Digital India: Less Cash, but not Cashless

The past month has seen historic events in India. On Tuesday 8 November 2016, the Modi government announced without prior warning that all 500 and 1000 Indian rupee notes would be rendered valueless more or less overnight. In effect, this meant immediate withdrawal of the largest bank notes in circulation, and issuance of new notes within a few days, renewing 86 percent of India’s cash economy. Is this another step towards a cashless economy? What has the cash withdrawal done to the black economy, and networks based on corruption? And what are the implications for the use of cash, especially among India’s poor? These are some reflections based on personal experiences from Delhi.

Photo by Gopal Vijayaraghavan

“Going for broke…” Photo credit: Gopal Vijayaraghavan

 

The morning after Modi’s announcement there was a sense of chaos and an atmosphere of distress. My neighbor suddenly confessed that he had a number of 1000 rupee notes stacked in his cupboard as savings. He was confused and agitated, as he most likely would have to officially declare the sum. He was expecting suspicious questions from the tax authorities.

The local vegetable vendor refused to accept any 500 rupee notes. He explained that his uncle was completely devastated because of his daughter’s wedding preparations. His uncle had saved up money for his daughter’s wedding of about 500 000,- rupees in cash, as this was how the payment would normally be done. Having no bank account where he could deposit the money, what was he supposed to do?

Major official goals of the demonetization have been to curb the black economy, tackle counterfeit notes and decrease corruption. The withdrawal of notes has the side-effect of increasing the use of digital banking and cashless transfers, moving the country towards a less cash-reliant economy. Last week, India’s Prime Minister disclosed the underlying reason, stating: “Our dream is that there should be a cashless society”. The goal is that Indians should substantially increase their reliance on debit card transactions and use of digital wallets.

Demonetization has forced those who to date had no bank account to immediately open an account, and those who were already banked to increase the digital part of their financial exchange. Millions have lined up in front of banks. On 24 November, cash exchange became banned and people had only one option to get rid of old notes – to deposit them in banks. Already within ten days of demonetization, the Reserve Bank of India could announce that more than 5 trillion rupees had been deposited.

As Digital India unfolds, the government is increasingly invested with means of tracking individual transactions. Cash transferred to digital currency means big money in tax revenue for the Indian government. Today, less than 10 percent of the 1,25 billion citizenry pay taxes. In a hard hit against the black economy, the government has also announced that people charged with keeping large amounts in cash, thus seeking to evade taxation, can be fined up to 200 percent in tax penalties.

Those living on less have also been caught up in the unfolding of events, sometimes falling victim to wild rumors. A woman from my neighborhood who earns her living from clothes laundering was convinced that Prime Minister Modi would soon transfer 250 000,- rupees into her newly opened bank account. Apparently someone had told her they heard this on the news. Her friend said she had heard of people dumping millions of rupees in cash in the Yamuna River to get rid of their black cash, to avoid tax penalties. The neighbor’s driver spent eight hours in a bank queue before he had to give up without accomplishing his business. The local vegetable vendor claimed he knew someone who would sell old 1000 notes for 600 rupees in 100 notes, giving a loss of 400 rupees, but a gain in the sense of having money with transactional value. His uncle finally resorted to this option, selling old large-denomination notes. His daughter’s wedding ended up costing the double of what he had set aside.

Undoubtedly, the government’s move has hit the black economy and tax evaders hard. It has shaken previous chains of corruption, and given numerous people living off the shadow economy sleepless nights. The lesson from previous demonetization in the 1970s is that corruption has continued as before when the ripples of the demonetization drive settle. This may no longer be as true in a more digitalized economy.

What demonetization has done is to make both rich and poor Indians rush to the bank. Demonetization of most of India’s cash will not instantaneously and magically create accountability and transparency. But it will push India towards a more digitalized, less cash-reliant, and more taxable economy.

 

Get to Know Your Data Double!

We all have a “data double”. But how well do you really know this other aspect of your identity? Unless you know what your entirely digital identity looks like, you should take responsibility for finding out and, at the same time, contribute to a digital drive to ensure that we all gain better control over our online, digital, lives. Very often it is our data doubles, not our physical selves, that will be assessed by the future employers, new flames, or benefits officers who make decisions about us.

Illustration: Siemens

Illustration: Siemens

A data Picasso?

A large number of businesses, public sector bodies, and multinational companies collect and process the information that we provide when we shop online, use social media, or make card payments. Your “data double” is the sum of all these digital footprints. What picture of you does this “data double” provide? And is it a desirable picture? Despite all the algorithmic modifications designed to ensure the accuracy of the data gathered, these types of automated analyses can be completely erroneous and produce a kind of Picasso-like distortion of the real you. A simple Google search for your name will generate many correct and incorrect results. With the help of tools such as Applymagicsauce, developed by the University of Cambridge, we can see, for example, how Facebook appears to believe that the first-listed author of this article is most likely a homosexual man.

Why Trump Is Bad News for Gender Equality in Foreign Policy

Posted to Federica Mogherini's Twitter account 14 June 2016

From a meeting about the Iran deal and Syria between EU’s high representative for foreign affairs Federica Mogherini and Iranian minister of foreign affairs Javad Zarif, flanked by their respective teams. Posted to Mogherini’s Twitter account 14 June 2016

While 2015 was in many ways a year of celebration for women’s participation in international politics, 2016 on the other hand seems to be a year of disappointments.

What will happen to women’s participation and gender equality in foreign policy when Donald Trump becomes the next President of the United States?

2015 – a year of celebration

For those of us interested in the role of women in international politics, 2015 was a year of optimism. We celebrated the 15th anniversary of UN Security Council Resolution 1325 on Women, Peace and Security. Sweden appointed its first feminist government, and became the first country to implement a feminist foreign policy. Coming up on the horizon, we saw the possibility that 2016 would be the year when the United Nations would elect its first female Secretary General. It even seemed plausible that the United States would elect its first female president!

Democratic Intervention?

Donald Trump has made statements sceptical of military interventions in the Middle East. This is perhaps a rare piece of good news.

Military intervention as a means of building democracy has once again become a hot topic. The Norwegian government has been criticized due to the consequences of the intervention in Libya. Hillary Clinton has been branded a hawk because she is seen as more willing to use military force than Obama. Some supporters of Bernie Sanders seemed to prefer Trump to Clinton, in the hope that Trump would be less interventionist.

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Experiences from the interventions in Afghanistan in 2001, Iraq in 2003 and Libya in 2011 have not been positive. What went wrong? Photo: US Marines – Iraq 2003

The logic behind democratic intervention is clear enough: democracies rarely if ever go to war with each other. Stable democracies also experience few civil wars. If a civil war occurs nonetheless in a stable democracy, as a general rule the conflict will be less bloody than in an authoritarian country. Genocide and politicide are also rare in democracies. An increase in the number of stable democracies, the argument runs, will contribute to lower levels of violence in both domestic and external conflicts.

Myths About War and Violence

Illustration: Espen Friberg / Morgenbladet

Illustration: Espen Friberg / Morgenbladet

‘Calculations made by a former president of the Norwegian Academy of Science and Letters, with the assistance of historians from a number of countries, show that since 3600 BC, the world has known only 292 years of peace. Since 650 BC, there have been 1,656 arms races. Sixteen of them ended in economic collapse, the rest in war.’

This story, or slight variations of it, has been circulating in the media for well over 60 years. Military periodicals, in both East and West, as well as journals published by the peace movement, have taken this story at face value.

This is despite the fact that the original author, Norman Cousins, in the heading of his article, which was published in St Louis Post-Dispatch, referred to an ’imaginary experiment’ and later referred to the story as ’fanciful’. The figure for the number of years of global peace seems to have been taken from some rather vague suppositions advanced by European historians in the second half of the 19th century, while the statistic regarding arms races that end in war was a pure invention by Cousins – as was the role of the Norwegian Academy of Science and Letters. In Cousins’s first article, he safeguarded his position by giving the Norwegian author the name ’Dr. Storhjerne’ (‘Dr. Brainy’).

Nonetheless, this tale migrated from the world of fantasy literature into popular non-fiction on the subject of war and peace. Although the origins of this story have been revealed a number of times, the first time as early as 1962, it has proved a difficult story to eradicate. The most recent reference I have found to the story was in a textbook on the causes of war published in 2013 by a well-reputed American academic publishing house. In this case, however, it was presented with a certain amount of scepticism.

Serious research has been conducted on both the relative numbers of years of war and peace, and the link between arms races and war, and I have no wish to distance myself from the warning about arms races that Cousins wished to convey. The problem is that there is no link between this serious research and the popular story that has been circulating for two generations.

It is perhaps the most resilient myth about war and peace in our times.

But there are many others. Here are six more.

What This Election Means for US Foreign Policy

The resonance of this U.S. election campaign is truly enormous, in every corner of the world. But despite much disgust about the mudslinging, it is not necessarily all that negative. Observers everywhere may be astounded that a candidate so arrogantly ignorant in international affairs could gather so much support, but that has also given them a greater understanding of the global stakes in this moment of choice. Paradoxical as it may seem, many people now have greater appreciation of the value of U.S. leadership and of their interest in preserving it. This leadership is indeed indispensable in various troubled areas, from the South China Sea to the Barents Sea, and hot spots, from Mosul to Donetsk, and cannot be taken for granted.

The Victims of War: Light at the End of the Tunnel?

In making the choice between pessimism and optimism, it may be a risky business to lean on everyday news. Let us rather have a look at figures that reveal more long-term tendencies.

 

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PRIO: Data from the Peace Research Institute Oslo. UCDP: Data from the Uppsala Conflict Data Program

Steven Pinker’s book The Better Angels of Our Nature, published in 2011, painted an optimistic picture of mankind emerging from its violent past. Since then, however, the trend has gone in the wrong direction. My work on a book in Norwegian on the same topic has been conducted during this reversal. The US election has changed this reversal into fears of a major and dramatic setback, if we are to listen to the most pessimistic accounts. Nevertheless, there are still good reasons for optimism in the longer term. The data recorded by the Uppsala Conflict Data Program (UCDP) suggests that currently there are three main trends in armed conflicts: a long-term reduction in violence; increasing fragmentation; and geographical concentration.

Countering Violent Extremism: Hidden Human Rights Costs

This is a guest blog post by a student who attended this years Peace Research course at the International Summer School 2016.

This summer we witnessed a wave of terrorist attacks all around the world, from peaceful European cities to historically insecure cities in Middle East. While the increasing number of lone wolves has made it considerably more difficult for the intelligence services to predict who the next attacker would be and where the next attack would occur, it is an established fact that the majority of attackers appear to be sympathizers of one of the biggest terrorist organizations of our time, Islamic State of Iraq and Syria (ISIS). In response to this increasing threat, many states have started addressing terrorism in a more comprehensive way by adopting new public strategies, broadly known as Countering Violent Extremism (CVE), that aims at dissuading extremists who have not yet succumbed to the military activities of terrorist organizations but who can be considered as active sympathizers who could potentially join the organization. However, these strategies has faced criticism both from the community targeted by these activities and also policy makers who finds them lacking strong empirical research background and bearing negative effects such as stigmatization of certain religious minorities who are permanently suspected of being vulnerable to the extremist ideologies.

In October 2015, the Human Rights Council passed the first resolution on human rights and preventing and countering violent extremism. PHOTO: U.S. Mission/Eric Bridiers

In October 2015, the Human Rights Council passed the first resolution on human rights and preventing and countering violent extremism. PHOTO: U.S. Mission/Eric Bridiers

On 19th February 2015, the White House held its three-day World Summit on Countering Violent Extremism (CVE) “to bring together local, federal, and international leaders to discuss concrete steps the United States and its partners can take to develop community-oriented approaches to counter hateful extremist ideologies that radicalize, recruit or incite to violence”. The summit focused on two issues: first, the specific issue of foreign terrorist fighters (FTFs) leaving their home Western Countries to join ISIS in Syria and Iraq, and second, the thematic issue of countering violent extremism. Although both terms have their roots in the Security Council resolution 2178 (2014), the global attention to CVE strategies mostly came about after the White House Summit and, particularly, the UN World Leaders Summit on Countering Violent Extremism in September 2015. The Summit, which was followed by a series of smaller, regional meetings, could be considered as a change in the hardline approach towards terrorism after the 9/11 attack.

To Tame a Hawk

Hillary Clinton is not seeking attention for her views on Syria. And she has her reasons for not doing so.

hillary-clinton-pres-2016

We can safely say that the 2016 US election campaign has been one of a kind. There is nothing new about the use of harsh rhetoric in pursuit of votes. The candidates and their supporters will freely attack each other and opposing policies and proposals. Things may become heated, but usually the arguments are about substance. This year, focusing on issues of substance has proved to be more than usually difficult, primarily because one of the candidates has conducted a campaign dominated by form rather than substance.

One area that has been more or less devoid of attention is foreign policy.

An Urban Century: Which Direction Should Cities Take?

The Habitat III conference in Quito, Ecuador this week is the most important meeting on cities and development in decades. It will shape the urban agenda of the 21st century.

New York is one of the cities that is threatened by sea levels caused by climate change. Photo: Pixabay

New York is one of the cities threatened by climate change induced sea level rise. Photo: Pixabay

It is now well-known that the world is more urban than rural, with the challenges of 21st century urbanisation firmly on the agenda. In Quito, Ecuador’s capital, the contrasting opportunities and challenges of cities are fully on display – vibrant and exciting culture, choking pollution, snarling traffic, and prosperity and insecurity varying dramatically between neighborhoods. And it is in Quito this week that these and other challenges will be taken up by the international community at The United Nations Conference on Housing and Sustainable Urban Development, better known as Habitat III.