When the 9.0-magnitude earthquake and resulting tsunami struck Asia and East Africa on December 26, Indonesia took a devastating hit. More than 100,000 people died and another 500,000 were left homeless, with some experts predicting that the final death toll may rise above 250,000. Aceh province on the northern tip of the island of Sumatra, where the Free Aceh Movement rebel forces have been fighting against the Indonesian Defense Forces for almost 30 years, was at the center of the destruction. Donald Emmerson, a senior fellow at the Stanford Institute for International Studies and director of its Southeast Asia Forum, is an Indonesia specialist who has been traveling to Aceh since the late 1960s. He's finishing a book entitled What is Indonesia? Identity, Calamity, Democracy.

STANFORD: What do we need to know about Aceh province?

That it's a wonderful place, that the people have a tradition of hospitality, and that they share with you what they have. It's very sad that it has been subject to so much violence and conflict for so many years.

What's been happening in recent times?

Since May 2003, Aceh has been virtually off-limits to foreigners. The [military] reasoning is that it's for security reasons, but there's always been a suspicion that it's also because bad things -- horrible things, killings and so forth -- are done in the dark, and they don't want people to watch. Certainly the human rights community has had great difficulty getting access to Aceh.

What could happen as a result of some 1,000 representatives of aid organizations being on the ground there?

The opening of Aceh to foreign and domestic humanitarian aid workers has the potential to introduce elements that can serve as a check on human rights abuses. Obviously, the time for mourning is not over. But if we can insert a silver lining in this very dark cloud, it might be that the devastation of the tsunami opens up an opportunity to rebuild much of Aceh, and that it will require cooperation among all Acehnese. I am cautiously optimistic about the opening that this catastrophe represents for trying to lessen the man-made pain of the Acehnese people.

What might a rebuilt Aceh look like?

The plan is to take villages that were destroyed, and maybe even the town of Meulaboh on the west coast, which was the worst hit, and move them inland a certain number of kilometers. Then, construct mangrove swamps as barriers against a repetition of the tsunami, and also to protect the soil from erosion and generate the possibility of brackish-water fishing for the livelihoods of the people. This is a massive effort that is going to last for years and years. Authorities have estimated that the rebuilding costs in Aceh could run to $2.2 billion.

Fishing villages would no longer exist on the coast?

I spent nine months in fishing villages in East Java, and I found that the relationship of the populations on the coast to the ocean is not necessarily what one would expect. They are not happy bathers on the beach, fishing is an extremely dangerous operation, and the ocean is considered a wild place.

Many fishing communities are overfishing the source. I wrote a long report for the Ministry of Agriculture's fisheries office, arguing that what Indonesia ought to do was take the money the government was spending to supply nylon fishing nets and higher horsepower outboard motors, and spend it on wives who were involved in craft commodities. The women have commercial skills, and getting microcredit programs for women to set up shops and expand is the future.

How will religion figure in that future?

Aceh is known in Indonesia as "the front porch of Mecca." The Acehnese are almost entirely Muslim. While there's a tendency among Americans to presume that [a Muslim nation] must be fanatic, Indonesia remains an overwhelmingly moderate society. There is a poignant photo, which hasn't been circulated in the U.S. press, of a sign at a depot for humanitarian relief supplies. It reads, "If you try to steal this material, you will be responsible to Allah."

The following is supplemental material that did not appear in the print edition of STANFORD.

What was the overall impact of the tsunami in Indonesia?

I think it's important to keep in mind that each of the affected countries was affected in a somewhat different way. In Sri Lanka, an estimated 70 percent of the coastline of the entire island was affected, so the economic consequences there are going to be more severe than the damage that was done to Indonesia. If you go down the west coast of Sumatra, you will see damage, but the main damage was overwhelmingly concentrated in a single province, Aceh, which represents less than 2 percent of the total population of Indonesia. Aceh got a double-barrel assault -- from the earthquake and the tsunami. The death toll was horrid, with a huge loss of life, but it was concentrated on the coasts.

How does Aceh's history set it apart from the rest of Indonesia?

The first record we have of an Islamic sultanate in what is now Indonesia is a stone carving dated 1297, on the north coast of Aceh. Aceh was closest to the Middle East, and there were Muslim traders who would go short distances, pause, sell, buy and reload. Long-distance Arab-Malay trade finally got to Indonesia, and the logical landfall was Ache.

Then there were tremendous and unequal casualties in the war against the Dutch, who recruited Ambonese troops to fight a colonial war in Aceh in the 19th century. There's a photograph of Dutch troops standing on the dead bodies of Acehese rebels. The Acehnese war lasted a long time, and it was one of the last parts of the archipelago to be fully brought into the colonial orbit.

Aceh has been for some time under a state of military emergency, and an estimated 13,000 have died as a result of the [rebel] war since 1976. But the tsunami has changed all that. Looking at it from a political science point of view, if we don't begin trying to analyze the situation, I'm not sure we can make it better down the road.

What needs to happen?

In a time of crisis what you need is efficiency and effectiveness, and you need somebody to stand up and say, "This is the way things are going to be." But the governor of Aceh is, by all accounts, exceedingly corrupt. He is in Jakarta now, in detention, awaiting trial on corruption charges. So you don't even have an active, sitting provincial government leader to take charge.

The number of members of the provincial administration who died in the tsunami is quite high, and the central government has had to send up 300 replacements from Jakarta. The administration of Aceh has essentially been completely taken over by the central government. This is potentially unhelpful, depending on how sensitive and effective the central government is and how corrupt the atmosphere is within which masses of foreign aid are moving.

The somewhat optimistic scenario is that now Aceh is even more dependent on the central government than it was before, with the need to rebuild substantial portions of its coastline. So a leader of the [freedom] movement [might] look down the road and say, "It's unrealistic for us at this point, with this incredible body blow to our economy, to expect that we can now somehow take over Aceh. We are more dependent than we were before on the central government."

And, conversely, in Jakarta there might be the thinking that since Aceh now so obviously needs support within the republic, "We are in a stronger position, and therefore we can afford to be generous, and to extend concessions, short of independence, that will take advantage of this." The bottom line is that two enemies who were at each other's throats now face a third enemy -- nature.

Are there other voices that should be heard in Aceh?

One of the difficulties of having negotiations between the Acehnese Freedom Movement and the central government is that it tends to exclude other Acehnese views, which is one reason why negotiations that took place previously were not successful. Acehnese society is pretty diverse, and the Acehnese Freedom Movement does not represent all Acehnese, not to mention the Javanese and Indonesians who have migrated into the province, who are university students and [members of] religious communities.

The conflict has lasted for 30 years in its present form, and it has created such enmities that there is no particular mood to compromise. The government has no incentive to reach out, and the Acehnese Freedom Movement remains intransigent. In the long run, those who disagree with a so-called freedom movement are in the shadows and their views tend not to be reported. My hope is that as these voices are allowed to take part in determining the future of Aceh and its political leadership, the polarization will decrease and there will emerge a kind of more moderate center, in favor of autonomy and full rights.

In the 1990s, the United States cut military assistance programs to Indonesia. Is the relationship between the two countries improving?

SBY -- Susilo Bambang Yudhoyono -- is a former military man, but he's identified as relatively clean, and associated with a somewhat more reform-minded element within the military. More than any previous president of Indonesia, he has had exposure to the United States. Certainly this is an opportunity for an improved relationship between Indonesia and the U.S.

PALO ALTO, Calif. -- The European Union is increasingly showing a new independent stance on foreign-policy issues as the logic of its industrial and economic integration plays out in the international arena.

Already the EU has taken a distinct and independent approach to both the Israel-Palestinian conflict and the nuclear crisis in Iran. Now it has broken ranks over the Korean Peninsula, fed up and concerned with the failure to resolve the ongoing crisis over North Korea's development of nuclear arms.

Reflecting this new stance, the European Parliament this week passed a comprehensive resolution on the Nonproliferation Treaty (NPT) and nuclear arms in North Korea and Iran:

• It urges the resumption of the supply of heavy fuel oil (HFO) to North Korea in exchange for a verified freeze of the Yongbyong heavy-water reactor, which is capable of producing weapons-grade plutonium, to avoid a further deterioration in the situation. At the same time it is calling for the European Council and Commission to offer to pay for these HFO supplies.
• It urges the Council of Ministers to reconsider paying 4 million Euros of the suspension costs for KEDO (the Korea Energy Development Organization) to South Korea to ensure the continued existence of an organization that could play a key role in delivering energy supplies during a settlement process.
• It demands that the Commission and Council request EU participation in future six-party talks, making it clear that the EU will in the future adopt a "no say, no pay" principle in respect to the Korean Peninsula. Having already placed more than $650 million worth of humanitarian and development aid into the North, it is no longer willing to be seen merely as a cash cow. This view was backed in the debate by the Luxembourg presidency and follows a line initially enunciated by Javier Solana's representatives last month in the Parliament's Foreign Affairs Committee.
• It urges North Korea to rejoin the NPT, return to the six-party talks and allow the resumption of negotiations.

The EP cannot substantiate U.S. allegations that North Korea has an HEU (highly enriched uranium) program or that North Korea provided HEU to Libya. It has called for its Foreign Affairs Committee to hold a public hearing to evaluate the evidence. "Once bitten, twice shy" is the consequence of U.S. claims that Iraq possessed weapons of mass destruction.

The world order is changing; the EU -- like China -- is emerging as a significant global power economically with the euro challenging the dollar as the global currency (even prior to the latest enlargement from 15 to 25 member states, the EU's economy was bigger than that of the United States). Speaking at Stanford University earlier this month, former U.S. foreign policy adviser Zbigniew Brzezinski pointed out that the EU, U.S., China, Japan and India will be the major powers in the new emerging global order. Since the new Asia will have three out of the five major players, he stressed the importance of engaging with it.

How will those already in play respond? Some may claim that statements by North Korea welcoming the EU's involvement and participation are merely polite, inoffensive small talk that cannot be taken seriously. Yet there have been a spate of pro-EU articles appearing in Rodong Sinmun, the daily newspaper of the Central Committee of the Korean Workers Party, since 2001.

Of 128 EU-related articles between 2001 and 2004, a majority praised Europe's independent counter-U.S. stance, emphasized its increasing economic power and influence, and heralded its autonomous regional integration. Rodong Sinmun portrays the EU as the only superpower that can check and balance U.S. hegemony and America's unilateral exercise of military power.

North Korea's perception of the EU is well reflected in articles such as: "EU becomes new challenge to U.S. unilateralism"; "Escalating frictions (disagreements) between Europe and U.S."; "European economy (euro) dominating that of the U.S."; "Europe strongly opposing unilateral power play of U.S.," and so forth.

Concurrently, North Korea has pursued active engagement with the EU by establishing diplomatic relations with 24 of the 25 EU member states (the exception being France). It is not necessary to read between the lines to recognize North Korea's genuine commitment to engagement with the EU based on its perception of the EU's emerging role on the world stage.

The Republic of Korea has publicly welcomed the prospect of EU involvement, while China wishes to go further and engage in bilateral discussions with the EU on its new policy toward the North. Russia will follow the majority. The problem is with Japan and the U.S.

In Japan, opinion is split by hardliners in the Liberal Democratic Party who view problems with North Korea as a convenient excuse to justify the abandonment of the Peace Constitution. They don't want a quick solution until crisis has catalyzed the transformation of Japan into what advocates call a "normal" country.

The U.S. expects an EU financial commitment, but not EU participation. The neocons believe that EU participation would change the balance of forces within the talks inexorably toward critical engagement rather than confrontation.

The question is whether the EU's offer will point the U.S. into a corner or trigger a breakthrough. Will U.S. fundamentalists outmaneuver the realists who favor a diplomatic rather than military solution? Only time will tell.

Glyn Ford, a Labour Party member of the European Parliament (representing South West England), belongs to the EP's Korean Peninsula Delegation. Soyoung Kwon is a postdoctoral fellow at Stanford University's Asia-Pacific Research Center.

Silicon Valley cannot be replicated-not even in the US, leave alone India.

But there is no underestimating the complex and high end nature of information technology work that's increasingly being done in India.

There is almost nothing that is not doable, except certain high investment, high value manufacturing, like microprocessors.

This year stands out for the speed with which India, still very much a poverty ridden developing country, has emerged as a partner of mature econom-ies in a wide ranging field that covers information technology, business processes and research and development.

Unsurprisingly, such a major development has been accompanied by drama, excitement, anguish and misunderstanding. The rapid acceleration in trends, which in some cases date back to over 10 years, has given little time to players on both sides to rationally assess and adjust to new realities.

Some don't seem to know what has hit them and have therefore gone on to make unrealistic assumptions.

In the west, particularly in the US, there is a backlash against outsourcing to countries like India, China, the Philippines and Russia, with India being the most visible and so taking most of the rap.

Correspondingly, there is an element of euphoria in India in the belief that it has arrived. Some are making unrealistic assumptions that it is on the way to becoming a new Silicon Valley to the world.

Significantly, the knowledgeable and those who are in the vortex of change have a realistic view of what exists on the ground and an enlightened foresight of the shape of things to come.

In this survey of opinion leaders in the information technology industry, we try to come to grips with the new, rapidly emerging reality what is the exact nature of the high tech work taking place in India in information technology and what are the precise contours of the emerging cross border partnerships?

First, the Silicon Valley red herring. Sridhar Mitta, managing director of the incubating firm e4e Labs, almost snorts at the mention of Silicon Valley.

He recalls how the good professors at Stanford University started to get too many visitors who came and asked the same questions what makes Silicon Valley tick and can we replicate it in our country?

They undertook a methodical study for a couple of years and helped define the uniqueness of the creative process that occurs in a small geography 30 miles by 10 miles, near the Californian city of San Francisco.

To Mitta, the Valley's defining characteristic is that some of the best brains in the world are concentrated in a small geography. "It is an innovative high tech cluster. There is an ecosystem of companies which add value to each other."

In Silicon Valley people are willing to share ideas and are not worried about theft. Business discussions are concluded very fast as people want to get on with a project. A project can be started in a week.

There is no concern over individual ideas being stolen as it is assumed that if you are bright you will have many more worthwhile ideas. In the Valley, people don't care about religion, creed or nationality. "There is only one religion, business," Mitta says.

Another industry insider concurs. "Silicon Valley is not a service, but a risk taking model, whereas the Indian software model is largely based on cost effective and efficient delivery of services," he differentiates.

Many of tomorrow's problems are first defined in US universities and then get crystalised as business opportunities. "Firms in the Valley work closely with those universities to quickly grasp the business ideas that emerge from diagnosing and solving a technical problem, for example."

Where does Indian expertise and capability stand then? "The Indian environment still lacks the original ideas that create the new business models. This is because of the lack of proximity to markets," the industry insider explains.

"Once an engineering problem is defined, it can be executed in India." The key and growing Indian competency now is that it has crossed the technical hurdle, there is little that cannot be technically done in India.

If Silicon Valley scores 100 for the purpose of our present discussion, Mitta gives Bangalore 15.

"Bangalore has passed criticality in technical prowess but is still abysmally low in interaction. The culture of networking is better in Bangalore than in the rest of India but nowhere near what exists in the Valley. Here a major part of the load is carried by multinationals which guard their secrets very jealously," Mitta says.

Bangalore also scores on its educational institutions which can deliver the raw materials or skills. Like the Valley, it has some of the best brains, relatively speaking, and some companies have reached criticality of size. Some complex work gets done here in a serial way within companies.

"I know that a US company can start a complex work group here which involves doing many things, though not all. But I don't know what the company on the floor above mine is doing," notes Mitta.

Subroto Bagchi, COO of MindTree Consulting, who is based in the US, explains that in the 1990s people thought that any work that required a high degree of customer knowledge and collaboration, design and architecting had to be done exclusively in the US.

"Anything that required innovation had to be done near the water cooler. So now there is hardware, software and wetware the coffee machine and what's between your two ears, as most of the human brain is water."

But the big change has come with the availability of high bandwidth which has made the water cooler virtual.

"If earlier we looked at India for just development or maintenance work, now we are able to look at co-development and co-architecting," Bagchi notes.

Till two human beings meet, trust is not established. Innovation-related activity, co-development and co-architecting are not done by two entities but by two human beings.

Two techies have to accept each other as "buddies" before they can innovate together. "That happened after Y2K. It established the cross cultural comfort. In a nutshell, India has become legitimate," Bagchi adds.

Higher value add projects are now coming to India and company boards across the world are increasingly being asked, 'What is your India strategy?' Investors in venture capital funds are asking them, 'What are your plans for India,' and they in turn are asking companies 'What are your India development plans?'

The software insider says India's current role is to "complement" not "replace" Silicon Valley. "If present trends continue, maybe India can equal Silicon Valley in seven to 10 years. But the approach cannot be 'We versus they.'"

Another authority adds his support to this scenario, making a deft distinction between what is on and not on.

Says Madhukar Angur, David M French distinguished professor at the Flint School of Management, University of Michigan: "Today almost nothing is too high-tech for India. In technology (IT, designing, R&D) India has taken significant strides. It is pretty close to self-sustaining growth. But it is not quite there. So MNCs will look at India as a location for startups but not standalone ones."

So they will also seek out partners, as Intel has done with startups like Tejas Networks.

The cooperation and joint development approach is underlined by K P Balaraj, managing director of WestBridge Capital Partners.

He feels that "the vast majority of the work being done by start-ups in India is led by teams located in the Valley. What is changing though is the timing of an India ODC (overseas development centre) which is being set up much earlier in the life cycle or even at the seed stage."

What is more significant is that as multinationals which follow the example of early leaders such as GE, TI, Intel, Oracle and others start to do more cutting edge work here, there will be a large base of India-based engineers and managers who will have the experience of building and bringing a world-class product to global markets, primarily the US.

"From this base, we will see a future generation of product entrepreneurs emerge who will have the vision and market credibility to attract high quality VC funding for their plans," Balaraj adds.

Innovation means developing new technology or products. Product development in India is already taking place but as a secondary exercise.

Sanjay Kalra, CEO of the HCL-Deutsche Bank joint venture DSL Software, explains the sequence of what came first and then what followed. At any point of time more than 70 percent of spending takes place on sustaining investments in existing technologies.

This, like work on new technologies, also requires high end work that is innovative. But a majority of the effort is in tasks that are process and procedure bound.

In such tasks, innovation is focused on how to deliver the subcontracted tasks better (process improvement, quality).

High end startups are now beginning to allocate and locate a high percentage of employees (or contractors) in India.

In the past it was the large technology players that leveraged the lower costs and high availability of talent. The smaller startups would contract to small and large players on a need basis.

But of late a lot of smaller startups are also beginning to factor in India as an integral part of their business plans right from the beginning.

What is more, several start-ups are now using India as the base to also conceptualise and then produce in India for markets in Asia.

The good news on products is that Intel is in India in a big way and is going in for the joint effort startups that hold the key to the future. Intel's own agenda, says Ketan Sampat, president of Intel India, is to establish leading edge design capability.

Says Sampat: "At Intel's development centre (its largest non-manufacturing site outside the US), we are engaged in some of the most advanced development activities not just in India but anywhere in the world. For example, the flagship next-generation enterprise processor that Intel will have in volume production is being designed entirely in Bangalore."

But he sees an important milestone that has to be crossed Indian firms still have not broken into the ranks of product companies with their own intellectual property and branded product lines.

"The i-flex's of the world are still too few and far between," Sampat says. So Intel Capital, the company's strategic investment programme, has been an investor in several Indian technology companies. Sampat mentions the investment in Sasken Technologies.

"Its product GSM/ GPRS software stacks complements our "Manitoba" (wireless Internet on a chip) product and it has customers worldwide."

He also mentions another telecom company, Tejas Networks. "It is starting with the Indian market which is sizeable now and is using it as a springboard to the global market."

Sanjay Nayak, CEO, Tejas Networks, sees only the beginnings of high end startups in India, like his company. "It will take some time before we see a major shift in startups originating in India, though the enablers are all there."

The most common trend is to have an "engineering backend" in India of a US originating startup. Within this, the major amount of work that is being done is "software" centric not much system design or hardware design work is done.

He expects that "once we have a few success stories of high-end product companies from India, it will accelerate the trend." In the past, countries like Israel and Taiwan have witnessed such trends.

Srini Rajam, chairman and CEO of Ittiam, another startup product company, sees high end start ups becoming increasingly dependent on designs done in India.

"There is a strong push coming from the investors of the start ups to locate a large part of their design team in India or source their key designs/IP from Indian companies, in order to improve R&D budget utilisation and time-to-market."

He sees early revival worldwide in one segment-the semiconductor and embedded systems. "This is in turn is enabling the growth of chip design, embedded software and system design activities in India."

Several factors are likely to encourage more high end work to come to India and help it become an increasingly important partner of Silicon Valley.

First, the reverse brain drain or brain gain that has been taking place in the last few years, especially since the tech bubble burst in early 2000 and the recession that set in in Silicon Valley.

One person who has been plotting it carefully is Rafiq Dossani, a senior research scholar at the Asia-Pacific Research Centre of Stanford University.

"My guess is that 6,000 jobs have been lost from Silicon Valley in IT to India. Looking ahead, the flow will depend on both opportunities in India and here."

The Silicon Valley economy is picking up rapidly and hiring should soon increase, feels Dossani. In addition, it remains unbeatable on new product development because of its global reach of talent and proximity to markets.

So the younger and more innovative will be attracted to the Valley. India will continue to attract those in the 30-40 age group interested in raising families in India and those interested in a rapid rise up the executive ladder through a stint at a senior level in India.

Also, a key security factor is enabling high end work to shift to India, argues Angur. India will be a country of choice for location of partnerships on considerations of economic stability.

"Multinationals gamble on technology but are cautious on geography. Even China and Taiwan have a security downside. India-Pakistan relations is indeed perceived as a security risk but still India is on the preferred US list."

He sees a significant historical parallel. Technology and IT will be to India what the automobiles industry was to the US.

"One out of every three in the US has something to do with automobiles. The IT revolution has the seeds of becoming something like that. In the immediate future mutlinationals will consider India more and more for high-tech startups and there will be more high tech jobs."

Bagchi shares a deeper insight rooted in Indian history and social development. India, he feels, has two cards up her sleeve: "One is the power of diversity and two the power of pluralism, imparted to it by its institutions."

The future of the global economy is in more trade but post 9/11, the west is also looking for a sense of comfort a degree of security and cultural fit.

How many countries are there with world class capability in IT services from which an American company can source? Out of the choices available, how many countries are both diverse, so that there is a democratic-cultural fit, and believe in institutional pluralism - executive, judiciary, legislative system? "These institutions give a guarantee of continuity," he says.

To become an innovation partner to Silicon Valley, an economy must innovate. Innovation is invariably linked to diversity. The US has been at the cutting edge of technologies because it has such a pro-immigration policy.

"We did IT services for 15 years and moved up the value chain. But the next big value chain is about innovation. That innovation depends on the fertility condition on the ground. That condition is necessarily about diversity," Bagchi adds.