Impact Investing: Challenges and Opportunities

This story originally appeared in Beyond Profit on December 3, 2010. Click here to subscribe.

Earlier this week, a report by J.P. Morgan and the Rockefeller Foundation declared impact investment a new asset class—a remarkable development in the lifecycle of this industry. What does it mean for social enterprise?

On November 29, J.P. Morgan and the Rockefeller Foundation released a report that will likely serve as a turning point in the development of impact investing. The report, which assesses expected and realized returns of more than 1,000 impact investments, estimates that the industry presents an investment opportunity between US$400bn and US$1 trillion with profit potential between US$183bn and US$667bn. Importantly, the report declares impact investment an asset class which provides a strong indicator to investors who may have shied away from social investing in the past to reconsider this emerging investment category.

The declaration of impact investment as an asset class functions as an on-ramp for investors eager to find the “next microfinance.” A recent article in Forbes estimates that microfinance comprises 50% of the total impact investing market. Within the social enterprise sector, microfinance (not withstanding the current crisis in India) has demonstrated to many investors the role capital can play in a for-profit investment and what that investment can achieve in financial and social returns.

Read more here.

What's Policy Got to do with Social Enterprise?

Here's my latest (December 6, 2010) for the Wall Street Journal.

Many social entrepreneurs and social investors tend to avoid inviting the government to their table because it often means a slow, fat-fingered solution, rather than a targeted, nimble infusion of resources.

However, government policy can also serve as a growth catalyst and a broad-based enabler, and, as such, cannot be overlooked as an important partner in the development of social enterprise as a sector.

What does a marriage between social enterprise and government look like?

Read the rest of the article here.

Indian Microfinance: Confusing Scale with Impact

Here's my latest (Nov 26, 2010) for GOOD Magazine.

Rumors of the death of microfinance in India have been greatly exaggerated. Here's what's really happening.

Until recently, microfinance was the darling of poverty alleviation. A foolproof way to pull people out of $2-a-day poverty. But, now, the microfinance sector in India is in crisis, so much so, The New York Times announced last week that “Indian Microcredit Faces Collapse from Defaults.” Is this another sub-prime fiasco? What happened to take us from “putting poverty in a museum” to putting the kibosh on the whole model?

Well, we got a little ahead of ourselves for several reasons. But, before we go there, here’s a brief recap on what’s happening in Indian microfinance: Last month, the government of the state of Andhra Pradesh, India’s most saturated microfinance market, ordered microfinance institutions to stop lending, and told borrowers to stop repaying. A spate of suicides by men and women who were microfinance borrowers alarmed many, and the government felt that microlenders were to blame. Were they?

In AP, two dueling parties provide a financial service to the poor. It gets a little complicated, but in essence, there are two ways to get a microloan, from the government or from a microfinance institution. Through banks, the government lends to groups of 11 to 20 women in so-called self-help groups or SHGs. The government has a mandate to disperse $22 billion to SHGs by 2014. The other option is a commercial, for-profit microfinance lender. They are shooting to use profits to scale up and reach even more borrowers. To get commercial microfinance money you become a member of a "joint-liability group" for a loan supported by group collateral. Some choose the SHG, others the standard microfinance institutions, and some take advantage of both, receiving multiple loans from multiple sources.

The government is vexed by the fact that borrowers often take loans from MFIs, sometimes double-dipping when they already have a loan through an SHG. To top it off, borrowers seem to repay MFI loans faster. The government believes they do so because MFIs are coercive. The sad truth is that some of them may be. But MFIs arguably also provide a better service, by delivering timely loans, and offering convenient, scheduled repayment plans at the borrower’s doorstep each week.

While, it’s possible that a desperate borrower might end his life due to coercion, he might also do so because of family pressure, lack of opportunity, a bad harvest, or massive debt. It’s difficult to know the cause without further investigation. In fact, an impartial investigation into the allegations is necessary, and would probably best be carried out by some entity other than the state government, which is, unfortunately, biased. But, the government didn’t wait. It shut down the MFIs, and now they are on the brink of financial collapse which is bad for borrowers, MFIs, and the Indian government.

The accusation of suicides due to MFI pressure is a serious matter. How did we come to this?

The core of the issue in India comes from the confusion between growth and impact. At some point in time, we stopped equating progress with poverty alleviation, and started measuring progress based on numbers of poor people reached. At a time when metrics are highly valued, counting the number of borrowers is much easier than evaluating the borrowers themselves to determine actual poverty alleviation.

If we measure progress by numbers of people reached, success depends on horizontal growth. For the last five years in India, commercial MFIs have been in a race to grow. MFIs in other countries can grow organically because many are allowed to take deposits. However, Indian regulation currently prohibits that, so commercial Indian MFIs require upfront capital from external sources. That capital enables them to disperse loans. More loans means more interest payments. More interest means more profit. More profit means more investors. More investors means more capital. More capital means more loans. More loans means more borrowers reached (i.e, “progress”). And so the cycle goes.

Five or ten years ago, when we thought that financial inclusion was the end game, a new borrower meant that you could check the box as having accomplished something. We’re older and wiser now. We know that microcredit, alone, is not enough to pull someone out of poverty. We should never have expected it to.

Think back to your first experience with financial inclusion. Did your first credit card make you a millionaire? Did you start a business with it? Probably not. It probably enabled you to buy something you needed, or gave you a cushion in an emergency—or maybe got you into debt you didn't need. It does the same thing for the poor, just in smaller increments.

Merely offering credit to more people doesn’t lead to poverty alleviation. It is a service that the poor should have access to, just like the rest of us. But, it is not a game-changer; it is one tool in the poverty alleviation toolbox.

Microcredit is only impactful if we create a deep connection to a borrower by offering a suite of services: microinsurance, financial literacy, business development training, etc. Some MFIs are already offering these services, and doing it well (see BASIX, for one great example), accepting that they may not grow as fast. The sooner MFIs evolve beyond the growth mantra and commit to making a real impact, the sooner we’ll be on the right track.

Lindsay Clinton is the editor of Beyond Profit and an Associate Vice President at Intellecap, a social development advisory firm in India.

Where will Social Enterprise be in 20 Years?

Check out a recent interview I did with Columbia's School of International and Public Affairs in conjunction with their Social Enterprise Bootcamp! Read here!

Forget the American Dream, Collaborative Consumption is a Better Path for Developing Countries

My latest post for Good Magazine.

The United States was founded on the idea of idea of individual liberty, individual ownership, and individual needs. Unfortunately, this is a costly way for a country to develop, especially if every citizen aspires to express his freedom and individuality by owning a car or a house or a hammer.

Nearly 250 years into the evolution of our ethos of individuality, some Americans are starting to recognize that the primacy of individual ownership is not always economically sustainable. A movement has begun that places value on providing access to products and services, rather than ownership. Do we all really need to own a car? Or can we share a ZipCar that can be rented by the hour and used as needed? Consider the space we use. Do we all need to live in a house? Or can we seek out co-housing situations, where families share communal spaces like kitchens and yards, but have private sleeping quarters. Consider items that are used by all, but infrequently: Could the residents of each floor of an apartment building share tools like hammers and brooms instead of buying their own?

The move toward access, rather than ownership is documented and promoted in three recently released books, The Age of Access, The Mesh, and What's Mine Is Yours. (See GOOD's infographic on this.) This trend has applications far beyond liberal American households and communities.

The concept of communal living and shared resources has long been a feature of Eastern society. Households are characterized by their joint family nature. Food is shared, and often served from one bowl. In poorer areas, multiple families share water taps, groups of women access microfinance together, strangers share taxis and rickshaws. However, the collective nature of Eastern society is less a political statement than an imperative to stretch sparse resources.

As the East develops, and the size of the middle class grows, there is a push toward individual ownership. With increased incomes, the incidence of joint families reduces, and sharing resources is less of a financial necessity. However, if the East starts to choose individual ownership more readily over communal access, emerging economies will likely struggle to manage these patterns of consumption, particularly with regard to pollution and waste.

From an economic development perspective, Western practitioners are guilty of seeking solutions for the poor that are based on these American values. It’s only natural; this ideal is integral to the West’s notion of progress. Solutions to a lack of access to clean water, sanitation, healthcare, and education often cater to the provision of individual ownership: a faucet in every kitchen, a toilet in every home. However, this paradigm is wasteful, and thus, may not be ideal or sustainable for developing world countries.

The indicators we use to gauge wealth creation and poverty alleviation often involve measuring whether each person or family owns a TV or a phone, or has a toilet. These indicators may be an imperfect way of evaluating progress, and more importantly, they place value on a framework of development that may not be in a developing country’s best interest.

While instinct pushes us to value ownership, it may actually be better to approach complex issues by instead offering access. Rather than providing every household financing for a solar battery charger, a better option might be a communal charging station in each village. Rather than pushing for every citizen to own a mobile device, perhaps merely having access to a phone number will suffice for a group of people that can share a single phone.

Development experts and social entrepreneurs from the West are sometimes tempted to provide solutions that we enjoy for ourselves. However, as our eyes open to the waste and excess that are byproducts of Western development, we must seek new paradigms instead of grafting traditional ideals onto others.

Image: (CC) by Flickr user tibchris.

Is India Really a Hotbed for Social Enterprise?

I'm writing a few posts a month for Good Magazine. Here's the first!

If you know anything at all about social enterprise, you are probably familiar with the fact that many of the case studies cited as successful are Indian in origin. Case in point: Aravind Eyecare, Jaipur Rugs, Barefoot College, d.Light. It makes you wonder: Is India better at producing social entrepreneurs than other countries? Is there something in the water? And if India really has cornered the social enterprise market, how did they do it?

First, let’s look at what we know. India is massive. It’s bursting at the seams with people, and because one out of every six people on the planet is an Indian, we are statistically more likely to stumble upon Indians anywhere—and some of those people are bound to be social entrepreneurs, right? Of course, a big pile of people does not explain why social enterprises often thrive in India, and the policy environment certainly doesn’t help: There are no freebies for social enterprise, no special legal structures (like the L3C here in the United States or the CiC in the U.K.), and few policies that help enterprises get funding. In fact, some might say that Indian social enterprises have succeeded in spite of policy, not because of it.

What about funding? Most Indian social entrepreneurs would tell you that they have just as much trouble as the next guy. There are only a handful of “social” or “social/commercial” funds in India, and while there is a frenzy of interest in India from foreign investors, many of them ride on the coattails of domestic funds, investing only after a trusted Indian social investor has made the first move.

So, what makes India different?

India has had a long, rich love affair with nonprofit organizations. A recent survey commissioned by the Indian government found that there is one non-governmental organization for every 400 people—which means there are about 3.3 million NGOs. Regardless of how great each NGO's impact is, the sheer number of them is symbolic of a culture that favors trying to help those in need. However, many have seen that these NGOs are not always accountable, transparent, or sustainable. Stemming from this tryst with NGOs is a graduation to sustainable social enterprise.

Second, with over 40 percent of people on the subcontinent living on less than U.S. $1.25 a day, there is plenty of need for social enterprise. With such a large population in need, there’s plenty of opportunity to test things out. Because of a lack of regulation and oversight, it is possible to get in there, run pilots, and figure out what works.

Third, the currency of language cannot be underestimated. One of India’s national languages is English, and many people, rich and poor, speak it. Even if social entrepreneurs in Romania or Ecuador or Côte d’Ivoire have great ideas, they may be held back in their ability to spread those ideas, enter international business competitions, or get funding from English-speaking Western countries.

Fourth, never underestimate the power of the Indian family. Indian families are tight, complex webs of people who you know and love, and people who you don’t know, but who you call “cousin” and “uncle” even if they have absolutely no relation to you. These networks—close and extended—translate into resources for social entrepreneurs. They are the building blocks of most start-up businesses, and these enable enterprises that would not otherwise have a chance, to get off the ground.

Lastly, and perhaps most important, there is a certain ethos in India which makes it possible for social enterprise to thrive. You can’t manufacture this attitude; it is something that only comes from living and working in India. This attitude, a mix of confidence, perseverance, and “can’t-touch-this,” known as jugaad, is an Indian way of getting things done using any means, against the odds. This ethos gets social entrepreneurs, once they put their minds to something, to figure out how to make broken systems work, to close gaps in service delivery, and to change the status quo.

So, combine a whole bunch of people who have an unstoppable attitude, an incredible combination of personal resources, a population in need, and a propensity towards helping others…and what do you get? A hotbed for social enterprise. What do you think? Are you drinking the KoolAid?

Image (CC) by Flickr user Meanest Indian

India Journal: Employership vs Entrepreneurship

(Left) A future employer?

Read below for my latest article for the Wall Street Journal.

With more than half a billion people under the age of 25, India is sitting atop a potential powerhouse of intellectual and physical energy. But, India’s demographic dividend is only a ‘potential’ positive unless India’s social entrepreneurs become actors in this transition.

A look at the numbers released in the recently published India Labour Report 2009 reveals that the population will grow to 1.4 billion by 2026, and 83% of this increase will be in the 15-59 age group—a huge lump of productive labor. Much has been said about India’s need to educate its youth in order to capitalize on this demographic window of opportunity. And, there is no denying the importance of education. But, there is also a dire need for job creation and job training. By 2025, India will house a whopping 25% of the world’s total workforce, with the projected number of new entrants into the workforce each year at 12.8 million. Where are these jobs going to come from?

The India Labour Report cites the need for a smooth legal and regulatory ecosystem, as well as employability frameworks and employment ecosystems in order to create a more enabling environment for job creation. I would argue that we also need to encourage social entrepreneurs to take on the challenge—by becoming employers themselves.

Social entrepreneurs are known for the creativity and innovation they bring to bear on the gaps in development. Whether tackling water or education, energy or sanitation, social entrepreneurs develop inventive ways to bring new solutions to social challenges. But, in all this creativity, they may be missing one of the larger issues at hand: “employership,” or, the generation of jobs where none existed before.

Lest you confuse employership with entrepreneurship, allow me to elaborate. ‘Entrepreneurship’ is a loaded word. There is pressure to launch a game-changing idea—or nothing at all. It asks for confidence and considerable chutzpah. It takes passion and an affinity for risk. To be an entrepreneur is to take the weight of the world on one’s shoulders in order to create something that no one has ever done before. It’s not something taken lightly, nor is it something many Indian families encourage.

Now, consider “employership.” The task of creating 100 jobs is challenging, but beautifully concrete. The framework is Problem/Solution, rather than Blue-Sky thinking. It requires flipping the idea of a target market on its head: it’s not about the consumer (yet); in the initial stages, it is about determining who to employ.

Several social entrepreneurs have founded companies that use already existing business models, but employ a specific segment of the labor pool. Dhruv Lakra started a courier company, Mirakle Couriers , which employs deaf adults, a group that receives concessions on Mumbai train transport. Revathi Roy is the Managing Director of ForShe , an all-women-driven taxi service, preferred by many women traveling alone. Vivek Agrawal is the CEO of Kanak Resources Management, a company that employs ragpickers—who have plenty of experience—to assist in municipal waste collection. In the case of all three enterprises, very few, if any, of the current employees were previously employed. But, each company’s labor pool also happens to offer a competitive advantage.

Perhaps we should encourage India’s budding social entrepreneurs to be less creative. Less innovative. Because employership does not require a game-changing idea, or a system-fix—just basic businesses that create jobs, raise standards of living, and create a virtuous cycle of advancement. If 1,000 people in each of 20 states built businesses that employed just 50 people, we’d see 1 million new jobs created—a decent dent in the projected 12.8 million demand. And, no doubt, by creating employment some of the problems social entrepreneurs are trying so desperately to solve may go away without direct intervention.

India has the chance to use its coming demographic transition as a catapult into the future, building its economy, its workforce, and its global brand। But, a working-age population won’t provide value on its own. By challenging India’s social entrepreneurs to become part of the solution, India will reap the benefits of this new wave of human capital.

India Chief Mentor: Where are the Entrepreneurs in Yoga and Ayurveda?

My latest piece, published in the Wall Street Journal. Read below for the full text.

Ever since the microfinance investment story began in India, investors have been scouting the “next big ‘social’ thing.” One category has been overlooked—affordable wellness. India has cultural assets—yoga and ayurveda—that, if harnessed effectively, could create tremendous value for communities and the economy.

But without social entrepreneurs and investors willing to take on the work of professionalizing these assets, we may never know their true worth.

Case in point: yoga. Pick any major city in the world—London, Paris, New York, San Francisco, Singapore, Bangkok—and you will find a great studio and a menu of yoga options. Try to find the same thing in Delhi, Mumbai or Calcutta, and you’ll have a difficult time.

With the exception of a bright spot or two in Mysore, Pune, and Rishikesh, practicing yoga in its birthplace is either exceedingly dull or completely bastardized (“power yoga” does not a yogi make). Yes, there are plenty of spots for “yogations” (yoga vacations) but they cater almost entirely to tourists and are often taught by tourists. Why come to India to be taught by a German instructor? Where are the great Indian teachers and the great Indian studios?

Having practiced yoga in India on and off for the last few years, I have found a handful of good teachers. But I’m told that the job usually doesn’t pay well and therefore is not a top choice for recent grads. Quite a perverse system of incentives, though: We encourage India’s youth to pursue monotonous low-paying work in call centers when they could study and/or promote some of India’s finest assets.

These assets — yoga and ayurveda — are not yet fully valued in the market. If they were, it might be a more sustainable approach to improving the long-term wellness of India’s middle-income population. (It should be noted that the “unaffordable wellness” market has plenty of capital behind it and a growing number of people who can and will pay for it.)

Many Indians haven’t adopted India’s healing sciences as part of their lifestyles—they are a bit esoteric, they say. With the exception of the buyers of the odd Bollywood starlet yoga DVD, practicing yoga is largely reserved for sweet old aunts and pot-bellied uncles. And the “practice” here is generally limited to pranayama (breathing) in the wee hours of the morning, often with the guidance of self-appointed guru Baba Ramdev on the TV in the living room.

As for ayurveda, a medical science that originated 5,000 years ago, the natural cosmetics industry in India is big business; 18% of all cosmetics in India are “ayurvedic.” But affordable preventative medicine through ayurveda still has untapped potential.

In the West, entrepreneurs, athletes, and the media have built an empire around yoga. The 2008 “Yoga in America” study, released by Yoga Journal, a magazine devoted to the practice, showed that yoga is a US$5.7 billion a year industry.

So, why don’t we see more enterprise activity in this area? Part of the barrier is that these assets are so integral to Indian life as aspects of personal spirituality and/or community heritage that professionalizing them is not seen as an opportunity. Patent offices in the U.S. and Europe have run into trouble quite a few times when they were found to be patenting yoga poses and formulas that use natural plant products as if they were new inventions.

It’s something that India never thought to do – until now. The Council for Scientific and Industrial Research has prepared patent formats for nearly 900 yoga asanas to prevent European and American companies from claiming them as their own, according to this article in the Hindustan Times.

Practicing yoga and encouraging less pill-popping and more naturopathy are two affordable ways to maintain a healthy lifestyle. There’s no doubt about the need: India has the second highest incidence of diabetes in the world and over 20% of urban Indians are obese, according to the National Family Health Survey. As India’s middle class grows, their waistlines will no doubt expand, too.

There must be a way to provide more value to communities, bringing a social return, while also making a financial return by injecting more energy, clinical R&D, and capital into these assets. If an entrepreneur took on the job of spreading yoga in a way that retained allegiance to the philosophy and enabled practitioners to enjoy its health benefits, perhaps we’d see fewer patients end up in hospitals in the long run.

Imagine if “school entrepreneurs”— the pioneers who run affordable private schools — started incorporating yoga into their programming. Or, what if the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy worked with a private company to incorporate 20 minutes of yoga in all public school curricula? Or, what if companies offered a mid-day yoga break?

Imagine the jobs that could be created through the spread of yoga—yoga instructors, yoga camps, the production of yoga products. It’s bound to be healthier and more interesting than doing data entry! It all seems like an investment well-spent.

Social entrepreneurs are starting to see the potential. Swas Healthcare, a chain of naturopathy clinics and hospitals is expanding in cities across Gujarat. The company provides treatments for chronic diseases and at an all inclusive price as low as 300 rupees per day, making it affordable to many. Last year, Aavishkaar Micro Venture Fund invested in it. Another affordable hospital focused on providing access to preventative healthcare to rural markets is the hospital network Vaatsalya. SEED Fund and Aavishkaar are both investors.

No word yet on any yogapreneurs dedicated to bringing wellness to the masses। Until then, we will likely continue to see the West (and Mr. Ramdev) take on first-mover status when it comes to adopting and transforming some of India’s best exports.

Facebook Fallout: Looking on the Bright Side

Sitting at Café Chattberbox in Zamzama, a hip little part of Karachi, drinking fresh peach juice. At the next table is a group of three men in their 20s or 30s talking about the downfall of Facebook in Pakistan. A guy sporting a goatee and an artfully aged t-shirt says his life has actually improved since the government shut down the social networking site. He’s now in much better touch with friends and family across the world. He moves his long hair off his shoulder and says, “Fuck man, people waste so much time on Facebook. They don’t even go to weddings or anything anymore. They just send a message.”

Since I arrived in Lahore almost a week ago, there have been numerous protests across Pakistan against Facebook because of a page that was created called “Everybody-Draw-Mohammed-Day” which encouraged users to draw cartoons of the prophet. I was late to my first meeting in Lahore because the car I was in got stuck behind a group of people protesting Facebook. One look at the crowd told me that most of the protesters were not Facebook users. How, I wondered, did these middle-aged men find out about the page on Facebook anyway?

A conversation a few days later with a lawyer in Lahore explained the trickle-down effect. The simplified version goes like this: Muslim clerics in faraway, but connected, places like London and Amsterdam, come to know about blasphemous Facebook pages from youth in their communities. These clerics tell their friends in Islamic Republics like Pakistan. Together, the clerics and their political cronies stir up their constituencies. It doesn’t matter what freedom of speech and freedom of expression are. What matters is that Mohammed has been blasphemed. The locals are encouraged, prodded even, to protest. It’s one more page in the big book of “Anger Towards the West” (see the recent New York Times article if you need more fuel for this fire).

So, while many in Lahore and Karachi and Rawalpindi and Islamabad have no idea what Facebook is, they marched through the streets to protest the material on it. And, a day or two later, the judiciary instructed the Pakistan Telecommunications Authority to block the site. And so it was. Many people are unhappy about it. But, there is one hipster in Zamzama who has seen the bright side. He goes on to say, “I don’t know how much longer I can stay here. I mean, as long as I don’t turn on the news, I’m fine.” Don’t worry, maybe they’ll block that soon, too.

Border Guard at Pakistan/Indian Border

Tall Guard at the Border with a fan on his head

Wagah Mama

I crossed into Pakistan today on foot wearing my salwar kameez, looking the part of a conservative foreign woman. An Indian porter, a proud Sikh from Atari, carried my red suitcase on his head, and when we got to the line that indicates that this is no longer India, he handed my bag to a Pakistani porter who gingerly took it and placed it atop his head. Although he interacts with the Pakistani porters each day, Mr. Singh says, they are not friends. Why, I ask? Because India is a great country. I believe he means for me to deduce the opposite about his neighbor.

Mr. Singh said that while there are 700 porters (I saw about 50), there are only about 20-30 people who cross the border each day. I can’t vouch for these numbers, but it’s fair to say that while the situation between Pakistan and India is tenuous, the border is rather quiet.

This morning, along with me, there was one French photographer, eager to get in, and about 25 18-wheeler trucks pregnant with white sacks of soybeans—food for poultry, I was told. Two Italians and one woman, presumably Indian, were crossing into India. Other than the numerous border guards and unofficial-looking official guys, the border seemed a no man’s land.

In fact, so little action happens at the border each day, that one of the immigration officers on the Indian side was receiving a leg massage when I approached. His masseuse, positioned on the floor in front of his shins, giving them a vigorous rub down, did not stop as the officer—pants rolled up to his knees—looked over my passport and gave his sign off. On the Pakistani side, the intake officer would not look at my passport until he finished his round of prayer beads.

As I walked across the dividing line, an armed, bearded soldier received me and my American passport, with an awkward, “Welcome to Pakistan.” The country doesn’t seem very welcoming judging from the regular violence in the news, but what seems to be a recurring theme already is locals who tell me that the news outside gives an inaccurate reading of what life is like on the inside. The Minster of Trade in Delhi told me that. The News International says that. The lovely gentleman I’m staying with says that. I’m curious to see for myself.

The crossover this morning was much less dramatic than the border scene I witnessed yesterday evening. Here, at Wagah, a dividing line between India and Pakistan, there is a melodramatic performance of pomp and circumstance each evening as the border gates for each respective side are shut. (The border closes at sundown, and only reopens at 10AM.)

Apparently, the dramatic border closing ceremony has been happening ever since partition. It has turned into such a spectacle that each country has build stadium seating for guests to watch the drama. We arrived at 4:30pm and while the Indian side’s rafters were packed, there was not a single spectator on the Pakistani side. Over the course of the next hour and a half, Indians entertained themselves by running up and down the road leading to the border gates carrying the Indian flag, and dancing in the street to the bumpin’ beats of Hindustani music. The message seemed to be, “It’s fun to be Indian.” Meanwhile, women and men slowly started to fill in seats on the Pakistani side—in separate sections, of course. By the start of the ceremony, India’s side probably had 600-700 people. Pakistan had a humble 80-90.

If you only had the ceremony to go on, India would seem a positively rich country compared to Pakistan. The cultural fabric of India felt vibrant and dense. It had more flags, more soldiers, more citizen support, and all the singing and dancing. You couldn’t help but feel sorry for the underdog. All Pakistan had going for it was its spot in the shade.

What’s remarkable and odd, is that these two countries, which take their divide very seriously, are able to engage in what has become a very theatrical ceremony. Border guards from each side have a yell off, where they each see who can hold a note the longest—over and over again. Pakistan often won this contest. Then there’s the march up to the gates, where the guards engage in some high kicks that would make a high school color-guard jealous. There’s high stepping, foot stomping, and pugnacious gestures—but at the end of it all, after the crowds go home, I’ve heard that it’s not uncommon for the guards to play cards together.

So, why all the vitriol? Indians tell me that their differences with Pakistan are not personal—they are driven by politics and history. At lunch today, though, my Pakistani host tells me that the evening show-off is disgusting and only promotes hatred. I’m surprised. He explains that while I may see it as theater, the locals who come to watch from either side take it very seriously. It deepens the divide and rubs raw the hatred.

I can see his point. While the show may be dramatic and boisterous, cocky and often playful—winning or losing is serious business.

Brand Central

In Pakistan's urban centers, it's not unusual for cars to carry gunmen, for protection.

It is not safe to travel in Pakistan. The US State Department has written 2.25 pages, single spaced, saying as much. And, while I am not one to take bombings, terrorists or target killers lightly, I go anyway. Duty calls—I need to make a trip for a research project related to work.

But, oh, the paradoxes of the developing world. Boulevards branded with Levi’s and McDonalds, Standard Chartered, and Pepsi. Manicured medians with flowering shrubs. It all looks so normal.

But, with power outages on and off throughout the day, there are regular reminders that these sign-posts of modernity are not signs of advancement. They are merely symbols of Western infiltration. The water is still dirty. Youth are still unemployed. The people still need protection from one other.

The Typist

There is a man named Anil whose life depends upon the Pakistan Embassy in India. If the Pakistan Embassy gets its act together and builds a website, any website at all, to represent its presence in India, Anil will lose his job. Anil, you see, is a typist. As in, he makes words on a typewriter. And while he doesn’t work for the Pakistani Embassy in New Delhi, he works very close to it. Rain or shine, Anil sits outside the Embassy, has been for 30 years, and helps travelers battle the bureaucracy within the Embassy’s run down offices.

You see, visa applicants are required to turn in their forms TYPED. Why? Because the Embassy doesn't have a website, they don't have forms that you can access online and print out before you show up. They supply the forms you need at Gate 1. They don't want to have to read your messy handwriting. So, they must be typed. And who has a typewriter handy on Shantipath Chanyakumari Road in New Delhi? I’ll tell you who.

Anil is Indian, but he doesn’t seem to have any problem with the fact that his life’s work is dependent upon his country’s arch-enemy. People will go to Pakistan, and when they do, they will need forms, and when those forms need to be typed, Anil will help. Incidentally, Anil also provides, free of charge, advice on how to fill in the forms. Having been privy to visa rejections over the years, he knows what will and won’t fly.

So, like a leech on a bleeding wound, Anil drinks up. And Pakistan’s Embassy survives another day without technology.

Sunny with a chance of...

The forecast in Delhi today is "Widespread Dust." Not sunny with...or cloudy but...or windy and...but just Dust Everywhere. http://xhtml.weather.com/xhtml/cc/INXX0096

High of 110 F.
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Stuck in her Ways

The Indian mindset often seems hard to shift. Mind set. Mindstuck. We’ve escaped for the weekend to a cantonment in the Himalayas of Himachal Pradesh. Whereas Delhi is over 100 degrees right now, and Mumbai is 90 with 74% humidity, the little village of Kasauli requires a light shawl in the morning, and is sunny and a beautiful 85 in the afternoon.

When we checked into our hotel, it was just after lunch. We asked the receptionist where we could go for a hike. “Oh, you can’t trek now,” he said with certainty. “It is too sunny.” This was the second time we’d been told this. The driver that brought us to the hotel also said, “It is too bright now. You can walk this evening.”

The weather was perfect. Not a cloud in the sky. Bright and clear. All that was needed was a slick of sunblock. But, someone once told these guys that they shouldn’t go out during the day. It will make you dark. You should take rest. And they listened, and now, they pass it on.

There are so many things like this here: you shouldn’t drink hot drinks then cold; if you’re sick, it’s usually the weather; if you have a cold, you should not work; it’s Western food (not oily Indian food) that’s causing Indians to have health problems, etc.

I admit, you hear these things often enough and you start to believe it. Even if it holds no water. Which is why some parts of India are really stuck. You hear something and pass it on, like a folktale, without considering an alternative. “The poor are ignorant.” “Orissa is a backwards state.” “Delhi is not safe for women.”

The typical response to India's challenges goes thus: “Adjust, adjust. It is like that only.” It indicates an acceptance of the ways things are, because that easy attitude makes it easier to go on, and get past the country's rough edges. But, a people desirous of change and advancement cannot afford to believe that it is like that only.

The Compulsion of Presence

Ten or fifteen years ago, we talked about how computers would change everything. In the future, you wouldn’t need to go anywhere, you could just pop on your video conferencing tool, or your laptop camera and have a meeting. You could internet chat with friends instead of going out. But, that hasn’t really happened. It’s 2010. The internet has been around for 4 decades, chat functionality has been around for 15 years, Skype has been around for 7. And yet, we still go to conferences, and fly to nearby cities for meetings.

I have the technology, as does my company, to enable every meeting to be a virtual meeting. Yet, we still insist of gathering together. The phone just doesn’t cut it. VOIP isn’t adequate. Even my friends who work for mega-money multi-lateral organizations, which have the tools to do state of the art video conferencing, aren’t doing it all that often. Why? It costs millions of dollars, and anyone you talk to has to have invested in the same caliber of system. And face it…we like to get together with other humans, in person.

This simple realization emphasized what we’ve been talking about at this in-person workshop in Bellagio: the compulsion of presence. In a world where many people are spending more and more time fielding email and connecting via social networks, we still value being present with our fellow man. Real, lasting, and valuable connections made in person still trump those made virtually. Not groundbreaking really. But, refreshing.

Country as Imagined Community

More ideas from Bellagio...

Many of us like to think of country borders as permanent and meaningful. In some cases, these borders are physical, for example, parts of the divide between the US and Mexico. But, in many cases, borders are lines on a map that serve to separate cultures and people that don’t necessarily need to be divided, for example, Punjabi Indians versus Punjabi Pakistanis (same people, just different sides of the fence). In other instances, the concept of a “country” only makes sense to a colonizer, but not to the people who are part of that country. India, for example, could easily be divided into several countries, each with its own language, dress, cuisine, and cultural traditions. On the other hand, parts of Africa could easily supercede their country divides, either because of spillover populations or cultural affinities.

The “country” as nation-state can both unite and separate, but the country as physical border divides. One idea we’ve discussed at Bellagio is the potential of transforming borders into uniters. Imagine the line between two countries that may have had conflicting relationships in the past. Drawing a line in the sand that says "this is mine, that is yours" only further cements the divide. But, what if the line in the sand were made into a park—neutral territory for either side to enjoy, that was classified as neither country’s official domain, but something shared. The concept immediately changes the way one thinks about the border. It is a connector. A few areas are already doing this. If you’re interested, check out the Balkans Peace Park Project and the Great Limpopo Transfrontier Park.

Robots, Pipes, Stampedes, Oh My!

Thirty two people from around the world have gathered in Bellagio to talk about the future. We are part of the Rockefeller Foundation’s “searchlight function,” an effort by the organization to work with teams around the world to uncover new and future developments that will affect the poor. In addition to about 10 sets of researchers, there are an additional 6-7 guests who have been seeded among us to add complexity and alternative perspectives to the conversation. Which is why, at breakfast yesterday, I found myself learning about the way robots can be used to find water leaks inside pipes and detect bank robberies before they happen.

Let me explain. Old leaking and cracked pipes are a big issue in many countries—developed and developing. The last month alone in Mumbai, the media has reported at least 5 major pipe bursts due to festering leaks. Smart robots can actually prevent this from happening by finding current or potential weak spots and patching them up.

As Andre-the-robot-man explained to me, the robots are programmed to sense dissonance in patterns. In the case of a pipe, they can sense when there is a break in the surface because it is different from the other parts of the pipe. The same kind of technology can also be used to identify when a bank is being robbed or when a crowd is getting out of control. The system maps the usual behavior, and when it notices a break in the pattern, it can alert the main system. Think about how useful this would be for crowd situations in India, where there are stampedes several times a year that inevitably cause unnecessary deaths of dozens, and sometimes hundreds of people. The technology developed by Andre’s company can actually detect a simmering situation about 4-6 minutes before it explodes—giving the powers that be time to react and prevent it.

At Bellagio, we are quite far from these realities--Indian stampedes and robots that find leaks--but the peacefulness here makes it surprisingly easy to focus and get on with the thinking.

Breaking Bread at Bellagio

Lake Como’s stillness has been interrupted by an afternoon shower. A look out the window of my room reveals that the thunder and lightning have made the storm sound more aggressive than the pepper of drops turns out to be. But, where the “storm” is lacking in moisture, it makes up in fog. My view, just moments ago, was of three or four hills converging on the lake. Now, there is just a gray cloud, and barely any hill to be seen at all.

I am here for a 4-day workshop at the Rockefeller Foundation study center in Bellagio, Italy. The property is set on more than a few acres of land that have, over the last 500 years, played roles as diverse as that of princess’ villa, Capuchin monastery, fortress, and hotel. Fifty years ago, the aforementioned princess bequeathed the property, with its many villas, landscaped hillsides, Lake Como swimming hole, and views of Italy and Switzerland to the Rockefeller Foundation.

Today, I climbed up the switchback paths to the leftover fortress, followed by bumble bees and scaring up quite a few lizards, to see the view of the other side of the lake. On the way, I passed through a dark, wet cave, and before that, went through a few gardens where it looked like a sane Edward Scissorhands did some handiwork. It is quiet here—perfect for thinking. But here there is an energy to the quietude.

That energy was apparent at dinner. Around the table sat men and women from Tanzania, Thailand, Vietnam, India, America, and Nigeria (and that was just one table of 7). We are all here to share our findings and methodologies from foresight research we’ve been conducting over the past 6 months. But, conversation at my side of the table focused on the World Cup, dowry practices in East Africa, relations between Pakistan and India, and flying times from Milan to everywhere we came from.

Bellagio in the Rain

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Olives and Oysters in Ferney, France

Is this thing on? It's been awhile. Work has been beastly. For months. But let this be the re-start of a concerted effort to write more often.

I'm sitting in an Apart'Hotel in Ferney-Voltaire, France. My friends Lauren and Maz just moved here three weeks ago for Lauren's new job doing something impressive involving vaccines for Africa. When they left DC, they took their 18-month-old son Julian and their 4-year-old Wheaton Terrier, Kine. Now the four of them are holed up eating baguettes in this little hotel across from a Nissan dealership and a horse farm (this is how they do things in France) until they find a proper house.

I left India early Friday morning, and by midnight, I was in France. In the interim, I set foot in four countries: Turkey (Istanbul airport) then Milan (airport then Milan Centrale) then Geneva, then over the border to Ferney. Long day.

Yesterday I revived myself with brie and pain quotidien from the boulangerie next door. Then Lauren, Julian and I sampled our way through the Ferney market, snacking on olives and oysters, white wine, goat cheese and the odd piece or blood orange or salty smear of tapenade.

Compared to Bombay, life here is clean and strangely void of energy. I keep trying to image if I could live here, but everything seems so still. I'm constantly on the verge of taking a nap.

Mumbai Gets an Organic Market

My latest post on Mumbai in the New York Times, originally published April 8, 2010.

Organic cotton: a sensible concept. Cotton candy: frivolous, but delicious. But organic cotton candy — these three words are not natural bedfellows. Nonetheless, the adventurous spirit of the Indian sweet tooth knows no bounds. Now, thanks to a new organic farmers’ market in Mumbai (Nilgiri Garden, Bandra Hindu Association, Linking Road, Bandra West), you can get a natural sugar rush — imagine eating a nimbus cloud that passed over a molasses factory — alongside local, pesticide-free food.

Getting fresh produce in Mumbai has never been a problem; the market often comes to you, via a street cart vendor. But finding organic fruits and vegetables is not as easy. The farmers’ market, apparently the first all-organic market in the city, hopes to change that. Kavita Mukhi, founder of Conscious Food (consciousfood.com), is the brains behind the operation, which will run every Sunday from 9 a.m. to 4 p.m. “The goal is to get the whole community, particularly younger generations, thinking about a different way to live,” Ms. Mukhi said. “It’s not about being a fanatic, but helping the earth.”

During the market’s inaugural Sunday in late March, the smell of cilantro hung in the air, and bags of purple onions awaited a willing buyer. Sanjay Pawar, a farmer and member of a cooperative in nearby Nashik, smiled in front of a dwindling crate of plump, striated eggplants. (Farmers can get 10 to 20 percent more for their products by growing organic, according to Mr. Pawar.)

AngelFood, a health food delivery service in Mumbai (angelfoodmumbai@gmail.com), occupied one of two coveted cafe stalls (a booth with a few chairs and tables), and did a brisk business selling vegan quiche and milkshakes, bottled garlic-chive dressing and pita sandwiches. At the macrobiotic cafe, health drinks like “The Alkalizer,” made with coconut milk, cucumber and cilantro, sold out.

Live music, film screenings and organic products like paint, paper, furniture and cosmetics will also be featured.

Big Brother South Asia

I had a business call with a colleague in Karachi, Pakistan last night. The call lasted 15 minutes. We spoke about organizations that are working on infrastructure issues in urban areas. Simple.

This morning I received a text message from my phone company: "You have made a call to ISD CODE 0092 Code.We urge you to exercise caution when calling unknown number and sharing personal details as it can be misused."

Pakistan's country code is 92. I'm curious as to whether this message is government-mandated. Is this for my protection? Or is this to prevent would be terrorists from using Airtel's cell network for its dealings?

Odd, no?