Chance: Get Out of… Debt

Stardate: 11024.6

The last few days made me feel like I was in CERN’s LHC, racing at near light speeds, meeting challenges head-on, smashing them to bits in soundless but resplendent encounters!  The rush of solving problems is addictive but the pace can sometimes take a toll.  So, it appears that in the world of colliders, the fast and furious conjure up loaves of bread or bird feathers simply to take a break from it all!  In the world of polymath’s, recreational cooking can help slow the pace some; aah the scent of pesto and garlic in hot olive oil!!  Had a great time whipping up (and consuming) some spicy pesto shrimp!!!  (Note: Ordinarily Henna doesn’t care for shrimp but this stuff is more than amenable to her – I think she just likes the idea of a man cooking for her while she is on conference calls… She takes this Women’s Development thing very seriously ;-D)

One of the many rabbits – umm particles – that I have been chasing thanks to the considerable motivational drive from my esteemed colleague HS Shajahan Merchant is the Debt Particle.  From an AKEPB perspective, our discussions were centered around leveraging Saleemah Ahmed‘s team to lay out, in simple terms, some strategies that both early career professionals (read: college debt, for which you may want to also investigate income based repayment) and mid-career professionals could follow to mitigate debt service burdens in the short-term and the overall size of personal debt that they may be carrying in the long-run.  Hopefully, by the end of this month, we should have a little card that provides quick pointers on getting out of (or at least reducing the burden of) undesired debt.  Over the last few months, Saleemah’s team has been hard at work helping folks with debt management, so it made sense to ask them to create a quick checklist – a “Get Out of Debt” (as in Monopoly) card.

Now, we don’t need a collider to tell us that there are both Debt Particles and Anti-Particles.  Debt can be good; the kind that fuels growth.  Without instruments such as student loans, home loans, business loans, bonds, and so forth, our socio-economic engine would slow down to an excruciating crawl.  In fact, it could lead to social injustices such as the imprisonment of the marginalized in deep wells of poverty and despair with not even a spark of hope for a way out.  On the other hand, debt can also be bad; the kind that [shaky or illusory] growth fuels.  Ninja loans anyone?

Carrying the particle analogy further, debt can be said to have mass, charge, and spin.  Mass is obvious, the amount of debt carried.  Charge, the debt service of course!  Now for spin.  This one requires a little twist to grasp.  The spin is essentially the credit score (or credit rating for bonds).  The better your credit score, the easier your access to cheaper credit – let’s call this spin “up”.  “Down” spin is truly vicious.  When you get in a credit crisis, your credit score drops (down spin), reducing access to credit and increasing your debt service.  Which in turn would effect an increased need for debt, leading subsequently, to a further reduction in credit score; down spin could become self-perpetuating forming a downward spiral of despair.

The good news is that solutions exist.  Solutions exist regardless of whether you hold Debt Particles or Antiparticles, regardless also of the mass, charge, and spin of those particles.  Now, I’m not saying that it will be easy.  Nor am I saying that this should encourage irresponsible behavior.  On the contrary.  My position remains that regardless of the economic landscape, excercise prudence in managing the mass, charge, and spin of the Debt Particles and resist the lure of Debt Antiparticles!!

PS: The “Get Out of Debt” card is still WIP.  We will bring the compilation to you soon, perhaps in another forum – perhaps even in person!  In the interim, feel free to help by sending me ideas that we should include on the “Get Out of Debt” card – while I go back to my particle smashing!

The Leaning Tower: Global Infrastructure

Stardate: 11022.7

First, Navroz Mubarak!  May the new year bring peace, prosperity, opportunity, and profit for all!  ;-D  It has been a while since my last post where I started my discussion of the WEF Global Risks report for 2010.  I had indicated that I would follow-up with two additional posts on the matter.  Well, here’s one.  Enjoy!

While discussing the appendicular skeleton in an audiobook on human anatomy, the lecturer caught my attention by noting a remarkable (and often taken for granted) attribute of our intra-structure; as the human body grows, the bones on one side of the our bodies grow evenly with respect to those on the other, without any direct measurement or communication mechanism!  The left femur and the right femur grow pretty much at the same pace keeping the overall body in balance!  In a few cases, however, bones on one side of the body grow faster than their counterparts on the other side impeding the individual’s motor abilities.

The Present:

While this condition is rare in skeletons, it is NOT uncommon in the economies of developing – and sometimes even developed – nations; where development in one socio-economic aspect significantly outpaces others.  The WEF report cites examples of villages in Africa and South America that lack basic infrastructure needs, such as running water and sanitation, situated alongside state-of-the-art highways and port facilities.  These imbalances, and the risks they pose, are no longer a matter merely of academic discourse or limited to esoteric economic debate.  Similar ideas are increasingly being portrayed via classical pop-culture vehicles; recall images of world-class call centers juxtaposed with feeble transportation infrastructure from Slumdog Millionaire!

The Past:

Drawing from the hundreds of encounters I have had with (now Late) Dr. Spellman’s guns-and-butter graphs from my undergraduate economics classes, some of this skewed development could be attributed to the undesirable side effects of comparative advantage among nations.  However, let’s not be quick to exculpate other dubious – not malicious perhaps, but certainly irresponsible – contributors, including (1) hypermyopic mining of resources and markets by quarterly-report driven initiatives, (2) weak or absent government oversight, (3) corruption, and so on.

Key observations from the WEF Report:

  • Challenge: To address infrastructure needs with a vision for sustainable and resource-efficient approach to projects (hmmm… sounds like a page out of the AKF handbook)
  • Last decade saw the rise of public-private partnerships on large infrastructure projects (I’m thinking PartnershipsInAction)
  • Must establish and share best practices, expert knowledge, and enabling technologies across frontiers
  • Infrastructure levels must be achieved in economically and environmentally sustainable manner (more green: wallet and planet)
  • Agriculture and food security related infrastructure concerns:
    • 1 Billion people went hungry in 2009
    • World population is increasing with roughly 75% of the world’s poor living in rural areas
    • Population growth leads to higher demands, not just for food but, also for water and energy required to produce and transport that food

The Future:

In many forecasting models, the recent past is used to estimate the immediate future.  So, where do we go from here?  Now that we recognize where we are and what got us here, what steps can we take to treat this condition?  Here are some initial thoughts that come to mind:

1. Countries of Opportunity: Developing nations are increasingly becoming countries of real opportunity.  Both, as a market for goods and services, and a source of talent and natural resources.  Going forward, we need to abandon the locust-approach to multinational ventures, which may yield profits in the short-term but is ultimately self-defeating for everyone – including the locust.  Instead, all parties should approach the venture as partners, seeking a truly win-win opportunity over the long-haul.  Let’s take that one step further.  Let’s start the dialog on what we can do collectively to make more and more countries, countries of real opportunity.  Imagine the potential of turning a deficit-oriented view of the developing world into an asset-oriented one where we take proactive measures on continuously nurturing new opportunity!

2. Green: Any discussion including “long-haul” should not ignore consequences on the environment.  We need a planet on which to pursue economic opportunity.

3. Civil Society: The Aga Khan Foundation was certainly avant-garde in recognizing the condition of skewed development and in systematically promoting, over the last 40 years, public-private partnerships to further sustainable development.  In the future, it is my estimate that organizations such as the Foundation and the broader civil society will continue to play a significant role in furthering sustainable and balanced development.  Governments and private enterprises alone cannot – and should not – be burdened with this task.  Sustainable development is our collective responsibility and we need to step up to it! 😀

4. Knowledge: Access to education – good education – must be made universal.  Further, we should facilitate the sharing of best practices, expert knowledge, tools, and technology.  Here again, the attitude should be of partnership, we should seek to learn from each other.

5. Addressing Corruption: Another classic example of the locust mindset, corruption, must be addressed.  Of course, this malaise would start somewhat self-correcting with the improvement of socio-economic conditions which would result from countries becoming countries of opportunity!  But, that does not mean that we allow corruption to impede progress in the interim!

A self-proclaimed econoptimist, I believe that we will move in this direction.  Our approach may be gradual at first, due to this Global Short Leg Syndrome.  But as we recover, we will develop better motor control, picking up the pace toward sustainable development!

Jobs, jobs, jobs!

Stardate: 11015.9

From day one in our respective offices, both President Obama and I have been obsessed with… jobs, jobs, jobs!  So, it is no wonder that I started my reading and analysis of the WEF report from the section on unemployment.

Key observations from the WEF Report:

  • Dramatic rise in unemployment over the last 18 months: reverberations from the recession still linger
  • Job creation is much slower than job evaporation (doesn’t take a genius to figure this one)
  • Despite incredible growth rates, India is enduring an unemployment rate (officially) of 7.2%
  • Here’s the kicker: some portion of jobless spike could be structural; remnants of the reverberations could transform into longer term underemployment
  • Oh and before the perpetually paranoid protectionists start building fences, please note that curtailing immigration may actually exacerbate the situation

So, what exactly is structural (vs. cyclical) unemployment?  During periods of economic growth, increased demand for goods and services drives up the demand for labor, leading to lower unemployment.  In recessionary times, the reverse is observed.  Nothing earth shattering here.  This is cyclical unemployment; tied to the business cycle.  In some cases, (consider US steel production) factors shift so drastically causing the underlying structure of the economy to change which precludes the spike in unemployment in a sector (or sectors) from reverting back to “normalcy”. This is structural unemployment; tied to the changed structure of the economy. Structural unemployment is generally more challenging (sometimes even futile) to combat.

And how does underemployment differ from unemployment?  Loosely put underemployment is the younger sibling of unemployment, where the reduction in demand for labor is distributed horizontally so that more people have less work rather than a few with work and others without.  However, underemployment could also imply underutilization of skills and talent or lower wages.

Finally, how do we get out of this mess?  Here are some strategies that I would like to offer – in no particular order:

1) Efficient placement processes.  Obviously, there are jobs out there, but the disproportionately large supply of labor is slowing (counter-intuitive as it may sound) the hiring process; for each open position, double or even triple digit resumes are being submitted. This flood of applications is simply clogging the pipeline and taxing the already overburdened HR personnel. What is exacerbating this even further is the narrow location-scope imposed by job applicants which in turn is rooted in the shift toward multi-generational housing arrangements (slowing of the economy is incentive enough for recent college graduates to move back in their parent’s houses).  If we are to tear through the unemployment doldrums, applicants need to go where the jobs are and make their job searches more focused in their areas of expertise and skill.

2) Education.  Which brings me to my next point.  If your skills are outdated or you find that the skills you possess do not seem to match the job opportunities out there (structural shift), acquire new skills; preferably those with better employment prospects.  No solution to unemployment or underemployment (particularly from a long-term perspective) would be complete without a heavy focus on continuous education.

3) Free flow of capital and labor.  There is a great big world out there.  Why limit your options?  Seek out regions and even countries of opportunity for your field of endeavor.  Having a hard time finding the right place for your skill set, this may be a good time to review #2 again.

4) Coming together.  The days of going at it alone are long gone. So, find a great network (like the Ismaili Professionals Network) and get involved.  Seek out others who are in the same profession or economic activity who can help you navigate through the maze of corporate hiring.  Or, consider launching a start-up!  The conditions may be ripe – particularly if you can seek out partners with complementary skills and/or venture funding ;-D  Jokes aside, this may be a very opportune time to explore entrepreneurial options specifically in regards to innovative ideas and new knowledge areas.

5) Innovation and new knowledge areas. At the RIPBC in Dallas, Chairman Amin concluded his presentation on Global Economy with “Leaders in innovation will continue to win in 21st century.”  I cannot agree more.  In fact, I believe the operative word here is “continue”.  Innovation leading to success is not a radically new or (forgive the pun) innovative notion, it is a time-tested phenomenon.

So, what are you waiting for?  Help me and President Obama fight this monstrous recessionary quagmire – you can start by helping connect just one prospect with a suitable opportunity!

Identifying and Managing Risk

Stardate: 11015.7

Notwithstanding all the pressing items on my to-do list, I resolved to review and comment on the Global Risks report for 2010 from the recent World Economic Forum by the end of this week.  With only 25 hours at hand and a daunting list of must-complete items still on that pesky list, it appears we may have a race against that thing called *time* once again.  Funny thing, this week has been unusually intense with back-to-back meetings; in person or on conference calls.  Now add to that logistical challenges of coordinating calls with team members spread in timezones across 4 continents; North America all timezones, Europe, Asia, and Australia!  As intense as it has been, I must admit, I am thoroughly enjoying it!! I guess that makes me a Workafrolic!!! (Richard St. John’s TED presentation)

In any case, while there are several risks identified in the report with varying levels of inter-connectedness, likelihoods of realization, and severity, my attention is drawn to:

1. continued unemployment and underemployment; echoes from the stalking recession
2. skewed, inadequate, or virtually non-existent infrastructure capacity; unsustainable development
3. energy myopia;

In Constantine (the movie), the angel Gabriel declares that humanity is at its best when faced with adversity (or something along those lines). However, I believe the archangel jumped to an incomplete conclusion. Humanity is at its best… tactically. In putting all our focus in the seemingly insurmountable challenges at hand, we sometimes tend to neglect the strategic view; the more severe the current issues, the more we tend to compromise on future think. And while this may be justified in many cases (for what good is the heavy bag of food if I am to drown), it is not always the prudent position (shed the weight of the bag of food to avoid drowning, only to be washed ashore starving).

In the little that I have reviewed, I have been pleased with the report’s balance in addressing short-term and long-term issues. In fact, a significant emphasis is on the long-term; I must say, I am impressed. So, between now and tomorrow nite, I will endeavor to review the report and supporting research particularly in the areas of the aforementioned 3 risks (or risk components) and share some comments with you 😀  Stay tuned…

C-a-R-E

Stardate: 11005.8

Not totally sure of the first few minutes, but here is how the story goes, a massive explosion happens sometime in the past.  What is the “past” anyway?  Well, that’s a topic for another day.  Getting back to our story.  There is debris all over – the explosion is so massive, it is still happening.  Debris hurtling in all directions at dizzying speeds.  Some pieces are still white-hot, others have cooled some, and yet others are down-right cold.  The accidental star – well, star dust – of this story is a giant somewhat-egg-shaped blue ball still with a fiery core that is fiercely racing, more like rolling, through space.  This third rock from the sun that we call Earth.  Now, why would this seemingly invincible giant blue ball – resulting from a cosmic explosion – need our protection?  Can it really be fragile in some sense?

No matter which side of the fence you sit on, one thing is for sure the Clean and Renewable Energy sector is here to stay.  And the possibilities are green in more than one sense!  Which is why for one of the sessions at the upcoming Regional Ismaili Professional and Business Conference (RIPBC) in Dallas, IPN is putting together an expert panel to discuss this extremely important and rapidly emerging sector of the economy.  Our goal from an IPN perspective for this session was to cast a net 10 years out in the future to identify new knowledge areas (nKA).  The next step was to zoom in on the nKAs with the greatest potential for sizeable socio-economic impact in relatively short order.  Another factor to bear in mind was the location of the RIPBC; the nKA would have to be relevant.  No surprise then that energy – green energy – kept bubbling up to the top in our discussions.  We sealed the deal when Shajahan, HS for AKEPB USA, proposed Shafiq Jadavji as the lead for this initiative.  Shafiq is an incredibly sharp individual with a strong grasp of this sector.  The scope and format of this panel has pretty much been his brainchild.

So, is green energy the next big thing?  A springboard for investment and engagement?  Or a pothole?  Well, having had subsequent discussions with the panelists, I am  sure that attendees will get a running start on ideas for re-greening the planet and their wallets!  ;-D

Back to the earlier question of protecting our planet.  Ignoring the harm we are causing our environment is like failing to notice that the branch we are cutting – yep the branch way on top of the tree with a great view and fresh air quality – is the very branch on which we are sitting.  Here’s to protecting this big blue ball we call home!  😀

Mad hatter

Stardate: 11001.4

Is it just me or does the must-learn space expand exponentially and almost immediately with respect to one’s current knowledge base?  It seems as though the more I learn, the more I discover is out there to master.  Reminds me of the limitations to approaching light-speed captured by the famous E = mc2 relationship; yet another naturally occurring asymptote perhaps programmed in existence to avoid the God-complex!

Why this train of thought?  I guess it began with a call earlier today discussing various upgrades to our software platforms and the new technologies on the horizon.  Specifically, we were discussing strategic initiatives that must be incorporated in our technology roadmap.  Now, any such discussion that is void of resulting implications to the end-users and their line of business is dangerously myopic.  So, that lead us down the path of trying to divine the evolution of various industries and segments including healthcare, utilities, field-service, distribution, and so on.  And then to anticipate their technology needs and the optimal means of addressing those needs – see where I’m going with this?  Well, neither do I!  ;-D  But, I’m sure that as we continue these meetings over the course of the next few weeks, a lot of this will begin to crystallize – at least that is the hope 😀

And this is perhaps the basis (at least partially) for those natural asymptotes; So that we would continue to learn,  continue to find challenges and experience the exhilaration on surmounting them!  (Only to find more challenges, …)