Editorial 1
Editorial 2
Global brain race
Letters to the editor

 
 
EDITORIAL 1 
 
 
 
 

Wrong tone

The president of India has not done his chair a great deal of good by speaking what is being perceived as only his own mind in the speech at the banquet given in honour of the American president, Mr Bill Clinton. True, there was nothing wrong in what he said. Neither is it necessary for Rashtrapati Bhavan to get the president’s speech for a banquet vetted by the relevant government department. The cause for unease lies in the force with which Mr K.R. Narayanan put across his message: that remarks about south Asia being the most dangerous region in the world are “alarmist” and damaging, and that the globalized village does not need a “headman” but a global panchayat. Brusqueness does not lie comfortably with hospitality. At one level, it can be said that Mr Narayanan as both president of India and host to the American president need not have gone out of his way to speak his mind. Inevitably, he has evoked unkind responses regarding his “Nehruvian socialist” past.

It is not just that Mr Narayanan’s comments were inappropriate to the occasion. There has been a great deal of silly fuss over Mr Clinton’s visit, but it is impossible to deny that this is a significant moment in India-United States relations. The prime minister, Mr Atal Behari Vajpayee, was both warm and firm, and a certain tone had been set in the exchange. The president’s remarks struck a discordant note. If tone is half the content of diplomacy, Mr Narayanan’s did not help. Mr Narayanan realizes the importance of media coverage. It will not help India’s interests if the Western press construes his remarks as a snub to Mr Clinton. Worse, the signals from India would be seen as irredeemably mixed if the executive speaks in one voice and the head of the state in another.

There is another angle to the Indian president’s comments, and that pertains specifically to the principles of governance in India. Mr Narayanan has made a number of moves that indicate he is not on the best of terms with the prime minister and the Bharatiya Janata Party. This is hardly healthy for the country. It may be argued that as president Mr Narayanan should have the space to criticize and advise, even warn, the executive. Whether that should be done in public fora, though, is debatable. But the most plainspeaking president must be aware that defence and foreign policy are two crucial spheres in which consultation is necessary before any public comment is made. An attitude or ideology is no reason to go against the grain of a concerted and carefully nuanced message one country is giving another. This is one more piece of fuel in the muted hostility between Rashtrapati Bhavan and the prime minister’s office. The fundamental difficulty lies in the way Mr Narayanan conceives of the Indian president’s job. He believes in a more active role than his predecessors took on. Although there is nothing in the Constitution to prevent this, an overactive president would go against the structure of the polity envisaged by it. And if activity means an exposure of political bias, to which suspicion Mr Narayanan’s various comments have unfortunately given rise, then it is definitely unconstitutional. The Indian president is meant to be above political wrangles and ideological biases, a neutral point of reference in the midst of tension.    


 
 
EDITORIAL 2 
 
 
 
 

People’s buses

Despite its populist rhetoric of opposing economic reforms, the West Bengal government is perhaps beginning to sit up to the subsidy syndrome. The state transport minister, Mr Subhash Chakraborty, has announced the Left Front government’s decision to reduce subsidy to the five transport corporations that run trams and buses in Calcutta and its suburbs. The state budget for 2000-2001 has also indicated a ceiling for subsidies to the transport sector. It is reassuring that the government is finally seeing sense in a matter on which its ideological stance has been oppositional. However, this is qualified by the double standards involved in the state government’s simultaneous and continuing critique of the Centre’s agenda of economic reforms. The Communist Party of India (Marxist) has noisily opposed the reduction of subsidies on kerosene and liquid petroleum gas. Similarly, in his recent budget speech, the state finance minister, Mr Asim Dasgupta, has spoken of an “alternative economic policy” opposed to privatization and liberalization, deemed to be oblivious to the interests of the common man.

The reduction of subsidy on public transport can only be good for the people if a simultaneous privatizing process is set in motion and vigilantly sustained. In spite of their low fares, the state buses and trams have long ceased to be safe and convenient means of conveyance. Appalling maintenance, reduced number of vehicles, underqualified drivers and a complete disregard of pollution control regulations make the services more hazardous than convenient. Hence, the proliferation of chartered buses and other privatized forms of public transport in the city. Moreover, these corporations have become unwieldy and wasteful mechanisms for providing employment to untrained party cadres. In this context, the government’s revenue-raising projects to complement the subsidy cuts, if properly implemented, are also promising. Repairing the hundreds of unused buses for leasing out to private parties at competitive rates will not only bring in money, but will also augment better quality transport capacity and generate more jobs. This money should not be controlled by the state, but should be given directly to the private parties running the services. The government’s recent decision to implement an insurance cover and social security for bus operators is also a better way of supporting a service whose only aim must be to provide quality transport to the people.    


 
 
GLOBAL BRAIN RACE 
 
 
NIRUPAM BAJPAI AND NAVI RADJOU
 
 
At the 1999 India-United States summit in Chennai the US ambassador to India, Richard Celeste, said India’s “silicon triangle” of Chennai, Bangalore and Hyderabad rivalled California’s silicon valley.

Indications are multiplying that the world is rapidly making a transition from an industrial to a knowledge based economy. In some places that transition has already occurred. In June 1999, a pathbreaking study found that the internet based knowledge economy generated $ 300 billion in revenue and created 1.2 million jobs in the US in 1998 alone. In just five years, it has already outpaced century old industries like the $ 223 billion energy sector and could catch up with the $ 350 billion auto industry next year. The average revenue per internet economy worker is about $ 250,000 — 65 per cent higher than an industrial economy worker.

The second industrial revolution was initiated in labour intensive manufacturing by automotive pioneers like Ford. The third revolution is being driven by the knowledge based services sector. “Brain” and not “brawn” is the key to sustainable economic growth.

Consequently, the level of development of the services sector, particularly the knowledge intensive segments, becomes a key determinant of national competitiveness for economies around the world.

Against this backdrop, a developing country or region that aspires to achieve rapid growth and join the global knowledge economy ought to develop its services sector. This has been the engine of growth and employment in developed economies. In the postwar period, services have led gross domestic product growth in these economies, more than doubling their share of GDP and employment in the last five decades.

In the US, which leads the global information technology revolution, services contribute almost 80 per cent of GDP. In Singapore, it accounts for 72 per cent of GDP. In Ireland, the world’s second largest software exporter, the service industries employ 65 per cent of the working population.

Paradoxically, a key contributor to the “servitization” of the world economy has been the non-services sector. The business success of companies engaged in every type of commercial activity — be it agriculture, manufacturing, finance or government — relies on the competitive edge of services firms. General Electric today derives most of its income not by selling electrical appliances but financial services. Its financial arm, GE Capital, is a $ 300 billion financial company. General Motor’s auto financing business brings home more revenue than actual car sales.

From an economic development perspective, there are many compelling reasons for emerging economies to develop their services sector.

To begin with, expanding this sector helps create national wealth: a positive correlation exists between high GDP per capita and the intensity of services activity in the economy. This is mostly because compensation levels in this sector normally surpass those in agriculture and industry. Moreover, in economies with a strong emphasis on services, people tend to climb the “value chain ladder” more rapidly.

Finally, since services businesses are typically skill rather than investment intensive, they are ideal sources of growth for countries with scarce capital and large, qualified workforces. India, with the world’s second largest pool of scientific manpower, can gain much by developing its service industries.

The year 1998 heralded not only the pre-eminence of the services sector but also information technology’s key role within that sector. Information services are now fundamental to the growth and development of the US economy.

In 1998 more e-mail than “snail mail” was sent in the US, its phone lines carried more data than voice. In August 1999, the US postal service acknowledged this by approving the use of the world’s very first electronic stamp, provided by E-Stamp.com. For a long time it was difficult to evaluate the economic impact of the infotech sector. Data made available now allows us to demonstrate its positive effects on worldwide economies.

A June 1999 US department of commerce study, “Emerging digital economy II”, highlighted the strong correlation between infotech and national prosperity. It found that between 1995 and 1998 infotech industries, both producers and users, contributed an amazing 35 per cent of the US’s real economic growth. Almost half the US workforce will be employed in infotech based industries by 2006.

The most remarkable facet of the emerging “digital economy” is of course electronic commerce. The internet, which enables e-commerce, is radically changing not only the way businesses serve and communicate with their customers, but also the way they manage their relations with suppliers and partners. Both the new internet based companies and the traditional producers of goods and services are transforming their business processes into e-commerce processes in an effort to lower costs, improve customer service and increase productivity.

The value of e-commerce transactions worldwide is growing exponentially and is expected to reach $ 3.2 trillion by the year 2003.

Driven by customer demand and business imperatives, the digital economy is globalizing. In May 1999, of the 171 million people across the globe with internet, half were in North America. While North America and Europe occupy a large absolute share of the internet world, Asia-Pacific is catching up fast. It is estimated that by 2003, the Asia-Pacific region will have 81 million internet users and will overtake Europe to become the world’s second largest internet user population. Singapore has already set targets. By 2003 it wants two billion dollars worth of products and services to be transacted electronically through Singapore and 50 per cent of businesses to use e-commerce.

The internet is also contributing to the rapid internationalization of the services sector. It makes it possible to unbundle the production and consumption of information intensive service activities. These activities, such as computing, accounting, personnel, marketing, distribution and so on, play a fundamental role not only in service industries but also in manufacturing and primary industries. As much as 75 per cent of employment in manufacturing in the US may be associated with service activities.

Typically, multinationals process at home the value added services and outsource those with high labour content to low cost international service providers. India and the Philippines have thus emerged as favourite destinations for software outsourcing.

Lately infotech enabled services, or “remote processing” which involves using software rather than writing it, is being described as the next major driver of technology led services industry. These services, such as customer interaction services, typically involve a much higher degree of consumer-provider interaction and bring in more revenue.

Riding on the popularity of the internet, this knowledge added services market is expected to skyrocket to $ 200 billion by 2010, according to McKinsey & Company. Several countries like Ireland, Philippines, India and China are vying for a piece of this lucrative pie.

Inspired by the success of Singapore, several developing countries consider infotech as a unique opportunity to leapfrog whole stages of industrial development.

Having missed the first two industrial revolutions, they are eager not to miss the third one — the knowledge economy. A few developing countries are closing the gap at breathtaking speed. Five years ago only one per cent of China’s population owned a telephone. Today more than 10 per cent does. China’s internet users are expected to grow from four million at the end of 1999 to 10 million by the end of 2000, compared to a paltry 1.5 million in India by the same year.

China is aggressively developing its infotech based services sector. Between 1980 and 1990, while China’s agricultural sector grew six per cent per annum, its services sector grew at an astonishing 13.1 per cent. China’s services sector used to be labour intensive. Increasingly it is capital and knowledge intensive. China is determined to emerge as Asia’s services hub in the 21st century.    


 
 
LETTERS TO THE EDITOR 
 
 
 
 

How the East was won

Sir — Rest, recuperation and sightseeing had been highest on Bill Clinton’s agenda for his visit to India. It was not his fault the Indians chose to think otherwise. Weeks before Clinton’s arrival, speculations tumbled over one another in political, diplomatic and business circles regarding the new dawn in Indo-American collaboration about to emerge. At the end of the visit the sun of the new dawn has still not been sighted. What has been, however, is the irresistible pull of white male power. Call it colonial hangover or what you will, with Clinton’s slightest show of charm managing to floor male and female parliamentarians alike, the American delegation has gone back richer in funny anecdotes, among pashmina shawls, carpets and other knick-knacks. So what if Clinton, at the end of his tenure, rattled off the names of Shweta Shetty, Alla Rakha and Satyajit Ray and impressed attention-starved Indians? One of his probable successors, George Bush Jr, still does not know the name of the Indian prime minister.
Yours faithfully,
Sreemoyee Mitra,
Calcutta

Back to basics

Sir — The Bihar fiasco has exposed the hypocrisy and opportunism of the National Democratic Alliance. The Congress too is not much better. The party had campaigned against Laloo Prasad Yadav in the assembly elections and promised that if voted to power, it would end the “jungle raj” in Bihar. It was sheer lust for power that led the party to change its stand and enter into a power sharing deal with the Rashtriya Janata Dal. The fragile coalition formed of the Congress, the Jharkhand parties and independents that Rabri Devi heads now is full of internal contradictions and is thus inherently unstable. Then again the differing stands of the central and state units of the Communist Party of India towards the RJD do not augur well for the government.

It now remains to be seen whether and how Yadav, who has always strongly opposed the division of Bihar, will agree to the Congress and Jharkhandi parties’ demand for a separate Vananchal/Jharkhand. Bihar’s economy has been ruined during the regimes of Yadav and Rabri Devi. Corruption, criminalization, mass killings, caste riots and lawlessness have increased to alarming levels. The state needs a strong administration and good governance and Rabri Devi is hardly likely to deliver the goods.

Yours faithfully,
Sasanka Sekhar Adhikary,
Uttarpara

Sir — “Rabri gets crown and payback bill” (March 12) is “fair” politics, Bihari style, after Nitish Kumar failed to muster the necessary numbers. There is further economic gloom in store for Biharis who will suffer just as the people of West Bengal have suffered decades of communist misrule. This is not to take away “credit” from Rabri Devi. But she must stop being her husband’s rubber stamp — it is an insult to the woman’s intelligence and capabilities.

Yours faithfully,
Sush Kocher,
Calcutta

Sir — As the single largest party in governance in Bihar as also the largest formation, given its pre-election alliance with the Communist Party of India (Marxist), it is fitting that the RJD should form the government in the state. Horsetrading failed the NDA and the Congress was rightfully rewarded with the speakership for supporting the RJD. However, Rabri Devi’s winning the motion of confidence does not guarantee that her government will last the full five years. The Central Bureau of Investigation will not let off the chief minister and her husband lightly in the Rs 42.52 lakh disproportionate assets case. Remember how Yadav had to resign when he was chargesheeted and put under judicial custody? The question now is what will happen if the governor allows the CBI to prosecute Rabri Devi. Yours faithfully, Mili Das, Sindri

Film over the eyes

Sir — The Bengali film industry — witness the sorry state of affairs it already is in— has deteriorated into arguably its worst situation in recent times. The film director, Prabhat Roy, was threatened recently by extortionists (“Ransom replay in Tollywood”, Jan 28). There is hardly any line of distinction left between Bollywood and Tollywood, now that extortionists are claiming big sums of money from local directors, knowing full well that they can afford it. Earlier, Bengali films were rooted in tradition and culture, mostly adapting their screenplays from novels by renowned Bengali novelists. All that has become a thing of the past, with Bengali films taking their cue from Bollywood hits, and becoming heavily dependent on music with actors and actresses strutting and gyrating in rhythm. The onslaught of vulgarity in our regional films is accompanied by a corresponding increase in the money spent on them. In an industry where money is now the moksha for all, threats like the one received by Prabhat Roy are but natural.

It is indeed sad that Roy cannot be seen in isolation from all that is happening today in the Bengali film industry. As far as his individual efforts are concerned, he too should be held responsible. Earlier, if he made films like Swet Pathorer Thala, Lathi, Shedin Choitramash, which won him both critical and popular acclaim, he has recently churned out Sudhu Ekbar Bolo, a film packaged with “superior” techniques, but bereft of Bengali ethos and culture. If directors and producers become permeated with such a get-quick-rich mentality, they will naturally have to deal with threats from extortionists as an occupational hazard.

It might be possible for the industry to regain its lost glory, if people associated with it can free themselves from the lure of Bollywood glamour, money and glitz, and give up copying Hindi films blatantly. Or else extortionists’ threats on Tollywood film directors will be a common phenomenon in the coming days.

Yours faithfully,
Kajal Chatterjee,
Dhanbad

Sir — The review of Hey Ram (Feb 25), contains more comments on the actor/director, Kamalahasan, than a critical analysis of the film. The critic says that the film does not deal with either history or communalism, whereas the entire theme revolves around the question of what communalism and fundamentalism have led our nation to.

Indeed, can there be anything wrong if Kamalahasan takes his cue from Saving Private Ryan, or if he aims at the Berlin film awards? The now “internationally-recognizable” Shekhar Kapur explicitly showed a woman being gangraped in Bandit Queen. Kamalahasan has not even done that.

Is it to be supposed that only the so called “parallel film” directors should have access to renowned festival awards? Also, the critic does not even make cursory references to the superb technical aspects of the film like editing, sound recording (which Indian film in history has been able to produce the sound of a shirt swinging in the air?), costumes, art direction or cinematography. He criticizes Kamalahasan for being anti-establishment; indeed, which “true artist” is not?

Yours faithfully,
V. Chandra Sekar,
Calcutta

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