NASSCOM wakes up after 15 months
A team of researchers including professors of University of Brighton published a report in July 2009 titled “Crime online — Cybercrime and illegal innovation”. It was picked up by online news channels and quoted in news items to propagate lies about so-called cybercrimes in the business process outsourcing (BPO) industry of India. The report tries to present data from the annual reports of the Indian Computer Emergency Team, and Symantec in a way that suits its story, of India being a centre of cybercrimes and in general being a weak state. (via Phishing study: Bunch of lies).
Plodders – all of you!
I got bad news for you, Mr. Kamlesh Bajaj!
Nasscom, your team and maybe you should include yourself. Plodders! All! The report you quote came out in July – and you are responding to it it after 3 months. What more, if you had dug deeper, you would have come out with more – dirt, that is.
The ‘prequel’
Nearly 15 months ago, a Scottish newspaper, The Sunday Herald ‘revealed’ that an Indian hacker had broken into the credit card database and stolen some 8 million records. The supposed ‘victim’, Best Western Hotel immediately rejected this claim, and revealed that 10 (ten only) records had been stolen. If you check this story today, The Sunday Herald has (of course), removed the Best Western rebuttal of this story. How did the newspaper identify the nationality of the hacker? A journalist’s ‘secret’ sources!
Indian Media
The serious part of the story was that only a few (all from the largest media house in India, in fact) Indian newspapers picked up this story. No other significant newspaper in the world picked it up. India’s premier business newspaper The Economic Times featured this story prominently in their print edition. The Times of India, which says it the largest English newspaper, dutifully carried this IANS report. The challenger to Times Of India, DNA also carried this report. Looking at these reports just a little deeper, and the source of all these reports is a IANS (India Abroad News Service) report.
So, it was evidently planted and created for the Indian media. The story was dated August 23rd, 2008, Saturday, and carried the next day, on a Sunday for maximum impact – and for the business press to pick up and run the story on Monday morning. The story was planted through IANS, a supposed ‘pro-Indian’ news agency. Did anyone come back and retract this story? Of course, not!
Every aspect of this hoax was planned in great detail.
Within the next 3 days, on August 27, 2008 the 2ndlook blog uncovered this hoax ‘Indian hacker’ story. The prequel to the report that you are rebutting after 3 months. The secret – the ‘provincial’ mind’ (aka मोटी, देसी और मंद बुद्धि) of 2ndlook knows …
What they don’t know …
What these English speaking, Westernized journos, dont know and cant care about are some inconvenient facts. How can India have a low prison population, with a poor police-to-population ratio and a crime rate which is not above the average – in spite of a large civilian gun population.
All the 5 indices (below) create a bias for a lawless Indian society and rampant crime. With these five indices, going against a stable social system, how does current day India manage low-to-average crime rates.
- India has the lowest per capita prison population in the world. (‘put more criminals behind bars’)
- India also has the lowest police-to-population ratio in the world. (‘increase police force’)
- India has the second highest national gun stock in the world. (‘more guns means more crime’)
- India has the largest number of poor in the world. (‘it is poverty which the root of all crime’)
- Capital punishment in India is again at low levels. (‘kill enough criminals to instill fear’)
Western thinking and systems of law and order predict that India should have the highest crime rate in the world – which is not true. India has low-to-average crime rate compared to the Rest of the World.
Historically, trade in India is governed by शुभ लाभ ‘shubh labh’ – and hence Indians have not been major players in drugs proliferation (unlike Japan, the West in which traded Opium in Korea and China) or in slave trade. In modern times, though India is a power in computing industry, India is not a big player in spamming or in software virus.
Indian ethical system
More than 2000 years ago, Megasthenes a Greek traveller to India wrote,
Theft is of very rare occurrence. Megasthenes says that those who were in the camp of Sandrakottos, wherein lay 400,000 men, found that the thefts reported on any one day did not exceed the value of two hundred drachmae, and this among a people who have no written laws
Interesting it is. Surprising it is not!
The failure of the Nation-State
Divide et impera
Vietnam suffered from a prolonged war (1956-1976) – and finally peace had a chance after 20 years of war. Korea remains divided. The Cyprus problem between Turkey, Greece and the Cypriots has been simmering for nearly 100 years.
The role of the Anglo Saxon Bloc, in Indonesia, the overthrow of Sukarno, installation of Suharto and finally the secession of East Timor is another excellent example. The Israeli-Palestinian conflict (1935 onwards) will soon enter its 75th year. The entire Arab-Israeli-Palestinian conflict is a creation of the Anglo-French-American axis. The many other issues in the West Asia and Africa are living testimony of the Western gift to the modern world.
The track record
Closer home is the Kashmir problem. After 60 years of negotiations, India-Pakistan relations have remained hostage to the Kashmir issue. Similarly, between China and India, the border issues remain 60 years after the eviction of Britain from India.
The Anglo-Saxon habit of partitioning countries is a disaster!
- Cyprus between Greece and Turkey
- Israel between Palestine, Jordan and Syria
- Chinese Singapore in Malaysia
- Northern Ireland out of Ireland
- Two Koreas
- Taiwan and China
and of course a Pakistan out of India.
With a benign, ‘democratic’ dictator like Lee Kuam Yew, in the frame, the Singapore out of Malaysia is too small and too short term a success to make any impact.
The other thing is the Western ‘nation’ model has been a huge failure. How many countries have been successful in this quest for ‘nationhood’?
The world commemorates start of WWII as its greatest tragedy | Top Russian news and analysis online | ‘RIA Novosti’ newswire
September 1, 1939, few people could imagine that World War II would last six years and become the bloodiest war of the 20th century.
The reasons for the war have already been discussed at length, but the debates have resumed now that several East European countries are trying to shift part of the blame for unleashing WWII onto the Soviet Union.
Naturally, the main target for their criticism is the Molotov-Ribbentrop Pact, signed on August 23, 1939. Critics say the pact allowed Hitler to start the war barely a week after it was signed.(via The world commemorates start of WWII as its greatest tragedy – ‘RIA Novosti’ newswire).
After decades of Allied propaganda, linked here is a Russian version. The demonization of Hitler (not that he needed help), and the Soviet Union by the Western Allies has not helped the cause of history. The interesting aspect which this writer brings out is how Hitler was courted by all the Western allies – and how the West looked away, as Hitler started marauding his neighbours.
Much like the world looks away when it comes to Israel today. Or the demonization of Iran!
RBI to buy 200 tonnes of IMF gold
RBI’s decision to shore up its gold reserves needs to be seen in the context of other central banks across the globe increasing their gold reserves. Among them are the central banks of China, Russia and a few countries in the European Union.
In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.
Compared with this, India’s central bank did not add anything to its gold reserves in the last one year, according to Bloomberg data. (via RBI to buy 200 tonnes of IMF gold – Home – livemint.com).
Two years ago …
2ndlook had estimated that the Chinese could possibly (and they have) increase their monetary gold reserves. On April 24th, 2009, Bloomberg reported that China had increased
its (gold) reserves by 454 tons to 1,054 tons through domestic purchases and refining scrap metal, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in an interview with the Xinhua News Agency today. China, the world’s biggest gold producer, has increased its holdings before, Hu said in the interview carried on the administration Web Site. They rose from 394 tons to 500 tons in 2001 and to 600 tons in 2003. The U.S. has the world’s biggest gold holdings at 8,134 tons, followed by Germany with 3,413 tons, World Gold Council data show. France has 2,487 tons and Italy 2,452 tons, while the IMF has 3,217 tons, according to the council.
Another report, from Market Watch, a WSJ web publication added,
The increase makes China the world’s fifth-largest holder of gold, just ahead of Switzerland, and among the six nations plus the International Monetary Fund that have reserves of more than 1,000 metric tons. Although Hu did not elaborate on where China had sourced the additional bullion, her comments were interpreted as meaning they came from domestic sources and may included refining of scrap metal. Traders also say the gold was accumulated systematically over a number of years. Last year China ranked as the world’s largest gold producer with 12.2% of world output, equivalent to 288 metric tons. The U.S. ranked second with a 9.9% share, or 234 metric tons.
What are the future plans of the Chinese? A report quotes an analyst
China should increase its gold reserve from 600 tons to about 2,500 tons in a short term and to 3,000 tons in a long term to cope with the versatile exchange rate risks, said Teng Tai, an economist of China Galaxy Securities Company.
Exactly …
This really does not mean much – except that it may keep gold prices on boil. Whether a currency is backed by 5% or a 10% gold reserve makes no material difference, especially in this era of rampant use of (not just by the US of A) “a technology, called a printing press” as an economic tool. For long term economic stability, gold needs to be in the hands of individuals – and not Governments.
Why India
Since China is a significant gold producer by itself, it may not get a shot at buying IMF gold. India has negligible domestic gold production -and was possibly therefore given preference by the IMF. Of course, preference may have been given to RBI’s purchase, given its ‘responsible’ and ‘mature’ behaviour during the current Great Recession.
What does RBI’s gold purchase mean
RBI’s gold purchase means two things.
The Indian Government which has had a rather low percentage of gold holdings as their currency reserves will now bolster these reserves. Even after this purchase, Indian official reserves, will only be the ninth largest in the world in absolute terms.
On average, countries hold about 12.6% of their reserves in gold, up from 9.9% a year ago. Some of this represents an increase in gold holdings, but another driver of the increased proportion is the rise in the value of gold. (from India propels gold to new high.)
The overhanging threat of open market sales by the IMF, speculated by many and discounted by 2ndlook, now stands neutralized. This will be a kicker to gold prices in the short term.
The ideal thing …
Sell gold to individuals. Governments should not have such large holdings of gold. Gold in the hands of Governments is the prime cause of war. Gold holding should be widely dispersed, as widely as possible, amongst individuals – like the Indian gold possession model. No national government, in the new financial architecture should be allowed to have more than 250 tons of gold – to progressively reduce to 50 tons.
Fat in the wrong place
Will India be different?
The generally accepted view is that the government runs a bloated bureaucracy. Its current employee strength is 3.32 million. But over 80 per cent of this number is accounted for by specific service departments: posts, central police forces and the railways. Logically, these should not be counted as part of a “bureaucracy”, which as a consequence stands reduced to a relatively modest 600,000. Since the overwhelming majority of even that consists of clerical and support staff, the operational part of the government is quite simply too small. (via Fat in the wrong place).
The good news!
2ndlook has been consistently saying that the Indian Government is NOT fiscally expanding – as percentage of GDP. In terms of employee numbers, like this post (linked above) shows, it has shrunk. As more Indians have moved away from the brink of survival, they have come to depend less on public health care and public food grain distribution.
It wuz jes poor service
Critics may carp that the those who have moved away, have done so due to the ‘poor’ service levels at Governmental health care and public food-grain centres. What the carpers forget is that there is a decrease in total demand for such centres or any vocal activism to improve the ‘free’ system. Quite unlike the citadel of the welfare state – the West.
Indians see a decreasing role for the State in the future – in spite of the best efforts of the State to increase its role. And a ‘progressive’ lobby, like the writer of the post (linked above), who would like the Government to have a better ‘teeth-to-tail’ ratio.
The Indian State meets its colonial cousin
Under the garb of ‘growth’ and ‘progress’ the Indian Government has launched new mega projects to expand its footprint. For instance, the NREGA and Unique Identification Database Authority of India (UIDAI; headed by by Nandan Nilekani of Infosys fame).Will the Indian Government sheds it colonial baggage and Western leanings and go for an Indic model?
So, what will it be, India! The world’s first (and only?) lean Government – or a bloated Western style ‘Welfare State”?
A dollar devaluation by another name
British Prime Minister Gordon Brown said on Tuesday there was substantial support among the Group of 20 nations for creating a new framework to tackle global economic imbalances … Analysts said the United States’ drive to agree a roadmap for a more balanced global economy could meet resistance from China which is unlikely to agree reforms that would threaten its growth … A document outlining the US position ahead of the September 24-25 summit said big exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings … The euro hit a one-year high against a sliding dollar ahead of a federal reserve meeting and the G20 talks on rebalancing, a process which is likely to require a weaker dollar.
Like Quicktake has pointed out in earlier posts, the US has alternated between an overvalued currency to gain ownership over large sections of world economy – and now with a devalued dollar, it seeks to gain an upper hand in merchandise exports. The three main points that one needs to understand are: -
One – It reduces the real value of US debt. The Chinese, the Rest of BRICS and the Others need to be paid a lot less in the future. (as pointed out earlier in various posts linked here.) Two – It makes US exports artificially competitive. (as pointed out earlier in linked posts). Three – The US competitiveness will be anchored to assets purchased with over-valued dollars.
| US | Germany | Japan | China | ASEAN | India | |
| Labour | High cost | High cost | High cost | Low cost | Med. cost | Low |
| Welfare Burden | High | Very high | High | Low | Low | Low |
| Entrepreneurship | Medium | Medium | Low | Low | Low | High |
| Domestic market | Large | Medium | Medium | Medium | Small | Large |
| Raw materials | High ownership | Low-medium | Low-medium | Medium | Medium | Medium |
What the US is proposing is that the Chinese Yuan must become ‘stronger’ – and the dollar must become weaker. This will mean a real reduction in US debt – and a subsidy for US exports. Of course, a devaluation has never helped any regime in the long run – but in the short run it reduces imports and increases exports. But is a ‘fix’ that the patient begins to row dependant on!
Is that the US is wanting to do to itself?
Related Quicktakes
Khap panchayats seek legal claws – India – NEWS – The Times of India
A over-regulating state is also ineffective state ('Prohibitions' cartoon and ©by Meera Sapra)
Irked at being equated with the Taliban and kangaroo courts, khap panchayats in Haryana are now determined to get some legal sanction.
Soon, they will draw up a set of recommendations for making “suitable” amendments to the Hindu Marriage Act (1955) at the state level so that their rulings become valid under law.
Khaps are traditional area-based community organizations whose rulings have no legal sanction. In keeping with tradition, khap panchayats oppose marriages within the same ‘gotra’ (lineage) and are known to have meted out harsh punishments to “erring” young couples. (via Khap panchayats seek legal claws – India – NEWS – The Times of India).
‘Indian’ NGOs
A NGO /activist publication recently ran an article on Haryana’s khaps – equating the khaps to the Taliban. This was the famous ‘Tehelka’, whose main aim in life is to show how ‘backward’, ‘ignorant’, ‘uncivilized’ the India(ns) are.
Of course, being ‘English speaking ‘activistas’ of the ‘civil society’, nobody can doubt their intentions or message or their ‘intelleigence. Except some like 2ndlook – whose ‘provincial’ mind’ (aka मोटी, देसी और मंद बुद्धि) cannot reconcile the ‘de-regulation’ that these NGOs want and greater regulation that they propose – as they exhale and inhale.
Of course, since they are ‘educated’. ‘modern activistas’ without any axe to grind, they must be right. What is the data that they have? This story was linked to me by an 2ndlook reader (novaaristotle) and is worth reading for an excellent hatchet job.
In conversations with villagers over weeks and months, it became clear that murders decreed by Khap panchayats were common. However, in most cases, a twisted notion of tradition and the fear of social boycott ensure the murders are never reported to the police or the media. The National Crime Records Bureau (NCRB) doesn’t classify or record honour killings and hence has no statistics on them. The lack of figures on murders ordered by Khap panchayats or ‘honour killings’ hinders research and legislation that might address the issue.
Maybe, they should look take a 2ndlook at Indian society – from a law and order point of view.
All quiet on the Indian front …
In more than 1000 Indic books, claiming to record more than 10,000 years of history, there is no instance of any dispute reaching the King. The longest ancient epic in the world, The Mahabharata has no incident where a private dispute reached Yudhisthir (though a mongoose could lecture the King about sacrifices and yagnas). There was never any case of private dispute, recorded in the Ramayana, that reached Ramachandra (though a dhobi could ‘inform’ the king about bazaar talk regarding the Queen Sita). Even a poor Brahman, Kautsa, could reach King Raghu for help in the disbursal of guru-dakshina गुरु-दक्षिणा.
Is it that Indians were ‘saints’ and did not have private disputes? Were they so civilized that they could solve all disputes by talking to each other? Is it that Indian kings were not bothered about delivery of justice!
It gets worse! No prisons …
Modern econometric modelling has an interesting perspective on Indian economy where research shows that for much of the last 1000 years, India has been a significant economic power till the 1900.
China and India, this analysis estimates, for the last 1000 years, accounted for 50% of the world economy. Statistical analyses showed India with a world trade share of 25% for much of the 500 years during 1400-1900. With this prosperity, the most interesting (historical) aspect of the criminal management story is the absence of any surviving mass jails in India prior to colonial India.
Without prisons, just how did pre-colonial India, one of the largest (and most prosperous) populations of the world, deal with crime and criminals?
But then crime rate in India must be really high …
Cut to modern India. With such an inheritance, India has the lowest prison population in the world. How can India have such a low prison population, with a poor police-to-population ratio and a crime rate which is not above the average – in spite of a large civilian gun population.
All the 5 indices (below) create a bias for a lawless Indian society and rampant crime. With these five indices, namely: -
- Police to population ratio (‘increase police force’)
- Prison population (‘put more criminals behind bars’)
- Capital punishment (‘kill enough criminals to instill fear’)
- Poverty (‘it is poverty which the root of all crime’)
- Gun ownership (‘more guns means more crime’)
against a stable social system, how does current day India manage low-to-average crime rates. More than 2000 years ago, Megasthenes a Greek traveller to India wrote,
Theft is of very rare occurrence. Megasthenes says that those who were in the camp of Sandrakottos, wherein lay 400,000 men, found that the thefts reported on any one day did not exceed the value of two hundred drachmae, and this among a people who have no written laws
Historically, trade in India is governed by शुभ लाभ ‘shubh labh’ – and hence Indians have not been major players in drugs proliferation (unlike Japan, the West in which traded Opium in Korea and China) or in slave trade.
In modern times, India is not a big player in spamming or in software virus – though a power in computing industry. In August 2008, a hoax story alleged that an Indian hacker, had broken into a credit card database, and sold it to the European underworld. Some ‘experts’ feared that this would spark of a crime wave across Europe.
The Indic model of justice, crime and law
Evidence of a different Indic system goes far back in history – to Lipit Ishtar, Hittite laws, Hammurabi et al. As far back as 4000 years back in history. Indian kings did not deliver justice. It was done at the local level by panchayats पंचायत. Indian justice systems did not rely on imprisonment or executions or the police to control crime!
The answer – the world’s most stable marriage system and the extended family-social structures took care of the wayward. The khaps may have gone overboard in some cases (based on anecdotal evidence) – but the real tehelka is that khaps is the way forward – and not greater Government regulation.
U.S. Leads World In Foreign Weapons Sales – Report – NYTimes.com
Citing a congressional study released on Friday, the Times said the United States was involved in 68.4 percent of the global sales of arms.
U.S. weapons sales jumped nearly 50 percent in 2008 despite the global economic recession to $37.8 billion from $25.4 billion the year before.
The jump defied worldwide trends as global arms sales fell 7.6 percent to $55.2 billion in 2008, the report said. Global weapons agreements were at their lowest level since 2005. (via U.S. Leads World In Foreign Weapons Sales – Report – NYTimes.com).
Can you stop me ...
US in the Post WW2 world
In South East Asia from 1950-1975, Israel from the 1960 onwards and now in Iraq, Afghanistan, the US has been the in the middle of most expensive conflicts (measured in terms of lives lost) in post WW2 world.
This model of international relations is something that needs to change. The poor in this world has not become much safer, seen more democratic or significantly more richer. What justification does this policy have – apart from “I have muscles and can you stop me from flexing them” logic?
Gold – a non-military solution
As I see it, there are two simple solutions. One – everyone who disagrees with (or even if you are worried about the economic consequences of) the US foreign policy should go out and buy gold. This will surely trigger a collapse of the US dollar. Just a 100,000 people buying a 100gm of of gold in the next 1 year will trigger the dollar collapse.
Drill for oil
The second solution will need more time and will need co-operation foron the BRIC Governments. The BRIC Governments must go out and drill oil wells all over the developing world. The collapse in oil prices will remove the petro-dollar funding of the US and simultaneously eliminate /reduce the trade deficit of the developing world.
The bubble you know
A Chinese bubble has been deflated. Too bad it’s the wrong one. The main Shanghai stock market index has fallen 23% from its peak at the beginning of August, reversing half of the run-up that started early in 2009. That’s a welcome correction, but it doesn’t mean a return to normality, or address the bigger bubble round the corner.
Shares were driven up by a belief in China’s recovery – and by a rush of liquidity. The fall occurred because both were gently dampened. Politicians have warned that economic recovery isn’t a done deal. Monetary authorities drained some liquidity from the market, curbed certain kinds of lending and asked banks to show restraint. (via The bubble you know).
Look ma, "Green shoots"
The long and short
The US economy is going to take some time to recover – a long time. Green shoots versus Brown Weeds is the kind of empty debate which covers the complete lack of visibility on the probable outcome that economists have.
The Japanese have finally decided to sack the LDP – after more than 50 years. The Japanese do not expect any major recovery or growth to happen for the next few years.
Europe is in the boondocks – and is unlikely to come out out of this soon. Their most feasible European option is a greater role for public sector – which the Europeans seem to have embraced in a bear hug.
The BRICs of global economy
Which leaves the BRIC countries. Russia is too dependent on high raw material prices – which need greater demand from the world economy to make a difference. Russia feeds on high growth rates – but cannot be the reason for growth of the global economy.
Ditto for Brazil. Which leaves the world with India and China. Let us first take the Chinese case first.
How ln can this model work
Biting the bullet
Most economists believe that to kill the Beast of Great Recession, the world is left with one, single magic bullet – China. This being the only bullet in the chamber, makes everyone very nervous, keeps everyone busy, reading Chinese tea leaves with great care.
There is overall consensus that the Chinese growth figures need to be ‘tempered’ – and significantly. The fears seems to be in two areas: -
1. Overstated growth rates.
“The Chinese government is one of the few governments in the world that knows its GDP numbers three years in advance,” Marc Faber told CNBC. Combine this with the other preoccupation where “China is desperately trying to figure out how to withdraw its funds from the dollar without driving it down — not an easy feat.”
2. Understated bad loans by banks.
an astonishing $300 billion vanishing act … the amount of bad debt the top three banks offloaded in the early 2000s. Back then, the People’s Bank created four asset management companies to scrub away the dirt from two decades of policy-driven lending. There was a big catch. The AMCs bought the loans for up to 100 per cent of face value, while recoveries were in the 20-30 per cent range. That means the top three lenders’ Rmb1.2 trillion of AMC bonds, which start to mature this year, are likely to be almost worthless. In theory, the Ministry of Finance is ultimately on the hook, but it is unlikely to make good for the banks. The amount due to all three is roughly one-sixth of China’s fiscal revenues for 2008. (from If in doubt, rub it out BY John Foley / August 29, 2009, 0:03 IST).
Housing makes up roughly a quarter of investment spending, which is in turn 40% of gross domestic product. The differences between China’s big cities make a bubble harder to spot. But record bids for land are cause for concern, as is falling affordability in big cities. Meanwhile, stagnant residential rents suggest speculation, not demand for somewhere to live, is pushing up house prices. A burst real estate bubble could be fiendishly tricky to clear up. While stock markets clear in a day, property gluts can take months – if they clear at all. ( from The bubble you know by John Foley, Septemeber 1st, 2009, 01:33 IST).
Everything is made in China
Both these severely strain the economic outlook and the banking sector. This may lead to, what the WSJ.COM says, a situation, where “China in the medium term will face just the overcapacity and bad debt that many observers feared already existed.”
But some of these observations and scare stories are exaggerations – and need to be read with the caveat that the dominant Western media portrays all competitors in a similar manner.
What about the Indian economy
That pretty much leaves India as the sole candidate. India cannot absorb the kind of imports that are required to make a difference to the global economy. Or boost exports to the rest of the world – to create consumer led growth. World Bank estimates are that India will grow faster than China by 2010. So, no go!
A plan for Indian businesses
What this means is that India needs to do: -
1. Not bank on any kind of global recovery soon.
2. And island itself – by ensuring that any kind of global mayhem, counter-party risks do not hit Indian banks, corporates, exporters, et al. This may need some strong alliances on export guarantees and credit enhancement by importers for exports from India.
The Indian Government, may not take any major initiative in this regard, but it is the Indian businessmen, who should and must understand this situation – and take the necessary precautions, actions, insurance, guarantees, due diligence, comfort letters – the entire gamut.
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