. Still, they signed the new contract, which proves that they're still making good enough profit out of it.

The caveat about Morales' nationalization program is that it can easily lead to inefficient bureaucracy and corruption as in the case of Indonesia's Pertamina. Therefore, efforts must be taken to make sure that socialism has its checks and balances, and still allow for some healthy competition.

Yunus used this principle with the Grameen Bank. He balanced capitalism by a strong motive to make it work for the poorest, i.e. by "tweaking" the system ('no collateral is fine'). His success is also due to efforts at strengthening comunity values of burden-sharing and collective achievement.

Can Morales "tweak" socialism in this style? If he can, do you think he'll get a Nobel Peace Prize in, say, 20 years from now?

See Amien Rais' take on Bolivia's oil & gas nationalization.

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Complexity as humanity's essence

Idul Fitri celebrations just passed. They say the holy days were observed to celebrate human's return to its "essence." But what is humanity's essence?

For me, it's complexity. There is no single way to dissect humanity, as humans are both rational and emotional, individual and social, physical and spiritual, "good" and "bad."

Two weeks ago my cousin passed away. She was just 16. Her mom told this story:
She laid in the hospital bed. Signs of life were fading away. But everytime we cried, her heartbeat regained. It's as if her soul was struggling to keep her body alive, because it seems that we weren't ready to let her go. Finally we stopped crying and told her: "we're ready to let you go." And she went. Peacefully.
My cousin was an example of how the (stronger) spiritual side has to give way to a dying physical body. My grandma, at home, is the other way around. In her late 70s, her body is still OK. But her mind has increasingly given up. We can dissect the mind and the body one-by-one, but overall, when we talk about someone as a person, both aspects count.

And in the same way, humans are both rational and emotional. Everything can be rationalized, but rationality is not everything. Last Ramadhan, Arya argued against giving to beggars because "our gift was mainly to make ourselves feel good." At the end of the post, he linked to an article from The Economist that explains - neurologically - why humans feel good when they give. No surprise or contradiction here. In Islamic teaching, giving and charity (as well as making much profit) are encouraged - not just for the sake of the needy, but for the giver as well. Giving nurtures the emotional side of the giver - the side that keeps him/her humane.

An article in Kompas a few days ago tells the story of people working in Jakarta, making Rp 2,000 - 5,000 (20 - 50 cents) a day. They save Rp 1 million ($100) after a year, and spend it all for Idul Fitri purposes back in their village with their relatives. Maybe this is similar to the traditional people of Tana Toraja in Sulawesi, who spend a lifetime's saving to give a "proper" funeral celebration for their deceased, together with fellow villagers.

If on one side we have rationality, individualism, capitalism, and the physical, then on the other side we have emotions, collective order, socialism, and the spiritual. That's why any attempt to make extreme the values of one side will be challenged by equal resistance from the other side. There's nothing special going on here. It's just humanity at work.

Picture credit: Vitruvian Man, by Leonardo da Vinci - from Wikipedia

Thursday, October 19, 2006

Cellphones, Real-time Prices, Real-time Negotiations

One hype/rhetoric in the field of "ICT for Development" is that price information, in the hands of poor producers, can help such producers gain leverage in dealing with middlemen. This is maybe true, but then again too many "ICT for Development" initiatives are so focused on the Internet, they forget the simple things that actually work: real-time voice communication.

Harvard economist Greg Mankiw pointed me to this Washington Post article on how cell phones have levelled the playing field in favor of poor fishers in the Indian fishing industry.

In this case, cell phones are more effective than a website containing list of prices, given that it's ubiquitous:
With 6 million new cellphone subscribers each month, industry analysts predict that in four years nearly half of India's 1.1 billion people will be connected by cellphone.
And dirt cheap:
less than a penny a minute -- the world's cheapest cellphone call rates
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Friday, October 13, 2006

Farmers' poverty: various factors

Sarapan Ekonomi has been facilitating a discussion about why our farmers stay poor (i.e., here and here). Surely an ambitious topic for some exchange of a few paragraphs, but I salute the initiative, the underlying idealism, and the lively discussion that also involves economists Arya and Ujang.

Although not an economist, I nevertheless want to contribute some thoughts, especially after my three-day visit to Muneng, a village in Kabupaten Madiun, East Java.

Despite winning a "swasembada pangan" (food self-sufficiency) award in 2002 from the Ministry of Agriculture, more than 40% of Muneng's residents remain poor. More than half are only elementary school graduates. This condition, among others, contributed to the selection of Muneng as a site for BPDE/Bappenas/UNDP's "telecenter" project that aims to use "ICT for poverty reduction." The project's main idea is that lack of access to ICTs is a major factor of poverty.

After some time working with poor farmers, project implementers have found that farmers' poverty is caused by a multitude of factors, and that lack of access ICT is merely one of them. Below, I will describe those other factors from their perspective, NOT in any specific order of importance.

One factor is dependency on chemical fertilizers and pesticides. Farmers don't produce these, companies do. Currently community organizers in Muneng and Pabelan, Central Java (another site for the project) are facilitating a few farmers' request to return to using organic fertilizers and natural predators to kill pests. These few now believe that organic farming produces better and more yield. [above: pic of organic fertilizer]

The second factor is farmers' lack of liquid assets (money). And no, this is not a tautology. Growing rice takes 4 months. During this time, a farmer may need money (regardless of whether they own land). So they borrow from "loan sharks" either with above market interest rates, or with an agreement that these "sharks" will buy their yield later, at below market price. With this condition, even farmers who's now doing organic farming sometimes have to sell their cow or goat's dung to these "sharks," only to buy it back later at higher price to be used as organic fertilizers.

The third factor is the small plots of land owned by each farmer, as Sarapan Ekonomi pointed out. Yes, this has been realized both by farmers and the Provincial government. That's why the province has started a program called "cooperative farming" (which is then also adopted by the Muneng telecenter), in which farmers who normally only have 0.3-0.4 hectare of land would be organized to collectivelly work on a minimum of 50 hectares land. However, as many field workers will tell you, organizing - much less land consolidation - is much easier said than done.

The fourth factor is related to conservative mindset and passive attitude. Since many farmers have forgotten the principles of organic farming that their ancestors once knew, now they are hesitant to try out a "different" method. Many would rather be "pasrah" (accept an uncomfortable condition) rather than force themselves to lean and invest in new things. "What if organic farming doesn't give better results?" they ask. So organizers gave them examples of successful organic farmers in nearby village. "What if it wouldn't work here? The soil may be different!" so they'd refute. [above: pic of organic paddy (right) compared to non-organic paddy, both at same age. The organic paddy is fuller and weighs more]

Pak Sukat is a successful farmer in the village of Babatan, 7 km away from Muneng. From the telecenter, he'd downloaded the latest methods to grow melon (including use of more organic fertilizers). Now he produces melons (and tomatoes, and rice) with less cost and more yield. One thing he had to do was to install a water pump on his farm to ensure water. Muneng residents, however, have been very reluctant to follow this method. "What if nothing changes, although we've invested in building the pump?" they'd ask. [left: pic of Pak Sukat with his water pump]

The latter is a soft factor, which sadly is too often overlooked, simply because it is ‘invisible and tacit.' Technocrats' ideology that the future can be engineered, and that poverty is in essence a technological (and/or market-related problem), fails to see that it is more likely to be caused by ‘a crisis of the spirit, a loss of political will, a cycle of self-defeat, and essentially about powerlessness, about fear, about the deadening realization that one’s children will not have a better life.’ This is Inayatullah in Transforming Communication: Technology, Sustainability and Future Generation.

So there you go. Four factors as to why farmers are poor, based on three-days' interaction with with field workers, right in the village of Muneng. Surely this is not meant to generalize all Indonesian farmers, as I've also found some who are very progressive, such those organized by SPPQT federation in Salatiga/Central Java. Are there more factors to farmers' poverty? Sure: take lack of access to affordable quality seeds, post-harvest processing, markets, and more. Which factor is the most important? I wouldn't be interested. They all matter and has to be dealt with equal seriousness. It's not a matter of "either or", but "both and also."

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Thursday, October 12, 2006

A Longer Life for What?

Daniel Goleman has once again pointed out that humans, as much as they are individual-rational beings, are social- emotional beings. The author of Emotional Intelligence and newly published Social Intelligence said that
Research on the link between relationships and physical health has established that people with rich personal networks — who are married, have close family and friends, are active in social and religious groups — recover more quickly from disease and live longer.
We often consider "a long life" as something good. However, an NYT article last month offered an alternative food for thought: would we (as society) rather have "a longer life or more stuff"?

This question in is more contextual in the US, where
The average cost of a family insurance plan ... has risen another 7.7 percent this year, to $11,500 ... In only seven years, the cost has doubled, while incomes and company revenue, which pay for health insurance, haven’t risen nearly as much.
"A longer life" means significant costs in the form of lost (economic) opportunity. In advanced countries, this translates mostly to money spent for healthcare. In developing ones, time spent by the family to take care of the old.

The first article pointed out how to enjoy life (and quickly recover from diseases) while we're still productive. The second one asked how long do we "need" to live anyway, especially if we're no longer productive or have become a "burden" for others.

What do you think?

Illustration credit: personal.rockbridge.net

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Monday, October 02, 2006

Celebrating Cities and Migrant Workers

World Habitat Day's theme for this year is "Cities: Magnets of Hope." The theme is chosen to commemorate how migrant workers, be it national or international, are increasingly coming in to cities. On one hand, cities may become strained. On the other hand, cities may be showered by "the gold dust of the economy." Are we going to complain, or take advantage of the situation? It all depends on how we view the in-migrating urban poor: as liability, or asset. (Don't forget to check out the Habitat Debate magazine on this topic)

I, for one, am in support of (low-wage) migrant workers coming in to areas/economies which are more capital-intensive than labor-intensive. My economic-geography professor once told this 18th/19th century story, when the U.S. was more labor-intensive (relatively more workable land than people), and Europe was more labor-intensive (relatively more people than workable land). The opening up of borders saw the migration of many (almost a quarter?) of Europe's working population into the U.S. Afterwards, low wages in Europe rose, and high wages in the U.S. dropped. In the end, both economies grew handsomely as production needs both labor and capital. Sorry for the lack of hard data. Don't have time to rummage through my old notes.

Anyway, I'm currently less in touch with the cyber world, as I'm doing a lot of traveling to the villages to see how effective telecenters (and ICT in general) really are for poverty reduction. Will share more about this later.

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