Wednesday, January 26, 2005

outsourcing europeans

By Jason Overdorf
(This article appeared in Business 2.0 magazine in January 2005).

With hundreds of employees yakking into headsets, Tecnovate's New Delhi office looks like a typical Indian call center, except for one thing: Nearly 100 of these workers aren't Indian. Call it "multilingual outsourcing" or "Eurosourcing" -- Tecnovate is leading a new trend in call-center hiring. Taking advantage of the 20-somethings who flock to India for postcollege sojourns, the firm is hiring workers from Germany, Norway, Sweden, and the like. The Europeans get an exotic year on the subcontinent, while Tecnovate gets a polyglot staff to serve its 15 travel, financial, and telecommunications clients. The imports work for Indian wages -- $5,000 to $8,000 a year, about 25 percent of what they'd earn at home -- but live like royalty. With an employment package that includes housing, a housekeeper, and time off to travel, Tecnovate has attracted more than 200 European workers since testing the program in 2002. Some have fallen in love with India and renewed their contracts. "Getting to know the culture and the way of living is something you don't see as a tourist," says Tea Westerlund, a Tecnovate staffer from Finland.

CEO Prashant Sahni says the privately held firm's profits have more than doubled every year since the nine-language model launched. Now other companies are taking notice of the young European workforce. A new employment firm called LaunchOffshore recently placed six Brits in Indian jobs and is looking to recruit a large number of multilingual Europeans in the coming year. That's an opportunity in any language.

Tuesday, January 25, 2005

the poor problem

The war on poverty is gaining momentum, and will figure high on the agenda at Davos this week, against a sobering backdrop: the war is not going as well as many thought.

By Karen Lowry Miller
(This article appeared in Newsweek International in January 2005).

Jan. 31 issue - A different war is now competing for the world's headlines—the war on poverty. British Prime Minister Tony Blair has made fighting African poverty a cornerstone of his leadership of the G8 this year, and will devote the March Finance ministers' meeting to it, while Chancellor of the Exchequer Gordon Brown is pushing a Marshall Plan for Africa. Both men are featured players at the World Economic Forum summit in Davos, Switzerland, this week; there, poverty will stand high on the agenda, fast on the heels of an ambitious blueprint released last week by the United Nations, aiming to revive its Millennium Development Goals, a project launched in 2000 to halve global poverty by 2015.

These efforts emerge against the backdrop of a sobering realization: the war is going worse than thought. The consensus view among the elites who gather in Davos has been that, no matter what street protesters and U.N. do-gooders may say, globalization is good for the poor. The recent boom in international trade and finance has reversed the course of history, shrinking the number of poor for the first time ever.

The statistical cornerstone of this world view is the work of Columbia University professor Xavier Sala-i-Martin, who has calculated that as global trade, travel and communications have boomed since 1970, the number of poor people worldwide has fallen by between 300 million and 500 million; between 1970 and 2000 the minority who live on less than $2 a day dropped from 29.6 percent to 10.6 percent. The problem, or so it was thought, was that the gains against poverty were mainly in the export powerhouses of Asia, while large swaths of Africa and Central Asia, held back by war, isolation, poor governance or a lack of natural resources, lay beyond the enriching reach of globalization.

It turns out that progress is much more spotty than that picture suggests. In December, the U.N. Food and Agriculture Organization (FAO) released a study claiming the number of hungry people worldwide rose in the second half of the 1990s, particularly because of India, where the number of hungry people rose by 18 million, and stalled progress in China. The claim is widely disputed. Sala-i-Martin calls the FAO methodology "bogus." But some Indian authorities do not dispute the basic trend: they say the number of poor people is rising in absolute terms, though not as a share of the population. Even World Bank senior development research adviser Martin Ravallion, who argues that the number of poor people in India is falling by about 1 percent a year, says the rate of poverty reduction is lagging far behind economic growth, which is now better than 7 percent. "The pattern is not as pro-poor as it potentially could be," says Ravallion. "It will constrain the ability of the poor to participate in growth and ultimately constrain India from growing."

The obvious conclusion is that opening national borders to globalization is not enough. Parts of Indian states like Bihar, Uttar Pradesh, and Orissa are as removed from international trade as Africa or Central Asia, and as badly governed. Agricultural economist M. S. Swaminathan says that 30 percent of rural Indians have no land, no fishponds, no assets of any kind. "Our problem of undernutrition... is a lack of purchasing power," says Swaminathan. "We need to create jobs in rural areas."

Swaminathan, who chairs a commission on hunger reduction, and other Indian analysts believe the new government, led by Prime Minister Manmohan Singh, is on the right track. It is looking into such measures as a guarantee that at least one member of a rural family has at least 100 days of employment each year, and that schoolchildren receive a mid-day meal. It is looking at food processing for the first time, because some 25 percent of the milk, fruit and vegetables produced for domestic consumption end up spoiling.

India's moves reflect a widespread questioning of the "Washington consensus," which places a priority on free markets and unrestricted capital flows. In December, the U.N. General Assembly resolved to pursue the Millennium goals under the rubric of "fair globalization." What that means in essence is that the war on poverty will be waged as Sweden (not the United States) might do it: with a focus on social programs to fill the gaps where the free market doesn't reach.

The Millennium report has targeted problems causing poverty, such as poor health care and education, and wants rich countries to pony up an extra $50 billion or so in aid per year to make it happen. Jeffrey Sachs, the Columbia professor who led the Millennium review, hopes the ideological debate is over. He wants to concentrate on practical solutions: roads, water wells, mosquito nets. "This is not a morality story," he says. "Globalization has bypassed people caught in the poverty trap." And there are far too many of them.

With Jason Overdorf in New Delhi

Friday, January 07, 2005

tide of grief

Tsunami: The Earth shrugged, and more than 140,000 died. A story of unimaginable tragedy and heroism

By Evan Thomas and George Wehrfritz

(This article appeared in Newsweek in January 2005).

Jan. 10 issue - If, on the Sunday morning after Christmas, you had been like some all-seeing, all-knowing deity, able to peer down through the ocean depths off the western coast of the island of Sumatra, here is what you would have seen:

Two giant tectonic plates, which have been pushing against each other for millennia, suddenly shift. The left plate has been sliding under the right at the rate of a few centimeters a year, but now the top plate suddenly springs up, lifting perhaps 60 feet along a 1,000-mile ridge. Above, ocean surface hardly ripples. In planetary terms, the movement is "utterly insignificant," says geologist Simon Winchester, author of "Krakatoa," a recent best seller about a volcano that exploded off Sumatra in 1883, killing 40,000 people. "The earth shrugged for a moment. Everything moved a little bit."

The quake jolted the Earth's rotation enough to trim a couple of microseconds off the clock. Relatively speaking, it was a small blip in the long, violent history of a planet with a molten core, where entire continents have vanished and then reformed. But the seismic bump was enough to displace trillions of tons of water in a few seconds. Silently, invisibly, the water pushed outward at the speed of a jet plane. As it neared shore, the speed slowed, and large waves formed, in some places very large ones. Usually, a tsunami does not look like the massive, cresting mountain of water in "The Day After Tomorrow." Still, it's not a sight you would ever want to see while standing on a beach.

As the waters receded last week, the death toll kept rising: 20,000, 40,000, 80,000, 100,000 ... and doctors warned of epidemics still to come. Suffering was indiscriminate in the luxury resorts and poor fishing hamlets along the Indian Ocean coast. "Kids missing and sharks washed ashore and people worrying about their Christian Dior shirts and jewels while people were being thrown against rocks. It was just so random," said Vikram Chatwal, a Manhattan hotelier vacationing in the Thai resort of Phuket. There were the tabloid-titillating survivor stories, like the rescue of Petra Nemcova, cover girl of the 2003 Sports Illustrated swimsuit issue, who clung to a tree for eight hours. Or the escape of the Harrow School cricket team, which had the pluck or luck to climb up on a pavilion in Sri Lanka as the waters swirled across the pitch. Less heralded, but bitterly mourned by their parents, were the 20 boys playing pickup cricket on Marina Beach in the south Indian city of Chennai, all swept away by a single wave. Lost: a whole church, as its parishioners worshiped on a Sunday morning. Found: a 20-day-old baby floating on a mattress, crying but alive.

There were some heroic tales. Casey Sobolewski of Oceanside, Calif., and his mother, Julie, were sailing off the Thai coast when the wave roared by. They began pulling aboard survivors sucked toward them by the undertow. Casey jumped into the dinghy to rescue some nearby floundering children. Julie was discouraged to see other boats hanging back, their passengers fearful of getting involved. The scene evoked images of the sinking of the Titanic, when all but one of the lifeboats stayed away as the great ship went down, lest they be overwhelmed and perish, too.

Helpless awe was the more prevalent emotion. TV images of shocked vacationers running before surging floods on sea coasts from Thailand to Sri Lanka were followed by scenes of utter devastation in the remote outreaches of the Indonesian archipelago (known as the Ring of Fire for its deadly seismic history). Slowly, the rest of the world realized the magnitude of the disaster (in the Bush administration, perhaps a little too slowly). If there was a single tragedy repeated over and over again, it was the failure to act—usually, the inability to act—until it was too late.

At Hawaii's Pacific Tsunami Warning Center, shortly after 3 p.m. on a quiet holiday afternoon, one of the scientists on duty, Stuart Weinstein, noticed a spike on the seismometer in the Cocos Islands, south of Sumatra in the Indian Ocean. The initial reading was for an earthquake registering 8.0 on the Richter scale. Quakes of such magnitude are not all that unusual. At 3:14, Weinstein and a colleague sent out a routine notice of the quake and a message: THIS EARTHQUAKE IS LOCATED OUTSIDE THE PACIFIC. NO DESTRUCTIVE TSUNAMI THREAT EXISTS BASED ON HISTORICAL EARTHQUAKE AND TSUNAMI DATA.

Over the next half hour, the seismic data kept streaming in to the Hawaii center, and the estimated size of the quake increased—fivefold, to 8.5 on the Richter scale. Time to call in the boss: director Charles McCreery was summoned by phone. Now a more ominous message was sent out: THERE IS A POSSIBILITY OF A TSUNAMI NEAR THE EPICENTER.

In fact, a tsunami had already smashed into remote North Sumatra, almost instantly killing thousands. The tsunami watchers in Honolulu had no way of knowing: there are sea-level wave monitors in the Pacific, but not the Indian Ocean. Set up after a tidal wave killed more than 150 people in Hawaii in 1946, the Hawaii tsunami center is responsible only for warning the 29 countries along the Pacific Rim, where tsunamis are frequent. In the Indian Ocean, tsunamis were unusual. Governments there have fewer resources. There is no warning system.

In Jakarta, Indonesia, some 5,000 miles to the east of Hawaii—and about 1,200 miles from the epicenter—Prih Harjadi, director of data gathering at Indonesia's Bureau of Meteorology and Geophysics, got his first inkling of danger in a phone call from his nephew. A quake had shaken the city of Medan, on the island of Sumatra. Harjadi rushed from his home to his office to learn of the unfolding disaster along the Sumatran coast. He was crestfallen. His government had discussed setting up a tsunami-warning system back in 1992. But an official request for aid from Japan "got lost" in the bureaucracy, Harjadi said. The cost of the plan never approved: $2 million.

The Thai coast, some 300 miles from the quake, was the next to be hit. The area has some of the most beautiful beaches in the world; tourists flock there. Coming off a recent divorce in Britain, Jack Davison was looking forward to sun, romance and adventure during his Christmas holiday in Thailand. The 57-year-old retired schoolmaster was walking near Patong Beach on Sunday morning when he noticed a crowd of Western tourists and locals staring curiously out to sea.

The water seemed to have vanished from the shore. Then the crowd noticed a small wall of white water about a mile out. Within seconds, the wall loomed larger and began tossing yachts and fishing boats like toys as it barreled in. The people around Davison began to scream. Too late, Davison and the others turned to run. The Briton was pinned beneath a car as both he and the vehicle were swept away. "It went totally dark, and the only thing I could see was the wheel of the car on top of me and the exhaust pipe. I thought that was it," recalled Davison. Suddenly, he was wrenched free and came up gasping. He watched in horror as a young European couple, completely naked, washed out of the window of their ground-floor room at the Sea Gull Hotel just before a car smashed into the window frame.

One of the young Europeans was a 29-year-old Italian named Dario Tropea. He and his female companion had been abruptly awakened by a torrent of water in their hotel room. In five seconds, the water level had risen to within inches of the 10-foot ceiling, leaving the trapped couple no choice but to link arms and dive through the window. Tropea lost consciousness. "When I woke up, I couldn't see the hotel, and I thought it had collapsed." Tropea found his shocked, naked companion, and they started back to look for friends—when they saw a second wave. "People were screaming, calling out for us to run, and car horns jamming as they crashed into the hotel," recalled Tropea, as he sat, dazed and injured but alive, in a hospital room two days later.

It took the tsunami less than two hours to cross the Bay of Bengal to India. In the small town of Nagapattinam on India's east coast, K. P. Selvam, a wiry, weathered, 43-year-old fisherman, was relaxing under a shade tree after Sunday mass, mending some nets. On this perfect day, he was thinking about going fishing with his mates. His wife was cleaning their house, a tile-roofed, mud-and-brick hut a hundred yards from the sea. Their small daughter and two sons played outside. Suddenly, Selvam heard a distant purr, a sound he had never heard before.

The sea had always been Selvam's sustainer and his friend. But the noise bothered him as he gazed into the clear sky and limitless horizon beyond. Then he noticed something that made his stomach churn. A thin black border had appeared on the horizon; it seemed to be thickening, growing. "I stood up and started shouting at my wife to run ..." Selvam recalled, speaking feebly. "I clung to a tree but soon realized that the huge tree had been uprooted." He survived. But his wife and three children, his home and many of his friends were gone, and he was surrounded by corpses—"some," Selvam said, "had their heads smashed."

Many of the fishermen and their families, swept away by the tsunami that rolled over the east coast of India, were squatters. Unable to afford houses in town, they had built huts illegally on public beachfront. Marimithu, a retired fisherman who works as a night watchman, says next time he will build a house with a brick foundation, though he must be aware that bricks and mortar did not save his neighbors. His children, who barely survived with him, now wake up screaming, "The wave is coming!" Vasturi, a 50-year-old grandmother, saw her daughter and two grandchildren swept away. Her daughter, Saraswati, managed to survive, but she cannot stop weeping. Three days after the death of her children, Saraswati's face was etched with deep, angry scratches that could only have been self-inflicted.

Tsunamis do not slow down or lose much power until they reach shallow water. This tsunami hit the coast of Africa some four or five hours after the quake. Back in Hawaii, the time was a little after 7 p.m. At the Pacific Tsunami Warning Center near Honolulu, Stuart Weinstein sat looking at his seismic readings, watching TV and, as he put it, "kind of feeling like a schmuck." Surrounded by technology, but lacking a warning system for the Indian Ocean, he had been reduced to typing in "tsunami" on Google to keep track of the death tolls as they were posted on the wires. The numbers started small—one dead in Phuket, 150 in Sri Lanka—but it was dawning on Weinstein that a disaster was happening, and there was nothing much to do about it. Weinstein and his colleagues, Barry Hirshorn and the center's director, Charles McCreery, realized that they were dealing not with a localized quake, but a gash stretching for hundreds of miles along the Indian Ocean floor. The seismology center at Harvard, the gold standard for earthquake watchers, was now estimating the strength of the quake as 8.9 (later revised to 9.0). That was a monster quake, capable of generating killer waves. The tsunami watchers wrestled over whom to call. They were on the phone to the U.S. embassies in Madagascar and Mauritius at about the time when the waves struck there. It was already too late.

The relief effort would become global and vast (including millions raised privately on the Internet). But it started with painful slowness. In the province of Aceh on the island of Sumatra—the area closest to the epicenter and the worst hit—the Indonesian government was barely in control. A rebellion had been spluttering and flaring for years. One of the groups that managed to get to Aceh after the tsunami was the moderate Islamic organization Muhammadiyah. Somewhat akin to the Christian Coalition in the United States (though much larger), the 35-million-member group has the clout to put politicians in office and runs a chain of colleges.

It took 72 hours for a Muhammadiyah relief mission to reach Aceh. The airport could accommodate only two cargo planes at a time. Arriving on a plane donated by budget carrier Lion Air (along with cases of donated instant noodles and strawberry milk), the Muhammadiyah team, accompanied by two NEWSWEEK journalists, secured an SUV belonging to the local military-intelligence chief. The man's riding crop, left on the back seat, provided a moment of levity. One Muhammadiyah staffer joked about his cell phone, punching buttons and saying in English, "Nokia is NOT connecting people." But the mood quickly chilled. Just beyond the airport, soldiers were filling mass graves with wrapped corpses. Across a bridge, at the edge of town, trees, brush, roof beams, scraps of clothing caked in mud—all lined the roads like dirty snow. Then they saw the bodies: naked, bloated, leaking, baked into putrescence by three days in the sun.

The Muhammadiyah team pulled on masks as their car pressed farther downtown. The driver had to slalom through the corpses as they drew close to the Muhammadiyah headquarters. They passed a 50-foot fishing boat, lying on top of a bridge. Buildings had been crushed. Whole neighborhoods had vanished. The car stopped before a pile of bodies. The group stepped out, looking somber, uncertain. Rizal Sukma, the secretary of Muhammadiyah, declared, "Turn back. Our headquarters is destroyed." Nearby, on a lamppost, hung posters of the missing.

The group retreated to the Grand Mosque, still standing but its minaret riddled with cracks. Built more than a century ago, the mosque was a bastion of resistance against Dutch colonial rule in Indonesia. When the tsunami hit, the holy place became a refuge. Many people fled before the rising waters into the main prayer hall, but the waters followed. Many drowned beneath the ornate pillars and gilded chandeliers.

Two days later the floor was still slick, the stench overpowering. A skinny man with a cane and stiff black hat, identifying himself as Zulkifli, went up to the group. "This is punishment from the gods," he said. "Because there is no justice, because our leaders are oppressive. They don't care about the poor." Where was the imam? He had not been seen since the quake. No one knew if he was dead or alive.


Din Syamsuddin, the president of Muhammadiyah (he has a doctorate in political science from UCLA), took charge. A short, clean-shaven man with a slight paunch and calm, grave manner, he ordered teachers and school administrators to sweep the streets for corpses, set up soup kitchens and prepare camps for refugees. One problem: the locals had been reluctant to bury victims until they could be washed and wrapped in white cloth, according to Muslim practice. But in Jakarta, Islamic leaders have issued a fatwa, a religious edict, declaring that during the crisis period field burials would suffice.

In 1883, when the volcanic island of Krakatoa blew up, it not only killed tens of thousands of people but spread political fallout across the archipelago. The cataclysm contributed to "militant, anti-Western Islamic movements" on the main island of Java, wrote Simon Winchester, leading to a full-blown revolt against the Dutch in 1888. Now the government of Indonesia, already on shaky ground with separatists on Sumatra, will be sorely tested to provide relief—and avoid taking the blame for the suffering meted out by an angry God.

Indonesian politicians are not the only ones with something to lose. More than 10,000 miles away, at the Bush ranch in Crawford, Texas, the president of the United States was beginning to feel some political heat. For the first three days Bush stayed out of sight, on vacation. "The president doesn't like the idea of empty gestures," a White House spokesman told NEWSWEEK. At first the administration pledged $15 million in humanitarian aid, and by Tuesday the ante had been upped to $35 million. By Wednesday, Bush was appearing before reporters in an airplane hangar to express his condolences. Then he was off in his pickup truck to clear brush. White House aides were defensive about Bush's slow reaction, but officials made it clear that the United States will play a prominent role in a multibillion-dollar global relief effort. By the weekend the administration had increased its pledge tenfold, to $350 million.

The Tsunami Warning Center in Hawaii is normally a pretty relaxed place. Headquartered near Pearl Harbor under some palm trees, the low-slung white building could pass as a pool house. The staff lives in houses just yards away. But the Warning Center staffers have not been getting much rest. They have been churning out a timeline demanded by the White House, which apparently wanted a better fix on the center's efforts to warn other nations.

McCreery says he's received some hate mail. "It's along the lines of 'You moron, I got on the Web and I found phone numbers. You could have started to look up numbers of hotels on the beach to warn them'." For a moment, McCreery looked as if he would just brush off the suggestion. But then he said, "You know, looked at calmly, it's not a bad idea. It's better to save some people than no people." Short-circuiting the chain of command, however, never occurred to them, and in truth, how many hotel managers would have listened to warnings from a frantic scientist half a world away on a calm and beautiful Sunday morning?

Still, McCreery tortured himself. "In retrospect, it's partly because we just didn't realize the scale of the thing. In some ways, I'm going to feel a responsibility my whole life." McCreery teared up, then regained his composure. "Sorry. The things we should have done were not done from last week, but things we should have done over a bunch of years" to set up a network in the Indian Ocean. McCreery was strung out; he'd barely seen his family in days. When he got the call on Sunday, he had been about to put together the bicycles he had bought for his twin 4-year-old girls for Christmas. The bikes were still sitting in their boxes.

Grief circled the globe. At a pagoda in Thailand visited by a NEWSWEEK reporter on Tuesday, the coffins were stacked eight feet high. But the coffins had run out, and aid workers had started wrapping bodies in tarps and blankets. Then they ran out of those and just laid the bodies in a grassy area. The faces on the bodies were frozen in grimaces of suffering. Hundreds of volunteers had come out to help, but many visibly gagged as they moved about the bodies. The bodies kept arriving.

With Sudip Mazumdar and Jason Overdorf in India, Joe Cochrane in Thailand, Eric Unmacht and Paul Dillon in Indonesia, Andrew Murr in Hawaii, Jamie Reno in San Diego, Eve Conant, Holly Bailey and Steve Tuttle in Washington and T. Trent Gegax and Julie Scelfo in New York