Saturday, April 28, 2007

Internet: How Anarchy Works

Quite a few years back, somewhere else on the net, I had uploaded a caselet on "The Net That Shaped the World"...

It was about how Paul Baran, a young Rand Engineer created a system of Distributed Communication , ARPANET (which later on metamorphosed into Internet). One observation was:

    "...But for Baran’s rather proper background, one would be tempted to say that in the guise of technology, it was a political statement for the counterculture that prevailed in the US during those times... Its effectiveness relied on paradoxes:

  • it aimed to help the army maintain “proper command and control” under wartime situation by offering a system which had no centralised control;

  • it was one of the most robust and efficient system which relied on inefficient and distributed, but interconnected, parts; and,

  • it created efficiencies in communication by building redundancies into the system."

Since then, of course, times have changed... "Hackers" (the "good guys", who loved the decentralised, interactive, sharing anarchy of the Net, have become the villains) and the "Nerds" (the "dark forces" of the commercial centralised interests have become the heroes)...

Thankfully, at the "back-end" of this medium, the "anarchy" (or grassoot democracy) still prevails... and helps the Internet to remain available, sustainable and evolving...

If you have never thought about who manages the Internet, here is a peek behind the curtains from an old issue of The Wired:

    The Internet, perhaps the greatest instantiation of self-organization the planet has ever seen, evolves in its fractious decentralized way through the Internet Engineering Task Force, the IETF. Which means, in the cyber '90s, that the True Masters of the Universe are not freemasons, mergers-and-acquisitions specialists, or venture capitalists but the members of a voluntary association of tech wizards that create and oversee the technological future of the Internet. It is the IETF's work on tough technical problems that will make possible the whiz-bang Net applications of the future.

    Maintaining a low profile and peaceably going about its business as collections of True Masters always do, the IETF has always consisted of anyone (that's right, anyone - an IETFer could be your mom, a former Soviet commissar of culture, or even a director of marketing) who wants to be part of the technical working groups charged with creating the standards and pathways that will move the Net into the next century. All you have to do is pay a token registration fee and sign up. No questions asked, no meritocratic credentials checked.

    In the IETF, there's a kind of direct, populist democracy that most of us have never experienced: Not in democratically elected government, where too many layers of pols and polls and image and handling intervene. Not in radical politics, where too often, the same old alpha-male/top-dog politics prevail despite the countercultural objectives pursued. And not in the feminist collective world, where so much time is spent establishing total consensus and dealing with the concerns of process queens that little gets done. The IETF provides a counter-example of true grass-roots political process that few of us have ever had the privilege to participate in, outside of the backstories about member planets of the Star Trek Federation. IETF group process succeeds because of a profound connection with, and understanding of, the real world of networking.

    Unlike most technical-standards bodies, the IETF has pioneered a culture of pragmatism (quit jawing, throw it out on the Net and see if it works). It maintains a high debate-to-politicking ratio: there may be 104 opinions in a room of 100 IETFers, but the work still gets done. Which is not to say IETFers have the finesse and indirection of 19th-century French diplomats: one IETFer, trying to avoid pissing matches over an issue, was heard saying, "I don't think urinary contests will solve anything"; and another, regarding the organization's expectations, "If you don't write well, there are lots of standards groups in Europe that would love to have you."

    MIT professor Dave Clark, one of the grand old men of the Internet, may have unintentionally written the IETF anthem in his A Cloudy Crystal Ball/Apocalypse Now presentation at the 24th annual July 1992 IETF conference. Today, it's immortalized on T-shirts: "We reject: kings, presidents, and voting. We believe in: rough consensus and running code." Which might translate to, "In the IETF, we don't allow caucusing, lobbying, and charismatic leaders to chart our path, but when something out on the Net really seems to work and makes sense to most of us, that's the path we'll adopt."

    Part of what has made the Net successful is precisely that: it works, and because it works, Net standards and protocols have dominated the marketplace, where others have tried and failed….

Sunday, April 22, 2007

Manufacturing "Merit" - Part 2

It was in the context of "reservations" and "merit"... Some months back, one of my posts on this blog/newsletter "Manufacturing Merit" had mentioned:

    " win in this Darwinian landscape, an entirely new industry has taken shape during last decade or so, which specialises in "Manufacturing Merit"...the "Coaching Institutes"...

...which help aspirants to "crack" the entrance tests for any of the premier engineering/business institutes - irrespective of their basic undestanding of the subject...

The post ended with my understanding of the scenario:

    "From a purely socio-historical point of view, the coaching institutes, in a very short period of time, have revolutionised two major changes in the societal texture of India:

    1. they have redefined and evangelised a new meaning of "merit", which is essentially based on the supply-demand gap of opportunities in the society, and

    2. they have successfully created a small but vocal new "social class" which owns the "merit" (and its definition) in the society."

Thanks to Abi's post about Bashing the JEE of IIT today, I accessed the Outlook aticle "Coaching Factories Are Dumbing Down The IITs"

... and it was heartening to see that this manufactured "merit" is loosing its shine...

The article starts thus...

  • Tata Steel MD, B. Muthuraman, an IIT Madras graduate, says IITs are now thriving on their "past reputation" and TISCO is "not likely to recruit" IIT graduates any longer

  • Many IIT professors too find the present crop of students lacking in creativity, and the spirit of innovation and inquiry

  • They blame the students' blinkered, robotic approach to their studies on the fact that a large majority are products of coaching factories.

  • They call for reform of the joint engineering exam (JEE), and of the IIT curriculum as well, to develop the students' societal awareness, communication skills and knowledge of the humanities.

    The nearly 2.5 lakh students who wrote the Joint Entrance Exam (JEE) a few days ago for the 4,600 seats across seven IITs were blissfully unaware of a simmering debate about the JEE system, the institutes' curriculum and their future employability. What has triggered the discussion within the fraternity is the concern expressed by two distinguished IIT alumni about the general decline in standards of excellence at the institutes in recent years. Their remarks have questioned the calibre of students who make it into the IITs by subjecting themselves to the killing rigours of coaching factories in places like Kota and Hyderabad. The alumni seemed to conclude that these products of coaching factories—who now form, according to Wikipedia, 95 per cent of students at IITs—had a blinkered approach to education, did not recognise new ideas and had lost the spirit of inquiry and innovation...

... which brings one back to the issue of "Merit" vs. "Reservations"...

or as this article so succintly puts it:

When excellence in the IITs today is more in the imagination than in reality, how could reservations further erode it?

I guess, it will make as much sense if one replaces "IITs" with "IIMs" and "JEE" with "CAT/XAT/MAT, etc."...

The Maya of "Employment Generation" through SEZs

Ealier this month, after almost 2 months of stalemate, the the Govt of India showed the green flag to process of clearing and notifying the SEZs. One of the sellling point of SEZ idea (ideology?) has been that it will help creating more jobs. As this report in Indian Express mentions:

"In fact, it’s the employment-generation potential of SEZs that seems to have helped the policy resurface in the face of strong opposition, not just from the Left parties, but from within the government too."

I downloaded this "Factsheet on SEZs" from the GOI's site,

This also clearly mentions " (d) creation of employment opportunities" as one of the objectives of SEZs.

Image and video hosting by TinyPic

Now, according to this document, the 234 approved SEZs will
- bring investments of Rs 3,00,000 crores
- generate 4mn jobs, and
- require approx. 33808 hectare of land

Notwithstanding the fact, that 4mn jobs (by 2009) are peanuts

- for a country with 400mn workforce,

- with abysmally low levels of skills (pl see an earlier post, The Future of Work/Employment in India for some statistics), and

- where about 10mn people enter the job market every year,

these figures lead to some interesting conclusions:

Cost of creating jobs
= 3,00,000 crores / 40,00,000
= Rs 7.50 lakh per job

This calculation, of course, does not include the cost of various "incentives and facilites" that are given to SEZs and its developers (see the list at the end of this post), According to Min of Finance these will cost another Rs 1,00,000 crores to the exchequer.

There is something else also that does not make sense. If 33808 hectare land is required to create 4mn jobs, then:

40,00,000 / 33808
= 118 jobs per hectare

Now contrast this to, for example:

  • according to this report which quotes NAECR study, "the Posco project would create an additional employment of 50,000 person years annually". Posco project in Orissa requires about 1600 hectares, i.e., it will actually generate 31 jobs per hectare

  • the Tata Car Project in Singur requires 997 acres (or about 403 hectares), which should create 47,630 jobs... but even according to the company it will generate 10,000 jobs.

  • the 10,000 acres (or about 4048 hectare) Nandigram SEZ would have provided 4,77,732 jobs.

  • even the small SEZs are no better. As this news article points out about the two pharma companies which have been granted 75 acres (about 30 hectares) each in AP, have an "employment potential of 2,000", which for 60 hectares should be more than 7,000.

    As an earlier report in The Outlook highlights:

  • "The fact is that a 515 MW power unit employs 80 people, a global-sized refinery of 10 MT can give jobs to 800, and a 4.5 million tpa steel plant could keep 1,800 employed. Considering that over 55 per cent of the 237 SEZs are IT-related, they’re unlikely to create rural jobs....">//i>

    Coming to the "hidden costs" of this employment creation via SEZ, the following is a cut-and-paste job from GOI's website:

    Incentives and facilities offered to the SEZs

    The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:

  • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units

  • 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.

  • Exemption from minimum alternate tax under section 115JB of the Income Tax Act.

  • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.

  • Exemption from Central Sales Tax.

  • Exemption from Service Tax.

  • Single window clearance for Central and State level approvals.

  • Exemption from State sales tax and other levies as extended by the respective State Governments.

    The major incentives and facilities available to SEZ developers include:

  • Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.

  • Income Tax exemption on export income for a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.

  • Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.

  • Exemption from dividend distribution tax under Section 115O of the Income Tax Act.

  • Exemption from Central Sales Tax (CST).

  • Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).

  • Saturday, April 14, 2007

    How Bangladesh and Sri Lanka beat India

    No, this is not about World Cricket Cup!!! :0)

    this is about the UNDP Human Development Report 2006

    Image and video hosting by TinyPic

    This table is courtsey the Outlook issue on State of the Nation

    ... and to be fair, in many ways India is better than Bangladesh ;)

    If you are not busy burning effigies of the Cricketing Idols/fallen-heros/gods (o whatever) of India, do have a look at this issue of outlook:

    Friday, April 13, 2007

    Modern Indian Socio-Economic Mythologies - Part 2

    NOTE: This is a enlargement of an earlier posting, a few months back. Since then, off and on, many (though, not all) of this information has appeared here. So in a way, it is also a consolidation of content to get a wider picture...

    Every age and generation in a society (and the dominant class/caste therein) have their own mythologies to live by. These cherished beliefs often don't match with the reality/facts. Nevertheless, they become ingrained in our psyche as "facts", because they are repeated and echoed by media, politicians, consultants, academics, and various interests and lobbies...

    ...In any case, they do help people to remain engaged with their lives - and feel meaningful with whatever they are doing...

    These are some of the "mythologies" of our age:

    M1: Pre-91/"liberalisation" was the period of "dark ages"

    Perhaps so (or not so - depending on how you want to interpret these figures)

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    M2: Last 15+ years have created a "boom" in jobs

    Actually, no!... If one looks at the figures/data. According to Planning Commission, post-mid '90s, the rate of job creation has become negative...

    Image and video hosting by TinyPic

    ...and more jobs are created in the unorganised sector than in the organised sector.

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    M3: India has a "huge" professionally qualified manpower

    Yes and no!...

    It is definitely huge, no doubt.... But then, everything in India is HUGE, when it comes to head-count. Ours is, perhaps the only country, where a population of 120mn people (twice the population of 50%+ nations) becomes a "minority"!!!

    Even if one defines "qualified" as any graduate and above degree-holder, even then the total "stock" is actually miniscule.

    Image and video hosting by TinyPic

    This, incidentally, is the overall status of our economically active manpower

    Image and video hosting by TinyPic

    ... and among those ecoomically active, this is the %age of those who have "marketable skills"

    Image and video hosting by TinyPic

    Lest one gets an incorrect (and exaggerated) meaning of "marketable skill", here is the listing of such skills:

    Image and video hosting by TinyPic

    M4: India has the advantage of "demographic dividends"

    Oops, yes!... India is demogaphicaly the youngest country in the world... Which gives us a tremendous economic advantage

    But actually, it was always a young country - at least, by the Census figures since last 3 decades... not sure is it gave us an economic advantage then.

    Image and video hosting by TinyPic

    M5: Urbanisation is a pre-requisite for economic growth and employment creation
    Perhaps so, though I am not sure, why this should be so.

    In any case, according to the 2005 Economic Census, the reality is like this:

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    Image and video hosting by TinyPic

    M6: India is becoming a "Rich" country

    In a way, yes!... India has the 2nd largest number of billionnires - after, of course, US - in the world.

    If a Billion is written as $1,000,000,000, and $1=Rs.45 approx, then the following figures are instructive:

    Image and video hosting by TinyPic

    M7: "Capitalism" - or whatever is its modern versions (notwithstanding the fact the Adam Smith has been kidnapped, gagged, and mis-quoted gossly and widely!!!) - is the best option to have a healthy society and economic prosperity

    The following is a comparison of countries on 5 indices (Color coding: the red is the paragon of free-market "capitalist model" and the yellow are the ones who are considered to be following the "socialist model"):

    Image and video hosting by TinyPic

    GCI (Global Competitive index); HDI (Human Development Index); Gini Index (measures income disparity); IDC ISI (IDC's Informational Society Index); QLI (Quality of Life Index)

    Wednesday, April 11, 2007

    Behind the Veil: CSR, Corporate Philanthropy, etc.

    Some months back, on another blog, I had written about the likely pit-falls of Development through Philanthropy (which would include large number of the corporate CSR efforts, funding agencies, "foundations", etc., etc.)...

    To quote:

      "...the top-down nature of these initiatives can (and often does) make them vulnerable to many undesirable consequences. Often such blanket initiatives neglect the local issues, and divert the attention to more symptomatic solutions. For instance, a drip irrigation scheme may be advocated as a solution, while the actual local problem is the lowering ground-water level due to its extraction by commercial interests. Similarly, an AIDS prevention program can neglect that the larger causes of death are due to hunger and not disease. Often these initiatives can (and do) also become the vehicles for dumping of obsolete technologies and harmful drugs, or even in empowering non-democratic power-structures at the grass root level."

    Here is an example, which corraborates this - and more:

      "Justice Eta, 14 months old, held out his tiny thumb... An ink spot certified that he had been immunized against polio and measles, thanks to a vaccination drive supported by the Bill & Melinda Gates Foundation.

      But polio is not the only threat Justice faces. Almost since birth, he has had respiratory trouble. His neighbors call it "the cough." People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill & Melinda Gates Foundation....

      ...The makeshift clinic at a church where Justice Eta was vaccinated and the flares spewing over Ebocha represent a head-on conflict for the Gates Foundation. In a contradiction between its grants and its endowment holdings, a Times investigation has found, the foundation reaps vast financial gains every year from investments that contravene its good works...

      ...The Gates Foundation has poured $218 million into polio and measles immunization and research worldwide, including in the Niger Delta. At the same time that the foundation is funding inoculations to protect health, The Times found, it has invested $423 million in Eni, Royal Dutch Shell, Exxon Mobil Corp., Chevron Corp. and Total of France — the companies responsible for most of the flares blanketing the delta with pollution, beyond anything permitted in the United States or Europe.

      ...Like most philanthropies, the Gates Foundation gives away at least 5% of its worth every year, to avoid paying most taxes. In 2005, it granted nearly $1.4 billion. It awards grants mainly in support of global health initiatives, for efforts to improve public education in the United States, and for social welfare programs in the Pacific Northwest.

      It invests the other 95% of its worth. This endowment is managed by Bill Gates Investments, which handles Gates' personal fortune... By comparing these investments with information from for-profit services that analyze corporate behavior for mutual funds, pension managers, government agencies and other foundations, The Times found that the Gates Foundation has holdings in many companies that have failed tests of social responsibility because of environmental lapses, employment discrimination, disregard for worker rights, or unethical practices.

      ...In addition,... the Gates Foundation endowment had major holdings in:

    • Companies ranked among the worst U.S. and Canadian polluters, including ConocoPhillips, Dow Chemical Co. and Tyco International Ltd.

    • Many of the world's other major polluters, including companies that own an oil refinery and one that owns a paper mill, which a study shows sicken children while the foundation tries to save their parents from AIDS.

    • Pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.
    "etc. etc.

    A well-meaning friend of mine who works with Bill & Melinda Gates Foundation, with whom I shared this news-item, wrote back:

      "Yes. Quite depressing, in fact. Anyway they are now planning to review their investments and take some decisions."
    Hopefully, so...

    er... no!, this posting is not about the Bill & Melinda Gates Foundation. That is just an example. Unless we look (and introspect) at the overall system of this issue of "doing business/living a good life" and "contributing to society" - and the trade-offs therein - this kind of inadvertant hypocracy will continue...

    ... at our own individual level, it often gets translated into personal paradoxes/ contradictions, e.g.,:

  • contributing to CRY (Child Rights and You), while simultaneously employing a child as a domestic help

  • appeiciating/applauding "Inconvenient Truth", but forgetting to switch-off fans, lights or AC

  • throwing litter on the street, while cursing the quality of municipal services