Friedman entirely misses the point. The system he describes is quite old. It is the hawala system -- which in this article he mischaracterizes as "hand-to-hand" -- pure and simple, with transactions recorded via mobile phones. Hawala was always a "virtual bank." His larger speculation may have merit, but his example doesn't support his speculation.
Interestingly, the Knights Templar created for Europe a similar system and, together with what could be considered one of the world's first institutionalized, non-governmental intelligence networks, became extremely powerful. The Templars in creating their "virtual" banking system, copied the Muslim hawala system, which predated it by some centuries. Had I read the Hindustan Times article Friedman cites, I would instead have ruminated on the significance of mobile access at the top of Everest, and what it symbolizes for humankind. Cheers, Lawry On Nov 3, 2010, at 7:26 AM, Keith Hudson wrote: > Here is one of the most interesting articles I have read in a long time -- > from today's NYT. > > Keith > > <<<<< > DO BELIEVE IN HYPE > > Thomas L. Friedman > > The Hindustan Times carried a small news item the other day that, depending > on your perspective, is good news or a sign of the apocalypse. It reported > that a Nepali telecommunications firm had just started providing > third-generation mobile network service, or 3G, at the summit of Mount > Everest, the world's tallest mountain, to allow thousands of climbers and > trekkers who throng the region every year access to high-speed Internet and > video calls using their mobile phones. > > I can hear it already: Hi, mom! You'll never guess where Im calling from . . . > > This is just one small node in what is the single most important trend > unfolding in the world today: globalization -- the distribution of cheap > tools of communication and innovation that are wiring together the world's > citizens, governments, businesses, terrorists and now mountaintops -- is > going to a whole new level. In India alone, some 15 million new cellphone > users are being added each month. > > Having traveled to both China and India in the last few weeks, here's a scary > thought I have: What if -- for all the hype about China, India and > globalization -- they're actually underhyped? What if these sleeping giants > are just finishing a 20-year process of getting the basic technological and > educational infrastructure in place to become innovation hubs and that we > haven't seen anything yet? > > Heres an example of why I ask these questions. It's a typical Indian start-up > I visited in a garage in South Delhi, EKO India Financial Services. Its > founders, Abhishek Sinha and his brother Abhinav, began with a small insight > -- that low-wage Indian migrant workers flocking to Delhi from poorer states > like Bihar had no place to put their savings and no secure way to send money > home to their families. India has relatively few bank branches for a country > of its size, so many migrants stuff money in their mattresses or send cash > home through traditional hawala,or hand-to-hand networks. > > The brothers had an idea. In every Indian neighborhood or village there's > usually a mom-and-pop kiosk that sells drinks, cigarettes, candy and a few > groceries. Why not turn each one into a virtual bank? So they created a > software program whereby a migrant worker in Delhi using his cellphone, and > proof of identity, could open a bank account registered on his cellphone text > system. Mom-and-pop shopkeepers would act as the friendly neighborhood local > banker and do the same. > > Then the worker in New Delhi could give a kiosk owner in his slum 1,000 > rupees (about $20), the shopkeeper would record it on his phone and text > receipt of the deposit to the systems mother bank, the State Bank of India. > Then the workers wife back in Bihar could just go to the mom-and-pop kiosk in > her village, also tied into the system, and make a withdrawal using her > cellphone. The shopkeeper there would give her the 1,000 rupees sent by her > husband. Each shopkeeper would earn a small fee from each transaction. > Besides money transfers, workers could also use the system to bank their > savings. > > Since opening 18 months ago, their virtual bank now has 180,000 users doing > more than 7,000 transactions a day through 500 branches-- mom-and-pop kiosks > -- in Delhi and 200 more in Bihar and Jharkhand, the hometowns of many maids > and migrants. EKO gets a tiny commission from the Bank of India for each > transaction and two months ago started to turn a small profit. > > Abhishek, who was inspired by a similar program in Brazil, said the kiosk > owners are already trusted people in each communityand are already in the > habit of extending credit to their poor customers: So we said, "Why not > leverage them?" We are the agents of the bank, and these retailers are our > subagents.The cheapest cellphone today has enough computing power to become a > digital mattress and digital bank for the poor. > > The whole system is being run out of a little house and garage with a dozen > employees, a bunch of laptops, servers and the Internet. The core idea, says > Abhishek, is to close the last mile -- the gap where government services end > and the consumer begins.There is a huge business in bridging that last mile > for millions of poor Indians -- who, without it, can't get proper health > care, education or insurance. > > What is striking about the small EKO team is that it includes graduates from > India's most prestigious institutes of technology who were working in America > but decided to come home for the action, while the chief operating > officer,Matteo Chiampo, is an Italian technologist who left a good job in > Boston to work here where the excitement is, he said. > > India today is this unusual combination of a country with millions of people > making $2 and $3 a day, but with a growing economy, an increasing amount of > cheap connectivity and a rising number of skilled technologists looking to > make their fortune by inventing low-cost solutions to every problem you can > imagine. In the next decade, I predict, we will see some really disruptive > business models coming out of here -- to a neighborhood near you. If you > thought the rate of change was fast thanks to the garage innovators of > Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get > fully up to speed. I sure hope we're ready. > >>>> > > Keith Hudson, Saltford, England > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework
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