A Blog About Nothing » Poverty

The greatest economist of all times…

The Homo Economicus — Mon, 23 Nov 2009 19:49:04 +0000

Sometimes, even if you are a great economist, you might want to take some advice:

http://aidwatchers.com/2009/11/african-leaders-advise-bono-on-reform-of-u2/

This Week in Pictures

The Homo Economicus — Mon, 15 Jun 2009 17:53:16 +0000

In the past two days I’ve been traveling around Chennai and some villages nearby, as part of a field trip organized by the Center for Micro Finance. Here are some pictures of the places I’ve visited so far:

A Street in Chennai

Poster in the Training Center of a Micro Finance Institution

Coconut Seller

Creativity

Children in a Poor Village near Chennai

Businesswoman in her Bicycle Repairing Shop

What do you want to be when you grow up?

The Homo Economicus — Sat, 13 Jun 2009 18:58:40 +0000

This was the question I asked to two girls today in the field trips I made near Chennai to poor villages. The first one is the granddaughter of the owner of a bycile repair shop that was created with a microcredit loan. The cute girl told me that she wants to become a Doctor. Her grandmother has established a very nice business located in a transited street. For 100 Ruppies (less than USD $3) she will check your bike and give you a diagnosis, and then, depending on what is the fail, she will charge you accordingly.

In the next couple of days I will write some basic conclusions about Microfinance that I’ve been extracting from my intense approach to this subject during the recent days.

I asked the same question to another girl in a Self Help Group (SHG) meeting. Very surprisingly she also told me that she wants to become a Doctor (why does nobody want to become an economist?). This group was learning with the help of the NGO Hand In Hand about basic financial concepts such as savings and managing money. The little girl was the daughter of one of the approximately 20 women that were present in the meeting. The little girl was enrolled in school, and she even spoken to us in English, which is the official language of th education system in India. For people that didn’t go to school in the state of Tamil Nadu, their mother toungue is Tamil.

The economic reforms of openness and liberalization made by Dr. Singh, back then the Minister of Finance of the (Congress Party) Government in 1991 (nowadays the prime minister of India) apparently are being felt even in very poor places. The astounding economic growth of India during the last two decades cannot be unnoticed. I wonder if little girls in the India of the swadeshi (self-reliance) – with import substitutions and limited capital markets – would ever think of being a Doctor. I must say that their answer – which I beleive they will be able to achieve – was the most interesting and best learning of the day.

“Sir, you’ve been upgraded to Business Class”

The Homo Economicus — Sat, 06 Jun 2009 11:47:01 +0000

These are the nicest words I’ve heard today.

I’m doing transit in London, about to board my plane to Chennai, India. I was given the good news in Heathrow Airport (after my flight from Tel Aviv). But, why? Well, it might be because I won a lottery because the plane is empty, or as a good gesture to me for leaving the western world for two months. Indeed, I believe that what I’ll see in India will be extremely different, in all senses, than the lifestyles of the people in the west. But that is one of the main reasons of my trip. I think that as an economist that wants to work in development, getting to know closely developing countries such as India with such high rates of poverty incidence and all the other complexities it presents, is a must.

I’ll be for the first 10 days or so in Chennai, attending a course in Micro Finance given by the Center for Micro Finance (CMF), the organization which I’ll be working for. I don’t know much about Chennai, but from what I read in the Lonely Planet guide for India, it said something like: “There is really not much to do in Chennai. It is very hot, and there are not numerous tourists attractions”. Which in other words I think it means: “Just go if you don’t have anything else to do”. However, since I do have something to do in Chennai, I don’t feel bad. Actually I don’t think I’m looking in particular for tourists attractions, but to see and learn about real India.

Then, I’ll be heading south to Thanjavur. A small city of 250 thousand inhabitants. This, in terms of India’s population, is VERY small. I haven’t had enough time to read a lot about Thanjavur. I know it is VERY hot, and it is small. I also know that there are a few temples which are considered important tourists attractions, and that are worth seeing. In any case, I won’t be only working in Thanjavur itself, but also going to the field in villages aroudn the town, so I’m not too worried (I must admit that just a little). In any case, I think it will be a great summer. I brought with me about 10 books to read, since I guess that it is one of the few activities I will be able to do in my spare time, and – aside from that – I couldn’t read too much during this past year, so it will be an opportunity to catch up with books that have been in my bookshelf for quite some time.

One of the books I’m reading, recommended by my good friend Soham, is “In Spite of the Gods: The Rise of Modern India” by Edward Luce. It is a fascinating book. I really recommend it for all those who want a compact and well written “clear picture” of the country.

For now, I have a plane to catch, so you’ll be hearing from me pretty soon!

Poverty Traps…

The Homo Economicus — Sun, 05 Oct 2008 22:46:00 +0000

Economists often refer to an equilibrium called ‘Poverty Trap’ – which is an scenario in which people experience poverty because of facts that are out of their control – thus, staying poor forever.

Without getting too much into the economics, I wanted to share with you an ‘alternative’ explanation of this phenomenon, which I saw in ‘Mafalda‘ – a very popular Argentinian comic strip during the sixties and seventies.

Susanita, the character at the left, says:
-”C’mon! Don’t you understand that they are poor because they want to? Use your brain… use your brain!”

Mafalda replies:
-”Ohh, my god!”

Then Susanita talks again:
- “Think about the hovels they live in, the bad and ugly furniture they have, the clothes they use! Don’t you understand that on top of earning very little money, they still have the bad habit of investing it in bad quality products! They will stay poor forever!”

Then Mafalda leaves, and Susanita thinks:
-”There is nothing to do with people who don’t think enough…”

PS: Just for the record, the purpose is only to understand what a poverty trap is… Not to learn about policy making from Susanita…