| |||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||
|
JUNE 2004 |
IN THIS ISSUE
MAIN FEATURE Ctrl+Alt+Delete : The Andhra Debacle By George Monbiot POLITICS A Defining Moment : Indian Elections 2004 By Praful Bidwai GLOBALIZATION The Coming Textiles Boom : Next Wave of Outsourcing By Siddharth Srivastava Publisher’s Note • Infotech India • Report: TiE Conference 2004 Scientists Honored: National Academy of Sciences U.S. Visas and Indian Students • Smart Labeling: RFID Tags Finance: A Secure Retirement • Indian Mercenaries in Iraq Community News in Brief • Auto Review: 2004 Chrysler Pacifica • Bollywood Tamil Cinema • Recipe: French Beans and Almond Sabji • Horoscope |
|
|
Publisher's Note
This magazine has often celebrated India’s growing scientific and technological prowess. However, we have also taken a look at the broader, socio-economic relevance of science and technology, and we haven’t been reticent about corporate malfeasance, either. This month’s cover story on Andhra Pradesh, though not directly about information technology or science—our usual focus—presents an area that has always intrigued this magazine—the crossroads of science, technology and politics. Andhra Pradesh did make strides in information technology, but the hype and hoopla surrounding it masked a dark secret of how its rural millions were deliberately sunk into poverty. George Monbiot’s remarkable article is an eye-opener which should be required reading for the many analysts and journalists—both Indian and Western—who were acting more like PR flacks than independent investigators of the truth. The recent election has not only brought a sea-change in Indian politics, it also has pundits, pollsters and analysts with eggs all over their face. In addition to fostering a salutary skepticism of armchair pundits, what else does it say about the polity of the world’s largest democracy? Our current issue presents a bracing analysis. Outsourcing is the big rage in the U.S.—literally. But while lawmakers are dancing to the tune of angry constituents seething at the loss of white collar jobs to India, do you know which industry is going to get hit by outsourcing? With World Trade Organization curbs set to expire, textile could be the next area where India becomes a huge global player, as an article in this issue explains. MAIN FEATURE  Ctrl+Alt+Delete:The Andhra Debacle By George Monbiot The The hype and hoopla around ousted Chief Minister N. Chandrababu Naidu and
But as Naidu wined and dined with the likes of Bill Clinton and Tony Blair, he made a devil’s pact with Western neoliberal ayatollahs to implement a brutal free-market program with disastrous consequences for millions of people in Andhra Pradesh, writes George Monbiot. Chandrababu Naidu, the state’s chief minister, was the West’s favorite Indian. Tony Blair and Bill Clinton both visited him in Hyderabad, the state capital. Time magazine named him South Asian of the year; the governor of Illinois created a Naidu day in his honor; and the British government and the World Bank flooded his state with money. They loved him because he did what he was told. Naidu realized that to sustain power he must surrender it. He knew that as long as he gave the global powers what they wanted, he would get the money and stature that count for so much in Indian politics. So instead of devising his own program, he handed the job to the U.S. consultancy McKinsey. McKinsey’s scheme, Vision 2020, is one of those documents whose summary says one thing and whose contents quite another. It begins, for example, by insisting that education and healthcare must be made available to everyone. Only later do you discover that the state’s hospitals and universities are to be privatized and funded by “user charges.” It extols small businesses but, way beyond the point at which most people stop reading, reveals that it intends to “eliminate” the laws that defend them, and replace small investors, who “lack motivation,” with “large corporations.” It claims it will “generate employment” in the countryside, and goes on to insist that more than 20 million people should be thrown off the land. Put all these — and the other proposals for privatization, deregulation and the shrinking of the state — together, and you see that McKinsey has unwittingly developed a blueprint for mass starvation. You dispossess 20 million farmers just as the state is reducing the number of its employees and foreign corporations are “rationalizing” the rest of the workforce, and you end up with millions without work or state support. “The state’s people,” McKinsey warns, “will need to be enlightened about the benefits of change.” McKinsey’s vision was not confined to Naidu’s government. Once he had implemented these policies, Andhra Pradesh “should seize opportunities to lead other states in such reform, becoming, in the process, the benchmark state.” Foreign donors would pay for the experiment, then seek to persuade other parts of the developing world to follow Naidu’s example. There is something familiar about all this, and McKinsey has been kind enough to jog our memories. Vision 2020 contains 11 glowing references to Chile’s experiment in the 1980s. General Pinochet handed the economic management of his country to a group of neoliberal economists known as the Chicago Boys. They privatized social provision, tore up laws protecting workers and the environment, and left the economy to multinational companies. The result was a bonanza for big business, and a staggering growth in debt, unemployment, homelessness and malnutrition. The plan was funded by the U.S. in the hope that it could be rolled out around the world. Pinochet’s economic understudy was bankrolled by Britain. In July 2001 Clare Short, then secretary of state for international development, finally admitted to Parliament that, despite numerous official denials, Britain was funding Vision 2020. Blair’s government has financed the state’s economic reform program, its privatization of the power sector and its “Centre for Good Governance” (which means as little governance as possible). British taxes also fund the “implementation secretariat” for its privatization program. The secretariat is run, at Britain’s insistence, by the Adam Smith Institute, a far-right business lobby group. The money for all this comes out of Britain’s foreign aid budget. It is not hard to see why Blair’s government is doing this. As Stephen Byers revealed when secretary of state for trade and industry, “The U.K. government has designated India as one of the U.K.’s 15 campaign markets.” The campaign is to expand opportunities for British capital. The people of Andhra Pradesh know what this means: they call it “the return of the East India Company.” This isn’t the only aspect of British history being repeated in Andhra Pradesh. There’s something uncanny about the way in which the scandals that surrounded Blair during his first term in office are recurring there. Bernie Ecclestone, the formula one boss who gave Labor £1m and whose sport later received an exemption from the ban on tobacco advertising, was negotiating with Naidu to bring his sport to Hyderabad. I have been shown the leaked minutes of a state cabinet meeting on Jan. 10. McKinsey, they reveal, instructed the cabinet that Hyderabad should be a “world-class futuristic city with formula one as a core component.” To make it viable, however, there would be a “state support requirement of Rs. 400-600 crores” (4bn-6bn rupees). This means a state subsidy for formula one of £50m-£75m a year. It is worth noting that in Andhra Pradesh thousands now die of malnutrition-related diseases because Naidu had previously cut the food subsidy. Then the minutes become even more interesting. Ecclestone’s formula one, they noted, should be exempted from the Indian ban on tobacco advertising. Naidu had already “addressed the PM as well as the health minister in this regard,” and was hoping to enact “legislation creating an exemption to the act.” The Hinduja brothers, the businessmen facing criminal charges in India who were given British passports after Peter Mandelson intervened on their behalf, have also been sniffing round Vision 2020. Another set of leaked minutes shows that in 1999 their representatives held a secret meeting in London with the Indian attorney general and the British export credit guarantee department, to help them get the backing required to build a power station under Naidu’s privatization program. When the attorney general began lobbying the Indian government on their behalf, this caused another Hinduja scandal. The results of the program the British have been funding are plain to see. During the hungry season, hundreds of thousands of people in Andhra Pradesh are now kept alive on gruel supplied by charities. Last year, hundreds of children died in an encephalitis outbreak because of the shortage of state-run hospitals. The state government’s own figures suggest that 77 percent of the population have fallen below the poverty line. The measurement criteria are not consistent, but this appears to be a massive rise. In 1993 there was one bus a week taking migrant workers from a depot in Andhra Pradesh to Mumbai. Today there are 34. The dispossessed must reduce themselves to the transplanted coolies of Blair’s new empire. Luckily, democracy still functions in India. In 1999, Naidu’s party won 29 seats, leaving Congress with five. Last week those results were precisely reversed. The British can’t yet vote Blair out of office in Britain, but in Andhra Pradesh they have done the job on behalf of the British people. - © George Monbiot
INFOTECH INDIA  U.S. Firms to Sell ISRO Images... Covansys to Hire 1,800... IIIT, IIT Join PlanetLab... Cryogenic Engine Explodes... Unisys to Open Development Center... Polaris Profit Up... BMC Signs Wipro... Tata, China Unicom Accord... SAP to Add 500 Jobs... BSNL Plans for Madurai... Pak to Test-fire Missile — Here is the latest on information technology from India US Firm to Sell ISRO Images American imaging firm Space Imaging will market to the world spatial images captured by the indigenous remote sensing satellites RESOURCESAT-1 and CARTOSAT-1. Antrix Corporation, the commercial arm of the Indian Space Research Organization, signed an agreement with U.S.-based Space Imaging early this year which gives the American firm rights to market worldwide the data from RESOURCESAT-1, that was put into orbit in October 2003, and CARTOSAT-1, which ISRO plans to launch later this year. India has emerged as one of the world leaders in remote sensing capabilities with ISRO having over 30 percent global market share in spatial images. “ISRO, Antrix and Space Imaging have worked as partners to fulfill India’s vision of a global commercial earth observation program and I am happy that the Indian Remote Sensing satellite system has emerged as one of the most high-profile programs of the imaging industry,” ISRO chairman G. Madhavan Nair has said in the latest issue of Space India. The Indian Remote Sensing satellite program primarily began with the objective of meeting diverse needs of natural resource management and environment-related needs of India and also for supporting advanced research in earth sciences. “In the past eight years, 19 ground stations have been installed to access data from Indian satellites IRS-1C and IRS-1D, and, hence, the success of these satellites is without question,” Space Imaging CEO Robert Dalal said. “We are investing six million to eight million dollars as part of our expansion,” Covansys India president and CEO K. Subrahmaniam told reporters in Bangalore May 18. The $378 million Covansys, one of the first American firms to have an offshore delivery centre in India, has development centers in Chennai, Bangalore and Mumbai employing a total of 3,200 people. The growth, besides at the U.S. development centers over the next one year, would be even at both Chennai, which has 2,500 people and the Bangalore centre with about 600 people. Driving NASDAQ-listed Covansys’s India center’s growth has been the recent deal with Fidelity National Financial which has picked up a 29 percent stake and assured a $150 million five-year deal. “We are adding new clients and also seeing growth from our existing clients like Peoplesoft,” Subrahmaniam said. The chipmaker said that the groups, the Bangalore-based Indian Institute of Information Technology and the Roorkee-based Indian Institute of Technology, will test the performance of networking and distributed-computing protocols being developed as part of the PlanetLab program. PlanetLab is an open, distributed network being used to try out new technologies in areas like distributed storage, network mapping, peer-to-peer systems, distributed hash tables and distributed query processing. The program operates at 156 sites worldwide. It is one of several research initiatives that Intel is working on in conjunction with universities and other academic groups. The company said researchers from the two centers will work closely with those from Intel India. Additionally, workers at the Indian PlanetLab institutes will collaborate with those from other countries to solve technical and non-technical problems. None was injured in the incident, officials told reporters in Nagercoil, Tamil Nadu. The cryogenic engine is formulated at Mahendragiri adopting indigenous technology and tests are being held at various places. General manager of the centre Muthu said the accident was due to technical flaw. A growing number of U.S. technology companies are opting to open development and engineering centers in India, taking advantage of the cheap, skilled labor there. The trend is causing concern among technology professionals in the United States. Last month, for example, the U.S. wing of the Institute of Electrical and Electronics Engineers expressed fears that offshore outsourcing poses threats to the nation’s tech leadership. Unisys said it plans to hire software engineers and data-processing workers directly and also through its local partners. The company has been operating in India through its offices in Mumbai and New Delhi. Unisys said it would continue to use third-party vendors in India for some software development and business process outsourcing work, even after the new center is set up. “For more than 20 years, our strategy has been to source globally in order to meet client demands. This new Indian operation will add capacity to Unisys global capabilities,” Cal Killen, vice president of solution development, said in a statement. “This expansion of global sourcing options supports our commitment to meeting clients’ needs while consistently managing costs.” The profit after tax for the same period stood at Rs. 72.20 crore, compared to Rs. 68.77 crore during the previous year, a company release said after a day-long board meeting in Chennai May 19. For the quarter ended March 31, the revenue stood at Rs. 170.30 crore, compared to Rs. 165.03 crore during the sequential quarter ended December 31, 2003. The company has recommended a dividend of 35 percent. The company launched this year Intellect Suite, a modern enterprise platform for financial service institutions, which seek to break through boundaries that shackle bankers. Intellect Suite is the new global version of Polaris’ highly successful OrbiOne suite of banking products. Quoting its chairman and managing director, Arun Jain, the release said the past year had been a remarkable journey of learning and discovery. “We spent a considerable amount of energy bringing in a phenomenal focus on building trust, empowering leadership and integrating the organization. This created a strong foundation for us now to build the new Polaris,” he said. Through the new global partnership, Wipro will offer BMC’s Control-SA, which includes asset management, workflow automation and password management applications. Wipro, headquartered in Bangalore, India, will also help customers design and implement security solutions. The MoU was signed by F.A. Vandrevala, chairman, Tata Teleservices, and Wang Jianzhou, chairman of China Unicom, in Mumbai. The understanding between Tata Teleservices and China Unicom to jointly develop applications on the CDMA platform aims at offering more and more value-added services to the subscribers of both the telecom operators and to come out with innovative offerings from time to time. The Memorandum of Understanding will immediately translate into Tata Teleservices and China Unicom offering international-roaming services to their subscribers on each other’s CDMA network. Tata Teleservices is India’s leading private telecom service provider. The company offers integrated telecom solutions to its customers under the Tata Indicom brand, and uses the latest CDMA 3G1X technology for its wireless network. Currently operating in eight circles — Delhi, Maharashtra, Mumbai, Karnataka, Andhra Pradesh, Tamil Nadu, Chennai and Gujarat — the company has a customer base of about 1.6 million. With a planned nationwide footprint across the country, Tata Teleservices has acquired licenses to operate in 11 more circles, which include Bihar, M.P., Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East), Uttar Pradesh (West) and West Bengal. China United Telecommunications Corporation was established on July 19, 1994. The birth of China Unicom brought competition into China’s telecom market and has been instrumental to the reform and development of the country’s telecom industry. The company offers integrated telecom service to its customers, which includes both GSM and CDMA mobile phone, long-distance call, local call, data communications, Internet service, IP phone, value-added service, wireless paging and a variety of relevant services. It is also the only Chinese telecom operator simultaneously listed at New York, Hong Kong and Shanghai Stock Exchanges. SAP spokesman Bill Wohl confirmed the German company’s hiring plans May 7, after a report about it appeared in a German newspaper. The company, which employs close to 30,000 people worldwide, will hire 1,500 more people this year, with India absorbing a third of the new positions, Wohl said. SAP also plans to add 500 jobs in the United States, where the company recently reported a 45 percent jump in first-quarter software sales. The new U.S. positions will be concentrated in the area of sales and customer support. SAP opened its research and development center in Bangalore, India, in 1998 and said last year that it would spend $120 million on expanding there. It is also adding staff at a new development lab in Shanghai, China. The vast majority of SAP’s software engineers still work out of the company’s headquarters in Walldorf, Germany. SAP hasn’t reduced its staff there as a result of the expansion into Asia — and doesn’t plan to, Wohl said. Wohl said the growth in India “makes good business sense,” because the salaries of computer programmers are lower there, and India is an emerging market for the company, which makes application software to automate corporate accounting, human resources and manufacturing. According to its Web site, SAP’s Bangalore lab develops Web portal software, Web services technology and applications for customer service and sales. As per the new plans, subscribers will be entitled to 300 free calls for a monthly rent of Rs. 360 and 1,025 free calls a month for a monthly rent of Rs. 975 respectively. Those booking basic phone services in the Madurai urban area under the new schemes will have to pay a one-time deposit of Rs. 1,000 for local calls/STD. No installation charges will be collected. The missile, which has a range of 3,500 km compared to the 2,000-km Shaheen missile test-fired in March, would be launched from the firing range near Nowshehra into the Arabian Sea, official sources were quoted as saying May 21. Prime Minister Mir Zafarullah Khan Jamali was informed of the details of the test when he visited the country’s premier nuclear installation Khan Research Laboratories yesterday, English daily The Nation reported.
POLITICS
The leader of the victorious Congress party, Sonia Gandhi showing the ink mark on her finger after casting her vote at a polling booth in New Delhi May 10. (PIB photo) The changes of the Seventies, although momentous, were largely directed from above, by parties, leaders and slogans. In the latest verdict, people’s gut-level concerns and choices from below have played a decisive role. Political parties have acted as their instruments. The single-most important message is that the Indian people comprehensively reject the Bharatiya Janata Party’s politics with its characteristic combination of communalism, parochialism, divisiveness, deception and unabashed economic elitism. Let’s put the issue bluntly. The BJP set out not just to rule for another five years, but to firmly establish a middle class-driven system, an Indian version of “property-owning democracy” based on the “India Shining” myth, in which the underprivileged would be effectively disenfranchised, the ethnic-religious minorities would submit to Hindutva’s majoritarian dictates, and where rapacious corporations would rule unhampered by democratic control. This project, and the entire set of social and economic policies that came with it, has been voted out. The significance of the verdict goes infinitely deeper than shifts in vote-shares, striking of alliances, the burdens or advantages of incumbency, appeals of different “brands” (like “Atal” or “Sonia”), or various strategies of election “micro-management.” Three very dissimilar states capture the essence: Gujarat, Andhra and U.P. In Gujarat, the electorate finally punished the BJP for its viciously right-wing, oppressively dualistic economic policies, its years of misgovernance and India’s worst state-sponsored communal carnage. The anti-BJP undercurrent, evident in all local elections two years before February 2002, was temporarily, artificially, suppressed by the polarization following the carnage, and the absence of a political alternative. (The Congress was then playing as Hindutva’s ‘B’ team.) The BJP received its worst drubbing in the very areas (central and northern Gujarat) where the violence was the fiercest. Gujarat Chief Minister Narendra Modi’s politics — crudely communal, blatantly imperious, and using language bordering on the obscene — has become a huge liability. So has the neo-liberal legacy in which capital thrives only by virtue of deindustrialization and casualization of production, and through rapacious labor exploitation (witness Alang’s ship-breaking yards). Andhra’s results are an unambiguous rejection of Chandrababu Naidu’s corporate-CEO-style politics. Naidu’s Andhra was turning into Chile-under-Pinochet, with massive transfers of public assets into private hands, starving of social sector spending and big tax-breaks for corporates. For Naidu, attending the Davos forum and blowing up huge sums on PR to impress potential investors was always a higher priority than redressing acute hunger or indebtedness (which drove over 3,000 farmers to suicide). Naidu stood exposed as a communally compromised politician when he refused to criticize the BJP’s outrageous conduct and its defense of the Gujarat pogrom. As agrarian distress grew, Andhra Pradesh citizens readily compared his tall claims about information technology with reality — IT’s measly 2 per cent share in state GDP and the state’s falling software-export rank. The people couldn’t take deception anymore. One more reason for Naidu’s rout is that Andhra was the only state where the opposition mobilized people in a sustained way. In Uttar Pradesh, the BJP has not only suffered a halving of its seats and substantial decrease in votes in all regions. Its social base has shrunk: even Brahmins are deserting it and the OBCs aren’t returning despite Kalyan Singh. The party’s defeat in Faizabad-Ayodhya, Kashi and Mathura only confirms what’s known: the temple issue is dead. The principal reason for the BJP’s growing unpopularity is agrarian distress, unemployment, and popular exhaustion with Machiavellian politics, reflected for example, in Vajpayee’s pitiable attempt first to get, and then divide, the Muslim vote by twisting facts to present Mulayam Singh as an ally. The BJP may soon be out of UP’s reckoning even as the Congress revitalizes itself through the projection of youth, dynamism and transparent earnestness. (That’s Rahul’s image, at least today). The BJP could shrink into what it was before the mid-Eighties — a relatively minor western India party, with 30 (or 50?) Lok Sabha seats. The Congress’s performance has outstripped the most optimistic projections, including its own. The credit must go to the party’s projection of a left-of-centre identity, based on pluralism and inclusivism, willingness to forge alliances, and Sonia Gandhi’s tireless, focused campaigning. She consistently drew vastly larger crowds than Vajpayee when she stressed gut-level livelihood issues and unsparingly attacked communalism. She has grown in acceptance and stature — as a serious, dignified and yet accessible leader, who is tough on the BJP but who never descended to its gutter-level personal attacks. Vajpayee’s manufactured image no longer sells. It has shriveled badly in the past three weeks. In any case, he’s unlikely to lead the BJP into the next election. The Congress did well where it was combative and unabashedly left-of-centre. It fared poorly where plagued by despair, drift and confusion about what agendas to emphasize. It must now rediscover the worth of good “populism” — a much-maligned word, once used to kill the best program designed for Indian children, namely mid-day meals. The future lies in ordinary people’s sensibilities, not the Sensex, leave alone global finance. The Left has put up its best-ever performance and assured for itself a moral-political stature far higher than its 62 seats. This derives from its fundamental commitment to popular sovereignty, secularism, its leaders’ intellectual qualities, and its clean politics. A Congress-Left alliance must form the core of the next government. To be inclusive, representative and durable, it should draw in Deve Gowda’s JD(S), Mulayam’s SP, and Ajit Singh’s RLD, besides the Tamil parties. However, it would be a huge mistake to rush into alliances without negotiating a proper, comprehensive common agenda, which reflects popular aspirations as well as rational priorities. This will be important in four areas: economics, social policy, institutional structures, and foreign and security policy. The economic priorities include major employment programs, quantum-jumps in social spending, macro-economic correction through progressive taxation and democratization and reform of the public sector, not its privatization. Crucial here is reversal of past policies which have added to inequalities and regional disparities and which generated nominal growth while impoverishing people. It’s vital to reaffirm secularism and pluralism actively by exemplarily bringing the Gujarat pogrom’s villains to justice, by resolving the Ayodhya dispute through a formula such as V.P. Singh’s temple-plus-mosque, banning and penalizing Togadia-style hate-speech, and extensively revising communal textbooks. Our public discourse must change towards genuine tolerance and respect for difference. Structures and institutions corrupted by the BJP — the PMO, the Akademis, the ICSSR-ICHR, Prasar Bharati, numerous official and advisory committees — must be thoroughly cleansed and reformed. Our foreign policy has become unbalanced as regards the U.S., Israel and the Iraq crisis. It’s basically disengaged from the neighbors, barring Pakistan. India must return to its broad-range policy orientation, which emphasizes non-alignment and a multipolar, non-hegemonic, multilateral, peaceful and rule-based world order. Similarly, our security policy must be freed of the jingoism the BJP has imposed on it. The nuclear policy must be turned upside-down, with disarmament as the top priority. This is a big agenda — but the minimum the new government will need to command credibility and authority and launch a politics of transformation. |TOP| REPORT  Winning Strategies TiECon2004 – A Siliconeer Report The World’s largest entrepreneurs’ brought top experts to provide candid advice for winning strategies for surviving and succeeding in todays challenging business world. A Siliconeer report. Media tycoon Ted Turner. Siebel Systems founder Tom Siebel. Bollywood’s most successful export to Hollywood Shekhar Kapur. Juniper Networks co-founder Scott Kriens. Motorola CTO Padmasree Warrior. Clearly, when The IndUS Entrepreneurs give out the call, the big boys come out to play. So it was May 14-15, when some of the top names in information technology and beyond (Ted Turner and Shekhar Kapur) headlined TiE’s 11th annual conference, “One Step Ahead – Harnessing the Optimism,” at the Westin Hotel and Conference Center at Santa Clara, Calif. TiE seems to have a good thing going. Despite the lean and mean days in Silicon Valley, organizers say their conference, billed by TiE as “the world’s largest entrepreneurs’ conference” has seen attendance climb 20 percent each year to well over 3,000 this year. TiE itself is well past its infancy, too. According to TiE president Sridar Iyengar, charter members at TiE have shot up 50 percent in the last 18 months. There are also now 42 TiE chapters in nine countries. And it wasn’t a boring conference full of back-to-back series of droning speeches either. It had drama. Literally. On the first day, a one-act play, “Insights into the Entrepreneurial Soul,” complete with actors playing a venture capitalist, a mentor and new entrepreneur, portrayed the inner voices of the entrepreneur and VC, using a stream-of-consciousness technique. With candor, wit and savvy, it provided tips to would-be entrepreneurs who have a big idea on how to make a convincing pitch to a venture capitalist. It turns out that what matters are the same old assets that have always mattered in business—honesty, experience, confidence and passion. Provided, of course, the idea itself is not a dud. Filmmaker Shekhar Kapur quipped that it was all “rather like the way I sell scripts” to Hollywood studios, with one exception. When Tom Cruise says “yes” to a project all the funding problems disappear. Since 1992, people associated with TiE have founded businesses with a combined market value of more than $200 billion, creating thousands of new jobs. This year’s conference focused on issues surrounding macro-level trends in job diversification. Breakout sessions featured a multi-faceted examination of global sourcing—more commonly referred to as outsourcing—with an emphasis on job creation, and advice on how to manage global operations. In the panel “Global Talent – the New Reality – The Big Picture of Offshore Services: Real Worry or Misplaced Fear,” Pillsbury Winthrop managing partner Mark Riady gave an overview of the rising hysteria in the U.S. against outsourcing. It was not a pretty picture at all. Anti-outsourcing legislation is pending or has been passed in a multitude of states and by the federal government. A law in the Tennessee legislature may be enacted soon, while a measure in Colorado has been thrown out by the courts. Panelists said that courts are likely to put an end to most of these laws. Businesses which heavily depend on state and federal contracts, though, may face a long-term problem. However, hotshot Silicon Valley entrepreneurs don’t seem terribly worried. Folks like Kanwal Rekhi and William Carr maintain that this is all election season hoopla, and economic imperatives are simply too compelling. After all, populist patriotism is apt to take a backseat when more people realize that the ban-outsourcing-and-keep-the-jobs-home policy comes with a pretty steep price tag at a time when states and the federal government are scrambling to cut spending amid harsh times and a poor public appetite for taxes. Meanwhile, 65-year-old media pioneer Ted Turner, who stunned the world once by donating $1 billion to the United Nations, presided over a private reception to announce the launch of an initiative bringing together his Turner Foundation with the American India Foundation and the United Nations Foundation. Turner is the founder of CNN, the first 24-hour all-news television channel in the U.S. A believer of non-violence who keeps a bust of Mahatma Gandhi on his desk, Turner spearheaded the Goodwill Games to foster understanding and peace during the Cold War. He is one of the nation’s largest holders of ecologically sustainable ranch land and has founded the Turner Endangered Species Fund. The UN Foundation has committed $28 million to a variety of UN projects within India. It has also chosen five natural UN World Heritage sites in India to promote sustainable preservation of wildlife and employment options for its communities, which are some of the poorest in India. GLOBALIZATION  The Coming Textiles Boom: Next Wave of Outsourcing - By Siddharth Srivastava Forget IT. The next outsourcing boom will be in textiles as the WTO quotas expire in 2005, with Indian industry is bracing for the next wave of outsourcing from the U.S. For a change, this has nothing to do with business processing, information technology or call centers. It’s actually an entirely different sector — manufacturing textiles and garments. And as it happens this shift will be at the cost of jobs, mainly in the U.S. and European Union. There are also fears here that outsourcing textiles is the next political hot potato that might hit the U.S. in an election year, resulting in non-tariff barriers. Textiles and garments have been one of one of India’s biggest export items, raking in $14 billion last year (compared to $10 billion in software.) Now, the sector is poised for a complete change. On Jan. 1, 2005, the 10-year-old Agreement on Textile and Clothing will come to an end in accordance with World Trade Organization rules. This will mark the beginning of a new regime where quotas that determined how much countries could sell each other will no longer exist. Till now low-cost countries like India, China, Pakistan and Indonesia could not increase their exports to lucrative markets such as U.S. and the EU due to the quotas. India is going to be a major beneficiary after Jan. 1 next year when competition opens up. According to estimates by industry consultants KSA Technical, Indian textile exports could jump from $14 billion to $50 billion by 2010. High-cost destinations such as Mexico, the Caribbean and Central American countries apart from others in the Indian sub-continent such as Sri Lanka and Bangladesh are likely to lose out. The potential of the industry is also evident from the expected growth of the global textile trade, which is estimated to increase from $400 billion to $700 billion by the year 2010. The Indian government’s new textile policy has set a target of textile and apparel exports of $50 billion by 2010, which in terms of world share could mean a rise of 2 percentage points to 5.6 per cent. It is worthwhile to note that India’s information technology sector accounts for 0.5 per cent of world share and is considered the crown jewel of India’s success story. The impact on the U.S. textile industry could be significant. According to a study by the Washington. D.C.-based American Textile Manufacturing Institute, more than 630,000 textile jobs could be lost in the U.S. and 1,300 plants could shut down due to the shift of manufacturing units to low-cost destinations, a killer blow to an already moribund industry. The study predicts that U.S. textile mills will lose billions of dollars in orders of yarns and fabrics. The two largest home textile companies in the U.S. — Pillowtex (shedding 6,500 jobs in North Carolina, the largest mass lay-off last year) and Westpoint Stevens shut shop and filed for bankruptcy last year resulting in substantial flight of manufacturing capacity to India. In India, there is significant brewing of activity in preparation of the new regime, with several U.S. firms pitching for new business. Wal-mart, J C Penney Company, Target. Federated group, Russell Corporation, Sears Roebuck are among the major U.S. retail chains and apparel companies that are entering into new deals to step up outsourcing of textiles from India. According to a report in Business Today, during the three-day KSA Technical annual summit in February, Wal-Mart placed orders worth $500 million; J C Penney $300 million and French retail giant Carrefour $100 million. Executives from these companies have been flying into India looking for new suppliers ready to sign big contracts. JC Penney’s president (purchase), for instance, visited India recently and held discussions with key apparel-makers including the Aditya Birla Group Company Madura Garments. Reports suggest that JC Penney plans to source $700-800 million worth of apparel from India over the next few years. The three biggest retailers Wal-Mart, JC Penney and Target have buying offices in India. Indian textile companies, on their part, have already embarked on a major capacity expansion to meet the manifold increase in demand. All textile majors, including Raymond, Zodiac, Welspun, Arvind and even some medium and small companies are expanding capacities. Arvind Mills has already doubled its garment capacity at Bangalore. Raymond, one of India’s largest fabric makers, is setting up a suit and trouser plant in Bangalore. Zodiac Clothing has recently expanded its shirt manufacturing capacity from 5– 6 million shirts per annum. Leading garment producers like OrientCraft and Creative Garments are building substantial additional capacities. Currently, India is focused more on low-value fabric exports than high-value apparel/clothing exports due to quota restrictions and government policies. The key lies in moving up the value chain by increasing garment exports, removing technological obsolescence and improving quality. It is expected that the removal of quotas will provide the necessary fillip to building scale, upgrading resources and productivity. India has several advantages over other countries with similar conditions and lower costs except China. There is a vertical integration of the complete production process — from growing of raw material cotton to in-betweens such as yarn, fabrics and garments. India is the third largest producer of cotton with highest area under cotton cultivation in the world. It is the second-largest textile producer in the world with a rooted tradition in textile production. Combined with cheap labor and skilled manpower at low cost, most competitors around the world (except China) do not hold too much of a threat. Also, several buyers from the U.S. and EU want to develop India as an alternative source to China in order to prevent the growth of a monopolistic player in the market. China is subject to quota restrictions till 2008 because of its late entry into the WTO. Hence, analysts believe that post-Jan 1, 2005 will result in a disproportionate gain in market share for Indian exports. However, the main fear yet is the fall-out in the U.S. consequent to the outsourcing of textile. Two years ago when cheap steel imports rocked the country, it culminated in the controversial anti-dumping duty (since thrown out by WTO). If textile turns into a political issue, there is likelihood of non-quantitative barriers. Unlike the software industry, India’s textile sector is largely disorganized and may be open to such attacks as lack of minimum working conditions, wages, child labor and environmental concerns. But, with a bit of luck and diplomacy, it is quite likely that after software, textiles will be the next big outsourcing story with billion-dollar deals the order of the day. - Siddharth Srivastava is a journalist based in New Delhi. |TOP| REPORT Scientists Honored: National Academy of Sciences A Siliconeer Report  Two Indian scientists have been honored by the U.S. National Academy of Sciences. A Siliconeer report.Molecular biologist Venkatraman Ramakrishnan (inset, r) and astrophysicist Ramanath Cowsik (inset, l) have been honored by the U.S. National Academy of Sciences “in recognition of their distinguished and continuing achievements in original research,” the NAS has said in a press release. Ramakrishnan has been elected a member and Cowsik has been elected foreign associate. They are among 72 new members and 18 foreign associates elected this year by NAS. Election to membership in the Academy is considered one of the highest honors that can be accorded a U.S. scientist or engineer. Foreign associates are nonvoting members of the Academy, with citizenship outside the United States. NAS, a private organization of scientists and engineers dedicated to the furtherance of science and its use for the general welfare, was established in 1863 by a congressional act of incorporation, signed by Abraham Lincoln, which calls on the Academy to act as an official adviser to the federal government, upon request, in any matter of science or technology. Molecular biologist Venkatraman Ramakrishnan is currently with the Medical Research Council, Cambridge, U.K. Ramakrishnan, a fellow of the Royal Society of U.K., has previously been awarded a Guggenheim fellowship. Starting out as a theoretical physicist, he made a two-year transition from physics to biology. At Yale University, he worked on a on ribosome structure. Ribosomes are the cellular components that manufacture enzymes, hormones, antibodies, and all other proteins in every organism from bacteria to humans. For more than 30 years, scientists have tried to uncover the ribosome’s molecular secrets by deciphering its three-dimensional structure. Ramakrishnan is internationally recognized for mapping the arrangement of proteins, helping determine the atomic structure and deriving fundamental insights. Ramakrishnan got his B.Sc. in physics (1971) from Baroda University and his Ph.D. in physics (1976) from Ohio University. He moved into biology at the University of California, San Diego. Ramanath Cowsik, director of Bangalore’s Indian Institute of Astrophysics is a Padmashri award-winning scientist. He has been educated entirely in India and is one of the world’s pre-eminent astrophysicists. Cowsik’s scientific contributions have been published in 175 research papers over several decades. His work spans the fields of astronomy, astrophysics, cosmology and non-accelerator particle physics. He established the highest observatory in the world in Hanle, Ladakh, in the Himalayas, at an altitude of 15,000 ft, for astronomy in the optical and infrared wavelength bands. He has contributed significantly to the understanding of highly energetic phenomena in astrophysics such as cosmic rays, pulsars, supernova remnants, gamma ray bursts, active- galactic nuclei and other such sources powered by accretion flows. |
George Monbiot is a columnist for the London Guardian. He has taught at the
- Praful Bidwai, a noted author, analyst and editorial writer, was formerly an