Environment

FSI scholars approach their research on the environment from regulatory, economic and societal angles. The Center on Food Security and the Environment weighs the connection between climate change and agriculture; the impact of biofuel expansion on land and food supply; how to increase crop yields without expanding agricultural lands; and the trends in aquaculture. FSE’s research spans the globe – from the potential of smallholder irrigation to reduce hunger and improve development in sub-Saharan Africa to the devastation of drought on Iowa farms. David Lobell, a senior fellow at FSI and a recipient of a MacArthur “genius” grant, has looked at the impacts of increasing wheat and corn crops in Africa, South Asia, Mexico and the United States; and has studied the effects of extreme heat on the world’s staple crops.

Paragraphs

The paper explains the evolution of India's software industry. Domestic entrepreneurship emerges as the key factor for origination, survival and innovation in a hostile industrial policy environment. The maturing of the industry required a shift to a supportive government policy; maturation was also critically enabled by the modularization of the programming function through new technologies. These changes favored domestic firms that provided programming services. Later policy and technological changes induced transnational entry and led to higher value-added output. The paper shows that technologically sophisticated industries can develop even when many conditions typically present elsewhere are missing. We provide conditions under which this may happen and show their effect on subsequent developments.

All Publications button
1
Publication Type
Working Papers
Publication Date
Journal Publisher
Shorenstein APARC
Authors
Rafiq Dossani
-

Korea stands at a critical juncture, as it transitions from mid-level to advanced country status. Yet at this important time, Korea seems to have lost its sense of direction. Ideological confrontations, uncertainty about identity, mistrust of the political process and the government, reform fatigue, and, above all, lack of vision have become endemic. Such symptoms are not unique in this global "age of deconstruction," but they are more salient in Korea, where crushing ideological disputes, ongoing inter-Korean conflict, and fallout from of rapid, intensive modernization have put the country in crisis.

If Korea is to move forward, politics and government must regain the confidence of the people. The country cannot become an advanced nation if its ideological obsessions remain entrenched. Creative, pragmatic leadership will bring outcomes-oriented vision, inclusiveness, and focus to the goal of sustainable development on the Korean Peninsula.

A period of historic uncertainty often ushers in an era of progress, and the current crisis presents a tremendous opportunity. Now is the time for Korea's leaders to learn from the past, embrace pragmatism, and make history.

Goh served as the Acting President when the current President, Roh Moo Hyun, was indicted for impeachment by the National Assembly on March 12, 2004 and his powers, including those of Commander-in-Chief, were transferred to Prime Minister Goh until Roh was acquitted by the Constitutional Court in May of the same year. As Acting President, Goh was widely acclaimed for his crucial role in restoring South Korea's stability, handling foreign affairs skillfully, and managing the central government effectively.

Goh has served as the 30th Prime Minister (1997-1998), twice as the Mayor of Seoul, (1998-2002, 1988-1990), Minister of Home Affairs (1987), Member of the National Assembly (1985-1988), Minister of Agriculture and Marine Affairs (1981-1982), Minister of Transportation (1980-1981), and Chief Secretary of Political Affairs to the President (1979-1980).

He holds the record as the youngest Governor in South Korea. At the age of 37, he became the Governor of Jeonnam Province in 1975. He was appointed by the President to lead a national agricultural modernization program called the New Village Movement, which transformed South Korea's agricultural sector into one of the most modernized and productive in Asia.

Between government posts, Goh has served as the Chairman of Transparency International in Korea to fight corruption in South Korea, a life-long cause for Goh. He has also served as the Co-President of Korean Federation for Environment Movement and president of Myong Ji University. He is a 1960 graduate of the Seoul National University. He was a Visiting Fellow at Harvard University in 1983 and a Visiting Professor at MIT in 1984. He is married with three sons.

Bechtel Conference Center

Goh Kun 35th Prime Minister of the Republic of Korea Speaker
Workshops
-

Among the different types of capital resources, venture capital as practiced in Silicon Valley is broadly acknowledged as being an important constituent of a high technology, entrepreneurial habitat. In the past two decades, policy makers from different regions have learned much from its experience.

The IT industry attributes its success partly to venture capital investments in early, risky, stages. Looking ahead, other industries will emerge in the knowledge economy. Within Taiwan and Mainland China, information related industries still dominate investment, yet in Silicon Valley emerging industries including biotechnology, medical instruments and nanotechnology have recently been attracting as much venture capital as the IT industry.

Today, venture capitalists from Silicon Valley and Taiwan are probing what they perceive as growing investment opportunities in Mainland China, On the other hand, the immaturity of its private equity market and the undeveloped state of exit mechanisms there is causing venture capitalists to hesitate to made large investments. Currently, Taiwan's venture capital faces low price-earnings ratios in its 1,400 publicly listed companies. This has contributed to a decline in VC investment. The Taiwan government expects to further liberalize the financing environment to bolster it as a regional center for domestic and international corporations.

This conference will address the influence of the system of capital on regional innovation and entrepreneurship in the United States, Taiwan, and Mainland China. The focus will be on the venture capital industry, corporate venturing and other institutions of capital related to regional industrial development.

Here are some questions to be addressed in this conference:

  • What is the pattern of venture capital investing in high-tech start-ups in the Greater China Area?
  • What are the trends in this industry?
  • How, specifically, does venture capital promote innovation and entrepreneurship?
  • What are the similarities among independent venture capital funds, corporate venture funds, angel funds, and commercial bank involvements?

Conference Organization

Conference Chairman

  • Dr. Chintay Shih, Dean of College of Technology Management, National Tsing Hua University, and Special Advisor, Industrial Technology Research Institute

Co-chairmen

  • Dr. Paul Wang, Chairman, Taiwan Venture Capital Association
  • Dr. Henry Rowen, Co-director, SPRIE
  • Dr. William Miller, Co-director, SPRIE

Executive Director

  • Dr. Sean Wang, Director General of Industrial Economics and Knowledge Center in Industrial Technology Research Institute

Conference Secretariat

  • Industrial Economics and Knowledge Center, Industrial Technology Research Institute (IEK/ITRI)

Conference Organizing Secretariat

  • ITRI: Yi-Ling Wei, Peter Lai, Frank Lin, Shu-Chen Huang
  • TVCA: Teresa Yang, Michael Chen, Riva Su
  • SPRIE: Marguerite Gong Hancock (Stanford)/Martin Kenney (UC Davis)

Auditorium, The Grand Hotel,
1 Chung Shan N. Road, Sec. 4, Taipei, Taiwan

Conferences
Authors
Donald K. Emmerson
News Type
News
Date
Paragraphs

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.

All News button
1
Authors
Soyoung Kwon
News Type
Commentary
Date
Paragraphs
APARC's 2004-2005 Shorenstein Fellow, Soyoung Kwon, discusses Europe's new perspective on Pyongyang.

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.

All News button
1
Paragraphs

Prospects for Peace in South Asia, the inaugural title in a new series of "Studies of the Asia-Pacific Research Center" published by Stanford University Press, addresses the largely hostile, often violent relations between India and Pakistan that date from their independence in 1947. The persistent conflict between the two neighboring countries over Kashmir has defied numerous international attempts at resolution and entered its most dangerous phase when both India and Pakistan became nuclear powers in 1998.

The struggle over Kashmir is enduringly rooted in national identity, religion, and human rights. It has also influenced the politicization of Pakistan's army, religious radicalism, and nuclearization in both countries. This incisive volume analyzes these forces, their impact on relations between the two countries, and alternative roles the United States might play in resolving the dispute. While acknowledging the risks, the book is optimistic about peace in South Asia. The key argument is that many of the domestic concerns (such as territorial integrity in both countries and civilian-military rapprochement in Pakistan) that were fueling the conflict have abated.

TABLE OF CONTENTS

1. Introduction, by Rafiq Dossani and Henry S. Rowen

PAKISTAN: POLITICS AND KASHMIR

2. Islamic Extremism and Regional Conflict in South Asia, by Vali Nasr

3. Constitutional and Political Change in Pakistan: The Military-Governance Paradigm, by Charles H. Kennedy

4. The Practice of Islam in Pakistan and the Influence of Islam on Pakistani Politics, by C. Christine Fair and Karthik Vaidyanathan

5. Pakistan's Relations with Azad Kashmir and the Impact on Indo-Pakistani Relations, by Rifaat Hussain

INDIA: POLITICS AND KASHMIR

6.Who Speaks for India? The Role of Civil Society in Defining Indian Nationalism, by Ainslie T. Embree

7. Hindu Nationalism and the BJP: Transforming Religion and Politics in India, by Robert L. Hardgrave, Jr.

8. Hindu Ethnonationalism, Muslim Jihad, and Secularism: Muslims in the Political Life of the Republic of India, by Barbara D. Metcalf

9. Jammu and Kashmir in the Indian Union: The Politics of Autonomy, by Chandrashekhar Dasgupta

INDIA AND PAKISTAN'S NUCLEAR DOCTRINES AND U.S. CONCERNS

10. The Stability-Instability Paradox, Misperception, and Escalation-Control in South Asia, by Michael Krepon

11. Pakistan's Nuclear Doctrine, by Peter R. Lavoy

12. Coercive Diplomacy in a Nuclear Environment: The December 13 Crisis, by Rajesh M. Basrur

13. U.S. Interests in South Asia, by Howard B. Schaffer

Notes

About the Contributors

Index

All Publications button
1
Publication Type
Books
Publication Date
Journal Publisher
Stanford University Press: Studies of the Walter H. Shorenstein Asia-Pacific Research Center
Authors
Rafiq Dossani
Henry S. Rowen
-

Agricultural production in North Korea collapsed between 1990 and 1996, leaving the country dependent on massive international food assistance. The causes of this agricultural decline are primarily found in the policy decisions which guided the development of DPRK farming, and which have not been adequately addressed either by the government or by international aid organizations. It is, however, feasible for the DPRK to produce enough food to satisfy basic domestic needs. A scenario is proposed in which the DPRK could increase food production, using sustainable farming methods. The cost of international assistance to facilitate such a restructuring would be similar to the current cost of food aid, and such assistance would strongly encourage increased technical and economic cooperation between DPRK organizations and their international counterparts.

Randall Ireson coordinates the American Friends Service Committee agriculture assistance program in North Korea. Over the last seven years he has made numerous trips to the DPRK, and accompanied nine agricultural study delegations from the DPRK to the US and other countries. Dr. Ireson has managed or evaluated many rural development projects, mostly in Southeast Asia. He has written extensively on social and development issues in Laos, and also taught sociology at Willamette University. He holds a Ph.D. in Development Sociology from Cornell University.

Philippines Conference Room

Randall Ireson American Friends Service Committee
Seminars
Authors
Rafiq Dossani
News Type
News
Date
Paragraphs
Y2K was shorthand for the potentially disastrous failure of computer systems at the turn of the millennium. The problem: Many old software systems might read "00" as 1900--not 2000--a glitch that could lead to a cascade of errors and malfunctions. Year two thousand came, and nothing happened--well, not much anyway. A credit card mistake here. A satellite blackout there. But no lives lost. No global economic catastrophe. Monday, January 3 was just another workday. Yet with the benefit of hindsight the economic impact of Y2K on America was far greater than the $100 billion-plus government and business spent on fixing the computer glitch. Chris Farrell reports.

Chris Farrell: Remember the dot-com boom of the 1990s? It seemed as if every entrepreneur with a good idea and a PC could challenge established companies for customers. Brick-and-mortar companies jumped on the e-commerce bandwagon. The demand for digital workers soared. Long-time computer professionals hopped from job to job, pulling down more money with every employer. Newly minted college graduates juggled multiple job offers. But when the Y2K problem emerged in the latter part of the '90s business and government quickly realized there still weren't enough IT workers on hand to find and repair the computer glitch. The quick fix? Hire computer professionals overseas. And that temporary solution permanently changed the global economy.

Paul Saffo: Y2K was huge in getting the ball rolling on offshoring.

Farrell: Paul Saffo is director of the Institute for the Future, a high-tech think tank in Silicon Valley.

Saffo: But once they went overseas, they discovered it's not just a matter of cost. These programmers overseas are often better than the best you can get in the United States.

Farrell: Ireland, the Philippines, and Israel were among the more popular destinations for offshoring Y2K programming fixes. But India became the offshore capital. It had plenty of high-tech companies staffed with well-educated English speaking digital workers. Thanks to India's steep import barriers in the 1980s, no one could afford new computer systems. So Indian tech workers were the world's leading experts in the older software languages that needed upgrading. Suhas Patil is chairman emeritus of semiconductor maker Cirrus Logic.

Suhas Patil: And they were listening to their customers and what their needs were, and as the recognition came that systems had to be upgraded to not have the problem based on the Y2K issues, that's how they got their break.

Farrell: And made the most of the opportunity. AnnaLee Saxenian is Dean of the School of Information Management and Systems at the University of California, Berkeley.

AnnaLee Saxenian: I think the importance of Y2K was overwhelmingly about establishing Indian companies' reputation among US customers and helping begin a set of customer supplier relationships that have simply taken off in the last four years.

Farrell: Of course, Y2K contracts ended in 2000. Yet many Indian companies took advantage of their now sterling programming reputations to negotiate for more sophisticated work. Research. Software development. Accounting services. Long-distance medical advice. Rafiq Dossani is a senior research scholar at Stanford University.

Rafiq Dossani: India is now growing at 70-80 per cent a year in offshored services ... services which are maintaining an accounting system, maintaining an HR system, doing claims processing, that's growing easily at 70 per cent, maybe even higher.

Farrell: Offshore also came onshore during Y2K. The town of Mountain View lies at the heart of California's Silicon Valley. Housed in one of the many nondescript low-rise office buildings that crowd the region's business avenues is the Indus Entrepreneur, or TIE. It is a networking base for the Indian high-tech Diaspora.

Shankar Muniyappa: Y2K was a big opening as early as 98.

Farrell: Shankar Muniyappa is director of information systems for TIE. He came to America for Y2K-and stayed.

Muniyappa: Myself and many of us believe still believe this is the place where you need to be if you want to be middle of innovation.

Farrell: Some 30,000 Indian IT professionals now live and work in the Valley. Rafiq Dossani of Stanford University:

Dossani: At least 25 per cent of the start ups have Indian employees at fairly senior levels working for them. And ... there's a whole infrastructure therefore being built around them because it's a substantial number now, so you see shopping malls you see business services and so on catering to this particular immigrant community.

Farrell: That community is adding vitality to the American economy. Still, many American high-tech workers are threatened by the offshoring of white collar jobs. The numbers are murky, but according to Mark Zandi of Economy.com 370,000 non-manufacturing jobs moved overseas over the past fours years-with most of the information technology jobs going to India. Salaries are down too. Still, the big factor behind the loss of 1.5 million jobs lost since Y2K is improved business efficiency or productivity - not offshoring. And Y2K also played an important role in boosting business efficiency.

Economists initially looked at Y2K as a productivity killer.

Imagine a town threatened by a rising river. Every able-bodied person in town is put to work stacking sandbags. It's necessary work to save the town - but it's unproductive work. Nothing gets built. No food gets grown.

With the Y2K bug, programmers, chief information officers, project managers, and other digital workers were getting paid to do unproductive work - stacking sandbags of silicon. No innovative investments. No new productivity enhancing software.

But economists were wrong. Y2K wasn't a flood. Instead, think of it as clearing a path choked with underbrush. Once the trail is open, it is much easier to zip from point A to point B. Y2K gave companies an excuse to clean up their software and hardware underbrush - a critical factor in today's improved business productivity. Paul Saffo:

Saffo: A lot of companies said well, gosh, if we're going to have to spend all this money to fix our software let's also see what else we can do at the same time, so it was an invitation to replace a whole bunch of stuff. ... So it forced people to ask hard questions about how they were using things and in the best instances people really did become more efficient.

Farrell: The result? Companies used the new systems they installed to cut costs and work smarter - and hire fewer workers.

[Voice of Leonard Nimoy: "Do you have hard copies of all your important documents ... such as bank statements."]

That's Leonard Nimoy, Mr. Spock from Star Trek. He's narrating the Y2K Family Survival Guide video - one of thousands of products peddled by prophets of doom. Y2K did bring home how reliant we all are on computers. Many of us still don't back up critical data at home. The same isn't true for business and government. Many learned from Y2K just how vulnerable information systems are to a malicious attack or unforeseen disaster. Case in point: Y2K actually helped some businesses survive 9/11.

[News broadcast of President George W. Bush: "I've directed the full resources of intelligence and law enforcement communities to find those responsible and bring them to justice."]

The attack on the World Trade Center stopped trading on the New York Stock Exchange. Against the odds, that citadel of capitalism opened six days later.

John Koskinen: The reason the markets, securities markets, were able to open the Monday after the Tuesday of 9-11 was they still had the test scripts that had been developed in 1998 and 99.

Farrell: John Koskinen credits preparations for Y2K. He was President Clinton's Y2K czar.

Koskinen: ... they were able to in effect take all of those Y2K scripts and make sure that all the transactions with all of the major players would close. Without that they never would have been able to do it in the time frame with the confidence they had.

Farrell: A record 2.4 billion shares traded on the New York Stock Exchange the day it reopened.

Y2K was a unique economic event. Earlier jolts to the economy, like the 1973 oil price hike and the 2001 attack of 9/11, were shocks. But the Year 2000 arrived right on schedule. The surprise was how little immediate impact the much-feared transition had on the economy. Yet we're still living and working with the economic impact of Y2K five years later.

For Marketplace and American RadioWorks, I'm Chris Farrell.

All News button
1
Paragraphs

This paper seeks to understand the evolution of financial intermediation in the course of China's economic transition. The research is based on a unique data set collected by the authors and other collaborators from a 1998 survey of financial institutions, enterprises, and government officials in southern China. Based on an empirical investigation of rural financial reforms, we argue that China's two-decade long financial reform was a gradual process that accommodates reforms in other sectors and responds to changing policy goals and the economic and institutional environment in which financial institutions operate. Although using standard measures of financial system performance may cast doubt on the effectiveness of China's rural banking system, when one understands the different roles that it has been asked to play it can be argued that it has not operated so poorly. But, China's rural economic environment is still changing. If the system continues to change in the future, responding to pressures in the economy, further financial reforms will almost certainly emerge in the coming years.

All Publications button
1
Publication Type
Working Papers
Publication Date
Authors
Scott Rozelle
-

China's rapid growth and increasingly close integration with world markets is transforming Northeast and Southeast Asian regional production and trade. Southeast Asia's relatively resource-abundant economies are expected to lose comparative advantage in low-skill, labor-intensive manufacturing activities while gaining comparative advantage in natural resource products. The latter shift will increase incentives to exploit and export the products of forestry, fisheries, and agriculture.

What are the implications for long-run growth and welfare, particularly in the poorest and least industrialized economies, including Indonesia and Vietnam? How will this trend interact with the other major phenomenon sweeping through Southeast Asia, i.e., decentralization? With reduced national authority and minimal local accountability, the potential for disastrous rates of resource exploitation is high. A race to liquidate natural resource assets, if sufficiently pronounced, could expose parts of the region to a new variant of the "natural resource curse" - the idea that resource-abundant economies grow more slowly than others.

Ian Coxhead is an economist and serves as director of the Center for Southeast Asian Studies at the University of Wisconsin-Madison. His specialty is the economic development of Southeast Asia. His many publications on trade, development and the environment include The Open Economy and the Environment: Development, Trade and Resources in Asia (2003, with Sisira Jayasuriya). Prof. Coxhead's current research features the impacts of globalization, regional growth, and domestic policy reforms on the structures of production and employment, issues of poverty and the environment, and the exploitation of natural resources in Vietnam and the Philippines.

Daniel and Nancy Okimoto Conference Room

Ian Coxhead Professor of Agricultural and Applied Economics University of Wisconsin, Madison
Seminars
Subscribe to Environment