Tuesday, November 08, 2005

Digital divide and digital dividend

Mr.Deve Gowda's recent outburst against InfosysTechnologies and its Chairman and ChiefMentor,Mr.N.R.Narayanamurthy indicates that there is aneed for introspection by IT companies regarding theircontribution to society.Deve Gowda has faulted Infosysfor its penchant for owning land and buildings;he isalso not satisfied about employment potential createdby the company.He wonders what can be the worthwhilecontribution from a peripatetic mentor to companies ofwhich he is a director.A dispassionate discussion on(a)how to bridge the digital divide,(b)ways to promotefair distribution of digital dividends among allstakeholders and (c)prevention of degeneration of'overboarding' into 'sinecures' is called for. Digital divide:There is doubtless a politicalagenda behind Gowda's carping criticism.But it is alsoto be recognised that growth of IT industry has notmade any difference to the lives of countless peoplewho feel alienated from the development process.Apartfrom the traditional 3R-s,computer literacy has becomea sine qua non for gainful employment.The haves andthe have-nots have been redefined as thecomputer-literate and the computer-illiterate.Onaccount of higher levels of remuneration in ITindustry,the incidence of relative poverty (thedifferential between the incomes of employed andunemployed)has increased leading to greater socialtension.Apart from the age-old urban-ruraldivide,there is now an intra-urban divide between theIT-savvy and others.With business and communicationturning more and more online every day,thecyber-challenged are becoming increasinglymarginalised.This polarisation is an invitation topoliticians to fish in troubled waters.Therefore,ITcompanies in their own interest and in the greaterinterest of society would do well to provide ITeducation to as many people as possible,be they inurban slums or in the remotest rural areas.Hardwarecompanies can also play a significant role innarrowing the digital divide by introduction ofinexpensive computers and peripherals. Digital divide is defined as the the socialinequity in the access and the opportunities forgaining competencies with information andcommunication technologies.Government and IT companiesought to work together towards amelioration of thisinequity instead of criticising each other. Digital Dividend:Society gains in a variety of wayswhen IT sector grows.Software is a major strength toour economy by virtue of its exportpotential.Employment opportunities are augmentedthanks to outsourcing of IT jobs to India.But equityand even enlightened self-interest of the industrydemand that benefits (dividends)accrue to all sectionsof society.Fair distribution of these dividends is asure way of bridging the digital divide.Instead ofcontinually harping on poor infrastructure,the ITcompanies may make a beginning by helping to construct nearby roads.Corporate socialresponsibility(CSR) is not a fetish.It should beviewed as an essential part of strategy to sustainbusiness growth.N.R.Narayanamurthy rightly points out,"The primary purpose of corporate leadership is tocreate wealth legally and ethically.This translates tobringing a high level of satisfaction to fiveconstituencies--customers,employees,investors,vendorsand the society-at-large.The raison d'etre of everycorporate body is to ensurepredictability,sustainability and profitability ofrevenues year after year."This underscores the factthat society-at-large also is a significantstakeholder in growth of any industry.Sustainedprofitability of IT industry in the long run ispossible only if digital dividend is fairlydistributed.Many IT companies are now admittedlydarlings of the stock market.They need to becomedarlings of society. Though CSR practised by IT industry cannot bebelittled (for example,Infosys contributed Rs.5 croretowards tsunami relief),society expects a lot more.The most prestigious award for excellence in CSR isthe TERI (The Energy and Resource Institute)annualaward established in 2001-02.In the first threeyears,14 Indian companies have qualified for this CSRaward.It is revealing that none of these companies isfrom IT industry.(All Indian registered companies areeligible to apply for this award.) Overboarding:IT industry has produced many capableleaders/managers.Naturally,their service as directorsis desired by many companies.Narayanamurthy'scontribution as chairman of Bangalore InternationalAirport Limited(BIAL) has been questioned by DeveGowda.Gowda's implicit assumption is that such a busyperson cannot devote required time and energy forBoard meetings.While it is likely that a person who isa Board member in several companies may not be able todo justice to all companies,Narayanamurthy's record interms of attendance is good.Albert Brunner,CEO of BIALhas confirmed,"Despite his hecticschedule,Narayanamurthy chaired all the board meetingsof BIAL barring one."Gowda's criticism regarding BIALseems to be misplaced.However,overboarding(thephenomenon of a person serving too many boards hascome to be called as 'overboarding')should be avoidedif the person concerned is not able to perform forwant of time. To sum up,though Deve Gowda's fulmination is undulyharsh,it is a warning signal to IT industry that it isrequired to improve its image as a sociallyresponsible sector.

Tuesday, October 25, 2005

Deve Gowda on Infosys

It is obvious that there is a political agenda behind Gowda's attack on Infosys.But,his reference to the company's penchant for owning land and buildings is worth analysing.

In 2004-05,the company spent more on capex than on R&D.

It is food for thought that no IT company so far has bagged the TERI corporate social responsibility award.

Sunday, October 16, 2005

Article in The Hindu

Date:16/10/2005 URL: http://www.thehindu.com/thehindu/op/2005/10/16/stories/2005101600051400.htm
Open Page
Are small banks viable?
AN INTENSE debate is now on in our country regarding the desirability of allowing small banks (either in the private or public sector) to continue as independent entities. Finance Minister P. Chidambaram has been advising the banks to aim at 3-Cs, namely consolidation, competition and convergence.
The basic premise of those arguing for the merger of small banks with large ones is that small ones per se are not potentially viable. It is contended that margins/spreads in banking business keep narrowing and therefore banking has become a "volumes game." Only the big players can survive; smaller banks have either to become big (organically or through mergers) or to go out of the scene.
The counter-argument is that the sustainability of the banking business depends on efficiency and governance; size is not the deciding factor. Banks have gone under not because they were small, but because they were ill-governed. Barings Bank, by no means a small one, collapsed because its systems were leaky and the camouflage of one person (Nick Leeson) was enough to undo a banking behemoth. Nearer home, GTB bit the dust owing to gross irregularities in management. New Bank of India and Nedungadi Bank lost their identity on account of lack of good governance.
There is always some inherent merit and some innate demerit in size. Big banks like State Bank of India and ICICI Bank are certainly able to take advantage of economies of scale, garner low-cost deposits and offer low-interest credit products. They can easily afford to put in place effective risk management systems and thereby avoid, at least theoretically, accumulation of distressed loans. Some large banks are alert enough to securitise and sell their potentially non-performing assets well in advance. It is another debate altogether whether these are desirable or sharp practices.
Empirical evidence
Size, however, is not a guarantee against judgmental errors. Empirical evidence suggests that the proportion of contaminated assets among larger loans is higher. The advantage of large-sized banks is that they can weather the shocks of large loan losses with less strain than the smaller ones. In this context, it is interesting to note that "small versus big banks" debate is taking place in many countries now. For example, Judy Wasylycia-Leis, an MP belonging to the New Democratic Party of Canada, has written to Canada's Minister of Finance, in a letter dated August 12, 2005, as follows: "We do not believe that large size of banks — resulting from bank mergers — improves our economy. Few benefit from Canadian banks such as CIBC losing billions on unproven investments such as Enron, yet permitting more Enron activities abroad is the central goal of current merger talks." This may be an ideologically loaded statement, but this also shows that bigness is not a panacea.
Small banks, on the other hand, ensure `financial inclusion.' They take care of financial needs of many small customers who may get marginalised by larger banks. Social desirability of this aspect is also stressed by Federal Reserve Bank of Chicago in its 2004 annual report. To quote: "On a dollar-for-dollar basis, community banks make nearly three times as many small business loans as the typical large banking company, and they rely more than twice as much on small deposit accounts for funding. These are long-run economic relationships — community banks do not sell off the loans they make to local businesses, and they consider their depositors to be permanent customers, not just sources of funds."
Size is crucial especially in capital-intensive industries. Surprisingly, despite the much talked-about Basel norms, banking is not equity intensive. Public deposits, which are basically debts for the banks, are typically more than ten times as much as the owned funds of banks. With such a high leverage, bigger banks obviously pose a much higher systemic risk. Hence, size can be counter-productive.
© Copyright 2000 - 2005 The Hindu

Wednesday, October 05, 2005

Manmohan Singh and Bhagavad Gita

Justifying India's vote on the Iran issue at theInternational Atomic Energy Agency (IAEA),ManmohanSingh has sought to draw support from the BhagavadGita.He is supposed to have said "One has to do one'sduty unmindful of the consequences" as reported in TheHindu dated 2nd October.Has the prime ministermisinterpreted the 47th stanza of second chapter ofthe Gita? "Karmanyevaadhikaaraste maa phalesu kadaachana" isprobably the most quoted phrase of Bhagavad Gita.Itmeans:"Your right is to work only;but never to thefruits thereof."This does not mean that one must beblind to consequences of one's actions.This stanzaonly exhorts us not to be disappointed in case theexpected results fail to materialise.The Gita does notnegate the Newtonian logic that every action has anequal and opposite reaction.If one desires to preventa particular reaction,one should avoid the action thatleads to that reaction. The next stanza further elaborates the theme ofnon-attachment to rewards (as against'non-consideration of consequences').It says,"Performactions,abandoning attachment,remaining unconcerned asregards success or failure.This evenness of mind isknown as yoga.'Samatvam yoga ucyate'"(2.48)The Gitadoes not preclude consideration of possibleconsequences before commitment of action. The 50th stanza shows how misconceived Manmohan'sinterpretation is."Yogah karmasu kausalam."Thatis,"Yoga is efficiency in action."We can improveefficiency by increasing output or improving outcomefor the same level of input.Our action is theinput.Consequence or outcome is the output.The Gita'smessage is that through yoga,one can maximise outputor rather the expected output.In case the actualoutput is less than the expected output,we should notfeel disheartened,but should carry onnevertheless.Unless we make an upfront appraisal ofpossible outcomes of our various options regardingaction,we cannot improve ourefficiency.Therefore,Bhagavad Gita certainly enjoinsus to weigh,in advance,the consequences of our actionor 'look before we leap'.There is also the ethicalimperative that in case the consequences of our actionare harmful or unwelcome,we are not supposed toindulge in that action.The Gita does not advocatereckless action unmindful of consequences.Through yogawhich is defined as 'equanimity of mind' and'efficiency in action',we can ensure that ourbehaviour is positive and conducive to growth. Unless we are mindful of the likelyconsequences,our actions are likely to bevitiated.Acting unmindful of the consequences isirresponsible;on the other hand,acting without an eyeon the rewards is yogic.The two are worlds apart.Howcan one be mistaken for the other? Performance of duty oblivious of its consequencesis oxymoronic.Voluntary action that heraldsdeleterious consequences cannot be glorified asduty.Such an action is anarchic and cannot attract anyscriptural approval.It is foolhardy to suppose thatdisregard for consequences will result in righteousaction.One only hopes that Manmohan Singh did not meanwhat he said.The prime minister is expected to explainthe justification for our stand in IAEA instead ofdrawing a red herring through a sophisticmisinterpretation of Lord Krishna's utterances.

Tuesday, September 27, 2005

Are small banks viable?

Are small banks viable? ---------------------- An intense debate is now on,in ourcountry,regarding the desirability of allowing smallbanks (either in the private sector or in the publicsector)to continue as independent entities.The FinanceMinister,Mr.P.Chidambaram,has been advising the banksto aim at the 3-Cs,namely Consolidation,Competitionand Convergence. The basic premise of those arguing for the mergerof small banks with large banks is that small banksper se are not potentially viable.It is contended thatmargins/spreads in banking business keep narrowing andtherefore banking has become a "volumes game".Only thebig players can survive;smaller banks have either tobecome big (organically or through mergers) or go outof scene. The counter-argument is that sustainability ofbanking business depends on efficiency andgovernance;size is not the deciding factor.Banks havegone under not because they were small,but becausethey were ill-governed.The Barings Bank,by no means asmall bank,collapsed because its systems were leakyand the camouflage of one person (Nick Leeson) wasenough to undo a banking behemoth.Nearer home,GTB bitthe dust owing to gross irregularities inmanagement.New Bank of India and Nedungadi Bank losttheir identity on account of lack of good governance. Banking Leviathans:There is always some inherentmerit and some innate demerit in size.Big banks likeState Bank of India and ICICI Bank are certainly ableto take advantage of economies of scale,garner low-cost deposits and offer low-interest creditproducts.They can easily afford to put in placeeffective risk management systems and therebyavoid,atleast theoretically,accumulation of distressedloans.Some large banks are alert enough to securitiseand sell their potentially non-performing assets wellin advance.It is another debate altogether whetherthese are desirable or sharp practices. Size,however,is not a guarantee against judgementalerrors.Empirical evidence suggests that the proportionof contaminated assets among larger loans ishigher.The advantage of large-sized banks is that theycan weather the shocks of large loan losses with lessstrain than the smaller banks.In this context,it isinteresting to note that "small versus big banks"debate is taking place in many countries now.Forexample,Judy Wasylycia-Leis,an MP belonging to the NewDemocratic Party of Canada has written to Canada'sMinister of Finance,in a letter dt.12th August,2005 asfollows: "We do not believe that large size ofbanks-resulting from bank mergers-improves oureconomy.Few benefit from Canadian banks such as CIBClosing billions on unproven investments such asEnron,yet permitting more Enron activities abroad isthe central goal of current merger talks." This may bean ideologically loaded statement,but this also showsthat bigness is not a panacea. Small banks,on the other hand,ensure 'financialinclusion'.They take care of financial needs of manysmall customers who may get marginalised by largerbanks.Social desirability of this aspect is alsostressed by Federal Reserve Bank of Chicago in their2004 annual report.To quote:"On a dollar-for-dollarbasis,community banks make nearly three times as manysmall business loans as the typical large bankingcompany,and they rely more than twice as much on smalldeposit accounts for funding.These are long-runeconomic relationships-community banks do not sell-offthe loans they make to local businesses,and theyconsider their depositors to be permanentcustomers,not just sources of funds." Size is crucial especially in capital-intensiveindustries.Surprisingly,despite the much talked-aboutBasel norms,banking is not equity -intensive.Publicdeposits which are basically debts for the banks ,aretypically more than ten times as much as the ownedfunds of banks.With such a high leverage,bigger banksobviously pose a much higher systemic risk.Hence,sizecan be counter-productive.Needless to say,we must laymore emphasis on prudent management of banks than onsize of banks.

Tuesday, August 23, 2005

"Overlooked" Resignations

V.Sumantran has resigned from Tata Motors after Ravi Kant was made M.D.
V.S. was in charge-E.D.-of cars division.RK was E.D.,commercial vehicles.

Coincidentally,the Head of Cars Division of Daimler Chrysler has recently resigned under similar circumstances on being overlooked while the Chief of CV division was promoted.

Cannot such exits be avoided?

Monday, August 01, 2005


Mumbai continues to reel under heavy rains.Heard from a government official:"The situation continues to be fluid."As BSE Sensex continues to defy logic and gravity,the North-South divide is becoming more obvious.Southern Mumbai remains flood-lit when the northern Mumbai is flood-hit.

Thursday, July 21, 2005

Why most things fail

I should have known better.I understand from a Reuters' message datelined 19th inst.that the Professional Association of Teachers,London has clarified that there is nothing called 'failure'.It is all 'deferred success'.--Srivarahan"K.R.Srivarahan" wrote:"Why most things fail:Evolution,Extinction and Economics" is a book written by Paul Ormerod and first published in March this year by Faber & Faber.He is a former Head of the Economic Assessment Unit at The Economist.His earlier books include 'The Death of Economics' and 'Butterfly Economics'.Irrelevance of mainstream economic theories is the common theme of these books.The writing in the latest book is a (AH)Kalroesque combination of rigorous reasoning and unambiguous statements.There is no reference to cliches like 'Murphy's Law' and Icarus Paradox though they are apparently appropriate to the title.The book reasons why as many as 10% of American companies vanish every year.It explains the causes for failure of public policies (plans to promote integration,ameliorate poverty,reduce inequality,enhance social mobility etc.).Though brief (255 pages),the book's coverage is comprehensive including game theory,bounded rationality,Slim-Fast vs.the Atkins diet,Coca-Cola vs. Pepsi,how the success of Windows is more accidental than planned,etc.(The New York Times commented in 1985,"Running Windows in 512 K of memory is akin to pouring molasses in the Arctic.The product is essentially useless."Comments of Bill Gates and Steve Ballmer in 1988 are even more surprising.Bill Gates:"OS/2,designed by IBM and Microsoft will be the environment for office computing in the 1990s".Steve Ballmer:"We are not going to have any more Windows.It is all OS/2".)Interesting parallels are drawn between extinction of biological species and closure of business firms.

Thursday, June 30, 2005

Sensex 25,000?

Rakesh Jhunjhunwala,the irrepressible bull in Mumbai,keeps saying that the Sensex will touch 25,000.Of course,he does n't say when.People generally dismiss him as a pathological optimist.Sensex at 7,000 was unthinkable a few months back.Many erstwhile unthinkables are becoming real these days.Who would have thought,scarcely a month back,that a Chinese company would outbid Chevron for Unocal?Who would have known that Jap funds would flow to India to nudge the Sensex past 7K?Is it unthinkable that a part of Chinese wealth now going to US treasury,may find its way to Mumbai stock market?With Globalisation apace,the locus of the unthinkable keeps shrinking.Chinese funds will soon drive Sensex if only because it is unthinkable now.Market capitalisation of Indian companies,presently around $400 billion,can easily be swayed by funds from our neighbour.But why should the Chinese be interested in Indian stocks?That is a million yuan question,as of now.

Monday, June 27, 2005

More on Data (in)security

There are atleast two reasons why we should not worry too much:1)In a country where an army commander would sell war plans for $500,anything can happen.2)An inexorable law of Globalisation is :"A problem that occurs somewhere in the globe can manifest itself anywhereelse also."It is too early to forget what happened in CardSystemsSolutions where data (encashable data) relating to 40 million credit cards were compromised.The famous courier UPS lost unencrypted data of Citicorp customers.Prior to this,Time Warner lost precious data concerning its ex-employees in a similar fashion.The present scandal will be under discussion till the next one occurs.Another law of Globalisation is :"The time gap between any two successive global scandals is progressively on the decrease."In a different context,it is interesting to compare two parallel events namely S.Korean Posco's $10 billion investment (the largest one-time FDI in India sofar) and CNOOC's $18 billion bid for Unocal.Posco is investing in the Paradip steel project in return for a 30-year right to export alumina-rich iron ore from India.This was well received in India barring some resistance from left fringes.But the mainstream US seems to be paranoid about CNOOC's offer.Tatas who would be adversely affected by the Posco move,maintained a dignified silence.Chevron,onthe other hand,is throwing tantrums.To top it all,Unocal's reserves are mainly in the Asia-Pacific region.The US energy system,surprisingly 50% dependant on coal,benefits less than 1% from Unocal.Srivarahan

Sunday, June 19, 2005

Kizhanatham,Nava Thirupathi and "Get Well" Anjaneya

It was very satisfying to perform "Thirumanjanam" to Sree Venugopala on 11th June.Kizhanatham where the temple is located is a one-street village on the banks of Thamraparani river.
On 11th and 12th,we visited the nava thirupathis-Sree Vaikuntam,Natham,Thirupuliangudi,Perungulam,twin thirupathis,Thenthiruperai,Thirukolur and Alwar Thirunagari.The temples are well maintained by TVS Venu Srinivasan.
We also visited an Anjaneya temple near Tirunelveli railway station.An hospital called "Get Well" hospital is close by.It used to be a good hospital till misunderstanding among promoters resulted in its closure.The patients are now getting faster relief from their ailments by praying to nearby Anjaneya.Hence his name:"Get Well Anjaneya".

Thursday, June 09, 2005

Data Security and Identity Theft

Identity Theft (IT?) is rare in Europe except in the UK where last year 100,000 people i.e. 0.17% of the population fell victim to account hijacking etc.The comparable figure in the US last year was 10 million ID theft victims i.e.3.39% of the population.

Though many reasons are given for relative insecurity in the US, the following recently reported cases explain why we must not be surprised:

Time Warner and CitiFinancial lost personal data of their employees and customers when computer tapes were lost by their couriers,Iron Mountain and UPS resply.The tapes contained names,social security numbers,payment history etc.TW and CF clarified that the mishaps occured despite enhanced security! (What would happen if security is lowered?) Ofcourse,the missing tapes were not encrypted.They were therefore sitting ducks.Both companies have promised that,in future,data will be sent electronically in encrypted form.

Identity thefts do not just happen;they are facilitated by corporate action!

Sunday, February 06, 2005

Is Management obsolete?

Is the concept of Management obsolete?

Management,both as a discipline and as a part of any organisation (business or otherwise) ,rests on two foundational assumptions.The first assumption is that resources are scarce and therefore they require to be husbanded and judiciously allocated among various claimants (departments or functions) in order to optimise overall returns.The second assumption is that any problem (in management science,any issue that calls for decisions is called a problem) needs to be thought through ,alternative courses of action generated and ultimately an optimal solution that ensures achievement of objectives be arrived at.In other words,managerial wisdom requires that any problem is carefully and deliberately analysed,pros and cons of alternative solutions are weighed and the best solution chosen for implementation.This typically leads to a non-intuitive and time-consuming circular decision-making process.

The first assumption regarding scarcity of resources is further buttressed by Malthusian theory which postulates that increase in population (assumed to be in geometric progression) consistently outstrips the growth in availability of resources.As a consequence,per-capita availability of resources is constantly on a downward spiral which automatically renders the managerial process of 'allocation' more significant with each passing day.Malthus also hypothesised that nature assumes a self-regulatory role whenever the pressure on natural resources reaches a critical inflection point and activates natural disasters like earthquake,cyclone and tsunami to cause a noticeable drop in human population.

Geologists now believe that natural shocks like earthquake are essentially acts of self-renewal which result in restoration and even augmentation of resources.Such cataclysmic events cause new mountains to come up;tsunamis are known to improve land fertility over a period of time and also to mobilise minerals from various areas and shore them up in certain places where they become more cost-effective to mine,on account of higher concentration.Therefore,the assumption that resources per-capita keep declining on a secular basis is misplaced.

The second assumption implies that decisions/judgements made after a detailed analysis are better than snap decisions or intuitive judgements.Malcolm Gladwell,in his recently published book entitled "Blink:The Power of Thinking without thinking" describes what he calls 'The Theory of thin Slices' according to which quick and instantaneous decisions are as good as informed/laboured decisions which consume a lot of time and resources.The DNA of any problem manifests itself in any and every part of the problem.Hence doing a detailed analysis results only in information overload and consequent obfuscation of the real problem.Therefore,the traditional concept of management as an allocator of scarce resources through a comprehensive and time-consuming decision-making process has become obsolete.There is an urgent need to re-conceptualise management.

Tuesday, February 01, 2005

Time issue dt.7th Feb 2005

The pictures in your special report on the tsunami said it all. What a colossal tragedy! The eastern coastline of India, long admired for its scenic beauty, is now feared for the ocean's potential fury. We are reminded of what Hindus call Pralaya—an overwhelming destruction and natural catastrophe. The only consolation, if you can call it that, is that another tsunami of similar magnitude is unlikely to occur in our lifetime.Kizhanatham R. SrivarahanMadras, India

Thursday, January 27, 2005

Letter to Time

Thu, 6 Jan 2005 04:39:00 -0800 (PST)
"K.R.Srivarahan" Add to Address Book

Kizhanatham Rengasamy Srivarahan,
7/4,Pattammal Street,


The pictures in your special report on tsunami said it all.What a colossal tragedy! The eastern coastline of India ,long admired for scenic beauty,is now feared for its potential fury.We are reminded of what the Hindus call as 'pralaya'.Pralaya is an overwhelming ocaenic deluge that terminates life.The only consolation,if you call it that,is the statistical belief that another tsunami of similar magnitude is unlikely to occur in our lifetime.


Letter to Time on 'Tsunami'

Your letter to Time
Wed, 26 Jan 2005 13:46:35 -0500
patrick_smith@timemagazine.com Add to Address Book

Dear Reader:
I am pleased to tell you that excerpts from your letter will be
published in the Feb. 7 issue of TIME. It will be available on newsstands
Monday, Jan. 31. Thank you very much for letting us hear from you. I am
sure that other TIME readers will be interested in your comments too.
Betty Satterwhite
Letters editor

Monday, January 17, 2005

Benefits of Tsunami

Deadly and Yet Necessary, Quakes Renew the PlanetBy WILLIAM J. BROAD
hey approach the topic gingerly, wary of sounding callous, aware that the geology they admire has just caused a staggering loss of life. Even so, scientists argue that in the very long view, the global process behind great earthquakes is quite advantageous for life on earth - especially human life.
Powerful jolts like the one that sent killer waves racing across the Indian Ocean on Dec. 26 are inevitable side effects of the constant recycling of planetary crust, which produces a lush, habitable planet. Some experts refer to the regular blows - hundreds a day - as the planet's heartbeat.
The advantages began billions of years ago, when this crustal recycling made the oceans and atmosphere and formed the continents. Today, it builds mountains, enriches soils, regulates the planet's temperature, concentrates gold and other rare metals and maintains the sea's chemical balance.
Plate tectonics (after the Greek word "tekton," or builder) describes the geology. The tragic downside is that waves of quakes and volcanic eruptions along plate boundaries can devastate human populations.
"It's hard to find something uplifting about 150,000 lives being lost," said Dr. Donald J. DePaolo, a geochemist at the University of California, Berkeley. "But the type of geological process that caused the earthquake and the tsunami is an essential characteristic of the earth. As far as we know, it doesn't occur on any other planetary body and has something very directly to do with the fact that the earth is a habitable planet."
Many biologists believe that the process may have even given birth to life itself.
The main benefits of plate tectonics accumulate slowly and globally over the ages. In contrast, its local upheavals can produce regional catastrophes, as the recent Indian Ocean quake made clear.
Even so, scientists say, the Dec. 26 tsunamis may prove to be an ecological boon over the decades for coastal areas hardest hit by the giant waves.
Dr. Jelle Zeilinga de Boer, a geologist at Wesleyan University who grew up in Indonesia and has studied the archipelago, says historical evidence from earlier tsunamis suggests that the huge waves can distribute rich sediments from river systems across coastal plains, making the soil richer.
"It brings fertile soils into the lowlands," he said. "In time, a more fertile jungle will develop."
Dr. de Boer, author of recent books on earthquakes and volcanoes in human history, added that great suffering from tectonic violence was usually followed by great benefits as well. "Nature is reborn with these kinds of terrible events," he said. "There are a lot of positive aspects even when we don't see them."
Plate tectonics holds that the earth's surface is made up of a dozen or so big crustal slabs that float on a sea of melted rock. Over ages, this churning sea moves the plates as well as their superimposed continents and ocean basins, tearing them apart and rearranging them like pieces of a puzzle.
The process starts as volcanic gashes spew hot rock that spreads out across the seabed. Eventually, hundreds or thousands of miles away, the cooling slab collides with other plates and sinks beneath them, plunging back into the hot earth.
The colliding plates grind past one another about as fast as fingernails grow and over time produce mountains and swarms of earthquakes as frictional stresses build and release. Meanwhile, parts of the descending plate melt and rise to form volcanoes on land.
The recent cataclysm began in a similar manner as volcanic gashes in the western depths of the Indian Ocean belched molten rock to form the India plate. Its collision with the Burma plate created the volcanoes of Sumatra as well thousands of earthquakes, including the magnitude 9.0 killer.
But despite such staggering losses of life, said Robert S. Detrick Jr., a geophysicist at the Woods Hole Oceanographic Institution, "there's no question that plate tectonics rejuvenates the planet."
Moreover, geologists say, it demonstrates the earth's uniqueness. In the decades after the discovery of plate tectonics, space probes among the 70 or so planets and moons that make up the solar system found that the process existed only on earth - as revealed by its unique mountain ranges.
In the book "Rare Earth" (Copernicus, 2000), which explored the likelihood that advanced civilizations dot the cosmos, Dr. Peter D. Ward and Dr. Donald Brownlee of the University of Washington argued in a long chapter on plate tectonics that the slow recycling of planetary crust was uncommon in the universe yet essential for the evolution of complex life.
"It maintains not just habitability but high habitability," said Dr. Ward, a paleontologist. (Dr. Brownlee is an astronomer.) Most geologists believe that the process yielded the earth's primordial ocean and atmosphere, as volcanoes spewed vast amounts of water vapor, nitrogen, carbon dioxide and other gases. Plants eventually added oxygen. Meanwhile, many biologists say, the earth's first organisms probably arose in the deep sea, along the volcanic gashes.
"On balance, it's possible that life on earth would not have originated without plate tectonics, or the atmosphere, or the oceans," said Dr. Frank Press, the lead author of "Understanding Earth" (Freeman, 2004) and a past president of the National Academy of Sciences.
The volcanoes of the recycling process make rich soil ideal for producing coffee, sugar, rubber, coconuts, palm oil, tobacco, pepper, tea and cocoa. Water streaming through gashes in the seabed concentrates copper, silver, gold and other metals into rich deposits that are often mined after plate tectonics nudges them onto dry land.
Experts say the world ocean passes through the rocky pores of the tectonic system once every million years or so, increasing nutrients in the biosphere and regulating a host of elements and compounds, including boron and calcium.
Dr. William H. Schlesinger, dean of the Nicholas School of the Environment and Earth Sciences at Duke, says one vital cycle keeps adequate amounts of carbon dioxide in the atmosphere. Though carbon dioxide is thought to cause excessive greenhouse-gas warming of the planet, an appreciable level is needed to keep the planet warm enough to support life.
"Having plate tectonics complete the cycle is absolutely essential to maintaining stable climate conditions on earth," Dr. Schlesinger said. "Otherwise, all the carbon dioxide would disappear and the planet would turn into a frozen ball."
Dr. Press, who was President Jimmy Carter's science adviser, said the challenge in the coming decades would be to keep enjoying the benefits of plate tectonics while improving our ability to curb its deadly byproducts.
"We're making progress," Dr. Press said. "We can predict volcanic explosions and erect warning systems for tsunamis. We're beginning to limit the downside effects."
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Saturday, January 15, 2005

Raghuram G.Rajan

Every year,Chennai enjoys melodious music in every sabha during Dec-Jan.This time,we had an additional aural delight in the form of lectures by persons including Montek Singh Ahluwalia and Raghuram Rajan.Rajan addressed a packed gathering in the Music Academy on the 13th Jan.This gave a welcome excuse for leaving office early on that day as the lecture started at 5p.m.If I get a soft copy of the address,it will be posted here.(Advance warning).Some of his quotes:-Acceptance of pizza does not tantamount to rejection of masala dosa.-Beethoven and Thiagaraja can co-exist.-A good heart alone is not enough.We also need a functioning mind.-A strong consensus in favour of weak reforms will not take us far.We need strong reforms.-Painless growth is not possible.Only the dead do not feel the pain.

Thursday, January 13, 2005

Stray thoughts

In India,there is a strong consensus in favour of weak reforms.

Acceptance of McDonalds does not tantamount to rejection of Masala Dosa.

Beethoven and Thiagaraja can co-exist.

Friday, January 07, 2005

Google,Stanford,Brin and Page

The word 'google' is already accepted as a verb meaning 'to search'.Brin and Page were supported in their efforts to set up a search engine by their university-Stanford.Stanford and its profs helped them with money and even encouraged them to get leave of absence .

Should not 'stanford' and 'brin and page' be recognised as verbs meaning as follows?

stanford: to extend extraordinary support to its (institution's) constituents to optimise their potential;

brin and page: to bring about revolutionary changes ,usually with support from one's institution.

Wednesday, January 05, 2005

MBAs: Old and New

Difference between old and young MBAs?

The old one slogs while the young one blogs.

Tuesday, January 04, 2005


MS was a phenomenon;her diction in any language(she has sung in 8 or 9 languages) was unexceptionably chaste.
Her rendering of Rajaji's Kurai onrum illai combined the highest philosophy with the best of music.Her concert at the UN with Ghatam Vinayakram as an accompanist is unforgettable.
Equally at ease in Classicals, and bhajans,her kutcheries were a treat for the connoisseur,tyro and even the musically disinclined.
Music has lost its best exponent.Our generation is lucky to have heard her live

Tsunami in Chennai

The tragedy that struck Chennai on Dec 26th made the Chennaivasis familiar with a new word.Alan Greenspan was recently asked:"What is the neutral rate of interest for the US economy?"He replied:"We have to reach neutrality before we can know the neutral rate."Similarly,one has to experience tsunami to understand what it is.This particular Tsunami (occuring on a Powrnami-the Tamil word for Poornima-this indeed was a double whammy since waves are higher on a fullmoon day) was a Bay equivalent of the SE Asian currency crisis.In the early nineties,SE Asia was short of funds.When funds started pouring in from other regions,countries in SE Asia were delighted.Trouble started when foreign funds started moving back.Likewise,when water flowed copiously into water-starved Chennai,people became excited.When water started receding,loss of lives and property stared us in the face.The dead included the morning-walkers and poor slum children who were playing cricket on the Marina beach.While we mourn the dead,we also become acutely aware of the ephemerality of human life especially when pitted against nature's fury.The tsunami trauma was so deep that some fisherfolk have developed a phobia towards the sea.Long admired for its serene beauty,the Marina is now feared for its ferocity.It is believed that during the 2nd World War,the presiding deity of Triplicane assured the citizens that Chennai would not be invaded by the enemy forces.If nature itself becomes our foe and water the invader ,there cannot be any divine assurance.