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Poverty

Let Scientific Precision Not be the Enemy of Common Sense

Zahid Hussain's picture

The supply of electricity is a necessary ingredient for economic and social development in low income countries. Electricity is considered to be one of the most important services for improving the welfare of individual citizens. In the digital age, it is difficult to visualize development without electricity. Apart from the availability of energy per se, change in the quality of energy is one of the most important drivers of productivity.

The process of economic development necessarily involves a transition from low levels of energy consumption to higher levels where the linkages between energy, non-energy inputs and economic activity change significantly as an economy meanders through different stages of development. With such progress, commercial fossil fuels and ultimately electricity becomes predominant. Further, the expansion of electricity supply is critical to minimize the consumption of biomass fuel that has been responsible for the massive deforestation, desertification and many health problems.

All of the above sounds fairly straightforward and non-controversial, right? Not really. Count on economists for coming up with Harry Truman’s proverbial “on the other hand”. In other words, there are no straight answers as is most often the case in the infernal complexities, contradictions and ambiguities of our favorite ‘dismal science’.

The Chicken and the Egg Ought to Come Together

Zahid Hussain's picture

The power supply situation in Bangladesh remains as precarious as ever; with power outages becoming more erratic and load shedding persistently higher than the corresponding months in the previous year (see Figure). Bangladesh is currently experiencing unprecedented levels of load shedding nationally. Brought about by a shortage of generation supply capacity, load shedding is a last resort measure to prevent a collapse of the national electricity supply system. The risk of load shedding will remain high until at least 2013 if further actions are not taken to ameliorate the situation. Specific and immediate interventions were needed to minimize the risk of load shedding until the new peaking plant and base load electricity generating capacity being built comes online.

The government has taken initiatives to increase the generation capacity to 7,000 MW by 2013 through various technologies (fossil fuel and renewable) with both private and public sector participation. A large portion of this plan relies on quick rental power based on imported liquid fuels which are expensive, more than three times the cost per unit of electricity at which power is currently produced by large power plants.

China's Accountability and India's Voice

Yongmei Zhou's picture

As a Chinese working on public sector governance and living in India, I'm often asked to compare the two governing systems, the largest democracy in the world and the largest non-democracy in the world. The gap in political and civil participation between the two countries is well known.

India's civil society and media are much more dynamic and vocal. I particularly admire the impact of the Center for Science and Environment on environmental policy, Pratham on education, the Naz Foundation on gay and lesbian rights, and MKSS on Rights to Information. I’m not aware of equally impactful counterparts in China but would be happy to hear about those you have come across. Certainly China can benefit from moving towards a more open society, where minority voices are heard and rights protected, and where abuse of official power and natural resource is restrained.

But when it comes to building infrastructure and reducing poverty, China is doing much better. Why? We often hear "Yes, but China is an authoritarian regime." -- as if authoritarian regimes automatically are more capable of development. Yes an authoritarian regime can be more efficient in making policies -- good or bad -- because the process of consultation and public deliberation can be truncated. But which theory predicts that democracies are less capable of building good infrastructure quickly or taking care of the poor?

In Pursuit of the Golden Deer

Naomi Ahmad's picture

This is a true story…

It is the year 2005. 26 young Bangladeshi men are crammed on a small rubber boat. Floating on the vast Mediterranean Sea. The boat's engine had stalled days ago.

10 days without food or water. The men are faced with a choice – death from drinking sea water or the inhuman alternative of having to drink one’s own urine. The pain of watching a brother or a dear friend slowly and painfully starve to death is too much. One by one the men start looking at each other - wondering which part of a dead body would be edible. Another weakly searches for something sharp enough to cut out a chunk of his own flesh, before collapsing dead from hunger and fatigue…

This is what a group of young Bangladeshis faced in 2005, when they embarked on an illegal journey to Spain. Only three survived the ordeal and lived to speak of the horrors of those 10 days.

The Inexorable March of Branchless Banking

Ignacio Mas's picture

There are two ‘coming of age’ tests for bold new ideas. The first, still in the realm of the market for ideas, occurs when the concepts become entrenched as conventional wisdoms, when you no longer need to justify them as ideas. The second is when they gain traction in the marketplace, when you no longer need to justify them as a business proposition.

The ground has shifted massively on both counts since I wrote about the opportunities from branchless banking in this blog more than two years ago. Few now would dispute that a key step to achieve much broader financial inclusion is to take banking transactions outside of banking halls and into everyday retail establishments that exist in every village and every neighborhood, and that financial service providers need to put technology in the hands of customers (in the form of cards or, better still, mobile phones) to increase the convenience and security of those transactions.

World Bank Commits $900 Million to Recovery in Pakistan

South Asia's picture

Pakistan’s deadly floods have affected more than 14 million people, with some estimates putting the figure considerably higher. The affected area covers 132,421 km, including 1.4 million acres of cropped land. Continuing rains have caused additional flooding and hindered relief activities.

Making Money Off the Poor? Microfinance Institutions Going Public Creates Controversy

Shweta Banerjee's picture

Microfinance originated in South Asia in the 1970s when pioneers such as Mohammed Yunus of Grameen, introduced the idea that providing small loans to the poor, especially women, can help generate income. In the last thirty years, after many experiments from around the world, the term microfinance now not only includes credit but also savings, insurance and cash transfer services for low income families.

An explosive growth of microfinance institutions (MFIs) has been seen within the last decade, both in India and globally. In fact, following the recent financial crisis, both Grameen Bank and Kiva have started lending in the United States.

The largest MFI in India, SKS made its first public offering on July 28, 2010. Backed by powerful funders like George Soros and Narayan Murthy, this is only the second “pure” MFI in the world to go public. The first one was the Mexican MFI, Compartamos, in 2007.

The Microfinance Gateway is the most comprehensive online resource for the global microfinance community and recently features an article based on eleven interviews with diverse experts on what they think the IPO could mean for the poor. Here’s a sneak-peek:

Financing Living Wage in Bangladesh’s Garment Industry

Zahid Hussain's picture

The Wage Board on garments in Bangladesh nearly doubled minimum wages on July 29, 2010. The minimum wage at the entry level will be raised to Tk 3,000 a month (or about $43) from Tk 1,662.50 ($24). The new pay structure, proposed to be effective from November 1, maintains the existing seven grades with the highest pay fixed at Tk 9,300 ($140) per month. About 3.5 million Bangladeshis work in the garment industry, which accounts for 80 percent of the country’s exports. International companies like Wal-Mart, JC Penney, H&M, Zara, Tesco, Carrefour, Gap, Metro, Marks & Spencer, Kohl's, Levi Strauss and Tommy Hilfiger all import in bulk from Bangladesh.

Garment workers apparently are unhappy over their wages, even after the proposed increase. They protested by smashing vehicles and blocking traffic in various garment sites in Dhaka following the announcement of the wage increase. Why has the frequency of violence increased?

Bangladesh sets a world record – 5 million CFLs in a day, one bulb at a time!

Ashok Sarkar's picture

CFL bulbIf you were in Bangladesh in June, you would have found teachers in schools, preachers in mosques, and ads in newspapers, television, loudspeakers and pamphlets, encouraging people to bring in their incandescent bulbs to exchange with new Compact Fluorescent Lamps (CFLs) – and encouraged they were! On Saturday, June 19th 2010, at over 1,400 rural and urban distribution centers spread across 27 districts, manned by teachers, utility workers and other volunteers, Bangladeshis collectively took home about five million high quality CFL bulbs, in the first round of distribution.

 

They broke a record set by the British in January of 2008, for the most number of CFL bulbs distributed in a single day―some 4.5 million. In June, the Government and people of Bangladesh were inspired to do even better … and they did!

 

Let Good Sense Prevail in Bangladesh’s Garment Industry

Zahid Hussain's picture

The garment industry in Bangladesh has been subject to several tests of resilience in recent years—global recession, energy shortage, input price increases, and labor unrest. Of late, the labor unrest has escalated apparently triggered by disagreement over re-fixation of minimum wage. The workers, for quite some time now, have been pressing for adjustment in minimum wage that was last increased in 2006, after 12 years, from Tk. 930* (about $60 in PPP) per month to Tk. 1,662 (about $108 in PPP) per month. The government in April 2010 committed that a new pay-scale for the RMG workers will be announced before Ramadan, and formed a Wage Board for making the wage recommendations. For reasons not yet fully understood, the labor unrest was reignited recently without waiting to hear what the Wage Board’s recommendations are. However, it is abundantly clear that dissatisfaction with the nominal level of the minimum wage is at the center of the discord between garment owners and workers.

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