GE's not General Powel, saved us from Armageddon

Ray Suarez talks with New York Times columnist Thomas Friedman about
his overseas reporting trip to the island nation of Sri Lanka and the
Indian cities Bangalore and New Delhi.

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RAY SUAREZ: This trip took Tom Friedman to the island nation of Sri
Lanka and the Indian cities of Bangalore and New Delhi.

Tom, let's start in Sri Lanka. When it made the American newscasts or
newspaper pages at all, it was usually a story of a terrible terrorism
problem or a long civil war. Is that still the headline today?

THOMAS FRIEDMAN: Well, it's not. That's actually the good news, Ray.
We forget that suicide terrorism which began in the Middle East, was
actually perfected in Sri Lanka by the Tamil Tiger separatist movement
trying for a Tamil country in Sri Lanka. When I say perfected it, they
really perfected it. They killed about 1,500 people through suicide
terrorism. They actually filmed many of their suicide killings,
including the killing of Rajiv Gandhi; their sort of cult leader, Mr.
Brabakaran, would have dinner the night before suicides with his
bombers, and they really made this a devastating, devastating tool of
warfare.

Fortunately though, last December they agreed on a cease-fire and
things have calmed down there enormously. It's still just a
cease-fire. There is no peace yet. There is no final peace yet.
Everyone is quite nervous. There is an air of optimism, an air that
something is over. The mandate of heaven has been taken away from the
gunmen and from the government army and people really want this thing
over.

RAY SUAREZ: How did they break the cycle? There would be a spate of
these terror killings or an advance by the guerrilla army, then a
counteroffensive by the national army, the state army of Sri Lanka and
went back and forth like that for many years. What made them finally

THOMAS FRIEDMAN: Many things. Part of it was just a sheer stalemate.
The government recognized the only way to stop suicide bombings is if
the Tamil Tigers did it themselves. They had no military means to do
it. How do you stop people who want to kill themselves? We have the
same problem in the Middle East. And the Tamils realized they could
not even hold their ethnic capital, Joffna in Northeast Sri Lanka. So
there was clearly a stalemate on the ground.

One of the biggest things that happened was 9/11. Basically, the
combination of September 11 and the whole delegitimatization globally
of this idea of suicide bombing and at the same time the fact that the
United States, India, Australia and Canada had named the Tamil tigers
as a terrorist group, and that's something that really alienated the
Tamil Diaspora in India, in North America, and in Europe, which had
been the main funders of the Tigers. These are middle class
entrepreneurial professional people. They said wait a minute, if
that's what this movement is about, we are going to take a step back
here, which they did. They withdrew the funding. And that really
forced the Tigers to the negotiating table.

RAY SUAREZ: Next you went on to Bangalore -- and Bangalore, again, not
a place on a lot of Americans radar screens but maybe we should speak
of it in the same breath as we do San Jose.

THOMAS FRIEDMAN: Well, we are a lot more connected to Bangalore than
people realize. If you lose your luggage on British Air or Swissair,
the person who answers the phone to track it down is in Bangalore. If
you have got a problem with your Dell computer, the person on the
other end of the phone you're talking to is an Indian in Bangalore.

Bangalore is India's Silicon Valley. And it's a remarkable place. I
mean, you know, I have kind of Friedman's rule of motor scooters, and
that is when you go to a developing country and you see a lot of
motorcycles around, that's like the best sign possible, because what
it is a sign of is kind of young, lower middle class people who have
left the countryside, come to the city and found jobs. And they found
jobs enough to give up the bicycle and buy a motor scooter. And
Bangalore is full of motor scooters.

The city produces about 40,000 young tech grads every year from
different engineering and computer schools, all of whom get absorbed
in this Silicon Valley there that is really providing the research and
the backroom capability for a lot of American corporations from
Bangalore, from the campuses of companies called Wipro and Infosys and
Mindtree, they're actually running the inventory, the accounts
receivable, the payroll, a lot of the human resources for big American
companies.

RAY SUAREZ: Like?

THOMAS FRIEDMAN: Like GE, GE Capital, like the Hong Kong Shanghai
Bank, like Sony, like Reebok, like American Express. And you go to
their campuses, I mean you go to the Infosys campus, you walk in, and
the first thing you see is a little par 3 hole. Then you see beautiful
manicured lawns, a food court with TGI Fridays and Domino's Pizza, an
incredible exercise hall and building after building. And they
literally point out that's the GE back room over there, that's
American Express's backroom over there. You have 300 people working
these buildings; they work on 24-hour cycles. And they're now the
backroom of these companies.

So the old days when we thought of India as maybe what they call doing
software coolies, writing very, sort of basic software code, they are
gradually moving up the food chain to really appropriate using their
minds, all of the backroom functions of major American companies,
leaving the American companies, the front end, to focus on marketing
and sort of primary design, you know close to their marketplace.

But even now you've got Indian companies sending people from India now
to the American company to even, you know, take up more and more of
that business. But what that means is that the intimacy with which we
are integrated with India and India with us is far, far greater than
ever before.

RAY SUAREZ: But this new thing must have been under threat during the
time when the State Department was saying to Americans, well maybe you
shouldn't go to India, at the time when our newspapers were full of,
as the bible says, war and rumors of war.

THOMAS FRIEDMAN: It's true. I was out with some Indian industrialists
one afternoon and the first thing they said to me-- I got kind of
bombarded from this the minute I walked into Bangalore - was -- what
exactly was the U.S. Government, the State Department and the U.S.
Embassy and New Delhi up to when they issued a travel warning on May
31, warning, you know, Americans, basically to get out of India
because a war with Pakistan was likely? There wasn't going to be a war
here. Nuclear war? Why, are you crazy, man, as one Indian business
said to me. We're talking about nuclear weapons! Are you crazy? When
you're down in Bangalore, you do get this sense there that nuclear war
was actually quite far away.

Nevertheless, they really got, I would say, an introduction, and most
importantly, the aging Indian Hindu national leaders in New Delhi, I
think, got an introduction that they really-- of something they didn't
really grasp fully before and that is just how intimately India is
connected to the United States and the world and that just the rumor
of war can have a huge impact on the Indian economy.

One thing that struck me when I was there, Ray, I was staying at a big
tourist hotel in Bangalore and in New Delhi -- no tourists around at
all. I believe I was the only American in the Imperial Hotel when I
was there in New Delhi. So just the rumor of war has had a huge impact
on the Indian economy, and that's why ever since that State Department
travel warning, if you notice, the Indian government has zipped it up.
There is no more talk about nukes, no more talk about war. And, in
fairness to the Indians, this is a problem for them, because there is
a real asymmetry between India and Pakistan.

India has this really high-tech economy now - I mean at the far end.
It also has a huge low tech agricultural-- 70 percent of Indians,
let's remember, still live in the countryside in villages but at the
cutting edge, it has got this high-tech economy connected to the
world. It's a country that really is hard wired basically to take
advantage educationally, culturally, in terms of democracy and
secularism, really to take advantage of the 21st century. But it has
got a neighbor that's really been failing at modernization, failing at
democracy. And they are very vulnerable to Pakistan now because any
threat of war from Pakistan can really create real problems and havoc
for India.

RAY SUAREZ: Well, you know, when you travel to Silicon Valley, they
talk about what people in Washington, like they are really far away
and on a different planet. When you went from Bangalore to New Delhi,
was there a similar kind of shift?

THOMAS FRIEDMAN: Absolutely. You get to New Delhi and you do again
feel like you're in the capital, you're away from the entrepreneurial
heartbeat of the country. And everyone is really just focused on
Pakistan, and the gentleman who you just had a segment on, President
Musharraf of India.

And what always strikes me when I'm in New Delhi is that Indians talk
about Musharraf exactly the way Israelis talk about Yasser Arafat. It
is kind of you can't possibly trust this guy. You know, don't you
realize he is a terrorist, et cetera, et cetera. I'm sure-- listen,
this is a country whose parliament, let us not forget, was attacked -
you know -- by pro-Pakistani militants just this last year. So even
paranoids have enemies and India has real enemies here that they have
to and legitimately worry about. But you do feel in New Delhi that
people have been talking to themselves there a lot there. There is an
obsession with Pakistan that strikes me as a little bit out of order
in that India is such a big country-

RAY SUAREZ: But New Delhi is a lot closer than Bangalore.

THOMAS FRIEDMAN: Absolutely - no question -- it is closer but it
always strikes me about India that it could and should-- it's got a
lot to be proud of. It's managed to maintain a democracy in this
teeming multiethnic, multilingual society for lo these 50 odd years
and it is really actually very impressive. One of the things that
strikes me is that the Indians should be more self-confident than they
are, more self-confident vis-à-vis Pakistan -- more self-confident
vis-à-vis the United States. There is a lot of worry about the
U.S.-India relationship.

You really feel when you're there, Ray, talking to people, how young
this relationship is, how during all the years of the Cold War, we
were really alienated from each other when in fact our two countries
have an enormous amount in common - I mean, you know, basically
multiethnic, multiracial democracies built around a high degree of
federalism and Lord knows we have differences as well but we have a
lot in common with India today.

RAY SUAREZ: Multiethnic, multiracial democracy but at the same time
there were religious riots in India over the past year between Muslims
and Hindus. The government of Atal Vajpayee, a Hindu nationalist
government, has moved more toward the tendency with the elevation of
Lau Krishna Avani to more influence within the government. Aren't
there sort of competing forces for India's attention that way?

THOMAS FRIEDMAN: Definitely. But let's look what happened. There were
riots between Hindus and Muslims in Gujarat earlier this year in
February. 60 odd Hindus were killed, maybe 600,000 to a thousand
Muslims. It was terrible, pogrom really instigated by the Hindu
nationalists in Gujarat. What happened? What happened? Nothing
happened. That violence not only did not spread around Gujarat, it
didn't spread anywhere else in India. I think that's a very, very
positive sign. And that's a sign that people in the rest of India not
only are their cultural ties that's still bind Hindus and Muslims in
villages. There has been a lot of mixing of faiths and whatnot. But
most importantly, it's about democracy, that's about free markets,
that's about people with something better to do.

RAY SUAREZ: Tom Friedman, thanks for coming by.

THOMAS FRIEDMAN: A pleasure, thank you.

http://www.nytimes.com/2002/08/11/opinion/11FRIE.html?
ex=1030184358&ei=1&en=4557d7e03e8af1ae
India, Pakistan and G.E.

By THOMAS L. FRIEDMAN

"BANGALORE, India Two months ago India and Pakistan appeared headed
for a nuclear war. Colin Powell, the U.S. secretary of state and a
former general, played a key role in talking the two parties back from
the brink. But here in India, I've discovered that there was another
new, and fascinating, set of pressures that restrained the Indian
government and made nuclear war, from its side, unthinkable. Quite
simply, India's huge software and information technology industry,
which has emerged over the last decade and made India the back-room
and research hub of many of the world's largest corporations,
essentially told the nationalist Indian government to cool it. And the
government here got the message and has sought to de-escalate ever
since. That's right in the crunch, it was the influence of General
Electric, not General Powell, that did the trick.

This story starts with the fact that, thanks to the Internet and
satellites, India has been able to connect its millions of educated,
English-speaking, low-wage, tech-savvy young people to the world's
largest corporations. They live in India, but they design and run the
software and systems that now support the world's biggest companies,
earning India an unprecedented $60 billion in foreign reserves which
doubled in just the last three years. But this has made the world more
dependent on India, and India on the world, than ever before.

If you lose your luggage on British Airways, the techies who track it
down are here in India. If your Dell computer has a problem, the
techie who walks you through it is in Bangalore, India's Silicon
Valley. Ernst & Young may be doing your company's tax returns here
with Indian accountants. Indian software giants in Bangalore, like
Wipro, Infosys and MindTree, now manage back-room operations
accounting, inventory management, billing, accounts receivable,
payrolls, credit card approvals for global firms like Nortel Networks,
Reebok, Sony, American Express, HSBC and GE Capital.

You go to the Bangalore campuses of these Indian companies and they
point out: "That's G.E.'s back room over here. That's American
Express's back office over there." G.E.'s biggest research center
outside the U.S. is in Bangalore, with 1,700 Indian engineers and
scientists. The brain chip for every Nokia cellphone is designed in
Bangalore. Renting a car from Avis online? It's managed here.

So it was no wonder that when the State Department issued a travel
advisory on May 31 warning Americans to leave India because the war
prospects had risen to "serious levels," all these global firms who
had moved their back rooms to Bangalore went nuts.

"That day," said Vivek Paul, vice chairman of Wipro, "I had a C.I.O.
[chief information officer] from one of our big American clients send
me an e-mail saying: `I am now spending a lot of time looking for
alternative sources to India. I don't think you want me doing that,
and I don't want to be doing it.' I immediately forwarded his letter
to the Indian ambassador in Washington and told him to get it to the
right person."

No wonder. For many global companies, "the main heart of their
business is now supported here," said N. Krishnakumar, president of
MindTree. "It can cause chaos if there is a disruption." While not
trying to meddle in foreign affairs, he added, "what we explained to
our government, through the Confederation of Indian Industry, is that
providing a stable, predictable operating environment is now the key
to India's development."

This was a real education for India's elderly leaders in New Delhi,
but, officials conceded, they got the message: loose talk about war or
nukes could be disastrous for India. This was reinforced by another
new lobby: the information technology ministers who now exist in every
Indian state to drum up business.

"We don't get involved in politics," said Vivek Kulkarni, the
information technology secretary for Bangalore, "but we did bring to
the government's attention the problems the Indian I.T. industry might
face if there were a war. . . . Ten years ago [a lobby of I.T.
ministers] never existed."

To be sure, none of this guarantees there will be no war. Tomorrow,
Pakistani militants could easily do something so outrageous and
provocative that India would have to retaliate. But it does guarantee
that India's leaders will now think 10 times about how they respond,
and if war is inevitable, that India will pay 10 times the price it
would have paid a decade ago.

In the meantime, this cease-fire is brought to you by G.E. and all its
friends here in Bangalore."

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