Cebolas iranianas e cebolas americanas: qual a melhor?

Eu penso que o The Onion, original, é infinitamente superior às agências de imprensa do Irã, de Cuba, da Coréia do Norte ou da Bielorussia, para ficar nas mais evidentes apenas, mas nunca se pode subestimar o zelo teocrático de zelosos guardiães da fé e da honra política dos mais bizarros personagens políticos da história do nosso tempo (e que tempo...).
Paulo Roberto de Almeida 

Iran Govt News Agency Publishes Onion Poll as Fact

The American Interest, September 29, 2012

Surreal is how many people around the world describe the situation in Iran: one of the world’s great and sophisticated cultures under the rule of backward-looking mullahs who think stoning adultresses, hanging homosexuals, threatening Israelis with annihilation and building a bomb is all in a day’s work. Complete with a hate-spewing, Holocaust-denying demagogue who thinks he’s the chosen instrument of God — though he was rejected by Iranian voters in the last election — the group of clowns, thugs and religious zealots in charge of Iran looks like something out of a satire by Swift or Voltaire.

Distinctions between reality and illusion are not always clear in contemporary Iran; the latest evidence comes from FARS, an Iranian news agency which implausibly claims to be independent of the government. While trolling through western news sources looking for important news, the editors came across a shock Gallup poll: 77 percent of white rural voters in the United States would rather vote for Iran’s President Ahmadinejad than President Obama.

Datelined Charleston, West Virginia, the full story is as follows:

According to the results of a Gallup poll released Monday, the overwhelming majority of rural white Americans said they would rather vote for Iranian president Mahmoud Ahmadinejad than U.S. presidentBarack Obama. “I like him better,” said West Virginia resident Dale Swiderski, who, along with 77 percent of rural Caucasian voters, confirmed he would much rather go to a baseball game or have a beer with Ahmadinejad, a man who has repeatedly denied the Holocaust and has had numerous political prisoners executed, than spend time with Obama. “He takes national defense seriously, and he’d never let some gay protesters tell him how to run his country like Obama does.” According to the same Gallup poll, 60 percent of rural whites said they at least respected that Ahmadinejad doesn’t try to hide the fact that he’s Muslim.

The source for the story was something called The Onion; to the thoughtful and competent people explaining the worldview of the Iranian government to the rest of the world, news from this source is as good as from any other.

It’s just possible, however, that FARS may have stumbled on a way to end the US-Iranian standoff. We suspect that if President Ahmadinejad, the Supreme Leader and Guide of the Iranian Revolution and a few of their closest aides and supporters were to rely on the Onion report and venture into the hills of West Virginia for a few friendly encounters with the locals, US-Iranian relations would quickly take a turn for the better.

Daron Acemoglu Conversation: Institutional development

THE WORLD THROUGH INSTITUTIONAL LENSES

A Conversation with Daron Acemoglu [9.12.12]

The issue is that when you look at the world from these sorts of institutional lenses, identifying problems becomes relatively easy. Solving them becomes very hard. It's no mystery how you get economic growth. You need to provide opportunities and incentives. But how do you make that political equilibrium? How do you make it so that everybody in society actually agrees and abides by a system that provides those incentives and opportunities even if it's not in their short-term interests? Those are the real challenges and that's exactly the sorts of issues we're seeing in Europe, it's the sorts of issues we're seeing in the United States, it's the sorts of issues we're seeing in Turkey. The problems are reasonably easy to identify. Developing solutions to them is hard because you cannot develop the solutions from the outside. It's not an engineering problem. At the end of the day you really need the grassroots solution to it. You really need people themselves to start taking part in the political process because any solution you impose from above is not going to stick unless it has the support of the people, unless the people themselves are the ones who push for it, who demand it, and who implement that solution.

DARON ACEMOGLU is the Killian Professor of Economics at MIT. In 2005 he received the John Bates Clark Medal awarded to economists under forty judged to have made the most significant contribution to economic thought and knowledge. He is the author of Why Nations Fail.
Daron Acemoglu's Edge Bio Page

[1 hour 4 minutes]

---

THE WORLD THROUGH INSTITUTIONAL LENSES
[DARON ACEMOGLU:] When I got into economics one of the things that attracted me was thinking about why some nations are rich and some are poor, why some are democratic and others aren't, and why they're socially, politically, and economically so different. I grew up in Turkey and I came of age in the middle of a military regime and the economy wasn't doing well so those questions were in the air. That's the sort of thing that attracted me to economics.
When I came into economics I realized those weren't the issues that most economists worked on. I was still interested in economic development and economic growth, but I tried to think about it using the same approach as economists did. Then about 17 or 18 years ago, I started talking to James Robinson who became my long time collaborator, and James and I both had the same issues with the economics approach. A lot of the interesting issues related to politics, institutions, and the roots of the politics of policies and institutions were left out. We started working, thinking, and discussing to try to write papers on these things. At the time it wasn't a big area within economics.

More at: http://edge.org/conversation/the-world-through-institutional-lenses
or here: http://textospra.blogspot.com.br/2012/09/daron-acemoglu-institutional.html

'Una sombra pronto seras...': ideologias politicas

Como um peronismo de botequim, sem qualquer doutrina, coerência ou mensagem mais explícita, a não ser a demagogia, a mentira e a embromação, esse fantasma da política brasileira atual deve desaparecer sem deixar rastros significativos...
Paulo Roberto de Almeida 

'Lulismo', um conceito equívoco

ALDO, FORNAZIERI - DIRETOR ACADÊMICO DA FUNDAÇÃO ESCOLA DE SOCIOLOGIA E POLÍTICA DE SÃO PAULO

O Estado de S.Paulo, 29 de setembro de 2012

Nos últimos tempos surgiu uma profusão de estudos, menções e referências ao conceito de "lulismo". Autores das mais variadas tendências referem-se ao conceito. Basta citar Francisco de Oliveira, Ricardo Vélez Rodríguez e André Singer. Com Os Sentidos do Lulismo André Singer empreendeu o mais abrange esforço para entender o suposto fenômeno. Dentre os vários artigos, reflexões e o livro, há poucas referências inquiridoras sobre a pertinência ou o significado do conceito.

De modo geral, a referência ao "lulismo" é como se ele fosse um dado evidente da realidade. Parece ser predominante a ligação entre o conceito e os processos eleitorais de que Lula foi candidato ou protagonista importante. Para o ex-presidente Fernando Henrique Cardoso, o "lulismo" expressa uma apelo aos pobres e uma prática de conciliação geral das classes; para Francisco de Oliveira, trata-se de uma "funcionalização da pobreza" para manter a exploração; para Vélez Rodríguez, é uma variante do populismo e uma prática patrimonialista de uso do Estado para fins políticos; e para André Singer, é um realinhamento eleitoral que implica a articulação dos segmentos mais pobres da população como a nova base social de apoio a Lula e, em parte, ao PT.

Os bons dicionários dizem que a função de um conceito é descrever os objetos da experiência para reconhecê-los, classificá-los e organizá-los. De acordo com o Dicionário Houaiss de Língua Portuguesa, a partir dos séculos 19 e 20 o uso do sufixo "ismo" disseminou-se "para designar movimentos sociais, ideológicos, políticos, opinativos, religiosos e personativos, através de nomes próprios representativos, ou de nomes locativos de origem...". No campo da política, portanto, o sufixo "ismo" associa-se a um corpo doutrinário ideológico, filosófico ou religioso de caráter sistêmico e coerente.

Na medida em que, no caso em questão, o sufixo "ismo" vem associado ao nome Lula, sugere-se a existência de um movimento político ou ideológico personativo configurando numa doutrina ético-política que veicula e enfatiza o valor da pessoa do ex-presidente e seus laços de solidariedade com um corpo coletivo que pode ser o "povo brasileiro" ou, particularmente, os "pobres", para a maior parte das análises.

Na realidade, tal movimento não existe. Nem mesmo dentro do PT existe uma corrente doutrinária ou seguidista lulista. O suposto caciquismo ou personalismo de Lula também não é efetivo. As recentes definições de candidatos passaram por intrincados processos de negociações e concessões mútuas e construções de consensos entre as partes.

Restaria ver se há um movimento lulista personativo na esfera social ou eleitoral. Nem mesmo nesse plano há evidências capazes de legitimar o suposto lulismo. Lula não deixou nem teve a intenção de legar um corpo doutrinário dessa natureza e, menos ainda, um movimento em torno de seu nome. O que houve foi um processo eleitoral, bem analisado do ponto de vista empírico por André Singer. Tanto as eleições de Lula quanto os seus dois mandatos devem ser analisados a partir de suas determinações específicas, sem transcendências ideológicas.

O fenômeno que aconteceu e vem acontecendo no Brasil tem similaridades, com formas nuançadas, em outros países da América Latina. O Peru conseguiu resultados espetaculares na redução da pobreza. Na Colômbia, depois de dois mandatos de Álvaro Uribe, elegeu-se Juan Manuel Santos, do mesmo partido político. Na Argentina, depois de um mandato de Néstor Kirchner, está em curso o segundo mandato de Cristina. O eleitorado reelege ou elege sucessores de governantes que conseguem bons resultados nas políticas sociais e econômicas.

Mas existem exceções a essa regra. No Chile, depois de 20 anos de governos bem-sucedidos da Concertación e mesmo com a ex-presidente Michelle Bachelet terminando seu governo com mais de 80% de aprovação, o candidato opositor de centro-direita, Sebastián Piñera, venceu as eleições. No mundo de hoje as hegemonias partidárias são menos estáveis e menos duráveis em relação ao passado. A perdurabilidade de projetos de poder depende ora de êxitos e resultados, ora dos líderes que os representam.

O eleitorado é pragmático, vota interessado e, na sua maior parte, não segue ideologias. Se um governo apresenta bons resultados, promove o crescimento, gera empregos, favorece o consumo, distribui renda, de modo geral o eleitorado quer a sua continuidade. Uma tabela do livro de Singer mostra que em 2006, no segundo turno, 44% dos eleitores que ganhavam entre cinco e dez salários mínimos e 36% dos que ganhavam acima de dez salários mínimos preferiam Lula. Isso desconstitui qualquer tese de que há uma polarização de classe nas eleições. Não faz muito sentido perguntar a um eleitor médio brasileiro se ele é de esquerda ou de direita, pois esses conceitos têm pouca referência prática.

Dilma mantém uma relação de continuidade e de diferença em relação a Lula e aos seus governos. Ela constituiu personalidade política própria e uma especificidade de seu governo, evitando o que muitos temiam: ficar à sombra de Lula. E o próprio Lula contribuiu para isso, evitando uma presença mais ostensiva no governo dela. O melhor método para analisar os dois governos é fazer um estudo comparativo entre ambos.

As eleições municipais deste ano parecem mostrar que não existe um eleitorado lulista cativo, configurado em qualquer fração de classe. Embora existam certas preferências partidárias em determinados setores sociais, o fato é que, em seu modo pragmático de ser, o eleitorado não é um ativo estocável por ninguém. Cada eleição é uma nova batalha, com novas circunstâncias e novos atores. Quem acredita na existência de um eleitorado cativo tende a ver o trem da História passar sem embarcar nele.

Argentina: tambem tem uma prospera classe media...

A mágica de Cristina

Editorial O Estado de S.Paulo, 29 de setembro de 2012

No mundo da fantasia da presidente Cristina Kirchner, quem ganha 13 pesos por dia, o equivalente a R$ 5, já não é mais considerado pobre na Argentina. É o que mostra o mais recente cálculo do Instituto Nacional de Estatística e Censo (Indec), o órgão que desde 2007, na presidência de Néstor Kirchner, torce números para servir aos interesses populistas da Casa Rosada.

Para considerar verdadeira a última projeção publicada pelo Indec, seria preciso aceitar que uma família argentina típica, com quatro pessoas, conseguiria pagar suas contas, alimentar-se, vestir-se, manter a saúde, estudar e ainda divertir-se com 1.555 pesos (R$ 673) mensais, como mostra o Clarín (24/9). Esse critério sugere que seria possível fazer todas as refeições do dia com 6 pesos (R$ 2,50). Não parecem números razoáveis, sob qualquer ponto de vista, mas são justamente esses dados que o governo de Cristina usa para vangloriar-se de ter reduzido a pobreza para menos de 6,5% da população, tornando a miséria praticamente inexistente - mesmo num país que está em crise crônica.

A diferença entre os delírios oficialistas de Cristina e o mundo real impressiona. Tomando-se a inflação real, e não a oficial, uma família argentina precisaria de 3.600 pesos (R$ 1.560) mensais para deixar de ser pobre. Com isso, o porcentual de pobres na Argentina saltaria dos alegados 6,5% para 21,9%, segundo levantamento da Universidade Católica Argentina. Em números absolutos, significa que o governo argentino quer suprimir, numa canetada, 6 milhões de pobres das estatísticas, reduzindo o total para parcos 2,6 milhões. Em sua defesa, o Indec alega que a linha de pobreza que utiliza é meramente "teórica", mas o fato é que ela é explorada para respaldar o discurso sobre o alegado sucesso das políticas sociais de Cristina.

Tal manipulação dos índices econômicos já se tornou a marca da Argentina kirchnerista - a ponto de a revista The Economist ter anunciado, em fevereiro, que não publicaria mais a inflação oficial do país, num texto sob o sugestivo título Não minta para mim, Argentina. A distorção no cálculo da inflação, por exemplo, prejudica não somente a estimativa da linha de pobreza, mas também a projeção sobre o próprio crescimento do país. Ao considerar uma inflação de 10% anuais, o governo induziu ao cálculo de que o Produto Interno Bruto (PIB) cresceu 2,5% no primeiro semestre em relação a igual período de 2011. Mas analistas mostram que essa expansão provavelmente não superou 1%, porque é preciso levar em conta uma alta de preços muito mais acentuada - a média das consultorias independentes é de inflação de 23,4% neste ano.

A discrepância entre os números explica por que, desde 2009, o governo dos Kirchners acusa as empresas que tentam calcular a inflação real de especular no mercado usando o aumento do custo de vida. Mais de uma dezena delas teve seu funcionamento prejudicado em razão de processos judiciais movidos pela Casa Rosada. Periodicamente, porém, o governo argentino passa o vexame de ser admoestado pelo Fundo Monetário Internacional (FMI), que divulga as estimativas de inflação do país com ressalvas. Há poucos dias, o FMI expressou "preocupação" com as estatísticas oficiais da Argentina e cobrou que elas fossem melhoradas "sem mais demora".

Não se pode menosprezar o esforço, ainda que por meio de assistencialismo, para tirar milhões de pessoas da miséria. A Universidade Católica Argentina - a mesma que verificou as distorções nos números de Cristina - atesta que o índice de pobreza recuou de 26,9% em 2007 para 21,9% em 2011, e o de indigência caiu de 8,1% para 5,4% no mesmo intervalo, o que é um grande avanço, considerando-se que o desastre econômico do início deste século fez a pobreza chegar a 45% no país. No entanto, na ânsia de supervalorizar seu governo na área social, Cristina abusa da prestidigitação estatística, que faz desaparecer os pobres. Algo semelhante ocorre no Brasil, onde, segundo a Secretaria de Assuntos Estratégicos da Presidência, já é considerado de "classe média" quem ganha pouco menos de R$ 10 por dia, ou apenas R$ 291 por mês. A diferença é que, aqui, os números não são falsificados.

Boas intencoes comerciais...

Transcrevo: 

"Os Chefes de Governo reiteraram o compromisso de seus Governos em resistir ao protecionismo em todas as suas formas, e sublinharam a importância de um sistema multilateral de comércio aberto e baseado em normas. Concordaram em que a conclusão de um Acordo de Associação Bi-regional abrangente, equilibrado e ambicioso entre o Mercosul e a União Europeia contribuiria significativamente para o crescimento e a prosperidade em ambas as regiões."

Comunicado Conjunto por ocasião do encontro da Presidenta da República Federativa do Brasil, Dilma Rousseff, com o Primeiro-Ministro do Reino Unido, David Cameron - Brasília, 28 de setembro de 2012

Reducao de impostos (apenas para capitalistas)

A presidente Dilma Rousseff vetou emenda a projeto de lei que tencionava reduzir impostos federais para produtos da cesta básica. O valor desta última poderia ser reduzido em até 15% se as reduções tivessem sido aplicadas.

Race to the top: entrepreneurs and bureaucrats - book review

The Race For the World

David P. Goldman

The Wall Street Journal, September 28, 2012

Entrepreneurship and the Global Economy

By Henry Kressel and Thomas V. Lento

(Cambridge, 266 pages, $45)

To triumph in today's winner-take-all market, entrepreneurs need deep pockets—and deep insights into technology.

Overall returns to American venture capital have lagged behind public markets since the late 1990s, Henry Kressel and Thomas Lento note in "Entrepreneurship and the Global Economy," and a quarter of venture-capital firms have earned all the profits. Why have results been so lopsided? Globalization is a big part of the answer. To succeed, today's ambitious start-ups—whether they are high-tech enterprises or low-tech service companies—must be global from inception. Entrepreneurs need access to deeper pockets than ever. But they also need to know how to maneuver through government mazes in state-dominated economies like China's. It is a winner-take-all world. The authors of "Entrepreneurship in the Global Economy" try to identify what makes a winner.

Mr. Kressel, a senior partner at private-equity firm Warburg Pincus and a former scientist, has helped to incubate dozens of successful companies during the past 30 years. In this sometimes dry but always informative account, he and co-author Thomas V. Lento recount some of their stories. Mr. Kressel, a physicist, ran RCA Labs in the 1970s when it learned how to manufacture integrated circuits and commercially feasible lasers with Department of Defense funding. His team invented the now-standard CMOS chip-production method and launched fiber-optic cable transmission. RCA founder David Sarnoff is Mr. Kressel's exemplary entrepreneur.

Sarnoff, a Jewish boy from Russia who immigrated to America at age 9, made his name at RCA when he launched commercial radio, beginning with an unprecedented national broadcast of Jack Dempsey's title match against Georges Carpentier in 1921. He helped create the first radio network, NBC, and shepherded the development of television and, eventually, the creation of a color-television standard in 1953. The self-taught Sarnoff triumphed by getting right every part of the mix: deep insight into technology; a diplomat's knack for handling regulators; and the staying power to stick with a vision that sometimes took years to pay off. These are the same qualities entrepreneurs need to vault the high threshold for success in the new global economy.

One company funded by Warburg Pincus that was based on an insight into technology was Aicent, founded by Lynn Liu, a Taiwan-born entrepreneur in Silicon Valley. In 2000, Ms. Liu saw an opportunity in the plethora of wireless-data standards around the world: Wireless companies required interchange hubs to exchange data, and Ms. Liu, the authors write, "positioned Aicent as a neutral third-party enabler of data traffic interoperability for carriers around the globe, concentrating at first on Asia." Big Asian carriers, she reasoned, would rather deal with a trusted third party than negotiate dozens of bilateral deals. Working with so many different carriers was difficult but essential to success. "A business like this," Ms. Liu told the authors, "needs to have the greatest number of connected carriers—the whole value is in the network."

One myth that gets shredded by the authors holds that American exporters can't break into the dirigiste Chinese market. All you need, they suggest, is management with a Sarnoff-like ability to hit on all cylinders. Raza Microelectronics Inc., a Silicon Valley start-up, set out to sell its communications chips in China after the dot-com meltdown, when big American manufacturers shunned newcomers. "Overseas markets were more open to network chip innovations from a startup than the domestic US equipment manufacturers, who had well-established chip suppliers," the authors report. "So the company decided that its primary sales target should be China, the world's fastest-growing network equipment maker."

That counterintuitive call came from Pakistani-born chief executive Atiq Raza, who recruited "sixty of the best microprocessor design engineers in the world" and set out to make "the industry's best single-chip data network microprocessor." He also hired a Chinese-born Stanford Ph.D. to head a customer-support group in China before RMI got its first round of venture funding in 2002. Among other things, the "comfort with international dealings that marks the educated immigrant community," the authors say, "must be counted as an important element in the company's growth and success."

To stay ahead of competitors like Cisco, RMI actually helped its customers design their equipment, enlisting a hundred corporate partners to provide complementary chips and software. The costs of continuing innovation were so high that the company was still unprofitable in 2008, when the stock-market crash cut off access to public-market funding. But a 2009 merger with NetLogic yielded $600 million of market value for RMI's shareholders. That is patience rewarded.

In both these cases, the entrepreneurs' success depended on finessing the governments of China and other interventionist countries who apply mercantilist policies to some of the world's fastest-growing economies. The authors conclude: "There are no sure-fire recipes for entrepreneurial success in a world where increasing government interference is to be expected." Governments do a dreadful job of picking winners, they point out, as in the sorry track record of the United States government in alternative energy. The same is often true of big corporations—Sarnoff's 50 years at RCA being a notable exception—which is why economies need start-ups and entrepreneurs. Mr. Kressel, drawing on his own experience at RCA, believes that there can be an important role for government. Investment in research and development for defense and space exploration, he thinks, brings economic benefits apart from its contribution to national security. "Government is best at generating innovations through funding of research and development," the authors write. "After that it should let the inventors and innovators plot the course, instead of the bureaucrats."

Mr. Goldman, president of Macrostrategy LLC, previously headed global fixed-income research for Bank of America.

A version of this article appeared September 28, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: The Race For the World.

Education: can U.S. universities remain at the top?

Can U.S. Universities Stay on Top?

Michael J. Siverstein and Abheek Singhi

The Wall Street Journal, September 28, 2012

At the Indian Institute of Technology in Delhi—one of the best engineering academies in the country—we met Shriram, a 21-year-old man who ranked 19 out of 485,000 on the school's very demanding entrance exam. We call him Mr. Number 19.

Shriram can tell you the date and time when he found out his test results. The exam—and the preparation for it—dominated his teenage years. He was singled out as a "big talent" at an early age, with an aptitude for mathematics and science. To get ready for the IIT entrance exam, he enrolled at a private coaching institute that prepares students with aggressive drilling in the major testing areas—physics, chemistry and math. Over those two years, Shriram estimates that he studied 90 hours every week.

When Shriram arrived at the IIT, he found a class filled with academic superstars. The faculty has high expectations. On the first math exam, his freshman class received an average grade of 30%. Shriram did poorly too but soon bounced back, sacrificing sleep so that he could study. "All my life I wanted to be here," he says. "I knew that if I could go to IIT, major in engineering, work and study hard, my life would be perfect. I would marry a beautiful girl, start a company, help my country advance and deliver on my family's hopes and dreams."

Both India and China have intense national testing programs to find the brightest students for their elite universities. The competition, the preparation and the national anxiety about the outcomes make the SAT testing programs in the U.S. seem like the minor leagues. The stakes are higher in China and India. The "chosen ones"—those who rank in the top 1%—get their choice of university, putting them on a path to fast-track careers, higher incomes and all the benefits of an upper-middle-class life.

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The system doesn't work so well for the other 99%. There are nearly 40 million university students in China and India. Most attend institutions that churn out students at low cost. Students complain that their education is "factory style" and "uninspired." Employers complain that many graduates need remedial training before they are fully employable.

For now, the U.S. university system is still far ahead. But over the next decade, there will be a global competition to educate the next generation, and China and India have the potential to change the balance of power. With large pools of qualified students coming of age, the two countries have made reforming their universities a top priority.

How far do they have to go? At the Boston Consulting Group, we have developed a new ranking to determine the educational competitiveness of countries: the BCG E4 Index. It is based on four Es: Expenditure (the level of investment in education by government and private households); enrollment (the number of students in the educational system); engineers (the number of qualified engineers entering the workforce), and elite institutions (the number of top global higher-education institutions).

The U.S. and the U.K. are ranked first and second, driven by raw spending, their dominance in globally ranked universities and engineering graduation rates. China ranks third and India fifth, largely on enrollment (Germany is fourth). The reasons for U.S. supremacy are clear: For one, it spends the most money on education, disbursing $980 billion annually, or twice as much as China and five times as much as India. It is also the most engineer-intensive country, with 981 engineering degrees per million citizens, compared with 553 for China and 197 for India.

American universities currently do a better job overall at preparing students for the workforce. The World Economic Forum estimates that 81% of U.S. engineering graduates are immediately "employable," while only 25% of Indian graduates and 10% of Chinese graduates are equally well prepared. "Chinese students can swarm a problem," a dean at a major Chinese university told us. "But when it comes to original thought and invention, we stumble. We are trying hard to make that up. We are trying to make technical education the grounding from which we solve problems."

In China, Peking University, founded in 1898, is generally ranked as the country's top school. One student there told us in a very serious tone: "Good luck finding a place in the library. You can't find a seat even at three in the morning."

Peking University is now part of an effort launched in 2009 to create a Chinese counterpart to the Ivies—called the C9 League. The objective is to attract the best graduates and faculty with an array of super-funded institutions. The schools recently received $270 million each in government funding, and they are also drawing back "sea turtles"—Chinese Ph.D.s from abroad—to lead the renaissance, with relocation bonuses as high as $150,000.

Though the C9 schools have the greatest potential to break into the global elite, Chinese officials also identified 100 key universities at the next level, where they have invested a total of $2.8 billion.

The difference in student quality between these tiers is often insignificant. The Gaokao is China's national educational test, given to 10 million secondary students to determine their rank and placement at university. The top scorers become national celebrities. But critics say that the test's emphasis on memorization, fact recall and processing speed can determine college admissions too arbitrarily. "I did not feel well the day of the test," one recent graduate told us. "As a result I placed in the top 10%, not good enough to get into the C9. I felt like my life was over."

Compared with China, India has farther to go. A senior dean at IIT Delhi said that he deals daily with shortages of equipment, poor pay for teachers and quotas that sometimes put students who can't read or speak English in the classroom. (The quotas are meant as a remedy for the caste system.) "We are underfunded, we have too few Ph.D.s on faculty, and we have a fifth of our enrollment taken by quota with no remedial programs," he lamented in his hot, open office.

One of the reasons for the underfunding is the relative weakness of India's central government, which accounts for only 15% of total expenditure on education. The 28 states that account for the balance vary greatly by wealth and infrastructure. But unlike China, India has significant private education, with nearly 200,000 private schools and 17,000 private colleges. The World Bank and private investors are pouring billions of dollars into education there, and the government plans to expand its best-known universities, as well as community colleges. The current five-year plan proposes higher-education investments of more than $18 billion.

Even with the current push, the combined higher-education resources of India and China will just begin to match the $32 billion endowment of Harvard alone. But success in these countries is based as much on attitude as on funds. The IIT's Mr. Number 19 represents a generation of driven, talented students who are intent on improving their lives. In one student's room at Peking University, the commitment to advancement is summed up with a phrase on a poster board: "If you work hard enough, you can grind an iron rod into a needle."

—Mr. Silverstein is a senior partner at the Boston Consulting Group. Mr. Singhi is a partner and director of its India consumer practice. Adapted from "The $10 Trillion Prize: Captivating the Newly Affluent in China and India," co-written with Carol Liao and David Michael, to be published on Oct. 2 by Harvard Business Review Press.

Education Strength

Which countries have the most competitive educational systems world-wide? The Boston Consulting Group's new E4 index assigns points in four categories, each equally weighted in the final score. Of the 20 countries ranked, here are the top 10.

Country	Total points	Enrollment points	Expenditure points	Engineering grads points	Elite university points
U.S.	237	25	73	48	91
U.K.	125	4	26	46	48
China	115	86	17	4	8
Germany	104	5	25	37	38
India	104	90	4	3	6
France	87	4	24	41	18
Canada	85	2	25	39	18
Japan	72	7	31	19	16
Brazil	38	17	16	2	3
Russia	32	9	10	10	3

Source: Boston Consulting Group analysis

A version of this article appeared September 29, 2012, on page C3 in the U.S. edition of The Wall Street Journal, with the headline: Can U.S. Universities Stay on Top?.