Archive for the 'Globalization' Category

A couple of items that caught my attention this week.

Dubbawallas of Mumbai. As the Indian economy grows at a dizzying pace, the subcontinent is experiencing rapid social change, but some traditions are standing the test of time. One of them is the dubbawallas — the men who deliver tiffins (those metal canisters) of home-cooked hot lunches to office workers all around Mumbai. Forget office cafeterias and fast-food chains. Workers in Mumbai still enjoy the warm lunches lovingly prepared by their wives, mothers, and grandmothers. The dubbawallas—whose business has been growing 5 to 10 percent annually—have an elaborate system of picking up tens of thousands of tiffins from homes each day, taking them to a central train station, sorting them by destination, and then getting them to the proper offices just in time for lunch. The entire process then works in reverse to get the empty tiffins back home. Rarely is a mistake ever made. As one dubbawalla says, “There is a service called FedEx that is similar to ours—but they don’t deliver lunch.”

Which companies are receiving H1-B visas? H1-B work visas were intended to help U.S. companies hire skilled workers from abroad when they can’t find Americans to fill job openings. Ironically, though, non-U.S. companies—namely Indian outsourcing firms—have been using the visas. Yes, that’s right. Outsourcing companies are staffing their U.S. offices with foreign workers on H1-B visas. BusinessWeek magazine recently compiled a list of the top 25 recipients of H1-B visas in the 2006 fiscal year. The Indian outsourcing firms Infosys and Wipro came in first and second, respectively. In all, 16 of the top 25, whether U.S. or non-U.S. companies, had significant outsourcing operations. For more details, check out the slide show of the list here.

Back in March, I wrote that the Web site SlideShare.net, which lets you share your PowerPoint presentations with the entire world, had launched the World’s Best Presentation Contest. Last week, the winners were announced, and it turns out that the two first-place winners (the judges’ top choice and the people’s top choice) both have India-related content.

Shift Happens. Did you know that the top 28 percent of the population in India with the highest IQs is greater than the entire population of North America? This slide show presents some startling statistics about our rapidly changing world. China and India are competing more strongly than ever with the United States. Technology is connecting us and transforming our society in ways never imagined. Change is part of the human condition, and this slide show reminds us that, well, shift happens.

PaniPuri. For those of you who love eating pani puri, this slide show will have your mouth watering. It celebrates all the virtues of this popular Indian food and concludes that it’s a “true World 2.0 Product.”

If you ever took an economics class you probably learnt a lot about subsidies, tariffs and quotas and drew dorky supply-demand charts to show the theoretical impact of these on consumers, producers and the economy. But few of us were ever told stories about the actual effect of subsidies, tariffs and things like that, on real people.
Well, now may be a good time to find out.

I have been closely following the current debate in the U.S. Congress over government programs that have been assisting farmers in America for years. If you watch C-Span sometimes, then you probably have been too.

Here are some facts:

The U.S. government’s farm subsidy program (i.e. financial support to farmers in America) in effect deny millions of people in poor countries a chance to survive in the global economy. U.S. farm policies have been around since the Depression era when farmers really did need the help. But due to sheer government negligence in upgrading policies for changing times, as well as due to the power of some fierce agricultural lobbies, these subsidies have remained to this day.

So how do they affect people in poor countries?

When subsidies are given to U.S. farmers, they are able to produce more rice, sugar, cotton or wheat than they would normally be able to produce given the regular prices of inputs. As a result, over-production takes place, and the world prices of these commodities are artificially lowered (remember that as supply goes up, prices goes down!), which means that farmers in poor countries like Mali, Laos or Cambodia are not able to get a fair price for these same products when they are sold on the world market.

Quite obviously, the governments of these puny countries also don’t have the same-sized war chest as the U.S. government that would enable them to help their own farmers with subsidies. As a result, farmers in poor countries suffer, or even get priced out of the market.

The primary justification given by the U.S. government for providing support to farmers is that it is necessary to protect small-holder farming families which are unable to deal with the high costs of inputs, such as tractors, pesticides etc.

However, the facts show that subsidies overwhelmingly go to the largest farmers and agribusinesses in the United States. According to the Environmental Working Group, between 1995 and 2005, the largest 4 percent of farms garnered half of farm subsidy payments, while the largest 10 percent pulled in 73 percent.

Important note: these large farmers are also important contributors to the political campaigns of elected officials from farm states.

Although the domestic rice market in the United States is saturated, the U.S. government continues to subsidize rice that the U.S. sells in the world market. Rice producers are among the biggest beneficiaries of the U.S. farm program.

Meanwhile, rice is a staple in the diets of half the world, in countries like Cambodia, Bangladesh and other countries, and an important symbol of rural self-sufficiency and national identity. Subsidized rice provides a deathblow to farmers in Asia that don’t stand a chance against the mighty U.S. Treasury.

Also of note: As if these massive rice subsidies weren’t enough, recently the U.S. Patents and Trademark Office granted a Texas company a patent for basmati rice, which Indians been eating for hundreds of years. After a long and painful battle the patent was finally revoked.

There is also some hope of ending the subsidies. A few loud and diverse groups, under the banner of Alliance for Sensible Agricultural Policies (ASAP), including fiscal conservatives, anti-poverty activities and nutritionists, are fighting to get rid of the subsidies that distort the market once and for all. I hope they win.

It’s a true world of “survival of the fittest” in our increasingly more capitalistic global economy. The gap between the “haves” and the “have-nots” is yawning wider as economic inequality increases within countries such as the United States, China and India. To make it into the coveted winner’s circle of those who are benefiting the most from globalization, you’ve got to compete. And you’ve got to compete ferociously.

And you can’t wait until adulthood to start competing. You’ve got to get on the racetrack in early childhood, if not sooner.

This past weekend’s New York Times provided some excellent coverage of the intense competition it takes to get into elite colleges. The article “Re-education” describes how Chinese schools are adopting more Western-style educational practices in order to produce well-rounded students who have the creativity, flexibility, and critical thinking skills necessary to succeed in a global economy (and get into Harvard). Meanwhile, the article “For Girls, It’s Be Yourself, and Be Perfect, Too” showcases the lives of overachieving girls at one of the best public high schools in the United States as they compete to get into the nation’s top colleges.

The message from both these articles, as well as from the everyday experiences of anyone who lives in a community of college graduates, is clear: In today’s world, teenagers must compete harder than ever to get into a good college. And the price you pay for not getting into one is very high.

Earning a 4.0 grade point average, scoring in the 99th percentile on the SAT, being class president, playing on the tennis team, acting in a school play, winning numerous academic awards, and volunteering at a homeless shelter are no longer good enough. You’ve also got to help build a health clinic in Kenya, start some kind of business (preferrably an online one), and complete a near Ph.D.-level science project to even have a chance of catching the eye of the director of admissions at the nation’s top universities.

There is no room for error. You must not strive for excellence; you must strive for perfection.

This is madness. But it’s also reality. In a world with fraying social safety nets, you’ve got to compete to survive. And the competition is cutthroat.

Some may argue that this “Be perfect, or else you’ll fail” mentality is all hyperbole. OK, perhaps so. But just talk to parents and teenagers, and you’ll discover it’s at least the mindset you need to adopt if you want to get into the best colleges.

Competition is one of the world’s most powerful motivators. It’s what put the U.S. flag on the moon.

And at the present time, those who don’t take competition seriously will be left in the dust.