Thursday, June 17, 2010

Does Anyone Care About Bhopal's Real Victims?

The sense of urgency Prime Minister Manmohan Singh displays in taking stock of the court verdict on the 1984 Bhopal gas leak is to appease anti-capitalists of various persuasions. Few people care about the real victims of the Bhopal tragedy. There is much outrage over the fact that Warren Anderson, the then chairman of the parent company has not been charged. My article titled Does Anyone Care About Bhopal's Real Victims? was published in The Wall Street Journal on June 14th 2010.

Prime Minister Manmohan Singh asked senior ministers Monday to take stock of last week's court verdict on the 1984 Bhopal gas leak and report back within 10 days. This belated sense of urgency is meant to placate everyone from anti-American groups to anti-industrialists, antitrade advocates and antitechnology believers who are up in arms over the court's light sentencing of executives implicated in the accident. Lost in the public outpouring are the long-suffering victims of the tragedy—and the issues that Indians should really be angry about.

The Bhopal disaster was a seminal moment in India's modern history. On December 3, 1984, about 40 tons of methyl isocynate leaked out of storage tanks at the Union Carbide factory in Bhopal. The gas spread through low-lying areas of the city, killing people in their homes and on the streets and in the railway station as they tried to flee. The death toll is estimated between 15,000 and 20,000, with over half a million said to be affected in some form.

Yet no one has asked how the disaster was tacitly aided and abetted by government neglect. The plant was established in 1969 to produce pesticides. In the 1970s, the company was allowed to implement vertical integration to produce hazardous ingredients such as methyl isocynate.

Back then India was a highly controlled economy with a web of licenses and permits and an inspector raj to ensure that regulations were followed. So how did Union Carbide acquire the land, then on the periphery of the city, for the factory? Why did the civic authorities allow the growth of slums and settlements in such close proximity to it? Prior to the 1984 tragedy, the factory had a series of minor accidents and leaks, so what was the army of inspectors doing? Why was there was no disaster management plan in place?

The government's post-crisis actions were equally irresponsible. In a bid to fend off U.S. trial lawyers eager to file class-action suits in American courts, India passed the Bhopal Gas Leak Disaster Act, which made the government the sole representative of the victims. Delhi also convinced a U.S. court to agree to transfer the jurisdiction to Indian courts. Such a legal restriction on victims' right to have a say in determining the quantum of compensation would be impossible in the U.S.

Victims' compensation was restricted when the Supreme Court approved the $470 million deal between government of India and Union Carbide in 1989, and quashed all further civil and criminal charges. The figure was based on the assumption of 3,000 deaths and 100,000 injured. Until recently, compensation had been awarded for over 15,000 deaths, and to 500,000 injured, reducing per-capita payouts dramatically. Many genuine victims had to pay bribes to access their compensation money.

Then there's the role of the various environmental activists and bureaucrats who made a career out of showcasing the tragedy. If they are so concerned about the victims, then why does ground water contamination allegedly continue to affect thousands of people who live in the vicinity? Why does the unused factory continue to stand without any effort at dismantling it, reclaiming the land and decontaminating the soil? Why does the hospital set up to care for victims remain understaffed? Why have many victims accused the hospital of refusing care? Ordinary Indians are right to be irked when they see cash splashes for any en vogue government program, but not for the victims of Bhopal.

Indians are also right to feel outrage over the two-year prison sentence handed out to the former non-executive chairman of Union Carbide's India operation, 87-year-old Keshub Mahindra, and a clutch of senior managers and plant operators, last week. In 1996, the Supreme Court had approved the prosecution of some Indian officials of the company's local subsidiary for criminal negligence. But not so for the American executives. There is greater anger that Warren Anderson, then chairman of the U.S.-based parent company who was accused of knowing about safety problems, has not been charged.

The Bhopal gas leak case undoubtedly exposes the shortcomings of India's broken judiciary. Court cases can drag on for decades, with about three million cases pending at various levels, including over 50,000 in the Supreme Court. Many smaller Bhopals get buried in this quagmire each day.

Prime Minister Singh and other government ministers may move in the coming days to paint Mr. Anderson as the main villain. That may help to score a few brownie points among professional anti-American protest groups, but such a move would hardly reduce the woes of long-suffering victims of the gas tragedy. It would only serve to divert the public's attention away from policy makers' responsibility toward their own citizens. Aside from the victims' terrible suffering, this would be a woeful way to pay tribute to their legacy.

Tuesday, June 1, 2010

Striving students and strangulating state

Here is my latest article where I discuss the relationship between education and employability, and the challenge that we in India face. I am doubtful of the effectiveness of the "education reforms" initiatives of the present UPA government, in meeting the challenges. And I suggest an independent system to assess the employability of youngsters. I will appreciate any comment or criticism that anyone might have.

The original article was published in the Wall Street Journal Asia, on 2 June 2010. The title was "Indian Students and the Strangulating State", New Delhi is trying to regulate innovation out of the educational system.

Indian students waited eagerly last week for the results of entrance exams to the most sought-after engineering schools, among them the famed Indian Institutes of Technology. More than 450,000 students competed for some 9,500 seats in what is perhaps the most competitive exam in the world. This year's success stories included a home-schooled 14-year-boy in Delhi and poor students from rural areas in Bihar state. They are even more remarkable because they triumphed over the state's strangulating embrace of the education sector.

With one of the youngest workforces in the world, India's economic potential is widely acknowledged. But the transition to a knowledge-intensive economy requires more skilled and competent employees. Barely 5% to 7% of the current workforce has had any formal training in a skill, and 70% may not even have completed primary schooling. According to estimates, only 10% to 15% of graduates are employable, and just 12% of the 18-24 age group enroll for any post-high-school courses. Although 135 million children are enrolled at the primary level today, about 15 million are in college, and only 2.3 million will graduate this year.

India's biggest challenge is not unemployment, but unemployability. A study by McKinsey and the National Association of Software and Services Companies a few years ago found that barely 25% of engineering graduates are employable. Last year, another survey by the Federation of Indian Chambers of Commerce and Industry and the World Bank reported that 64% of the employers were not satisfied with the skills of the engineering graduates. According to biotech industry sources, barely half of the 200,000 post graduates in science are employable.

New Delhi is making the situation even worse with its new Right to Education Act, which came into effect on April 1. The Act requires the government to educate children for free until age 14. The government estimates this mandate requires additional 1.2 million trained teachers in the next five years, tens of thousands of new schools, and by 2020, another 700 universities and 35,000 new colleges. Foreign investment will be encouraged at the margins. The government is also engaged in creating a new national regulator for higher education, which would create multiple new layers of bureaucracy.

New Delhi's policies are highly flawed, starting with the assumption that the private sector will not build schools and invest in education. Yet surveys have found that 40% to 50% of children from the slums of Delhi attend private informal schools. In a country where 35% of the people are still officially illiterate, setting up schools is completely tied up under a license and permit raj. It requires 30-35 types of permissions to set up a school even in Delhi.

Secondly, the government wants to attract investment. But education is one area where for profit activity has been completely prohibited. For instance, hardly any of the thousands of coaching institutes preparing students for admission to engineering and medical colleges would meet the regulatory requirements and standards set by the government to qualify as a school.

Thirdly, the regulatory environment has created a system of patronage to favored organizations seeking to enter higher education. In the past year, senior officials at regulatory bodies in both the technical and medical education have been accused of corruption. While they maintain their innocence, the Central Bureau of Investigation is said to be investigating more than 100 people across the country. Yet, rather than deregulate, the present effort centralizes control even further.

Each year hundreds of organizations apply for permission to start technical institutes, but many seem to have no scruples about bribing the authorities to acquire the necessary clearances. In one instance, a college in Uttar Pradesh had an address where nothing stood except farmland. Just last month, out of 150 self-financing engineering colleges inspected in Tamil Nadu, 67 were asked to improve their faculty and strengthen physical infrastructure before they can admit any students this session. It is not uncommon to find engineering colleges rotating faculty, equipment, and students to hide the real situation when inspectors call.

Last year, a local Kolkata newspaper estimated the various rates of bribes to a technical education authority. To start a technical or professional institute, the rate ranged from $10,000 to $50,000, whereas deemed university status would set you back $1-2 million.

To overcome the scarcity of skilled workers, Indian companies are already investing in education in a big way. Major companies have undertaken steps to engage with faculty at many colleges and universities to help them understand the needs of the industry, and adapt their curriculum. Companies are spending huge resources to train the recruits. In 2008, Infosys spent $5,000 on retraining each of the thousands it hired. Wipro spends about 1% of its annual revenues on retraining thousands of fresh graduates it recruits.

The natural solution is for companies, business chambers and even universities to define a base set of skills they are looking for among first-time employees. They could create an independent body to design and conduct the test periodically among job seekers. It could be organized on the lines similar to the independent standardized tests which are widely accepted by all major colleges across the United States. Given the scale of private education initiatives in India, if there are such independent assessments linked to employment, a whole host of service providers will grow to prepare the students accordingly.

Young Indians are seeking relevant education in unprecedented numbers, as the hordes of students taking the IIT entrance exams and enrolling in private coaching schools demonstrate. From the "education reform" initiated by the government, though, one cannot help escape the feeling that the government is merely looking to expand bureaucratic control and increase the scope of political patronage.

Education is not primarily about any particular content or skill set, but about the continuous capacity to seek new knowledge and acquire new skills. Education can empower only in an environment of freedom, where students can choose from a range of educational providers offering a diverse package of knowledge and skills. India will enjoy demographic dividends only when education becomes free from the clutches of the state, and the youth are able to leverage their education in the competitive economic environment.

Mr. Mitra is director of the Liberty Institute, an independent think tank in New Delhi, and a columnist for