http://news.bbc.co.uk/2/hi/business/7675103.stm
10,000 PEOPLE DIE EVERY DAY DUE TO MALNUTRITION!
.....so how bad was your day!
Friday, October 24, 2008
IMF Loan
Pakistan seems to be headed into deep financial turmoil. Thanks mainly to inept and spendthrift leadership and a faulty taxation system. The forex reserves have fallen abysmally low (only covering about 2 months of imports). To safeguard the country from default urgent cash is required.
Since the so-called 'friends of Pakistan' have not stepped in to help and we have saturated all demand to give loan to Pakistan by the World Bank, Asian Development Bank and DFID, the IMF is the last resort.
But under the agreement under discussion Pakistan will have to bend over backwards to say the least. The $9.6 billion loan comes at a markup of 16.7% and has many other conditions attached, such as disclosing all loan information, cutting the defense budget by 30%, decreasing pensioners, agriculture tax imposition, PKR 50 billion increase in taxation, strong role of IMF in making the financial budget and lots of other controls. This is tantamount to selling the ownership of the country. What is going to happen to this country if agreements like this go through is anybody's guess.
Since the so-called 'friends of Pakistan' have not stepped in to help and we have saturated all demand to give loan to Pakistan by the World Bank, Asian Development Bank and DFID, the IMF is the last resort.
But under the agreement under discussion Pakistan will have to bend over backwards to say the least. The $9.6 billion loan comes at a markup of 16.7% and has many other conditions attached, such as disclosing all loan information, cutting the defense budget by 30%, decreasing pensioners, agriculture tax imposition, PKR 50 billion increase in taxation, strong role of IMF in making the financial budget and lots of other controls. This is tantamount to selling the ownership of the country. What is going to happen to this country if agreements like this go through is anybody's guess.
Life is beautiful but it surely does not seem like it at the moment atleast not if you're in Pakistan.
Friday, October 17, 2008
quotes of my own
There is a term applied to certain times in your day to day life when everything becomes clear and all the whole world seems to make sense. These are referred to as 'moments of clarity'. For some this happens when you've smoked up a bit or after a heavy discussion after a couple of drinks, or after not having had sleep for some time, or having gone without food for more than a few hours, or after somebody or someone has made you feel extremely happy! Usually such moments of clarity go to waste since no effort is made to put them down on paper or their value not truly understood by those lucky enough to witness such moments. I have personally had such moments and though most have been forgotten some were luckily preserved by some coincidence or the other. Here are a few of those thoughts that came during certain 'moments of clarity'
Capitalism vs Social Business: In a world of diminishing resources and a burgeoning population, it is vital to help society meet its needs rather than work on creating 'wants' that the world does not need.
The seed of selfishness and greed planted in our hearts by capitalism inhibit our desire to help the poor.
Money: No one on death bed wishes they'd made more money
Wants and Needs: The inability to differentiate between wants and needs is the cause of all our headaches
....more shall be added as they become clearer! ;-)
Wednesday, October 15, 2008
Imran Khan - Pakistan Tehreek-e-Insaaf - Sasta Tandoor
One of Pakistans true heroes and a genuine products of the limited democracy Pakistan has had, is Imran K
han. His rise to fame was via guiding Pakistan to success in the 1992 World Cup of cricket. He was instantly a mega hero, a position he used to launch a large scale cancer hospital which charges customer only what they can afford and which in many cases is nothing.
Since then he has moved on to form a political party whose primary objective is
justice and service to the underprivileged, something which is badly needed in the country. Considering the recent price hike and incredulous inflation rates hitting the country his party, the Pakistan Tehreek-i-Insaaf (PTI), http://www.insaaf.pk/ came up with a bold new strategy to serve people of low incomes basic food items such a roti (commonly eaten, kinda bread) at a very reduced rate of PKR 2, thats about 3 cents.
This is a really good offer and provides wondrous relief to the poor. He plans to start this scheme, the Sasta Tandoor, all over the country and seeks support. More information can be had via videos such as http://www.youtube.com/watch?v=ryEvVaSM4G8 Donations can be made via the following information.
han. His rise to fame was via guiding Pakistan to success in the 1992 World Cup of cricket. He was instantly a mega hero, a position he used to launch a large scale cancer hospital which charges customer only what they can afford and which in many cases is nothing.Since then he has moved on to form a political party whose primary objective is
justice and service to the underprivileged, something which is badly needed in the country. Considering the recent price hike and incredulous inflation rates hitting the country his party, the Pakistan Tehreek-i-Insaaf (PTI), http://www.insaaf.pk/ came up with a bold new strategy to serve people of low incomes basic food items such a roti (commonly eaten, kinda bread) at a very reduced rate of PKR 2, thats about 3 cents.This is a really good offer and provides wondrous relief to the poor. He plans to start this scheme, the Sasta Tandoor, all over the country and seeks support. More information can be had via videos such as http://www.youtube.com/watch?v=ryEvVaSM4G8 Donations can be made via the following information.
Bank: Muslim Commercial Bank
Account # 1000701
Routing #: 027470763
SWIFT code: MUCBPKKA
Suicide Bombings
It has been argued for a while why religious scholars do not openly condemn the suicide bombings and somehow 'justify' to an extent these actions by giving the argument that there is no other option left for those oppressed.
A couple of days ago, however, the Muttehadda Ulema Council, which is a major group of religious scholars, declared via a unanimous decree (fatwa) that suicide bombings are unlawful (haram) which is in my mind one of the first times that a significant religious body has come out so blatantly against it. I hope there is more to come in this regard and rather than keeping hush about it signifying it as an unwritten rule, it should be properly and emphatically criticized by those in control.
Monday, October 13, 2008
Muhammad Yunus - Social Business
I recently read a great book by Nobel Award winner Muhammad Yunus from Grameen Bank fame - 'Creating a world without poverty'. I wrote a short summary of some of the main parts. This is after having read about 2/3rd's of the book.
A fabulous book about ‘Social Business’ – the business with a goal to help the poor.
He explains the problems inherent in the corporate for-profit companies that are all around us. He terms them as Profit-Making Businesses (PMB) and the problem with them is that their only concern is profit making, where every action is considered actionable only on the basis of how it affects the bottom line. History has shown that such businesses are good only for the rich and not the poor. Income and wealth inequalities are only increasing due to the way these businesses are and hence that is why poverty has increased so much. The fact that 94% of the worlds income goes to 40% of the people is testament to the fact. So how do we go about fixing the poverty issue which affects such a large portion of the world’s population?
Well, there are a few systems/mechanisms in place but they are mostly inadequate to meet those requirements. There is the government, but it us usually too slow, corrupt and inefficient in most underdeveloped countries (where most poverty afflicted people live) and hence the government is unable to deliver. We have non-profit organizations which do a lot to help the poor but the biggest problem with them is that they rely on constant donor support and when that support falls down due to donor fatigue or any other factor, the work of these organizations comes to a halt. Then there are the ‘multilateral institutions’ the World bank, the IMF etc but they only look at GDP as the way to growth, whether or not that helps the poor is not their concern, so their support and work has not helped the poor people at all. (Read John Perkins – Confessions of an economic hit man for more facts about these institutions). Then there are the Corporate Social Responsibility (CSR) teams of the PMB but they are designed to do things only if it helps them so they will squeeze out as much as they can from the people and then give back a small percentage of that to give back. It all goes back to differing focus on profit rather than social benefit. Social Business takes the positives from these systems but changes the goal so that it helps those that need the help.
Then Yunus talks about his Grameen Bank initiative which came about when he realized that poor people are neglected by the financial services of regular banks because they are deemed to be too risky an investment and they have no collateral and the world considers helping the poor by creating jobs when the fact is that the poor are far better off when they are given reasonable opening to grow via financial opportunities to start their own businesses. Hence, he starts of by giving loans to the poor via a banking system customized to the needs of the poor. The loans are given at much lower rates than what the money lenders in the localities give the loans (20-30% vs 100-250%). The loans are given to the women mostly since research and observations have shown they are more likely to spend the funds on family and business rather than on themselves. The results of his ‘microcredit‘ system are unbelievable as he gets 98% returns on loans which the banks think is not likely to be sustained but it has been for over 20 years. Of those borrowers who have part of the microcredit system over 60% have now risen out of poverty. Now over 100 million families worldwide have been assisted with this method and the target for 2012 is 175 million families. It has not been without hiccups but the system has been transformed to fit the needs and requirements. The system has been copied all around the world with similar results where poverty has been heavily reduced.
Essentially the way a social business runs is that investors/donors contribute funds to a business whose primary objective is to help in social uplift of poverty stricken people. Such a business has to be constructed in such a way that it is not charity or aid given to the people rather good and services are brought to the people at lower rates than market rates. So there is a return on the capital investment. Hence such a business will return the invested capital back to the donors and from then on will bring returns further on and become sustainable. The organization will hopefully keep generating profits which can be used to expand the business or in a slight variation of the above social business type act as PMB and give returns to the target market which will also be the owners of the business. Obviously the design of such a business is not easy and many ideas are bound to fail (just like in the free market) but there will be successes which will help a lot of people come out of poverty. He also differentiates social business from social entrepreneurship which is a very broad concept which encompasses social business as well as for profit, non profit and other variations which help the poor.
Currently the Grameen Family of businesses consists of 26 diverse social initiatives all directed towards assisting the poor in getting out of poverty. These are Grameen Bank, the Grameen Trust, Grameen Krishi (Agriculture) Foundation, Grameen Uddog (Enterprize), Grameen Fund, Grameen Fisheries and Livestock Foundation, Grameen Telecom, Grameen Shamogree (products), Grameen Cybernet, Grameen Energy, Grameen Phone, Grameen Welfare, Grameen Education, Grameen Communication, Grameen Knitwear, Grameen Capital Management, Grameen Solutions, Grameen IT Park, Grameen Business Promotion, Grameen Information Highway, Grameen Star Education, Grameen Bitek, Grameen Healthcare Trust, Grameen Health and Grameen Danone. Some have been successful some have been not but they continue tweaking the businesses to get them to work.
The success of the Grameen Family of businesses can be estimated from the following facts about Bangladesh.
─ The poverty rate has fallen from 74% in 1973 to 57% in 1992 and 40% in 2005
─ Gini Index measuring inequality has remained virtually unchanged despite high growth
─ Population growth curtailed to 1.5% in 2000 from 3% in 1970
─ Life expectancy increased from 56 to 65
Another impressive and interesting fact is how poverty is defined. Although there are over 33 definitions of poverty worldwide, the way it is described here is very unique where rather than focusing on $1 income/day etc it is defined by 10 points that need to be met to be a poverty free family. These give a much more identifiable and clearer picture of their living standards.
The family lives in a tin-roofed house worth >= $370. Sleep on cots not the floor
Drink pure water from tube wells or boiled water, or purified arsenic free water
Able bodied children of age 6 should have attended or be attending primary school
Monthly loan repayment installment is >= $3
Use hygienic and sanitary latrine
Sufficient clothing including clothes, blankets and mosquito nets.
Additional source of income for emergencies
Savings account >= $75
Ability to feed three meals a day throughout the year
Conscious about health, can take action and pay for medical expenses.
He identifies that the best way to start supporting a poor community is with credit, all other systems such as education, health etc as important as they are need to follow afterwards. He once again clarifies that charity is not the answer. The way to go is the formation of a ‘sustainable’, ‘no loss’, ‘no dividend’ social business. He goes into details of how, if south Asian countries formed alliance and did trade could be able to overcome poverty to a large extent and be able to develop economies as well.
The whole heart warming process of creation of the Grameen Danone business is explained in intricate detail including the results it achieved and the benefits it caused not just to the poor target population but to the large $16 billion corporation in terms of a feeling of helping others which Yunus feels resides in every human.
He explains the problems inherent in the corporate for-profit companies that are all around us. He terms them as Profit-Making Businesses (PMB) and the problem with them is that their only concern is profit making, where every action is considered actionable only on the basis of how it affects the bottom line. History has shown that such businesses are good only for the rich and not the poor. Income and wealth inequalities are only increasing due to the way these businesses are and hence that is why poverty has increased so much. The fact that 94% of the worlds income goes to 40% of the people is testament to the fact. So how do we go about fixing the poverty issue which affects such a large portion of the world’s population?
Well, there are a few systems/mechanisms in place but they are mostly inadequate to meet those requirements. There is the government, but it us usually too slow, corrupt and inefficient in most underdeveloped countries (where most poverty afflicted people live) and hence the government is unable to deliver. We have non-profit organizations which do a lot to help the poor but the biggest problem with them is that they rely on constant donor support and when that support falls down due to donor fatigue or any other factor, the work of these organizations comes to a halt. Then there are the ‘multilateral institutions’ the World bank, the IMF etc but they only look at GDP as the way to growth, whether or not that helps the poor is not their concern, so their support and work has not helped the poor people at all. (Read John Perkins – Confessions of an economic hit man for more facts about these institutions). Then there are the Corporate Social Responsibility (CSR) teams of the PMB but they are designed to do things only if it helps them so they will squeeze out as much as they can from the people and then give back a small percentage of that to give back. It all goes back to differing focus on profit rather than social benefit. Social Business takes the positives from these systems but changes the goal so that it helps those that need the help.
Then Yunus talks about his Grameen Bank initiative which came about when he realized that poor people are neglected by the financial services of regular banks because they are deemed to be too risky an investment and they have no collateral and the world considers helping the poor by creating jobs when the fact is that the poor are far better off when they are given reasonable opening to grow via financial opportunities to start their own businesses. Hence, he starts of by giving loans to the poor via a banking system customized to the needs of the poor. The loans are given at much lower rates than what the money lenders in the localities give the loans (20-30% vs 100-250%). The loans are given to the women mostly since research and observations have shown they are more likely to spend the funds on family and business rather than on themselves. The results of his ‘microcredit‘ system are unbelievable as he gets 98% returns on loans which the banks think is not likely to be sustained but it has been for over 20 years. Of those borrowers who have part of the microcredit system over 60% have now risen out of poverty. Now over 100 million families worldwide have been assisted with this method and the target for 2012 is 175 million families. It has not been without hiccups but the system has been transformed to fit the needs and requirements. The system has been copied all around the world with similar results where poverty has been heavily reduced.
Essentially the way a social business runs is that investors/donors contribute funds to a business whose primary objective is to help in social uplift of poverty stricken people. Such a business has to be constructed in such a way that it is not charity or aid given to the people rather good and services are brought to the people at lower rates than market rates. So there is a return on the capital investment. Hence such a business will return the invested capital back to the donors and from then on will bring returns further on and become sustainable. The organization will hopefully keep generating profits which can be used to expand the business or in a slight variation of the above social business type act as PMB and give returns to the target market which will also be the owners of the business. Obviously the design of such a business is not easy and many ideas are bound to fail (just like in the free market) but there will be successes which will help a lot of people come out of poverty. He also differentiates social business from social entrepreneurship which is a very broad concept which encompasses social business as well as for profit, non profit and other variations which help the poor.
Currently the Grameen Family of businesses consists of 26 diverse social initiatives all directed towards assisting the poor in getting out of poverty. These are Grameen Bank, the Grameen Trust, Grameen Krishi (Agriculture) Foundation, Grameen Uddog (Enterprize), Grameen Fund, Grameen Fisheries and Livestock Foundation, Grameen Telecom, Grameen Shamogree (products), Grameen Cybernet, Grameen Energy, Grameen Phone, Grameen Welfare, Grameen Education, Grameen Communication, Grameen Knitwear, Grameen Capital Management, Grameen Solutions, Grameen IT Park, Grameen Business Promotion, Grameen Information Highway, Grameen Star Education, Grameen Bitek, Grameen Healthcare Trust, Grameen Health and Grameen Danone. Some have been successful some have been not but they continue tweaking the businesses to get them to work.
The success of the Grameen Family of businesses can be estimated from the following facts about Bangladesh.
─ The poverty rate has fallen from 74% in 1973 to 57% in 1992 and 40% in 2005
─ Gini Index measuring inequality has remained virtually unchanged despite high growth
─ Population growth curtailed to 1.5% in 2000 from 3% in 1970
─ Life expectancy increased from 56 to 65
Another impressive and interesting fact is how poverty is defined. Although there are over 33 definitions of poverty worldwide, the way it is described here is very unique where rather than focusing on $1 income/day etc it is defined by 10 points that need to be met to be a poverty free family. These give a much more identifiable and clearer picture of their living standards.
The family lives in a tin-roofed house worth >= $370. Sleep on cots not the floor
Drink pure water from tube wells or boiled water, or purified arsenic free water
Able bodied children of age 6 should have attended or be attending primary school
Monthly loan repayment installment is >= $3
Use hygienic and sanitary latrine
Sufficient clothing including clothes, blankets and mosquito nets.
Additional source of income for emergencies
Savings account >= $75
Ability to feed three meals a day throughout the year
Conscious about health, can take action and pay for medical expenses.
He identifies that the best way to start supporting a poor community is with credit, all other systems such as education, health etc as important as they are need to follow afterwards. He once again clarifies that charity is not the answer. The way to go is the formation of a ‘sustainable’, ‘no loss’, ‘no dividend’ social business. He goes into details of how, if south Asian countries formed alliance and did trade could be able to overcome poverty to a large extent and be able to develop economies as well.
The whole heart warming process of creation of the Grameen Danone business is explained in intricate detail including the results it achieved and the benefits it caused not just to the poor target population but to the large $16 billion corporation in terms of a feeling of helping others which Yunus feels resides in every human.
Saturday, October 4, 2008
the world and my views
things are just happening so quickly..its hard to keep up. the US senate and house of reps has approved the bailout plan which i feel is not right without putting regulations on these financial orgs first. this is like giving them a ticket to do whatever u want...and knowing that if things go wrong the govt will save u again because the economy cant survive without u. its a signed check to the financial institutes to party on.
the US elections are getting nearer and i really enjoyed the palin-biden debate. surprised by her actually. she seemed very disappointing in earlier interviews. but she came out pretty strong in the debate..lets see how the presedential debate goes. its all exciting stuff but the truth is, either way it doesnt matter. the presidency is really just a showpiece to the public the real decisions are made by think tanks and advisors and elsewere...but it is nice to follow.
as for pakistan, the corrupt offiicials in power, all elected as part of the democratic process, are robbing the nation of all that is left. it is pretty sad. many friends and family are leaving for more promising jobs abroad. its realy very sad. its times like these i prefer to have a fatalistic attitude and try not to think or worry too much about whats going on.
im nearing the end of my mba program and wondering what path to take as far as much job is concerned. i hope i wont have to bow down and go the way of the multinationals (mnc's) that would be the truly sad. i'd prefer working for a social sector organization and work towards fixing something in this nation where everything seems to be broken.
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