[p2p-research] director of the Legatum Center for Development and Entrepreneurship at MIT

Mon Jul 5 04:03:27 CEST 2010

hi sam, if you identify his email or physical address, I'd like to co-write
that letter with you ...

please note I'm off for five days and may be off the grid most of the time
..

On Mon, Jul 5, 2010 at 3:07 AM, Samuel Rose <samuel.rose at gmail.com> wrote:

> Yes, would be glad to.
>
>
>
> On Sun, Jul 4, 2010 at 1:25 AM, Michel Bauwens <michelsub2004 at gmail.com>wrote:
>
>> Dear Sam,
>>
>> I think that *Iqbal Quadir should know about our work, both FF-P2P-F, and
>> could perhaps use our work as potential for funding opportunities,*
>> **
>> *could you contact him on our joint behalf?*
>> **
>> *he's at MIT,*
>> **
>> *Michel*
>>
>>
>>
>>
>> The link between poverty, (de)centralisation and (non)connectivity<http://blog.p2pfoundation.net/?p=9662>
>> [image: photo of Michel Bauwens]
>> Michel Bauwens
>> 9th July 2010
>>
>>  A talk by *Iqbal Quadir* , “Technology Empowers the Poorest”, summarized<http://longnow.org/seminars/02008/may/21/technology-empowers-the-poorest/>by Kevin Kelly:
>>
>> “In Quadir’s view, it’s not that centralization per se creates poverty.
>> Poverty is the natural beginning state of all societies, east or west.
>> Rather, *decentralization is the engine which removes poverty and brings
>> wealth. To the degree that infrastructure, education, and trade can be
>> decentralized, wealth will rise in proportion. To the degree that
>> infrastructure, education and trade are centralized, poverty will remain*
>> .
>>
>> Whereas many of us in the west, particularly the digital west, agree with
>> this intuitively, we act contrary to this observation when we give
>> large-scale aid to poor countries. As Quadir’s colleague William Easterly
>> argues in his book The Elusive Quest for Growth, the billions and billions
>> of dollars spent on aid for developing countries has not only *not* helped,
>> it has set them back decades. Aid, as we know it, kills development. This
>> harm occurs because almost all previous aid has funneled through a central
>> government or semi-governmental organizations and that official route
>> tightens centrality. Even if the governments were saintly, and they are
>> definitely not, the scale of money flowing through these centralizing nodes
>> prohibits the distribution of resources, infrastructure, trade, and
>> education. The more aid that arrives, the less development can actually
>> happen.
>>
>> *Technology is the escape from this quandary. Quadir came to see that
>> “technologies that connect” could liberate productivity. He matched his
>> experience in Bangladesh as a 13-year-old boy having to walk 10 kilometers
>> to get medicine, only to find out the medicine man he sought was not home,
>> and then walking back empty handed, having wasted a day — all because there
>> was no connection between his home and the pharmacist. Many years later in
>> New York he wasted a day at work when there was no electricity to run phones
>> or computers. Productivity required connectivity. If connectivity could be
>> decentralized then it would lead to increased wealth.*
>>
>> Quadir settled on the cell phone as a way to decentralized connectivity.
>> In the early 1990s cell phones were big, dumb, and very expensive. Calls
>> were $3 per minute. Only the rich could afford them. But he wanted the
>> poorest people in the world to get them. How would this be possible?
>>
>> First, he believed in Moore’s Law: that the phones would decrease in price
>> and increase in power every year. That seemed inevitable to him. He said he
>> could see “micro-chips marching toward the poor.” He was right about that.
>> Second, he piggybacked his hopes on a remarkable invention of another
>> Bangladeshi, Mohammad Yunus, who developed micro-financing (and later won a
>> Nobel prize for this invention). In Yunus’ scheme a woman who owned
>> virtually nothing could get a loan of $200 to purchase a cow. She would then
>> sell the surplus milk of the cow to pay back the loan, earn both milk and an
>> income for her family, and maybe buy another cow. Ordinarily, no bank would
>> have lent her this trifling amount because she had no collateral, no
>> education, and the costs of overseeing such a small loan with small gains,
>> would have been prohibitive. Grameen Bank, Yunus’ creation, discovered that
>> these illiterate peasants were actually more likely to repay these small
>> loans, and were very happy to pay good interest rates, and so that in
>> aggregate, these micro-loans were more profitable than loaning to large
>> industrial players.
>>
>> Quadir proceeded to ask, what if the women could rent a cell phone instead
>> of a cow? Grameen Bank could make a micro-loan to the poor for the purchase
>> a cell phone, which they then could sell/rent minutes to the rest of the
>> village. The enterprising phone-renter would benefit and more importantly,
>> the entire village would benefit from the connectivity. It did not really
>> matter if the minutes were expensive, because when you have no connection,
>> you are willing to pay dearly for it. Quadir started off his GrameenPhone
>> with 5 cell towers, and eventually GrameenPhone erected 5,000 towers.
>>
>> In 1993 when Quadir began, Bangladesh had one of the lowest penetrations
>> of telephones on the planet — only one phone for every 500 people.
>> GrameenPhone project unleashed 25 million phones. Today there are 100 times
>> as many phones, or one per 5 people. Just as Quadir had envisioned, this
>> decentralized connectivity has increased productivity. Without connectivity
>> people waste a lot more time on economic errands. With cell connectivity
>> farmers maximize their profits by getting real-time prices at distant
>> markets; shepherds can call a vet, or order medicine. One study concluded
>> that the total lifetime cost of an additional phone (including the cell
>> tower and switching gear) was about $2,000, but that each phone enabled
>> $50,000 of increased productivity. And surprisingly, the poorer the country
>> to begin with, the greater the increase in wealth from connectivity.
>>
>> A lot of myths cloud the good intentions of developmental aid, Quadir
>> says. Myths such as: poor countries have no resources, or that the poor
>> don’t have discretionary spending, or aren’t concerned with brands,or aren’t
>> good credit risks, and so on. All these assumptions have been proven untrue
>> over and over again, and especially so with GrameenPhone. The chief myth it
>> dispelled was that government needs to subsidize technological development,
>> when in fact there is good money to be made enabling the productivity of the
>> poor. As Quadir says, “You don’t make money on the poor, but with the poor.”
>> At dinner I asked Iqbal what he would have done differently with
>> GrameenPhone. He replied, “Kept more shares.”
>>
>> Quadir is now searching for other technologies to decentralize, and
>> thereby become a tool to erase poverty. He is director of the Legatum Center
>> for Development and Entrepreneurship at MIT, which has been funded with $50
>> million. He is investigating whether energy can also be dethroned from its
>> current mode of extremely centralized generation. Only 10% of the
>> electricity produced at its source remains at the end of the wires as they
>> reach homes and factories. Perhaps there are ways to decentralize its
>> generation, which would trigger connections at the local level, and in his
>> scheme, elevate wealth and democracy. If it worked, decentralized energy
>> might also work in rich countries, increasing wealth and democracy in our
>> part of the world as well.”
>>
>>
>> --
>> P2P Foundation: http://p2pfoundation.net  - http://blog.p2pfoundation.net
>>
>> Connect: http://p2pfoundation.ning.com; Discuss:
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>>
>> Updates: http://del.icio.us/mbauwens; http://friendfeed.com/mbauwens;
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>>
>> Think tank: http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>
>>
>>
>>
>>
>
>
> --
> --
> Sam Rose
> Future Forward Institute and Forward Foundation
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> ambition." - Carl Sagan
>

-- 
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