Business Case Studies, Executive Interviews, Reuben Abraham on Bottom of the Pyramid

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Executive Interviews: Interview with Reuben Abraham on Bottom of the Pyramid
November 2008 - By Dr. Nagendra V Chowdary


Prof. Reuben Abhraham
Reuben Abraham is a Professor and Director of the Emerging Markets Solutions Initiative (EMSI) at the Indian School of Business.


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  • Is it only restricted to India or any other emerging markets?
    Our focus is very clearly emerging markets, so India is purely a lab; so everything we do is with the idea that we can port it out to other markets. We have an existing product in education, which is aimed at a school system in Pakistan and the structured financial product for that was developed in Switzerland. It's fairly international

  • Do you think Switzerland is a kind of emerging market?
    No, the money is in Switzerland.

  • How soon is it going to be extended to other emerging markets may be Brazil, Mexico, Argentina other countries?
    We have no time frames. If you work with that sort of ideologies, chances are there that you fail. We are completely opportunistic. The Pakistan opportunity came to us by chance and we took it. If some other opportunity comes to us we would greet them. Through Soros we do a bunch of things in West Africa and Liberia and if it that gets translated into something that we can do to ISB, it's fine. We are completely opportunistic about it.

  • What is actually interesting in emerging markets? May be few characteristics you can tell us?
    I was trained as a development economist. So, if you ever ask yourself the question why are some countries rich and some countries not that's the question that can occupy your entire life.

  • What differentiates the emerging markets from let's say, a gulf nation?
    There are some varieties of things like Poor infrastructure and poor education. If you want to put a large scale differential, I say its infrastructure. When I say infrastructure it includes healthcare, education, airports, housing, transportation etc. The trouble in India so far has been the logic, we are poor and therefore we can't afford the infrastructure; we are poor and therefore we have very poor infrastructure.

  • Is this the same in all the emerging markets something like a legacy cost?
    There are built-in legacy costs. There are also Government issues like extremely bad public policy. Especially in this country, I don't have to go into details as to how bad the public policy has been.

  • Therefore, do you suggest firstly, unlearning in all these emerging markets so that people can see the light of the day?
    I would rather think about it as unlearning process. The more the government can step out, the better and better we are, because there is no evidence in the last 50-60 years of the government actually having helped. Based on that evidence may be it's time to think of different ways of doing things. Now If you look at Hyderabad airport, it's a great example. It has got 7 kms of most fantastic road, great airport and you run into the worst infrastructure imaginable. You can ask them why the infrastructure is so poor: I have heard reasons including lack of money.Well, there is a lot ofmoney in the world, as I said there is a $160 tn. So don't tell me that there is no money.

    You have to ask the question why these things are not being done. It's not been for the lack of money. Obviously, there are rent seekers in the business. No flyovers in a rich country would take this much time to build. I mean, how long did the airport itself take to build? 2yrs? At what scale is Beijing build up things for the Olympics? So there is no doubt that even in an emerging market if you put your will to it and have enough cash, you can do anything you want and about very quick time.

    George Bush once used this memorable line, which I think as completely true for everything that keeps happening in India. The line is "The soft bigotry is of low expectations". No one in this country expects an outer ring road to be finished in anything less than 5 years. That's the problem because a ring road should not take more than six months to complete or a year maximum. But in this country the expectations is for 5 years. The incentives are all messed up.

    I think people start living with this low expectation.

    Exactly the soft bigotry is of low expectation.

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