The Ongoing IT Revolution and Security Implications for Pakistan

Dear SAC,

I do not agree with you that establishing commercial ties with India will neutralize the threat at IT level or any level. First of all if there are ever any commercial ties with India, Pakistan will loose in bilateral trade. There is not a thing in the world that Indians make and we don’t. As a matter of fact the quality of Pakistani products is far better than Indian products. There is no point in trading items that both countries make. If India were any better, e.g. at least at the level of Chinese, the trade would have made sense.

That was not a Jingoist remark. I was once involved in a study, that was being conducted by Ministry of Production, under the auspices of SAARC agreements. During that study I got a first hand opportunity to study various Indian engineering machinery and equipment; in my honest opinion they make godawful machinery. Their machine tools are way inferior than those made by Pakistan Machine Tool Factory and PECO and their machinery is no match to our Heavy Mechanical Complex and Heavy Rebuild Factory.

As far as commodity trade is concerned, the only people who benefit are bureaucrats and politicians on both sides, in particular, and Indian manufacturers in general. The manufacturing cost in India is relatively less than that in Pakistan, probably because they had a head start over us as far as infrastructure is concerned. In addition, when they market something in Pakistan they reduce their selling prices way below their manufacturing costs. The Indian manufacturers easily offset these costs by government subsidies, by reducing the quality, and the size of their domestic market also helps. In a bigger scheme of things their actions are strategically very important; because in the end, Pakistani manufacturer suffers-the traders/distributors/bureaucrats/politicians benefit no matter what.

Pakistan is currently importing 600 items from India under SAARC agreements and the resentment is Pakistani manufacturers is growing day by day.

Is there some sort of limit on software business available that both countries cannot do well simultaneously and independantly of each other? There seems to be an implication here which I donot understand at all that Indians will somehow block Pakistani achievements in the IT field. Its a bit like saying if India wins an Olympic Gold(ha!), Pakistan will have to miss out on its own medals???
So I ask, which war?
Sadhana

You make some good points, but you seem to fall into the knee-jerk India-bashing trap so typical of Pakistanis. Sort of takes the fizz out of the cola and leaves me with the same old aftertaste, leading one to think, hmmm, there they go again. Specifically...

``The powers that be in Islamabad seem (as usual) to be unaware of how this seemingly innocuous event has the potential to reduce Pakistan to be a vassal state of its arch-enemy India.``-- Yeah right, let`s use those Pakistanis to weave some more carpets for our newly built megamansions and while they`re at it, how about some soccer balls and some sweets as well. Excuse me, aren`t you already a vassal state of the benevolent Saudis?

`` Record increases in India’s defense budget as well as its defiant almost arrogant behavior in world affairs are strong indicators of its militant attitudes.`` -- You keep funding more of those psycho jehadis and expect Indians to sit around and say, hmmm, with a billion, we sure can take minor adjustments to our population. You can`t expect to stir a hornet`s nest and tiptoe away without a few stings. If your assorted governments [or whatever you call your ruling regimes] spent less arming yourselves to the teeth and provoking 4 wars, you wouldn`t be in such a sorry state.

``...the real threat comes from India’s burgeoning IT strength rather than its military might...`` ---C`mon, stop kidding yourelf. You might see India`s IT strength as a threat, but Indians don`t do everything visavis its neighbour. It`s free market and the entrepreneurs are going where the opportunities present itself.

Let me assure you and other Pakistanis, you`re pretty much the last thing on our minds. We want to progress and move forward, and you`re nothing more than a minor irritant, though one that causes nasty pains every now and then.

The bottom line; nothing ain`t going to change a bit. Your CE and his next few replacements will still harp on the Kashmir line and on the other hand, the role of the fundementalists will grow even further, and every sane Pakistani will do what one needs to survive--something a lot of Chowkwallas have done--get the hell out before it implodes under its own weight.

Sorry for being this cheerful, but till your leadership realizes the magnitude of its mess, it will be deja vu, all over again.

Cheers

The IT dominance that India has achieved on the world stage (not in terms of quantity but in terms of sheer influence) is not a result of recent initiatives. Contrary to what your correspondent believes (AND PLEASE SAC-WHAT`S YOUR NAME?-the Indian government has played a role in making this happen. The 1950s saw India invest in educational infrastructure - not just the IITs but at least a hundred other institutions - older colleges like the Colleges ofEngg. in Pune, Madras etc., and the Regional Engg. Colleges in many States (including the one in Srinagar which has produced several top-notch professors who teach in the US today), a network of research institutions. That is paying off today.

I have recently moved from India into a top-ranked business school in the US. I have several Chinese, Japanese, Korean and European classmates apart from the Americans. The awe that you command as an Indian - one from the land of IR dominance - is simply experienced to be believed. Wherever I have been - the Social Security Office, the Motor LICENSE Bureau, shopping malls - I find that being an Indian means a new respectability. The Indian presence in academia in the US is simply awesome. Of the faculty of the top 50 business schools between them - 8-10% are Indian or of Indian origin.

The Indian in the US is typically the best educated immigrant available (among the 1 million Indian Americans school dropouts are unknown, 75% hold a college degree and 55% hold graduate degrees)

Now Japan and Germany are queing up in India to woo Indian talent. But find that Indian companies already operating in these countries have picked up the best already!

In terms of competitive strategy India is trying to raise the stakes to a level where Pakistan can simply not afford to compete. As happened recently with the defence budget.

Just as the service companies vital information is nestled within India we have intrepid businessmen like Dhirubai Ambani who enjoys a private audience with Bill Clinton! Ambani`s Reliance Industries refinery - the largest greenfield refinery in the world - has securitised its receivables for the next 30 years and floated them on debt markets. Obviously the financiers who have piced up this stock will ensure that Reliance Jamnagar wil remain safe in any war by working on the US government to intervene!

So that`s the way the cookie crumbles. It would be vainglorious of Pakistan to ignore these signs especially at a time when economic indicators are turning sour. India`s GDP per capita is and GDP per capita PPP is already ahead of Pakistan`s. The Indian leahe dership at last is showing the maturity not to be PAkistan centric and is boldly taking on world opinion. Unlike in the past when every sundry Pakistan dictator would be cordially addressed by the Indian leadership, this time the BJP has cold shouldered the CEO and de facto denied him recognition. Notice that no official Indian comunique ever referes to the HEad of State of Pakistan!

The options for Pakistan are few. Get on woth the job of governance and leave this business of competition aside. It`s a lost battle, especially when the adversary is running a marathon and you have to sprint to catch up!

Excellent article. Pakistani switchover to ``Javadis``, who are fundamentalists to the core in establishing new internet order will be appreciated everywhere.

Urstruly # 1

If Pakistani goods are better than Indians, how can Indians be any threat in commercial ties to Pakistan? Let the consumers decide whether any items from India, or for that matter from China or other countries, provide better value than the domestic ones. Is that not the whole idea behind free trade? May be I am missing some thing from Pakistan`s point of view. IMHO, globalization in general and India-Pakistan trade and commercial ties in particular, will be better for our consumers and provide competition to local sheltered manufacturers.

Sadna

You have raised a valid point here. A situation of ``zero sum game`` occurs in a field of human endeavour when it reaches its limits such that it can not be further expanded. In such case, gain of one inevitably results in loss of other since the total resource pool becomes fixed. IT is a fast expanding sector, so the rules of zero sum game do not apply here. Both India and Pakistan have enough space to prosper simultaneously without hindering other`s progress.

Usually in non zero sum games, a strategy of cooperation pays off over competition. So Pakistan can certainly benefit if it decides to cooperate with India. However if Pakistan is slow to develop its resources and IT growth of the world pleateaus off then certainly it will become a zero sum game and small players will turn out to be the losers. This also applies to India. In my opinion, India and Pakistan should therefore for the betterment of their future generations, settle Kashmir issue( make LoC permanent border) and start cooperating. Or they may not decide to cooperate but simply reduce hostilities so that more funds can be diverted to educational sector.

It is obvious that the author is biased against India.

``Record increases in India’s defense budget as well as its defiant almost arrogant behavior in world affairs are strong indicators of its militant attitudes.``

The author would have made a stronger point had he provided instances of India`s ``almost arrogant`` behaviour rather than assume it to be a given - clearly reflects his prejudiced mind.

``Massive computers holding the institutional knowledge of these Goliaths are humming away silently in the air-conditioned confines of Bangalore and Hyderabad. By entrusting this information to Indians, these companies have every incentive to protect and nurture their partners in order to ensure the well-being of their information. ``

Ever heard of BCP? Business Continuity Planning. No sane company would place all its eggs in one basket or all critical information in just one location (be it India or anywhere). Being somewhat familiar with GE, Citibank and British Airways` outsourcing in India, I would say any company would have to keep a BCP site outside of the country, have hot backups etc etc. Hence the servers humming in India may not be so critical. In fact, it is the other way round. It is the Indian companies who have their servers for internet operations running in the server-farms in the US, due to better bandwidth etc.

Secondly, just because servers are running in India, does not mean Indians have sudden access to useful information...

The companies are outsourcing their operations to India only because it is cost effective to do so, akin to Reebok manufacturing its shoes in Asian countries rather than in the US.

The major ``threats`` to Pakistan, if any, of India doing well in IT when compared to Pakistan are the obvious ones:

- Contribution of IT revenues to the Indian economy, thereby boosting defence budgets...

- Better relations with the developed nations and therefore more negotiating room for India, as the developed nations realise they need Indian talent in IT to drive their economies...

- Greater concern for stability and peace in the Indian sub-continent (as it affects the developed countries` interests), therefore greater focus on Pakistan`s ``moral and diplomatic support`` to terrorists...

I would like to talk about threats to India in IT. India`s talent pool is limited and we are getting closer to the bottom of the barrel every day. NASSCOM has estimated that there will be a huge shortage (I forget the numbers) in 5 years time of IT professionals in India. Also given the fact that they are all working for FOREIGN clients who bring in more revenue, there is hardly any GOOD talent available for meeting IT needs of local Indian companies. This is critical to the development of Indian economy.

The shortage has meant increasing costs and also a decline in quality of people (scraping the bottom of the barrel). India`s big advantage so far over US companies has been cost. The day countries like Pakistan, Bangladesh, Sri Lanka, Nepal, China (in English), Africa etc get their act together, they will be able to quote better prices than Indian companies... This is the threat that Indian IT companies are facing. Switching IT vendors is easier than shutting down manufacturing plants in one country and setting them up in another. Already, Philipines and Mexico are the competitors to India in IT.

However, one must also say that the entry barriers are steadily rising - very few companies now outsource to vendors based on cost alone. Expertise in project management, quality, domain expertise and past experience is increasingly becoming important - and this is where Indian IT firms should score.

I pick a line from your article ``Indian contribution to the IT revolution has happened despite the Indian government.``

That is correctly and briefly the case. And being so, why can you not apply it to Pakistan also? Think about the many Silicon Valley companies where Indians and Pakistanis work together, do Netravalli, Chandrasekhar or Dham consider their Pakistani friends to be ``vassals``. I will give you dozens of more names if you so desire.

You are a loyal Pakistani, I am a loyal Indian, but has anybody stopped you from trying to do software business in any of the two countries? In both the countries, if you so desire? Please think before you write stuff like this that ``Indians want to make Pakistanis vassals``. In this day and age? Really, you need to go back to Eco-1 and understand why one country needs strong neighbours.

I think I am not entitled to say this because I am Indian, but you will forgive me because I have to: there is a great middle-class loyalty to India that ex-pat Indians seem to have which I find often missing in the Pakistani middle-class that I have met during the course of a life as a seafarer sailing with them, as a ``gulfie`` working with them and now on the InterAct at chowk.

Why do you need your Pakistani government, of any hue, to help you rent cheap computers, rent a cheap house, add a few telephone lines and ISDN link, and start?

We in India are looking at making anybody a ``vassal`` state but please face it, you are responsible for your own destiny and nobody is going to wait for you, correct?

As for the stuff about arch-enemy, get a life. We have many things to do in India instead of only looking into our neighbour`s house. Let me say it straight: the choice is up to you in Pakistan, if you want to be a friendly competitive neighbour like Canada to USA or a basket case like Mexico to USA.

Go to TIE and see if it has a solely Indian agenda?

If we try to do well, we become a threat? What are you, colonial, all over again?

Sac,
Whereas I agree that Pakistan needs a concrete IT policy rather urgently, I fail to understand your logic in invoking ``Indian threat`` to motivate Pakistanis to move in this direction. Your view of Indian IT professionals/entrepreneurs as a threat to Pakistan is also beyond me. Comparing them to Zionists is insane. Your implication that Indians will, somehow, use their IT know how for evil designs, is an attitude problem of yours.

We must learn and acquire knowledge because it is enlightening; it brings us closer to rest of the world by broadening our horizons. It is economically beneficial for us, and good for our self-esteem…. Jealousy or fear should not be the driving force behind it. This is absolutely wrong and unprofessional attitude.

As an IT professional (paki), I find your article offensive for its underlying theme. IT pros. what do you reckon?

Sac,
Whereas I agree that Pakistan needs a concrete IT policy rather urgently, I fail to understand your logic in invoking ``Indian threat`` to motivate Pakistanis to move in this direction. Your view of Indian IT professionals/entrepreneurs as a threat to Pakistan is also beyond me. Comparing them to Zionists is insane. Your implication that Indians will, somehow, use their IT know how for evil designs, is an attitude problem of yours.

We must learn and acquire knowledge because it is enlightening; it brings us closer to rest of the world by broadening our horizons. It is economically beneficial for us, and good for our self-esteem…. Jealousy or fear should not be the driving force behind it. This is absolutely wrong and unprofessional attitude.

As an IT professional (paki), I find your article offensive for its underlying theme. IT pros, what do you reckon?

This article brilliantly shows why Pakistan has failed miserably in the IT game. Keep defining your existence as a function of India and we will happily continue helping to lead your economy to the gutters.

Rsaxena #11

You Say:

“Keep defining your existence as a function of India and we will happily continue helping to lead your economy to the gutters.”

By making such statements, you only reinforcing sac’s view.

Rsaxena #11

You Say:

“Keep defining your existence as a function of India and we will happily continue helping to lead your economy to the gutters.”

By making such statements, you are only reinforcing sac’s view.

I think what the author meant by “loosing the battle to India” was the battle of influence that both countries are fighting.

Whether you choose to acknowledge it or not , this war of influence is actually very real - just look at the extraordinary lengths the Indian and Pakistani Governments are going to influence world leaders.

By being way ahead in IT a critical component of the ``connected world`` India will not only be influential directly but powerful multi nationals will have a vested interest in influencing their governments to neutralize Pakistan. These corporations might not be critically dependent on India but with a enough of time and money at stake to be bothered.

Crucial to Pakistan, India will also hold more influence than Pakistan in all of Middle East and Central Asia. The reasoning is that the majority of smaller companies located in these regions will not be able to attract IT vendors from the developed world and India is probably their best bet to get technical and managerial expertise of some standard.

What I didn`t understand was the part where Pakistan becomes a vassal state, I was quite sure Pakistan would die before bowing to India. Does the author care to explain?

Sadhana #2,

You are right, benefits from IT are not mutually exclusive, there is enough to go around. But the war of influence between India and Pakistan will have only one victor. They can stop the war altogether, but that is as likely as PCs becoming slower next year.

Vikram

Dear Sac,

You have at last put the IT revolution in a language that can propel your country men into action into action. It is a war with India, good idea. But how sad, your country men are stuck in the quick sands of hatred. It is said that if stuck in the quick sands, pi..s..ing may at times help to reduce the sink rate. That is what they are doing on the chowk.

regards

Jay.

Urstruely,

You can console yourself, if you want to,when you say Pakistan makes superior products--& then claim its not jingoism.

I`m sure there are products that Pakistan makes that are superior to India. In a free market consumers look for quality vs price. The market is the most nonprejudicial entity created by humans. If Pakistani products are good, they will be lapped up by Indian consumers & vice versa. It will also force Indian & Pakistani manufacturers to improve quality just to stay afloat.

When countries lift trade barriers, they always iron out issues like govt subsidies & dumping. There are checks & balances negotiated along the way.

If Pakistan trades with India, it will benefit Pakistan more because it gives you access to a huge & growing market. Also, if your claim about the superiority of Pakistani goods is true, it will give Pakistan a huge advantage. Besides, if either country has investments & assets in their neighobr`s, they will think twice about nuking them.

Your reasons for not trading with India are bogus excuses that protectionists make all over the world. In the end, India wont miss out that much if it does`nt trade with Pakistan. The real question you should ask yourself is--in this day & age, can Pakistan afford not to!