sac August 27, 2000

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The information technology revolution is a global phenomenon and its effects will not be confined to its economic impact alone.

href="/tag/Pakistan">Pakistan the ramifications are much more serious. 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.
After Kargil, the India of old is no more. It is confident, proud and determined to play its role on the global stage. Military muscle is never built up to remain inert for long. 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. Enormous outlays toward blue-water navy buildup and enhancement of nuclear capability are tell-tale signs of an aggressive rather than defensive stance. However, the real threat comes from India’s burgeoning IT strength rather than its military might. Let me elaborate.
Indian programmers as well as other technology related professionals have been streaming into the US since the late sixties. They have now achieved positions of prominence in may areas of intellectual endeavor. The signs are eerily reminiscent of an overwhelming presence of Jews in important spheres of American public life. Indian professors are very visible in business and engineering faculties of major schools across the United states. Indians have also made dramatic strides on Wall Street. Their presence in Silicon valley has become the stuff that legends are made of. People like Rajat Gupta who runs Mckinsey, arguably the most influential consulting company in the world or Vinod Khosla who is probably among the top two or three venture capitalists in Silicon valley or Sabeer Bhatia who founded hotmail are the heroes not only for Indians alone but more importantly for American graduates coming out of elite universities who hold them in higher esteem than the jaded politicians that abound in American politics. This influence is not earned diabolically. It is earned by dint of hard work, perseverance and beating overwhelming odds. But most importantly it has been won without any help from the Indian government. Indian contribution to the IT revolution has happened despite the Indian government. Things are changing now. Indian cities are now fighting amongst themselves to be the next IT Mecca. Indian software exports are projected to increase from $4 billion annually at a 50% clip for the remainder of the decade. Contrast that with Pakistani software exports of $30 million last year.
Why is Indian dominance of IT such a threat?
IT is not just programming services. It encapsulates a whole new paradigm of looking at the world. This paradigm centers around the importance of information in today’s economy. Whoever controls information controls the world. Indian programmers have the know-how and the expertise to access this all-important commodity. Prominent companies like GE, Citibank and Goldman Sachs have moved most of their data processing operations to India. 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. This is an entirely different scenario from multinational manufacturing plants or other forms of physical foreign presence. Indians are now not only the custodians of information they are the purveyors and creators of that information. That ability gives them enormous leverage in the global economy. Unencumbered by ideology, Indian professionals are not only blazing new trails in the US, they are also returning to India in droves to put the expertise they’ve learnt to good use.
What can Pakistan do to neutralize that threat?
Pakistani leaders have to realize that the path to salvation does not lie in confrontation but in accommodation. We have to make earnest efforts to improve commercial ties with India. Contrary to popular opinion, the common Indian just like the ordinary Pakistani desires peace. But similar to the Pakistani establishment, the Indian establishment has different aims. Till better sense prevails, we have to counter that threat. It is one “jihad” that’s worth undertaking. Here are some steps to consider.
Increase in budget provisions for IT are useless. They speak of an academic or bureaucratic mindset that believes in cause and effect rather than a hands off policy. Ironically the best thing the government can do is to get out of the way. It can remove bottlenecks in the way of establishing new software companies by rationalizing its credit and taxation policies. Law and order situation is also of paramount importance for any potential foreign software investment. The next IT czar of the country should come from the private sector rather than academia. To give you an idea of the ill-focused government IT policy there was a reception held recently in New York where some erstwhile minister and his minions presided over a congregation of prominent software professionals from Pakistan. In the first twenty minutes it was apparent that none of the Pakistani functionaries had any clue as to what was going on. They were prattling on and on about how much better Pakistani programmers are at C++ than their Indian counterparts!! They were also predicting confidently that Pakistan would overtake India in software exports in the next 5 years!! Most of the invitees walked out in sheer disgust.
Pakistan has a window of opportunity of not more than two years to get its IT strategy in place. After that no increase in defense budget or nuclear capability can prevent the inevitable. India will have won the war without firing a single shot.