Obama's CIO Vivek Kundra Previous Close Employees Arrested for Fraud, Bribery

This is one hell of a story. One week after President Obama announced his new CIO of the United States, the FBI raided the very office where Kundra just held the position of CTO and arrested Kundra's former CSO and another former employee, for massive fraud and bribes.

D.C.'s top IT security official charged with bribery

Arrested this morning was Yusuf Acar, who currently is the District of Columbia's acting chief security officer; police said they found $70,000 in cash in his Washington home. Acar's annual salary is $127,468, according to court documents.

The second suspect arraigned on bribery charges is Sushil Bansal, CEO and founder of Advanced Integrated Technologies Corp. (AITC), a Washington-based outsourcing vendor that has won a number of contracts from the district's IT department.

This is where Vivek Kundra was CEO just one week ago. Bansal is on a H-1B guest worker Visa, previously worked also for D.C. city government and magically started his own company for which he is now indicted for fraud and bribery by the FBI.

Now there are multiple questions.

How can someone on a temporary non-immigrant H-1B Visa start a company in the United States in government and in security?

Secondly, how can the Obama administration put someone in a CIO position with these kind of connections and seemingly is promoting offshore outsourcing?

How in God's name can the government even promote the offshore outsourcing of government jobs? How can the government not realize the security issues in using offshore outsourcing?

How many other government contracts, I.T. security issues do we have these kind of offshore outsourcing agenda, bribes, hand rubbing and so on?

This is not the direction you want to take a ever more critical security area, never mind the fraud, bribery and abuses.

Now even more unbelievable, Bansal was named entrepreneur of the year by the Association of Indians in America.

Ok, the entrepreneur of the year is somehow on a non-immigrant Visa yet seemingly self-sponsoring and forming a company which was pure fraud and bribery all the while offshore outsourcing American jobs.

The relationships of these people being former, close employees of Vivek Kundra at minimum shows incredibly bad judgment. It's hard to imagine one not being aware this was going on under their nose...

What was Kundra doing in the first place using a H-1B for a government job? There are numerous Americans out of work who have all of these skills and yes, they too can incorporate themselves and manage a firm...and they can do it even without fraud, bribery and abuse!

So, considering those facts, who knows what the FBI will discover, I'm just glad they are looking.

This is government, security issues and that assuredly should require U.S. citizenship so why was anyone on a temporary Visa even allowed to apply or provide any services in the first place?

More to come on the details but at minimum putting someone so close to offshore outsourcing and H-1B Visas as the top CIO sends a horrific message to all U.S. workers.

It's supposed to be our government....right?

This Washington City Paper pulled out some of the FBI document details.

Revolutionize procurement? Maybe not exactly the way you think!

Update: Networked World discovered Yusuf Acar isn't even qualified for the job he held and Sushil Bansal is magically a Cisco preferred vendor!

I hope all continue to dig and investigate for obviously these tentacles of corruption are way beyond the D.C. city government I.T. department!

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People Fed up with H-1b and Outsourcing have been handed a gift

I've noticed a new phenomenon. Mainstream media will report on an issue they normally black out (like this one or anything H-1b) after everyone already knows about it, and is talking about it, just so the blackout doesnt become so obvious

Even the right wingers wont touch this one, becsause it's cheap labor.

It's essential the blogousphere get this one out - this is a wooden stake to drive through the H-1b/Outsourcing industry vampire's evil heart

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You Hit on the Red Dot

All the propaganda for Pro-H1b specially CNBC but no news regarding the damage that these guest worker visas has done to the following industries: Information Technology, Engineering, Architecture, Science. Well Heck even hotels bring in H1b workers.

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I love curry

Seriously, there are many people, who are U.S. citizens screaming bloody murder at global labor arbitrage, offshore outsourcing, guest worker Visas and they are of an Indian ethnic background....
so one must judge from one's deeds. This is much more about citizenship, which country do you identify yourself with and really has an effect on particular career "wipe out" experience most of all...

than any cultural identity. Think national identity and that's where the "curry" issue comes in. There is no doubt India is trying to capture the services sector, especially all of I.T. as well as STEM, thinking this is a "trade" issue....and they use guest worker Visas, offshore outsourcing, the U.S. educational system, by any means and method!

But the thing here is we have many U.S. citizens of "variety pack" ethnicity but they are also getting the shaft in these career areas...

So, it's a matter not only of citizenship but really is that person an American? The reason I put this second condition on citizenship is so many recent "citizens" are simply using U.S. citizenship status to better assist their home country....they do not take citizenship to mean anything more than a nice business feature to enable the shipping of jobs, sectors, industries to their "real" country...

i.e. they are not loyal to the U.S. believe in the U.S., consider the U.S. home or other any real affinity with other Americans...

But there are a host of other people who sure as hell do take it all seriously, just as someone who has a 400 generational American ancestry....

So, it's not an ethnicity issue.

So, please be sensitive with your curry and let's put the real focus on nationality, i.e. which country and economy are you for anyway?

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In the old days

To become a naturalized citizen of the United States, one had to renounce one's old country and government.

Perhaps today, we need to get them to renounce their corporation as well.
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The cases happened during his Watch

If a ship runs aground on a reef, the Captain is still responsible even though he was not the one at the helm. Same here, the corruption and contracts happened on Vivek Kundra's watch as the CTO of DC. In fact, for the company in question, the contracts doubled when Vivek started as the CTO of DC. If Obama keeps this guy on the Federal CIO job we are doomed; he will have free reign on the contracts. He should be charged for incompetence as being the CTO of DC. If he can't handle DC what more on several federal agencies.

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IT Outsourcing

You are correct to point out that this is primarily a labor issue and HB-1 is effectively a means through arbitrage to discount cost for value added services. Fact: India and China offer heavy state subsidies to educate their workers.
(China also invests heavily in its manufacturing infrastructure...roads, freeways, ports, airports, etc.)
Why does the U.S. subsidize foreign students that come here to study? Is it because it ultimately benefits U.S. Hi-tech corps? If so, are those corps. repaying for this subsidy through taxes? Offshoring, outsourcing, HB-1...these are all part of a singular subsidy structure that has succeeded in off-shoring our entire manufacturing supply chains. The myth propogated is that we don't churn out enough qualified engineers and scientists. I know plenty of non-foreign engineers and MBA's that are either unemployed or under employed. The managements of our U.S. Companies (and our tax rules) have failed us by giving incentive to offshore.

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Academia, cess pool

That's one area that hardly gets any attention as in zero and we know they are labor arbitraging in research with H-1B and also, extensively, post docs, sometimes using the J-1 Visa.

I've written a few things noticing a much less quality and time degree is being accepted into U.S. PhD programs, directly, not just the Masters...which is a "BSc" but these vary and there are now reports of people with less than 2 years of education deemed "higher" are getting straight into U.S. graduate programs.

Then the rejection rates are higher for U.S. citizens than foreign students in many schools but even more suspect, we have reject rates for graduate school hitting > 80%!

Then, I sure would like to see a statistic sampling of all funding for all schools, especially U.S. higher education receiving state and federal funds.....based on citizenship status. I've heard reports that foreign students are getting funding and U.S. citizens are getting denied...

well, that's pretty odious considering not only did the U.S. student get into grad school, but they are cutting the mustard just fine.

But, one needs to look at aggregate data to prove a pattern (or disprove one)....

Then, isn't it amusing the politicans always talk about "retraining"? Well, how do you "retrain" someone with a BS/BA, MS/MA, PhD?.....

at minimum they need to return to graduate school, or get in for another Masters or another PhD!

It's also pretty damn odious where someone with these levels of education, work experience and skills cannot find a job!

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The FBI was informed of the fraud and bribery in March 2008

The FBI was notified of the fraud and bribery by an employee and began their investigation in May. Kundra was in charge at the time and though has not been named in released FBI documents, I am sure his new assignment will be removed from him and the Obama Administration will have to find a replacement.

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I think you are right, but "replacement" is key

The other candidate was the Cisco CTO, someone who was moving anything and everything over to India and China as fast as they can, demanding unlimited H-1Bs, thrashing, Churning their workforce....

The key question is why is the Obama administration not looking at the many gurus who either went to DARPA or started in DARPA?

Why are they not sticking to national security and the national interest in this post?

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Cisco...?

Why not go down the list...Microsoft, Cisco, Oracle. Hard to find any mid-level executive white guys floating around any of these any more.:-)(Sorry if that sounds politically incorrect.

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Who Cares About Being PC?

We are at war here, dealing with a corrupt H[indu]-1B that is trying to eliminate all Americans from the I.T. industry

I have witnessed the abuse of the H-1B system first-hand and have reported it to the DOL.

15 years in the biz, with top skills, and I have seen my wages decline every year -- it is occupational apartheid at the hands of mostly upper-caste Hindus. Call me politically incorrect, just don't call me a coward. It is the truth, and for over ten years 200,000 American programmers have suffered the humiliation of being displaced by low-skill, low-wage H[indu]-1B imports.

The monopoly of the IT profession by the mostly Indian H-1B lobby must stop. So few of those imports can communicate in English, much less code. And their phony "CVs"!!!! What a riot. 24-yr olds with 10 years of .Net experience!!! ROFL LMAO.

And the idiot American I.T. managers droll over these guys, because they are docile, humble, and meak -- unlike the skilled U.S. developer, who maybe cocky yet talented.

American I.T. managers that hire H-1Bs are spineless, and most know that there is no value-add with an illiterate H-1B sent in by a bloodsucking Desi bodyshop. But since most CIOs, CTOs, and V.P.s in corporate I.T. are failed developers, that is how they like it.

There is no "programmer shortage" -- just a shortage of American I.T. executives with integrity and gonads.

And there is a Cisco/Kundra connection, Brad Reese writes about it in NetworkWorld:

http://www.networkworld.com/community/node/39660

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RE: Not PC

Well, Acar is Turkish so I don't know how we got into the great Hindi Brahminm, Vaishnavm, Gujarati caste takeover of IT/STEM/Professional jobs from that one.

So, look, put your data into statistics for that shows your "not so PC" information accurately. I see every day the racism coming from Indian posters on the blogs....against Americans and I see this racist BS even make it to Academia. It's a complete perversion of U.S. domestic diversity, equal opportunity for never was the intent to eradicate all U.S. citizens from jobs and replace them with an entire group, of one race, one nation.

So, while I also know there is brazen discrimination against Americans now in many tech focused corporations one needs to dig out statistics to prove that.

Great article on the fact Yusuf Acar isn't even qualified as well as a Cisco preferred vendor. Will put in post as an update.

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I agree, but I think you've missed the point

We are at war here, dealing with a corrupt H[indu]-1B that is trying to eliminate all Americans from the I.T. industry



I agree, to a large extent, but I think you've got the wrong enemy. The true enemy is the person I call a free traitor:


American I.T. managers that hire H-1Bs are spineless, and most know that there is no value-add with an illiterate H-1B sent in by a bloodsucking Desi bodyshop. But since most CIOs, CTOs, and V.P.s in corporate I.T. are failed developers, that is how they like it.



These are our real enemies- we're in a civil war, not an international one.

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H-1B HIring Quota

I did some contract work for a large financial services firm. The line managers of that firm were REQUIRED to staff at least 35% of their positions with H-1B consultants. One of the things that came to mind was that the firm, may be even the top managers, had large investments in the Indian companies.

The financial services firm has since been taken over and it irritates me that tax payer money is being used by the firm to hire/retain H-1B consultants.

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Occupational Apartheid

The caste angle has been exposed on posts to my blog and other sites that cater to the Indian expat community, known as Desis.

There is a lot of resentment against certain castes that exploit underclasses in India and these castes have come to dominate the H-1B bodyshop niche and the Indian I.T. consulting industry.

Even Hindu.com recognizes the monopoly:

The H-1B visa was introduced in the 1990s owing to shortage of U.S. engineers in companies such as Microsoft and Yahoo.

For some years 1,15,000 foreign engineers were allowed annually before the U.S. settled for the 65,000 annual limit. Initially, many of the engineers, overwhelmingly Indian, were absorbed by these U.S. companies and served the purpose for which the visa was designed – to maintain U.S. corporate edge by importing engineers in case of a shortfall.

However, as the officials pointed out, critics of the system in the current downturn got a boost when the date for 2007 and 2008 from the U.S. Citizen and Immigration Services showed that most of those given visas were to Indians who entered the country to work for India-headquartered firms working for or in large U.S corporations.

http://www.hindu.com/2009/02/27/stories/2009022755181300.htm

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OK, all of this is not ok, Better Read this now!

Look, we're an economics site. If you want to talk about labor economics, global labor economics, domination of one nation to capture a particular service sector, etc. that's all fine.

The line is drawn when I see racial slurs, ethnicity categorization (which is not the same as national, or citizenship), or any sort of stereotyping of a particular subgroup.

This is a warning and if you do not understand the differences here...well, there are plenty of other places to post.

I cover global labor issues, especially those related to services and use of guest worker Visas because it's a very real economic "theft" of the United States...

but keywords like "Desi" or classifying someone as "following orders" and a stereotype....

sorry, that does not fly on EP.

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I normally don't agree with where you draw the line

But I agree in this case, and here's why:

The Indian Bodyshoppers wouldn't be here if we didn't have an "every man for himself" attitude among C-class executives in the United States.

The real danger is centralization of wealth INTERNAL to the United States, that encourages these stupid decisions. Too many Lee Iacoccas, not enough Henry Fords.

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Occupational Apartheid nails it

Mr. Oaks, I see you are walking the "identity politics", PC line. This issue is a targeted attempt by a foreign government to manipulate a labor market and associated manufacturing goods (software creation and maintenance, hardware distribution). That government and country has a name. That culture has a character and it plays out in the workplace. The PC and identity politics we have been fooled into holding so dear allows a distinct anti-American, anti-diversity workplace culture and hiring practice to take root in many if not most corporate (and as we have seen government) IT departments responsible for hiring and acquiring goods and services. Populism can get messy. In this case there is a clear country, class and culture which is responsible for so much American middle class angst. Why are we not allowed to call a spade a spade in America? Why are we not able to point out the web of national origin, ethnicity and class cronyism?
And why are there not Latvians, Serbs, Thais and Irish you read about in this context. It is because you cannot separate the corruption and cronyism of the gamed labor immigration system from a distinct nationality who uses sheer numbers to flood our labor market and who uses identity politics gotcha tactics and minority business owner laws to cheat non-immigrants American out of a middle class wage. If you live this (trying to make a decent living or even get a job with an IT background) you would know - it is not about a funny punch line from South Park, it is a very stressful, anger-invoking situation.

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a response

firstly, create an account.

Secondly, calling out the statistics of a particular country, namely India, is fine....

what is not fine is name calling and stereotyping.

You are also missing the obvious. There are many Americans who are of Indian ethnicity who are also getting the careers cut short, economically decimated and labor arbitraged.

Americans are being labor arbitraged and that is women who seemingly are first up on the labor arbitrage chopping block, older workers and yes people who are of Indian ethnicity.

So, if you want to talk about India targeting the I.T. sector and how they go about doing that is fine. One can point to China doing very similar things with manufacturing and they did create a tariff schedule that would guarantee they would capture certain sectors...

but to name call or move into ethnic focuses on an economics site....not ok. Just because other blogs are filled with this sort of thing and yes I am completely aware of some of the outrageous posts by Indians...doesn't mean we're going there or any of it flies here.

this is also simply not statistically accurate, to focus on ethnicity....as I point out, many U.S. citizens of various ethnicities are getting labor arbitraged so one must focus on which country, national loyalty.

It's like assuming an American of Irish descent magically supported the IRA in the 1980's. Obviously false as a general rule.

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PC-Phobia Will KIll Us

Great post, anon.

Mr. Oaks, we have a reality in I.T. that runs counter to this nation's values -- the displacement and alieanation of American workers at the hands of a nepotistic and insular foreign workforce. How do you explain the cases where 75% or more of an I.T. staff in a department come not only from the same country, but the same region, and belong to the same caste.

The corruption in India by the upper-caste Hindus is well known, and they now dominate the I.T. consulting industry. And the persecution of Dalits is unconscionable.  The indentured servants being exploited by the bodyshops and the corporate I.T. execs are little more than desperate pawns in a battle to decimate the American programmer.

 One cannot be reasonable at peace with the idea that one ethnic group can monopolize an entire industry at the expense of other immigrants and American citizens.  55k of H-1B visas went to India, out of 85k.  This consolidation is abusive and extreme.  No longer do we hear about a shortage of skilled talent, it is all about the commoditization of hi-tech workers.  The H-1B party line is that Americans are lazy and easily replaced by low-skilled males from a country that is 40% illiterate.  This premise is absurd.  We might as well be importing Somali goat herders or Aboriginals to take our programming jobs -- at least they would be cheaper and more humble.

And BTW, "Desi" is a term embraced by the Indian diaspora and not a slur.

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last warning

you need to prove these claims with statistics that can be validated instead of accusations.

Also, this thread is on Obama's CIO choice and the possibilities of offshore outsourcing, corruption, etc.

So, these comments are getting way off topic as well.

Read the rules, adhere to them please.

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Here's the problem as I see it

Hindus are actually the *last wave* of this problem.

Where were you when the Irish came? Then the Italians? Then the Braceros decimated the agricultural industry? When the Eastern Europeans came? When the second wave of Mexican immigrants moved in on the construction industry? When the textile industry moved offshore to Bangladesh?

Us IT workers all said, let the unemployed learn our sector, we need help for Y2K. I remember the attitude towards H-1bs back in the late 1990s when we needed the help, completely the opposite since 2001.

To a large extent, it looks like our current problem is just a continuation of what has been happening in the United States since the 1890s.

Only when you realize that, can you realize the problem isn't as much Hindu Brahmins, as it is Wall Street Bankers.

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Nepotism

Tunnel Rat is not as off base as you might think, Robert. He's alluding to terrorism of a different kind, but I believe he has nailed it correctly, and it's similar to what Pat Buchanan has been saying for years now. I know for a fact that within certain departments within Cisco and others the numbers of relatives working there is huge--it's
fast becoming a closed system.

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must prove it

he's claiming a certain state, caste is trying to capture the U.S. job market in (I guess) I.T.

but no evidence. the key here is to post actual evidence.

Look, I am not amused at all by those who focus on cultural, socio-ethnic issues instead of the economic stats.

I know this issue inside and out, have been dealing with it for years so I also know the pitfalls that do not hold up the values of domestic diversity, meritocracy, equality, social mobility.

And you know, because I write about this, I am clearly on the side of the U.S. working professional.

This site is not going to turn into one of the comment cess pools on this topic. Period. There are plenty of sites to go degenerate into that...hell, try any youtube video on H-1B and post on Dice, slashdot. Not here.

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Well, actually

I have no statistical evidence, but I have noticed that certain States of India, and certain Castes, seem to have a better chance of producing India Institute of Technology grads.

And it hasn't gone unnoticed by the Indian Government and students of these institutions.

But I'd argue that the higher poverty and illiteracy rate in the lower castes is going to mean that the upper castes are more likely to grab these positions anyway. So you'd better have more than just anecdotal evidence.

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Unbelievable!

Some reports have indicated that Kundra may have had contact with the individuals of interest in the investigation in his earlier positions. It is essential that the links between them be identified and researched.

A person with character would have resigned given that he was obviously in over his head in the DC position even if he was not directly involved in the fraud. The fraud happened on his watch; he is responsible for it. There are tens of thousands of people more qualified for the position.

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India is a mess. It's that

India is a mess. It's that simple, but it's also quite complicated. I'll start with what I think are India's four major problems--the four most preventing India from becoming a developing nation--and then move to some of the ancillary ones.

First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don't know how cultural the filth is, but it's really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump. Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi, Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India. Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight. Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one's health, not how good it is. People casually throw trash in the streets, on the roads. The only two cities that could be considered sanitary in my journey were Trivandrum--the capital of Kerala--and Calicut. I don't know why this is. But I can assure you that at some point this pollution will cut into India's productivity, if it already hasn't. The pollution will hobble India's growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small 'c' sense.)

More after the jump.

The second issue, infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India. Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls. The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand, much less Western Europe or America. And I covered fully two thirds of the country during my visit. There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older. Everyone in India, or who travels in India raves about the railway system. Rubbish. It's awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses. At least fifty million people use the trains a day in India. 50 million people! Not surprising that waitlists of 500 or more people are common now. The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit. Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia, Israel and the US I guess.

The last major problem in India is an old problem and can be divided into two parts that've been two sides of the same coin since government was invented: bureaucracy and corruption. It take triplicates to register into a hotel. To get a SIM card for one's phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service. Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India. The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don't have the time, manpower, money or interest in doing their job. Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.

I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don't think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way. Mumbai, India's financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam, or Indonesia--and being more polluted than Medan, in Sumatra is no easy task. The biggest rats I have ever seen were in Medan!

One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn't produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing. The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It's a shame. Indians and India have many wonderful things to offer the world, but I'm far from sanguine that India will amount to much in my lifetime.

Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I've been there. I've done it. And I've seen 50 other countries on this planet and none, not even Ethiopia, have as long and gargantuan a laundry list of problems as India does. And the bottom line is, I don't think India really cares.

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