The Yanks Are Coming!

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The Indian Thanksgiving By SARAH KHAN | Wall Street Journal, Nov 26 2009

A naturalization test at an immigration office in Boston was the last hurdle standing between me and U.S. citizenship. But for me this journey had actually begun years before, on a rickety vessel you may have heard of—The Mayflower. Except in my adaptation, that leaky ship sailed down the Red Sea to the New World of Jeddah, Saudi Arabia, where I proudly played the role of a pilgrim in a kindergarten play at the American school. Decked out in a gray frock and a hat fashioned from black construction paper, I prepared to welcome a band of friendly Native Americans to the very first Thanksgiving.

In my five-year-old mind, it seemed perfectly logical that a scrawny Indian girl with brown skin and a Canadian passport should be charged with inviting those other Indians (feather, not dot—although I'm Muslim so we don't have either) to celebrate the founding spirit of America. In a desert nation, no less, thousands of miles from Plymouth Colony.

"Sarah, is it?" asked the immigration official testing me. "So, where are you from?"

Easy question, no easy answer.

We're called TCKs--"third-culture kids--studying at international schools in faraway lands, and wind up cultivating a hybrid culture that's neither apple pie nor masala chai. I was born in Toronto but moved to Saudi Arabia when I was a baby, so my ties to my birth country were tenuous. Summers were spent carting boxes of Oreos and Capri Sun to Hyderabad; winters involved snowball fights with cousins in Michigan. For International Day, I'd don an elaborate Indian ensemble and march with the Canadian contingent of the parade, but thanks to the school curriculum and our frequent trips to the States, my insides bled red, white, and blue. From my Saudi classroom I could rattle off every U.S. state capital, but damned if I knew where Ottawa was.

Intending to head to the U.S. instead of Toronto when our Middle Eastern sojourn was over, my parents filed for green cards—which, incidentally, were pink—and we eventually wound up moving to Massachusetts when I was in high school. Even though I'd never actually lived on this side of the pond before, it felt just right. I may have traveled to 25 countries and lived in four, but in my vision of the land of opportunity, the streets were paved with Golden Arches. Suddenly there I was, a stone's throw from Plymouth Rock.

But despite this long-awaited homecoming, we never got around to wrapping up the requisite paperwork and actually becoming citizens. So I went on to college, a Canadian girl who'd never really lived north of the border, a pseudo-American who somehow got her Valley Girl accent in Saudi Arabia, by way of India. With a composite like that, I never really knew where to slot myself, so I elected to have fun with it. Americans really get riled up by their neighbors in the 51st state, I learned quickly. I kept a mammoth Canadian flag in my dorm room, just to annoy people, and I discovered that "Oh, I can't, I'm Canadian," is the ultimate get-out-of-jury-duty-free card. Fittingly enough, Thanksgiving became my favorite holiday, thanks mostly to the tandoori-style turkey dished up by my aunt at the annual Khan feast. For years, I lived like a citizen without actually being one. I reaped all the benefits at home, then easily slipped into the role of friendly Canadian tourist abroad.

Then 9/11 happened. Whispers began swirling of Muslims being deported for no good reason, and suddenly that became the motivation we needed. After all, God forbid the Department of Homeland Security ship us back to Canada. A whole country north of Buffalo? Shudder.

And that's how, in the spring of 2002, I found myself at the nondescript immigration office in Boston, ready to rouse my own American dream from hibernation.

Like any other kid raised in the American school system, I'd spent years dedicatedly forgetting everything I'd ever been taught about government. Who knew there were 435 voting members of Congress? But I did now, thanks to my last-minute cramming efforts that morning, and I sat down confidently in front of the officer, prepared to wow him with my civic knowledge, good moral character, and patent lack of communism.

"What do you do, Sarah?" asked the man standing between me and my new passport, continuing his effort at amiable banter.

"I'm a junior at Boston College," I replied.

"Excellent!" he said. "What are you studying?"

Considering he spends his days interacting with people of varying levels of literacy, my soon-to-be interrogator seemed excited to discover that I was an English major. He wasted no time engaging me in an animated discussion about the literary merits of Chaucer.

"So," he finally said, sad to change the subject and get back to business. "Are you ready?"

Let's do this, I thought. Just wait till I dazzle you with my newfound knowledge of the electoral college!

"First I'm going to need to test your English skills. Can you please write this for me: 'I am happy today.'"

I am happy today? This, after I'd just spent the last 15 minutes dissecting The Canterbury Tales?

Annoyed by the request, I still wrote the words in my finest handwriting, hoping not to let down the entire English department of Boston College. Then my literary friend probed me on my knowledge of the stars and the stripes, and rewarded me for remembering that the Constitution was written in 1787. I was informed that I'd passed with flying colors, fingerprinted for posterity, and sent on my merry way.

A few months later my parents, proud citizens themselves, joined me in Boston's historic Faneuil Hall for my oath. I'd donned yet another gray outfit for the occasion—slacks and a blazer this time, and no construction-paper hat—and was ready to be sworn in to my not-so-new life. I took my seat amid the kaleidoscope of eager faces, each concealing its own story of what it meant to be there. For some, this day symbolized the culmination of struggle, success, and a dream; for me, it was just the inevitable conclusion of a lifelong voyage. When the judge finally led us in the Pledge of Allegiance, a thunderous chorus resonated throughout the room, reciting the words in unison—except for the judge himself, that is. In an ironic twist, he stumbled over the lines, then turned cherry red as he was corrected by a symphony of accents.

And then it was all over. I left the courthouse clutching my naturalization certificate, my own little piece of the (apple) pie.

Thanksgiving in my family is a true coming together of Indians and Americans—but one far different from what the Pilgrims may have envisioned. I wear shalwar khameez and head over to my aunt's house, the center of operations for the Khan family affair, where we rip into an eclectic spread: halal turkey with desi-style masala; good old-fashioned mashed potatoes, stuffing, corn, and pumpkin pie; lasagna and macaroni for the vegetarians—all preceded by, of course, samosas and pakoras. The guys take over the big screen in the family room to watch football while Bollywood reigns supreme in the den in the form of Indian karaoke. And like millions of others across the country, we all slip blissfully into the food coma—until it's time to hit the Black Friday sales at 3 a.m.

It doesn't get more all-American than that.

[Macaca]

Northeasterners in Delhi Deserve Better By VIBHUTI AGARWAL | Wall Street Journal, Nov 24 2009

Last month, a 19-year-old Naga girl was murdered in New Delhi. She was strangled and her body burned after she reportedly turned down the advances of her neighbor.

The protest and demonstrations that followed raised awareness of a dark aspect of our society: When it comes to racism, those from the northeast often suffer disproportionately in the capital.

The city is a harsh environment for millions of its citizens, of course, but those from our northeastern states frequently are singled out for abuse because they look different and often dress different.

At a time when we are quick to slam the Australians for racist abuse of Indian students there, we should take the time to consider how our own city is treating its immigrants – even from within India.

The Northeast Support Centre – a New Delhi-based non-governmental organization that helps northeastern youth living in Delhi – estimates that as many as 86% of the roughly 100,000 northeastern people in the capital have been victims of some racial discrimination over the last two years. Some 20 cases of sexual harassment and racial abuse against northeastern women have been reported in the capital this year. The organization's website has listed details of 47 cases of racial discrimination since its inception in October 2007.

There are seven states in northeast India - Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Roughly, 15,000 people come from there to Delhi every year. Almost 4,000 are admitted annually to Delhi University alone.

"Media is abuzz with reports of racial abuse against Indians abroad, but episodes of attacks on India's northeastern crowd remain obscure," says Madhu Chandra, spokesman of the Northeast Support Centre.

Racial discrimination – from frequent taunts to physical abuse -- against the people of the northeast has never been confronted with any sense of urgency or seriousness. It is not just girls from the northeast who fear for their safety; the boys, too, have similar concerns. From harassment by landlords to non-payment of salaries or suspension without notice, their woes are lengthy. Recently, a 22-year-old Manipur boy was roughed up by locals and a couple beaten by store managers because of their short stature and distinctive features.

"We are singled out because we look different," says 26-year-old Ritika Lama from Assam, who works as a hair-stylist in New Delhi. Ms. Lama says she always sticks with people of her own community to avoid being isolated when she encounters abuse.

Many northeasterners complain police and government authorities are unhelpful and frequently blame the victims' attire for racial attacks.

"The mindset in north India is that men have power over women physically," says Ranjana Kumari, director of New Delhi-based Center for Social Research, a think tank. "This is why they cannot stand the freedom of sexuality enjoyed by men and women in the northeast."

In a capital that strives to be modern – and where hundreds of thousands of foreign visitors will congregate next autumn – we should expect better treatment for our own.

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The Distress of Distressed-Asset Investing in India By BEN MERTON | Wall Street Journal, Oct 31 2009

At the end of 2005, I started a fund to acquire a distressed, publicly-traded manufacturing unit in Bangalore. The company had gone bankrupt because of weak management and too much debt, combined with a dip in demand for its products during the downturn that started in the late 1990s. It subsequently registered for protection from its lenders with the Board of Industrial and Financial Reconstruction in 2003.

Being a 26-year-old aspiring entrepreneur from the U.K. with no Indian roots, I was blissfully unaware of my forthcoming baptism of bureaucratic fire as we sought to buy up this distressed asset.

As the acquiring fund, our intention was to inject fresh capital, restructure the company's balance sheet, bring in new management, and execute a textbook turnaround. The business environment in 2005 had changed substantially for the better since the company had started struggling, the company's brand was still respected, and we had a strong local partner who could provide us with steady demand for our products.

So, at the beginning of March 2006, we formally indicated our intention to settle with the target company's three secured creditors. Two of these creditors were state-run lenders and one was a private bank.

Skip forward 670 days, more than 300 visits to the desks of different bureaucrats and bankers, 31 committee meetings (consisting of sub-committees, joint committees, special committees, settlement committees, executive committees), three board meetings, and we finally received our state-lender settlements in January 2008.

The main problem facing any institution wishing to invest in distressed Indian companies is the system's total lack of transparency at every stage of the restructuring process. For the entrepreneur, this is arguably where the opportunity lies. But the system should not be geared towards allowing only those with a high risk appetite to take part. Any reform process must take into consideration the perspectives of potential investors, not just those of the financial institutions and the management of the bankrupt company, as is currently the case.

Getting this part of the corporate equation right is crucial if India is to establish a dynamic manufacturing industry and balance out its asymmetric dependence on the service sector. By recent tradition, the government has sided squarely with entrenched interests – both management and labor – against what it has viewed as the ravages of corporate turnaround specialists. But this is an antiquated and short-sighted view. The high rate of loan defaults by Indian companies and the 10+ years that it takes for a company to the complete the bankruptcy process means that there is now over $50bn worth of assets stuck in the system - assets that could be used to create jobs, pay taxes and contribute to GDP growth.

The government's Board of Industrial Financial Reconstruction was created in 1987 to help rehabilitate ailing companies but in practice it seems to be getting in the way. The BIFR adds enormous amounts of time to an already lengthy process of taking over a troubled company with very little corresponding reduction in risk. It has no power to force a settlement on creditors who control less than 75% of the secured debt of a bankrupt company. In practice, even in cases where there is a consensus of more than 75% of creditors, even one minor lender that doesn't want to settle can significantly delay the resolution process to the overall detriment of the proposed deal.

Even with regards to the handling of unsecured creditors, the BIFR can do very little to reduce the cost of acquisition for the acquiring company, allowing only for a mandated deferred payment schedule. However, unlike with statutory creditors (who cannot give a reduction on principal amounts due), unsecured creditors are usually more than willing to write down dues and defer payments on a case-by-case basis if settlements are received immediately.

In this respect, the BIFR actually works against the potential investor by freezing the amounts due to unsecured creditors, thereby artificially raising the cost of acquisition.

There has been talk that some in the government may be considering abolishing the BIFR and incorporating a Chapter 11-style bankruptcy provision into an amendment to the Companies Act. However, it is not clear how high these reforms are on the government's to-do list.

The 2002 Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interests Act -- known in typical bureaucratic speak by the massive acronym SARFAESI Act -- did make some progress towards providing creditors effective legal recourse to realize the value of secured assets within a reasonable length of time. However, it is only applicable in cases where a secured creditor controls more than 75% of a bankrupt company's liabilities, and even then it only allows the creditor to attach and sell the physical assets of the company.

Along with the rest of India, I watched the Satyam scandal unfold with bewildered awe. What intrigued me most, though, was not the public humiliation of an outsourcing giant, but the way in which the government quickly replaced the board of directors and sold the equity to the highest bidder. Under normal circumstances in India, like the ones I have struggled through, the only way to change the management of a bankrupt company is with management consent, even if they only have a minority interest. As one might expect, this is tantamount to trying to persuade a turkey about the virtues of Christmas.

From a potential investor's point of view, the first criterion in assessing whether to invest in a distressed company is whether you have the right people on the bus. Satyam is a glaring example of where a change of management was required in order to attract a third-party investor. But why should this only occur when the company's founders have demonstrably perpetrated a fraud and the case is deemed in the "national interest?" There are a vast number of Indian companies whose shareholders, creditors and employees are being held hostage by incompetent management. Why are they let off the hook when they run their companies into bankruptcy?

In the case of Chapter 11 in the U.S. or the Insolvency Act in the U.K., clear provisions are made for the courts or administrators to change management control of distressed companies. While the BIFR was created to allow for similar rehabilitations, we have seen that it fails to address all the needs of potential investors. As such, the only practical route available to a bankrupt Indian company is liquidation, in which huge amounts of value are destroyed when the physical assets are sold in a bank auction. These sale proceeds often only cover the secured and statutory dues, leaving unsecured creditors and shareholders completely in the cold. It also means lost employment and tax revenues for the state as the business itself is dismantled.

Over the past five years, I have analyzed and consulted many distressed companies covering the length and breadth of the country. In only a tiny number of cases have I found a potential investment opportunity. Most fail to attract investors because of a flawed legal framework to support a potential rehabilitation.

While India may have escaped the worst of the global economic crisis, bankruptcy rates are bound to increase over the next few years as companies take the strain of softening global markets and higher debt costs. It is crucial that a system is in place that allows for effective handling of these bad accounts, including addressing the concerns of potential investors at each step of the bankruptcy process.

Ben Merton is a director of Algypug Enclosures, a manufacturer of sheet metal fabricated products for the power, automation and telecoms sectors, based in Bangalore.

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Deadly Labor Wars Hinder India's Rise By PETER WONACOTT | Wall Street Journal, Nov 20 2009

COIMBATORE, India -- This ancient city has turned itself in recent years into a manufacturing dynamo emblematic of India's economic rebirth. But a homicide case playing out in an auto-parts factory here is raising concerns about whether the Indian industrial miracle is hitting a wall of industrial unrest.

Pricol Ltd., which makes instrument panels for the likes of Toyota Motor Corp. and General Motors Co., was rocked in late September when workers burst into the office of Roy George, its 46-year-old human-resources boss. Angry over a wage freeze, they carried iron rods, witnesses say, and left Mr. George in a pool of blood. Police arrested 50 union members in connection with his death, their lawyer says. Charges haven't been filed.

Battle lines are being drawn in labor actions across India. Factory managers, amid the global economic downturn, want to pare labor costs and remove defiant workers. Unions are attempting to stop them, with slowdowns and strikes that have led at times to bloodshed.

The disputes are fueled by the discontent of workers, many of whom say they haven't partaken of the past decade's prosperity. Their passions are being whipped up, companies say, by labor leaders who want to add members to their unions and win votes for left-leaning political parties. Adding to the tensions are the country's decades-old labor codes, which workers and companies alike say require an overhaul.

"We can't be a capitalist country that has socialist labor laws," says Jayant Davar, president of the Automotive Component Manufacturers Association of India.

The unrest serves as a reminder that India has far to go before it stands alongside the world's other economic powerhouses. With its widening middle class and growing base of rural consumers, India has averaged more than 8% growth for the last half-decade. It is seen as a country that can help lead a global economic recovery.

But first, it must show it can ride out booms and slowdowns alike. The country's manufacturing sector, after growing about 7% annually for the past 16 years, logged 2.4% growth in the 12 months that ended in March. That has pressed manufacturers to make some unpopular cutbacks -- spurring labor actions that have slowed production further and suppressed growth.

Strikes at India's manufacturing and service companies rose 48% in 2008 from the year before, India's Ministry of Labor says. This year, labor actions have hit manufacturers from Indian automaker Mahindra & Mahindra Ltd. to Finland's Nokia Corp. and Swiss food giant Nestle SA.

Workers at a unit of Korea's Hyundai Motor Co. staged sit-ins in April and July, demanding recognition of an outside union and reinstatement of suspended workers.

In September, workers at a unit of Japan's Honda Motor Co. tried to prevent a trial of a new assembly line by threatening engineers and executives with shock-absorbers and motorcycle pieces, according to a court documents.

Some confrontations have turned vicious. Last year, the chief executive of Graziano Trasmissioni India Pvt. Ltd., a manufacturing unit of Swiss high-tech group OC Oerlikon Corp., was beaten to death by workers who had been suspended at a plant outside New Delhi.

The impact has been global. A strike that started in late September at Indian supplier Rico Auto Industries Ltd. left Ford Motor Co. without transmission parts, forcing it to halt production temporarily at an Ontario plant that makes Edge sport-utility vehicles and at a Chicago plant that builds Taurus sedans.

The six-week Rico strike spurred GM to idle an SUV-production facility in Delta Township, Mich., for a week and cut one shift for a second week. GM also cut a shift at a transmission factory in Warren, Mich., said a person familiar with the matter.

At Pricol, the standoff that led to Mr. George's killing continues. The company says its pay is generous for the market. It accuses S. Kumarasami, a labor lawyer who organized the Pricol union, of inciting violence and trying to bring the company to a standstill to advance his broader leftwing political agenda.

Mr. Kumarasami, who wasn't among those arrested and represents 20 Pricol workers who remain in custody in the matter, says he doesn't advocate violence. The company risked workers' lives, he says, by choosing to suppress wages. "Economic violence is also violence," he says.

An Asian Manchester

Coimbatore, a colonial-era textile hub in the southern state of Tamil Nadu, expanded in recent decades into a manufacturing center for machine parts and small motors. Dubbed the Manchester of South India, its streets are lined with shops that sell pumps, coils and bearings.

Pricol was founded here in the 1970s by Vijay Mohan, the son of a textile-factory owner, as a maker of moped speedometers. Now its seven plants around India export 50 products -- from fuel gauges and clocks to cigarette lighters -- to some 40 countries.

As its work force grew, so did its problems.

Pricol, like other Indian manufacturers, is guided by two old labor laws. The country's Industrial Disputes Act of 1947 requires companies to gain government permission before dismissing workers. The Contract Labor Law of 1970, meanwhile, prohibits employers from using temporary workers for long-term jobs. Both aim to encourage companies to protect workers by making them permanent.

Manufacturers have long complained that it can take years to dismiss their permanent employees, leading to bloated work forces and hampering companies' ability to respond quickly to changing business conditions. Executives and industry groups say relaxing the labor laws would allow companies to hire more workers and would attract more manufacturers to India, ultimately underpinning a rise in wages.

"Some of the hardships faced by labor will be lessened if there is greater demand for workers, as would happen in a more flexible market," says Cornell University economics professor Kaushik Basu, who was recently appointed chief economist for India's Ministry of Finance. There are no current efforts to change the laws, officials say.

Union leaders complain that companies are hiring contract workers for longer than the law intends. They say that by using these workers -- who are generally paid less and don't draw company pensions -- employers undercut permanent employees' leverage in wage negotiations.

"Companies are doing well in India, even during a global recession," says D.L. Sachdev, national secretary for the All India Trade Union Congress, which is backed by the Communist Party of India. "The way they keep their margins safe is to increase the exploitation of the workers."

Mr. Mohan, now 62 years old, says Pricol tried to do right by workers from the beginning -- offering employees one cafeteria instead of separate facilities for workers and executives, and adopting equal wages for male and female workers before most other local manufacturers did so. And for 25 years, Mr. Mohan says, it avoided hiring cheaper contract workers.

"People said I was a bloody fool," he says. "I was, in fact, an idealist."

But in 2000, fearful of building a costly permanent work force, Mr. Mohan changed course. Factory contract workers now account for about one-third of the 2,200 people employed at Pricol's three Coimbatore plants, the company says.

By 2007, Pricol's sales had nearly tripled from 2000, to 4.81 billion rupees ($104 million).

Workers grew upset that their wages hadn't seemed to rise along with company sales, says machine operator C. Murali Manoharan. Then a 16-year Pricol veteran, he made about $170 a month at current exchange rates. He says supporting his school-age daughter grew harder as food and education prices rose, and he seethed as executives saved enough from their salaries and bonuses to buy new cars and houses.

"The company's growth was huge," Mr. Manoharan says. "But our wages were still low."

Workers began demanding bigger pay increases. Mr. Mohan resisted, telling workers that raises had already been negotiated by Pricol's existing unions.

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Doused With Kerosene

In early 2007, workers turned to Mr. Kumarasami. The head of the All India Central Council of Trade Unions in Tamil Nadu's capital, Chennai, Mr. Kumarasami promised Pricol workers he would help secure higher wages for permanent and contract workers alike.

Mr. Kumarasami immediately led a strike at Pricol's three Coimbatore plants. At one point, striking female factory workers doused themselves with kerosene and threatened to light themselves on fire. Mr. Mohan says the threat was a union stunt to wring concessions from the company, which Mr. Kumarasami denies.

With production slumping, Mr. Mohan replaced the striking contract workers with other contract workers, and braced for a battle with Mr. Kumarasami. "He'd thought we'd buckle in a day," says Mr. Mohan. Permanent employees returned to work in June, after striking for 100 days.

In July -- when Pricol traditionally announced its wage increases -- Mr. Mohan said there would be no raises, citing the work stoppages' impact on production and sales. Soon after, several contract laborers who had been hired during the strike were rounded up by workers and tied to trees outside the factory, say executives and workers.

These disruptions stung. In 2008, as India's automobile market boomed, Pricol's sales remained essentially flat. Net profit fell to half of 2007 levels.

In July 2008, Mr. Mohan again said he couldn't raise wages. The next month, engineers and Pricol executives touring the factory floor were beaten by a group of workers with iron rods, says V. Balaji Chinnappan, a general manager of manufacturing. Several were hospitalized. Mr. Kumarasami said his union discourages violence and blames the flaring tempers on "the intransigence of the management."

Splits developed in Mr. Kumarasami's union. Machinist Mr. Manoharan, then serving as a union leader, said he began to believe a labor settlement wasn't possible with Mr. Kumarasami in the picture. Toward the end of 2008, he says, he started meeting privately with Pricol executives to explore a settlement.

Soon, he recalls, came a telephone call from another worker, who told him: "Join with management and I will beat you."

In March 2009, two men on motorcycles he couldn't identify came to his house and thrashed him with iron rods, breaking his hand. In May, he says, another Pricol worker slashed him from behind with a machete as he waited at a bus station, leaving him unable lift his arm.

"That union achieved nothing," says Mr. Manoharan, who is paid by Pricol though his limp arm has kept him off the job.

Such feelings led some Pricol managers to believe they could work around Mr. Kumarasami. One executive who spearheaded this approach was human-resources manager Mr. George, a native of the southern Kerala state educated at one of India's top management universities.

Hired into a volatile situation in March 2009, the new HR boss tried to bond with workers, executives say, particularly those who had protested wage freezes with work slowdowns, including cardplaying or sleeping during their shifts. He asked to hear grievances and maintained an open-door policy. Attempting to cool tensions among co-workers, the balding father of two organized "bring your kids to work" days.

In the summer, citing flat sales and a rare net loss stemming from the unrest, Mr. Mohan declined to raise pay.

On Saturday, Sept. 19, Pricol handed dismissal notices to more than 40 workers that Mr. Mohan calls "militant" union members.

Pricol calls the dismissals legal and says it warned workers verbally and in writing. Mr. Kumarasami maintains the dismissals are "illegal" and says he is challenging them through the government's Labor Bureau.

Shattering Glass

The next Monday during lunch break, Pricol's Soundarya Rammurthi says she heard shattering glass and screams. The 30-year-old human-resources executive says she saw two workers with iron rods and "burning eyes" heading into Mr. George's office. She fled the building and called security guards.

Pricol executives say two video cameras -- one that would show people entering the building, another near Mr. George's office -- were intentionally disabled. A third camera recorded about eight workers fleeing the human-resources building, says Mr. Chinnappan.

Mr. Kumarasami declined to comment about the 20 workers still detained in the matter before charges have been filed. He calls Mr. George "an unfortunate victim," but accuses Pricol of using the murder to destroy his union. He says more than 1,200 Pricol workers remain members.

Mr. Mohan says he's ready to make peace. He has enlisted outside mediators and agreed to their suggestion to unfreeze factory wages. Mr. Kumarasami said this has helped create "a mood to consult" with management on labor issues.

Pricol's output has rebounded. Between shifts, workers amble around a cordoned-off murder site. In Mr. George's vacant office, gashes remain in the walls.

"I don't say that everything is hunky-dory," says Mr. Mohan. "There's an artificial calm."

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Investing in India: Art of the Impossible? By Roger Bate | The American, Nov 27 2009

Here’s how India will become the place for future investment and future pharmacological breakthroughs.

During Indian Prime Minister Manmohan Singh’s current visit to the United States, he will no doubt encourage American business to invest in his country, and perhaps contemplate why far more U.S. investment, and notably pharmaceutical investment, goes to China. At first glance it is mystifying, because India is the most interesting pharmaceutical market in the world, containing every imaginable product and producer; but it also contains every kind of frustration for producers and investors, especially foreign players.

It all proved too much for one major player, Novartis, the Swiss pharmaceutical giant. This month its CEO Daniel Vasella earmarked $1.25 billion for research and development activity in China, and apparently pulled $125 million planned for an R&D facility in Hyderabad, India. Although Vasella denied the two decisions were linked, he is certainly sending a strong message about the favored location for investment.

“In principle you can discover in India, you can do research. There has been some progress on the protection of intellectual property but it’s not up to the standard that I would expect to make an investment into discovery-led research,” said Vasella in an interview with Reuters. He continued: “There are significant differences between India and China—in the political system, in the decision-making processes, in the complexities of the processes, and in the continuity. I think India has potential but things take longer to get done.”

Aside from lack of support from the courts, investors in India risk having their products faked by cheerfully unscrupulous ‘businessmen.’

Vasella is smart not to rule out further major investments in India because it probably has more potential for innovation than China—freedom of expression and the right to rebel are vital parts of good science. (This is why Jim Watson, Nobel Laureate and co-discoverer of the structure of DNA, told me a few years ago that he believed that until China truly embraced freedom of expression, it would drive few if any new drug breakthroughs.)

For now the frustrations of investing in India are immense. For example, Novartis is in its fourth year of litigation with the Indian authorities over its novel treatment, Glivec. The drug, which has become the treatment of choice for chronic myelogenous leukemia and other cancers, notably gastrointestinal stromal tumors, brings in annual revenues of near $4 billion in worldwide sales.

In 2006, the Indian government ruled the drug was only an improvement on an existing product rather than a patentable innovation. Since then Novartis has challenged ruling after ruling and today the issue is before the Indian Supreme Court, but resolution continues to be maddeningly slow. One judge proposed for the hearing recused himself and no replacement has been chosen yet. One of the main frustrations is that Indian rulings have often been inept. For example, the newly formed Intellectual Property Appellate Board (IPAB) ruled earlier this year that no patent would be granted to Glivec as there was no evidence that a significant increase in therapeutic efficacy had been achieved. However, at the same time, the IPAB decided that new evidence of the drug's efficacy could not be heard. The IPAB also contended that granting Glivec a patent would cause civil unrest because of the high cost of the drug. Yet price is not a matter over which a patent should be judged. Additionally, 99 percent of Glivec administered in India is supplied free of charge through a Novartis patient assistance program.

Vasella is smart not to rule out further major investments in India because it probably has more potential for innovation than China—freedom of expression and the right to rebel are vital parts of good science.

Novartis's investment decision is probably also influenced by the treatment of fellow Swiss drug giant, Roche. Its lung cancer drug, Tarceva, was granted a patent, but when a large local generic manufacturer broke the patent, Roche received no protection.

Investors in India also risk having their products faked by cheerfully unscrupulous “businessmen” such as Pavel Garg of Haryana Province. This gregarious rascal has been filmed discussing bribing of ministers, and delights in explaining how he adulterates medicines to fool basic quality tests. Fakers like Garg ignore that the medicines they produce can harm individuals and may even build drug resistance for diseases such as tuberculosis and malaria.

China is a consummate counterfeiter, but the authorities have recognized the damage this has caused exports and are taking firm action. Cui Enxue, director of China's State Food and Drug Administration drug safety inspection bureau, promised last month that any Chinese company dealing in fakes would be found and punished. While many problems remain with counterfeiting in China, Western companies' concerns are taken seriously by Beijing.

There is the nagging worry, of course, that China's Marxist leaders could arbitrarily undermine intellectual property, or, perhaps most likely, not provide the right intellectual and personal freedoms required for first-rate science. One has to hope that China eventually becomes a political democracy and entrenches the liberal economic reforms made over the past two decades. As Novartis’s Vasella concludes, intellectual property is “very fundamental to our business and any investment we make without it is a no-go.”

India is a democracy with an independent judiciary, and even though it is sometimes painfully slow in arriving at the right decision, there's every hope that it will. Change is driven by the increasingly excellent Indian companies (Ranbaxy, Piramal, and Reddy in particular), which will be the ones ensuring improved intellectual-property protection. If Indian scientists are allowed the freedoms and protections they demand, India will become the place for future investment and future pharmacological breakthroughs.

Roger Bate is the Legatum Fellow in Global Prosperity at the American Enterprise Institute.

FURTHER READING: Earlier, Bate scrutinized India’s problems with counterfeit pharmaceuticals: “India’s Claims on Counterfeit Drugs.” He has also detailed local Indian leaders’ efforts to combat the problem in “Nursing India’s Drug Market Back to Health.” He recently criticized the push for locally producing pharmaceutical drugs in India in “When Local Production is Not the Answer.”

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Some Indians Find It Tough to Go Home Again By HEATHER TIMMONS | New York Times, Nov 28 2009

NEW DELHI — When 7-year-old Shiva Ayyadurai left Mumbai with his family nearly 40 years ago, he promised himself he would return to India someday to help his country.

In June, Mr. Ayyadurai, now 45, moved from Boston to New Delhi hoping to make good on that promise. An entrepreneur and lecturer at the Massachusetts Institute of Technology, with a fistful of American degrees, he was the first recruit of an ambitious government program to lure talented scientists of the so-called desi diaspora back to their homeland.

“It seemed perfect,” he said recently of the job opportunity.

It wasn’t.

As Mr. Ayyadurai sees it now, his Western business education met India’s notoriously inefficient, opaque government, and things went downhill from there. Within weeks, he and his boss were at loggerheads. Last month, his job offer was withdrawn. Mr. Ayyadurai has moved back to Boston.

In recent years, Mother India has welcomed back tens of thousands of former emigrants and their offspring. When he visited the United States this week, Prime Minister Manmohan Singh personally extended an invitation “to all Indian-Americans and nonresident Indians who wish to return home.” But, like Mr. Ayyadurai, many Indians who spent most of their lives in North America and Europe are finding they can’t go home again.

About 100,000 “returnees” will move from the United States to India in the next five years, estimates Vivek Wadhwa, a research associate at Harvard University who has studied the topic. These repats, as they are known, are drawn by India’s booming economic growth, the chance to wrestle with complex problems and the opportunity to learn more about their heritage. They are joining multinational companies, starting new businesses and even becoming part of India’s sleepy government bureaucracy.

But a study by Mr. Wadhwa and other academics found that 34 percent of repats found it difficult to return to India — compared to just 13 percent of Indian immigrants who found it difficult to settle in the United States. The repats complained about traffic, lack of infrastructure, bureaucracy and pollution.

For many returnees the cultural ties and chance to do good that drew them back are overshadowed by workplace cultures that feel unexpectedly foreign, and can be frustrating. Sometimes returnees discover that they share more in their attitudes and perspectives with other Americans or with the British than with other Indians. Some stay just a few months, some return to the West after a few years.

Returnees run into trouble when they “look Indian but think American,” said Anjali Bansal, managing partner in India for Spencer Stuart, the global executive search firm. People expect them to know the country because of how they look, but they may not be familiar with the way things run, she said. Similarly, when things don’t operate the way they do in the United States or Britain, the repats sometimes complain.

“India can seem to have a fairly ambiguous and chaotic way of working, but it works,” Ms. Bansal said. “I’ve heard people say things like ‘It is so inefficient or it is so unprofessional.’ ” She said it was more constructive to just accept customs as being different.

Sometimes, the better fit for a job in India is an expatriate who has experience working in emerging markets, rather than someone born in India who has only worked in the United States, she said.

While several Indian-origin authors have penned soul-searching tomes about their return to India, and dozens of business books exist for Western expatriates trying to do business here, the guidelines for the returning Indian manager or entrepreneur are still being drawn.

“Some very simple practices that you often take for granted, such as being ethical in day to day situations, or believing in the rule of law in everyday behavior, are surprisingly absent in many situations,” said Raju Narisetti, who was born in Hyderabad and returned to India in 2006 to found a business newspaper called Mint, which is now the country’s second-biggest business paper by readership.

He said he left earlier than he expected because of a “troubling nexus” of business, politics and publishing that he called “draining on body and soul.” He returned to the United States this year to join The Washington Post.

There are no shortcuts to spending lots of time working in the country, returnees say. “There are so many things that are tricky about doing business in India that it takes years to figure it out,” said Sanjay Kamlani, the co-chief executive of Pangea3, a legal outsourcing firm with offices in New York and Mumbai. Mr. Kamlani was born in Miami, where his parents emigrated from Mumbai, but he has started two businesses with Indian operations.

When Mr. Kamlani started hiring in India, he met with a completely unexpected phenomena: some new recruits would not show up for work on their first day. Then, their mothers would call and say they were sick for days in a row. They never intended to come at all, he realized, but “there’s a cultural desire to avoid confrontation,” he said.

The case of Mr. Ayyadurai, the M.I.T. lecturer, illustrates just how frustrating the experience can be for someone schooled in more direct, American-style management. After a long meeting with a top bureaucrat, who gave him a handwritten job offer, Mr. Ayyadurai signed on to the Council of Scientific and Industrial Research, or C.S.I.R., a government-financed agency that reports to the ministry of science.

The agency is responsible for creating a new company, called C.S.I.R.-Tech, to spin off profitable businesses from India’s dozens of public laboratories. Currently, the agency, which oversees 4,500 scientists, generates just $80 million in cash flow a year, even though its annual budget is the equivalent of half a billion dollars.

Mr. Ayyadurai said he spent weeks trying to get answers and responses to e-mail messages, particularly from the person who hired him, the C.S.I.R. director general, Samir K. Brahmachari. After several months of trying to set up a business plan for the new company with no input from his boss, he said, he distributed a draft plan to C.S.I.R.’s scientists asking for feedback, and criticizing the agency’s management.

Four days later, Mr. Ayyadurai was forbidden from communicating with other scientists. Later, he received an official letter saying his job offer was withdrawn.

The complaints in Mr. Ayyadurai’s paper could be an outline for what many inside and outside India say could be improved in some workplaces here: disorganization, intimidation, a culture where top directors’ decisions are rarely challenged and a lack of respect for promptness that means meetings start hours late and sometimes go on for hours with no clear agenda.

But going public with such accusations is highly unusual. Mr. Ayyadurai circulated his paper not just to the agency’s scientists but to journalists, and wrote about his situation to Prime Minister Manmohan Singh. India is “sitting on a huge opportunity” to create new businesses and tap into thousands of science and technology experts, Mr. Ayyadurai said, but a “feudal culture” is holding the country back.

Mr. Brahmachari said in an interview that Mr. Ayyadurai had misunderstood nearly everything — from his handwritten job offer, which he said was only meant to suggest what Mr. Ayyadurai could receive were he to be hired, to the way Mr. Ayyadurai asked scientists for their feedback on what the C.S.I.R. spinoff should look like.

To prove his point, Mr. Brahmachari, who was two hours late for an interview scheduled by his office, read from a government guide about decision-making in the organization. Mr. Ayyadurai didn’t follow protocol, he said. “As long as your language is positive for the organization I have no problem,” he added.

As the interview was closing, Mr. Brahmachari questioned why anyone would be interested in the situation, and then said he would complain to a reporter’s bosses in New York if she continued to pursue the story.

1. Fulbright scholar in new adventure By Anne Trafton | TechTalk, Sep 19 2007
   
2. Echomail Board Of Directors

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The Brain Boomerang By S. MITRA KALITA | Wall Street Journal, Dec 1 2009

"Nothin' like leaving America to make you love it, huh?" a former State Department official said to me last week. We were making small talk at a conference in New York.

I nodded in agreement. She was, after all, expressing something I often felt in my two years living in India. Back then, I longed for efficiency, electricity, bagels.

But I wasn't completely honest. And it took a visit from the Indian Prime Minister and ensuing media coverage on the "brain drain" of Indians from the U.S. to remind me that the reverse could also be true: Leaving India makes you love it, too. Hustle. Innovation. Growth. Golgappas.

It's taken me almost a year—background: born in the U.S., moved to India in 2006, moved back to the U.S. last year—to concede as much. As I left India, one reader wrote: "you seem to be addicted to the negatives of India. You are not at all attuned to the cautious optimism of India." Another: "Your observations were cliched and NRIesque."

Apparently, other returnees are also in culture shock. In a more honest-than-usual take on the phenomenon of repatriating, The New York Times wrote over the weekend: "….many Indians who spent most of their lives in North America and Europe are finding they can't go home again." These returnees, the article detailed, have trouble navigating creaky infrastructure and the infamous Indian bureaucracy. Meanwhile, columnist Venkatesan Vembu in the DNA newspaper implored NRIs last week to ignore Manmohan Singh's welcome mat; "don't come home," the article said, adding that the diaspora did more for India as ambassadors overseas.

Returnees' difficulties can be forgiven for the same reason that India intoxicates: it's always on the remake. The country my parents left in the 1970s was most certainly different than the one I arrived to in this decade—and that India was different from the one I left. The changes are often cosmetic, such as new roads, buildings, a bungalow razed up into three flats. But they can also be deep and pervade the national psyche. For example, India's air, albeit polluted, now exudes possibility. Youth can suddenly become deejays, designers, airline stewards, or all three. And so my cousin's plea for a job might be met by another cousin's scolding: "There are no handouts anymore. Figure out what you want to do and make it happen."

It's far from easy—but it is possible. That wasn't the case as recently as a decade ago.

Prakash Grama, who has lived between India and the U.S. for the last few years and is the CEO of SPAN Systems Corp., lauds Indians as "strong team players (who) help manage situations where roles are not clear or need to be switched frequently." That ability to reinvent themselves quickly and as needed will serve them well, especially when boom goes bust.

Mr. Grama, who now lives in Orange County, Calif., also cites Indians' "flexibility in working hours to meet the dynamic schedules. IT (information technology) people work until 7 p.m. on a daily basis and work weekends frequently."

Indeed, Indians are willing to slog. Once, I viewed the trait negatively, equating long hours with inefficiency. Then I returned to the U.S., where workers get a lot more done in a shorter amount of time, five-day work weeks to eight-hour days. But a certain complacency accompanies the work ethic, not the urgency I always sensed in India. As the recession and recovery force U.S. companies to remake their systems, even their very business models, their worst enemy will be such complacency. India, by contrast, takes less for granted, starting with the tap spewing water in the morning to the weekly paycheck. In turn, the need to survive with fewer resources breeds innovation. So too does another factor that has all but disappeared from so many U.S. industries—competition.

Every morning in New Delhi, I received nine English-language newspapers. And while I'd like to take some credit for motivating my staff, it was the marketplace that kept the heat on all of us. Here, in the U.S., the worst recession in a generation is cranking it even higher, forcing managers to renew focus on their core missions, their relevance to customers, overhaul their staffs and their skills. As I watch, I can't help but think they might want to look east to see how a largely lean, inexperienced and young work force has managed to keep the Indian economy churning (at 7.9% growth in the last quarter, no less).

To be sure, an expatriate entering the Indian workplace is hardly in for a smooth ride. Workers might not be direct enough to ask for a raise or more responsibility but they will be blunt enough to tell you that you look especially fat this week, or too thin, or too tired. And the desire to survive often leads to shortcuts and trumps teamwork. But that's where the western-educated Indian can come in, serving as the bridge between where the Indian workplace lags and where it still can go.

So by all means, go home. Help rebuild India. There will be frustrations, for sure, from corruption in business to government. But stick it out a few years and you might actually learn more than you impart. When that happens, don't forget to come back to your other home—and maybe you can help rebuild these United States, too.

S. Mitra Kalita is the deputy global economics editor at The Wall Street Journal. She can be reached at mitra.kalita@wsj.com.

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Dealing With Generation Why By SUNAM SARKAR | Wall Street Journal, Dec 1 2009

I find myself a bit of an anachronism in today's corporate world, having worked for all of three companies over the last 21 years. My parents' generation of course would have thought that was two too many, but these days when I interview people with six or seven years of experience and as many employers on their résumés I often wonder at the generational changes in outlook that drive these trends.

Invariably, when questioned on the reasons for these multiple job hops, the response is "for growth." Begging the question, what growth? But maybe that is where my thinking is outdated. Many of the interviewees operate not from a "what growth?" paradigm but rather from a "why loyalty?" paradigm. In an age when companies are routinely laying off workers and pink slips are an inherent part of the managerial lexicon, do organizations have the right to expect loyalty from their employees?

The questions in the minds of today's job seekers are;

• Why should I have to attain seniority to get responsibility?
• Why shouldn't I ply my trade where I get paid more?
• Why must my needs be subservient to the company's?
• Why is my career development to be entrusted to someone else?

In the face of such relentless though unspoken logic, what do managers and companies tend to do? Usually, we lack answers, since the questions are coming from very different mindsets to those that we operate from. All our training teaches us to look for stability in career patterns. Looming significantly in the mind is the amount that the company will spend on the training and development needs of each new recruit, only to see it being written off with an early exit. And finally, we expect longevity of service just because that has always been the way it's been.

Is it time for us to re-orient corporate thinking away from the concept of expecting blind loyalty till eternity? Youth has always been the irresistible force that sparks revolutions and maybe this is the opportunity for us to let go some of our long cherished tenets and accept the new reality.

An application of the Law of Diminishing Returns to the question of longevity of employment tenure should suggest that there is a point beyond which it is actually better to let go those who have been around for a while and are unlikely to make it further up the increasingly narrow pyramid of management hierarchy. Fresh perspective and insight are just as vital for the modern organization as is experience. Those moving out, too, take their enhanced skills and perspectives to their new employer and inject something new into their next workplace.

If corporations start looking at their people investments over shorter horizons, a lot of the angst felt on premature exits disappears. Each industry and each company can develop its own sweet spot, but if the expectation is for a mean job tenure of, for example, four years, investments should be aligned with that timeframe. A career plan can then be broken up into more manageable "job" or "role" plans with both the individual and the employer knowing exactly what the expectations are and what inputs will be provided to achieve them. For those whom the company believes can go up the pyramid there should be another four year plan, involving preferably a role change and the consequent enhancement of benefits.

In cases where the employee chooses to leave before the initial period is over, it still is a loss to the employer but a loss against a much smaller and more focused investment. This will be equally, if not more, compensated by those who continue beyond the first plan period. If the discipline of changing the role and responsibility is maintained, ensuring freshness and challenge, then the Law of Diminishing Returns does not kick in. Perhaps organizations will also recognize the hidden costs of a blind pursuit for loyalty, one of which is very often the exodus of younger talent who see their growth blocked by long serving but not necessarily inspirational superiors.

Gen Y is today pushing us to re-look at so many of our shibboleths that managers are often bewildered by the variety of issues they are confronted with. However, an approach that sees the opportunities arising out of these challenges invariably leads to refreshing and energizing actions that can only be good for the corporate world at large. And for management practitioners of Generations What, Why and all other eras in between.

Sunam Sarkar is chief financial officer of Apollo Tyres Ltd.

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Former British Chancellor of the Exchequer Nigel Lawson | Times of London, Nov 23 2009

The reason we use carbon-based energy is simply that it is far and away the cheapest source of energy, and is likely to remain so for the foreseeable future.

Switching to much more expensive energy may be acceptable for us in the developed world. But in the developing world, there are still tens of millions of people suffering from acute poverty, and from the consequences of such poverty, in the shape of preventable disease, malnutrition and premature death. So for the developing world, the overriding priority has to be the fastest feasible rate of economic development, which means, inter alia, using the cheapest available form of energy: carbon-based energy.

1. Can Countries Cut Carbon Emissions Without Hurting Economic Growth? Wall Street Journal, Sep 21 2009
2. India Not Counting on Others to Fund Carbon Cuts By RAKESH SHARMA | Wall Street Journal, Dec 1 2009
   
3. A Different Take on the U.S.-India Climate Change "Spat" By PAUL BECKETT | Wall Street Journal, Aug 5 2009
4. Can the U.S. and India Play Nice on Climate Change? By Jesse Zwick | New Republic, Nov 23 2009
   
5. Climate Calculus Times of India, Dec 1 2009
   
6. Moves by U.S., China induce India to do its bit on climate By Rama Lakshmi | Washington Post, Dec 2 2009
   
7. Climate Breakthrough: Obama and China Commit to Change by Mark Hertsgaard | Vanity Fair, Nov 23 2009
   
8. As Hu Jin Tao, Obama Prepare to Meet, World Public Gives China, US Low Marks on Climate Change World Public Opinion, Nov 13 2009
   
9. Europe Bypassed on Climate Summit By JAMES KANTER | New York Times, Dec 2 2009
   
10. Betting on Copenhagen By OLIVIA JUDSON | New York Times, Dec 2 2009
    
11. Target practice in Copenhagen By Eugene Robinson | Washington Post, Dec 1 2009
    
12. Global Warming Revolt Down Under
    Finally, the Liberal Party finds its voice on climate change.
    Wall Street Journal Editorial, Dec 2 2009
    
13. Global Warming Revolt
    A carbon tax faces new opposition.
    Wall Street Journal Editorial, Dec 2 2009
    

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The Climate Science Isn't Settled
Confident predictions of catastrophe are unwarranted.
By RICHARD S. LINDZEN | Wall Street Journal, Dec 1 2009

Is there a reason to be alarmed by the prospect of global warming? Consider that the measurement used, the globally averaged temperature anomaly (GATA), is always changing. Sometimes it goes up, sometimes down, and occasionally—such as for the last dozen years or so—it does little that can be discerned.

Claims that climate change is accelerating are bizarre. There is general support for the assertion that GATA has increased about 1.5 degrees Fahrenheit since the middle of the 19th century. The quality of the data is poor, though, and because the changes are small, it is easy to nudge such data a few tenths of a degree in any direction. Several of the emails from the University of East Anglia's Climate Research Unit (CRU) that have caused such a public ruckus dealt with how to do this so as to maximize apparent changes.

The general support for warming is based not so much on the quality of the data, but rather on the fact that there was a little ice age from about the 15th to the 19th century. Thus it is not surprising that temperatures should increase as we emerged from this episode. At the same time that we were emerging from the little ice age, the industrial era began, and this was accompanied by increasing emissions of greenhouse gases such as CO2, methane and nitrous oxide. CO2 is the most prominent of these, and it is again generally accepted that it has increased by about 30%.

The defining characteristic of a greenhouse gas is that it is relatively transparent to visible light from the sun but can absorb portions of thermal radiation. In general, the earth balances the incoming solar radiation by emitting thermal radiation, and the presence of greenhouse substances inhibits cooling by thermal radiation and leads to some warming.

That said, the main greenhouse substances in the earth's atmosphere are water vapor and high clouds. Let's refer to these as major greenhouse substances to distinguish them from the anthropogenic minor substances. Even a doubling of CO2 would only upset the original balance between incoming and outgoing radiation by about 2%. This is essentially what is called "climate forcing."

There is general agreement on the above findings. At this point there is no basis for alarm regardless of whether any relation between the observed warming and the observed increase in minor greenhouse gases can be established. Nevertheless, the most publicized claims of the U.N.'s Intergovernmental Panel on Climate Change (IPCC) deal exactly with whether any relation can be discerned. The failure of the attempts to link the two over the past 20 years bespeaks the weakness of any case for concern.

The IPCC's Scientific Assessments generally consist of about 1,000 pages of text. The Summary for Policymakers is 20 pages. It is, of course, impossible to accurately summarize the 1,000-page assessment in just 20 pages; at the very least, nuances and caveats have to be omitted. However, it has been my experience that even the summary is hardly ever looked at. Rather, the whole report tends to be characterized by a single iconic claim.

The main statement publicized after the last IPCC Scientific Assessment two years ago was that it was likely that most of the warming since 1957 (a point of anomalous cold) was due to man. This claim was based on the weak argument that the current models used by the IPCC couldn't reproduce the warming from about 1978 to 1998 without some forcing, and that the only forcing that they could think of was man. Even this argument assumes that these models adequately deal with natural internal variability—that is, such naturally occurring cycles as El Nino, the Pacific Decadal Oscillation, the Atlantic Multidecadal Oscillation, etc.

Yet articles from major modeling centers acknowledged that the failure of these models to anticipate the absence of warming for the past dozen years was due to the failure of these models to account for this natural internal variability. Thus even the basis for the weak IPCC argument for anthropogenic climate change was shown to be false.

Of course, none of the articles stressed this. Rather they emphasized that according to models modified to account for the natural internal variability, warming would resume—in 2009, 2013 and 2030, respectively.

But even if the IPCC's iconic statement were correct, it still would not be cause for alarm. After all we are still talking about tenths of a degree for over 75% of the climate forcing associated with a doubling of CO2. The potential (and only the potential) for alarm enters with the issue of climate sensitivity—which refers to the change that a doubling of CO2 will produce in GATA. It is generally accepted that a doubling of CO2 will only produce a change of about two degrees Fahrenheit if all else is held constant. This is unlikely to be much to worry about.

Yet current climate models predict much higher sensitivities. They do so because in these models, the main greenhouse substances (water vapor and clouds) act to amplify anything that CO2 does. This is referred to as positive feedback. But as the IPCC notes, clouds continue to be a source of major uncertainty in current models. Since clouds and water vapor are intimately related, the IPCC claim that they are more confident about water vapor is quite implausible.

There is some evidence of a positive feedback effect for water vapor in cloud-free regions, but a major part of any water-vapor feedback would have to acknowledge that cloud-free areas are always changing, and this remains an unknown. At this point, few scientists would argue that the science is settled. In particular, the question remains as to whether water vapor and clouds have positive or negative feedbacks.

The notion that the earth's climate is dominated by positive feedbacks is intuitively implausible, and the history of the earth's climate offers some guidance on this matter. About 2.5 billion years ago, the sun was 20%-30% less bright than now (compare this with the 2% perturbation that a doubling of CO2 would produce), and yet the evidence is that the oceans were unfrozen at the time, and that temperatures might not have been very different from today's. Carl Sagan in the 1970s referred to this as the "Early Faint Sun Paradox."

For more than 30 years there have been attempts to resolve the paradox with greenhouse gases. Some have suggested CO2—but the amount needed was thousands of times greater than present levels and incompatible with geological evidence. Methane also proved unlikely. It turns out that increased thin cirrus cloud coverage in the tropics readily resolves the paradox—but only if the clouds constitute a negative feedback. In present terms this means that they would diminish rather than enhance the impact of CO2.

There are quite a few papers in the literature that also point to the absence of positive feedbacks. The implied low sensitivity is entirely compatible with the small warming that has been observed. So how do models with high sensitivity manage to simulate the currently small response to a forcing that is almost as large as a doubling of CO2? Jeff Kiehl notes in a 2007 article from the National Center for Atmospheric Research, the models use another quantity that the IPCC lists as poorly known (namely aerosols) to arbitrarily cancel as much greenhouse warming as needed to match the data, with each model choosing a different degree of cancellation according to the sensitivity of that model.

What does all this have to do with climate catastrophe? The answer brings us to a scandal that is, in my opinion, considerably greater than that implied in the hacked emails from the Climate Research Unit (though perhaps not as bad as their destruction of raw data): namely the suggestion that the very existence of warming or of the greenhouse effect is tantamount to catastrophe. This is the grossest of "bait and switch" scams. It is only such a scam that lends importance to the machinations in the emails designed to nudge temperatures a few tenths of a degree.

The notion that complex climate "catastrophes" are simply a matter of the response of a single number, GATA, to a single forcing, CO2 (or solar forcing for that matter), represents a gigantic step backward in the science of climate. Many disasters associated with warming are simply normal occurrences whose existence is falsely claimed to be evidence of warming. And all these examples involve phenomena that are dependent on the confluence of many factors.

Our perceptions of nature are similarly dragged back centuries so that the normal occasional occurrences of open water in summer over the North Pole, droughts, floods, hurricanes, sea-level variations, etc. are all taken as omens, portending doom due to our sinful ways (as epitomized by our carbon footprint). All of these phenomena depend on the confluence of multiple factors as well.

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Consider the following example. Suppose that I leave a box on the floor, and my wife trips on it, falling against my son, who is carrying a carton of eggs, which then fall and break. Our present approach to emissions would be analogous to deciding that the best way to prevent the breakage of eggs would be to outlaw leaving boxes on the floor. The chief difference is that in the case of atmospheric CO2 and climate catastrophe, the chain of inference is longer and less plausible than in my example.
Mr. Lindzen is professor of meteorology at the Massachusetts Institute of Technology.

1. The Science Behind the IPCC Climate Report Is Sound Letter | Wall Street Journal, Dec 7 2009
   
2. A heated debate The Economist, Nov 27 2009
   

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The Web Discloses Inconvenient Climate Truths
The world cannot trust scientists who abuse their power.
By L. GORDON CROVITZ | Wall Street Journal, NOV 30 2009

For anyone who doubts the power of the Internet to shine light on darkness, the news of the month is how digital technology helped uncover a secretive group of scientists who suppressed data, froze others out of the debate, and flouted freedom-of-information laws. Their behavior was brought to light when more than 1,000 emails,and some 3,500 additional files were published online, many of which boasted about how they suppressed hard questions about their data.

The emails, released by an apparent whistle-blower who used the name "FOI," were written by scientists at the Climate Research Unit of the University of East Anglia in England. Its scientists are high-profile campaigners for the theory of global warming.

The findings from East Anglia have been at the core of policy reports by the U.N.'s Intergovernmental Panel on Climate Change. The IPCC does not do its own research but compiles information relating to climate change. It has declared the evidence that the globe is warming to be "unequivocal," a claim routinely cited by lawmakers in the U.S. and elsewhere as authoritative.

The IPCC stresses honest science. According to its Web site, its goal is to "assess on a comprehensive, objective, open and transparent basis the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation."

The panel, which shared the 2007 Nobel Peace Prize with Al Gore, now faces the inconvenient truth that it relied on scientists who violated scientific process. In one email, the Climate Research Unit's director, Phil Jones, wrote Michael Mann of Pennsylvania State University, promising to spike studies that cast doubt on the relationship between human activity and global warming. "I can't see either of these papers being in the next IPCC report," he said. He pledged to "keep them out somehow—even if we have to redefine what the peer-review literature is!"

In another email exhange, Mr. Mann wrote to Mr. Jones: "This was the danger of always criticizing the skeptics for not publishing in the 'peer-reviewed literature.' Obviously, they found a solution to that—take over a journal! So what do we do about this? I think we have to stop considering 'Climate Research' as a legitimate peer-reviewed journal. Perhaps we should encourage our colleagues in the climate research community to no longer submit to, or cite papers in, this journal."

Other emails include one in which Keith Briffa of the Climate Research Unit told Mr. Mann that "I tried hard to balance the needs of the science and the IPCC, which were not always the same," and in which Mr. Jones said he had employed Mr. Mann's "trick" to "hide the decline" in temperatures. A May 2008 email from Mr. Jones with the subject line "IPCC & FOI" asked recipients to "delete any emails you may have had" about data submitted for an IPCC report. The British Freedom of Information Act makes it a crime to delete material subject to an FOI request; such a request had been made earlier that month.

Over the weekend, East Anglia officials disclosed they had disposed years ago of the historic weather data underlying their analysis. This may be one reason they've fought information requests. They say they'll release the data they still have some time next year.

The emails showed how the global-warming group stifled dissent. They controlled the peer-review process, keeping opposing views unpublished, then cited "peer review" as evidence of their "consensus." One of the dissident scientists, Roger Pielke of the University of Colorado, wrote on his blog that the emails show the "collusion to suppress other scientifically supported views of the climate system, and the human role within it, is a systemic problem with the climate assessment process."

These disclosures have led to some soul-searching. "Opaqueness and secrecy are the enemies of science," wrote George Monbriot, a leading British environmentalist. "There is a word for the apparent repeated attempts to prevent disclosure revealed in these emails: unscientific." Demetris Koutsoyiannis, a hydraulic engineer who has written on climate change, wrote that scientists who suppressed others "must have felt that this secrecy was their best weapon: to censor differing opinions, to develop 'trick' procedures, to 'balance' the needs of the IPCC, and even to 'redefine' peer review."

This unseemly business reveals another flaw. Why are scholars who review papers allowed to remain anonymous? Reforming scientists and lawmakers might put the question more concretely: How many of the anonymous reviewers who spiked skeptical scientific papers over the years are the people who wrote these emails detailing how they abused peer review to block contrary evidence?

Science was one of the first disciplines to insist on transparency in order to foster competition in data and ideas. In the case of global warming, transparency is better late than never, as policy makers now have the chance to review the facts. Facing up to high-profile flaws is hard for any profession, but honest scientists will cheer how in our digital era eventually the truth will out, and will accept that no scientific hypothesis can be viewed as sacred or can be proved in secret.

1. Feynman on Scientific Integrity By Peter Pearson | Wall Street Journal, Dec 3 2009
   
2. Scientist steps down during e-mail probe
   Hacked messages about global warming caused controversy
   By Juliet Eilperin | Washington Post, Dec 2 2009
   
3. Climatologist Leaves Post in Inquiry Over E-Mail Leaks By JOHN M. BRODER | New York Times, Dec 2 2009
   
4. Climate-Change Scientist Steps Aside Amid Probe By KEITH JOHNSON | WSJ, Dec 2 2009
   
5. University Plans Climate Data Probe By GUY CHAZAN | Wall Street Journal, Dec 4 2009
6. Lawmakers Probe Climate Emails By KEITH JOHNSON and GAUTAM NAIK | Wall Street Journal, Nov 24 2009
   
7. Climategate: The White House Stonewalls with Stupidity By Roger Simon | PJM, Dec 1 2009
   
8. Democrats: "ClimateGate" Leak A Non-Scandal By Declan McCullagh | CBS News, Dec 3 2009
   
9. Obama Science Adviser Urges Climate Action Amid Uproar By STEPHEN POWER | Wall Street Journal, Dec 3 2009
10. Furor Over Climate Triggers U.K. Probe By GUY CHAZAN | Wall Street Journal, Dec 6 2009
11. U.N. Panel to Probe Claims on Manipulating Climate Data By GUY CHAZAN | Wall Street Journal, Dec 5 2009
12. I Pledge Allegiance to Global Warming
    British scientists sign a government loyalty oath.
    By JAMES TARANTO | Wall Street Journal, Dec 11 2009

[Macaca]

The Economics of Climate Change
The stakes are too high to treat Climategate as just another academic spat.
Wall Street Journal Editorial, Dec 1 2009

The emails and documents leaked last week from some of the world's leading climatologists offer a rich trove of evidence that scientists were massaging the data and corrupting the scientific process to support their own preconceptions. But they also offer the beginnings of an explanation for why. In the words of another famous leaker, follow the money.

On its Web site, the University of East Anglia's Climate Research Unit describes how it could barely make ends meet for most of the years since it was founded in 1972, and how most researchers weren't even guaranteed salaries in the early years. "Since 1994, the situation has improved," CRU writes. Why 1994? That was the year the U.N.'s climate change convention came into force. Since then, it has been boom times for those lucky enough to have gotten in on the ground floor of a growth industry powered by grants from governments eager to understand just how quickly we were overheating the planet.

In the 1990s, CRU director Phil Jones helped bring in £1.9 million ($3.1 million) for climate research. But in this decade, according to one of the leaked documents, the total shot up to £11.8 million, including grants from the U.K. National Environmental Research Council, the U.S. Department of Energy and NATO. Another leaked spreadsheet for CRU researcher Tim Osborn shows a similar pattern. Between 1994 and 2000, Mr. Osborn secured research contracts totaling £173,881. Between 2001 and 2007, the last year covered by the file, his haul jumped to £764,055.

Or consider the cash that Michael Mann—another climate establishment figure whose name comes up frequently in the leaked emails—has helped pulled for Penn State University. In 2000, before Mr. Mann joined the faculty, the university banked $20.4 million in research funding for environmental sciences. By 2007, two years after he came on board, Penn State counted more than $55 million a year for environmental research, much of it government funded.

To keep this money flowing, climate scientists needed to keep the fear going. Anything that called into question their most dire predictions of climate catastrophe would put all that funding at risk. On the other hand, the bigger the climate calamity, the more willing governments became to fund global-warming research. Keeping the dissenters on the outside was not simply a matter of academic jealousy. It was in many cases a question of professional survival.

In 1988-1989, the U.S. ponied up 199,500 Swiss francs ($198,995) to the U.N.'s Intergovernmental Panel on Climate Change, or IPCC. By the end of Bill Clinton's and Al Gore's tenure in the White House, America's annual offering to the international global warming authority had ballooned more than 2,600%—to 5.42 million Swiss francs in 2000-2001. The very earth hung in the balance, after all.

The gusher of money that has flowed into climate research does not, by itself, impeach the conclusions reached by the scientists. But it does make clear just how much their professional fortunes became tied to the notion of climate catastrophe. It was the fear of catastrophic climate change, after all, that unleashed the rising ocean of money by which their research came to be funded. Findings that might call the hysteria into question would also, perforce, put at risk the flow of funds into their field.

According to the old quip, the disputes in academia are so vicious because the stakes are so low. In this case, the money trail suggests the reverse—the scientists were so protective of their theory because the stakes had become so high. Under those circumstances, it's no wonder they were tempted to "hide the decline" in temperatures and keep their critics out of the peer-reviewed literature.

For the world's economy, of course, trillions of dollars are now at stake in pursuit of emissions reductions based on the flawed science that these leaked emails have helped lay bare. For the rest of the world too, the stakes are too high to treat this as just another academic spat.

[Macaca]

The Science and Politics of Climate Change
Science never writes closed textbooks. It does not offer us a holy scripture, infallible and complete.
By MIKE HULME | Wall Street Journal, Dec 3 2009

I am a climate scientist who worked in the Climatic Research Unit (CRU) at the University of East Anglia in the 1990s. I have been reflecting on the bigger lessons to be learned from the stolen emails, some of which were mine. One thing the episode has made clear is that it has become difficult to disentangle political arguments about climate policies from scientific arguments about the evidence for man-made climate change and the confidence placed in predictions of future change. The quality of both political debate and scientific practice suffers as a consequence.

Surveys of public opinion on both sides of the Atlantic about man-made climate change continue to tell us something politicians know only too well: The citizens they rule over have minds of their own. In the U.K., a recent survey suggested that only 41% believed humans are causing climate change, 32% remained unsure and 15% were convinced we aren't. Similar surveys in the U.S. have shown a recent reduction in the number of people believing in man-made climate change.

One reaction to this "unreasonableness" is to get scientists to speak louder, more often, or more dramatically about climate change. Another reaction from government bodies and interest groups is to use ever-more-emotional campaigning. Thus both the U.K. government's recent "bedtime stories" adverts, and Plane Stupid's Internet campaign showing polar bears falling past twin towers, have attracted widespread criticism for being too provocative and scary. These instinctive reactions fail to place the various aspects of our knowledge about climate change—scientific insights, political values, cultural moods, personal beliefs—in right relationship with each other. Too often, when we think we are arguing over scientific evidence for climate change, we are in fact disagreeing about our different political preferences, ethical principles and value systems.

If we build the foundations of our climate-change policies so confidently and so single-mindedly on scientific claims about what the future holds and what therefore "has to be done," then science will inevitably become the field on which political battles are waged. The mantra becomes: Get the science right, reduce the scientific uncertainties, compel everyone to believe it. . . and we will have won. Not only is this an unrealistic view about how policy gets made, it also places much too great a burden on science, certainly on climate science with all of its struggles with complexity, contingency and uncertainty.

The events of the last few of weeks, involving stolen professional correspondence between a small number of leading climate scientists—so-called climategate—demonstrate my point. Both the theft itself and the alleged contents of some of the stolen emails reveal the strong polarization and intense antagonism now found in some areas of climate science.

Climate scientists, knowingly or not, become proxies for political battles. The consequence is that science, as a form of open and critical enquiry, deteriorates while the more appropriate forums for ideological battles are ignored.

We have also seen how this plays out in public debate. In the wake of climategate, questions were asked on the BBC's Question Time last week about whether or not global warming was a scam. The absolutist claims of two of the panelists—Daily Mail journalist Melanie Phillips, and comedian and broadcaster Marcus Brigstocke—revealed how science ends up being portrayed as a fight between two dogmas: Either the evidence for man-made climate change is all fake, or else we are so sure we know how the planet works that we can claim to have just five or whatever years to save it. When science is invoked to support such dogmatic assertions, the essential character of scientific knowledge is lost—knowledge that results from open, always questioning, enquiry that, at best, can offer varying levels of confidence for pronouncements about how the world is, or may become.

The problem then with getting our relationship with science wrong is simple: We expect too much certainty, and hence clarity, about what should be done. Consequently, we fail to engage in honest and robust argument about our competing political visions and ethical values.

Science never writes closed textbooks. It does not offer us a holy scripture, infallible and complete. This is especially the case with the science of climate, a complex system of enormous scale, at every turn influenced by human contingencies. Yes, science has clearly revealed that humans are influencing global climate and will continue to do so, but we don't know the full scale of the risks involved, nor how rapidly they will evolve, nor indeed—with clear insight—the relative roles of all the forcing agents involved at different scales.

Similarly, we endow analyses about the economics of climate change with too much scientific authority. Yes, we know there is a cascade of costs involved in mitigating, adapting to or ignoring climate change, but many of these costs are heavily influenced by ethical judgements about how we value things, now and in the future. These are judgments that science cannot prescribe.

The central battlegrounds on which we need to fight out the policy implications of climate change concern matters of risk management, of valuation, and political ideology. We must move the locus of public argumentation here not because the science has somehow been "done" or "is settled"; science will never be either of these things, although it can offer powerful forms of knowledge not available in other ways. It is a false hope to expect science to dispel the fog of uncertainty so that it finally becomes clear exactly what the future holds and what role humans have in causing it. This is one reason why British columnist George Monbiot wrote about climategate, "I have seldom felt so alone." By staking his position on "the science," he feels alone and betrayed when some aspect of the science is undermined.

If climategate leads to greater openness and transparency in climate science, and makes it less partisan, it will have done a good thing. It will enable science to function in the effective way it must do in public policy deliberations: Not as the place where we import all of our legitimate disagreements, but one powerful way of offering insight about how the world works and the potential consequences of different policy choices. The important arguments about political beliefs and ethical values can then take place in open and free democracies, in those public spaces we have created for political argumentation.

Mr. Hulme, author of "Why We Disagree About Climate Change," is professor of climate change at the University of East Anglia.

1. Climategate: Science Is Dying
   Science is on the credibility bubble.
   By DANIEL HENNINGER | Wall Street Journal, Dec 3 2009