Profiling and labelling

It was heartening to see, on this Sunday, columnists in various newspapers - Vir Sanghvi in Hindustan Times, Gautam Adhikari and R Jagannathan in DNA rubbish the hysteria over `racial profiling' in the west in the wake of 12 Indians sparking off panic on the Northwest Airlines flight from Amsterdam to Bombay.

Jaggi very rightly pointed out that the whole problem arose because of the boorish behaviour of Indians, something all of us are familiar with. There are many who will argue that all they were doing is stretching themselves out, switching seats, exchanging new cellphones they had bought etc. so what's the big deal?

The big deal was that they refused to listen to warnings by the flight staff. It's something all of us are familiar with. But what is normal in India is not normal in other parts of the world and certainly not in an atmosphere of heightened and perfectly justified nervousness.

Gautam pulled no punches when he called the Indian reaction to the Dutch action "infantile". Vir Sanghvi felt the action was racist but very rightly lambasted Indian double standards, reminding us about how at one time every Sikh was seen as a potential terrorist. Remember how for many years there was no Sikh in the Prime Minister's security after Indira Gandhi's assassination? He also points to how innocent Muslims are harassed in a similar fashion now.

But I don't recollect the whole of India getting into such a lather about the Sikhs as it does about Muslims. This racial profiling noise is something that the media in India and self-proclaimed liberal Indians (mostly leftists, actually) indulge in every time Muslim homes are raided and Muslim youth rounded up after a terrorist attack. It's always called a knee jerk reaction. The minute any Muslim is arrested, there are interviews with neighbours and family members saying the person is innocent, he used to mind his own business, he was such a nice person, we can't believe he is a terrorist, this is a frame up etc etc. It's almost as if the media is trying to drum up sympathy for him. For heaven's sake, if I get arrested for a crime, my family is hardly likely to say I am guilty and that they always knew I was up to no good!

It's interesting that this debate should be happening during the week after I saw Rang De Basanti on television. One aspect of the film left me feeling very disturbed and depressed and I was planning to write about it as a sequel to my previous post on Putting a Name to Terror.

In the film, when the college students are partying in a monument, the political goons who come and disrupt the party, saying `band karo ye nanga naach' and ranting about `videshi parampara' have saffron scarves around their necks and huge tilaks on their foreheads, clearly marking them out to be Hindu extremists. And obviously the party they belong to is the one in power and is responsible for the corruption in defence purchases! The activist who first disrupts the party and then becomes friends with the college gang is beaten up by his party colleagues for trying to expose the government on the MiG issue. The imagery is very clear. It is the Hindutva spewing politicians who are unreasonable and steeped in bigotry and responsible for corruption as well.

Why did it offend me, even though I have utter distaste for the Vinay Katiyars, Bal Thackerays and their like? Because it is not just those kinds who rage against `nanga naach' and `videshi parampara'. Don't Muslim extremist organizations do the same? Don't the left parties keep raving and ranting about consumerist culture and western lifestyles? What was the need to identify the ideology of the political party activists? This film was just about aimless youth. Why bring in the religious fundamentalism angle into it? And then labour the point that such chauvinism is the hallmark of the Hindutva types?

I had felt a similar sense of outrage when I had seen Mahesh Bhatt's Zakhm several years back. That was about illegitimacy and it so happened that the hero's mother was Muslim and father Hindu. So, Mahesh Bhatt being among the self-proclaimed liberals, it had to be about secularism. And how was this to be depicted?

Go check out the picture again, if you've forgotten it. All the good characters are Muslim, Christian and Sikh. The Hindu characters belong to a Shiv Sena kind of organization and are rabid fundamentalists who cause riots. The hero's brother who joins them is, therefore, a wayward youth who is brainwashed by them. The hero is not brainwashed by them and is, therefore, the hero.

My question is simple: aren't there fanatics in other religions who do the same amount of harm as the Shiv Senas and Bajrang Dals do? How come they are never caricatured like this? If there is ever any hint of caricature, our pseudo-liberals are quick to jump to their defence and immediately blame the saffron brigade for vitiating the atmosphere.

Really, when are these double standards going to end? How long are we to treat fanaticism by Islamic groups with kids' gloves and even try to rationalize it even as we keep condemning Hindu fanaticism? Fanaticism has no colour. It is fanaticism and has to be condemned whether it is green, saffron or red (yes, communists are also fanatics).

And for what I've written, I'm going to be ideologically profiled - as a Hindutva type!

Putting a name to terror

American President George Bush's latest gaffe has everyone - liberals and leftists - in a tizzy. When commenting on the terror plot to blow up ten planes bound for the United States from the United Kingdom, he warned about the dangers of "Islamic fascism". The short point everyone is making is this: how can he brand the entire community and entire religion ideology like this?

It's not the first time such labeling has been done - Islamic terrorists is a common enough phrase in the West and India (and that's why I suspect a lot of the objection to Bush's words is because Bush said them) - and invited similar reaction.

That is not to say the point is irrelevant, but why does it apply only to Islam? Every terrorist movement comes to be known by the cause it espouses. The terrorists fighting for a separate Sikh homeland of Khalistan were known as Sikh terrorists. LTTE cadres are referred to as Tamil terrorists (not Eelam terrorists, though Eelam is the name of the Tamil homeland they are fighting for). The IRA is an Irish terrorist outfit. The insurgents in the north east are known variously as Naga, Mizo, Manipur rebels. Separatist militants in Kashmir are known as Kashmiri terrorists. So terrorists claiming to act in the name of Islam, who say they are staging a jihad, come to be known as Islamic terrorists. Why should it be seen as anything more than that?

The counterpoint put forward to this is that the terrorists are misinterpreting Islam and misusing it for their own ends. Sure they are. No one seriously believes that any religion advocates or even condones the kind of violence we are seeing now. A majority of the Sikhs had little sympathy for the Khalistan movement or the terrorists. I don't know too much about the popular support for the other militant movements but am confident that ordinary people who may be sympathetic to the cause would not approve of the violent means adopted by those fighting for the cause. How come the other labels never invited this kind censure? Come to think of it, why is Hindu fanaticism an acceptable term, but not Islamic fascism?

Time to stop obsessing with China and FDI

MIT professor says potential for disruption of reforms is high

Seetha

New Delhi

http://digital.dnaindia.com/

Is China vulnerable to an East Asian kind of crisis? It could, given the combination of high financial inefficiency and declining productivity. That was the combination in East Asia, right before the financial crisis, says Yasheng Huang, professor at the MITs Sloan Institute of Management.

Huang, who co-authored the definitive paper "Can India overtake China" along with Harvard Business Schools Tarun Khanna, was in India to deliver lectures on "Policy framework and development strategies: India and China" organised by the Confederation of Indian Industry.

Improvement in Chinas financial sector has been very modest compared with the Indian reforms in the 1990s. "The potential for disruption is and remains high. Though whether or not there will be an actual crisis will depend on other things we cant foresee," he warned, speaking to DNA Money.

Huang, who has been a trenchant critic of the development model followed by China in the 1990s, had one message for India: dont be obsessed with China or foreign direct investment (FDI). Ascribing Chinas success to its world-class infrastructure or its huge FDI inflows is an incorrect, misleading and harmful way of understanding the Chinese phenomenon, was Huangs simple point. "India is achieving 8% growth with 50% of Chinas investments and 10% of its FDI. To me this is a picture of more sustainable growth.

Chinas FDI inflows, Huang argues, reflect the systemic weaknesses in the economy. The financial system heavily supported the state-owned enterprises (SOEs) and actively discriminated against domestic private sector firms, which, then had no choice but to turn to foreign investors for equity capital.

A vibrant domestic private sector, Huang argues, can pull in high quality, technologically intensive FDI. Suppressing it, he warns, will bring in only low quality FDI, as it is in China. Huang questions the popular notion in India that FDI is needed to bring in technology. Korean firms, he points out, obtained technology by getting technical designs and information from the companies they supplied to, as also by exporting capital and acquiring firms in Silicon Valley and elsewhere. Much of Indian investments abroad too, he notes, are for acquiring technology, mentioning Ranbaxy as just one example.

Provinces like Zhejiang following an Indian growth model tend to get more technologically intensive FDI. They may have poor infrastructure but fairly liberal financial policies that support the domestic private sector. Zhejiang is home to a lot of the Indian IT firms. "India has the best of both worlds because it can get FDI as well as the benefits of domestic private sector growth."

Nor has Chinas growth to do with its huge infrastructure build up. The huge investments happened in the 1990s, his presentation showed, while the growth preceded it. China, in fact, may have over-invested in infrastructure, since the actual usage of expressways and some other hard infrastructure is very low. Not for him arguments that usage volumes will increase ten years down the line. "

Why? The volume is a function of growth and the growth is a function of education, health." Putting huge amounts of capital in physical infrastructure, will pull away resources from the health and education systems, which are equally, if not more, important for growth. Most business analysts underestimated India because they only looked at the lack of airports and hotels, he rued, ignoring its soft infrastructure. "Economic growth is a function of soft infrastructure, property rights and a relatively efficient financial system."

Though China is on a course correction of sorts, this, says Huang, is yet to show up in increased domestic consumption, another factor that economists like Morgan Stanleys Stephen Roach have identified as a factor behind Indias more sustainable growth. The government has started waiving rural education fees, reducing rural taxation. All this, Huang believes, will increase the consumption to GDP ratio over time.

Though attempts are being made to address the problem of lack of local entrepreneurship (which Huang and Khanna had identified as a major weakness in the Chinese growth model), Huang isnt sure the government is going about it in the right way.

"They think the lack of innovation is because of too much FDI. Its not because you have very liberal FDI policy. It is because you have very illiberal domestic investment policies." The government is beginning to look into the domestic business environment but not as drastically as Huang thinks they should.

India must invest in basic education'

Yasheng Huang says in the long run, the Indian growth story is far more sustainable than China's

http://digital.dnaindia.com/epapermain.aspx?queryed=20&eddate=7/30/2006

India's economic growth has prompted many to suggest that it will eventually compete with the other Asian economic giant, China. The numbers of course tell another story. On most counts, foreign investment, infrastructure and sheer economic strength, China is way ahead. Yet, there are sceptics about China. One of them is Yasheng Huang, MIT Sloan Institute of Management professor, whose paper, Can India Overtake China, co-authored with Tarun Khanna, has become a must read on the India-China race. He thinks India's economic model has several positive aspects that Indians themselves tend to dismiss. In an interview, Huang tells Seetha where he thinks China has gone wrong and why India is a better bet.

The Indian development model is seen as more sustainable than the Chinese one. But India is now pursuing the Chinese pattern of export-led, FDI-driven growth.

Indians are enamoured of China when the Chinese themselves increasingly recognise the shortcomings of their development model. I am not criticising the Chinese model as a whole. I am criticising the 1990s model, which is more investment driven. The current central leadership is more concerned about the aftermath of the huge investment programmes, about social issues, of the crowding out effect of FDI. They are increasing investments in agriculture and rural areas. But they cannot change policies drastically, because a lot of them have strong local support base. Besides, it will take some time for the changes to filter through the system.

You have argued that it is not FDI that propels growth but growth that pulls in FDI.

Over the last decade in India, FDI increased but only very moderately, but the growth pick-up was substantial. It's incorrect to say that China's economic miracle was created by FDI. It was created in the 1980s by rural entrepreneurs and economic liberalisation. Worldwide, FDI has played a relatively insignificant role in economic development. Why do we expect large countries like China and India, with huge entrepreneurial bases and domestic markets, to depend so heavily on FDI as a way to grow? I'm not against FDI; I'm FDI neutral. I am also not for protectionism. But the obsession with FDI in China has created huge distortions in the economy, with foreign investors being favoured and domestic ones being discriminated against.

The conmon argument is that FDI provides technology. That is just patently not true. In China we are talking about FDI in textile factories, shoe factories, garment factories. India has the best of both worlds. It can get FDI as well as the benefits of domestic private sector growth. This is what makes the Indian growth story superior and far more sustainable.

You argue that China's infrastructure hasn't been responsible for its growth. But can a country grow if it has an infrastructure deficit?

I didn't say infrastructure is not important for growth. My point is that poor countries struggle without infrastructure and they do something else right that promoted growth. Once you have the growth, you have the resources to invest in infrastructure. A lot of the Indian obsession with China is with Shanghai, with high rises and skyscrapers. That is wrong. I distinguish between business necessary infrastructure like power and roads and business unnecessary infrastructure, like government buildings. Much of the perception of China in India is shaped by business unnecessary infrastructure.

You identify China's lack of democracy as a weakness. But India's democratic advantage is seen as being overestimated.

High quality democracy should not slow down decision-making excessively. If there are problems with political interest groups in the Indian system, the first thing to look at is the quality of democracy. I think democracy is used in India very often as an excuse for not getting things done. It could be a reflection of poor leadership. In a democracy you need leadership, management. Rather than saying it is the problem of democracy, let's ask: do we have the necessary leadership?

Indians lament that our politicians have only a five year vision, while China's policy makers have a longer term vision.

What if that long-term vision is wrong? There is no free lunch. In a democracy, just as in a one party system, you come with certain liabilities. But they are of different kinds. Indians must make up their minds about what kind of liabilities they like and don't like. Land seizures, corruption are big problems in China. And it's all because China doesn't have democracy.

Wage costs in are rising faster in China than in India while productivity is rising slower. Could that be another reason why India will overtake China?

That's a big factor. Whether India is actually going to overtake China or not depends on what China is going to do. They need to reform their financial system, their legal system.

And what does India need to do?

For India to transform itself from a poor struggling developing country into a middle income prosperous one, it needs to have broad success in the manufacturing industry - labour-intensive low-end industries. For that, it has to invest massively in basic education. It should do everything possible not to divert resources that would have gone to the social sector. Indians are so creative, they can think of clever ways of managing this trade-off between physical and social infrastructure. We should never lose sight of the fact that basic education should take priority over all these things.

Apart from posting two more pieces on the blog - the interview with Dalit activist Chandrabhan Prasad is particularly interesting, even if I say so myself - I have a bit of good news to share. My book has been published by Penguin and it's out in the bookstores. It felt good to see it there. It's called The Backroom Brigade: How a few intrepid entrepreneurs brought the world to India.
It basically tells the story of how the BPO industry started and grew to where it is today. It's not a management tome nor a how-to kind of a book, but more like a current history story told in a chatty style.

We do want that education

Seetha

It is perhaps a measure of the myopia that marks policy-making in India, that a controversy has brought to the fore an issue that the country should have been grappling with anyway. The issue of higher education infrastructure, for instance, is being talked about now only because of the decision to reserve 27.5 per cent seats in all Central higher education institutions for other backward classes (OBCs). The number of seats are to be increased so that no one loses out.

That's easier said than done, as the government itself is realising. The Delhi University vice-chancellor has said that it will take three years for the University to expand the infrastructure to cope with the increased load. So now, the oversight committee headed by Veerappa Moily will study the situation and work out a roadmap for doing this.

But why have we reached such a situation in the first place? The strain on the higher education infrastructure would have come regardless of caste-based quotas. Why didn't we prepare for it?

India's access ratio in higher education (the number of students as a proportion of population in the eligible age group of 18-23) is a laughable eight per cent, against 35-55 per cent in most developed countries. India plans to dominate the world economic stage with these kind of numbers?

The University Grants Commission's Tenth Five Year Plan in 2002 had planned to increase the access ratio to double digits-10 per cent-by 2007. That, the then UGC vice-chairman Arun Nigavekar had estimated, would have meant bringing in 14 million students into the higher education stream. This newspaper has reported that there is a 15 per cent increase in students passing out of school every 10 years and that the Human Resource Development ministry expects this to double in the next decade. The financial implications of this are enormous-close to Rs 12,000 crore, Nigavekar had estimated in 2002.

Can the public sector education system alone do this? Certainly not on its own.

Sure, no country has expanded its higher education infrastructure at the pace India has. Much of it has happened in the public sector, but the private sector has also played a significant role. Unfortunately, successive governments have done little to actively encourage private initiatives in education or let a vibrant market develop in that sector. If it had allowed that it is likely that the issue of lack of access of disadvantaged groups to education would not have come up at all. The current problem (and resistance to quotas) is as much a demand-supply mismatch one as it is a social one.

It's now time to start fashioning an environment that will encourage and facilitate the development of a vibrant market in education, which will supplement government efforts in primary, secondary and higher levels.

Why not revive the lapsed Private Universities Bill (introduced in the mid-1990s), which enabled registered societies, public trusts and companies to set up self-financing universities with their own curriculum, fee structure and degrees, under the benign supervision of the UGC? That's the kind of system the country needs.

It doesn't mean that the state withdraws from the field-why, even an ardent open economy advocate like Montek Singh Ahluwalia wants a hike in public spending on higher education -but rather, expands the market to increase supply.

Increasing the role of the private sector will also ensure that the curriculum is more in tune with what the job market requires; something that is not easily done in the government system. The problem of the lack of employability of our youth-regardless of caste-is a result of this.

It's not that the private sector is always more efficient. For all those private institutions that are doing sterling work, there are equal numbers which are extortionist and exploitative. The quality of education in quite a few leaves much to be desired. And there are several fly-by-night operators.

Unfortunately, attempts to regulate it only seem to foster a licence and inspector raj that encourages corruption even as it remains ineffective. The line between regulation and intervention is very fine but it is one that will have to be drawn.

Will creating a market solve the problem of access overnight? It won't. The problem is too huge and complex. It will take years -maybe even a decade-for a robust, fair market to develop.

But one thing is clear-education cannot be a public sector monopoly. The country and the economy have too much at stake to let this happen. Too much time has already been lost and since the benefits won't be immediate, the time to move in the right direction is right now.

http://digital.dnaindia.com/epapermain.aspx?queryed=9&eddate=6/1/2006

"Pvt sector should integrate Dalits in the supply chain"

http://digital.dnaindia.com/epapermain.aspx?queryed=9&eddate=5/29/2006

As India Inc grapples with the sceptre of job quotas for backward classes, some activists are trying to change the paradigm of the debate. Dalits should become entrepreneurs, Dalit scholar Chandrabhan Prasad tells Seetha, and the private sector can lend a helping hand by giving them preference in the supply chain.

# Do job reservations in the private sector have any relevance?

Dalits as a community should start thinking beyond working for others and start thinking of becoming businessmen and hiring others.

# Do they have a tradition of entrepreneurship?

There are many entrepreneurs, but they are small players. The only traditional business activity was leather processing. Most of those working in this area are in Agra and some have large companies. They prospered during World War Two, but post independence, the bania lobby took over the trade and Dalits have become sub-suppliers to them.

# How can Dalit entrepreneurship be fostered?

By integrating them in the supply chain. If the private sector has a problem with job reservations, why don't they start by making Dalits partners in the business by seeking supplies from them. Keep 5% or 10% outsourced services for Dalits. Hindustan Lever has 43,000 employees and two lakh dealers. Obviously, the latter is a larger pool and will create less displacement. Then there won't be so much social polarisation. It won't become an emotive issue.

I know someone working in a small factory making gear stick covers for Eicher tractors. This is sold to a wholesale dealer for Rs 5 a piece. He sells it to Eicher for Rs 10. If Eicher buys directly from a Dalit manufacturer, without compromising on quality, it can buy it for Rs 7.50. Both gain Rs 2.50.

Assuming a HLL dealer get a 1% commission, he can earn a minimum of over Rs 60 lakh a year. A Dalit can take up this dealership, taking less commission than others. Don't replace existing dealers, but when new dealerships are given out, reserve some for Dalits.

# So, they will need special privileges even here?

Yes, because the system of enterprise and trade requires traditional social networking. Dalits are not in the social loop. So industry has to make a conscious effort to bring them into the supply chain.

The American experience is so inspiring. Now, what 33 million Blacks spend annually in the market is equal to what 1 billion Indians produce annually. People say that affirmative action has saved the American economy because it has created a new class of aggressive consumers.

Similarly, if a Dalit is linked with HLL and Eicher, he will prosper and buy - not a Mercedes immediately - but a Maruti 800, a Videocon television and will build a house in his village. Whatever every empowered Dalit earns will go back to the market.

# Do Dalit entrepreneurs face discrimination in the market?

People may not practise untouchability. But if there is a manufacturer named C B Ram and another named C B Aggarwal, I will unconsciously start wondering and may opt for Aggarwal. It may not be deliberate. Many try to keep their identity hidden because of fear. The fear may be wrong but the very fact that it is there means there is some social basis for that.

# Dalit activists argue that the condition of Dalits has worsened post liberalisation.

They are right. Government downsizing after 1991 has hit Dalits very hard. With job reservations, they were assured of employment. That has stopped.

But instead of fighting liberalisation, Dalits must use it to their benefit. The fittest vehicle to get into mainstream society is the Indian rupee. Society will accept only empowered Dalits - wearing good clothes, living in good houses, exuding confidence.

# To become entrepreneurs, Dalits will need education, training which many of them don't have.

Lets start with areas where no formal education or complex skills are required. Dalits can start with this, earn enough to educate their children who will then not need reservations.

Coming together through business is much more reliable than any social reform law. The Dalit bourgeoisie will eliminate all social tensions. If the big industrialists understand this, it will be good.