skewed liberalization

["Srinath S" <srinaths@usa.net>]

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The article in ToI was informative. It does not make sense to bank on a
single sector like IT and hope that the other sectors would pickup
automatically. In fact, success in one sector might erode away professionals
from the other sectors, thereby aggravating the symptoms of the
govt-controlled economies. At best there will be unforseen failures, lack of
coordination and a veritable rolling of heads.

The article however talks about increasing FDI. I don't agree with it there.
Increasing FDI without recourse to ground realities will only aggravate the
problem. Instead what we need is a massive entrepreneural drive. Some basic
concepts of monetary transactions should have to be set straight and
structures need to be built that can register local demands and make it
locrative enough to meet them.

In an earlier mail I had been telling Prof. Roy how as IT researchers, the
system progressively molded us to ignore local problems and instead
*imagine* "research problems" based on what we read in journals and
conference proceedings. Here was one PhD student making his defence:
"Consider a mechanic going in his car and connected by a laptop and a cell
phone to both his boss and his customers..." Duhhhhhh??? All the mechanics I
have seen in India live in shanty houses, struggle to make ends meet and
walk to work and back. Talk about a mechanic going in his car connected by a
laptop... Sure, one can point out that the newest MNCs are setting up
mechanic shops where mechanics do just that. But what is their percentage in
India? What about the big big mass of population whose demands are not
researched? Who get silently ignored?

It is not difficult to figure out why, as the ToI article says, most of the
IT innovations are completely ignored in India and get used elsewhere.
Simple skewed economics. Think of liberalization as an electric field. In
the absense of any strong influences, the field dissipates evenly in all
directions; but in the presence of stronger fields in the vicinity, it gets
skewed. The dynamics of the big money economics in India have little r no
relation to demands that exist in India.

Economic strength is not measured in terms of numbers that denote percapita
GDP etc. It is measured in how easy it is to make demand and supply meet.
The purchase power parity. There are a lot of numbers going around regarding
purchase power of Indians. But without a knowledge of how they are
calculated and whether the measurement model is comprehensive enough, one
cannot deduce anything.

-srinath

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