Wednesday, September 30, 2015

Why India Won't Get A Permanent Seat At UNSC

India has been actively pursuing its quest for permanent membership of the UN Security Council (UNSC). It has pushed for text based negotiations in the UN General Assembly (UNGA) as a step to move forward the agenda of UNSC reform and expansion stuck fruitlessly in the Open-Ended Working Group all these years. Now that the UNGA has resolved to commence such negotiations in the 70th UNGA session, there is sense of progress. Many would rightly say that the start of text based negotiations does not mean that India is anywhere near obtaining permanent membership. The text in question is not a mature document that could be finalised or significantly progressed during the current UNGA session. In reality, this is the start of a long drawn-out process with no visible closure date. No breakthrough that brings us within striking distance of our aspiration has actually been achieved.

Hard reality

Some believe that an unjustified sense of achievement is being projected officially, or, worse, that official India is being hopelessly naive in ignoring the hard reality that UNSC expansion remains a remote proposition. To think that our professionals have been hypnotised by their success in terms of better structuring the process would be unwarranted. They understand that the process now begun does not guarantee success on substance within any predictable time-frame. The negotiating text is a 25 page document that contains the views of diverse groups of countries, whether the L69, the G-4 or the African group, on five identified parameters, namely, the size of the expansion in the permanent and non-permanent categories, regional distribution, the working methods of the Security Council, its relationship with the UNGA, and veto powers. These are complex issues on which negotiations could drag on for ages. To expect concrete results from the 70th UNGA session would be to harbour illusions.

Nevertheless, to view the introduction of a negotiating text as a futile exercise would not be justified either. That China, Russia and the Uniting for Consensus (UFC) countries (comprising countries like Pakistan, Italy, Mexico, Egypt, South Korea etc) have rejected the text and strongly opposed its introduction suggests that they see this step as a breach in their strategy to continue stalling the process of reform and expansion through open-ended discussions without any working text. They have made demarches with member states to change their position, but without success. China, Russia and US have effectively boycotted the process by refusing to provide any inputs to the negotiating text. The UFC countries too have not provided any input but have asked the UNGA president to attach their letter to the text. France and UK have, on the contrary, provided inputs. Russia’s negative position has been particularly noted in India. We expect China to block our bid for permanent membership as much as possible.

Highly restrictive

We know the highly restrictive US position on expansion, including its ambivalent phraseology on our claim for permanent membership. Russia has supported our candidature for years now, which is why its heavy-duty opposition to a negotiating text has come as a surprise. This suggests that they along with China actually do not want UNSC expansion. In discussions with us the Russians apparently claim that they have no issue with India’s membership and that of Brazil, but are strongly against that of Japan and Germany. The UN Charter requires a two-third majority for amendments, but Russia wants the expansion and reform issue to be decided by a larger majority, a “near consensus” as they say.

Current challenge

Russia otherwise insists on the supremacy of the Charter, but, inconsistently, not in this case. Their other argument that the vote will be “divisive” is not convincing because the last expansion was decided not only by a two-third majority, but was divisive, as two permanent members abstained. While we are of the view that reform and expansion will improve the functioning of the UNSC, the Russians are concerned about disintegration and fragmentation of the UN as a result. We would prefer Russia to be less rejectionist on the issue.

The immediate challenge is to ensure that the next UNGA chair picks up the baton from his predecessor and sees that Inter-Governmental Negotiations (IGN) on the negotiating text begin in November. Beyond that, if no consensus is reached on a text which can be put to a vote- which one can safely assume would be the case — other choices are available. It can be a member driven or chair driven process. A broader coalition, which would include India, can take the initiative to present their own text for vote. The ING chair at some stage can present a text-a “zero draft” for further negotiations, emulating the process followed with the adoption of the Post-2015 Development Agenda by world leaders this month in New York. If ever a decision gets taken with no P-5 veto in the UNSC (politically difficult if the UNGA delivers a two-third majority on the issue), all member countries will have to ratify the agreement.

If cynics are right in doubting whether the P-5 will easily agree to share power with would-be aspirants, the more hopeful may not be wrong in believing that circumstances will force a change. The crisis we see today reflect the failure of the UNSC as presently constituted to ensure global peace and security.

Saturday, September 19, 2015

Gold Schemes Are Impractical And Unworkable.

 

The government has announced the Gold Bond and Gold Monetization schemes with great fanfare. The aim is to utilize the approximately 25000 Tonnes of gold in the country and channel them into financial savings or instruments so that annual gold imports of 800-1000 Tonnes come down. However, as is the case with most of the Government schemes, the actual rules, regulations, KYC requirements, capital gains, low rates of interest of 2.5% etc. are likely to make these schemes unworkable.

Buying gold has been a tradition in India not for decades but centuries. Wearing gold jewelry and gifting during marriages is a part of Indian tradition. Over the last 10-15 years, there has also been a huge increase in buying of gold in the form of coins and bars for two reasons. The first is that these are being accumulated for future use as parents use their current cash flows to accumulate gold for their children’s marriages.
The second has been the investment buying which has been a result of the secular uptrend in the value of gold over the last decade where gold prices went up despite the crash in equities, real estate etc. till 3 years back after which gold has fallen or stagnated. The total value of gold at the current prices will be in a range of $ 800 billion to $ 1 Trillion.

Why the current scheme is unworkable:

  1. The government and its officials have gone at length to explain that this is not an amnesty scheme and as such anyone disclosing their gold run the risk of getting the infamous tax department after them.
  2. Secondly, while most of us staying in cities and saving money in banks might still think that possibly making 2-2.5% on idle gold makes sense, for a majority of Indians as well as the informal sector, the cost of borrowings varies between 12-24% per annum depending on the place, need or vocation. As such this rate of interest is unlikely to attract anyone.
  3. As far as gold in the form of jewelry or even coins goes, the making charges are in the range of 2-10% as such it makes no sense for people to surrender gold in this form to the RBI or the Government.Such monetization will be an absolute no starter.
  4. The only target segments that are likely to oblige the government could be some large temple trusts like Tirupati etc. A lot depends on how the large temple trusts respond.
  5. It is estimated that around 20-30% of the total annual demand is for investments. Now the government and those positive on the Gold Bond Scheme might assume that some part of this might get into Gold Bonds.
    There are two issues with this. First, a lot of it again would be cash purchases & second when the RBI issues Gold Bonds, who takes on the price risk of Gold? Will it not have to go and hedge by buying gold and in turn make the entire exercise futile?
  6. I am not aware of the statistics, however it will be interesting to see how much capital gains the government actually gets out of purchase and sale of Gold. My view is that it will be negligible except for those holding ETF’s. As such, why would these people come out and invest in an instrument where Capital Gains tax is applicable.

The Government is not clear about what the purpose is. If the purpose is to lower imports, control CAD, get money into financial savings etc. then the route is different.

Why a gold amnesty scheme would work better:

There is a huge amount of gold which is there with Indians that has either been bought in cash or is there as ancestral holding which has not been declared as official holding. Gold and Land have been the two main assets that have been used to deploy unaccounted cash in India.
As such a majority of gold where the source cannot be proved cannot form a part of the above plans of the government. In my view a one-time amnesty scheme makes more sense.

Unlike a normal amnesty scheme, where the undeclared income is converted into white by just paying tax on it the gold amnesty scheme will have to run differently as no one will like to pay upfront tax on the value of the asset that they are declaring.

I believe that the best way to run this scheme will be as follows

  • As the first step, the gold will be declared by the holders to the government and the government will, in turn, issue 10-year zero coupon bonds to the people who declare the gold. The yield on these bonds will be in the region of 3-4% and on redemption the amount that is paid will not be taxed in the hands of the holder. The post-tax yield on ordinary 10-year bonds are in the region of 6% and as such the 1-2% gap will take care of the tax that the declarer has not paid on the black money used to buy gold.
  • At the second step, the government will have to decide what to do with the gold that it has got. One option would be to sell it to the RBI which will then add this gold to the foreign exchange reserves and in turn given the equivalent money in INR to the government.
  • The other option will be for the RBI to sell this gold in the international market, realize the money in USD and provide the equivalent INR amount to the government.
  • The last option will be for the Government to open up the gold so bought for purchase by the Indian Public. This will cut down imports of gold significantly.

Any of these options will boost the Foreign Exchange reserves, stabilize the rupee and build Foreign Exchange Reserves. Now the question is how much gold will the government need to get to make a meaningful impact. At current prices one ton of gold will be approximately $ 40 million. As such 25 tons will be required for $ 1 billion. As such the government needs to target a quantity of 1000 tons for an amount of $ 40 billion. This is 4% of the current holding of gold in India.

Given that the government will be able to realize around Rest 2,50,000 Cr in 10-year money it will also remove crowding out from the economy. This will give a significant leeway for the Indian Economy till the time till the government takes steps to resolve that Current Account Deficit problem in a more sustainable manner. 

Gold Schemes Are Impractical And Unworkable.

 

The government has announced the Gold Bond and Gold Monetization schemes with great fanfare. The aim is to utilize the approximately 25000 Tonnes of gold in the country and channel them into financial savings or instruments so that annual gold imports of 800-1000 Tonnes come down. However, as is the case with most of the Government schemes, the actual rules, regulations, KYC requirements, capital gains, low rates of interest of 2.5% etc. are likely to make these schemes unworkable.

Buying gold has been a tradition in India not for decades but centuries. Wearing gold jewelry and gifting during marriages is a part of Indian tradition. Over the last 10-15 years, there has also been a huge increase in buying of gold in the form of coins and bars for two reasons. The first is that these are being accumulated for future use as parents use their current cash flows to accumulate gold for their children’s marriages.
The second has been the investment buying which has been a result of the secular uptrend in the value of gold over the last decade where gold prices went up despite the crash in equities, real estate etc. till 3 years back after which gold has fallen or stagnated. The total value of gold at the current prices will be in a range of $ 800 billion to $ 1 Trillion.

Why the current scheme is unworkable:

  1. The government and its officials have gone at length to explain that this is not an amnesty scheme and as such anyone disclosing their gold run the risk of getting the infamous tax department after them.
  2. Secondly, while most of us staying in cities and saving money in banks might still think that possibly making 2-2.5% on idle gold makes sense, for a majority of Indians as well as the informal sector, the cost of borrowings varies between 12-24% per annum depending on the place, need or vocation. As such this rate of interest is unlikely to attract anyone.
  3. As far as gold in the form of jewelry or even coins goes, the making charges are in the range of 2-10% as such it makes no sense for people to surrender gold in this form to the RBI or the Government.Such monetization will be an absolute no starter.
  4. The only target segments that are likely to oblige the government could be some large temple trusts like Tirupati etc. A lot depends on how the large temple trusts respond.
  5. It is estimated that around 20-30% of the total annual demand is for investments. Now the government and those positive on the Gold Bond Scheme might assume that some part of this might get into Gold Bonds.
    There are two issues with this. First, a lot of it again would be cash purchases & second when the RBI issues Gold Bonds, who takes on the price risk of Gold? Will it not have to go and hedge by buying gold and in turn make the entire exercise futile?
  6. I am not aware of the statistics, however it will be interesting to see how much capital gains the government actually gets out of purchase and sale of Gold. My view is that it will be negligible except for those holding ETF’s. As such, why would these people come out and invest in an instrument where Capital Gains tax is applicable.

The Government is not clear about what the purpose is. If the purpose is to lower imports, control CAD, get money into financial savings etc. then the route is different.

Why a gold amnesty scheme would work better:

There is a huge amount of gold which is there with Indians that has either been bought in cash or is there as ancestral holding which has not been declared as official holding. Gold and Land have been the two main assets that have been used to deploy unaccounted cash in India.
As such a majority of gold where the source cannot be proved cannot form a part of the above plans of the government. In my view a one-time amnesty scheme makes more sense.

Unlike a normal amnesty scheme, where the undeclared income is converted into white by just paying tax on it the gold amnesty scheme will have to run differently as no one will like to pay upfront tax on the value of the asset that they are declaring.

I believe that the best way to run this scheme will be as follows

  • As the first step, the gold will be declared by the holders to the government and the government will, in turn, issue 10-year zero coupon bonds to the people who declare the gold. The yield on these bonds will be in the region of 3-4% and on redemption the amount that is paid will not be taxed in the hands of the holder. The post-tax yield on ordinary 10-year bonds are in the region of 6% and as such the 1-2% gap will take care of the tax that the declarer has not paid on the black money used to buy gold.
  • At the second step, the government will have to decide what to do with the gold that it has got. One option would be to sell it to the RBI which will then add this gold to the foreign exchange reserves and in turn given the equivalent money in INR to the government.
  • The other option will be for the RBI to sell this gold in the international market, realize the money in USD and provide the equivalent INR amount to the government.
  • The last option will be for the Government to open up the gold so bought for purchase by the Indian Public. This will cut down imports of gold significantly.

Any of these options will boost the Foreign Exchange reserves, stabilize the rupee and build Foreign Exchange Reserves. Now the question is how much gold will the government need to get to make a meaningful impact. At current prices one ton of gold will be approximately $ 40 million. As such 25 tons will be required for $ 1 billion. As such the government needs to target a quantity of 1000 tons for an amount of $ 40 billion. This is 4% of the current holding of gold in India.

Given that the government will be able to realize around Rest 2,50,000 Cr in 10-year money it will also remove crowding out from the economy. This will give a significant leeway for the Indian Economy till the time till the government takes steps to resolve that Current Account Deficit problem in a more sustainable manner. 

Tuesday, September 15, 2015

How the Speed of Light was first measured

 

 

The speed of light in a vacuum stands at “exactly 299,792,458 metres per second“. The reason today we can put an exact figure on it is because the speed of light in a vacuum is a universal constant that has been measured with lasers; and when an experiment involves lasers, it’s hard to argue with the results. As to why it comes out somewhat conspicuously as a whole number, this is no coincidence- the length of metre is defined using this constant: “the length of the path travelled by light in vacuum during a time interval of 1/299,792,458 of a second.”

Prior to a few hundred years ago, it was generally agreed or at least assumed that the speed of light was infinite, when in actuality it’s just really, really, really fast-  for reference, the speed of light is just slightly slower than the fastest thing in the known universe- a teenage girl’s response time if Justin Bieber were to say on Twitter, “The first to reply to this tweet will be my new girlfriend.”

The first known person to question the whole “speed of light is infinite” thing was the 5th century BC philosopher Empedocles.  Less than a century later, Aristotle would disagree with Empedocles and the argument continued for more than 2,000 years after.

One of the first prominent individuals to actually come up with a tangible experiment to test whether light had a speed was Dutch Scientist, Isaac Beeckman in 1629. Despite living in a time before lasers- which gives me the chills just thinking about- Beeckman understood that, lacking lasers, the basis of any good scientific experiment should always involve explosions of some kind; thus, his experiment involved detonating gunpowder.

Beeckman placed mirrors at various distances from the explosion and asked observers whether they could see any difference in when the flash of light reflected from each mirror reached their eyes. As you can probably guess, the experiment was “inconclusive”.

A similar more famous experiment that didn’t involve explosions was possibly conducted or at the very least proposed by Galileo Galilei just under a decade later in 1638. Galileo, like Beeckman also suspected that the speed of light wasn’t infinite and made passing references to an experiment involving lanterns in some of his work. His experiment (if he ever conducted it at all), involved placing two lanterns a mile apart and trying to see if there was any noticeable lag between the two; the results were inconclusive. The only thing Galileo could surmise was that if light wasn’t infinite, it was fast and that experiments on such a small scale were destined to fail.

It wasn’t until Danish Astronomer, Ole Römer entered the fray that measurements of the speed of light got serious. In an experiment that made Galileo flashing lanterns on a hill look like a primary school science fair project, Römer determined that, lacking lasers and explosions, an experiment should always involve outer space.  Thus, he based his observations on the movement of planets themselves, announcing his groundbreaking results on August 22, 1676.

Specifically, while studying one of Jupiter’s moons, Römer noticed that the time between eclipses would vary throughout the year (based on whether the Earth was moving towards Jupiter or away from it). Curious about this, Römer began taking careful notes about the time I0 (the moon he was observing) would come into view and how it correlated to the time it was usually expected. After a while, Römer noticed that as the Earth orbited the sun and in turn got further away from Jupiter, the time Io would come into view would lag behind the expected time written down in his notes. Römer (correctly) theorised that this was because the light reflected from Io wasn’t travelling instantaneously.

Unfortunately, the exact calculations he used were lost in the Copenhagen Fire of 1728, but we have a pretty good account of things from news stories covering his discovery and from other scientists around that time who used Römer’s numbers in their own work. The gist of it was that using a bunch of clever calculations involving the diameter of the Earth’s and Jupiter’s orbits, Römer was able to conclude that it took around 22 minutes for light to cross the diameter of Earth’s orbit around the Sun.  Christiaan Huygens later converted this to more commonplace numbers, showing that by Römer’s estimation, light traveled at about 220,000 kilometres per second.  This figure is a little off (about 27% off) from the figure noted in the first paragraph, but we’ll get to that in a moment.

When Römer’s colleagues almost universally expressed doubt in his theory about Io, Römer responded by calmly telling them that Io’s 9th of November eclipse in 1676 was going to be 10 minutes late. When the time came, the doubters stood flabbergasted as the movement of an entire celestial body lent credence to his conclusion.

Römer’s colleagues were right to be astounded in his estimation, as even today, his estimation of the speed of light is considered to be amazingly accurate, considering it was made 300 years before the existence of both lasers, the internet, and Conan O’Brien’s hair. Okay so it was 80,000 kilometres per second too slow, but given the state of science and technology at the time, that is remarkably impressive, particularly given he was primarily just working off a hunch to begin with.

What’s even more amazing is that the reason for Römer’s estimation being a little too slow is thought to have less to do with any mistake on his part and more to do with the fact that the commonly accepted diameter of the Earth’s and Jupiter’s orbits were off when Römer did his calculations. Meaning yes, Römer was only wrong because other people weren’t as awesome at science as he was. In fact, if you slot the correct orbit numbers into what is thought to be his original calculations from reports before his papers were destroyed in the aforementioned fire, his estimation is nearly spot on.

So even though he was technically wrong and even though James Bradley came up with a more accurate number in 1729, Römer will go down in history as the guy who first proved that the speed of light was not infinite and worked out a reasonably accurate ballpark figure on what the exact speed was by observing the movements of a speck orbiting a giant ball of gas positioned about 780 million kilometres away. That right there ladies and gentlemen is how a badass, lacking lasers, does science.

 

Thursday, September 10, 2015

Hasgeek, and their ramblings to support exorbitant ticket rates


Hasgeek has announced a javascript workshop as part of their annual javascript convention in India, jsfoo. Below is the screenshot from the blog entry announcing the workshop.

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Yup, the cost of an entry ticket to this nodebots workshop is INR 15000/- . Yes. Apparently, only the rich can attend hasgeek's workshops, even if they are based on free/open source technology.
Look at other workshops too:
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And then, three days later they post a supporting entry on their blog about why the rates for their conventions and workshops are exorbitantly priced.
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Scolling down their various entries, it can be seen that in the past, they have actually written a five-part-miniseries about their ridiculous ticket pricing.
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This just goes on to confirm that hasgeek is more of  a pr company than company trying to imbibe hacker-culture in India.
The only hasgeek workshop I attended was Droidcon-2013. I attended the beginner level workshop, because on the Android platform, I was a beginner. Having worked in enterprise software all my career, I was craving for a bit of coding again, to hit the compile button and create magic again, like in my school/college days. The beginners workshop was priced at a reasonable 1k INR only.
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And…it was worth it. The 2 day workshop was instructed by these exceptional speakers:
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Now I must say that not all of the topics in the agenda was covered. Due to the unique mix and match of the participants at various experience levels, a few things had to be skipped to keep time. But the speakers did a fantastic job of covering maximum area among themselves. They invested quality time in properly sharing their wealth of information with us, the participants, and more than happy and patient to take questions. By tea-break on the first day, there were phones going buzz and blink in the room running cool new apps developed by newbie developers themselves !
I was intrigued. For a long time I had been out of touch with open source languages, I was trying to find a way back in, to at least code in my little freetime, if not part of my daily office regime. Workshops and conventions like these are exactly what people like me wanted, simple and cost effective events which was well within the reach of coders, but which delivered as promised. I was delighted, and determined to return to another hasgeek workshop soon. But I could never.
Well one reason was that I hardly had the time. But the real reason was that all the workshops and conventions were priced exorbitantly high. For a 6 hour workshop on a topic of free technology, I could not justify shelling out many thousands of rupees.
And now things have come to a point were only the filthily rich can afford to participate and share their knowledge on free software.

Wakeup , hasgeek. No amount of follow up posts on your blog can justify the humungous amounts you are charging for your events. Not cool.



PS:
And now I am trying to watch the sucking jfsoo livestream on youtube.
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