India Planning Manned Space Mission?

According to this article here, ISRO, India's space agency is ready to send a manned space mission in another seven years if it gets the nod from the government. Critics have already been complaining that the lunar mission is itself outdated (been-there-done-that types) and India should focus on just launching satellites for better purposes.

Critics have called the mission outdated and complained that the agency is wasting the budget of 25 billion rupees, or $555 million, allotted by the government. They say cash-strapped India should restrict its space program to launching satellites. Nair defended the mission, saying it would encourage the Indian scientific community and would investigate the physical characteristics of the lunar surface in greater depth than previous missions by other nations. "It will explore its minerals, map the terrain and find out whether water and helium deposits exist," he said. "It will also give us a deeper understanding about the planet Earth itself or its origins. "Earlier missions did not come out with a full understanding of the moon, and that is the reason scientists are still interested."

I am not so sure about how much more useful a lunar mission will be given the history of the Apollo missions and the lack of returns on that. But I very much support space missions like this, if nothing, they will create more opportunities to other sectors of the economy. Investment in technologies that will create more opportunities and bring progress is never a bad thing. We wait until everyone in the country had their basic needs covered, progress in other areas would never happen. A few years from now, these will create jobs in much the same way that the IT industry has done.

Where do we go from here?

So, yesterday, I finished Fareed Zakaria. I think this book is an excellent read, and I would highly recommend it anyone interested in issues such as democracy, democratic trends, relationship between democracy & economics of a nation. In the conclusion, I found this very disturbing statistic (I am sure it is one of many of a similar kind):

Despite its democratic glories, India was ranked 124th out of 172 nations in the 2002 United Nations Development Program (UNDP) human development ranking, ranking low in almost all aspects of human development: literacy, education, infant mortality. It ranks lower than countries like Bolivia, Guatemala, Syria, and Cuba.

Also considering the fact that Asia is home to 800 million of the 1.2 billion people in the world living on less than $1 a day (and I daresay a large percentage of that 800 million is from India too), I think it is quite clear how far we are from getting to a point where all Indians have a decent standard of living.

Here is the 2003 UNDP Human Develoopment Index (HDI) ranking for India (we have slipped to rank 127 now). Notice the following - Gender Inequality in Education and Economic Activity, People with AIDS/HIV in the Leading Global Health crises and challenges. Commitment to education and public health is pathetically low. Here is another depressing summary of the state of our environment. The GDP per capita is around $2800, just around the cut-off limit that Zakaria's book talks about as being the stable zone for democracy.

This makes me feel really low. I wonder where do we go from here? Where do we start solving our problems?

Tyler Cowen Blogging at WSJ: The Economic Fortunes of Europe and Asia

The last couple of days Tyler Cowen (Prof. of Economics at George Mason University) and John Irons (Associate Director for Tax and Budget Policy at the Center for American Progress) have been discussing outsourcing here in the online edition of Wall Street Journal. Today's discussion was on The Economic Fortunes of Europe and Asia. Tyler also blogs at Marginal Revolution regularly.

John: The rapid growth of some Asian economies and the more tepid pace of European growth raises an interesting contrast in styles of growth, and illustrates that gross domestic product is not the only measure of well-being. Europe has stronger controls on pollution than does, say, China. China on the other hand has seen higher growth rates. While the two economies are not really comparable (per capita output is significantly greater in Europe), and it's not necessarily true that pollution control necessitates lower growth, it raises an interesting point about how to measure and compare growth. How much economic growth is it worth to give up some quality of life? Is a slightly higher growth rate of GDP worth polluted skies and
rivers?

We require a broader measure of well-being than just GDP when evaluating economic performance -- one that takes into account things like environmental conditions, leisure time and other measures of life quality than total consumption. One could add in measures of human rights, health outcomes, public safety and the like. Progress on the GDP side cannot blind countries to other measures of well-being.

Tyler: Turning to Asia, China is not the economic juggernaut we often think. Chinese per capita income just recently passed $1,000 a year. To put this in perspective, Chinese per capita income remains below Morocco; Guatemala is richer still. Yes, size matters, but size also constrains China, makes it harder to manage, and limits its national unity. Most publicly listed Chinese companies have majority state ownership, with an average of about 60% in government hands. Public officials are rampantly corrupt and the provinces often ignore the central authority. China will have a harder time moving to democracy than did either South Korea or Taiwan; size, the need to keep numerous provinces in line, the presence of nuclear weapons, and military designs on Taiwan are all critical factors that will limit Chinese freedom. Yes, China will rise in importance, but we shouldn't start by extrapolating the current 9% rate of growth.

John's observation is interesting and very valid I think. The manner in which technology has penetrated different nations has been interesting. For example, here is an article on some common technologies one can see put to good use in China. I guess a few of those are present in India too now - for example, high cell phone penetration and deployment of high speed GPRS networks to cover large city areas (Reliance recently announced this for deployment in Indian cities), informative city traffic lights, etc. Here is another article on broadband penetration in South Korea. S. Korea has about 75% penetration for broadband, as compared to less than 20% in the US.

Tyler's analysis is in line with the relationship between democracy, liberalism and GDP of a nation that I read in Zakaria's book (here is a summary I had posted earlier).

Indian Women in Wall Street Journal's Top 50 Women to Watch

Thanks Sonal, for pointing to this link. Two Indian women figure in this list: Indra Nooyi, President and CFO of Pepsico and Naina Lal Kidwai, Deputy CEO of HSBC.

Indians in MIT's top 100 Innovators

According to this article here, 9 Indians have figured in MIT Technology Review's top 100 Young Innovators (under 35 years of age). Unfortunately, I do not have access to MIT Tech Review anymore (my subscription ran out - I cannot afford to pay in dollars any more!), but here is the list of Indians who made it there.

1. Anuj Batra (34), systems engineer, Texas Instruments
2. Ramesh Raskar (34), visiting research scientist, Mitsubishi Electric
3. Chaitali Sengupta (34), systems architect, Texas Instruments
4. Srinidhi Varadarajan (31), director, Terascale Computing Facility, Virginia Polytechnic Institute and State University
5. Mayank Bulsara (32), co-founder and chief technology officer, AmberWave Systems
6. Ravi Kane (32), assistant professor, Rensselaer Polytechnic Institute
7. Smruti Vidwans (30), postdoctoral fellow University of California, San Francisco
8. Vikram Sheel Kumar (28), co-founder and chief executive officer, Dimagi
9. Ananth Natarajan (33), chief executive officer, Infinite Biomedical Technologies

Bangalore's outsourcing woes

Much has been talked about outsourcing to Bangalore. Perhaps only we folks who actually live here face the actual issues the city is facing. Of late, however, there has been a lot of talk about the infrastructure woes of the city (and most Indian cities, really). Tyler Cowen was recently in town, and he had some things to say here:

I mean outsourcing from Bangalore, not outsourcing to Bangalore. Apparently production costs are rising out of control in a city that accounts for a third of India's software exports. The major culprit is congestion; a seven-kilometer commute can now take ninety minutes. Population has grown by a third since 1995, and the new metro and airport are badly behind schedule. Bombay has had similar problems. The remedy? Madras (Chennai) is rising in popularity as is Calcutta, despite its propensity to elect communist governments.

The bottom line: Indian infrastructure is chaos. This economy has only a limited ability to absord outsourcing ventures. For instance it is common for current enterprises to supply their own electricity and other public services.

I saw in the Deccan Herald 2 days ago that Azim Premji announced new Wipro offices will be set up in Mangalore and Mysore.

Daniel Drezner had also linked Tyler and had some comments here.

Nitin had an interesting post here on The Acorn about Montek Singh Ahluwalia's recent proposal to use the Indian Federal Reserves to tackle the huge financial need ($160 billion) to solve Indian cities' infrastructure problems. I daresay I agree with Nitin on not allowing the government to force RBI to use the Indian reserves to this purpose, which might not get utilized in the way we want it.

Book Review: The Future of Freedom - I

Well, it has been a while since I started reading Fareed Zakaria's The Future of Freedom: Illiberal Democracy at Home and Abroad. Over the last couple of weeks, I have made a lot of progress - once the interest in the topic set in, it has been great reading. To me, this book has been a lot of interesting information and analysis providing a lot of insights into democracy, economics, liberalism, etc. I will try to summarize some key observations from the book here, at least, what I thought were interesting to me till now.

Democracy, Constitutional Liberalism

Zakaria makes several compelling observations about democracy:

1. Democracy has certainly shaped the new generation of nations during the post World war era. Why has this been the case? Today, 119 countries, that constitute 62% of the world nations, are democratic. Democracy should not imply the power of the electorate. Dictators like Egypt's Hosni Mubarak & Zimbabwe's Robert Mugabe organize national elections, and win regularly. But this is mere rhetoric and forces such as these are merely
   wrongly apeing the fundamental notions of democracy.
2. Democracy has affected large facets of our lives today. Capitalism, information, technology - all these have become democratic. Social structures have adapted, with economic power shifting downwards in the social strata. Information has been democratized, with the internet revolution. This has also led to the democratization of technology, and subsequently to the ease with which anyone can get recipies of developing weapons of mass destruction online.

Liberal democracy, by definition, refers to a political system marked not only by free and fair elections but also by the rule of law, a separation of powers, and the protection of basic liberties of speech, assembly, religion and property. Interestingly, this bundle of freedoms - termed "constitutional liberalism" has often not gone together with democracy, even in the West. Some examples of this - Hitler came to power through free and fair elections, elections have paved the way to dictatorships in parts of Central Asia; both Yugoslavia and Indonesia were far more tolerant and secular when they were ruled by Tito & Suharto than now, when they are democracies. Constitutional liberalism ties two idealogies - it is liberal because it emphasizes individual liberty. It is constitutional because it places the rule of the law at the center of politics.
America itself has large examples of undemocratic governance - the US Supreme Court is headed by nine unelected men & women with life tenure. The US Senate is one of the most unrepresentative upper houses, with each US state sending two representatives to Wash DC, regardless of its population. This has had its effects, with small states with tiny populations huge political influence.

Looking at the non-western transitions to liberal democracy (or as close as it gets to liberal democracies), it is interesting to note that South Korea, Taiwan, Thailand, Malaysia, etc. all started off as countries ruled by military juntas or single party systems. These regimes liberalized the economy, the legal system, rights, and decades later, held free elections. India is a unique exception, more on this later. This clearly mocks Western foreign policies (particularly the US), which has embraced popular leaders in Asia & Africa who were holding free elections (Ghana, Tanzania, Kenya), but later turned into dictators after the elections. East Asia has its problems - most countries are rife with corruption, nepotism, voter fraud - but so were most Western democracies, even 50 years ago.

The Economics of Democracy

This chapter on the relationship between economics, wealth of nations, and democracies was most interesting to me. A few key observations from here:

1. High per capita income is key to the success of democracy. There are exceptions, India being the biggest one. But a comprehensive statistical study of every country between 1950 and 1990 reveals that countries with a per capita income of under $1500 will not survive for too long. Between $1500 and $3000, it has survived for a couple of decades. Above $6000, democracy is highly resilient. Thus economists, and perhaps Zakaria also,
   tend to conclude that a country must attempt a transition to democracy when its per capita income is between $3000 and $6000. The idea here is that as countries develop economically, their societies also develop strengths and skills to sustain liberal democratic governance.
2. Money by itself does not produce democray. It must be earned wealth. Economies such as the Persian Gulf sheikdoms, for example, are oil-rich states that have a lot of wealth. This kind of wealth (from abundance of natural resources, you could say) does not produce positive political change because their economic development is fundamentally different - it is not along capitalistic lines, where there is a natural transition from agriculture to industry to high level services. In most of these countries, the wealth from vast oil or mineral resources were used to buy modernity, thus leaving the middle class still unskilled. Adult literacy rates are low in all such countries.
3. What is the problem with unearned wealth? This is a key point about countries that have abundant natural resources and those that do not. In a country with no resources, for the state to get rich, the society has to get rich so that the government can then tax this wealth. East Asian regimes had to work hard to do this. Governments that are rich have this too easy - they dont tax their people, they get fat on revenues and dont have to tackle the tasks of creating frameworks of laws to protect the liberties of the people. More importantly, since they dont tax their people, there is no accountability, responsibility or transparency of the governing bodies/people.

Indian Democracy - An Experiment in History

On reading this book and some others (notably, Shashi Tharoor's India: From Midnight to the Millenium, and Sunil Khilnani's The Idea of India), I am all the more convinced about India's unique place in the history of democracy. Contrary to economic theories about democracy, or any other trends that the world has seen, India has been a democracy since its freedom from British colonialism. It has developed economically in the last decade or so in spite of a poor economy since its freedom (India saw its worst decades in terms of economy during the 1960s and 1970s under Indira Gandhi, with what has been termed the Hindu rate of growth - a paltry 3%), it has been tolerant and secular for the most part (except for recent trends of Hindu fundamentalism), and it has always had free and fair elections (I think statistically we can ignore the booth capturing and voter frauds that happen in isolated pockets of the country). No other nation has had such an immense challenge in terms of diversity. As Shashi Tharoor says, it is "a
country that’s divided by caste, creed, color, culture, costume, custom, cuisine, conviction and consonant and still have a consensus on the basic democratic principle that you don’t have to agree all the time, as long as you can agree on the ground rules of how you can disagree". In my opinion, Tharoor is being merely hopeful rather than see what reality has to say, especially about the agreement part, but this gives an idea nevertheless, about how amazing it is that India has remained a democracy, albeit an inefficient one. A multi party electoral system, although not entirely efficient, has ensured that all ethnic, linguistic and religious sections of the society are represented, and also helps to keep the government or ruling party (which has, in the recent past, been more of a coalition of sorts than pure majority) in check from pursuing its own agendas (thanks to my friend S. for pointing this out to me recently).

I really would like to know how we could reform our electoral system to make things more efficient for India, at least in theory - I have read some comments about how we could move to a presidential form of governance (which I dont agree with really considering our diversity - two party systems would never work), or empower the Rajya Sabha and make it more effective than what it is now (here on The Acorn for example). But I am not sure what the solution is, even in theory. I would appreciate any comments on this.