Let us rewind for a moment to the aftermath of the ‘Monkeygate’ incident during the Border - Gavaskar trophy in Australia last year. As the media started going to town about the scandal, I received one of those SMS jokes, which I thought was quite funny. It said that Harbhajan didn’t call Symonds ‘monkey’; he used the common North Indian pejorative, ‘Teri ma ki….’. This joke was doing to the rounds much before the Indian team made its official stance on the matter. To my complete surprise, Sachin Tendulkar gave the exact explanation of the incident during the hearing. Is it possible that someone in the Indian Team management saw the joke and identified it as a wonderful opportunity?
A similar thing has just happened with L.K.Advani going to the press about colossal amounts of illegal Indian money that is supposedly sitting in Swiss banks. Read about it in The Hindu and Zee News
Why do I compare this with Indian Cricket’s ingenious excuse for Harbhajan?
Back in October/November 2008, a similar story about Indian money in Swiss Banks was going around on newsgroups, blogs and chain mails. Read a sample here and here.
The main thing which was wrong about the chain mail is the fact that there is nothing called the Swiss Banking Association. There is a Swiss Bankers Association and it has not published any report dealing with illegal money
This however, did not prevent the BJP and Mr. Advani from picking up a figure ($1400 billion) from the chain mail and making a lousy attempt to create an election issue out of it.
Inexplicably, when speaking to the press, Mr. Advani claimed that the figures were from Wikipedia, describing it as a ‘most credible’ source of information. However Wikipedia does not have any such information!
Since the borrowed figure from the chain mail had to be supported, two of the members of the committee set up by the BJP to look into the issue came to the fore to explain it. Prof.Vaidyanathan from IIM Bangalore and S Gurumurthy, who is described by The Hindu as an ‘RSS ideologue’. S Gurumurthy’s article is basically a rehash of Prof Vaidyanathans interview.
In this interview, he explains how he arrives at the figure, based on findings of the Global Financial Integrity study ‘Illicit Financial Flows from Developing Countries: 2002-2006 authored by Dev Kar and Devon-Cartwright Smith.
Lets take a closer look at what the learned Professor says (His comments are in small font)
1. This report shows that the average amount moved from India annually during 2002-06 is $27.3 billion. This means, during the five-year period, the amount taken away is $27.3 billion x 5 = $136.5 billion.
This is correct, and we will agree with the professor, even though the annual figure is closer to $25 billion (The data is presented as a bar chart). But let us not split threads.
2. The share of Swiss banks in this dirty money is a third of the global aggregate; some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks. This appears in page 30 of the report mentioned above.
Really? A third of dirty money goes to Swiss Banks? Just how Professor came up with this proportion is mystifying. Secondly, unless the professor is talking of some report other than the GFI study that is available in the public domain (link given above), page 30 of the report mentions nothing about Swiss banks. It gives the profile of Raymond W Baker, Director of GFI. In fact, the words ‘Swiss Bank’ do not appear even once in the report.
3. The important point is that this is only for five years. More amounts were stashed away during the Nehruvian socialist regime. So the loot for 55 years would be several times the amount. In fact, in those days, the Indian rupee commanded a better value per US dollar, so fewer rupees could get a dollar. Hence the estimation that Indian money stashed away may be of the order of $1.4 trillion.
Since he is a professor of Finance at one of India’s premier business schools, we expect Prof Vaidyanathan’s basic math to be correct, and the magic number of $45 billon derived mysteriously above multiplied by 55 years will give us about $500 billion, the lower estimate quoted by Advani. That’s nowhere close to the $1400 billion figure quoted in the chain mail and used as an upper estimate by Prof. Vaidyanathan. Isn’t there a difference of $900 billion? Simple – blame it on the evil socialists and the exchange rate!
So what’s the story? The most simple explanation is given by this blogger in a comment on his blog “The fact is - these boys simply took a figure from a chain email. When the press release came out - there was no mention of GFI or Raymond Baker. All they said was Wikipedia - which does not have the info in the first place. When their hoax was caught - the IIM-A professor quickly juggled his figures - like multiplying GFI approximates by a factor that fitted in (55 years or 60 years) and simply brought the figure to match the hoax email”
Bibek Debroy has written this article, which effectively dismantles the hoax and exposes the arguments of both Vaidyanathan and Gurumurthy.
Let me end this article with a reference to another SMS joke. This joke attributed the collapse of Bear Stearns to the large number of IIM graduates recruited by it prior to its collapse. Given that Prof. Vaidyanathan is professor of Finance at IIM Bangalore, his inept jugglery at trying to arrive at the chain mail figure raises the possibility of this SMS joke, like the Harbhajan joke, coming true. Lets hope it doesn’t! And let’s hope that we will see politicians talking more about real issues and not about Internet hoaxes.
A similar thing has just happened with L.K.Advani going to the press about colossal amounts of illegal Indian money that is supposedly sitting in Swiss banks. Read about it in The Hindu and Zee News
Why do I compare this with Indian Cricket’s ingenious excuse for Harbhajan?
Back in October/November 2008, a similar story about Indian money in Swiss Banks was going around on newsgroups, blogs and chain mails. Read a sample here and here.
The main thing which was wrong about the chain mail is the fact that there is nothing called the Swiss Banking Association. There is a Swiss Bankers Association and it has not published any report dealing with illegal money
This however, did not prevent the BJP and Mr. Advani from picking up a figure ($1400 billion) from the chain mail and making a lousy attempt to create an election issue out of it.
Inexplicably, when speaking to the press, Mr. Advani claimed that the figures were from Wikipedia, describing it as a ‘most credible’ source of information. However Wikipedia does not have any such information!
Since the borrowed figure from the chain mail had to be supported, two of the members of the committee set up by the BJP to look into the issue came to the fore to explain it. Prof.Vaidyanathan from IIM Bangalore and S Gurumurthy, who is described by The Hindu as an ‘RSS ideologue’. S Gurumurthy’s article is basically a rehash of Prof Vaidyanathans interview.
In this interview, he explains how he arrives at the figure, based on findings of the Global Financial Integrity study ‘Illicit Financial Flows from Developing Countries: 2002-2006 authored by Dev Kar and Devon-Cartwright Smith.
Lets take a closer look at what the learned Professor says (His comments are in small font)
1. This report shows that the average amount moved from India annually during 2002-06 is $27.3 billion. This means, during the five-year period, the amount taken away is $27.3 billion x 5 = $136.5 billion.
This is correct, and we will agree with the professor, even though the annual figure is closer to $25 billion (The data is presented as a bar chart). But let us not split threads.
2. The share of Swiss banks in this dirty money is a third of the global aggregate; some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks. This appears in page 30 of the report mentioned above.
Really? A third of dirty money goes to Swiss Banks? Just how Professor came up with this proportion is mystifying. Secondly, unless the professor is talking of some report other than the GFI study that is available in the public domain (link given above), page 30 of the report mentions nothing about Swiss banks. It gives the profile of Raymond W Baker, Director of GFI. In fact, the words ‘Swiss Bank’ do not appear even once in the report.
3. The important point is that this is only for five years. More amounts were stashed away during the Nehruvian socialist regime. So the loot for 55 years would be several times the amount. In fact, in those days, the Indian rupee commanded a better value per US dollar, so fewer rupees could get a dollar. Hence the estimation that Indian money stashed away may be of the order of $1.4 trillion.
Since he is a professor of Finance at one of India’s premier business schools, we expect Prof Vaidyanathan’s basic math to be correct, and the magic number of $45 billon derived mysteriously above multiplied by 55 years will give us about $500 billion, the lower estimate quoted by Advani. That’s nowhere close to the $1400 billion figure quoted in the chain mail and used as an upper estimate by Prof. Vaidyanathan. Isn’t there a difference of $900 billion? Simple – blame it on the evil socialists and the exchange rate!
So what’s the story? The most simple explanation is given by this blogger in a comment on his blog “The fact is - these boys simply took a figure from a chain email. When the press release came out - there was no mention of GFI or Raymond Baker. All they said was Wikipedia - which does not have the info in the first place. When their hoax was caught - the IIM-A professor quickly juggled his figures - like multiplying GFI approximates by a factor that fitted in (55 years or 60 years) and simply brought the figure to match the hoax email”
Bibek Debroy has written this article, which effectively dismantles the hoax and exposes the arguments of both Vaidyanathan and Gurumurthy.
Let me end this article with a reference to another SMS joke. This joke attributed the collapse of Bear Stearns to the large number of IIM graduates recruited by it prior to its collapse. Given that Prof. Vaidyanathan is professor of Finance at IIM Bangalore, his inept jugglery at trying to arrive at the chain mail figure raises the possibility of this SMS joke, like the Harbhajan joke, coming true. Lets hope it doesn’t! And let’s hope that we will see politicians talking more about real issues and not about Internet hoaxes.
