Saturday, January 6, 2018

Weekend reading links

1. Spurred by emerging Asia's voracious infrastructure building projects, sand prices are rising and the commodity itself is increasingly becoming scarce. SCMP has a nice article on sand scarcity,
According to Price Waterhouse Coopers, Asia is slated to represent nearly 60 per cent of global infrastructure spending by 2025, mainly driven by China’s growth. In 2019 alone, Asia will need almost 11 million tonnes of sand, of which almost 8 million will be used in solely China, Freedonia Group says.
Aggressive sand mining has led to the disappearance of wholesale islands, and devastated marine eco-systems and river beds. Many countries have banned exports of sand.

Also as prices rise, high-silt and high moisture content sand with reduced binding strength will become available, thereby eroding the quality of construction.

2. Fascinating essay in New Yorker about the efforts of China to assume global political leadership, efforts which have gathered pace amidst the vacuum created by Trump's abdications.
In recent years, it has taken steps to accrue national power on a scale that no country has attempted since the Cold War, by increasing its investments in the types of assets that established American authority in the previous century: foreign aid, overseas security, foreign influence, and the most advanced new technologies, such as artificial intelligence. It has become one of the leading contributors to the U.N.’s budget and to its peacekeeping force, and it has joined talks to address global problems such as terrorism, piracy, and nuclear proliferation.
And China has embarked on history’s most expensive foreign infrastructure plan. Under the Belt and Road Initiative, it is building bridges, railways, and ports in Asia, Africa, and beyond. If the initiative’s cost reaches a trillion dollars, as predicted, it will be more than seven times that of the Marshall Plan, which the U.S. launched in 1947, spending a hundred and thirty billion, in today’s dollars, on rebuilding postwar Europe. China is also seizing immediate opportunities presented by Trump. Days before the T.P.P. withdrawal, President Xi Jinping spoke at the World Economic Forum, in Davos, Switzerland, a first for a paramount Chinese leader. Xi reiterated his support for the Paris climate deal and compared protectionism to “locking oneself in a dark room."... China is negotiating with at least sixteen countries to form the Regional Comprehensive Economic Partnership, a free-trade zone that excludes the United States, which it proposed in 2012 as a response to the T.P.P. If the deal is signed next year, as projected, it will create the world’s largest trade bloc, by population.
The article quotes, Daniel Russel, until March 2017, the Assistant Secretary of State for East Asian and Pacific Affairs, who has this portrait of what China thinks about Trump,
“The Chinese felt like they had Trump’s number. Yes, there is this random, unpredictable Ouija-board quality to him that worries them, and they have to brace for some problems, but, fundamentally, what they said was ‘He’s a paper tiger.’ Because he hasn’t delivered on any of his threats. There’s no wall on Mexico. There’s no repeal of health care. He can’t get the Congress to back him up. He’s under investigation.”
This hospitality as a strategy to weaken resolve is fascinating,
In the mid-nineteen-eighties, the C.I.A. commissioned a China scholar named Richard Solomon to write a handbook for American leaders, “Chinese Political Negotiating Behavior.” Solomon, whose study was later declassified, noted that some of China’s most effective techniques were best described in the nineteenth century, when a Manchu prince named Qiying recorded his preferred approach. “Barbarians,” Qiying noted, respond well to “receptions and entertainment, after which they have had a feeling of appreciation.” Solomon warned that modern Chinese leaders “use the trappings of imperial China” to “impress foreign officials with their grandeur and seriousness of purpose.” Solomon advised, “Resist the flattery of being an ‘old friend’ or the sentimentality that Chinese hospitality readily evokes.” (Henry Kissinger, he wrote, once gushed to his hosts, “After a dinner of Peking duck I’ll agree to anything.”)
The Chinese duly exercised this during Trump's November state visit to China. And it worked to perfection,
Upon Trump’s arrival, they took a sunset tour of the Forbidden City. They drank tea, watched an opera performance at the Pavilion of Pleasant Sounds, and admired an antique gold urn. The next morning, at the Great Hall of the People, Trump was greeted by an even more lavish ceremony, with Chinese military bands, the firing of cannons, and throngs of schoolchildren, who waved colored pompoms and yelled, in Chinese, “Uncle Trump!” Government censors struck down critical comments about Trump on social media. 
Trump and Xi met for several hours and then appeared before the press. “The hosting of the military parade this morning was magnificent,” Trump said, and he praised Xi as a “highly respected and powerful representative of his people.” He mentioned the need to coƶperate with regard to North Korea, and to fix an “unfair” trade relationship, but he said nothing about intellectual property or market access. “I don’t blame China,” Trump said. “Who can blame a country for being able to take advantage of another country for the benefit of its citizens?” There were gasps from business leaders and journalists. “I give China great credit.” Some Chinese members of the audience cheered. Xi and Trump took no questions from the press.
3. The alleged leakage of Aadhaar data is disturbing. This from the Quint should set off alarm bells,
Let’s face it, even relatively unimportant systems have access control via 2-stage or 3-stage processes, OTPs, biometric checks and the like – but the world’s largest biometric database allows its admin rights to be freely exchanged across any email address in the world. Could the UIDAI not have added a security check, such as a biometric authentication, for any unknown person who tries to log in from these freely exchangeable logins?
4. There is something about the Chinese government which gets them cracking down on complex challenges with meaningful intent. It helps that it is not handicapped by the democratic discount. Take the case of traffic congestion. All the largest cities have policies that cap private vehicle increases through license plate auctions etc to complement massive public transit investments. 

The latest is the no-holds-barred central crackdown on polluting industrial units which has resulted in the closure of tens of thousands of companies. The government has detailed targets for cleaning up air, water, and soil; an environmental protection tax; the world's largest emission trading system; and empowerment of the Central Environment Ministry. This is interesting,
Smokestack industries are based in a small number of provinces such as Shandong in the east and Shanxi in the north. So long as enforcement was in local hands, officials had little incentive to act. None wanted to throttle companies in their own backyard. But from a national perspective, the economic trade-offs of greener growth ought to be easier to stomach. China will both pay a price and reap dividends.
Not something that may be possible in federal democracies like India.  

5. Economist has a feature on Pakistan's experiments with PPPs in education. Since April 2016, 4300 government schools have been handed over to private providers in Punjab, where the Chief Minister no less is personally driving the initiative. 

The success of the charity The Citizen's Foundation is very impressive,
The charity runs perhaps the largest network of independently run schools in the world, educating 204,000 pupils at not-for-profit schools. It is also Pakistan’s largest single employer of women outside the public sector; in an effort to make girls feel safer in class, all of TCF’s 12,000 teachers are female... In 2016 TCF opened its first “college” for 17- and 18-year-olds at this campus in an attempt to keep smart poor pupils in school longer. Every day it buses 400 college pupils in from around the city. It builds schools using a standard template, typically raising about $250,000 for each of them from donors; it recruits and trains teachers; and it writes its own curriculums. Since 2015 TCF has taken over the running of more than 250 government schools in Punjab, Sindh and Khyber Pakhtunkhwa. It gets a subsidy of around 715 rupees per month per child, which it tops up with donations. So far it has increased average enrolment at schools from 47 to 101 pupils, and test results have improved.
And the institutional arrangement to oversee PPPs is impressive,
The Punjab Education Foundation (PEF), another quasi-independent body, oversees some of the largest school-privatisation and school-voucher programmes in the world. It has a seat with the ministers and administrators at Mr Sharif’s quarterly meetings. The Punjab government no longer opens new schools; all growth is via these privately operated schools. Schools overseen by PEF now teach more than 3m children (an additional 11m or so remain in ordinary government-run schools).
I do not believe that PPPs can be driver to significantly improve learning outcomes in countries like Pakistan. PPPs may move the system up to a slightly better learning outcomes equilibrium, but hardly enough to be of any real significance. That can happen only by fixing public schools. 

As the PPPs scale, as with the case of PPPs across sectors, the challenge of monitoring an inherently difficult to monitor indicator (and also easy to game) like student learning outcome will surface. The article itself talks about the gaming of scores afoot. In extremely weak state capacity systems, such contracting and maintaining the quality of contracts is most certain to overwhelm the Punjab Government.

As to lessons for India, this is the relevant takeaway,
Even if there is bluster aplenty and a long way to go, though, the fact that politicians are burnishing their reputations through public services, rather than patronage alone, is a step forward. And if there is a little Punjabi hype to go with the Punjabi speed, then that may be a price worth paying.
When will electoral politics in Indian states gravitate towards demanding good quality of service delivery in public hospitals and schools? Any Chief Ministers to take this?

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