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Tiny Loans, Big Debts Worry India - La...

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  • MONDAY, NOVEMBER 29, 2010 Copyright 2010 The New York Times

    Supplemento al numeroodierno de la Repubblica

    Sped. abb. postale art. 1legge 46/04 del 27/02/2004 Roma

    By MATT RICHTEL

    REDWOOD CITY, CALIFORNIA

    EVEN AS SOME parents and edu-

    cators express unease over how

    engrossed todays students are

    with digital technology, many American

    schools are intensifying its use in the

    classroom.

    The tension is on vivid display here

    at Woodside High School, amid the for-

    ested hills of Silicon Valley.

    As elsewhere, it is not uncommon

    at Woodside for students to send hun-

    dreds of text messages a day or spend

    hours playing video games, and virtu-

    ally everyone is on Facebook. But the

    principal, David Reilly, 37, a former

    musician, is determined to engage

    these 21st-century students on their

    own terms. He has asked teachers to

    build Web sites to communicate with

    students, introduced popular classes

    on using digital tools to record music,

    secured funding for iPads to teach Man-

    darin and obtained $3 million in grants

    for a multimedia center.

    I am trying to take back their atten-

    tion from their BlackBerrys and video

    games, he says. To a degree, Im

    using technology to do it.

    One consequence of technologys

    impact on young people, say research-

    ers, is the risk of developing brains

    unable to sustain attention. Their

    brains are rewarded not for staying on

    task but for jumping to the next thing,

    said Michael Rich, an associate pro-

    fessor at Harvard Medical School and

    executive director of the Center on

    Media and Child Health in Boston. The

    worry is were raising a generation of

    kids in front of screens whose brains

    are going to be wired differently.

    The tension between technology and

    learning surfaces in Vishal Singh, a

    bright 17-year-old student whose ability

    to be distracted by computers is rivaled

    by his proficiency with them.

    At the beginning of his junior year in

    high school, he made a name for him-

    self among friends and teachers with

    his storytelling in videos made with

    digital cameras and editing software.

    He acts as his familys tech-support

    expert, helping his father, Satendra, a

    lab manager, retrieve lost documents

    on the computer, and his mother, Indra,

    a security manager at the San Fran-

    cisco airport, build her own Web site.

    But he also plays video games 10

    hours a week. He regularly sends Face-

    book status updates at 2 a.m., even on

    school nights, and has such a reputa-

    tion for distributing links to videos that

    his best friend calls him a YouTube

    bully.

    Teachers call Vishal one of their

    brightest students. But he performed

    poorly in English and algebra last

    semester. He did get an A in film cri-

    tique.

    Hes a kid caught between two

    worlds, said Mr. Reilly one that is

    virtual and one with real-life demands.

    Several recent studies show that

    young people tend to use home

    By LYDIA POLGREEN and VIKAS BAJAJ

    MADOOR, India Indias rapidlygrowing private microcredit industryfaces imminent collapse as almost allborrowers in one of Indias largeststates have stopped repaying theirloans, encouraged by politicians who accuse the industry of earning outsizeprofits on the backs of the poor.

    The crisis has now reached a criti-cal stage, and is likely to reverberate around the globe. Indian banks, whichput up about 80 percent of the money that the companies lent to the poor,are increasingly worried that aftersurviving the global financial crisismostly unscathed, they could now faceserious losses. The banks have about $4 billion tied up in the industry, bank-ing officials say.

    Initially the work of nonprofitgroups, the tiny loans to the poorknown as microcredit once seemed a promising path out of poverty for mil-lions. In recent years, foundations,venture capitalists and the WorldBank have used India as a petri dishfor similar for-profit social enterpris-es that seek to make money while fill-ing a social need. Like-minded indus-tries have sprung up in Africa, LatinAmerica and other parts of Asia.

    But microfinance in pursuit of prof-its has led some companies around theworld to extend loans to poor villagersat exorbitant interest rates and withoutenough regard for their ability to repay.Some companies have more than dou-bled their revenues annually.

    Responding to public anger andgrowing reports of suicides among peo-ple unable to pay debts legislators inthe state of Andhra Pradesh passed astringent new law restricting how thecompanies can lend and collect money.

    Local leaders urged people to re-nege on their loans, and repaymentson nearly $2 billion in loans in the statehave virtually ceased. Lenders say thatless than 10 percent of borrowers havemade payments in the past few weeks.

    If the trend continues, the industryfaces collapse in a state where morethan a third of its borrowers live.Lenders are also having trouble mak-ing new loans in other states, because banks have slowed lending to them asfears about defaults have grown.

    One borrower, Durgamma Dappu,a widowed laborer, took a loan from a

    KUNI TAKAHASHI FOR THE NEW YORK TIMES

    Many in Andhra Pradesh have

    stopped repaying microloans. This

    womans indebted daughter fled.

    JIM WILSON/THE NEW YORK TIMES

    Vishal Singh, 17, often works on his computer instead of doing homework. He multitasks by answering texts from friends.

    Tiny Loans,

    Big Debts

    Worry India

    Con tin ued on Page IV

    Con tin ued on Page IV

    VIISCIENCE & TECHNOLOGY

    For cats, a big gulp

    with a tongues touch. VIIIARTS & STYLES

    Disney animation is

    burdened by its past. VIBUSINESS OF GREEN

    Uncertain future for

    Hungarian miners.

    Wired for DistractionStruggling to Learn in a Flood of Texting, Web Surfing and Games

    INTELLIGENCE: Measuring happiness, one country at a time. Page II.

    Repubblica NewYork

  • THE NEW YORK TIMES IS PUBLISHED WEEKLY IN THE FOLLOWING NEWSPAPERS: CLARN, ARGENTINA DER STANDARD, AUSTRIA LA RAZN, BOLIVIA DNEVNI AVAZ, BOSNIA FOLHA, BRAZIL

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    DELO, SLOVENIA EL PAS, SPAIN TAGESANZEIGER, SWITZERLAND UNITED DAILY NEWS, TAIWAN SABAH, TURKEY THE OBSERVER, UNITED KINGDOM THE KOREA TIMES, UNITED STATES EL OBSERVADOR, URUGUAY

    O P I N I O N & C O M M E N TA R Y

    II MONDAY, NOVEMBER 29, 2010

    Direttore responsabile: Ezio MauroVicedirettori: Gregorio Botta,

    Dario Cresto-Dina,Massimo Giannini, Angelo Rinaldi

    Caporedattore centrale: Fabio BogoCaporedattore vicario:

    Massimo VincenziGruppo Editoriale lEspresso S.p.A.

    Presidente: Carlo De BenedettiAmministratore delegato:

    Monica MondardiniDivisione la Repubblica

    via Cristoforo Colombo 90 - 00147 RomaDirettore generale: Carlo OttinoResponsabile trattamento dati

    (d. lgs. 30/6/2003 n. 196): Ezio MauroReg. Trib. di Roma n. 16064 del

    13/10/1975Tipografia: Rotocolor,v. C. Colombo 90 RM

    Stampa: Rotocolor, v. C. Cavallari186/192 Roma; Rotocolor, v. N. Sauro

    15 - Paderno Dugnano MI ; FinegilEditoriale c/o Citem Soc. Coop. arl,

    v. G.F. Lucchini - MantovaPubblicit: A. Manzoni & C.,

    via Nervesa 21 - Milano - 02.57494801

    Supplemento a cura di: Alix Van Buren,Francesco Malgaroli

    Dictatorship of Law in Putins Russia

    Russias newly outrageous legaltreatment of Mikhail Khodorkovsky,the former owner of the countrys larg-est oil company, is a reminder that Rus-sia has yet to grasp the idea of equal jus-tice under law especially when the Kremlin decides someone is in the way.

    Mr. Khodorkovsky was convicted in2005 on trumped-up charges of fraud and disobeying a court order and lost his company to Kremlin loyalists. Rus-sians call his sort of case telephonelaw, imposed by the politically pow-erful through a call to the courthouse. With his sentence almost up, he wasjust tried again on suspect charges of embezzling and money-laundering.

    The judge is expected to reach a deci-sion in December.

    Two decades ago, the United States State Department urged the new Rus-sia to resurrect the jury system, as TheTimes described, to put the law in the hands of the Russian people. Jurieshad been abolished after the Sovietrevolution, along with anything rec-ognizable as courts and lawyers. Theywere reborn in 1993.

    Defendants have a right to a jurytrial in a small fraction of crimes likemurder and kidnapping. Comparedwith non-jury trials in the Soviet era,when the acquittal rate was likely less than 1 percent, the rate with juries has

    climbed to between 15 and 20 percent.Because of this apparent success, itis tempting to look for the growth of a familiar sense of justice. That search ends in disillusionment.

    The Soviet system relied on prose-cutors to find what passed for the truth in criminal cases, so the foundation forreform is at odds with the new systemthat juries are part

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