India the Superpower? Think again

India should put aside pride about its growing economy and concentrate on improving the lives of average citizens, argues Fortune's Cait Murphy.
FORTUNE Magazine

By Cait Murphy,
Fortune assistant managing editor
February 9 2007


Plug in the words "India" and "superpower" into an Internet search engine and it's happy to oblige - with 1.3 million hits. I confess that I did not check each one, but I suspect that almost all of these entries date from the last couple of years.

This is understandable. For the first time ever, India has posted four straight years of 8 percent growth; since it cracked open its economy in 1991, it has averaged growth of 6 percent a year - not in the same league as China, but twice the derisory "Hindu rate of growth" that had marked the first 45 years of independence.

India has gone nuclear, and even gotten the United States to accept that status. Its movies are crossing over to become international hits. The recent $11.3 billion takeover of Corus by Mumbai-based Tata Steel was the biggest acquisition ever by an Indian firm.

No wonder the idea of India as the next superpower is fast becoming conventional wisdom. "Our Time is Now," asserts The Times of India. And in an October survey by the Chicago Council on World Affairs, Indians said they saw their country as the second most influential in the world.

Sorry: India is not a superpower, and in fact, that is probably the wrong ambition for it, anyway. Why? Let me answer in the form of some statistics.

* 47 percent of Indian children under the age of five are either malnourished or stunted.
* The adult literacy rate is 61 percent (behind Rwanda and barely ahead of Sudan). Even this is probably overstated, as people are deemed literate who can do little more than sign their name.
* Only 10 percent of the entire Indian labor force works in the formal economy; of these fewer than half are in the private sector.
* The enrollment of six-to-15-year-olds in school has actually declined in the last year. About 40 million children who are supposed to be in school are not.
* About a fifth of the population is chronically hungry; about half of the world's hungry live in India.
* More than a quarter of the India population lives on less than a dollar a day.
* India has more people with HIV than any other country.

(Sources: UNDP, Unicef, World Food Program; Edward Luce)

You get the idea.

The 2006 UN Human Development Report, which ranks countries according to a variety of measures of human health and welfare, placed India 126th out of 177 countries. India was only a few places ahead of rival Pakistan (134th) and hapless Cambodia (129) and behind such not-about-to-be-superpowers as Equatorial Guinea (120), and Tajikistan (122).

As these and other numbers suggest, Indian triumphalism (a notable 126,000 hits on Google) is not only premature, it is misguided. Yes, growth has been brisk, and of course growth is necessary to make a dent in poverty. But as Edward Luce, author of the excellent, "In Spite of the Gods: The Strange Rise of Modern India," noted in a recent talk, poverty in India is not falling nearly as fast as its brisk rate of growth might anticipate.

The reason for this is that Indian growth has been capital-intensive, driven by the growth in high-value services such as IT. This is a good thing, but what it does not do is create stable and reasonably paid employment for not particularly skilled people - and this matters a lot, considering eight to 10 million Indians enter the labor force every year. Luce estimates that there are 7 million Indians working in the formal manufacturing sector in India - and 100 million in China.


India is awash in private equity

To look at it another way, the 1 million Indians working in IT account for less than one-half of one percent of the entire working population. This helps build reserves (and national confidence, and tax revenues) but is not the poverty buster that labor-intensive development is. As Prime Minister Singh told Luce, "Our biggest single problem is the lack of jobs for ordinary people."

The problem with India's self-proclaimed (and wildly premature) declaration of superpower status is that it reflects a complacency about both its present - which for many people is dire - and its future. Eight percent growth for four years is wonderful, but as the saying goes, past performance is no guarantee of future results. And India is not doing what it needs to in order to sustain this momentum.

Consider the postwar history of East and Southeast Asia. The comparison is appropriate because India started at about the same point, and has watched just about every country in the region get ahead of it on the economic curve. All these places developed by being relatively open to trade; by investing in primary and secondary education; and by building pretty decent infrastructure (not only roads and ports, but health clinics and water supplies). India has begun to embrace one leg of this triangle - freer trade.

Wireless Wonder: India's Sunil Mittal

Even here, though, many of the worst features of the swadeshi ("self-reliance") era remain intact, including an unreformed state banking sector; labor regulations that actively discourage hiring; abstruse land laws (and consequent lack of land titles); misshapen subsidies that hurt the poor; and corruption that is broad, deep and ubiquitous. Nothing useful is being done about any of this.

As for the other two legs of this development triangle - education and infrastructure - these are still badly broken. About a third of teachers fail to show up on any given day (and, of course, are unsackable); the supply of both water and power is expensive and unreliable.

These facts of life too often go unremarked in the current euphoria about the state of the nation. "We no longer discuss the future of India," Commerce Minister Kamal Nath told the Financial Times in a typical comment. "The future is India."

Hubris, of course, is the stuff of politics everywhere. But the future will not belong to India unless it takes action to embrace it, and that means more than high-profile vanity projects like putting a man on the moon or building the world¹s tallest tower. It means showing that the world's largest democracy can deliver real progress to the hundreds of millions who have never used the phone, much less the Internet. And in important ways, that just isn't happening.

India has many reasons to be proud, but considering it remains a world leader in hunger, stunting and HIV, its waxing self-satisfaction seems sadly beside the point.


India

Thaksin: Demon or Monkey?

In a traditional Thai dance called the Ramakien, Hanuman the monkey general leads the king's army into battle against an evil demon named Tosakanth.


But in Thailand's modern-day political drama, it's Thaksin Shinawatra, the former prime minister, who's been cast as the bad guy by the country's military.

The generals who overthrew him in a coup last September blame Thaksin for nearly all of Thailand's problems - from the bloody fighting in the south and the New Year's Eve bombings in Bangkok to the cracks in the runway at Bangkok's new airport.

But for many Thais - maybe most - Thaksin isn't a villain. He's still their hero.

Enduring popularity

When Al Jazeera's David Hawkins travelled to Thaksin's political heartland in Thailand's north to see how much support remains for the former prime minister amongst the rural poor who voted him into power, the results were surprising.

Khankaew Wutisin, a fruit vendor said: "I'm a poor person. Thaksin made us feel important, like we had a voice."

Saenjan Wora-on, a shopper, said: "The good thing about Thaksin was he helped people. He gave us a healthcare scheme. He paid Thailand's national debt. No one else can do the things that he did."

Tong Panchompu, a trishaw driver, said: "I want him to come back. I don't think this government will be around long."

Thaksin is especially popular in Chiang Mai. After all, it's his hometown. But he won two national elections, both times by a landslide.

For sign painter Charin Jompo those were good times - the martial law imposed by the army has hurt business, he says.

Jompo said: "We don't do any political work anymore. We'd get into trouble."

He's thrown away all his pro-Thaksin banners, but the ex-prime minister's picture still hangs on the wall.

"We've had more than 20 prime ministers, but no one made a difference like Thaksin", Jompo said.

Corruption alleged

But Thaksin's detractors say he's still a corrupt and conniving political opportunist.

Panitan Wannatayagorn, a political analyst, said: "Hitler was popular, you know. Mussolini was popular. Marcos was popular, you know. Fidel Castro was popular - is popular still today. Some of these people are good. Some are not good. Thaksin is essentially falling into that category."

There are 23 ongoing investigations into the alleged corruption of Thaksin's government, but so far he hasn't been charged with anything.

Even though Thaksin says he isn't planning a comeback, hardly anyone in Thailand believes him.

And perhaps they're right. Since the coup, Thaksin's managed to stay in the media's spotlight and keep everyone guessing about his intentions.

In an interview with Al Jazeera, Thaksin said he would still be prepared to help the country's army chiefs restore democracy.

Thaksin said: "They have to return power back to the people. They cannot hold power forever.... This is the first time they have staged a coup against a popular government.

"So if you stage a coup against a popular government you don't have to waste the time to justify the coup but you should take the time to reconciliate the difference of people of the two sides."

In the Ramakien story, the king's army wins in the end, defeating the Tosakanth, the evil demon.

But the Thaksin Shinawatra story isn't over yet. Thailand's former prime minister might still make monkeys out of the generals who threw him out of office.
Source: Al Jazeera



Why we are grateful to Thaksin (again)

I

t may be too early but the temptations are there. Readers have suggested we'd be better off leaving the man alone and instead looking forward to the country's future despite his world tour lecturing on Thailand. As much as journalists and Thais would love to put everything "Thaksin" behind them and start anew, things keep bringing him back to our thoughts.

Thaksin Shinawatra can be proud of himself. Even though he is out there, he is still doing Thailand favours that he himself might not be able to imagine. My maid is now very keen to learn more about His Majesty the King's sufficiency theory because she feels the prime minister in exile may have attacked it. Football lovers have recently been more interested in the results of the Thailand-Singapore match rather than fixating on the English Premier League and their favourite European teams.

Behind all of these positive changes is the man. And I'm sure many people would like to express gratitude to him.

Read :"Why we are grateful to Thaksin (again)" here.


Thailand Thaksin

Optimist of Freedom and Democracy

The world must still remember the black eye Anwar Ibrahim received from a policeman, which was caught on camera and beamed around the world. The scene unfolded when the then deposed Malaysian deputy prime minister was walking into court on Sept. 29, 1998 for the alleged crime of sodomy and corruption.

But the event and his subsequent imprisonment at Sungai Buloh Penitentiary went beyond a mere black eye: “The incident was also an eye-opener for my country, for all Malaysians, that injustice was an acute problem in this country,” Ibrahim, who describes himself as a liberal and democrat, recently told The Jakarta Post.

In the midst of the 1997 economic crisis, Ibrahim - who supported free market principles - campaigned for greater accountability and rejected handing government bail-outs to politically connected companies. He also severely cut government expenditure in mega projects and introduced the controversial Anti-Corruption Legislation as acting prime minister.

All these moves are believed to have displeased then prime minister Mahathir Mohamad. Ibrahim was sacked and was imprisoned under what many believed to be a fabricated conviction.

Ibrahim was finally released in 2004, but is still barred from running for office until 2008. He is presently advisor to the People’s Justice Party, of which his wife Dr. Wan Azizah is president.

Born on Aug. 10, 1947 in Cherok Tok Kun, Penang, Ibrahim is known for his student activism. Today, he is seen as a prominent advocate of the “Asian Renaissance” and a leading proponent of greater cooperation among nations. He is also passionate about Shakespeare, and his favorite singers are Asha Bhosle and Latta Manggeskar.

During a recent interview with the Post at Kenyir Lakeview Resort in Terengganu, Malaysia, Ibrahim shared his views on freedom of expression, justice, democracy, multiculturalism, interfaith dialog, economy and problems faced by Muslims around the world and in Malaysia.

Question: If you became prime minister, would you relax restrictions on the Malaysian press?

Answer: The issue of prime minister has to be decided by Malaysians and also be dealt within the party. However, the position of the opposition is very clear that the media must be free from government’s control. In Mahathir’s era, the media freedom index was 150; now we are a few points worse.

Q: Would you also abrogate the repressive Internal Security Act?

A: We (The People’s Justice Party) oppose not only the ISA, but also all draconian laws, all restriction on the media, students and unions. The present government (under Prime Minister Abdullah Badawi) might be a bit more relaxed than that of Mahathir, but all repressive laws are still in place.

Q: How do you assess multiculturalism in your country, and what is the progress of the interfaith dialog that you initiated?

A: We have initiated a number of interfaith discussions at the civil society level, and I am encouraged that all the meetings and forums that we conducted were well attended. The deliberation was frank and there was a willingness and readiness to support a reform agenda for freedom, for respect of religion, for tolerance and against any form of extremism.

We are not for challenging other faiths, but for understanding and having the humility to learn and accept others. The politics of engagement would moderate even the fundamentalists.

Unfortunately, the government refuses to engage in a public discourse on these issues, and our national media is in a total blackout on this kind of news. Actually, the issue is not merely extremists as alleged, but also the incompetence of the government to grasp the issue. Like the government apparatus arresting a couple on the street. This has nothing to do with fundamentalism and extremism; this is a total hypocrisy because the government allows all of the excesses of corrupt practices among the rich or the ruling clique, but harass young couples on the street.

Q: You have mentioned that you are a consensus builder and you allow open debate within the members of the People’s Justice Party. Do you give your personal stand on strategic issues?

A: I actually listen a lot, and indeed I would give my personal views on important issues.

Q: So what is your personal view on Muslims converting to different religions?

A: This is not really a big issue. It affects only a very few individuals, and not only among practicing Muslims in the first place. I think we have to be a bit farfetched to use this as criteria for general Muslims converting to Christianity or Hinduism or others. We have to mold the discussion with better understanding of some specific issues.

Under Malaysian rules, if you want to convert to Islam, you have to go to a (specific) religious court.

So this is not a public decision, not a governmental decision, it is an individual decision that needs to be discussed with religious authority that he or she endorsed at the first place.

Q: How would you lure non-Muslims to become members of the People’s Justice Party?

A: There are quite a substantial number of non-Muslim party leaders and followers; you know there are Chinese and Indians … many of them are Christians. And one of the vice presidents of the party is Lee Boon Chye, a famous Chinese surgeon.

Q: If you become prime minister and you replace the New Economic Policy with Malaysian New Economic Agenda, wouldn’t you fear being left behind by Malay Muslim constituents?

A: Well, this issue is being debated by Muslims as well - or the Malays. The policy has benefited certain parts of the Malays - it has been abused.

We have UMNO (United Malays National Organization) leaders using this (policy) to enrich themselves, while a vast majority of the Malays themselves are being marginalized.

So we ask the Malays, why do you need this agenda? The new agenda, of course, would not marginalize the poor, of which the majority are Malay, but we would encourage all Malaysians — Chinese, Indians — to fully participate in the economic process.

We have made it clear that dismantling this New Economic Policy and replacing it with the Malaysian New Economic Agenda - which is more competitive, more vibrant - will attract more foreign investment, is able to rid the country of corruption which is endemic, is able to rid the country of cronyism… we have evidence that government contracts are benefiting ministers and their family members and cronies directly.

Q: What do you think of problems faced by Muslims around the world, particularly in Malaysia?

A: Of course, many of them are enraged by the policy of the West, particularly the United States under this administration of Bush. It is very difficult for them to see a just resolution of the conflict between Israelis and Palestinians; we see this unending battle in Afghanistan and continuing occupation of Iraq. This has caused a lot of anxiety among Muslims.

But we have to deal with this and that, notwithstanding our disagreements with some of the foreign policy prescribed by the U.S. We must remain in a moderate voice and promote understanding.

Q: The restrictions on you will be officially lifted in 2008; are you optimistic?

A: I will always be an optimist. Otherwise, I would not have survived in jail.

Alpha Amirrachman
Jakarta Post
February 1st 2007

Mexican Muslim Cleric Jailed

An imam from Mexico was given a four year jail sentence for defrauding a businesswoman. 46-year old Said Louahabi had been arrested on April 23, 2004. He conned 36-year old Felicia Ang Pei-shan into believing that five bags of black "notes" could be processed and converted into US dollars, Euros and sterling.

Ms Pei-shan gave him 297,000 ringgit ($84,012) of her own money. The incident took place between February and March 2004, at the Maple Suite, Maple Tower hotel in Chagkat Raja Chulan.

Said Louahabi had no previous convictions, and his defense had tried to use the argument that he worked as a translator at international conferences and had a wife and two children to support.

Louahabi was said to be remorseful. He had founded an Islamic center in Mexico.

Deputy public prosecutor Mohd Abazafree Mohammed Abbas said: "His actions did not reflect those of an imam. He had abused his position to cheat." Abbas asked for a punitive sentence as the case was of public importance and "involved a foreigner".

Sessions Court judge Nursinah Adzmi ordered that Louahabi's seentence should commence from April 2004, the time of his arrest.

Read the News Here and Here .

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INDIA'S IT MIRACLE NOT SO MIRACULOUS

India's IT industry is not as successful as it seems and other countries should think carefully before following suit, writes Athar Osama.

Since India, Ireland, and Israel emerged as 'software super-powers' in the mid-to-late 1990s, many developing countries have joined the race for economic development led by information technology (IT).

Information and communications technology can level the playing field between advanced and under-developed countries in terms of access to information and knowledge. But it cannot be a panacea for the developing world's quest for economic growth and prosperity.

Many countries have tried to replicate India's success by developing IT-led economic development strategies, designed to "propel their economies into the twenty-first century". Serious effort and precious resources have been spent on these endeavours.

But new evidence suggests that this might not be a viable way forward.

Fortunate circumstances

There is a growing sense that India's IT miracle may not be replicable. Through the collective examples of other countries such as Brazil, Iran, Pakistan, Romania, Sri Lanka or Ukraine, we now know that India's success arose from decades of sound human resource policies, institution building, and a historical accident in the form of the millennium challenge.

Critical decisions, taken decades ago, enabled India to take advantage of an opportunity when it presented itself. In the 1950s, for example, India established the Institutes of Technology that have since become the engine of growth for Indian IT and a symbol of its human resource advantage. When IBM moved out of India in 1978, it left behind several hundred unemployed Indian computer engineers who sowed the seeds of software entrepreneurship throughout the country.

This early-mover advantage has proved crucial to the country's success. India was fortunate enough to be at the right time and place — it capitalised on unique circumstances and never looked back. It's initial success in software exports also set in motion self-fulfilling prophecies not available to other countries. The most important of these was the image of India Inc., the inspirational success stories that have driven others to work hard and succeed, as well as the 'can do' attitude and confidence that now characterise India's corporate sector.

Exaggerated success

In addition to these exceptional circumstances, growing evidence suggests that India's software 'miracle' may not be as deep as it is believed to be.

The inherent competitive dynamics of the software exports industry means that the exporter sees a small portion of the revenue generated. As much as 55-60 per cent of revenue from India's IT exports never make it back to the country.

Several credible sources, including the United Nations Conference on Trade and Development, have also questioned the validity of Indian data on software exports. A 2005 study by the US Government Accountability Office (GAO) found significant discrepancies between US and Indian data on IT outsourcing.

In 2003, for example, India claimed to have exported US$8.7 billion worth of software, most of which went to the United States. But US companies recorded just US$420 million worth of software imports from India — a remarkable 20-fold difference.

The GAO believes that this huge inconsistency arises, in part, from India misreporting financial data. For instance, India counts the earnings of all temporary workers in the United States as part of their exports figures. But this is against universally-accepted financial disclosure conventions suggested by the International Monetary Fund. The result is a gross over-representation of Indian software exports.

Several factors also point to a relatively small impact on economic development from India's IT industry. In 2005, for instance, the IT exports industry was a marginal job-creator, employing 770,000 people — just 0.21 per cent of the total labour force. Trickle-down effects on other parts of the Indian economy, such as job creation in the services sector or increased productivity due to higher use of IT in, say, manufacturing, are also largely absent.

Careful consideration

It may come as a surprise to the world's development community that India's IT industry has had far less impact on development than is often stated.

But it highlights the tough challenges that face would-be replicators of the Indian experience, who see IT exports as both a means and an end to their economic development goals.

A serious reassessment of the IT-led economic development policies and philosophies favoured by many developing country politicians and development planners is needed.

For most countries, IT would remain a marginal industry creating jobs for no more than a minor share of a country's labour force. It would perhaps not deliver broader economic gains unless accompanied by industrial development of the kind that occurred in the West during the first half of the twentieth century, or is taking place in China today.

There is certainly no harm in adopting forward looking science and technology-based development strategies. But doing so without considering a country's unique endowments, initial conditions, and political trajectories could be counterproductive.

Wholesale replication of an IT-led development philosophy might not be the best way forward.

Athar Osama is a senior executive at ANGLE Technology Group — an international technology and economic development consulting company.

(Source: Science and Development Network)

**********

Lawmaker won't apologize for 'Islamophobic' letter

A Virginia congressman will not apologize for writing that without immigration overhaul "there will be many more Muslims elected to office demanding the use of the Quran," his spokesman said.

Republican Rep. Virgil Goode's letter to constituents also warns that without immigration overhaul "we will have many more Muslims in the United States."

Spokesman Linwood Duncan said Goode's letter was written in response to complaints his office received about Minnesota Rep.-elect Keith Ellison's request to be sworn in using the Quran.

Ellison is the first Muslim to be elected to Congress.

Goode's office released the letter to CNN Wednesday.

In it, Goode wrote, "When I raise my hand to take the oath on Swearing In Day, I will have the Bible in my other hand. I do not subscribe to using the Quran in any way.

"The Muslim representative from Minnesota was elected by the voters of that district and if American citizens don't wake up and adopt the Virgil Goode position on immigration there will likely be many more Muslims elected to office and demanding the use of the Quran.

"We need to stop illegal immigration totally and reduce legal immigration and end the diversity visas policy pushed hard by President Clinton and allowing many persons from the Middle East to come to this country.

"I fear that in the next century we will have many more Muslims in the United States if we do not adopt the strict immigration policies that I believe are necessary to preserve the values and beliefs traditional to the United States of America and to prevent our resources from being swamped."

He added, "The Ten Commandments and 'In God We Trust' are on the wall in my office. A Muslim student came by the office and asked why I did not have anything on my wall about the Quran.

"My response was clear, 'As long as I have the honor of representing the citizens of the 5th District of Virginia in the United States House of Representatives, the Quran is not going to be on the wall of my office.' "

The Council on American-Islamic Relations asked Goode to apologize.

"Rep. Goode's Islamophobic remarks send a message of intolerance that is unworthy of anyone elected to public office," the council's Corey Saylor said in a statement. "There can be no reasonable defense for such bigory."

Duncan told CNN that Goode stands by his comments

Goode makes complete ass of self

Virgil Goode, stands by his anti-Islamic rhetoric: "...If American citizens don't wake up and adopt the Virgil Goode position on immigration there will likely be many more Muslims elected to office and demanding the use of the Koran.

Follow-up Appended

Brace yourself for the following letter, shared with C-VILLE by John Cruickshank, chair of the local Sierra Club chapter. Representative Virgil Goode (www.house.gov/goode) told us, through his press secretary, “I wrote the letter. I think it speaks for itself.”

Congress of the United States
House of Representatives
Washington, DC 20515-4605

December 7, 2006

Mr. John Cruickshank
7 xxx Sxxxxxx Dr.
Earlysville, VA 22936

Dear Mr. Cruickshank:

Thank you for your recent communication. When I raise my hand to take the oath on Swearing In Day, I will have the Bible in my other hand. I do not subscribe to using the Koran in any way. The Muslim Representative from Minnesota was elected by the voters of that district and if American citizens don’t wake up and adopt the Virgil Goode position on immigration there will likely be many more Muslims elected to office and demanding the use of the Koran. We need to stop illegal immigration totally and reduce legal immigration and end the diversity visas policy pushed hard by President Clinton and allowing many persons from the Middle East to come to this country. I fear that in the next century we will have many more Muslims in the United States if we do not adopt the strict immigration policies that I believe are necessary to preserve the values and beliefs traditional to the United States of America and to prevent our resources from being swamped.

The Ten Commandments and “In God We Trust” are on the wall in my office. A Muslim student came by the office and asked why I did not have anything on my wall about the Koran. My response was clear, “As long as I have the honor of representing the citizens of the 5th District of Virginia in the United States House of Representatives, The Koran is not going to be on the wall of my office.” Thank you again for your email and thoughts.

Sincerely yours,
Virgil H. Goode, Jr.
70 East Court Street
Suite 215
Rocky Mount, Virginia 24151

Cruickshank had never communicated with Goode’s office about Muslim immigration or official uses of the Koran. According to Goode’s office, Goode had received a flood of e-mails from constituents in response to newly elected Minnesota Representative Keith Ellison’s declaration that he would use the Koran, not the Bible, when being sworn into Congress next month. This letter was Goode’s response to those e-mails; Goode’s office says Cruickshank received the letter in error.

December 21, 2006

Media attention continues to grow around Rep. Virgil Goode and his letter to constituents, first published by C-VILLE. The story has been widely circulated by AP, Gannett, and others. The Smoking Gun has posted a copy of the letter with credit to C-VILLE. Stories close to home include the Roanoke Times, Richmond Times-Dispatch, and Washington Post, as well as an editorial in the Roanoke Times asking “How can one swear to uphold the Constitution while denying its protection to all Americans?”

December 20, 2006

Since this story was first published by C-VILLE on December 19, numerous websites have linked to it eliciting responses from around the country, including the Council on American-Islamic Relations (CAIR), Wonkette, Talking Points Memo Muckraker, and The New York Times. The story has been picked up by a host of other news and policy organizations. CAIR called for Goode to apologize. Contacted by C-VILLE on December 20, Goode's press secretary Linwood Duncan said, "He has no intention of apologizing and he stands by the letter." Duncan took the call after a Goode staffer, who had answered the phone, asked C-VILLE, "Are you going to call us an 'ass' again?" The answer: Yes.

Islam phobia ??


Malaysia imam Mexico USA Virgil Goode:Muslim India IT