technology: the saviour of the world

ECONO M IES OF M ACHINES

Technology is worth more than our imagination

tupnik, iPad, Tesla and the likes may seem more of a path-breaking concept that revolutionised the way technology interfaces with humans. But the lesser known fact is that these innovations latently played a pivotal role in reviving economies around the world, giving countries edge over others in boosting their economies and skyrocketing themselves to the top of socio-economic rankings. Amidst economic crisis that is haunting the world, it's technology that seems the only visible solution that can lead to economic prosperity. It was iPads equipped with a custom-made 'debt-restructuring application' that saved the drowning Greek economy a whopping $140 billion. It was after 7.9 per cent economic contraction last year that prompted Medvedev to look for new industry engines and is the reason why Russia is keen on establishing a silicon valley-like project outside Moscow with tax breaks and special rules. More and more entrepreneurs all across the globe are delving into wave of opportunities in the green technology industry that has the potential of producing millions of green jobs. A study across 120 nations (between 1980 and 2006), carried out by Christine Zhen-Wei Qiang (Telecommunications and Economic Growth, World Bank, unpublished paper), estimated that each 10 per cent point increase in broadband penetration adds 1.3 per cent to a high income countrys GDP and 1.21 per cent to low and middle-income nations. As a matter of fact, technological development gave America an unique advantage. Federal stimulus bill allocates $100 billion into discovery, development and implementation of various technologies reflecting US governments seriousness towards technological development. This serves the dual purpose of both stimulating economic growth in the immediate future as well as creating employment opportunities and more so in becoming the key driver of growth in the long run. Innovation in science and technology is estimated to account for as much as 90 per cent of additional economic growth (Manseld, 1972; Evenson et al., 1979; Griliches, 1987; Solow, 2000). Better technology allows economies of scale. US spends 2.8 per cent of its federal budget on national research and development as a percentage of GDP which is higher than that of Germany (2.5 per cent), France (2.2 per cent), Canada (1.9 per cent) and England (1.9 per cent). Europe as a whole allocates 1.9 per cent to research and development, while industrialised nations spend around 2.3 per cent. And the repercussions are vividly visible! According to the Asian Development Bank, the Asia-Pacific region will need investments worth $6 trillion in new energy infrastructure by 2030 to meet the projected doubling of energy demand. The verdict is clear; the country with superior technological advancement would attract higher economic growth and ultimately rule the world.

Ganesh Kumar Roy

election cost: rising trend

T H E H IN D S IG H T O F IN D IA N E LE C T IO N S
India tops in spending in elections but decreasing voter turnout indicates its ineffectiveness

ndia's national spending on health care, education and judiciary oscillated around 2.5, 4.97, 1.0 per cent of GDP respectively which is lower than that of countries like US, UK, China and Japan. But then there is one arena in which India is a world-class spender where it would be tough to find anyone who would agree that we get equally world-class value for our money. We are referring here to our stale electoral system, which has resulted in a legislature that hardly attracts 57 per cent of total registered voters across India. A study conducted by Centre for Media Studies (CMS) explored that Lok Sabha Polls in India in 2009 had cost more than what Barack Obama and other candidates spent in the US Presidential election 2008. As per the US federal election commission, Obama and others collectively spent around $1.8 billion (Rs.8,000 crore) in that election while CMS revealed that India spent a staggering $2 billion (Rs.10,000 crore) to elect the government in 2009. At the same time, India spent the gargantuan amount of money in a matter of a few months while the cost of US elections was spread over a year. Moreover, it experienced more than 100 per cent increase as compared to the previous general elections held in 2004 where about Rs.4500 crore were spent. Similarly, India spent Rs.3,200 crore in the 1998 Lok Sabha elections compared to Rs.2,200 crore back in 1996. Voting turnout has increased to 62.1 percent in 1998 from 57.9 percent in 1996 but then the rate has declined substantially to 59.9 per cent in 1999 and 58.1 per cent in 2004. As per various media sources, voting turnout in 2009 was estimated to be around 57 per cent compared to an average voting turnout of 62 per cent in US. The trend vividly highlights how in spite of diminishing voting turnout, cost of elections has increased exponentially over the years which boils down to 70 per cent increment with each passing election. The global scenario does not reflect a bright picture either. US crossed the billion dollar mark in election spending for the first time in 2008 Presidential election. Presidential elections had cost the US about $880 million in 2004 against $525 million in 2000 and $425 million in 1996. Similar surge in the cost of UK parliamentary elections has also been observed. UK Parliamentary Secretary Mark Harper estimated the cost of the 2010 election to be around 113 million while the last general election cost the country around 80 million. But a few countries like Australia and Canada have been able to check their election costs not for a long time but at least in a certain election. Australia witnessed a slightly lower expenditure in House of Representatives & half-senate elections 2010 around $161 million against $163 million spent in 2007. On the same lines, the Chief Electoral Officer of Canada estimated the cost of the 41st General Election 2011 to be around $291 million, a slight decline from the cost of 2008 election which was pegged at roughly $300 million. In a democratic system, forming a government is becoming more and more expensive day by day. Going by the trend, the next Lok Sabha Election in 2014 would cost India nothing less than Rs.17,000 crore. While the country is already suffering from social malaises, it makes less sense to spend this mammoth amount on election, especially when successive government has failed to address these issues. Over all, be it economically or non-economically, the RoI of vote is decreasing, year-on-year!

Amir Hossain