Monday, November 13, 2006

the good life

(Newsweek International, November 13, 2006 issue)

Still known to many as Bombay--and to others as Bollywood--India's film and financial capital is a great melting pot.

STROLL past the majestic stone dome, turrets and pointed arches of the Chhatrapati Shivaji Terminus--a UNESCO world-heritage site known by most locals as Victoria Terminus, or VT.

WATCH a few overs of cricket--India's one universal religion--at the Oval Maidan (Veer Nariman and Mahatma Gandhi roads).

EAT a plate of sali boti (mutton with fried potatoes) at Britannia, beloved by the city's Parsis. Don't leave without trying the unbeatable caramel custard (Wakefield House, 11 Sprott Road, 16 Ballar Estate).

SAIL across the harbor to Elephanta Island and tour the remarkable 1,500-year-old rock-hewn temples in honor of Shiva, the Hindu god of destruction. Beware of tourist-bullying monkeys! (


Wednesday, November 08, 2006

india's weapon: its diaspora

Nonresident Indians were once viewed with suspicion. But now they and their money are coming home.

By Jason Overdorf
Newsweek International (November 13 issue)

In a way, the story of India and its diaspora reads like a Bollywood script about two brothers, the younger one rich and successful, the older one poor but closer to the family. And now, not too late in life, they are reconciling.

As recently as a decade ago, overseas Indians were viewed either as cash cows to be milked or as traitors who'd taken their highly subsidized educations and abandoned the motherland to get rich abroad. That disapproval was reflected in a play on words that turned NRI, or nonresident Indian, into "not required Indian." But as India has evolved from agrarian torpor to high-tech vibrancy in recent years, the newly self-confident country has also begun to re-evaluate its relationship with its expatriates. At the same time, members of the diaspora have begun looking homeward for the same reason they originally left—the pull of economic opportunity. "The mind-set of India changed in the 1990s," says author Gurcharan Das, whose book "India Unbound" charts the country's rise. "The minds of young Indians, especially, became decolonized."

Everyone knows about the "reverse brain drain" of talented Indians who have returned home from Silicon Valley to fuel the country's tech boom. But more quietly, the money has now begun to follow the people. Though overseas Chinese, not to mention overseas Filipinos and Mexicans, are much more famous for sending cash home, Indians now lead the world in this category. According to the World Bank, cash remittances from Indians abroad have more than doubled since 1995, and last year totaled $22 billion. (China, at $21 billion, was close behind.) Over the past decade India's aggregate remittances totaled $154 billion—about 50 percent higher than what China received from its much larger diaspora.

With more than 20 million Indians overseas, including 200,000 millionaires in America alone, the diaspora could be a critical weapon for India in its effort to catch up to its archrival. A recent JPMorgan report says the diaspora is becoming "a powerful catalyst in helping India realize—perhaps even exceed—its aspiration toward 10 percent annual GDP growth." Aside from remittances, the stock of bank deposits held by nonresident Indians, many of whom bank money in India to take advantage of preferential interest rates, topped $32 billion last year, accounting for a whopping 23 percent of India's foreign-exchange reserves. These large inflows have helped protect the value of the rupee and dampen inflation in a nation that, unlike China, runs a trade and government deficit. And while it's not clear how much of the foreign money flowing into the Bombay Stock Exchange comes from overseas Indians, local traders assume the NRIs account for a good share of the incoming money that has driven up the market 300 percent since 2003. Over the same period, the Shanghai market has stagnated (due in large part to China's reluctance to open it to hot money from any overseas source).

There are other critical differences between the Chinese and Indian diasporas. Because overseas Chinese are concentrated nearby in places like Hong Kong, Singapore and Taiwan and largely earned their wealth in manufacturing, they're both better situated and more motivated to make direct investments in factories on the mainland. In contrast, India's post-independence emigrants were mainly professionals—doctors, lawyers, scientists and engineers—or small shop and hotel owners, settled in countries far from India. Until recently they had neither the expertise nor the impetus to invest in their homeland.

That's a big reason, says JPMorgan analyst Rajeev Malik, that to date overseas Chinese have sunk far more than their Indian counterparts have into new factories back home. The overseas Chinese contributed as much as half of China's foreign direct investment in the 1990s, while overseas Indians chipped in only about 10 percent of India's much smaller total. In 2000, for example, overseas Chinese pumped $32 billion in FDI into China, compared with $200 million for Indians.

But this, too, is changing. Curiously enough, India's first concerted official effort to court its own diaspora began on the heels of its first nuclear test in 1998. To help offset the international backlash that led to sanctions, India issued Resurgent India Bonds, for sale to overseas Indians only. This patriotic appeal drew in $4.2 billion.

Over the next five years, India's burgeoning economic might undermined the members of the protectionist swadeshi—or "self-sufficiency" —lobby in their battle against free-market reformers. Bureaucrats began for the first time to embrace the business class, including videshi—or "foreign"— executives. In 1999, India introduced a quasi-citizenship scheme for Indians born overseas that allows them to travel in and out of the country without a visa, as well as to buy land and take advantage of investment programs directed at nonresident Indian passport holders. In 2000, the government formed a high-level committee to explore ways to improve ties with Indians abroad, and in 2003 it introduced Non-Resident Indian Days, at which government ministers seek diaspora investment. The next year India created a Ministry for Overseas Indian Affairs to address the concerns of the diaspora throughout the year.

At the same time, the diaspora itself has undergone remarkable changes. The mix of contract workers and professionals, scattered from the Persian Gulf to Britain, the United States and Canada, has developed a new core of increasingly high-powered entrepreneurs, centered in but not limited to Silicon Valley. Many of them, like Gururaj (Desh) Deshpande (founder of Sycamore Networks), Vinod Dham (father of Intel's Pentium chip), Vani Kola (founder of RightWorks software) and venture capitalist Vinod Khosla are investing time and money in Indian companies. "Business people in India now have a lot more confidence, and people here [in America] have a lot more respect for what the guys in India are doing," says Deshpande. "If it was 10 years ago and somebody came here looking to invest or contribute, if you got a phone call or an invitation from somebody in the government it was like they were doing you a big favor. Now they offer to come see you. They're reaching out."

The result has been a very recent spike in huge investments from the diaspora. "The pace of investing in India is accel-erating," says Google billionaire Ram Shriram, whose Sherpalo Ventures is now investing in Indian firms. Hotmail founder Sabeer Bhatia has unveiled plans for a $2 billion infrastructure project in Haryana that he's billing as India's Silicon Valley. And, most dramatically, the world's leading steel tycoon, London-based Lakshmi Mittal, is building a $9 billion steel plant in the eastern state of Jharkhand—the largest expat investment to date. "I am very proud to be an Indian, and yes, there is certainly an emotional dimension to be able to invest in my place of birth," says Mittal. "[But] investing in India is a business decision, as it's a market with huge potential for growth in steel consumption."

All this has made Indian and NRI business leaders more active in promoting ties. Organizations like the Confederation of Indian Industry's Indian American Council identify opportunities for collaboration in areas like training and education, health care and scientific research. The expat network Indus Entrepreneurs mentors younger entrepreneurs and has created more than $200 billion in wealth by helping to build start-up companies.

Supersuccessful NRIs see India as an exciting frontier where they can use the skills and contacts they developed abroad to launch second-act careers with a broad socio-economic impact. Consider Deshpande, who—first as "coach," then as investor and chairman of the board—helped entrepreneur Sanjay Nayak build India's first homegrown telecom-equipment company, Tejas Networks. Now six years old, Tejas holds the No. 2 market share in India. Former McKinsey & Co. managing director Rajat Gupta, who left India more than 20 years ago, used a combination of India savvy and a brilliant network abroad to set up the Indian School of Business and the Public Health Foundation of India. Six years after it opened its doors, ISB is the eighth largest business school in the world. The PHFI, launched this year, will set up five world-class Indian Institutes of Public Health, the first two opening by 2008, which will eventually produce as many as 10,000 graduates a year.

Successful emigrants like Dham, Kola and Shriram are bringing more than money to India. They're both benefiting from and fueling a new sense of possibility. Dham, for instance, helped persuade Kola to move home after 22 years in the United States to run a new $100 million VC fund, based in Bangalore. On a trip home, Kola felt something she had felt years ago in Silicon Valley, a sense of being at the center of things. "I'm happy and proud that this is where things are happening now," says Kola, who says the move to India was like getting back on a bike after a break of 20 years. "It's fun. It's almost like a gift I wasn't expecting." Today, India's prodigal sons and daughters are more than welcome home.

Monday, October 23, 2006

an oasis for india's poorest

The All India Institute treated 3.5 million patients last year, and charged each a dollar.

By Jason Overdorf
Newsweek International
Oct. 30, 2006 issue - Several hundred poor and middle-class Indians are awaiting screening for dengue fever, a mosquito-borne disease that has reached near-epidemic proportions in Delhi this fall. Sick and frightened, they lie on straw mats and blankets spread over the pavement in a queue that streams around the ambulance drive and out to the main road. Inside, doctors in the All India Institute of Medical Sciences, or AIIMS, are working to fight off the outbreak of the sometimes deadly virus. Mosquitoes are common on the hospital campus, too, and a dozen ward doctors have contracted dengue themselves. One medical student has died.

This is what it takes to be India's best public hospital. Last year the government-run hospital, with about 2,000 beds, treated 3.5 million people, achieving mortality and infection rates comparable to the best facilities in the developed world—for fees that come to about $1 a day for inpatients.

AIIMS can do this because of government funding of about $100 million a year. Because it doesn't waste much cash on amenities, it can afford to buy cutting-edge equipment. Senior residents at AIIMS make about $400 a month. But they stay because of perks—doctors get the chance to spend one or two years working abroad, for instance—plus the opportunity to work with the latest technology and obtain big research grants.

Monday, September 11, 2006

migration: roads to nowhere

The world's poor are heading from one struggling nation to the next, as globalization rewrites the immigration map.
By Mac Margolis
Newsweek International

Sept. 11, 2006 issue - When he left Luanda six years ago, fleeing the draft and the ruins of Angola's civil war, José Paixão Afonso hoped to start over in a new land. Like thousands of his compatriots, he chose Brazil, a country that not only shared his mother tongue of Portuguese but also stoked imaginations all over Africa. "I thought it was going to be all love and brotherhood, like a Brazilian soap opera," he says. In a way it was. Afonso married and settled in Rio de Janeiro, where he began buying cheap

Brazilian clothing to resell back home. Then one night in July the pilgrim's idyll turned ugly. After collecting on a shipment to Angola from a courier at the Rio airport, he stuffed $6,000 into his underpants and caught a bus to town. Apparently, someone was watching. Minutes later, two armed men claiming to be police intercepted the bus and forced all the Angolans aboard to disembark. Afonso was robbed and beaten senseless. Another foreigner might have been on the next plane home. But Afonso is an immigrant not a tourist, and Brazil is home now. "I never expected this," he says, sighing, still nursing his injuries. "But what can you do?"

Afonso's tale is stark but hardly unfamiliar. The story of immigrants everywhere is one of hard luck, humiliation, occasional violence and stubborn survival against long odds. What's surprising is the venue. Developing countries like Brazil are best known as exporters of the huddled masses, not hosts. At best the Third World has traditionally been a way station to somewhere better. Who among the placeless and the poor, after all, would want to stake life and limb on an uncertain future in another struggling nation? The answer: plenty. Now Burmese women flock to Thailand to stitch designer wear for U.S. and European labels. Jobless families from Bangladesh wash up on the coastline of Mozambique, hoping to make their way to South Africa. Costa Rica has instituted tough new laws to shut down people smuggling—into the country, not out. For more and more of the world's roving poor, yesterday's way station has become tomorrow's final stop.

Not that the basic laws of immigration have been revoked. The flight from poverty and the lure of some golden shore are, even more than war and natural disaster, the twin forces that drive millions from their homelands every year. But globalization is redrawing the map of mass migration. Cheap international travel, tumbling trade barriers, surging growth in once sleeper economies and 24/7 media that spread word of opportunities everywhere are all multiplying the choices for those looking to improve their lot. Argentine job ads are published in Bolivian newspapers. Nigerians track events in South Africa on satellite television.

As anxieties over terrorism and an ever more competitive job market send the richest societies into a xenophobic crouch, more and more of today's migrants are willing to try their luck in other developing nations. Population scholars reckon that some 61 million people from developing nations—nations of the "south" in the argot of economists—now make their home in another developing country. That's nearly a third of the total 191 million global migrants, and virtually the same share as the 62 million who have moved from poor to wealthy nations, or south to north. (An additional 53 million moved between the developed nations, while 14 million went from rich to poor countries.) "There is a tendency to see immigration as an issue only for the U.S. and Western Europe. But it's worldwide," says José Antonio Ocampo, under-secretary-general for Economic and Social Affairs for the United Nations, which will host a summit on migration and development on Sept. 14-15. "The booming parts of the developing world are becoming magnets for migration."

Such population movements are not unprecedented. India and China sent 50 million indentured servants and contract laborers to the Pacific islands, Australia, South Asia and Africa in the mid-19th century—a human tide rivaling the European exodus to the New World a few decades later. A few other rising nations of the south, like South Korea, Pakistan and the oil-rich states of the Persian Gulf, are also well-known destinations for itinerant laborers. But as globalization has spread investment around the world, the incomes of many other once poor nations have been steadily rising. After the late-'90s slump, Thailand's economy is on a roll again; this year, the Thai government reckons it will need 500,000 additional workers. On the rebound from its own financial meltdown early this decade, Argentina is taking in tens of thousands of Bolivians, Paraguayans and Uruguayans.

Unlike France, say, or the United States, these poor countries both ship out their own migrants and receive them from other nations. "When countries send people abroad they leave niches that are being filled by immigrants," says Donald Terry, who manages the Multilateral Investment Fund at the Inter-American Development Bank. While Mexicans are queuing up in droves at the U.S. border, for instance, plenty of less fortunate Central Americans settle for life just shy of the Rio Grande. In 2005, Mexican authorities detained 240,269 undocumented migrants, nearly double the figure for 2002. As the circle tightens on the northern escape route, Plan B is looking increasingly attractive. "I'm doing a bit better, thank God, and there is work in Tijuana," says Paulina Ibarra Salas, a 57-year-old Guatemalan widow and mother of nine, who slipped into Mexico in 2000 but ran out of money before she could cross over into California. "Life is very tough in Guatemala, and I like Tijuana."

Some southern nations have welcomed poor foreigners before but rarely in such numbers. South Africa has traditionally drawn laborers from surrounding states, but since the end of apartheid migrants have been streaming in from across the continent. Thailand, too, now attracts workers from all over the region. Even in Brazil, where foreigners have been scarce, Angolans and Koreans are arriving, while São Paulo has seen its Bolivian population increase more than sixfold in a decade.

What's worrisome is not just the volume of this migration but its implications. While life is no lark for immigrants anywhere, these newcomers are scratching out a living in lands with flimsy social safety nets and where the only consistent immigration policy is often mass deportation. The vast majority end up in the informal economy, where exploitation is the rule, and lodged in slums, so adding to urban decay. "South-to-south migration is one of the most challenging—and underrated—issues of our time," says Marcello Balbo, professor of urban planning at the University IUAV of Venice, and a specialist in developing-world migration.

Yet still they come. The going wages in the developing world are no prize, but often they're just high enough. Besides, many migrants find the language, climate and customs of southern nations far more comfortable than U.S. or European culture. "For today's migrants, neighborhood matters," says the United Nations' Ocampo. Though work in the United States may pay six times more, nearly half a million Haitians have settled next door in the Dominican Republic to earn $50 a month. By the books, Malaysia is a middle-income country and still pocked with poverty, but to millions of Indonesians and Bangladeshis, with a third and a tenth the per capita income respectively, it looks like a beacon of opportunity. Some 2 to 3 million migrants live alongside Malaysia's 25 million citizens. Thailand's surging economy has sucked in 2 million to 4 million workers from neighboring Burma, Laos and Cambodia, who gladly accept half the $4-a-day legal minimum wage for thankless factory and sweatshop jobs that many native Thais wouldn't touch.

Once, most migrants to the Third World headed to the countryside, to work the harvests, or to a few specific industries, such as mining or oil. Now they cluster in cities, where the jobs have also migrated and social networks smooth the way for newcomers. Though a modest 2.5 percent of South Africa's population is reckoned to be foreign born, immigrants now comprise 7 percent of Johannesburg's residents. Fully a third of those living in Abidjan were born outside the Ivory Coast. About half of the million or more Bolivians living outside their country reside in greater Buenos Aires. Tijuana harbors no fewer than 37 nationalities, including thousands of Chinese.

Not all cities open their arms to these strangers, however. Like outsiders everywhere, southern migrants are seen as intruders—stealing local jobs, depressing wages—or criminals. Mostly, they are victims. Labor rights are unheard-of, let alone access to public health or welfare. They know the law mostly by the blunt end of a nightstick. In Thailand, some employers have been known to keep undocumented workers "under lock and key at night," says Allan Dow, in the Bangkok office of the International Labor Organization.

Scores of São Paulo sweatshops now depend upon the labor of illegal immigrants from the Andes, who work slave's hours and bed down dozens to a room in airless tenements, which are hothouses for tuberculosis and other diseases. It took a deadly fire in a Buenos Aires garment factory, which claimed the lives of six undocumented Bolivian workers, to jump-start the Argentine government's plans to legalize some foreign workers. One of the harshest markets for migrants is surely Malaysia, where the government periodically orders crackdowns on illegal immigration. After a Kuala Lumpur raid in February by members of RELA, Malaysia's volunteer reserve, five bodies of Burmese workers were pulled from a lake. Eyewitnesses said they'd heard screams from the lake as volunteers had charged after the migrants. The government denied that the volunteers were responsible for the deaths.

No one knows the risks better than Femi Oshin, a Nigerian freelance journalist who moved to Johannesburg in 2003. When he failed to produce the proper paperwork at the airport, he landed in the notorious Lindela Repatriation Centre, once the guest quarters for itinerant gold miners near Johannesburg and now a holding tank for foreigners awaiting deportation. After a month of sharing a cramped cell with 19 other Nigerians, he was finally released and granted asylum, but not before—he and his cellmates claimed—they were badly beaten by 15 guards "for not obeying the rules."

In Hillbrow, a fading Johannesburg high-rise housing complex that has become Oshin's home and a haven for many of South Africa's estimated 1.2 million immigrants, everyone knows the rules. "Police are always on the prowl for illegal immigrants, and detain any foreigner who does not have his papers," he says. "If I see a cop in the distance, I take another route." The country's new Immigration Act, sanctioned in 2002, could help, but its implementation has been delayed by constant court battles. Meanwhile, South Africa has expelled more than a million migrants since 1994.

That is the lot of immigrants everywhere, of course—to be needed but not wanted, worked liked coolies yet condemned as parasites. Yet the benefits often outweigh the costs. "We'd like to say, 'These are ignorant people,' [but] it's not true," says Sashi Thatun, program manager for a U.N. project to combat human trafficking in the Mekong River region. "All these workers are taking calculated risks." What may be most surprising about the southern migrants is how well they fare in the face of adversity. The World Bank estimates that $70 billion to $90 billion—or 35 to 40 percent of all money sent home by migrants—flows between developing countries. Nearly a million Nepalese employed in India sent back some $500 million throughout the 1990s, according to one study. So vital is the lifeline of remittances from Buenos Aires to La Paz that the collapse of the Argentine economy in 2001 shaved 1 percent off Bolivia's GDP—perhaps one of the factors contributing to the social turmoil that saw two Bolivian presidents fall in three years.

The message to officials in the developing world couldn't be sharper. Immigrants of the south are not only among the most mistreated laborers anywhere, but perhaps one of the world's most squandered assets as well. Coaxing foreign workers from the shadows of the informal economy, where neither they nor their employers pay taxes, is not only a matter of justice but of sound economics. After all, in many southern cities, some industries—textiles in Argentina and Brazil, water supply in Abidjan, canneries in Bangkok—are dominated by immigrant labor. Yet the pundits and policy gurus, and all but a handful of world leaders, are strangely silent about the growing problem in the south's own backyard. "Officially, developing-world migrants are invisible," says Balbo. "There is simply no south-south immigration debate."

The blind spot could be tragic. South Asians will not soon forget India's nationalist campaign in 2003 to arrest hundreds of Bangladeshis and herd them onto trains for deportation. Because Dhaka and New Delhi have never seen eye to eye on illegal aliens, Bangladeshi border guards drove them back with clubs and gunfire. Hundreds were trapped in a deadly no man's land for days, and several were injured in the shooting. India is now at work on a 4,000-kilometer fence on the Bangladesh border—seven times longer than the wall the U.S. Senate voted to build between Texas and Mexico. Given the determination of today's migrants, neither project is likely to do much good.

With Joe Cochrane in Jakarta, Joseph Contreras in Tijuana, Karen Macgregor in Johannesburg, Jason Overdorf in New Delhi and Jonathan Kent in Kuala Lumpur

Sunday, August 27, 2006

the green devolution

India's population is growing faster than farm output, threatening one of its most prized achievements.

By Jason Overdorf
Newsweek International

Sept. 4, 2006 issue - The Furnace Australia sailed into Chennai last month carrying a load of wheat and, some warned, ill tidings. India's first wheat imports in six years marked a reversal in the march toward "food independence" that the country began in the 1970s. To M. S. Swaminathan, one of the agronomists credited with sparking the so-called Green Revolution, the return of grain imports should be seen as "a wake-up call" for a country that has in recent years taken its ability to feed its people for granted.

Though India's government officially dismissed the return of grain imports as a passing event, Swaminathan and other experts saw it as the latest sign of a long-term decline. The growth rate of grain production has fallen from 1.5 percent before 1995 to 1 percent today, due to a combination of bad management, unpredictable weather and a growing water shortage. Meanwhile, the growth rate for all crops has fallen to 1.25 percent a year, the lowest level since India gained independence in 1947, says Ramesh Chand, acting director of India's National Centre for Agricultural Economics and Policy Research. That's too slow to keep pace with a population now growing, according to United Nations estimates, at a rate of 1.5 percent a year. Chand says the threat to India's food independence is manageable, if the government makes the right moves.

These are sobering indicators for the Green Revolution, which was originally inspired by grave threats to the food supply in India. After back-to-back droughts put the country in danger of massive starvation in 1966, a U.S. presidential-advisory commission called for an "effort unprecedented in human history" to raise farm output around the world. And so it did, as scientists produced new strains of rice and wheat that boosted yields by a factor of five, with the help of heavy irrigation and applications of chemical fertilizers and pesticides. In India, an initially well-executed campaign raised grain output from 82 million metric tons in 1960 to 176 million tons in 1990 and cut imports to zero by 2000. That is, until the trend reversed last month.

Now production gains are slowing as the water supply dwindles, overzealous use of fertilizer and pesticides taints the soil and excessive irrigation waterlogs the land along canals in the showpiece states of India's Green Revolution, like the Punjab and Haryana.

Because irrigated land is two and ahalf times more productive than rain-fed land, many of the gains of the Green Revolution were produced by an increase in the area under irrigation. But as India's population and economy grow, water supplies are shrinking. Already, the World Bankestimates, India meets most of its irrigation and household demand by tapping groundwater—a practice that is "no longer sustainable."

Similar threats haunt China and other developing nations that were big beneficiaries of the Green Revolution. China has responded by relaxing its commitment to being completely self-sufficient in the production of food—encouraging farmers to grow more lucrative fruits and vegetables, while importing wheat and soybeans. To free-trade advocates, this approach makes sense—why obsess over "food independence" in an increasingly global free market, if others grow wheat more efficiently than you do? Focus on the goods, agricultural or not, that you grow most efficiently.

Indeed, when Indian Prime Minister Manmohan Singh called in January for a "second Green Revolution," his concern focused on raising farm incomes, not securing the food supply. He called for a fresh emphasis on fruits, vegetables and new plant varieties that would command higher prices in export markets. He also encouraged measures to harvest rainwater more efficiently, improve the soil and spread the benefits of agricultural technology, including genetically modified seeds.

But the basic position of the Singh government is that India normally produces more grain than it consumes, and soon will again. As for the recent return to imports, officials dismissed it as a procurement snafu: this year, for the first time, India allowed private buyers, including multinationals, to buy wheat directly from farmers. That helped push up prices, and the government responded by refusing to match the prices offered by private buyers. It wound up buying less wheat than usual for the federal program that provides subsidized grain to 150 million poor Indians. When supplies fell short, the government had to turn to imports—temporarily, officials insist.

Critics argue that Singh and his government are missing the big picture. Farm-policy analyst Devinder Sharma complains that "the people who govern this country believe technology is the answer to every problem," and are pushing a second revolution without examining why the first "has collapsed." Chand says the key going forward is to target backward states like Bihar and Madhya Pradesh, which have done little to modernize their farms, and thus have "huge potential" to reverse the slowdown in output.

One reason for these problems is that over the past decade India, as part of its effort to reduce the state role in the economy, has cut back significantly on investment in farms. Public-sector investment fell from just over 2 percent of agricultural output in 1991 to less than 1.5 percent in 2001. That slashed funds for upgrading Green Revolution technologies and for the extension programs that teach farmers how to make it all work.

By the late 1980s, when the early gains made in rice and wheat had slowed, India attempted to extend its success to pulses (peas and beans) and oilseeds. Though it did manage to produce high-yield seeds, the program failed to supply enough of these seeds to farmers, and poor oversight allowed corrupt traders to pass off ordinary seeds as high-yield hybrids, says Delhi University agricultural economist Usha Tuteja. With its vegetarian tradition India is the world's largest consumer of protein-rich pulses, but now ranks near the bottom in the production of these crops.

Swaminathan urges leaders to focus on what he calls an "evergreen revolution." The goal would be to correct the damage wrought by the first Green Revolution: adoptingnew methods like the use of natural predators instead of chemicals to eliminate pests, and switching to organic fertilizers and more efficient drip irrigation. He also says Singh should promote crops that require less water, including native Indian grains such as finger millet (ragi), pearl millet (bajra) and sorghum (jowar).

That's a tough sell for two reasons: these coarse grains, once a staple of regional Indian cuisines, have fallen out of style since the first Green Revolution made wheat cheap and plentiful. So restoring their popularity will take a major marketing push, of the kind governments rarely do well. Second, Singh sees India very differently from the critics, as a nation fighting to attain middle-class comfort, not one at risk of sliding into mass hunger. Watch the future voyages of the Furnace Australia, and whether it is carrying grain to India, for one strong sign of which view is right.
© 2006 Newsweek, Inc.

© 2006

Sunday, August 20, 2006

sexing up science

Western educators and industrialists team up to boost engineering's appeal.

By Mac Margolis and Karla Bruning

Newsweek International

Aug. 21-28, 2006 issue - With his unkempt hair, halogen smile and soft spot for Tamil poetry, A.P.J. Abdul Kalam is not your ordinary national figurehead. The diminutive 74-year-old Indian president seems more like a self-help guru than India's leading technocrat. Though his job in this parliamentary nation is largely ceremonial, Kalam, a newspaper boy turned aeronautical engineer who stewarded India's guided-missile program, has made it his mission to raise his country to glory through scientific scholarship. He travels from school to school, exhorting students to hit the books and excel at science. If they do, he promises, India will be a fully developed nation by 2020. His mantra: "Dream, dream, dream."

By all indications, the budding scientists of India—and elsewhere in the developing world—have taken that advice to heart. Enrollment is soaring at engineering and technical schools throughout Asia. India claims to produce more than 300,000 engineers a year—three times the number in the United States. By some estimates, China turns out twice as many engineers as India, while South Korea produces nearly as many engineers as the United States with one sixth the population. Skeptics say the numbers are exaggerated. But even discounting for official hype and inconsistent academic standards, it's hard to miss the new geography. Legions of engineers from Asia's emerging-market nations are vying for—and winning—contracts, customers and patents in an increasingly competitive global marketplace. According to a recent report by Booz Allen Hamilton and Nasscom, India's IT-industry trade group, the offshore engineering industry is expected to surge from between $10 billion and $15 billion today to between $150 billion and $225 billion in 2020. India alone is poised to grab a quarter of the market.

And that's exactly why educators in the wealthiest countries are losing sleep. True, the United States, the United Kingdom and Germany—the three engineering titans—still lead the way in technological innovation. A recent study by Duke University showed that while developing countries often inflate the numbers of science scholars, the United States still employs nearly a third of the world's science and engineering researchers, publishes 35 percent of science and engineering articles and generates 40 percent of research and development spending. But in middle and high schools, where the spark of scientific curiosity begins, the majority of students can't be bothered to take advanced math or physics. Enrollment in university engineering programs is stagnating; the dropout rate for graduate engineering students is a whopping 45 percent. "We have a choice: do we want Britain to become a theme park or a hub of business activity?" James Dyson, the British inventor cum entrepreneur, wrote recently in The Sunday Times. "We are on course to shuffle into a sort of residential home for retired great powers."

Now Western educators are shifting their focus from what went wrong with engineering to how to fix it. They are most troubled not by the shortfall of new scientists but by their plummeting caliber of scholarship. Even those who make it through engineering school are not always well prepared; the pharmaceutical giant Sanofi-Aventis says it often has to retrain science graduates in the company laboratory.

Some institutions are trying to present students with more real-world challenges early on. In planning its curriculum, Dyson's new School of Design Innovation—scheduled to open in Bath, England, in 2008—has teamed up with companies like Rolls-Royce and Airbus to work practical design and innovation problems into the coursework. Other schools are drafting students into community service. Duke University's Pratt School of Engineering dispatched one group of undergraduates to Indonesia to help shrimp fishermen devastated by the 2004 tsunami by building a manually operated aerator for hatchery ponds. Duke junior Lee Pearson spent a month in Uganda for a clean-water project, using a clothes iron to seal water samples and building an incubator out of cardboard and Styrofoam.

Being in the field "teaches you to be flexible and ruthlessly creative," says Pearson. Indeed, Richard K. Miller, president of Franklin W. Olin College of Engineering in Massachusetts, which graduated its first class in May, says it's crucial to get students to think "outside the box" and work in teams. "Our future doesn't depend on producing more engineers than China. [We] need more innovators," he says. "Engineering is about invention." A number of Olin graduates have parlayed classroom projects into award-winning business plans. One student, in partnership with his grandfather, launched an inter-national company that designs, manufactures and sells supportive seating for meditation.

At younger levels, industries are going out of their way to make engineering—and its components, math and science—more appealing. The Society for Women Engineers recently launched "Wow! That's Engineering?" a high-tech hands-on program that invites middle-school students to play games with gravity, motion and sound. The campaign is aimed especially at young girls, who traditionally have been conditioned to think of math and science as guy stuff—one of the reasons, perhaps, that only 11 percent of working engineers in the United States are women. Another program, "FMA Live! Where Science Rocks," sponsored by Honeywell Hometown Solutions and NASA, sends troupes of hip-hop artists and other professional entertainers into U.S. high schools and colleges across the United States to stage "interactive" skits and demonstrations of basic physics. (FMA stands for Isaac Newton's second law of motion: force equals mass times acceleration.) One routine launches a hapless school administrator across a stage in a futuristic hover chair to collide with a giant cream pie—all in the name of showing the laws of action and reaction. Is it education or show business? "Our culture has changed profoundly," says Tom Buckmaster, president of Honeywell Hometown Solutions. "We have to think of students as you would potential customers, and discover what turns them on."

Behind the hocus-pocus is the conviction that engineering has long had a bad rap. "The misperception of science and engineering jobs as geeky, dirty and dull puts off young people from a bright, exciting and profitable future," says Dyson. That's a stark contrast to the developing world, where science and technology are considered the keys to progress. "When I go to Seoul or Hong Kong, I see signs everywhere for nanotechnology, biotech labs and IT firms," says Florence Hudson, a space engineer and vice president of marketing for IBM. "The developing world's students are hungry for technology. We are not."

Whatever helps break down that resistance, say the experts, is worth trying. "It's an incredibly sexy time to be an engineer," says Kristina Johnson, dean of the Pratt School of Engineering. "Think of the problems science has to solve, like global warming, public transportation, communicable diseases. Yet we still do not have a cadre of professionals prepared to solve them." Engineering's toughest challenge may be to reinvent itself—and the work has just begun.

With William Underhill in London, Jason Overdorf in New Delhi and Corinna Emundts in Berlin

© 2006 Newsweek, Inc.

this rampart is rising

In many nations, class barriers to college are growing.
By Rana Foroohar
Newsweek International

Aug. 21-28, 2006 issue - When students take to the streets, they're usually united against something like war or racism. But when Indian students took to the streets last May they had a different cause. These were children of the wealthy upper castes out to stop a plan to reserve more university places for their peers from poor and lower-caste backgrounds. This was youth versus youth, and they were fighting for the status quo.

Resistance to social-leveling campaigns in higher education isn't limited to India. When a top French Grande Ecole—alma mater of presidents and prime ministers—began giving preferential treatment to poor students, there was an outcry from the upper classes. In Britain, there are fears that efforts by top-tier universities to recruit more students from state secondary schools will dumb down the ivory tower. These controversies say something important about the state of academia: for all the pious attacks on injustice that emanate from universities, the class gap is growing from the United States to Britain, parts of Continental Europe and Asia. The reasons are myriad: state-controlled systems that artificially limit the number of university places, admissions procedures that favor the privately educated, falling financial aid and failing public secondary schools.

The bottom line is that the worldwide boom in higher education is not, in many cases, broadening its reach among the poorest. The proportion of 25- to 34-year-olds who have university degrees is rising across the 30 member states of the Organization for Economic Cooperation and Development, and exceeds 20 percent in 18 of them. But in nations like Japan and the United States, where education costs are skyrocketing, the typical student comes from a much wealthier background than in the past. At Tokyo University, which has traditionally educated an economically diverse population, nearly half the parents of undergraduates now have incomes higher than $82,500 (well above the national average of about $57,500 for men in their 50s). In the United States, the percentage of students with families making more than $150,000 a year has been rising steadily for over a decade, to nearly 17 percent, while the proportion of those with a family income of $49,000 or less has been declining. A 2003 study of the 146 most selective U.S. colleges found that only 3 percent of students came from the poorest quartile of families, while 74 percent came from the richest.

By some accounts, the class divide is perhaps most pronounced in Europe. The slotting of children into vocational or university tracks continues to limit the upward mobility of many poor kids at an early age. Meanwhile, the relative lack of funding, particularly compared with the United States, means fewer new university slots to accommodate growth in demand. Today, only about a third of all secondary-school grads in the European Union go on to university, and working-class kids are highly underrepresented, especially at elite institutions. In the U.K., where Tony Blair's New Labour Party has made socioeconomic diversity in top schools a key priority, a recent survey found that the share of spots at Oxford that go to state schoolkids (in other words, not rich private-school grads) has fallen 5 percent since 2001.

Politicians and educators everywhere are looking for ways to fix the imbalance. But there's a lingering fear that easing the way for poor kids will bring down the quality of education and, thus, national competitiveness. "My honest opinion is that it is going to be a disaster," says P. V. Indiresan, former director of the prestigious Indian Institute of Technology (Madras), about the proposed quota system. "No. 1, it introduces a new social tension which we never had in the IIT system before. No. 2, you need certain institutions in a country where you are able to stream the very best talent available. Once you get students of a lower caliber, there will be enormous pressure to reduce to the standard of instruction."

Business leaders second this sentiment, and not only in India. Almost everywhere outside the United States, where affirmative action has long been the status quo, there is resistance to changing admissions to favor the less advantaged. When Richard Descoings, the head of France's prestigious Sciences Po Paris, began aggressively recruiting kids from lower-class backgrounds in 2001, critics lamented the end of blind égalité and privileged students worried that the degree would be devalued. "There were eternal debates on whether this program fit in with the principles of the French Republic," says Descoings, "but nobody asked whether or not it was effective."

In fact, it was; this past summer, the first class of 15 pioneers from poorer suburbs graduated from Sciences Po with respectable results, some near the top of the class. Elsewhere, there's also plenty of evidence that, given a chance, kids from lower-income backgrounds can do just as well or better than others. In the U.K., for example, Sir Peter Lampl, head of the Sutton Trust, an education nonprofit, says that if admissions were based purely on A-level test results, two thirds of students at Oxbridge would come from state rather than private secondary schools. In reality, only about half of them do. "Many poor kids don't have the confidence" to apply to top schools, particularly since graduating secondary school students must apply before they see their test results, says Lampl. And while private secondary academies advise students on how to maximize their chances of admission, even how to target specific departments at certain schools, state-school pupils are left to their own devices. The result, says Lampl, is that top-tier universities in Britain are excluding some 3,000 qualified state-school students every year.

That has major economic implications, given that the wage premium on a top-tier degree has never been higher. According to a number of studies, if going to college increases your earning power, then going to a top university increases it exponentially. Harvard economist Caroline Hoxby has shown that graduates of top schools in the United States typically earn hundreds of thousands of dollars more during their lives than similarly accomplished graduates of state universities. Depending on the country, a person with a university degree can command anywhere from 25 to 120 percent more than one without.

Finances are a further burden for the nonrich. As numbers of college applicants rise, costly prep classes, which can run $50 or more per hour, are becoming de rigueur. In the United States, while the absolute amount of aid to university students is up, financial aid is being replaced by merit aid, which favors the middle and upper classes. In Europe, where universities are still tax-supported and practically tuition-free for everyone, the poor get no leg up on the rich, who already have every advantage.

That something must be done is obvious to most nations. Basically, the combination of aging societies and rising demand for tech-savvy workers mean that most rich nations face an emerging shortage of educated labor, one that can't possibly be filled by the wealthy alone. Some solutions are, of course, country-specific. Europeans need to modernize and, to some extent, privatize their university systems so they can better respond to the needs of the market. More flexibility is key; while the United States and Scandinavia offer all kinds of two-year or associate's degree programs, in many parts of Europe and Asia four-year degree courses are the only option. But in Norway, for example, a modular system allows students to balance school with work or family commitments. They can finish courses in their own time, acquiring certificates for specific skills over a period of months, or a year, which can eventually be combined into a degree.

Perhaps the best way to equalize university education is to improve secondary schools in poor regions. In India, the rate of absenteeism in state schools is 25 percent—and that's for teachers. "Poor but talented kids tend to go to impoverished high schools, where parents, teachers and other students are just less interested in learning," says Richard Kahlenberg, a fellow at the Washington-based Century Foundation. "What they need is to be around peers who have big dreams—that will allow them to work up to their potential."

In Britain, educators are trying to cultivate those dreams with a new program in which top universities would help identify talented students as young as 11, and help them stay on track to reach elite colleges. The ethos is reflected in Oxford's new recruiting slogan: "It's not where you're from—it's where you want to go." As the need for knowledge workers grows, it will clearly be more and more important for poor kids, as well as rich ones, to go all the way to the top.

With Jason Overdorf in New Delhi, Tracy Mcnicoll in Paris and Akiko Kashiwagi in Tokyo
© 2006 Newsweek, Inc.

© 2006

Tuesday, August 01, 2006

tutors get outsourced

(Business 2.0) August 1, 2006 -- IDEA NO. 6 Services that once required face time can be profitably handled online.

America's education crisis, along with the rise of online video, is turning into another big opportunity for India. Companies like New Delhi-based Educomp are tutoring U.S. high school students in math and science one-on-one via the Internet. Anyone with a PC and a webcam can use the service, and the Indian companies' combined annual revenue is an estimated $10 million. That's a small slice of the $2.3 billion tutoring business, but India's share is growing fast.

Indian companies charge as little as $100 a month for unlimited, real-time, interactive video tutoring. A private face-to-face session in the United States runs as much as $100 an hour. Plus, most of the Indian companies guarantee that their tutors have at least an undergraduate degree in the subject they teach. In the United States, nearly 30 percent of high school math teachers lack a major or minor in the field.

TutorVista, based in Bangalore, recently tapped $2 million from Sequoia Capital and anticipates $10 million more for acquisitions by next year. Chairman K. Ganesh compares the sector to mobile communications: When the right price point is reached, he says, "the market size will increase 10-fold."

But the real opportunity could lie in using online tutoring to leverage other educational services. New Delhi-based Career Launcher has already acquired a U.S. company and begun to roll out bricks-and-mortar tutoring centers just like the ones it operates in Dubai. Seems they have a thing or two to teach American educators.

Thursday, June 29, 2006

ring of change

The Ten Most Dynamic Cities
In this list of cities from key economic regions of the world, even the big names will surprise you.
Newsweek International
July 3-10, 2006 issue


A factory suburb of Delhi, now surrounded by posh high rises.

In old Ghaziabad—20 kilometers outside New Delhi in the north Indian state of Uttar Pradesh—ancient green-and-white three-wheeled Tempos that double as buses career alongside a tangle of bicycle rickshaws, buffalo-drawn wagons and pushcarts. Tiny, no-name manufacturers advertise rubber gaskets, gears, machine tools. You'd never guess Ghaziabad is India's hottest city.

But thanks to skyrocketing real-estate prices in the capital, Ghaziabad is emerging as the next popular address for Delhi-bound commuters. In residential pockets on the outskirts like Indirapuram, posh new developments are sold out. The largest developer, Shipra Estate Ltd., has built 7,000 two-, three- and four-bedroom flats, all of which are already occupied, says Vijay Sundar Raj, manager of sales and marketing. Many of the residents commute to IT jobs in neighboring Noida and Delhi.

Strategically located on the old Grand Trunk Road from Bangladesh to Afghanistan, Ghaziabad was targeted by the state for industrial development in the 1980s. Today the city is home to more than 14,000 small-scale industrial units and larger plants run by giants like Coca-Cola and the International Tobacco Co., which still provide most of the jobs in Ghaziabad proper. For all the new luxury high rises, Ghaziabad today is one of the most heavily industrialized cities in Uttar Pradesh.

The forecasts of rapid population growth, however, have more to do with New Delhi. Despite attempts to bar new industry within the capital, Delhi still creates more new jobs per year than the southern Indian IT centers of Bangalore and Hyderabad. "Delhi is a very big magnet," says S. K. Zaman, a top planner for Uttar Pradesh state, ruefully reflecting on the government's failure to contain the capital's population, which has grown by 50 percent every 10 years for the last half century, and now stands at around 14 million.

Authorities are having more success shifting at least some new growth to the outskirts. New roads, concessionary land prices and other schemes are drawing companies like Samsung, Honda and Siemens to satellite cities like Gurgaon and Noida. With its excellent highway connections to Noida and Delhi, Ghaziabad is starting to reap the benefits. Though it still doesn't have the cachet of Noida, it boasts cheaper land, and the completion this summer of the controversial Tehri Dam should help prevent frequent water and electricity shortages. None too soon. The city is already building a village to host the 2010 Commonwealth Games. And plans for both a new expressway and a second Delhi international airport on the east side of the capital should help put the entire region, Ghaziabad included, on the global map.

—Jason Overdorf

unlikely boomtowns

The last half-century was the age of the megacity. The next will belong to their smaller, humbler urban relations.
By Rana Foroohar
Newsweek International

July 3-10, 2006 issue - Great cities like London, New York and Tokyo loom large in our imaginations. They are the places people still associate with fortune, fame and the future. They can dominate national economies, and politics. The last half century has been their era, as the number of cities with more than 10 million people grew from two to 20, as now famous names like Rio, Mexico City and Mumbai joined the list. But with all respect to the many science-fiction novelists who have envisioned a future of increasingly dominant urban giants, their day is over. The typical growth rate of the population within a megacity has slowed from more than 8 percent in the '80s to less than half that over the last five years, and their number is expected to stagnate in the next quarter century. Instead, the coming years will belong to a smaller, far humbler relation—the Second City.

Within a year or so, more people will live in cities than in the countryside for the first time in human history: the 21st century will be an urban one. But increasingly, the urban core itself is downsizing. Already, half the city dwellers in the world live in metropolises with

less than half-a-million residents. Second Cities—from exurbs to regional hubs, resort towns to provincial capitals—are booming. Between 2000 and 2015, the world's smallest cities (with under 500,000 people) will grow by 23 percent, while the next smallest (1 million to 5 million people) will grow by 27 percent. This trend is the result of seismic shifts, including the global real-estate bubble; increasing international migration; cheaper transport; new technologies, and the fact that the baby-boom generation is reaching retirement age.

This rise of Second Cities is dramatically illustrated by our top-10 list, which encompasses the fastest-growing cities in each of the world's 10 most important economies (following stories). Based on an advance copy of the latest U.N. forecasts for all cities with populations greater than 750,000, the list includes only two major capitals—Moscow and London, which continue to outpace smaller rivals for unique national reasons. All the rest are aspiring middleweights like Toulouse, Munich and Las Vegas, or former unknowns like Florianópolis (Brazil), Ghaziabad (India), Goyang (South Korea) and Fukuoka (Japan), which may not remain unknown for much longer. Boomtowns breed ambitious city fathers, so it's hardly surprising that Toulouse is competing with Paris to host the 2016 Summer Olympics, or that Fukuoka is challenging Tokyo for the same honor.

There are several megatrends that get lost on a top-10 list, however. One is the concentration of fast-growing cities in emerging economies: of the top 150 fastest-growing cities in this size class, the most by far, 55, are in China, followed by an intense boomlet of 12 in Indonesia, and 10 in India. In the developed world, while none make the top 150, metropolises in the United States are growing much faster than those of Europe and Japan. This is due in part to the fact that overall population is declining in those places, but it drives home the relative dynamism of the Asian and American superpowers. The growth cities of the United States and China are growing faster than 2 percent, leading a pack of small cities, while those in Europe are growing at maybe half a percent, and are typically the rare exceptions in nations where most cities are shrinking.

In a way, the emergence of Second Cities has flowed naturally (if unexpectedly) from the earlier success of the megacities. In the 1990s, megalopolises boomed as global markets did. This was particularly true in metropolitan areas with high-tech or "knowledge based" industries like finance—witness the renaissance of New York and London, and the explosion of growth in Shanghai or Hong Kong. Bonuses got bigger, bankers got richer and real-estate prices in the world's most-sought-after cities soared. The result has been the creation of what demographer William Frey of the Washington-based Brookings Institution calls "gated regions"—places like New York, London, Tokyo—in which both the city and many of the surrounding suburbs have become unaffordable for all but the very wealthy.

One reaction to this phenomenon is further sprawl—high prices in the urban core and traditional suburbs drive people to distant exurbs with extreme commutes into big cities. As Frey notes, in the major U.S. metropolitan areas, average commuting times have doubled to about 90 minutes over the last 15 years, making once rural places like Pike County, Pennsylvania, viable dormitories for workers employed in New York. "It's hard to believe, but a place like Las Vegas is now actually a kind of suburb of Los Angeles," says Frey, noting that there are plenty of people who make the six-hour one-way drive a few times a week. And while the extreme commute is a longstanding tradition in Japan, it is spreading to Europe. Brighton, a once seedy beach resort about an hour by train from the capital, is now "London by the Sea," populated by arts and media types. House prices have boomed lately, and the city is now on its way to getting the requisite Frank Gehry landmark building (a futuristic residential tower and sports complex) to herald its success.

Why does one town become a booming Second City while another fails? The answer hinges on whether a community has the wherewithal to exploit the forces pushing people and businesses out of the megacities. One key is excellent transport links, especially to the biggest commercial hubs. Though barely a decade old, Goyang is South Korea's fastest-growing city in part because it is 30 minutes by subway from Seoul. Burgeoning IT hubs outside Delhi like Gurgaon and Noida, for which Ghaziabad serves as a new bedroom community, all sit on good roads into the capital.

Europe's cheap airlines have given new life to any number of provincial capitals, from Glasgow to Bologna. Estate agents estimate that a new Ryanair or easyJet link to a given city can immediately raise property prices in the area by 30 percent or more. In Asia, the number of cheap, short flights between cities is also growing.

Another growth driver for Second Cities is the decentralization of work, driven in large part by new technologies. While more financial deals are done now in big capitals like New York and London than ever before, it's also clear that plenty of jobs in booming service industries like banking, entertainment and high tech are flowing to places like Dubai, Las Vegas, Tallinn, Dalian and Cape Town, all of which international real-estate services firm Jones Lang LaSalle names as "Rising Urban Stars." These places have not only improved their Internet backbones, but often have tech parks and universities that turn out the kinds of talent that populates growth industries.

Consider Montpellier, France, a case study in urban decentralization. Until the 1980s, it was a big Mediterranean village, but one with a strong university, many lovely villas and an IBM manufacturing base. Once the high-speed trains were built, Parisians began pouring in for weekend breaks. Some bought houses, creating a critical mass of middle-class professionals who began taking advantage of flexible working arrangements to do three days in Paris, and two down south. Soon, big companies began looking at the area; a number of medical-technology and electronics firms came to town, and IBM put more investment into service businesses there. To cater to the incoming professionals, the city began building amenities: an opera, a tram line to discourage cars in the city center. The result, says French urban-planning expert Nacima Baron, is that "the city is now full of cosmopolitan businessmen. It's an entirely new town, a new society."

Today it's easier for Second Cities to build self-sustaining economies, independent of megacities, as firms and workers look to avoid the problems of major urban centers. "Economically, after a city reaches a certain size, its productivity starts to fall," notes Mario Pezzini, head of the regional-competitiveness division of the OECD in Paris. He puts the tipping point at about 6 million people, after which real estate costs, travel times, and the occasional chaos (witness the recent Paris riots) "create a situation in which the center of the city may be a great place, but only for the rich, and the outlying areas become harder to live and work in."

Meanwhile, the democratization of the good life—even small towns now have good sourdough bread, international newspapers—means that people no longer have to choose between the culture and chaos of the big city, or the ease and boredom of everything else. Pseudo-European-style café culture is cropping up in American towns like West Palm Beach, and European minicities like Groningen, in the Netherlands, draw millions of tourists with Philippe Starck-designed museums and renovated downtowns. Retiring baby boomers are giving new life (and money) to a host of sun-belt cities in the United States, as well as many Provençal and Tuscan towns.

Immigrants play a big role, too. In places like Las Vegas, they're morphing from cheap labor to a new middle class reshaping the character of the city. In the U.K., hundreds of thousands of Eastern European immigrants have helped galvanize the capital and smaller northern and coastal cities, where workers in agriculture, construction and lower-level service jobs are sorely needed. Ultimately, they are expected to take their earnings home, where they are likely to seek property not in Prague or Warsaw, but in less-expensive Brno or Cracow. That's a big reason Jones Lang LaSalle expects the 60 Central and Eastern European cities with 500,000 or more people to be among the hottest places for corporate relocation in the next few years.

All this means, of course, that second cities won't stay small. Indeed, some countries are actively promoting their growth. China's Go West campaign encourages investment in smaller inland cities. Italy is trying to create tourist hubs of towns close to each other with different yet complementary cultural activities. "The worst-case scenario is that we end up with some national version of New Jersey—an inefficient sprawl with no center," says Frey of Brookings. Already, one has to wonder if all the marketing pressure for Second Cities to pay for iconic buildings or to re-create mock versions of New York's SoHo is a productive use of capital. If one of the biggest drawing cards for Second Cities is unique local flavor, why ape the best-known megacities? Devolution of policymaking power is leaving many lesser cities more free than ever to shape their destinies. To Vegas, Toulouse and company: this is your era. Don't blow it.

With Jason Overdorf in New Delhi

© 2006 Newsweek, Inc.

Tuesday, June 13, 2006

india's maoists step up rebellion

Thursday, June 8, 2006 Page A16
Special to The Globe and Mail

DORNAPAL, INDIA -- Madkam Devi, a pretty 19-year-old in a sari printed with pink flowers, shifted the thin-limbed infant on her hip and gazed into space as she described how she narrowly escaped being hacked to death by Maoist revolutionaries a month ago.

She and 51 other villagers of Manikonta, a village in the central Indian state of Chhattisgarh, had returned to their homes from a government relief camp on April 25 to collect cooking pots, plastic buckets and other household items they had left behind when they made their hurried departure for police protection from the guerrillas. Finding the village deserted, they quickly gathered their belongings and started back to the relief camp. They didn't get far before the Maoists ambushed them.

"Some people panicked and tried to run, but some of the Maoists were wearing uniforms and shouted to us that they were the police, and we shouldn't be afraid," Ms. Devi said.

The Maoists, including about 50 gunmen in uniforms and another 150 irregulars armed with axes and wooden staves, killed two villagers and captured the others, Ms. Devi said. Some were badly beaten, a taste of the treatment the prisoners would receive over the next four days. But the worst was to come. As an example of the fate that awaits villagers who participate in a government-aided people's movement against their rebellion, the Maoists executed 13 of the villagers.

The Maoists -- sometimes called Naxalites, in reference to an armed uprising in the village of Naxalbari in West Bengal, from which the movement began in 1967 -- have maintained a low-level insurrection in India for nearly 40 years, organizing uprisings among landless workers, hijacking trains, mounting frequent attacks on police posts and industrial facilities, and murdering their political opponents. Their rebellion is gaining ground, expanding across 14 eastern and central Indian states, running all the way from the Nepal border in the north to the southern coast, and becoming a major Communist force intent on winning control of the Indian state through military means.

And the war is growing ever more deadly. More than 700 people, 500 of them civilians, were killed in raids, land-mine blasts and other incidents in 2005. Provisional data from the past four months suggest the death toll will be higher in 2006.

The rapid increase in violence has prompted some experts, such as Ajai Sahni of the New Delhi-based Institute for Conflict Management, to warn that the Naxalite insurrection has surpassed separatist terrorists in Kashmir as the largest internal threat to India's ability to govern its vast territory.

India's national and state governments have long refused to acknowledge the seriousness of the problem, because of what it says about their administrations, Mr. Sahni said. "Unlike the Kashmir issue, which we could blame on somebody else, this was entirely indigenous. It pointed to state failures."

The Maoist movement is rooted in the deep impoverishment of rural India. Although India's economy is growing at close to 8 per cent a year, nearly three-quarters of its people live in rural areas that continue to lag far behind the cities, especially in the problem states of north and central India. Just 20 per cent of rural people have access to basic amenities such as running water, compared with 70 per cent in urban areas. And poor nutrition and lack of health care mean that the infant-mortality rate for rural India is nearly 40 per cent higher than in urban areas.

In Chhattisgarh, the lack of local economic progress is obvious despite a huge influx of investment to develop the state's mineral resources. "Mining has been going on for three decades, but the only industry to flourish in the area is prostitution," a spokesman for the Maoists recently told local reporters.

In recent months, the rebel attacks have become more daring. In November, hundreds of Maoists stormed a jail in Bihar, freeing a captured Maoist leader and about half of the facility's 650 inmates. In February, the rebels raided a state-owned mining company in Chhattisgarh, stealing tonnes of explosives for the manufacture of crude bombs.

The violent attack on the villagers of Manikonta signalled a shift in strategy by the guerrillas, who previously had focused attacks on organs of the state. By brutalizing ordinary villagers, the Maoists are taking a dangerous gamble. Historically, they have embraced local causes and won respect, and sometimes support, through hard work and a dogged battle against social injustice and government corruption.

In Chhattisgarh, local observers say that years ago the Maoists forced contractors to pay tribal labourers the wages mandated by the state, rather than skimming from the payroll. They thrashed corrupt officials of the forest department, and forced truant government teachers to show up for their classes in the deep jungle, instead of merely drawing their salaries.

However, Chhattisgarh officials now say that the Maoists more often work to stop projects that would benefit the local poor.

"Contrary to what they [the Maoists] say, Naxalism is not growing, because there is no development in the state," said Chhattisgarh Home Secretary B. K. S. Ray. "Basically, this is a terrorist movement to gain political power through violence. Initially, they may have wanted land reform and equality, but now it's a gang of extortionists, gangsters and killers."

The tribal people of rural India need roads, schools and jobs. But the Maoists are committed to a full-scale Communist upheaval and radical redistribution of wealth, and believe that these incremental gains will never erase the gross inequalities of what they term India's "bourgeois comprador democracy."

"There is no dilution in the ideology," said Mr. Sahni of the Institute of Conflict Management. "There is absolutely no set of economic initiatives on the horizon that can give prosperity, dignity et cetera to 810 million people in rural India."

Friday, May 26, 2006

shrinking flocks of vultures spoil ancient culture's funeral rituals

By Jason Overdorf
Special to The Globe and Mail

MUMBAI -- Smack in the middle of the thicket of ultramodern high-rises that make up Malabar Hill, one of Mumbai's most exclusive neighbourhoods, followers of an ancient religion are fighting to preserve funeral rites that go back thousands of years.

The Parsis -- so called because their ancestors immigrated from Fars, or Persepolis, in Iran -- are Zoroastrians, who believe that earth, water, air and fire are sacred elements. For that reason, their religion forbids them from burying or cremating their dead.

Instead, in a ceremony that no outsider is allowed to witness, pallbearers followed by a procession of mourners in flowing white robes carry the body to one of five tremendous stone structures, evocatively named the Towers of Silence, where the corpse is laid out on a marble slab to be dried up by the sun and devoured by carrion birds.

A great flock of white-backed vultures used to strip the bodies of the dead in less than an hour. But today, India's vultures are nearly extinct due to accidental poisoning, and the flock that once served the Towers of Silence is no more.

"When I was young, there were so many birds that they used to swoop down at you," says Minoo Shroff, the white-haired chairman of the city's Parsi Punchayet, the charitable trust charged with maintaining the funeral grounds, or doongerwadi. "There used to be 50 to 70 vultures on a well. Now, other birds like kites and crows are there, but seeing a vulture is very, very rare."

According to the United Kingdom's Royal Society for the Protection of Birds, the near extinction of South Asia's vultures happened faster than any other on record. Between 1988 and 1999, the region's eight vulture species declined by as much as 95 per cent -- the birds dying out so rapidly that millions were reduced to a few thousand in little more than a decade.

"The speed and scale of the vulture declines across South Asia has been totally unprecedented," says Chris Bowden, director of the RSPB's vulture program, who visited India recently. "For such formerly abundant birds in the space of just 10 years to be facing the real possibility of extinction is almost unbelievable."

For many years, the reason for the vultures' disappearance was a scientific mystery, with researchers blindly looking for an unknown contagious disease. But in 2004, scientists of the U.S.-based Peregrine Fund discovered that the vultures were being poisoned by an anti-inflammatory drug called diclofenac, which local farmers use to treat sick cattle. One feeding from a tainted cattle carcass is enough to cause fatal renal failure in the birds.

The culprit identified, Indian Prime Minister Manmohan Singh called for a universal ban of diclofenac in 2005. But so far the Ministry of Agriculture has been dragging its feet even though scientists have identified a harmless substitute, conservationists say. "For well over a year, the Ministry of Agriculture has done nothing," says Rishad Naoroji, a Parsi naturalist.

A handful of state governments have banned diclofenac, but only a national effort will be effective, according to Asad Rahmani, director of the Bombay Natural History Society.

That leaves the Parsi community in a dire situation. Without the aid of the vultures, the sun alone can take months to reduce the bodies laid out in the Towers of Silence to desiccated skeletons, a worrying problem as the mushrooming city encroaches on the funeral grounds. Already, the Punchayet has been compelled to stop using one of the towers, located in proximity to the high-rise Paradise Apartments, when residents complained about the sight and smell of the decaying corpses.

More crucially, many Parsis themselves have begun to doubt whether months of putrefaction amount to a death with dignity.

The search for a solution has opened a rift between the traditionalists and pragmatists of the community, which was already divided over the issue of intermarriage. The Parsis played a vital role in the development of Mumbai, formerly Bombay, and spawned three of India's largest business houses -- the Tata, Godrej and Wadia groups. But in recent years they have seen their population plunge some 40 per cent to about 40,000 people, as younger members of the community delay marriage, marry outside the community and have fewer children in favour of successful careers.

Its ties already weakened, the last thing the community needs is more people moving away from tradition, conservatives believe.

To stop that from happening, some conservative Parsis back a proposal to build a giant aviary and breed a captive population of vultures to serve the towers. But reservations about the cost of the project -- which would have run to several million dollars -- as well as doubts about whether it would work, have put the plan on hold.

Instead, the Punchayet has adopted a pragmatic solution developed by Homi Dhalla, president of the World Zarathushti Cultural Foundation, a group that sponsors various efforts to preserve Parsi traditions.

Dr. Dhalla, 60, developed a plan to focus powerful solar concentrators at the working area of three of the five towers, amplifying the heat of the sun and thus speeding the desiccation of the bodies. With these devices, the sun can reduce a corpse to a dry husk within three to five days.

Because they harness the power of the sun, Dr. Dhalla believes the solar concentrators, though an innovation, suit the tenets of the Zoroastrian religion. "It was quite difficult for me to find a solution within our theological limitations," he says.

But many conservatives don't believe he has. Khojeste Mistree, a conservative leader with a sizable following, argues that Dr. Dhalla's solution is little more than a solar-powered crematorium.

Parsi theologians like Dr. Firoze M. Kotwal, a former high priest, agree. "From a religious point of view," he says, "this method is not very proper."

Thursday, March 30, 2006

the perfect score

Student cheating is reaching new levels, forcing an overhaul of standardized tests.

By Emily Flynn Vencat
Newsweek International

March 27, 2006 issue - Chris doesn't consider himself a cheater. Yet for the past four years, the 21-year-old senior at one of California's most prestigious universities (which he doesn't want identified) has used an arsenal of tricks to pass his classes. He's plagiarized, taken illegal prescription drugs to improve his focus, obtained exam questions in advance and text-messaged his friends via cell phone to find quick answers to tough questions. Still, he doesn't see any of that as out of the ordinary. "Sure, I've used test banks, study drugs, text buddies, cyberessays and picture messaging," he says. "But so does everyone."

That may be an exaggeration—but not as big of one as you might think. From Beijing to Bristol, the rates of academic cheating have skyrocketed during the past decade. In a huge study of 50,000 college and 18,000 high-school

students in the United States by Duke University's Center for Academic Integrity, more than 70 percent admitted to having cheated. That's up from about 56 percent in 1993 and just 26 percent in 1963. Internet plagiarism has quadrupled in the past six years, according to the same study. In Britain, a recent government-sponsored report found such rampant cheating in the state-run GCSE and A-level exams that Secretary of Education Ruth Kelly called for a total revamp of the coursework system before 2008. Hundreds of Asian universities' Web-based bulletin boards are dumping grounds for the memorized answers to Test of English as a Foreign Language questions—the basis of most U.S. colleges' admittance of foreign students.

Nearly all of India's ultracompetitive entrance exams have been stolen and sold to students at least once during the past five years. In 2004 students paid up to $15,000 apiece for access to answers to India's Pre-Medical Test—and the perpetrators pocketed $1 million. In China, where the number of university students has almost tripled since 1998 to 16 million, police last year cracked one of the biggest qiangshou (hired gun) gangs—Web-based agencies where students can hire expert look-alikes to take any of a host of national exams for them. The gang had already taken in $212,000 from nearly 1,000 students in 19 provinces across the country. Also in 2005, South Korea faced the biggest exam-cheating scandal in its history when officials realized that the previous fall's national college-entrance exam, the CSAT, had been infiltrated by more than 20 cheating rings across the country; they had text-messaged exam answers to paying students taking the test. "We've passed the tipping point, where cheating is so common that it's an accepted social norm," says David Callahan, author of "The Cheating Culture."

What's turning students into crooks? First and foremost, technological advances have made cheating easier than ever. From purchasing "original" essays from Web sites like to "outsourcing" computer-programming homework to experts in India via sites like, students can now buy A's for the price of a school lunch. At the same time, mobile phones and MP3 players have given test takers new tools: picture messaging lets them contact friends outside the classroom with photographed copies of whole exams. SparkMobile, a new service from SparkNotes (Barnes & Noble's take on Cliffs Notes), will text students themes to use for surprise in-class essays or beam them iPod-friendly audio summaries of classic novels.

Competition, though, is the real culprit. As the work force becomes ever more crowded and the number of college grads skyrockets, top educational credentials are increasingly seen as the only sure vehicle to success. Thirty-five years ago, just 11 percent of Americans had a college degree; now nearly a third do. In the European Union, the number of university graduates has shot up by 30 percent in the past five years alone. In hypercompetitive Asia, where most academic achievement is measured by standardized tests, that can lead to excruciating pressure. "Your exams are so closely connected to your admission to college that a 0.1 percent difference can determine whether you get admitted or not," says Sudha Ravi, vice principal at a prestigious New Delhi secondary school.

Sociologists argue that the upsurge in school dishonesty also reflects attitudes in the culture at large, where cheating has become acceptable and even admired. International tycoons make enviable fortunes through market manipulation and fraud: think Enron, WorldCom and Martha Stewart. Scientists like South Korea's once revered stem-cell research pioneer, Hwang Woo Suk, fake lab results. In a recent poll of 25,000 high-schoolers by the California-based Josephson Institute of Ethics, nearly half agreed with the statement "A person has to lie or cheat sometimes in order to succeed." In Australia, a new study from Griffith University of students at four major campuses revealed that 40 percent believe faking research results is a "minor" offense. "Students feel like it's just no longer a big deal to cheat," says Don McCabe, the founder of Duke University's Center for Academic Integrity.

The problem is so pervasive that it's reshaping the face of academic admissions. In the future, exams from the SAT to the MCAT to the A-levels will be administered in secure rooms equipped with metal detectors, radio-frequency locators to check if students are receiving text-messaged answers on their mobile phones and, in China and South Korea at least, the threat of up to seven-year prison sentences for cheats. This year the world's most respected graduate entrance test, the GRE, which is taken by half a million students annually, is undergoing the biggest face-lift in its 55-year history. Starting this October, exam questions will be changed from test to test. Start times will be staggered across the globe so students in Los Angeles can't post memorized or photographed test sheets on the Web for students in Hong Kong. "We've basically revolutionized the way we're administering our high-stakes tests," says Ray Nicosia, director of security for the world's largest test administrator, the Princeton, New Jersey-based Educational Testing Service, which runs 25,000 test centers in 192 countries. "We're changing to combat this problem."

America's med-school en-trance exam, the MCAT, is stepping up security measures using biometrics. As of next year, would-be doctors will have to give electronic fingerprints and submit to digital photographs, making it easier for exam boards to catch cheaters who pay others to take the tests for them. The SAT last year added a writing section which, says Nicosia, provides a "substantive handwriting exemplar" to authenticate test takers. South Korea's Ministry of Education has introduced metal detectors for bathroom visits. In India, testing bodies have limited the number of administrators with early access to the exams.

European exams like Britain's GCSE and A-levels and France's baccalaureate are arming themselves with plagiarism-spotting software, like and, which compare student papers with everything available on the Internet and highlight copied sections in bright red. Some top institutions in the United States and Europe have even "legalized cheating." They now allow students to surf the Web on PDAs and laptops during "open Internet" exams. Proponents argue that this helps students learn research skills more applicable to real-life work situations, where information is freely available.

At the same time, a growing number of top universities are reducing their emphasis on standardized tests. Many are even beginning to throw them out altogether in favor of interviews and recommendations—markers of aptitude that can't be faked. The rising incidence of scoring errors has only heightened their concerns; just two weeks ago the U.S. College Board revealed that some 4,000 scores from last October's SAT had been miscalculated—some by as much as 400 points. "I do see a rise in alternative ways to augment the scores," says Gary Natriello, an education professor at Columbia University's Teachers College. "People are looking for those other signs that a student has a lot of potential."

Will standardized tests ever become obsolete? According to the Massachusetts-based National Center for Fair & Open Testing, some 730 American colleges no longer require undergrad applicants to take either the SAT or the ACT. In Britain, Oxford and Cambridge used to interview top candidates once; now final decisions are made after two interviews. Marlyn McGrath Lewis, the director of admissions for Harvard College, says more and more universities are adopting a "holistic approach to admissions"—and that's essential. "The quality of [the class] depends on it." Not to mention the quality of the education.

With Jason Overdorf in Delhi and Jonathan Adams in Taipei

© 2006 Newsweek, Inc.

real estate: remaking mumbai

(This article appeared in Newsweek International on March 27, 2006)

The latest quiet reform undertaken by India's government deals with one of its oldest problems—land reform. Across the country, thousands of acres of land are tied up in disputes over decrepit edifices. But last week, a landmark Supreme Court judgment removed restrictions on the sale of land owned by Mumbai's defunct textile mills, freeing up hundreds of acres in the city center for development. Is this a turning point? On the surface, certainly. Six hundred acres of valuable land in the heart of the city are now slated for massive projects including office buildings, high-rise apartments and shopping malls. However, environmentalists and representatives of Mumbai's millions of slum dwellers argue that unfettered development of the mill lands will do nothing to solve the housing crisis facing the city's poor, as well as exacerbate water and power shortages. An equally pressing question is whether the ruling will speed the conversion of agricultural land on the edge of India's cities into much-needed residential and industrial developments—a transition to modernity that until now has been hopelessly slowed by red tape.

—Jason Overdorf