Tuesday, June 28, 2005


cyber age: ND Batra
From The Statesman
Digital spies, nowhere to hide

From time to time many US Senators say how deeply concerned they are the way the USA is gradually slipping into a low-intensity surveillance society. Since the terrorist attacks four year ago, there’s a diffused sense of insecurity, which flares up occasionally. The Americans are quietly submitting to whatever brings them a feeling of assuredness. While they protest against intrusiveness by the government, businesses dig into their personal lives with near impunity. Protests remain muted.

Senator Shelby told a congressional privacy caucus a few years ago, “It would appear that while you use the Internet, the Internet is using you. You can get more information of a computer (about an individual) than a wiretap. What concerns me is the national implications to this.” The Senator was referring to web bugs and other online surveillance devices that are being increasingly used by businesses to track users when they surf their websites. Tracking is done unobtrusively and the user can never suspect that he is being watched; nonetheless, the practice is questionable, especially when the Website does not declare it in its privacy policy.

Most of us are familiar with cookies, small software programmes the advertisers put on our hard drives to track where we surf so that they can customise the most appropriate advertising message for us to achieve target marketing, reaching the right person with the right message. But web bugs are different. These tracking technology devices can be programmed to collect whatever data is required without the user’s knowledge. For example, a web bug can be programmed to look at a data file on a networked desktop without leaving a trace that data has been touched at all.

When you look at your online mutual fund statement, the web bug too could be monitoring it. A few companies do inform their visitors about the tracking devices they use and for what purposes. Some companies use web beacon, a single-pixel picture, to count and identify users. A web beacon can track whether a particular message, including junk mail, has been opened and acted upon or not. Any electronic image that is part of a web page, including a banner ad, can be programmed to act as a beacon and spy on the user. Web portals/search companies claim that the information enables them to personalise the surfing experience when a frequent user visits their sites. Some use beacons to do demographic research on behalf of their clients, but assert that no personally identifiable information gathered from the beacon research is shared with the clients.

Users can opt-out, but most of them don’t know whether the option is available, nor do many of them pay attention to the privacy statement. Surveillance technologies are not limited to the Net. Several companies are using biometrics, face recognition, radio frequency and global positioning system (GPS) technologies, to keep a watch on their properties and track suspects.

Many car rental companies in the USA use GPS to keep track of their rental cars. If a car is stolen or is involved in an accident, the company would know the exact location of the car. GPS also enables them to check the speed of a rental car.

In July 2001, for example, Acme Rent-a-Car of New Haven, Connecticut charged one of its renters $400 for exceeding the speed limit, which it tracked with GPS; but the Connecticut department of consumer protection sided with the renter and did not allow Acme to collect the fine.

It also raised an intriguing legal question whether a private car company can act as traffic police and penalise the offender.

Many airports have been using digital fingerprint identification technology from Visionics Corporation to conduct background checks without any protest from employees.

Face recognition technology is being extensively used not only in airports but also in ballparks, banks and other business establishments.

If a suspect turns up, his face is digitally matched in seconds with the image database. It is not a foolproof system; for example, a man with sunglasses could not be identified with face recognition technology. So far no terrorist has been apprehended by face recognition technology, but the security business is booming the USA. The US Customs and some airports are using low-dose x-ray machines, such as Body Search, to electronically scan a person for drugs, bombs and contrabands. Body Search electronically strips a person naked and projects the image on the screen for scrutiny without the person being asked to take her clothes off – all in the name of security.

Hundreds of air travellers, including women, are randomly subjected to electronic Body Search.An interesting security tracking technology is the radio-frequency identification tag (RFID), which is attached to a suspect’s baggage as he checks in. The tagged baggage is automatically routed to a security area where it is screened with special cameras and sensors for explosives and other hazardous materials.

What’s our digital future? Along with our baggage, we too might have to wear radio-frequency ID tags so that we can be monitored as we move from one airport to another, from country to country via GPS. It may not increase security, but it surely is going to be multi-billion dollar business, thanks to the perpetuation of fear created by Al-Qaida. How ironic that terrorism creates business opportunities for some.

Tuesday, June 21, 2005

All that's news but no ethics

cyber age: ND Batra
From The Statesman

Ethical cleansing: All that’s news

This is the Internet age. News spreads instantly. To set the world on fire, you don’t need six degrees of separation. In May, Newsweek’s report about the Koran being desecrated was based on an anonymous government source, which turned out to be false and caused massive streets protests in Pakistan and Afghanistan, where 15 innocent people were killed.

Newsweek’s apology and retraction has not helped the credibility crisis of news media. Newsweek saw something scoop-worthy and succumbed to the temptation of reporting it. That’s what tabloids do. Of course, since the uncovering of Abu Gharib prison abuses, there has been widespread suspicion that similar abuses might have been taking place in the Guantanamo Bay prison facility also.

This is a variation on profiling mentality, that is, you have a mental picture of something and you go on imposing it on similar looking situations. But that is not journalism. Sometimes the US news media is too deferential to the White House and faithfully reports what it is told; but at other times, it behaves as if whatever the government says must be false. The attitude of healthy scepticism, trust but verify, which distinguished US news media before 9/11, has not altogether vanished but has certainly become subdued.

Under the pressure of the 24/7 instant media flow, news organisations sometimes too hastily give up their gatekeeping functions and betray our trust, in spite of their good intentions. It is not only about the Bush administration’s pre-war propaganda about the weapons of mass destruction, which most American news media lapped up without much questioning, and later on began to discover to their dismay how wrong they were.

Some of them, for example, The New York Times and The Washington Post, have indulged in the luxury of critical self-examination, and published lengthy analysis why they ceased to think independently and swallowed the official line about weapons of mass destruction.

The American media mindset, excessively partisan or deferential, can be dangerous to the world. The behaviour of American media, especially after 9/11, shows that freedom of the Press does not necessarily lead to independent and objective reporting and analysis. American news media, especially wire services such as the Associated Press, dominate worldwide news gathering and dissemination.

They are the eyes and ears of the world in the sense that we see the world as much as they want us to see it and the way they want us to see it. This might sound like a conspiracy theory, but should we always trust news media? It is not so much their biases and prejudices in the selection and exclusion of stories; it is the matter of reporting facts that could be verified.

Because the world depends upon them about what is happening, they have an ethical responsibility to go behind the story and uncover the truth before they publish what they garner at the first attempt. Of course, sometimes it is a major dilemma for news media how to deal with events that are happening at a warp speed; nonetheless, disclaimers and caveats, or subsequent apologies and retractions, do not go far enough in explaining what is real and what is fabrication.

In an environment of distrust and fear, people would accept anything, even if it were a hoax. On the eve of Halloween on 30 October1938, when war drums were getting louder in Europe, the famed Hollywood actor Orsen Welles created widespread panic in Grover Mills, a small town in New Jersey, by broadcasting the hoax that Martians (based on HG Wells’ War of the Worlds) had landed in the town. Some people rushed to their churches believing that the end of the world had come while others got ready to fight the Martians.

Radio was the major news source in those days and people accepted as truth whatever they heard on radio. Welles wanted to debunk that blind faith with his radio hoax but instead aroused the wrath of the people and Congress.

The Federal Communication Commission would impose a criminal penalty on any station broadcasting a hoax today. While the Welles radio hoax fooled only the ordinary folks of New Jersey and no serious material harm was done, but it does show what rumours and hoaxes posturing as news could do.

Newsweek’s unverified story not only killed innocent people but also further spoiled the already tarnished image of the USA in the Muslim and Arab world.

Max Boot, a senior fellow at the Council on Foreign Relations, wrote in the Los Angeles Times that “perpetrators were prisoners, not guards…. the most serious desecrations of the Koran at the Guantanamo Bay detention facility were committed by the Muslim inmates themselves. Some of the most inflammatory allegations, such as guards flushing a Koran, appear to be the result of unsubstantiated rumours spread by inmates who may have been following Al Qaida instructions to falsely claim mistreatment. Or maybe they were simply trying to deflect blame for all the Korans they were mutilating.”

Regardless of the Pentagon’s conclusion based on Brigadier- General Jay Hood’s internal investigation that no desecration occurred, and Newsweek’s retraction and apology, it is going to be difficult to undo the damage to public diplomacy. The Afghanistan Islamic clergy once again has demanded, “Whoever is responsible for these crimes should be handed over to an Islamic country to face trial.”

Tuesday, June 14, 2005

India's Economic Growth as a "Virtuous Cycle"

India readying plan for China-like grip on US

India and knowledge economy

From The Statesman
ND Batra

Recently, Indian Prime Minister Manmohan Singh announced the establishment of a National Knowledge Commission, “on matters relating to institutions of knowledge production, knowledge use and knowledge dissemination”. Which is recognition of the fact that India like the USA and other developed countries is moving toward an information technology and knowledge-based economy.

According to the World Development Report 1999-2000, most advanced economies today are “truly knowledge-based”, in which “the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living — more than land, tools and labour”. Today’s technologically advanced economy is a triangulation of knowledge, labour and capital. But the driving force is knowledge produced by information technology, innovations which make labour and capital more efficient, the kind of knowledge that is being generated in India’s technology parks in places like Bangalore, Hyderabad, Kolkata, Mumbai, Pune, Gurgaon and so on.

A handful of technology-based knowledge producing cities could lift the whole country through surging ripple effects. Technology-based knowledge, unlike capital and labour, is inexhaustible and is “non-rivalrous”, as economists say. Sharing knowledge does not diminish it, though patent and copyright protections may be essential. But there is a caveat. In a thought-provoking essays, “Beyond Information Revolution”, published in The Atlantic Monthly a few years ago, Peter Drucker said “bribing knowledge workers”, who are leading the Information Revolution, with stock options and other incentives may in the long run prove nonproductive and even disastrous in the 21st century. The dotcom bubble bust gave us much to think about.

Drucker talked about Victorian England, where some of the most important technologies of the Industrial Revolution were developed. Because of the British class system which valued a “gentleman” more than engineers, traders and entrepreneurs, the industrial leadership passed on to the USA and Germany in the 1850s. England raised Cecil Rhodes, Robert Clive, East India Company (a trading rather than a manufacturing venture) and commercial banks but no venture capitalist, like JP Morgan in the USA, a person “who has the means and mentality to finance the unexpected and unproven”. Drucker is right about venture capitalists who are mostly responsible for the information technology growth in the USA, though we should not forget the role of the federal government because initially The National Science Foundation and the Pentagon financed the Internet’s development. No less important than the venture capitalist, it is the idea of the Internet — open standards and communal sharing of software — which has bred the Information Revolution.

Drucker said that at the heart of the Information Revolution is not the computer, which at best is a tool to routinise information processes; nor is it software, which is nothing but “the reorganisation of traditional work, based on centuries of experience, through the application of knowledge and especially of systematic, logical analysis”. It is rather the creation of knowledge, which is fuelling the next wave of the Information Revolution. Paul M Kennedy of Yale speculated in his book The Rise and Fall of the Great Economic Powers (1989) that since the USA had become a global robocop and was spreading its economic resources too thinly, it too would meet the fate of the earlier imperial powers, which had declined by overextending themselves. But look what has actually happened. Instead of economic and political decline, the USA is going through a healthy economic growth period, in spite of the 9/11 terrorist attacks, the 2000 dotcom bust, outsourcing, and recent corporate scandals. The unemployment rate is 5.1 per cent, which is the envy of the world, thanks to technology-based knowledge and venture capitalism. The future economic growth, according to Drucker, would come not so much from the booming stock market and Internet industry; but from those industries where the knowledge worker would be as important as the financier or the capitalist, for example, biotechnology where the gestation period is long and rewards for workers cannot be stock-market driven.

He suggested that since “performance in these new knowledge industries will come to depend upon running the institution so as to attract, hold, and motivate knowledge workers”, we would have to do something else, something symbolic, for example, giving knowledge workers the status of “fellow executives and partners”. In the knowledge factories of the 21st century, there will be hired workers. You may call them principals and partners and give them flexible work hours or freedom to work-wherever-you-go with the wireless laptops. But there would still be the need for command and control and visions of venture capitalists.

While the mandate of the Knowledge Commission is to sharpen India’s “knowledge edge”, and “promote excellence in the education system to meet the knowledge challenges of the 21st Century”, the greater need is to create a system where entrepreneurs and venture capitalists grow and accept the challenge of “the unexpected and unproven”.

The Knowledge Commission should study how the marketplace, apart from the universities and the IITs, could be harnessed to create knowledge that generates innovations that can raise India’s growth permanently in a kind of what economists such as Stanford’s Paul Romer and others call as “a virtuous cycle”.

Tuesday, June 7, 2005

No Captain could have saved the Titanic

cyber age: From The Statesman
Globalisation exposes India’s dilemmas
ND Batra

Globalisation has raised the curtain on India, exposing its strength and its weaknesses. So it is not unusual to come across a person asking a question, such as: If Indians are so smart, why are there so many poor?
The quick answer is that corruption and poor fiscal management have bogged down India.

But on the other hand, many fast growing Asian countries, including China, have not been free from these problems either. Of course, one could blame the socialist politics of the post-Independence generation that believed that a bad shaving blade made in India was a sign of self-reliance and spiritual strength. It is true to some extent that protectionism and crony capitalism of the socialist era proved a poor substitute for the challenge and response of the competition of the marketplace.

Initially the foreign exchange crisis of the early 1990s forced India to open up its doors to privatisation and market economy. But India was sucked into globalisation aided by the information revolution that had begun to sweep the world.

India’s diaspora, especially in the IT field, began to show its unusual ingenuity for developing new products and services as well as for solving complicated problems, including those arising from Y2K.
Bangalore was able to leapfrog its poor infrastructure and transformed itself into a cyber module that smoothly docked with the rising digital world, thanks to Indian satellite technology, which ironically developed during the era of socialism and self-reliance.

While the spectacular success of Bangalore and IT showed what India could do for the world, at the same time it exposed India’s vulnerabilities, its slow-moving rural economy, massive shortfalls in investment for infrastructure development, more than 300 million illiterate people, and a high rate of underemployed and unemployed people.

The world began to look at India’s underbelly, as it were, and the exposure has challenged Indian sensibilities. Indian policymakers and intellectuals began to grapple with the problem of slow growth and rising expectations as never before.

Bimal Jalan, former Governor of Reserve Bank of India, has argued in his book, The Future of India: Politics, Economics, and Governance, that the euphoria created by IT and other industries might not last, not unless India develops the political will to succeed.

Mr Jalan suggests that a stronger Parliament and more powerful judiciary would make politicians and bureaucrats more accountable and responsive to public needs. Individuals who exercise political power should be made answerable for not only how they make use of the power vested in them but also whether they achieve their goals.

“If ‘powers’ can be exercised without collective responsibility, then there is an equally strong case for ministers to take individual responsibility for their ‘duties’ in certain vital areas like poverty alleviation,” says Mr Jalan.

But some problems are systemic and individuals can do so much, howsoever honest they may be. Poverty reduction depends on the rate of economic growth and how widespread and decentralised are the economic opportunities. The system as a whole has to be geared to growth, which means a national consensus on growth strategies rather than holding any individual minister responsible for poverty reduction.

Mr Jalan leaps to a surprising generality: “If there were no corruption, India’s growth rate would have been eight per cent per annum in the 1980s and 1990s, rather than close to six per cent.” I don’t know how Mr Jalan came to this 20/20 hindsight of econometric calculations, but being a banker and economist he must have done his homework before writing the book. If economic growth jumps to eight-nine per cent, would that be an indication that corruption level has dropped in India?

How strong is the correlation between corruption and economic growth? How strong is the correlation between infrastructure and economic growth? What are the other factors of growth?

If India cannot eliminate corruption immediately, or to put it in another way, if corruption is a social constant (C), are there other factors that can be manipulated to spur growth to a double digit?

That’s the challenge; nevertheless, that does not obviate the necessity of reducing corruption. The source of corruption is unaccounted exercise of power, of course. Elected officials can be removed, though one might say cynically, only to be replaced by another bunch of corrupt people. But democracies do have methods of dealing with corrupt people in high places.

There is a two-fold solution to the problem. Public accountability through media exposé, especially the Internet and television, as the American experience shows, is a strong corrective. Second, privatisation could act as an antidote to corruption because it takes power away from bureaucrats and gives it to entrepreneurs and corporate leaders.

But they too, as the American experience shows, abuse power. Nevertheless, if laws were enforced rigorously, the corrupt would find their rightful place in jails as many American CEOs have discovered. Fighting corruption is a never-ending process. So is the case with poverty.

Dedicated ministers no doubt have a crucial role to play and some do so with great gusto, for example, India’s energy minister, Mani Shankar Aiyar, who has put India on the world energy map. India has begun to make a giant, energy sucking sound.

A person of similar zeal and dedication is needed for controlling the spread of AIDS. India should appoint a high-powered AIDS czar and give him necessary funds and authority and make him accountable for fighting the disease, which is much more widespread than we have been given to believe.

There are other areas where individual ministers could be held accountable for doing their duties well and fulfilling their political commitments, but on the whole in a parliamentary system, as Mr Jalan knows, it is the collective responsibility that matters. It is not only the captain who matters, but it is the ship as a whole.
No captain could have saved The Titanic.