governance, political economy, institutional development and economic regulation

Posts tagged ‘Bill Gates’

Let billionaires manage the global commons

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Photo credit: huffingtonpost.in

Facebook CEO Mark Zuckerberg’s pledge to give away 99 per cent of his shares in the company, assessed at $45 billion, is the most recent in a series of over 138 billionaires who have signed the “giving pledge” to donate 50 per cent of their fortunes to charity. The 500 top billionaires in the Forbes list have a net worth of $4.7 trillion. Donations to charity, in the US alone, amount to over $300 billion every year.

Compare this with the fate of the pledge to stop climate change, proposed at just $100 billion every year from 2020 onwards. The nations of the world are scrapping over who should pay how much. Nothing better illustrates the ascendancy of the “box wallahs” (big business) versus the public bankruptcy of nation states.

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photo credit: http://www.cnbc.com

The leaders of 190 nations of the world and their extensive delegations could have more effectively sought an appoint-ment with the 1,826 billionaires in the Forbes list with a net worth of $7.5 trillion — equal to around 10 per cent of the world’s gross domestic product. With an estimated annual income of around $150 to $200 billion they could potentially make up for the international intransigence in funding the global commons.

Private wealth has always been a metric of success, especially if it is built up within one’s lifetime, if it is legitimate and if some of it is used to do good deeds. Could the talent, which has demonstrated private success, be institutionalised for achieving similar success in global public affairs?

This rhetorical question merits consideration because the governance record of multilateral institutions has been pretty lacklustre, particularly in matters related to promoting the global commons. And time is running out.

Cynics would assert that billionaires are created from unpaid taxes, which they are big enough to avoid paying, unlike common folk. Others may baulk at trusting rich folks with the world’s future — after all many have grown their private wealth at public expense — as is the case with oil, mining and tobacco companies.

Why trust those who don’t walk the talk?

But it sounds somewhat ridiculous that the heads of 196 nations should have more “voice” in managing our future than 138 billionaires who are willing to pledge more money to charity, than all these nations can collectively gather over the next two decades, to protect the global commons.

Big is not beautiful

Have we ballooned the functions of nation states way beyond what they can efficiently do? Is the nation state a “fit for purpose” entity for the new, integrated world order of this century and beyond?

It is conventional to think it necessary to limit the power of the state versus the human rights of citizens — a concept embedded in the principle of the rule of law. It is less conventional to think it necessary to limit the economic functions and fiscal powers of the state. The success of “developmental” states, like China, in sharply reducing poverty and spurring economic growth has bolstered the case for fiscally empowered, intrusive or “nanny” states. The world and India are rediscovering the virtues of public finance-led growth.

This is a sharp departure from the conventional wisdom, which prevailed from the latter half of the 1980s till the 2008 financial crisis, that private investment and management trump public finance options in effectiveness. The 12th Five Year Plan (2012-2017) — incidentally possibly the “last supper” for planning in India — reflected this earlier consensus by relying on private investment for around one half of the plan outlay. The definition of “private investment”, of course, was somewhat disingenuous. Loans taken by a private firm from a publ-ic sector bank were categorised as private investment. Today, such loans, particularly to private infrastructure developers, have turned sour and increase the non-performing assets (NPAs) of publicly owned banks.

Minimum government equals maximum governance

Fiscally muscular, democratic states, with expansive public ambitions, are wasteful and inefficient. Their instinct is to throw money at the problem. This is always the politically safest option though it may not be the most efficient “value for money” alternative. Examples abound. Why is it easier to construct a village school building than to staff it with teachers? Why are public buses in Delhi, bought just five years back during the Commonwealth Games in 2010, increasingly seen on the roads in a breakdown condition? In both cases, a fiscal windfall — a central scheme or a high-prestige project — makes available the capital investment, but there is no link with sustainable revenues for keeping the asset operational over its useful life.

India’s electricity supply industry is another case in point. In the First Five Year Plan, large-scale public investment was the planner’s choice for rapid electrification. More than six decades on, distribution utilities — primarily publicly-owned and managed — have an accumulated loss of $50 billion despite two previous bailouts in 2012 and 2002. Sadly, even on the most easily achieved efficiency metric of transmission and distribution loss, only the private utilities and some public utilities in Maharashtra, Gujarat and West Bengal perform well. In others, between a quarter to one half of the energy input into the grid, never gets billed to customers.

The core developmental function of the government is to regulate by setting standards of performance and by financing the delivery of public goods and services, which the private sector would otherwise have no incentive to supply. In India, unfortunately, our first response is to propose the direct delivery of public goods and services via state-owned enterprises. This in-house option is often preferred as being less time consuming and more controllable. There is also the implicit comfort that no one gets punished for the inefficiency of the public sector. But officers rooting for private sector service delivery face the challenge of having to stand ready to be hauled over the coals for the slightest mishap.

If our concern is jobs and better service delivery, it is only private investment and management which can generate results. Open the gates to the innovative genius of public-spirited billionaires. Why look a gift horse in the mouth?

Adapted from the authors article in the Asian Age December 10, 2015 http://wwv.asianage.com/columnists/let-billionaires-save-world-605

The third public toilet

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Public toilets are an emotive subject. The Gates Foundation has developed one which incinerates the waste using solar power; expectedly an innovative and green solution from the Big B of Silicon Valley. The Japanese have for long unleashed their geekiness on customizing digitally operated toilets to become so threatening that just trying to use one becomes daunting for the technologically challenged. But the king of public toilets, in India, remains Bindeshwari Pathak whose brain child “Sulabh” has, since 1970, provided public toilet comfort to travelers, itinerants, slum dwellers and the homeless; an astounding 15 million every day and growing.   

Expectedly, therefore, whilst striking a blow for equity and protection of minority rights, the Supreme Court directed the government that Transgender (TG) be recognized as a third gender and provided with separate public toilets. A laudable objective in a country, where even the existing two genders and the “specially enabled” often “feel” the absence of a public toilet.

Public toilets are certainly the way to go. Private toilets are awfully costly and wasteful. They generally occupy at least 10% of the carpet area of your house. This is valuable space grossly underused in nuclear families. At current realty rates, private toilets need to rank as a luxury on par with air conditioning. If you can’t afford air conditioning you probably should not be investing in a private toilet.

But much depends on the availability and quality of public options. Many public services do not have toilets segregated by gender; think airplanes or railway carriages or even small restaurants. It was only in 1739 that gender based toilet segregation became available in French restaurants.   

The notion of separate public toilets for men and women is related to three cultural traits which vary across the world. First is the “prudish” trait which requires that physical contact between men and women be minimized, just as volatile chemicals are stored separately in laboratories, to avoid mishaps and misadventures from their inadvertent mixing. So separate queues for women in banks, separate buses, separate rail compartments, separate taxis and separate toilets.

Second, is the need for comfort and absence from sexual stress that flows from being with the same gender. After all one is at ones most vulnerable in the toilet and the successful completion of the task at hand requires one to be at ease and relaxed. So there is validity in the assumption that separate toilets for men and women are both more efficient and effective.

Third, is the need for assuring physical safety, especially of women.  A public toilet, by its very character, is shielded from public gaze. In addition, if it is unlit or located in isolated areas, as they often are, they become fertile ground for sexual assault and intimidation. Hence the need for separate toilets.

It is probably in this context that the SC directed a third public toilet for the third gender. The issue that arises is should toilets be segregated by gender (a physical attribute) or sexuality (a mental attribute).

Gay or Lesbian persons would probably choose to use the toilet of their sexuality rather than that of their gender on the grounds of prudishness, lack of sexual stress and safety. Unexceptional, straight people of either gender would probably agree with them on their choice. They probably feel the sexual tension if they are to share a toilet with a gay/lesbian person who only has a common gender with them but a different sexuality.

The key problem with using sexuality to determine which of the three public toilets to access, is that it is not discernible at “face value”. Gender being a physical characteristic is easier to spot but still needs physical examination. Also there is the issue of Bisexual persons who probably deserve a special toilet of their own.

The way to solve the gender/sexuality based toilet access conundrum is to use a proxy. This should be the way you are dressed. Irrespective of gender or sexuality if you dress as a woman, you should have access to the women’s toilet and vice versa for men. Transgenders could also be conveniently accommodated using this metric.

Of course this still does not solve the problem of the closet gay/lesbian persons who hide their sexual orientation by dessing according to their gender, because the law in India criminalises their sexual practices and social norms still discriminate against them. But that is changing. The Supreme Court is considering a curative petition which will likely overturn its recent regressive decision which passed the baton to Parliament to decriminalize “sex against the order of nature”.

Once this happens, the problem of the third public toilet shall have been solved. Everyone shall have access to the public toilet one dressed for, exactly as it is for entry into exclusive clubs and bars. You are only allowed in if you have dressed appropriately.

It is in the government’s interest also to fast forward legislation on decriminalizing gay/lesbian sexual practices and recognizing same sex marriages. Otherwise it faces the uphill challenge of adding a third public toilet to the non-existent two.

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