Category Archives: South Asia

Stray thoughts on building sustainable advantages in IT

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– McKinsey Quarterly recently published a report (unavailable without priced membership) about the comparative advantages in IT industry for India and China. The report concluded that Indian IT industry’s economy of scale, established ladership and business practices provides India with powerful advantages. Chinese IT industry – because of its highly fragmented nature – would take a long time to catch up. It seems to have gotten wide coverage in Indian media.
– I recently read news coverage of an interview with Narayan Murthy (Infosys Chairman) in which he talked about the infrastructure burdens of the cities (power, roads, water, transportation) and how these are limiting the growth of IT industry in India (I lost the link).
-International Herald Tribune has a story about how Wipro is trying to widen its talent pool:

” By hiring Prity Tewary, Wipro, India’s third-biggest software exporter, may have found the key to expanding the engineering talent pool that Indian universities produce in a year …. She and 1,100 others, many of them plain vanilla science graduates, are studying for a four-year master of science degree in software, telecommunications and microelectronics on Saturdays. Wipro is paying their tuition, providing them with classroom resources on its sprawling, university-type campuses, and giving them stipends that start at 6,000 rupees, or $137, a month. In turn, the student-workers are helping the company go beyond the limited universe of 184,000 fresh engineers available for hiring as programmers each year.
“We build our own engineers,” says S.K. Bhagavan, who oversees Wipro’s in-house “talent transformation” team of 70 faculty members. In a year, Bhagavan’s team conducts 150,000 hours of training, and that includes coaching in “soft skills” needed by a work force that interacts with clients globally.
… At an aggregate level too, India needs to convert more of its generalist scientific talent into software professionals to sustain the industry’s competitiveness. Of a total population of 7.7 million science and technology professionals in 2000, about half, or 3.8 million, were science graduates. Only 970,000 were graduate engineers, according to an estimate by the Institute of Applied Manpower Research in New Delhi. While India does need more science doctorates to carry out research, it doesn’t need more unemployed physics graduates.
Seven out of 10 employees hired in the last three years by Infosys Technologies, Wipro’s slightly bigger competitor by market value, were fresh graduates. In order to raise the quality of the talent it hires, the Bangalore-based company has released some of the course material it uses to train employees to universities under a $2 million “Campus Connect” initiative.”

– Joel Spolski gave some interesting advise to computer Science graduates in USA a few weeks back (via Kingshuk). They are as applicable for Indian developers:

Would Linux have succeeded if Linus Torvalds hadn’t evangelized it? As brilliant a hacker as he is, it was Linus’s ability to convey his ideas in written English via email and mailing lists that made Linux attract a worldwide brigade of volunteers.
Have you heard of the latest fad, Extreme Programming? Well, without getting into what I think about XP, the reason you’ve heard of it is because it is being promoted by people who are very gifted writers and speakers.
Even on the small scale, when you look at any programming organization, the programmers with the most power and influence are the ones who can write and speak in English clearly, convincingly, and comfortably. Also it helps to be tall, but you can’t do anything about that.

Catering to the BPOs in India …..

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According to Nasscom, India has around 8.13 lakh IT professionals , which amount to at least 8.13 lakh meals per day. Taking Rs 30 as the minimum cost of a thali, you can earn a mouth-watering Rs 244 lakh per day!
With many BPOs serving two square meals a day, 8.13 lakh meals is a much discounted figure. The delectable dal makhani and palatable paneer can earn you lakhs. Those who smelled this inviting opportunity early on are now earning big money.

Here is the whole story

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South East Asia Earthquake and Psunami weblog is regularly updating its list of volunteer organizations and charities supporting Tsunami victims and seems to have the most complete list. It is also a clearinghouse for information on resources, aids, donations and helplines for Tsunami victims
New York Times has a comprehensive list of agencies in USA that are providing assistance to the Tsunami victims and are accepting contribution. Washington Post has a slightly different list of agencies to which one can donate money or supplies. The Post said that most groups are recommending donation of money (wherever possible).

Charities offering relief to countries affected by the Tsunami

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There really isnt much to say.
I have listed below some of the aid agencies that are rushing men, material and resources to South and East Asia in support of the quake relief efforts.
Please Do consider giving.
Doctors Without Border
Medecins Sans Frontieres will be sending a charter to Indonasia within 24 hours. They are also sending an assessment team to Indian, Malaysia, Bangladesh and Burma. I think very highly of MSF.
you can donate to MSF through this page.
Prime Minister’s relief fund in India
Dr Manmohan Singh asked for donations to his National Relief Fund to help support the flood-effected people. Obviously, they havent made this easy. This page gives you the account number for sending checks to the relief fund. Mark it to the local Indian Embassy/consulate. If you want to pay through credit card, use this form.
Oxfam
Oxfam is taking donations for its relief efforts in areas affected by Tsunami in South and East Asia. They are active in some of the quake effected areas – specially in Sri Lanka.
You can donate to Oxfam through this page.
Red Cross and Red Crescent Societies
I am not huge on Red Cross. But let us face it – they have the best ground operation in South Asia. They already have an extensive operation – helping to evacuate victims. Their site allows you to define where your donation dollars go.
You can send money through this page. For those in India, it is probably easier to send a check to Indian Red Cross.
World Vision
This BBC story said that one third of the dead in the coastal regions are children. World Vision is trying to help. You can donate to them through this page.
CRY is the most well known NGO in India among those that work with children. Their online donation page is here. Although, I havent seen anything yet about what they can do in supporting the relief efforts.
Update: There is a more India specific list of agencies here)

A modern fairy tale

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A quarter century ago, Soviet Union invaded Afghanistan. They found that the artifacts of Kabul museum – 5000 years of Afghan history – had vanished.
For a very long time, people expected the objects to show up on the global black market of art objects. But nothing ever come up. Eventually, the Russians left. The Taliban came to power. They too destroyed or looted what they could lay their hands on. But whatever left the vaults of Kabul museum in the year of 1979 could not be found.
And now the artifacts have been coming back.
About 8 government museum employees made a pact in ’79. They stored these objects in small boxes and hid them away in various locations. They promised each others not to open the boxes until and unless all of them were present. The pact held through 25 years of bloody history of Afghanistan. And now the artifacts are coming back – boxes of 2000 year old Bactrian gold jewelry and ornaments, boxes of coins depicting Afghan royalty dating back to 500 BC, ivory plaques from 2000 year old Kushan culture …..
The archaeologist Fredrik T. Hiebert has been taking inventory for the Afghan government. All told, there are 20,400 objects. Less than 100 are still missing. Guy Gugliotta filed the story for Washington Post last month.
If you like cheer up stories, here is another one of how Iraqi engineers revived the marshes that Saddam had drained off to kill the way of life for Marsh Arabs.

Worse that Papua New Guinea

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At 65%, India has a worse literacy rates than Zambia, Tanzania or Combodia. Because the NUMBER of people in the educated middle classes is so high (as opposed to the percentage of people), our perception of the scope of this problem is skewed.
Kaushik Basu claims that we can’t get kids to go to school until we start getting their teachers to take classes regularly. This statement threw me because I had been very fortunate in my teachers in the primary schools (and before you start getting snarky on me let me point out that I went to a government school). Basu says that a recent World Bank – Harvard study concluded that teacher absenteesm in India is 25%. Only Uganda seems to have a worse record (Papua New Guinea does better)
He suggests an interesting approach for resolving this problem in his BBC column.
(Via Suhit Anantula)

A lousy tax system

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” …. Businesses in Bangalore run their own bus services, contract with private suppliers for drinking water, and install generators to protect themselves from interruptions in electricity supply. The state can’t fix the shambles because it is broke. India’s government debt exceeds 70% of GDP, so more than half its tax receipts go to paying interest.
But the debt isn’t because of excessive spending in the past. India’s government expenditures amount to about 15% of GDP, compared to an average of around 40% of GDP in the OECD. Rather, India’s financial difficulties stem from a badly designed and administered tax system. Rates and rules for personal and corporate income taxes appear reasonable by international standards. Nonetheless, India’s government collects income taxes amounting to only about 3.7% of GDP, about half that in South Korea and the other Asian tigers.
Agriculture in India accounts for about a quarter of GDP, but even wealthy farmers don’t pay taxes. Export-oriented companies in the software and other industries enjoy tax holidays on their profits, although their employees do pay taxes on their personal incomes. Despite reasonable rates, tax evasion is widespread. “

From Amar Bhide’s article on tax system in India

In Light of India

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Octavio Paz served twice in the Mexican embassy in India. In 1951 when he was transferred from Paris to Mexico?s newly opened embassy in Delhi – apparently a punishment for his participation in events commemorating of the Spanish civil war the anniversary. He was transferred to Japan soon after.
He was sent back as Mexico?s Ambassador to India eleven years later when he was already well established as a poet. He stayed on until 1969 when he resigned his post in protest against Mexican government?s repression of the student uprising of Oct 1969.
His book – ?In Light of India? (written in 1993) is more a collection of essays on India than a memoir of his years there. But it benefits from the anecdotes of his years in India and the insights that he gained during his stay.
Paz has a searing intellect and breathtaking depth of knowledge on comparative literature, religion and history. He uses them to reach interesting and provocative conclusions.
In the concluding two chapters he compared the theological foundation of Eastern religious traditions with that of Judeo-Christian ones.
I do not entirely agree with his conclusions. I always felt that Hindus for a very long time have jived far more with the rituals of religion established at a much later time than with the abstract theological ideas established in the Vedic ages (we probably would have avoided a lot of grief otherwise). But irrespective of wheather you agree with him or not, his discursive journey through the intellectual history of Asia, Europe and native American traditions is a rich and stimulating read.
This is a book of personal impressions, sometimes a little disjointed and shallow, sometimes brilliant – but always engaging. Take for example the following extract:
?The difference between Hindu and Christian asceticism is even more marked than between their eroticism. The key word of Western eroticism ? I am referring to the modern West, from the eighteenth century to the present ? is violation, which is an affirmation of the moral and psychological order. For Hindus, the key word is pleasure. (Ed: I suppose he is not talking about the contemporary VHP variety) Similarly, in Christian asceticism, the central concept is redemption; In India, it is liberation. These two words encompass opposite ideas of this world and the next, of the body and the soul. Both point towards what has been called the ?supreme good?. But there the similarity ends ? redemption and liberation are paths that lead from the same point- the wretched condition of man ? in opposite directions. ?.
The origin of the Christian cult of chastity is not in the Bible but in Greek philosophy, particularly Platonism. Nature and the body are not condemned in Genesis or the other books of the Old Testament. ?? Christianity probably would not have adopted Plato?s pessimistic vision had it not been for two ideas that, although they do not appear in Greco-Roman tradition, are the true sources of Christian attitude toward the body: the belief in a unique God, creator of the universe, and the notion of Original Sin. These two ideas are the spinal column of Judaism and Christianity, and the point of convergence of the two. In the story in Genesis, God makes man from the primordial mud, and his companion from one of his ribs. A material creation, like that of a sculptor with wood or stone. Adam is made of mud, and Even is ?bone of (his) bones and flesh of (his) flesh.?. The first divine mandate is to be fruitful and to multiply.
In Eden there are two trees, the tree of life and the tree of the knowledge of good and evil. The fruit of the first is the food of immortality, and while Adam and Even live in the Lord?s garden they will not know death. As for the other tree God expressly forbids them to eat its fruit. ?. Adam and Even ate the fruit and God expelled them from Eden. Their failure was disobedience. But the root of that failure is something infinitely more serious: they preferred themselves. Their sin was not loving God, their creator, but instead loving themselves and wanting to be gods. ?. Within this conception is a condemnation of the love of the body. The Platonic condemnation of the body was made to reinforce the notion of Original Sin: the shameful preference of the creature for itself. The true idol of mankind is man himself.
?..From the Hindu perspective, the story in Genesis is meaningless. Apart from certain incoherencies in the narrative, there is an idea that is difficult for Hindu tradition to accept: the notion of a creator God. ? In general, the Hindu sacred books say that the universe is the result of the working of mysterious and impersonal laws. From the Vedic era on, religious thoughts knew a unifying principle, which the Upanishads called Brahman, the being of man. Yet they never inferred from this principle the existence of a God who was the creator of this world and of men. That which is divine, not a divinity, is the creative force and the matrix of the universe. The idea of the Original Sin, the consequences of the first disobedience, in which the shameful love of man for himself and his indifference to the Other and to the others is incomprehensible to Indian tradition. The universe was not created, and thus there is no Lord, no command, and no disobedience.”
(Click below for the rest …)

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A weak dollar and the IT industry in India

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backgrounder in NYT about the impacts of the falling dollar :
“…There are at least three schools of thought on whether a dollar collapse is likely and, if it happens, what it would mean.
One group, which includes the Federal Reserve chairman, Alan Greenspan, contends that …the dollar may well decline in value,.. but the decline would be gradual and would help reduce American trade imbalances by making exports cheaper and imports more expensive. The Bush administration goes one step further, arguing that America’s huge foreign debt simply reflects the eagerness of others to invest here….(Ed: Dr DeLong demolished the treasury department argument in this post).
A second school of thought holds that foreign governments like China and Japan will continue to finance American borrowing and keep the dollar strong because they are determined to sustain their exports and create jobs.
But a third school, which includes officials at the International Monetary Fund, worries about a collapse in the dollar that would send shock waves through the global economy. ….. That group argues that the dollar needs to depreciate another 20 percent against the other major currencies but warns about a run on the dollar that could reduce its value by 40 percent.
A collapse of that size would severely affect Europe and Asia, which ave relied heavily on exports to the United States for their growth. steep drop in the dollar could lead to higher interest rates for the federal government and American private borrowers, as foreign investors demanded higher returns to compensate for higher risk. And it could expose hidden weaknesses among financial institutions and hedge funds caught unprepared.
“There is a school of thought that the U.S. can keep borrowing forever,” said Kenneth S. Rogoff, professor of economics at Harvard University and a former chief economist at the I.M.F. “But if you add up all the excess saving being thrown out by the surplus countries, from China to Germany, the United States is soaking up three-quarters of it right now.”…
For Mr. Rogoff and several other economists, the question is not whether the dollar declines – but how fast and how far the fall turns out to be.”
What does it mean for India?
Bad things obviously. We are sitting on the biggest reserve of US$ in our history. I read a few news stories that suggested that Chadambaram is looking to invest them in infrastructrue projects. (I wish we would use it to pay off part of our debt!)
The IT Industry is probably slightly better prepared for the short term. The big three have long since recognized that future holds a stronger Rupee. They may be able to buy themselves some protection fo the immediate future, . But in long run, it would obviously impact their revenue stream adversely – about half of India’s IT revenues come from USA.
Unfortunately, this is happening at a time when the effects of rising staff cost are also being felt. The bigger firms are increasingly looking towards China and elsewhere to bridge the resource gap. (I should note here that right now English speaking Chinese software engineers are more expensive. But Indian salaries should reach parity soon. On the other hand, the churn rate in China is lower. They also have a larger pool of untapped IT personnel). Add to this, increasing commoditization of many sortware support / maintenance activities.
IT sector in India is staring at serious margin erosion. I think we are looking at a shake up in the industry in the next two to three years. Obviously like all such naval gazing, this could be way off base.
This article in Outlook looked at a different set of parameters and reached similar conclusions.