Edward Snowden - the surprises that failed to surprise!

For the past month or so, Edward Snowden had become a household name. Most people I met had an opinion about him and his revelations. They shared theirs and demanded mine. There was a problem, I didn't have one.

The first time, I suppose, I heard about the National Security Agency (NSA) was in 2003 or so when I read Dan Brown's years old novel - Digital Fortress. The plot, which I vaguely remember, involved a renegade ex-employee of the NSA, ironically. I personally feel, not before a friend pointed it to me, that Michael Chricton was a better researcher than Dan Brown, not to mention the plagiarism charges against the latter, I take it that this news was an open secret atleast since 1998 when the book was first published. So I was sure that it was entirely possible to be snooped upon by one agency or the other and given the age we were living in, I was quite sure it was happening.

However, the whole episode had 'exposed' many other things that 'surprised' me.

To start with President Obama of the United States of America. Though personally I like the Republicans more than Democrats, Obama was hard to be dismissed. He won with his oratory skills - emphasizing on Hope and Change and his famous - 'Yes, we scan' slogan. He seemed to be a person of his word and his promise on transparency did intrigue me. But now he has proved he is just another actor in the World's stage after he authorized the witch-hunt for Snowden.

Another person who I admire for his nationalism and resolve is President Vladimir Putin of the Union of Soviet Socialist Republics Russian Federation. He had openly challenged the United States of America in many issues and called for a multipolar world. If there was someone who was expected to stand cold like the Russian Winter on the face of American diplomatic heat it was Putin. However, his recent statements that Snowden should stand down and stop embarrassing his 'partners' to gain asylum in Russia was a surprise of sorts.

Ecuador's earlier rhetoric and support for Edward Snowden and its sudden u-turn attributed to Julian Assange's statements suggesting that he was running the show rather than the Ecuadorean Government came in at a distant third in the surprises race.

Edward Snowden is like Steve Jobs, a prophet or messiah to a small or large crowd but to me he comes across as someone who took something old, polished it, smoothened some rough edges (rounded corners patent?!), gave a fancy name (PRISM?! How about iSnitch?!) and marketed it and became famous.

Systemic Bias.?!

The other day a friend of mine was asking me about Educational loans. Given my brief association with the Banking sector and the fact that my dad is still in active service with a Public Sector Bank, I have become some kind of a 'go-to-guy' for basic information regarding banking products. The friend's friend on whose behalf he was enquiring had aspirations to make it to a foreign university in a European country and my friend was quite excited, understandably, given that the aspirant was quite studious and well deserving. However, there was a problem. The aspirant's family was into agriculture full time and his dad, despite being quite successful, didn't possess any substantial assets other than massive farm lands.

Now that was bad news. The banking sector in India has been undergoing a silent crisis in the form of NPAs (Non Performing Assets) for some time now. A lot of corporate loans viz. Kingfisher have gone bad and many including Adani, GMR, et cetera are expected to go bad and not just that there has been a lot of delinquencies in the personal loans segments as well, especially Education, Home and Car loans, due to drying up of the job market. The picture was never green as far as Agriculture was concerned. It was almost a given that the Agriculture loans are either written off by the Banks or the Government at some point of time. Moreover, most public sector banks won’t accept Agricultural land as mortgage because they cannot go after it if the loan is defaulted as easily as they could with other property and also because in some states it’s illegal. If the banks were a little more cautious in extending credit earlier they wouldn't be so neck deep in trouble, the banks having realized that have pulled up their socks and in the process bringing untold misery to deserving loan applicants.

Recently a couple of news made headlines. Current Account Deficit (CAD) increases; driven mainly by Gold imports, Money Laundering by Banks expose by Cobrapost, Tax evasion and its impact on the fiscal deficit, Moneylenders, et al. I personally feel that the Banking structure in our country has directly resulted in such irritants in the system and I am going to follow the family and how their quest for funds for a legitimate and noble cause might come from unscrupulous and dubious sources.

There was a time not long ago when farmers can submit a proof of possession of agriculture land and Gold ornaments and collect nearly 75% of the value of the Gold as loan at a mouth watering interest rate of 7%. This was when Gold was at its all time peaks and there was a possibility that the interest rate might further go down to 5% with excess government subsidies. At that time the interest rates on Term deposits with the Bank was around 8% and technically if one invests the loan amount back in the bank they can earn up to 3% net interest margin (NIM). Just to give a perspective the NIM of popular banks during the same period hovered around the same figure give or take 1%. Now that gold has climbed down from its historic highs, the common man, especially small farmers, believing the trend would be repeated is trying to amass as much as they can, driving volumes up. Now RBI and Government had stepped in to douse the fire kindled by the passion for the fiery yellow metal which they could have done earlier and avoided the whole situation now. Now they blame the obsession of people with Gold, however, they were prima facie the reason for this obsession.

Turned away from the Banks and having already pledged all their Gold, the family might approach a Moneylender. These days’ moneylenders are exclusively servicing clients turned away from Banks and financial institutions and charge them interest which amounts to as much as the principle in many cases if not more. Over and top of this, since they aren't regulated, they take lands or other properties, even those banned from being mortgaged as security. None of the money that transfers hands goes through any bank accounts or anything, thus the whole transaction is as good as never happened, no taxes, nothing.

Now the family probably has enough money, however, he would have to wire a part of that money as college fees and other expenses. Now the Banks which had earlier turned them away due to systemic reasons will have to act intermediaries to transfer the amount. Call it strung by guilt of not able to help a hard working farmer and setting it right or to earn some precious commission from the wire transfer, the banks would give out some precious ‘advise’ on how to do it without arousing the suspicion of the Income Tax Department.

The money borrowed would soon be back doubled or tripled and end up with the money lender as black money. The banks might bend backwards to convert it to white counting on precious commissions, anyway, if not they some other bank would do it and the process goes on. If the farmer was able to get help through official channels easily this whole trail could have been avoided.

I have personally seen how farmers and small businessmen suffer because they don’t have proper banking access. RBI’s ‘Financial Inclusion’ through opening banks all over the country alone will not help achieve anything. Some prejudice against such debtors and systemic bias in the system should be corrected for real betterment of the society.

A new meaning of Ethics.?! Is Ethics really absolute?

Wipro, one of the largest and well recognized Indian company involved in Information Technology, Consulting, Business Process Outsourcing services and other product manufacturing in the non-IT space (which they have decided to demerge) has been named as one of the most ethical companies in the world by a leading think-tank, Ethisphere Institute in their annual rankings.

Immediately my thought went to an Economic Times report on IT companies spending substantial amount of money in Lobbying. Then my grouse was whether the employees whose jobs depended on such activities complain about corruption in India. 

Between January and March this year (2011), Wipro spent nearly $60,000 (Rs 27 lakh) to lobby lawmakers and other officials about restrictive visa rules and policies that favour local companies. - The ET report

However, many pitched in to 'educate' and 'enlighten' me that Lobbying was legal in the United States of America. But I couldn't take it - will a corporate bend back on its motto of maximizing shareholder's wealth to appease a stakeholder? I don't think so. Why then would a government bend back (fewer jobs at home for the general public) to appease the stakeholders (foreign/domestic investors/players)? And the process that assists this, lobbying, is legal? I can't buy it.

Ethics are absolute. 

The Ethisphere Institute's website on the World's Most Ethical Companies Ranking website starts with this line. I don't think so. If two countries, India and USA, can have two different take on something as simple as lobbying on whether it is legal (Radia tapes and Walmart controversies), and am not even comparing USA and Venezuela (Comrade Chávez, RIP!). How then can ethics be absolute?

I believe ethics or for that matter any trait can only be relative. And the award can at best be named World's Most 'Legally Compliant' Companies Ranking.

DISCLAIMER 

(I know the work ain't a 'Vishwaroopam' or as true and open about IIPM, still why take the chance in case someone brings it up as an Amicus curiae!)

• I have nothing against Wipro, in fact, I have become a fan of Mr. Azim Premzi with all his philanthropic activities and support for higher taxes and his choice of car (a Toyota Corolla 1.8 Petrol, I was told).
• I understand the pains and effort that has gone in putting up the list by the Ethisphere Institute. Really Commendable.
• I am an Indian and am proud an Indian company has figured in there.