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7

Growing evidence shows that India is serving interests of foreign influencers at the cost of the well being of Indian citizens. Demonetisation is just one in a long list of moves that benefit big money.

Finance Minister, Arun Jaitley, said something interesting when he addressed the Digi-Dhan mela today. He said that Bill Gates told him that more than 100 Cr have mobile phones, 109 Cr have Aadhar cards, digital economy will boom in India.

This had many people puzzled. What does Bill Gates have to do with anything that he's been quoted out of the blue? Why would Bill Gates be the source of information on how many mobile phones or Aadhaar cards are in India for the Finance Minister with access to National statistics? For example the Assocham Deloitte study that says that internet connectivity is still out of reach for 950 million Indians? A few others, who had been paying attention to the news remembered Bill Gates endorsing the demonetisation last month and then denying much knowledge of it and limiting his endorsement to the digitisation of the Indian economy.

But what does Bill Gates have to do with India's demonetisation that he was even asked to comment or endorse it at all or that made headlines on the subject twice and a month later the Finance Minister used data allegedly provided by him to support the viability of this insane venture? 100 crores is 1 billion - in a country of 1.2 billion, with 22% of the population (264 million!) below an absurd poverty line. You'd need to hand phones to babies on birth to get that kind of penetration! That alone should tell you that the number is useless for anything more than propaganda. It is the total number of SIMs sold. Of them "active" - used once a month at a minimum - are 900 million. This number would also include dual SIM phones, SIMs used for non-phone devices (air pollution measuring devices, for example), multiple SIMs used for businesses and so on. This really tells you nothing about the kind of penetration that would allow cashless transactions. Far more accurate statistics with relevance to demonetisation are available for India that make it clear that India has 220 million (100 crore is 1 billion) smart phone users (not all of them have internet enabled).

For that, we must rewind a bit, to something I've mentioned briefly in previous articles and explore it in more details.

Worldwide, as banks fail to manage their money responsibly, we are seeing them flounder. Powerful companies and people writing and influencing monetary policies are encouraging cashless transactions - supposedly to improve the government's coverage for taxation, but in reality, in a country with 70% of its population only owning 10% of its wealth while the top 1% own almost 60%, the cost of digitizing the vast majority of citizens is not even going to be covered by anything that can possibly be recovered from their meagre income that is way below taxable limits. It doesn't take a hotshot economist to know that in a country where 1% of the population pays taxes, the "tax net" is unlikely to get any substantial benefits from being thrown over 100% to see who gets caught. The costs of such an exercise would outstrip any benefits.

What going cashless actually achieves is providing a lifeline to banks by:

  1. Getting most of the nation's money into them and shoring up their failing liquidity
  2. By generating an income for them from the routine transactions of every citizen's day to day living.
  3. Preventing withdrawal of cash from banks by people who want to make more economical choices instead of paying commissions for every use of money.

This happening in India is of a great deal of profit to the global banking elite as well, as credit card services, banks invested in India and other financial service providers generate an income for banks based outside India with their shares of the seemingly small transaction charges on day to day use of money in a country of 1.2 billion people.

There is a great deal of effort put into "encouraging" countries worldwide into adopting cashless transactions by the global financial elite and governments stumped by failing banks and the lure of improved tax collection are capitulating, though none fell as hard and recklessly as the Indian government.

The Quint had correctly reported that the USAID had launched the “Catalyst: Inclusive Cashless Payment Partnership”, designed to scale digital payments systems in India in partnership with India's Ministry of Finance on the 14th of October. This is the press release on the official USAID website. So it is unclear why The Quint updated its article to remove this information and instead add an update that it was initiated jointly by USAID and GOI, but commissioned on the 15th of November as though it didn't happen till it was commissioned. Regardless, this explains what Bill Gates was doing there at all to be commenting on the demonetisation - that should have been a domestic issue. Among the organizations partnering in the Catalyst is the Bill & Melinda Gates Foundation.

Also included in the list is the UN fronted Better Than Cash Alliance that India joined on the 1st of September 2015. To quote their website, "The Alliance is funded by the Bill & Melinda Gates Foundation, Citi Foundation, Ford Foundation, MasterCard, Omidyar Network, United States Agency for International Development, and Visa Inc. The United Nations Capital Development Fund serves as the secretariat."

So, Bill & Melinda Gates, Omidyar Network, Mastercard and Visa participate as themselves as well as as part of the Better than Cash Alliance. USAID participates through the BCA. World Economic Forum participates directly. Many Indian banks, and surprisingly PayTM as well as phone networks are included.

Way before anyone in India articulated a need for cashless payments beyond the normal use for convenience - and there was an existing natural rate of adoption, USAID and its allies seem to have got the bright idea that India needed to go cashless and moved to get India to participate. Not one, but two organizations created in their need to "save" India from itself. One wonders why. The economy was doing well, the government was already undertaking means to improve access and inclusion of more citizens in the banking system - for example, the Jan Dhan Yojana, the expansion of the DBTL scheme (both of which put citizen's money into banks, the second mandatorily) had both been launched before the government joining these groups for promoting a digital economy in India.

Given the catastrophic results of the demonetisation, and the complete absence of consulting with anyone in the country - the government's own economists, RBI directors or security agencies included, it becomes important to ask just who was consulted and the quality of information that was provided and whether it influenced decisions adversely for the country.

There are reasons to believe that there may have been influence against National interest:

  1. Jaitley's direct quote of incorrect statistics allegedly provided to him by Bill Gates, that he used in order to justify the demonetisation at the Digi Dhan mela, even as all statistics of any reputable source point to the opposite. The RBI's data even shows that while the number of card transactions at PoS has increased (out of necessity), the value of transactions has actually gone down, clearly indicating a reluctance to adopt cashless transactions more widely than what was going on naturally.
  2. While in opposition, the BJP itself has pointed out that the CIA works through the USAID programme acting through philanthropic foundations to destabilize countries. There is considerable evidence to support this that BJP were already aware of. USAID has been implicated in covert operations to support subversive activities in countries from Cuba to Pakistan and notably the backing of Al Qaeda affliated rebels in Syria recently.
  3. Ford Foundation grants have in the past preceded at least two major political upheavals in the country - the Janlokpal Andolan and the creation of the Vivekananda International Foundation (which backed it and later ran subversive slander campaigns undermining the newly emerging AAP) were both preceded by grants by the Ford Foundation to their founding members or organizations. The Jan Lokpal Andolan discredited the government then in power. The Vivekananda International Foundation masterminded the rise of the current government, discredited the Aam Aadmi Party that was on the rise and now has an extraordinary number of members appointed to government positions, including the National Security Advisor Ajit Doval, under whose "able guidance", India's regional foreign policy has collapsed. There are allegations that he influenced a controversial supercession in the appointment of the next Army Chief.
  4. Contributed by reader Prem A (in comments below): The conflict of interest doesn’t stop there, Dr Nachiket M. Mor is the country directory of Bill & Melinda Gates Foundation and he is also one of the directors of RBI.
  5. Usual sources of reliable advice and information to the government appear to have been bypassed in this apparently "well planned" demonetisation, indicating that other sources of information were likely used - the government may potentially have been misled to use information that was not in national interest. This needs investigation given the mounting damage being inflicted on the country.
  6. Strangely, neither the government's joining the Better than Cash Alliance, nor the Catalyst were reported in India at all. For a government that proudly publicizes its every sneeze and hiccup that is dutifully given maximum publicity by a subservient media, if this were indeed a move that would benefit India, it is unclear why the Prime Minister would not proudly declare it.

37

So it is time to come back to the series on Globalization.

Human Capital Flight or Brain Drain is the migration of educated and skilled professionals from less developed places to more developed places. The usual reasons are going abroad for further education and settling there or taking jobs in developed countries for better salaries and living standards. While brain drain does result in financial profit for the persons migrating or their families they may remit money to, there are other less realized aspects of brain drain that also need to be considered.

Expense of education borne by less developed country, while fruits of the person's service are reaped by developed countries.  Today's outrage on Twitter was the government making it mandatory for doctors going abroad for further education to return to work in India after completing their education and reserves the right to enforce it by not issuing No Objection Certificates to doctors who don't comply. The government of India estimates some 3,000 doctors who studied in government subsidized hospitals have left the country in the last one year. The annual cost of each student is about 31.31 lakh rupees, while fees charged are Rs.850/- per annum. The government is paying the difference per student that results in no gain to the citizens. 939 crores is no amount to sneeze at. In a country with high poverty, scarcity of medical professionals and tight budgets, this money should be better utilized or recovered.

As far back as 2001, the UNDP had estimated that India loses about $2 billion a year from IT professionals taking up jobs in the US alone.

Some argue that those working abroad remit money. But a country's well being is not money alone. When 3000 doctors go abroad, there are supporting jobs that get reduced too. Less nurses, less ward boys, less patients treated, more losses due to ill health, less villages with access to healthcare... it is all interconnected - which is why governments subsidize - for development.

On a "for higher education" scale... a 2009 report by Associated Chambers of Commerce and Industry (Assocham) estimated that India lost around $10 billion annually in foreign exchange from an average 5 lakh students choosing to go abroad for further education every year and made a strong case for deregulating higher education. The concern of the Indian government that doctors going abroad for further education return to work in the country makes sense. But more is needed. here need to be more and better education facilities to keep the students in the country - which will also result in more jobs within the country. It is a cycle.

The government spends considerable money in education from basic schooling to subsidizing degrees that have costs well beyond the average man's capacity to spend. This expense is intended as an empowerment of citizens as well as raising the skill capital of the country. Brain drain delays the development of the country. In his essay on Globalizing Inequality, P. Sainath quotes statistics from Africa from the Economic times, and puts them in a context of national interest.

...today, according to the Financial Times, the entire continent of Africa has just 20,000 engineers and scientists to serve a continent of six hundred million people, because today, there are more African scientists and doctors and engineers working in the United States than in all of Africa and much of this drain of medical personnel has come from South Africa – the country facing the world’s largest AIDS pandemic.

Lower employment in developed countries. Migrant professionals increase competition to native professionals and often work at lower salaries, resulting in increased unemployment for the local population. UK's visa restrictions for professionals from 2010 came from rising unemployment in the country with hundreds of thousands unemployed IT professionals and engineers while 36,000 immigrated for jobs from outside the EU. As the economy tightens worldwide, these inequalities become more and more visible and resented.

But beyond this, there is also a social cost. When well educated people leave for more prosperous surroundings, their influence also leaves with them beyond their services. Educated minds lead to a more thinking society and increasing brain drain adds to the less developed areas remaining permanently mired in poverty and less world aware society.

Brain drain, or Human Capital Flight increases inequality and makes poorer countries poorer and richer countries richer. A few random examples come to mind. Michio Kaku, the scientist-activist calls the H1B America's secret weapon. It is the visa for professionals to immigrate. Over half of America's top professionals are non-Americans and they are driving the country's prosperity, because they change the ratio of educated and skilled professionals in society - making the country skill dense and thus with more opportunity too. On the other hand, if India has one doctor for 1700 people, Ghana has one for 6700 people. 305,000 Malaysians migrated overseas between March 2008 and August 2009 compared to 140,000 in 2007. According to the official Chinese media, 65,000 Chinese last year secured immigration or permanent resident status in the United States, 25,000 in Canada and 15,000 in Australia in 2007. A 2007 study of Chinese students found that 7 out of 10 students enrolling abroad never return. And while it is true that lack of opportunity or oppression drives or abundant opportunity pulls these people, these numbers of people moving to greener pastures is also making the pastures greener, and their loss is desertifying the pastures they leave.

Many have recommended deporting/encouraging return of Pakistani professionals back to Pakistan as a possible solution for dealing with extremism by increasing powerful, influential voices who have seen the merits of a developed and inclusive society. Obviously no one imagined them to pick up guns and fighting wars with the Taliban, but the influence of thoughts that were more broad minded would dilute the influence of extremism and provide alternative ways of thinking for people at large. In other words, they would strengthen the moderate voice. It is no coincidence that reversal of brain drain was suggested as a developmental intervention.

Needless to say, I support the government's decision to make it mandatory for doctors to serve in the country even if they go abroad for further education. In addition to doctors studying in government colleges, I think doctors studying in private colleges should also be required this, though for a shorter period. There are reasons - below.

  1. Whether a government or private educated doctor, the government still has made considerable contributions to making that education possible and in the cost that is possible in India. Consider, for example an Indian doctor and an American doctor working on similar jobs, paying off their education loans. Even if the Indian doctor gets paid less, guess who finds the payments easier? That is the difference in a developed and developing country, which makes a developing country more needy. I see nothing wrong in citizens with the capacity to pursue extensive education being expected to have a stake in helping develop the country.
  2. I think this should apply to all professionals, not only doctors, though doctors have more conspicuous investment and scarcity of professionals.
  3. This should not apply to those who do all their degree education abroad, since their investment is also in another country.

I got several significant comments, which I'd like to talk of here.

The medical students are already giving in a lot of effort for 7-8 years to go through a shabby education system. Give them adequate compensation/incentives to work in rural areas. Monetary/reduction in study term/preference in PG admission. ~ Raj Rambhia [1][2]

This, I think is a matter of education reform, and applicable to all students whether they continue working in India or abroad.

the question of how the students can "give back" is indeed a serious one. the number of students that manage to study medicine in India is largely due to government subsidized education. Two issues here 1. How do you get them to "pay us back" and 2. What about all who studied in private colleges.

1. Lets say, 4.5 years of studies and the avg. 10 lakh that the govt spends on a student can be reimbursed in 1 year of internship and 1 year of Bond. The bond already exists, and lasts 6 months long. Problem is, there is no enforcement. Is 6 months enough? will one year fix this? Difficult decisions to make. In the 6 months, of the docs who do it seriously, a large number of them see upwards of five hundred patients a week, many do twice as many. thats a few hundered thousand patients treated by the lot of them, does that cover the costs?

Now, they get to go abroad only after they finish the bond, and get a NOC. The new "law" adds a clause to the NOC, it says studies that you do on your own money, in your own time, also, now belong to the nation. Meaning, you come back, irrespective of how many years you have worked in India. and "given back"

2. What about all those who did not study in government colleges? Like me. My college made me do a bond, 2 years paid pittance and on call24x7, I enjoyed it, as did most others I know. Now, 3 years down the line i might want to go work in the US for 10 years, maybe my wife wants to do a PhD, but if I go by the j1 Visa, i cannot, my visa expires when I finish studying.

~ Uberschizo

I am not certain even in this instance the government is speaking of private colleges, though I support even if they are. Also, I am not certain the government means stints working in India for every higher education course. The impression I got was mandatory serving in India, which would be a one time deal. Let us see what clarifications emerge.

Additionally, I think for exceptional cases, there should be an alternative to reimburse the government for the money invested in their education in stead of working, though I hesitate to recommend this, because it isn't only about money, but a professional less in the country. Also, extremely specialized doctors would find it far cheaper to pay back than invest time, but our country needs the neurosurgeons more than the money.

I think some of this also ought to be in reforming education so that students form attachments in the country and genuinely care about the need of the country, which will go a long way toward making this easier for all.

Another comment referred to this as a "communist" choice. I disagree. It is about as communist as the country making the specialized education possible and affordable or people earning more also paying taxes at higher rates. On the other hand, it is capitalist in an exploitative way to the interests of people of both countries to get educated using resources of a poorer country, depriving someone of them, and then going abroad to undercut salaries for doctors who have invested far more money to get qualified there.

In my eyes, while specific solutions may be good for specific groups of people, governments being responsible for entire countries, have a responsibility to make decisions that will help all. The decision to enforce professionals to serve in the country impacts thousands of lives beyond that student alone.