What after Mumbai? Part I

The Mumbai attacks that began on November 26th have severely dented the confidence of Indians, as a country and a society, to continually better their overall quality of life (or existence - take your pick). A huge contributing factor in creating that dent is the increasing lack of trust among Indians in their government's will and ability in somehow bringing an end to the almost monthly terror attacks. There is a perception that major cities are being targeted on some kind of a rotation-policy basis and there seems to be nothing that anyone is doing or has been able to do about it all. The government has been feeling the heat from all quarters. They are being forced to act in improving security on all aspects, from internal policing to external threat assessments, from improving intelligence to prevent attacks even before they happen, to responding efficiently if and when they do to minimize loss to life and property. For now, it seems as if they've finally taken some positive steps in that direction, albeit steps that should have been taken five years ago.

But its also not unthinkable to believe that terrorists have made plans for what happens next and are perhaps poised somewhere, waiting to spring the next wave of attacks on an increasingly fearful populace. Or at least Indians fear as much now more than ever. The fallout of this new upgraded terror level on the country as a whole, starting or culminating with the Mumbai attacks depending on the perspective, will be tremendous.

Some economy related trends seem to be emerging and some others could perhaps be speculated. (Note: This is by no means a comprehensive list - it's primarily a first pass really.)

1. Paradigm shift towards protecting assets (Rise of security industry):
For one, big corporations based in India seem to be realizing that the economic boom of sorts that has been happening in India for the past decade or so could easily be derailed by security breaches such as Mumbai-November'08 and countless other less spectacular but as much or more devastating events that took place regularly in other Indian cities. Protection of their assets including their properties, loyal customers and most importantly their image and brands will now require a new security abstraction altogether. Failure of the government to provide this security cover has forced them to seek their own cover of sorts.

Large companies like the Tata group , the Bajaj group, the Reliance groups, and the IT companies, among several dozen others, will probably push for employing their own privately armed security guards at their installations, creating private armies of sorts with substantial weaponry and powers. There is also talk of the Tata group creating its own security and intelligence agency for securing its assets - a reaction based on its disillusionment of the systemic failures and shortcomings of the governmental agences in doing so. There is also talk of conducting much more comprehensive background checks on new and old employees to avoid hiring and employing terror-minded individuals secretly wanting to cause destruction to their employers. Expect to hear more of this sort of news in the near future. Already, there is speculation that the private security industry will grow tremendously in the coming months and years (Investors take note perhaps?). All this can only mean that a fundamental shift in the erstwhile naive and complacent approach by these companies towards security awareness and assest protection is under way - leading to the growth of new industry altogether.


2. Pullouts from India:
The continued failure to protect their installations may also mean that these corporations may resort to moving outside of India if necessary and wherever possible, especially if their security needs cannot be met adequately. This is a deal that any government of India cannot and will probably not accept without a fight however. The damage to India Inc. as the business community is broadly referred to as, from the Mumbai attacks will also impact the government of the day, who will have to bear those consequences along with the responsibility of allowing such an event to take place (and perhaps of prolonging it as well). Multinational companies will also reasses their plans in India - leading to, at the very least, a freezing of growth activities in the present. If the security situation worses, expect pullouts from them as well.


3. Economic Losses as potentially huge motivators for improvements in governance:
Losses to India Inc. would also mean loss of revenue to the government and the individuals within as well, which will hurt a lot more in the long term staring with at the ballot. Not to mention the severe loss of face, both nationally and internationally, in admitting to their inability to provide security to the rich and the influential, the common person being long excluded from that protection.It is thus entirely possible that market forces such as the situation described above will force the government to act and to be more and constantly vigilant as well.


4. Overall:
But the biggest economic consequence will arise from the denting of the confidence of the ordinary citizen. People may be fearful of their security and law and order situation in general, leading to an ultra-cautious approach with regards to money. Malls, movie houses, etc. will see fewer patrons because of the fear of terrorist attacks. Public transport will be relied upon much less for the same reasons leading to big losses in revenue. Tourism will be several affected in the short term - especially foreign tourism. With states like Rajasthan, Uttaranchal, and Kerala relying in no small amounts on internation tourism, expect several folks over there to be badly impacted by the slowdown in visitors. The lack of tourists is also a symptomatic of the general lack of confidence perhaps of the international community in being present and doing business with another country. For India, this could mean a lot less investments of foreign entities in the Indian market and economy.

People will in general go out less, buy less, travel less and feel less happy. Maybe people will end up buying more stuff online instead - the web based businesses are probably well placed for this situation. But it remains to be seen if Indians feel secure doing a whole lot of shopping with credit cards online. I know they're pretty queasy about it right now. Maybe that could change however.

So bad news for the economy in general. The government will have to show the will and produce results in reducing the security and law and order fears in the immediate future for this to not have as significant an impact to economic progress as is currenty feared.

Part II will be about socio-religious (if there is such a word) consequences of the Mumbai attacks.

Did the Indian media give away too much info to the bad guys? NDTV (India) responds

One of the many concerns voiced by several Indians ,who watched the almost 3 day attack on Mumbai, which began on Nov. 26th, 2008, was that the "too close to the action" live coverage of Indian news channels of the entire event may have communicated important information about the anti-terrorist operations conducted by the Indian military back to the terrorists. Live coverage of army operations against terrorists holed up in the Taj and the Trident (formerly Oberoi) hotels and the Nariman House apartment building in Mumbai, could have perhaps been a factor in the terrorists being able to successfully hold out against the Indian military for so long. The fact that the terrorists had Blackberrys and satellite phones supports this theory as well.

Now one of the Indian news channels, NDTV, has responded to these concerns via their senior correspondent/reporter Barkha Dutt.

Several statements stand out from her op-ed piece. Here's one:

"Please do note that at all times, the media respected the security cordon- a cordon that was determined by the police and officials on site- and NOT by the media. If, as is now being suggested, the assessment is that the media was allowed too close to the operations, here is what we say: we would have been happy to stand at a distance much further away from the encounter sites, had anyone, anyone at all, asked us to move. In the 72 hours that we stood on reporting duty, not once were we asked to move further away."

It's clear that there really was no coordinated strategy on how to deal with media coverage between the various security agencies involved in the anit-terrorist operations. as she outlines in her piece:

"Across the world, and as happened in the US after 9/11, there are daily, centralized briefings by officials to avoid any inadvertent confusion that media coverage may throw up. Not so in Mumbai. There was no central point of contact or information for journalists who were often left to their own devices to hunt down news that they felt had to be conveyed to their country. No do's and don'ts were provided by officials."

The op-ed piece also has a whole lot of self-congratulatory language in it as well - detailing how several important folks thanked NDTV in particular for their coverage of the whole event. I noticed the same in TV spots on the various other Indian news channels as well - congratulating or self-promoting themselves in some way or the other. Some of the accompanying stunts included: encouraging people to light candles (this is actually clever: the number of candles lit across the country would convey to that particular channel the proportion of people actually watching their channel - so much better than TRP ratings. Besides, lighting of candles is becoming off late a popular response to tragic events. This first began in response to the then fast-going-nowhere investigation on who killed Jessica Lal. The movie "Rang De Basanti", an Aamir Khan starrer earlier in 2006, may have provided the inspiration in the Lal case. I saw candles being lit in a few places across Mumbai), observing a minute of silence in respect, showing 30 second, 1 min and 2 min spots of clippings of the terror attack coverage with accompanying grim music and such, and various others.

Nevertheless, they provided the transparency that such things lacked in previous situations. One hopes that this transparency ensures that officialdom can no longer spin excuses in such situations. These channels, while frequently not reporting with any reasonable levels of journalistic integrity, are providing a medium for the disgruntled populace to express themselves, and ask tough questions, and for millions of others to hear them and sympathize with them, and wait, along with them for a response to those questions.