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ICG Risk Blog - [ Striking Mumbai is akin to striking financial centers such as Manhattan or London yet many in the west are oblivious ]

Striking Mumbai is akin to striking financial centers such as Manhattan or London yet many in the west are oblivious


Too many in the west don't know that Mumbai is Bombay renamed, much less that it is the financial center of India. In Why are US blogs ignoring Mumbai..., Ennis Singh Mutinywale notes that the Mumbai attack had "similar methods, similar scale" to the "Madrid 3/11 bombings and the London 7/7 bombings" but rates "barely a mention" in the US blogger press:

Doesn't this story have important ramifications for American foreign policy? If the attacks were mounted by a Pakistan based organization, it could move two nuclear countries closer to an armed confrontation. If it was mounted by Al-Qaeda, that would be significant as well...

I can say that it does indeed have critical ramifications which, say to say, are being studiously ignored by the US and EU outsourcing community and the 'stateside' customers of those outsourcers. Those same ramifications are being as quickly minimized away by Indian outsourcing firms concerned that clients will seek safer sites (Indian costs are already rising which is forcing tertiary outsourcing to China.) There is also a cultural overhang to the lack of coverage which, while anguishing to many lay Indians is viewed with some relief by Indian business seeking operational continuity.

We have been covering the actions of the jihadist Lashkar-e-Toiba (LeT) (Army of the Pure),  Naxalite Maoist groups such as the People's War Group (PWG), and the United Liberation Front of Asom (ULFA) for some time. Our predictions are tracking well and it is only the aggressive actions by Indian security services that have minimized attacks to date. See:

We will return to these items but I would like to combine Ennis' more detailed critique at Sepia Mutiny with what I think is the best analysis of media bias in disaster coverage, the Journal of International Affairs monograph, “Regarding the Pain of Others”: Media, Bias and the Coverage of International Disasters.

I cannot recommend this article enough. It illustrates what I call the "lens of the news" that wanders a tiny spotlight through a dark room; events out of the spotlight are immediately forgotten while some never get in:

Over the last two years the world has had a surfeit of disasters. Everywhere one turned there were new photographs of bodies lined up so relatives could come and claim them. In October 2005, the images of covered corpses, stunned faces, keening mothers, tumbled homes and nature gone awry resulted from the South Asia earthquake. In August, the global tragedy was Hurricane Katrina, where the bodies the world saw weren't under rubble but floating in New Orleans' toxic flood. In July, the casualties were British; grainy cell phone photos carried viewers into the very moment that terror struck the London transport system. In December 2004, the sprawled bodies in awkward, disconcerting color were the child and adult victims of the Indian Ocean tsunami. Three months earlier, in September, the translucent corpses of children were from the school siege in Beslan. And virtually every day-should one have troubled to look for them-one could find photographs of the human and other wreckage of another suicide bombing, or three, in Iraq.

But not all of the crises of this past year or so have equally commanded the attention of the world and its cameras. Some disasters have had the bad luck to occur at a moment when a more telegenic disaster was already capturing global attention… Other crisis stories have played even more poorly in the media… And some crises of unimaginable proportions still go unreported; the number of threatened or killed is not a solid predictor of coverage. The media have covered some of the most devastating disasters sporadically… Other global disasters are in such a state of stasis that the media have effectively ignored their numbing devastation…

The analysis of US press coverage is savage and well deserved:

Exactly what the American mainstream media considers to be important could be read in their coverage of the crises of 2005: just-breaking news, dramatic pictures, Americans at risk, situations that can be distilled down to uncomplicated controversy (he said, she said) or uncomplicated violence (such as that caused by natural disasters), quick and/or resolvable denouements and human anecdotes. Immediate actions are valued far more than processes. With this as the key, it is easy to understand why the top news stories in 2005 could range from the devastation of the tsunami to Jennifer Aniston's divorce, from the death of Pope John Paul II to the care and feeding of Terry Schiavo.

Most mainstream media outlets do not consider international crises and disasters holistically. Crises are not crises; instead, they are a kind of virtual merchandise to be sold to fickle audiences who select what news to consume from an exhaustive menu of choices-from tragic disasters to celebrity breakups. When media consider what stories to put on their news budget, elements often far removed from the intrinsic "importance" of a crisis matter.

Like the insurance industry that worries over insured losses more than absolute losses, the media worry over what is "new," what is photogenic, what directly affects their audience, what can be told in a minute-thirty or seven hundred words. The elements of a crisis are disaggregated and evaluated quite dispassionately, often by media accountants with priorities and expectations far different than that of government officials, policy wonks, NGO specialists, insurance executives or even news junkies.

When relief workers look at crises and see crises, for example, media look at crises and see news which is, for most media, a commodity. Other professions-engineers or health workers, for instance-might consider the same crises and see needs of a global community or of individual victims. Viewed in that light it is possible to understand why media institutions do not have any inherent business instincts to cover even major disasters beyond the initial cataclysm.

'Regarding the pain of others' explains much of Ennis's distress and it did that of many Pakistanis over the minimal coverage of their devastating earthquake. The section THERE'S NOTHING BETTER THAN PHOTOS OF A "WHITE WESTERNER IN A BATHING SUIT" goes far in explaining the relatively strong and sustained attention and outpouring over the 2004 tsunami while many other disasters of similar scale were forgotten save for aid agencies, recovery planners and risk analysts as myself.

As I write this, the Israeli incursions against Lebanon and Gaza are pushing Mumbai out of the western news hole. The lens of the news is moving on.

Returning to Indian specifics, we have long identified the multiple benefits of militant attacks against Indian economic recovery. From Commercial blindness:

An LeT attack on outsourcers in India is a "twofer" in that an attack damages the Indian state and its ability for economic gain directly, and damages US and European firms indirectly -- where an attack on US soil would be prohibitive in terms of placing surveillance and strike teams on the ground…

Who can blame the Indians for keeping mum, but where are the US and European firms that should have a fiduciary responsibility to their stakeholders and to their clients who data and business continuity are in the possession of their Indian entities and outsourcing partners?...

[India benefits from the fact] that the great unwashed commercial consumers in the West do not know who Lashkar-e-Toiba, Army of the Pure, really is. The South Asia Terrorism Portal [is] a sound source of basic information, unlike many other Indian sites which are merely anti-Pakistani or nationalistic... SATP has much to say about Lashkar-e-Toiba here ... but I would net it out as follows:

LeT rose as part of the Mujahideen resistance against Soviet occupation in Afghanistan as the military wing of Markaz-ud-Dawa-wal-Irshad (MDI), an Islamic fundamentalist organization rising from Pakistan, where the US has been pressuring Musharraf to curb their activities. LeT’s goals go far beyond regaining Muslim control of Jammu and Kashmir to recreating Islamic governance of India in union with other predominantly Muslim states surrounding Pakistan. LeT is now active in Jammu and Kashmir, India, Chechnya, again in Afghanistan from 2002 to date, Iraq, Bosnia and other garden spots. Think of LeT more as educated and skilled than [as] peasants…

The threat to IT and outsourcing assets in Bangalore and Hyderabad should be taken seriously despite the bland denials from Indian authorities who are understandably anxious to protect what amounts to the core of Indian economic revival… Thoughtful outsourcers there should consider counterthreat and personnel security improvements in addition to IP theft mitigation…

The December 2005 attack against a "temple" of Indian "knowledge society," Bangalore's Indian Institute of Science (IISc) occasioned a forecast extension of the twofer concept. From Indian pipedream:

Shock waves still reverberate through the Indian high-tech community... "the psychological impact of the attack is immenseanalogous to the impact that an attack on MIT would have in the United States."

Political attacks have turned economic in India. Shock waves should be reverberating though US outsourcing assets in the Indian subcontinent, but they remain inert... 

Extending the "twofer" concept in October 2005, we had forecast this attack progression:

  1. Personnel and symbolic targets
  2. Expat data and business process outsourcing (BPO) centers
  3. Manufacturing and development centers

The latter two target groups can cause supply chain disruptions. It is overlooked, for example, that great numbers of US banks have Indian data centers, attacks against which have a multiplier effect in that the bank and all its customers are affected.

Targeting data, BPO and manufacturing facilities leverages the operations and business continuity of US and European firms that would otherwise be difficult to attack directly, while embarrassing the Indian government in demonstrating that it cannot protect its offshoring endeavors, thereby driving potential investors to areas presumed to offer less risk. Unfortunately, relocating from India elsewhere in Asia merely exchanges direct attack risks to more intellectual property loss risks...

The key for expat firms that have no viable options for relocation is to conduct a rigorous vulnerability assessment, then implement the appropriate risk mediation interventions for personnel, facilities and data.

Commercial damage control got underway following the IISc attack as is now happening after the Mumbai attack to placate US and European clients. After IISc:

Nandan Nilekani, CEO of a major Indian outsourcer, Infosys Technologies Limited, was quick to attempt to play down risk to US firms:

"Our campuses are physically secure. We have all kinds of checks that we do. The entire perimeter is guarded which we believe enable us to be fully secure."

The interviewer went on to quote Nilekani as saying, "Even after American companies factor in additional security costs, doing business in India is still far cheaper than staying home."

And after Mumbai:

Sanjay Anandaram, "a partner at JumpStartUp Venture Fund, a US$45 million fund with headquarters in Mauritius":

Investors are not naive and have factored in the political, economic, and other risks involved before investing in India… The blasts Tuesday have not led investors to revaluate doing business in India, because they are among several attacks, riots, and natural calamities to have affected Mumbai and the rest of the country over the years… After similar bombings targeted business centers in Mumbai in 1993, business returned to normal once the story was no longer in the news pages.

A "spokeswoman for ICICI OneSource Ltd., a business process outsourcing company in Mumbai":

Customers outsourcing to India have their own business continuity plans in addition to what Indian outsourcers offer. "On an average less than 10 percent of what is outsourced by a customer is offshored to India, and within India they use providers in multiple locations"… ICICI did not have to move work to its centers outside Mumbai Tuesday, as all its staff for the evening shift were already in the office.

If you believe the spokeswoman, I have some beachfront Arctic property for you. The vast majority of foreign firms are in denial or have been lulled into a false sense of security as the effectiveness of their "business continuity plans." LeT may not be able to operate outside the Indian subcontinent, but it is a skilled and persistent attacker within it. Again, I cannot blame Indian business for wanting to obscure the magnitude of a threat that is growing, in part due to India's success in attracting businesses and industry that can not be easily struck in the US or EU.

If it is confirmed that al Qaeda has an operational cell in the Indian-controlled part of Kashmir, LeT's home territory, Indian authorities will face a heightened threat of Muslim extremism.

Indian Intelligence Takes Closer Look at Al Qaeda
New York Times
July 13, 2006

Train Bombers Focused on Mumbai Business Class
New York Times
July 13, 2006

Open Thread: Mumbai Bomb Blast
posted by Arzan Sam Wadia at 9:26 AM on July 15, 2006
Mumbai Metroblogging

Points that the Mumbai Blasts tell us...
posted by Santhosh G Wilson at 6:48 PM on July 13, 2006
Mumbai Metroblogging

Why are US blogs ignoring Mumbai, ask South Asian bloggers
posted by Xeni Jardin at 04:00:18 PM
July 12, 2006

Deafening silence in the blogosphere
Ennis Singh Mutinywale
Sepai Mutiny
July 12, 2006

Mumbai blasts should not affect investment to India
Investors said to have already factored in risks
By John Ribeiro, IDG News Service
July 12, 2006

Mumbai Inquiry Focuses on Militants
New York Times
July 12, 2006

Series of Bombs Explode on 7 Trains in India, Killing Scores
New York Times
July 12, 2006

Blasts in Mumbai's local trains.
posted by Selma Mirza at 9:46 PM on July 11, 2006
Mumbai Metroblogging

“Regarding the Pain of Others”: Media, Bias and the Coverage of International Disasters
Susan D. Moeller
Journal of International Affairs
Columbia University School of International & Public Affairs
Spring/Summer 2006
Vol. 59, No. 2, Page 173-196
1 April 2006
Mirror at Reuters AlertNet
(Now scrolled off)

Gordon Housworth

InfoT Public  Risk Containment and Pricing Public  Strategic Risk Public  Terrorism Public  


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