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This paper summarizes and extends my earlier critique (Bhattacharjea, 2006) of the empirical literature on labour regulation and industrial performance in India. I now focus only on the impact of legal restrictions on temporary layoff, permanent retrenchment and plant closures. After summarizing my earlier paper, I describe in detail the variability of employment protection regimes across Indian states attributable to court judgments, a key factor which other authors have ignored.

I hypothesize that firms may adapt to restrictions on labour flexibility thru fragmentation and outsourcing, a phenomenon that has not been recognized in the literature. I then draw attention to features of the official industrial statistics which undermine many of the conclusions of earlier studies, and propose an alternative methodology to test the new hypotheses while avoiding these pitfalls. The results of this empirical exercise are inconclusive, but reinforce my skepticism about the literature that tries to relate legal restrictions on labour flexibility to industrial outcomes.

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This paper considers the links between the extent of economic security and subjective work satisfaction. Special attention is paid to the effects of individually and collectively traumatizing events as well as relative gains and losses. These are aspects of “well-being” that have attracted relatively little empirical research in developing countries. Individually traumatizing events depress work satisfaction more strongly than collective catastrophes. The data also suggests that the predominant focus on income in developing countries is too narrow. While both absolute and relative income constitute strong predictors, especially for men, there are many less costly ways to increase work satisfaction. Across the gender divide, the ability to perform work in accordance with one’s skills and to develop those skills (skill security) strongly increases work satisfaction. Occupational health and safety (work security) as well as participative measures (voice security) further significantly increases subjective work satisfaction.

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Miriam Abu Sharkh
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Expansion of irrigated land can cause local cooling of daytime temperatures by up to several degrees Celsius. Here the authors compare the expected cooling associated with rates of irrigation expansion in developing countries for historical (1961-2000) and future (2000-30) periods with climate model predictions of temperature changes from other forcings, most notably increased atmospheric greenhouse gas levels, over the same periods. Indirect effects of irrigation on climate, via methane production in paddy rice systems, were not considered. In regions of rapid irrigation growth over the past 40 yr, such as northwestern India and northeastern China, irrigation's expected cooling effects have been similar in magnitude to climate model predictions of warming from greenhouse gases. A masking effect of irrigation can therefore explain the lack of significant increases in observed growing season maximum temperatures in these regions and the apparent discrepancy between observations and climate model simulations. Projections of irrigation for 2000-30 indicate a slowing of expansion rates, and therefore cooling from irrigation expansion over this time period will very likely be smaller than in recent decades. At the same time, warming from greenhouse gases will likely accelerate, and irrigation will play a relatively smaller role in agricultural climate trends. In many irrigated regions, therefore, temperature projections from climate models, which generally ignore irrigation, may be more accurate in predicting future temperature trends than their performance in reproducing past observed trends in irrigated regions would suggest.

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Earth Interactions
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David Lobell
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Investments aimed at improving agricultural adaptation to climate change will inevitably favor some crops and regions over others. We present several quantitative criteria that could be used to prioritize these investments, with a focus on global food security impacts by 2030. An analysis of climate risks for 94 crops across 12 food insecure regions is first conducted, based on statistical crop models and climate projections from 20 general circulation models. Subsets of crops are then identified based on different criteria, such as the impacts under "best case", "most likely", and "worst case" scenarios. Overall, results indicate South Asia and Southern Africa as two regions that, without sufficient adaptation measures, will likely suffer negative impacts on several crops important to a large food insecure population. The particular crops identified, however, depend on criteria that will vary for different institutions according to their capabilities, goals, and risk attitudes. Results from this work is helping inform investment decisions made by the Global Crop Diversity Trust. Press release and media coverage.
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David Lobell
Rosamond L. Naylor
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Asia’s economies have been hard hit by the current global financial crisis, despite in most cases enjoying strong macroeconomic fundamentals and stable financial systems.  Early hopes were that the region might be “decoupled” from the Western world’s financial woes and even able to lend the West a hand through high growth and the investment of large foreign exchange reserves.  But that optimism has been dashed by slumping exports, plunging commodity prices, and capital outflows.  The region’s most open, advanced and globally-integrated economies—Hong Kong, Singapore, and Taiwan—are already in severe recession, with Japan, Korea and Malaysia not far behind, and dramatic slowdowns are underway in China, India, Indonesia, Thailand and Vietnam.  What role did Asian countries play in the genesis of the global crisis, and why have they been so severely impacted?  How is their recovery likely to be shaped by market developments and institutional changes in the West, and in Asia itself in response to the crisis?  Will the region’s embrace of accelerated globalization and marketization following the 1997-98 Asian financial crisis now be retarded or reversed?

Linda Lim is a leading authority on Asian economies, Asian business, and the impacts of the current global financial crisis on Asia, and she has published widely on these topics. Her current research is on the ASEAN countries’ growing economic linkages with China.

Forthcoming in 2009 are Globalizing State, Disappearing Nation: The Impact of Foreign Participation in the Singapore Economy (with Lee Soo Ann) and Rethinking Singapore’s Economic Growth Model. She serves on the executive committees of the Center for Chinese Studies and the Center for International Business Education at the University of Michigan, where formerly she headed the Center for Southeast Asian Studies. Before coming to Michigan, she taught economic development and political economy at Swarthmore. A native of Singapore, she obtained her degrees in economics from Cambridge (BA), Yale (MA), and Michigan (PhD).

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Linda Yuen-Ching Lim Professor of Strategy, Stephen M. Ross School of Business Speaker University of Michigan
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Abstract: Nuclear testing has a special place in the Indian nuclear discourse. India's activism on disarmament issues can be traced back to Prime Minister Jawaharlal Nehru's 1954 call for a test ban. In recent times, at three critical junctures: CTBT negotiations (1994-96), the dialogue with the U.S. after the nuclear tests of May 1998 (1998-2000) and the negotiations on the civil nuclear agreement with the U.S. (2005-2008), the testing issue has made a demand for answers on fundamental questions. Gill and Gopalaswamy believe that the debate on the politics and science of nuclear testing in India reflects two larger questions: firstly, in the manner in which India should relate to the wider nonproliferation regime pending nuclear disarmament and secondly what should be the nature and extent of the Indian nuclear deterrent in a world with nuclear weapons? Neither of these questions has been satisfactorily answered and thus it is still an open debate.

There are significant international dimensions to this debate. The first aspect is the fate of the CTBT, which India refused to sign after two and half years of engagement. The second aspect is the perceptions of the credibility of India's deterrent in a fluid strategic landscape. Gill and Gopalaswamy argue that while India has begun to be relatively more engaging with the nonproliferation regime, it is unlikely that New Delhi will ratify the CTBT anytime soon. Rather, engagement with India on fissile material/fuel cycle control and delegitimization of nuclear weapons may turn out to be a more productive use of scarce political capital in New Delhi and elsewhere in the short run. As this engagement develops, the CTBT would be seen less as a step child of the regime from which India was kept apart but more as one among a number of regimes that involve India in a network of mutual restraints, thus improving the prospects for India's participation in a formal, global ban on testing.

On the scientific aspects, Gill and Gopalaswamy argue that a ‘perceptual set' induced by U.S. nuclear history is at the heart of the controversy over the two-stage device tested on May 11, 1998. They believe that in the light of new data made available by Indian scientists, the option of renewed explosive testing should be considered by India only as a demonstration of intent to maintain the credibility of India's deterrent if certain redlines were to be crossed. The fact that India has such redlines in mind would act to induce more responsibility on part of the other nuclear weapon states relevant to India's decisions, thus reducing the probability of renewed testing by India.

Amandeep Singh Gill is a visiting fellow at CISAC. He is a member of the Indian Foreign Service and has served in the Indian Mission to the United Nations in Geneva, the Indian Embassy in Tehran and the High Commission of India in Colombo. At headquarters in New Delhi, he has served twice in the Disarmament and International Security Affairs Division of the Ministry of External Affairs from 1998 to 2001 and again from 2006 to 2008 at critical junctures in India’s nuclear diplomacy. He was a member of the Indian delegation to the Conference on Disarmament during the negotiations on the Comprehensive Nuclear Test Ban Treaty. He has also served as an expert on the UN Secretary General’s panels of experts on Small Arms and Light Weapons and on Missiles.

His research priorities include disarmament, arms control and non proliferation, Asian regional security and human security issues.  He is currently working on the interaction of nuclear policies of major states, particularly in Asia.

Before joining the Indian Foreign Service, Amandeep Gill worked as a telecommunications engineer. He retains an abiding interest in the interaction of science, security and politics. He is founder of a non-profit called Farmers First Foundation that seeks to reclaim agriculture for the farmers and demonstrate the viability of integrated agriculture in harmony with nature.

Bharath Gopalaswamy is a postdoctoral associate at Cornell University's Peace Studies Program. He has a PhD in Mechanical Engineering with a specialization in Numerical Acoustics. He has previously worked at the Indian Space Research Organization's High Altitude Test Facilities and the European Aeronautics Defense and Space Company's Astrium GmbH division in Germany.

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Amandeep Singh Gill Visiting Scholar, CISAC Speaker
Bharath Gopalaswamy Postdoctoral Associate, Cornell University's Peace Studies Program Speaker
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As evidence emerges that the gunmen who caused the carnage in Mumbai were operatives of the Pakistan-based Lashkar-e-Taiba, one question reverberates: Was the Pakistani government responsible for the Mumbai terror attacks?

This is the wrong question to ask. During the late 1980s and the 1990s, the Pakistani government created terror organizations such as Lashkar-e-Taiba as tools of asymmetric warfare against Indian rule in Jammu and Kashmir. In recent years, however, the jihadis, like the magic brooms in Goethe's tale, "The Sorcerer's Apprentice," have taken on a life of their own; along with the government, the army and the intelligence services, such groups now comprise one of the main centers of gravity within Pakistan.

Several factors have enabled them to reach this point. The jihadis have been armed and trained by elements of the Pakistani military and security services, and are funded by a sophisticated international financial network. In addition, they enjoy street popularity, and remain a useful means of combatting India's presence in Kashmir. Consequently, the Pakistani government has balked at opportunities to shut them down.

As a result, the militants are now in a position to conduct their own policy. Like the Goethe's magic brooms, they often act against the interests of their creators, attacking security personnel, assassinating government officials and seizing territory within Pakistan, as well as launching attacks on India that could trigger a regional war. The question, then, is not whether the Pakistani government was responsible for the Mumbai attacks, but who will now play the role of sorcerer and rein in the jihadis.

In theory, either the Pakistani or the Indian government could do so. But Mumbai has shown that neither side is up to the task. The Pakistani government cannot prevent militants from using its soil to strike India. The Indians are completely unable to anticipate or repel such attacks. In addition, they lack the military capabilities needed to clear militant strongholds within Pakistani territory.

The situation requires a radical re-thinking of South Asia's security. Both sides must adopt policies that transcend their traditional comfort zones. The Pakistani government must forswear militancy, end support for the jihadis and accept international military and financial assistance in crushing them. The Pakistani government needs to recognize that the costs of supporting militancy outweigh its benefits, and that Mumbai may be the last chance to get control of the situation. If the government does not act against the militants now, then it may lose control of the state, or find itself drawn into a catastrophic conflict with India in the wake of another terrorist attack.

The Indians, for their part, must start to take their own security more seriously. In 1991, after suffering a major financial crisis, the Indian government came to terms with the failures of its socialist development model and adopted a free-market approach to economic growth. Similarly, India must use this crisis to wholly revamp its security infrastructure. If it fails to do so, the country's impressive economic expansion of recent years will be for naught. Simply put, international corporations will view the country as being too dangerous and refuse to do business there.

The road to real improvement in India will be long and complex, but the Indians can start by properly training and equipping their police and domestic security personnel, who were outgunned and outwitted for nearly three days in Mumbai by just a handful of terrorists. Simultaneously, New Delhi must address the legitimate concerns of its own Muslim community, including the long-aggrieved Kashmiri population, so that overseas terrorists do not find willing collaborators within India.

Finally, there is another player in this subcontinental drama: the United States. The United States, which has forged a strategic partnership with India, can quietly and privately nudge New Delhi to address the internal tensions in Kashmir. More important, however, the United States must use its leverage as Pakistan's largest source of bilateral assistance to press the Pakistanis to end their support for the jihadis. It cannot continue to provide Islamabad with billions of dollars to fight the war on terror while Pakistan-based militant groups conduct operations like the Mumbai attacks. If Pakistan is to continue to benefit from American largesse, it must demonstrate a tangible commitment to ending support for such organizations.

None of these steps will provide an overnight solution to the problems laid bare by the Mumbai attacks. But, in time, they can help South Asia to create its own modern-day sorcerer, and deal with the militant forces that Pakistan has unleashed over decades. If the region fails to do so, its story, unlike Goethe's, will not have a happy ending.

Sumit Ganguly is the director of research of the Center on American and Global Security at Indiana University, Bloomington, and an adjunct senior fellow of the Pacific Council on International Policy. S. Paul Kapur is associate professor at U.S. Naval Postgraduate School; the views he expresses in this article do not necessarily reflect those of the U.S. government.

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The Mumbai terror attacks, apparently carried out by Pakistan-based Kashmiri militant groups, highlight one of the most pressing challenges facing the new Obama administration. Though it is officially a key ally in U.S. anti-terrorism efforts, the Pakistani government has been unable or unwilling to control Islamist militancy within its borders. Large swaths of the country are now in the hands of the jihadis, including reconstituted elements of the Taliban. These groups are wreaking havoc both in Pakistan and abroad. Combined with Pakistan's collapsing economy and arsenal of at least several dozen nuclear weapons, this is the recipe for disaster.

Observers have suggested that, to ameliorate this situation, the United States should lead a renewed effort to solve Pakistan's dispute with India over the territory of Kashmir. The resolution, according to this reasoning, will significantly reduce the militants' incentives for violence. There is even talk of appointing former President Bill Clinton as special envoy to lead such a project.

Not a good idea

Despite its intuitive appeal, this would be an unfortunate South Asia policy for the United States. American efforts to mediate the Kashmir dispute would be ill advised for three reasons:

First, Islamist militants seek nothing less than complete Pakistani possession of Kashmir. Such a solution is out of the question. To allow Muslim-majority Kashmir to secede from the Indian Union on the basis of religion would badly undermine India's efforts to build a cohesive state out of the multiplicity of ethnic and religious groups within its borders. India has flatly rejected such an approach for more than 60 years and will not agree to it now. Thus, American efforts to devise a solution acceptable to both New Delhi and the militants would, at best, be wasted.
At worst, such a policy could convince the militants that violence has been effective, coercing the United States into bringing India to the bargaining table. This could embolden the jihadis further, resulting in even more terrorism in Pakistan and abroad.
Second, American intervention in the Kashmir dispute would greatly annoy India. After decades of mutual indifference, Washington and New Delhi now view each other as strategic partners, with a host of common economic and security interests. The Indian government has made clear that it considers Kashmir a bilateral issue to be resolved solely with Pakistan. U.S. interference would demonstrate callousness toward Indian concerns on this sensitive issue and could squander much hard-earned good will.

Kashmir improving

Third, proponents of American intervention ignore recent improvements in Kashmir. Left to their own devices, India and Pakistan have launched a peace process and implemented a series of confidence-building measures. As a result, violence has declined, and Indian forces have adopted a less aggressive posture in the region.

Of course, such improvements are tenuous. They could fall victim to events such as the Mumbai attacks, which were undoubtedly intended to undermine the improved security situation and increase regional tensions. Nonetheless, given recent progress, it would be inadvisable to jettison Indo-Pakistani bilateralism in favor of third-party diplomatic intervention.

Observers are correct to note the dangers emanating from Pakistan and the importance of South Asian stability to United States security. South Asia is no longer a strategic backwater; it is a region to which the Obama administration will have to pay close attention, as events in Mumbai have dramatically demonstrated. In crafting its South Asia policy, however, the administration should remember that less can be more, particularly regarding Kashmir.

S. Paul Kapur is associate professor in the Department of National Security Affairs, U.S. Naval Postgraduate School, and a faculty affiliate at Stanford University"s Center for International Security and Cooperation. His views do not necessarily reflect those of the U.S. government. Sumit Ganguly is professor of political science at Indiana University-Bloomington and an adjunct senior fellow of the Pacific Council on International Policy in Los Angeles. They wrote this article for the Mercury News.

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The small band of terrorists who attacked Mumbai last week killed nearly 200 people, wounded several hundred more and stoked tensions between India and Pakistan. The attacks have brought attention to the countries' long-simmering dispute over Kashmir and the diplomatic balancing act the United States must play between the nuclear-armed neighbors. They also expose major flaws in India's national security and highlight Pakistan's ineffectiveness in dealing with terrorist groups.

Paul Kapur, a faculty affiliate at Stanford's Center for International Security and Cooperation and an associate professor at the U.S. Naval Postgraduate School, is an expert on international security in South Asia. He's the author of Dangerous Deterrent: Nuclear Weapons Proliferation and Conflict in South Asia, and his work has appeared in journals such as International Security, Security Studies, Asian Survey, and Asian Security.

In an interview with Stanford Report, Kapur discussed the group that was likely behind the attacks and how he expects the situation to unfold.

American and Indian officials say there's evidence linking the attacks to members of Lashkar-e-Taiba. Who are these people, and what would be their motivation for hitting Mumbai?

Lashkar-e-Taiba is one of a number of militant groups that have been fighting against Indian control of Kashmir. India doesn't control all of Kashmir but controls part of it, including the Kashmir valley, which is especially prized.

These types of groups have been active since the late 1980s. There was a spontaneous--and mostly indigenous--uprising against Indian rule in Kashmir as the result of Indian ineptitude and malfeasance. The Pakistanis took advantage of the situation and got involved with the insurgency and started backing militant organizations with arms and training and financial and logistical support. It was an opportunity on the Pakistani side. By supporting the insurgency, they could potentially get the territory from India and bleed Indian resources.

What does that say about Pakistan's responsibility for the attacks?

There does seem to be strong evidence that Lashkar-e-Taiba was involved, and the attackers did come from Pakistan. But that doesn't mean the Pakistani government was directly involved with this operation. My guess is they probably weren't.

Events like this show that the Pakistani government is either unable or unwilling to quash militancy within its territory and to stop terrorists from using Pakistani soil to launch attacks on its neighbors.

Even if the Pakistani government now is not directly pulling the strings of these groups, the groups exist largely because of Pakistani support in the past. So now the genie is out of the bottle. The big danger is that a group like this could trigger an Indo-Pakistani crisis and conflict without the direct involvement of the Pakistani government.

But that doesn't mean the Pakistani government was directly involved with this operation. My guess is they probably weren't.

What does this mean for relations between India and Pakistan? Do you expect India will launch a military response?

It's certainly possible. If you think about the last time there was a major Indo-Pakistani militarized crisis, it was after a failed attack on the Indian parliament-also involving Lashkar-e-Taiba-back in 2001. That attack failed. About five people died, and it was over in the space of a morning. Nonetheless, the Indians were so outraged that they mobilized about 500,000 troops along the international border, and there was a major standoff that lasted almost a year.

That was-in my view-a lot less provocative than Mumbai. This attack killed almost 200 people, wounded hundreds more, lasted almost three days and targeted the financial hub of India. There's going to be a lot of pressure domestically for the government to act in a forceful way.

The unfortunate thing is that things were getting better between the two sides. Since that last crisis in 2001-2002, a peace process had begun and there was really a thaw in Indo-Pakistani relations. Kashmir had actually gotten more stable, and the general sense was that the regional trajectory was a positive one. Ironically, it may be that some of that progress is what motivated the Mumbai attacks. Part of the goal of an operation like this would certainly be to derail improving relations in the region.

Both India and Pakistan have nuclear weapons. How will that factor into how the countries deal with each other?

Nuclear weapons will create incentives for the two countries-even in the event of a crisis-to behave somewhat cautiously so the situation doesn't spin out of control. But the problem is that nuclear weapons also greatly reduce the margin for error. In the event of a miscalculation, the cost could be catastrophic.

America is an ally of both these countries and has relied on the Pakistanis to combat the Taliban along the border with Afghanistan. What's at stake for American diplomacy in this situation?

It's very tricky. The U.S. relies on Pakistan as a major ally in the war on terror. We've been pressuring the Pakistanis to pay attention to the northwest frontier and the border with Afghanistan and get that area under control. One thing the United States does not want to see is an Indo-Pakistani conflict, which draws Pakistani forces away from that mission in the northwest and back to the east to combat the Indians. From the standpoint of U.S. goals in Afghanistan, it would take resources away from that struggle, and so the United States very much wants the current situation to be resolved in a way that doesn't involve a major confrontation.

The problem is that it's going to be hard for the U.S. to say to the Indians, "Hey, you shouldn't retaliate against these guys," because this is exactly the argument that the United States makes in justifying its own retaliation against terrorists. If a country is unable or unwilling to keep its territory from being used to launch terror attacks, then U.S. leaders have claimed to have the right to go in and deal with the situation.

There are reports that India received warnings about the possibility of terrorist attacks on Mumbai. What did government officials do with that information, and why wasn't more done to beef up security and counterterrorism measures?

It's not clear that they did anything. They may have ratcheted up security for a short time and then let it return to normal levels. One of the things that's going to come out of this in the weeks and months ahead is an examination of the effectiveness of the Indian security services. Obviously, there's a huge intelligence failure here. But at a tactical level, it took almost three days to get a handful of terrorists out of three or four buildings. It wasn't a shining moment. The Indian security forces bravely did their job. But in terms of their effectiveness, my sense is that there were some pretty serious shortcomings.

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