While excellent newsletters on specific themes within public policy already exist, this thought letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. Audio narration by Ad-Auris. If this post was forwarded to you and you liked it, consider subscribing. It’s free. #225 Reaching for the MoonCan Space Powers Become Semiconductor Powers? Understanding India's Internal Security Challenges. And Some Good Readings.India Policy Watch #1: Can Space Powers Become Semiconductor Powers or AI Powers?Insights on current policy issues in India— Pranay KotasthaneChandrayaan-3 was deservedly the news of the past week. The reactions reaffirmed the notion that success in space exploration is the ultimate advertisement for science and technology. (To understand the significance of a space programme, check out this Puliyabaazi with Pavan Srinath from December 2018.)
From a policy perspective, the success of this mission throws up a rather interesting question: If largely government-run efforts could make India a bonafide space power, can it apply the learnings to become an AI power or a semiconductor power? The short answer is no, not necessarily. Because there are significant categorical differences between space and nuclear technology on one hand and AI research and semiconductors on the other. Read on for the longer version. First, observe the countries that have operational space or nuclear weapons programmes. Countries having operational space launch vehicle programmes are the EU, the US, Japan, China, India, Israel, North Korea, South Korea, Iran, Ukraine, and Russia. The countries with nuclear weapons are Russia, China, the US, France, North Korea, Israel, India, Pakistan, and the UK. As you can see, success in these two areas seems to be orthogonal to the regime type. But one thing’s common. They are all largely government-driven efforts, with the private sector playing a secondary role. The second important point to note about space and nuclear programmes is that these domains are technically complex but operationally simple. Simple in the sense that these domains have the following features that competent companies that government-run companies can manage without too much trouble:
Thus, it’s no surprise that many communist regimes with strong State-run space and nuclear programmes couldn’t excel in computing or semiconductors. For instance, Mao’s China could get its space and nuclear programmes off the ground with the “Two Bombs, One Satellite” project, which even survived the madness of the Great Leap Forward and the Cultural Revolution. However, the same strategy failed miserably for semiconductors. The initial government-owned successes couldn’t survive the demands of constant upgradation and capital infusion. In fact, Chinese scientists made the first transistor in 1956 and the first IC in 1965, ahead of South Korea and Taiwan. But twenty years later, China was nowhere in the game. It was only the period of global integration and private-sector investment when China could make a fresh beginning. The USSR’s case is also quite similar. Like the Star City for its space programme, the USSR hoped that Zelenograd would be a grandly planned city, a scientific paradise, that would excel in semiconductor manufacturing. It was supposed to be the Soviet ‘Silicon Valley’. But that was not to be. After initial successes, it too petered out. India’s case is not too different. Two of India’s public-sector firms, Bharat Electronics Limited (BEL) and Semiconductor Complex Ltd (SCL), were both able to strike technology transfer agreements with competent Western chip-making firms. They began producing chips but faded away by the 1980s. There are three general lessons from the failures of these government-run, government-owned programmes of the USSR, China, and India. First, government-run companies didn’t have any incentive to compete in a hyper-competitive space that demanded constant capital infusion and technology upgradation. They started well but couldn’t keep themselves in the race for long. Eventually, when political vectors aligned in the right direction, their products became old and costly. Even customers within the government could find better technology at cheaper rates through imports. Second, these companies were shielded from internal competition. Competition forces companies to seek differentiation. Without it, they could sustain themselves at low-level equilibria. BEL and SCL were both a part of the race initially. But from the government’s perspective, this competition was undesirable—having two companies perform the same task wastes resources. While SCL was chosen to manufacture chips, BEL was confined to assembling them. In Taiwan, on the other hand, the government-led ERSO was able to spin off multiple private companies and foster competition successfully while BEL and SCL were busy fighting turf wars to attain monopoly power. While this approach may have saved the government precious money, it perpetuated a structure that was fundamentally at odds with innovation. Third, inward-looking trade and business policies proved costly, as in the case of the USSR. The dominant economic narrative was to save foreign exchange and dollars from leaving the country. This meant strict import controls and exorbitant tariffs. Even after paying these duties, equipment remained stuck at ports awaiting government approvals. The cumulative effect was that products from BEL and SCL couldn’t compete internationally. Seeking self-reliance, the government was neither interested nor confident in exporting chips. Hence, although government successes in space and nuclear domains are truly admirable, lessons from these domains do not broadly apply to sectors such as semiconductors today. Perhaps, a better model to study is India’s automobile story via Maruti. Although it began as a vague dream for a fully atmanirbhar “people’s car”, the government gave considerable freedom to the management, relaxed trade norms so that it could import intermediate parts easily, and provided consistent political and financial cover in the initial phase. But the energy, time, shift in incentives, and effort that governments need to expend to see them through makes failure a more likely outcome. India Policy Watch #2: On Internal SecurityInsights on current policy issues in India— RSJWe haven’t written anything about the situation in Manipur in any of our editions so far. While I have read through the history of the issues involved and the genesis of the current situation, I have struggled to think about it through a frame that will provide any real insight into the policy failure there. Internal security is a complex area, and I don’t have the required appreciation of the state apparatus that’s responsible for it. In a way, this is quite strange. Growing up in the 80s, I didn’t need any help in grasping the seriousness of India’s internal security challenges. The everyday violence in Punjab, Kashmir, Assam and Tamil Nadu during that decade was apparent even to a school-going kid in a remote part of eastern India that got its newspapers two days late. That experience should have spurred further inquiry into why the state failed institutionally on so many occasions then and what were the policy lessons learnt from that violent decade. But I guess I shut all of that out of my mind. So, I was delighted to see a new book edited by Devesh Kapur and Amit Ahuja titled ‘Internal Security in India: Violence, Order, and the State’ which has a stellar list of scholars writing on various aspects of internal security challenges in India, the evolving response of the state in preserving order and the integrity of the nation and what those responses have meant for civil liberties and democratic process in India. I’m midway through the book, and I have found it to be both enlightening and exhaustive in its scope. While the authors do lament about the lack of easily available data on the various forms of internal violence across states, they have managed to gather enough to give the reader a data-supported basis for the arguments and the opinions they have formed through the book. I strongly recommend it. Maybe after I finish, I might have a reason to write about Manipur. I have taken two extracts from the first chapter in the book that get to the core premise of the book and set the stage for the remaining chapters. In the first extract below, you get a sense of the tremendous increase in centralisation of internal security apparatus and the huge shift to private sector security at the local level while the police and security capacity in the states continue to shrink simultaneously.
The second extract that I have talks about the reduction in the incidents of internal violence going by the data available from various states but points to four trends that suggest a shift in the nature of the violence and the dangers that these trends portend for a democracy. There are further chapters in the book that back the claims for these trends. As Kapur notes in an interview in the Times of India, the state’s capacity and ability to manage mass violence has grown, but the question is about its willingness to act. In a way, analysing these trends and this somewhat strange unwillingness can lead us to understand the likely fault lines that are emerging in internal security, of which, possibly, Manipur is a symptom.
HomeWorkReading and listening recommendations on public policy matters
If you liked this post from Anticipating The Unintended, please spread the word. :) Our top 5 editions thus far: |
