Friday, May 27, 2011

India: The Numbers

I totally stole this idea from my friends Ted and Sarah, who have the best travel blog I have ever seen (LINK).  Below are some of the numbers from our stay in India.  India was excellent, action-packed, and provided us with a newfound perspective on South Asia.  To sum up India in a couple points: 1.) You cannot generalize India, it’s too diverse 2.) India is full of both positive and negative extremes 3.) Bring your patience or just stay home.

Time spent in India = 3 months
Cities/Towns/Villages Visited = 19
Nights slept in a hospital = 2
Illnesses defeated = 4
Money raised for Shanti Bhavan with YOUR help = $11,600 (as of May)
Laptops broken and replaced = 1
Flights taken = 7
Hours spent in a hired car (excluding taxi) = 34
Hours spent on a long distance bus = 19
Hours spent on a long distance train = 51 (4 journeys)
Longest taxi ride = 3 hours to go 30 km in Mumbai
Motorcycles hit = 1
Most expensive drink = $18 – Taj West End Bangalore
Cheapest drink = $1.00 – Bar in Hosur
Cheapest hotel = $30 – Mysore
Nights slept at friend’s house = 12 (thanks to Jay Lurie, Sumit and Linda Dutta)
Business meetings attended = 26
Michigan Wolverines met = 9 (Go BLUE!)
Tigers seen in the wild = 3
Elephants ridden = 2
Meals that contained beef = 0
Days rained on the mainland = 2 out of 87
Opportunities in India = Countless
We are planning to do a Best of Pics, Best of Panoramics, and Best of Videos as soon as we get them all sorted out…Stay tuned!

Thursday, March 17, 2011

Bank of America and India's Multi-Billionaire Mobster

Today I woke up to the following headline and did a double take: BofA Board Adds Billionaire Ambani, Boosting Access to India.”  Mukesh Ambani?  THE Mukesh-corrupt-billionaire-who-barely-escaped-jail-on-insider-trading-charges-Ambani?  Wow.  BofA has really stretched on this one.

Mukesh's crib

Most Americans do not know the back story on Mukesh Ambani.  His family is known as the most powerful in India.  The press loves to "ooh and aah" about his recently completed Mumbai home, worth an estimated $1 billion, boasting 27 stories, equipped with 3 helipads (1 is never enough) and a parking garage for 160 vehicles.  His family business, a super-conglomerate empire called Reliance, was started by Ambani’s father in the 1960’s and covers the gamut as far industries go – biotechnology, infrastructure, solar power, financial services, retail, communications, blah blah blah. 
The dark side of the Ambani legacy is littered with government bribes, black-money malfeasance, and a family feud that combines the tomfoolery of the Kardashians, the Sheens, the Spellings, and the Hiltons altogether (talk about a reality show).  If you seek more on the topic of "Mukesh Ambani corruption" I am happy to google that for you (LINK).  In Anand Giridharas' recently released book entitled "India Calling," he writes that friends of Ambani think of him as a "nonviolent Don Corleone" who trades in the currency of "tip-offs and information".  Sounds like a perfect fit for the BofA Board of Directors, no?  Seriously, who makes these decisions?   
When I saw the headline, I immediately walked over to a handful of business students at Shanti Bhavan, to get “the Indian youth” perspective.  I prompted them with the following question:  what would you say if the biggest bank in the United States invited Mukesh Ambani to join their coveted Board of Directors?”  The response was...immediate laughter. One child yelled out “he is a criminal!”  Another chimed in “he paid hundreds of crore (1 crore = 10 million rupees = $220,000) to stay out of jail.”  They were shocked to hear that Bank of America (a firm I have shared many past experiences about) would even consider such a notion.
What ever happened to background checks and due diligence?  I guess when BofA is competing to finance those high margin Indian government infrastructure projects they will pull out all the stops.

Wednesday, February 16, 2011

Closing the Wealth Gap: A Lesson from India

Sunrise in Southern India

India is a fascinating place.  I think it is really difficult to understand this country without seeing it for yourself and experiencing the culture in the first person.  Though I have only been on the ground for a short period, I have witnessed enough to convince myself that I made the right decision by coming here.  Before arriving, I heard varied opinions:  "India is beautiful with a spiritual wonder about it;" "India is home to the poorest people in the's a sh*t hole and you will go once and never go back;" "India has an entrepreneurial quality about it...there is so much totally works for me;" "First suggestion about India:  DON'T GO (said to me by an Indian-American living in NYC)."  I actually have a bet with a naysayer friend in Hong Kong about whether I will return to this country after my first visit.  Nevertheless, I believe I will be back many times and he will lose the bet.

Rural village in Tamil Nadu
Some people believe India has already drowned in its own squalor and despair and will never have a meaningful voice on the world stage. They feel India's bureaucracy will further induce a snail-like climb out of poverty and the country will lag behind the widespread advancement and burgeoning growth that the rest of the emerging world is experiencing (particularly that of its neighbor China).  I am beginning to take a step back from this argument.  India's bureaucracy and dated ways of conducting business may prove to be its saving grace. Pardon

To put it into perspective, India's economy (in terms of GDP) is a tad smaller than Canada's, and its GDP per capita is about the same as Iraq's.  It is a country with a population that is 4 times that of the United States in a space that is one 1/3rd  the size.  In today's world where economic growth is a necessity fueled by lax monetary policy and irresponsible credit expansion, India has marched to the beat of a different drum.  Their Reserve Bank is far more strict and less accommodating.  Their value system and work ethic is strong and they do not lean solely on exports the way the rest of Asia does.  India has real domestic demand (something quite foreign to Americans)!  They also have their own music (ranging from the ancient period of the Mughals to the modern age of A.R. Rahman), movie stars (Amitabh Bachchan is a combination of George Clooney and Robert De Niro…a legend here), sports teams and you can be sure that they will not be airing their own version of MTV's "Teen Mom" anytime soon.

So what is the point?  Despite some of the positives I mentioned above, India is the world's poster child for economic inequity and social inequality.  Some estimates state that 40% of the population falls below the poverty line (which is an income of about $1.25/day).  I recently spent some time interacting with Dr. Abraham George about the dynamics of this country and it led us to the impetus behind him founding Shanti Bhavan, a school located in Tamil Nadu, India.  The school aims to educate the children of India who come from the most dire conditions (these children come from the 'untouchable' caste, the lowest class of society that is highly discriminated against).  His belief, which has become mine too after having spent time at his school teaching the kids, is that in order to combat the widening gap between the wealthiest whales and the poorest paupers, one must introduce quality education to those who need it most...and this is precisely what he is doing.

This school is a model that can be applied not only in India, but anywhere in the world where the concept of "the rich get richer" is becoming a tiring reality.  Sound familiar?  Tunisia, Egypt, Iran, Albania, Yemen, Bahrain, Jordan and eventually the United States, can all afford to take a critical look at education for the poor (and even those who are slightly above the poverty line).  These countries want change right?  The voice of change can be found within EDUCATION.   
6:30 am: I come to class and find the 12th grade like this
Dr. George’s attempt to strike at poverty is worth exploring on a deeper level as there is something very unique about it.  He begins with the poorest youths.  The children are selected at the age of 4, based on their level of poverty and their intelligence quotient.  They receive an education at Shanti Bhavan absolutely free of charge.  There are 200 children here between ages 4 and 18 who are willingly participating in an intensive curriculum that would make most American college students blush.  All the kids go to school for 6 days a week and the older students frequently attend classes from 6:30 am until midnight.  The children are humble and respectful and almost all of them have career goals. They don't bully, they are well-mannered, extremely cultured and are knowledgeable about current world events (their teachers come from all over the globe).

Their fluency in English and social etiquette are head and shoulders above the children in the villages where they come from, making them celebrity equivalents back home.  If their performance lacks and they do not show improved effort, the kids can be asked to leave the school.  This is not a good outcome, of course,  and it happens to very few of them. These kids do not have any other viable options - receiving an education at Shanti Bhavan has saved their lives.  Many of them would have never been sent to school by their families who are trapped under the heavy thumb of destitution.  Without this opportunity, many of the kids would have been forced into hard labor at a young age or even worse, been victims of physical abuse.   Shanti Bhavan pulled them from the grasps of enduring ignorance and gave them the chance to live their lives another way - devoid of poverty, full of hope, and one step nearer to closing the gap.

For more on how you can get involved in Shanti Bhavan (they need volunteers to come out and teach everything from accounting to music) please visit their website (HERE) and read the personal statements of some of their upcoming graduating class (HERE).  If you would be willing to make a donation, you can find the orange DONATE button on the left hand side of this blog.  As you can see, we have had a number of donations so far and we appreciate your support...these kids appreciate it even more.  

If education in Africa is also of interest, check out our friends' organization called PROJECT A.B.L.E, dedicated to promoting literacy for African youth.

(This posting has been edited by Shilpa Raj - 12th grade student at Shanti Bhavan and future author and journalist...any mistakes are Justin Golden's fault :)

Tuesday, January 18, 2011

A Trillion in Tuition

With an overwhelming number of topics for discussion these days, I find myself running into information overload on what to write about (a form of writer's block= too much out there!).  I have a new simplistic way of organizing whether an issue is newsworthy:  pay attention when the number associated with the issue has a "T" next to it..."T" like TRILLION. In 2002, I worked for Deutsche Bank and I remember we celebrated being the first European bank to have assets over $1 Trillion Euros. Back then it was a huge deal. 

Today, it is the prioritization "line in the sand" for politicians, economists, and journalists trying to deal with issues that matter. Numbers that have a "T" next to them include:  bailouts, Federal Reserve money printing, US National Debt owned by foreigners, pension shortfalls, municipal liabilities, household debt, etc.  The item I would like to discuss today, however, is college debt.  This number, according to Alan Collinge from, is nearing the $1 Trillion mark.  While Americans have tightened their belts, reduced some frivolous spending, and gone back to school to help their candidacy for employment, college debt has surpassed credit card debt! No small feat!  

I have seen tons of articles about the topic of higher education recently and wrote a little note about it a few months ago (Creative Economy).  There are a couple things I would like to share about why people should be paying attention.  Why is the government pushing us so hard to go to college and offering us financing at terms that appear too good to be true?  Well, it is one of the ways to get people under the proverbial "thumb" of Uncle Sam. These loans do not go away, the interest rates will go up, and the government is behind 90% of them.  "Take out a loan, go back to our collective brain trust get smarter...lets show countries around the world that our education standards are the highest...Asians go to school 8 days a week, we have to step it up!" It seems logical to me.  After the housing bust, the government needs to somewhat modify the American dream.  What is the 2nd most expensive asset we buy, something we are told we cannot live without, and something the government can easily offer to us?  A COLLEGE DEGREE.

The competition is fierce.
No wonder this debt is piling up and the cost of college is rising at its fastest pace ever.  It is a way to balance the debtor-creditor relationship – if the students owe the government a trillion and the government owes China and Japan a trillion…hmmm.  Get the students to owe us more and then our national debts will not look so bad.  Follow me?  Some public universities are seeing double digit increases in tuition each year (LINK).  As you extrapolate those increases you will see why new parents have to start paying attention…TODAY!  Here is a helpful website (College Tuition Calculator) for all of the parents out there who plan on seeing their children go to 4 year universities.  If you want to be spared from doing the work, here is a theoretical scenario of a newborn:

-Current school tuition/room and board annual cost:  $20,000
-Years until college: 17
-Number of years attending the university: 4
-Expected annual tuition increases over the next 17 years:  6%
-Expected annual returns on investment for savings account: 2%


-Monthly savings required today in order to pay this amount once college begins: $939 (based on the 2% savings rate of return) (the math on these numbers)

Add a couple kids to the equation and you can see how this is becomes a monstrous problem quickly.  The sheer notional size of the numbers is staggering; that is not the only shocking part.  I found some other interesting "features" about student loans that I am willing to bet not everyone was aware of.  Student loan debts are precluded from the following protections that apply to traditional consumer debt (mortgage, credit card):

1.)  Bankruptcy protection (you go bankrupt and your student debts are NOT erased)
2.)  The right to refinance (government loans cannot be refinanced though private loans can)
3.)  Fair debt & collection practices (they can garnish disability and call you at odd hours)
4.)  Adherence to usury laws (interest rates have no limit)
5.)  Truth in lending requirements (disclosures can be vague)
6.)  Statutes of limitations (time does not run out on how long they can come after you)

(Source: Default-Student Loan Documentary)

I was surprised to find this was the case for college loans...then I thought about it for a second… then I was not surprised.  Either college will have to become more affordable or we better start saving now.  Either way the government is incentivized to make college more expensive.  You owe them more and they get to tip the terms on the debt in their favor.  At the end of the day, we do not want every kid in America trying to become the next Lebron James. Of course bailing out on college wasn't the worst bet for Henry Ford, Michael Dell, Bill Gates, and Mark Zuckerberg, but they may be the exception.  Is meritocracy and mentorship the answer?  If someone can get the job done without the degree, then they should not be viewed any differently.  For example, I am spending a year traveling, getting my version of a post-graduate degree in global entrepreneurship from the college of “the world.”  Should that not count as legitimate education?