Artificial intelligence’s newest sensation — the gabby chatbot-on-steroids ChatGPT — is sending European rulemakers back to the drawing board on how to regulate AI.
The chatbot dazzled the internet in past months with its rapid-fire production of human-like prose. It declared its love for a New York Times journalist. It wrote a haiku about monkeys breaking free from a laboratory. It even got to the floor of the European Parliament, where two German members gave speeches drafted by ChatGPT to highlight the need to rein in AI technology.
But after months of internet lolz — and doomsaying from critics — the technology is now confronting European Union regulators with a puzzling question: How do we bring this thing under control?
The technology has already upended work done by the European Commission, European Parliament and EU Council on the bloc’s draft artificial intelligence rulebook, the Artificial Intelligence Act. The regulation, proposed by the Commission in 2021, was designed to ban some AI applications like social scoring, manipulation and some instances of facial recognition. It would also designate some specific uses of AI as “high-risk,” binding developers to stricter requirements of transparency, safety and human oversight.
The catch? ChatGPT can serve both the benign and the malignant.
This type of AI, called a large language model, has no single intended use: People can prompt it to write songs, novels and poems, but also computer code, policy briefs, fake news reports or, as a Colombian judge has admitted, court rulings. Other models trained on images rather than text can generate everything from cartoons to false pictures of politicians, sparking disinformation fears.
In one case, the new Bing search engine powered by ChatGPT’s technology threatened a researcher with “hack[ing]” and “ruin.” In another, an AI-powered app to transform pictures into cartoons called Lensa hypersexualized photos of Asian women.
“These systems have no ethical understanding of the world, have no sense of truth, and they’re not reliable,” said Gary Marcus, an AI expert and vocal critic.
These AIs “are like engines. They are very powerful engines and algorithms that can do quite a number of things and which themselves are not yet allocated to a purpose,” said Dragoș Tudorache, a Liberal Romanian lawmaker who, together with S&D Italian lawmaker Brando Benifei, is tasked with shepherding the AI Act through the European Parliament.
Already, the tech has prompted EU institutions to rewrite their draft plans. The EU Council, which represents national capitals, approved its version of the draft AI Act in December, which would entrust the Commission with establishing cybersecurity, transparency and risk-management requirements for general-purpose AIs.
The rise of ChatGPT is now forcing the European Parliament to follow suit. In February the lead lawmakers on the AI Act, Benifei and Tudorache, proposed that AI systems generating complex texts without human oversight should be part of the “high-risk” list — an effort to stop ChatGPT from churning out disinformation at scale.
The idea was met with skepticism by right-leaning political groups in the European Parliament, and even parts of Tudorache’s own Liberal group. Axel Voss, a prominent center-right lawmaker who has a formal say over Parliament’s position, said that the amendment “would make numerous activities high-risk, that are not risky at all.”
The two lead Parliament lawmakers are working to impose stricter requirements on both developers and users of ChatGPT and similar AI models | Pool photo by Kenzo Tribouillard/EPA-EFE
In contrast, activists and observers feel that the proposal was just scratching the surface of the general-purpose AI conundrum. “It’s not great to just put text-making systems on the high-risk list: you have other general-purpose AI systems that present risks and also ought to be regulated,” said Mark Brakel, a director of policy at the Future of Life Institute, a nonprofit focused on AI policy.
The two lead Parliament lawmakers are also working to impose stricter requirements on both developers and users of ChatGPT and similar AI models, including managing the risk of the technology and being transparent about its workings. They are also trying to slap tougher restrictions on large service providers while keeping a lighter-tough regime for everyday users playing around with the technology.
Professionals in sectors like education, employment, banking and law enforcement have to be aware “of what it entails to use this kind of system for purposes that have a significant risk for the fundamental rights of individuals,” Benifei said.
If Parliament has trouble wrapping its head around ChatGPT regulation, Brussels is bracing itself for the negotiations that will come after.
The European Commission, EU Council and Parliament will hash out the details of a final AI Act in three-way negotiations, expected to start in April at the earliest. There, ChatGPT could well cause negotiators to hit a deadlock, as the three parties work out a common solution to the shiny new technology.
On the sidelines, Big Tech firms — especially those with skin in the game, like Microsoft and Google — are closely watching.
The EU’s AI Act should “maintain its focus on high-risk use cases,” said Microsoft’s Chief Responsible AI Officer Natasha Crampton, suggesting that general-purpose AI systems such as ChatGPT are hardly being used for risky activities, and instead are used mostly for drafting documents and helping with writing code.
“We want to make sure that high-value, low-risk use cases continue to be available for Europeans,” Crampton said. (ChatGPT, created by U.S. research group OpenAI, has Microsoft as an investor and is now seen as a core element in its strategy to revive its search engine Bing. OpenAI did not respond to a request for comment.)
A recent investigation by transparency activist group Corporate Europe Observatory also said industry actors, including Microsoft and Google, had doggedly lobbied EU policymakers to exclude general-purpose AI like ChatGPT from the obligations imposed on high-risk AI systems.
Could the bot itself come to EU rulemakers’ rescue, perhaps?
ChatGPT told POLITICO it thinks it might need regulating: “The EU should consider designating generative AI and large language models as ‘high risk’ technologies, given their potential to create harmful and misleading content,” the chatbot responded when questioned on whether it should fall under the AI Act’s scope.
“The EU should consider implementing a framework for responsible development, deployment, and use of these technologies, which includes appropriate safeguards, monitoring, and oversight mechanisms,” it said.
The EU, however, has follow-up questions.
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( With inputs from : www.politico.eu )
Two years after the British “took over” the governance of Jammu and Kashmir and appointed Sir Oliver St John, the first British Resident on September 25, 1885, Andrew Wingate was appointed the land Settlement Officer on January 15, 1887. Of the state’s 28 tehsils he did land settlement in Lal and Phak Parangna’s leaving the gigantic exercise to Walter R Lawrence. In his preliminary report, however, he detailed how the land, crops, markets and people were consumed by the middlemen unleashed on the peasantry
This photograph taken by an astronaut on December 1, 2021, using a Nikon D5 digital camera with having 70-mm focal length, was released by NASA on December 31, 2022. It shows the Kashmir valley in a haze.
“The general result of the last 70 years appears to be that the population is now little more than half of what it used to be. That it is a considerable loss, there can be little doubt. Traces of disused irrigation and of former cultivation, ruins of villages or parts of villages, of bridges, &c, local tradition, all point to a greater prosperity, which by the end of the Sikh rule in AD 1846 had well-nigh disappeared.
Feeding People
To maintain the population, two devices have been resorted to, both I believe of old date. The first, prohibiting export of rice is still in existence. The second, prohibiting any Kashmiri crossing the passes was removed during the last famine. The door of hope was, however, opened too late for of the numerous refugees few succeeded in reaching the open country and consequently few came back. Since then, numbers of Kashmiris visit the Punjab every winter where they find employment and save on their wages, returning in the early spring to cultivate their fields, generally bringing with them some cloth or other trifle for their wives, but getting frequently roughly handled by the customs’ clerks for their pains.
Kashmiri requires more and more frequent nourishment and warmer clothing than his brother of the plains. Not only does the climate necessitate more but the Kashmiri has the body and strength of an elephant. The collectors of shali often pay insufficient attention to this point, and as the aim is to collect for the use of the city all that can be safely taken, they are apt, acting on their experience of what a family consume in the plain, to leave too little to properly support and multiply the agricultural population. (page 16)
I saw mobs struggling and fighting to secure a chance of getting a few seers of the government shali, in a way that I have not witnessed since the great famine of southern India.
Stagnant Prices
I have found it impossible to obtain any record of bazar prices, but I believed I am correct in saying that before AD 1846 the normal price of shali was about eight annas per kharwar, and that it varied with the harvests. For example, during the famine of AD 1861-33, the price rose greatly, and oven after AD 1833, it remained for some time as high as Rs 1.5 per kharwar. Whether the kharwar was reduced to 15 traks instead of 16 traks then I have not ascertained. Shortly after Maharaja Golab Singh assumed control, the present system of collecting shali in large granaries in the city and selling it by retail through government officials appears to have been introduced, and the price of shali, with a brief interval about AD 1879 when it was raised to Rs 1.5 has remained stationary at Rs 1.25 per kharwar of 15 traks = two maunds and one seer of standard weight at 80 tolas per seer.
For over 40 years the system has been sufficiently profitable to support a large body of the pandit population of the city in idleness, and the government has gradually become on the one side a farmer working with coolies under a management closely approximating forced labour, and on the other side, a gigantic bannia’s shop doling out food to the poor in exchange for their coppers, and keeping with every cultivator an account showing what is taken from him whether in the way of grain, oil, wool, ponies, cows, &c, and what is given to him in the shape of seed, plough-cattle, cotton or wool to spin and weave, and a hundred other petty details. (page 17)
When I told your Highness in Darbar the price of shall must rise with the state of the harvest, and must probably be often higher than rupees two chillki, a shiver went round the officials, and your Highness said you would not dare to raise the price so great would be the outcry. I can only say that a country cannot go on feeding a semi-idle host at less than cost price and somebody must be a loser. The cultivators have lost much, even the interest to cultivate, and now the loss is falling on the State. (page 26)
The Booty
Under the Sikhs, the State took a half-share of the kharif crop and in addition four traks per kharwar and on account of the rice straw and the vegetable produce of’ the Sagazar” plots, the whole of which were kept by the Asami and were supposed to be free of assessment, Rs 1-9-0 per cent, was added to the total. The patwari and kanungo got 4 a trak per kharwar between them.
Inferior village servants got something. Nazarana was levied four times a year, and tambol (about two per cent) was taken on occasions of marriages in the ruler’s family. The villagers had also to feed the state watchers of the grain, called Shakdar. Non-resident cultivators paid a little less and Pandits and Pirzadas only paid two extra traks instead of four.
For the rabi and kimiti crops, all classes of cultivators were taxed alike, and in addition to the half-share, three traks per kharwar were taken under the names of extra cesses. The kimiti crops appear to be those that have always had a money value and are tilgogal, sarson, tobacco, cotton, linseed, saffron and the like.
For other crops, whether kharif or rabi, the collection might be in kind, or the villages might be farmed out. But I can find no trace so far of any crop rates. Walnut oil, fruit-trees, and honey have also always been taxed. Under the above, the State share was not less than three-fifth of the gross produce and what the cultivator actually retained was certainly less than two-fifths and probably only about one-third. The abundance of fruits, berries, and nuts, the extensive grazing area, and forest produce, enabled the cultivators to live, but an assessment so heavy as this would extinguish all rights in land, would render land valueless and would reduce a population forcibly confined within the valley to the condition of tenants-at-will. (page 18)
Panchan Pather is a fascinating meadow in Kulgam that was opened for tourists by officials recently. Photo: special arrangement
Since the times of the Sikhs, the pressure has been undoubtedly relaxed but it must still be pretty severe when cultivators, are found ready to sell whole villages for no other equivalent than the protection of a powerful name. Many of the Mukaddams, or heads of the villages, are very intelligent, but when it comes to seeing their children stinted of food, with hearts sickened by deferred hope, they sign away fatuitously day by day such rights as they possess. During Maharaja Golub Singh’s rule (AD 1846 to 1857) the Sikh procedure was followed, but some slight relaxations were made in favour of land newly cultivated, for large areas were lying waste.
His Highness was fond of horses and a number of grass-rakhs were reserved from cultivation.
Under Maharaja Ranbhir Singh, circles of villages were annually farmed out to contractors, called kardars. About 1865 the extra traks per kharwar were reduced for all Pandits and Pirzadas for a time to only one trak.
From about 1869 the practice of contracting with the Mukaddams or with the Zamindars gradually established itself in place of the farming system, and only two extra traks came to be levied instead of four.
In 1873-74, the village contracts seem to have been divided up into asamiwar khewats” or cultivators’ accounts, and either produce or cash was taken from each man.
In 1875 the harvest was a bad one, and the state took two shares of the produce and left one only to the cultivators. Next year fresh contracts were entered into either with Mukaddams, Kardars or cultivators and two traks per kharwar were again added to the assessment, besides an aggregate tax of Rs 9-12-0 per cent, if paid in cash or nine kharwars 12 traks per hundred kharvvars if paid in kind. This tax included a number of items, such as support of the Palace-temple, the abolished kanungo’s share, and so on.
In 1877 the scarcity began and the new contracts broke down and so the State collected in kind only, and this practically continued till 1880 when a new asamiwar khewat was made based upon previous years’ collections as estimated in cash but payable either in produce or cash as the cultivator was able. This khewat or cash settlement is supposed still to be valid, but after the good harvests of Samvat 1937 and 1938 the settlement was thought to have been too easy, and so it was raised by Rs 8-9-0 per cent, the chief item of the increment being Rs 6-13-0 for a pony tax, which might be paid in ponies instead of money, and in place of the Rs 1-9-0 per cent, formerly levied for fodder, the cultivators were required to give five kurus of rice-straw per 100 threshed.
This settlement includes all cesses except the tambol and nazrana. In 1885 the Rs 8-9-0 per cent, tax was remitted, and so now the khewat of S 1937 is supposed to have been reverted to, with the exception of the five kurus of rice-straw which are still taken.
In 1886, one seer per kharwar, formerly payable to the zillalidars, was made payable to the State, who appointed paid chowkidars. If this revenue history is not very correct, it must be remembered that access to the revenue records has been denied me. (page 19-20)
A pre-partition photograph showing the men and women busy in rice-field harrowing.
Grain Free Market
There are neither grain shops in the bazar nor bannias nor bankers. I do not know whether it is an offence to sell shali but cultivators are afraid to do so, and in tehsils nominally under a cash settlement and with an abundant harvest my establishment have once and again been literally starving and the only way they can get food is by having it sent out, rice, atta, dall from the government storehouses in Srinagar to the tehsildars who thereupon sell to my men for cash. My men still find difficulty in procuring the necessaries of life, and only very urgent representations at headquarters have secured the supplies necessary to stop the angry and to me humiliating clamour of my subordinates to be allowed to buy food for ready money. (page 17)
Coolies, Not Cultivators
I have been told by the highest and most trusted officials in Srinagar that the Kashmiri cannot be trusted with shali because he would eat the whole of it, that he will not plough unless the tehsildar gives him the seed and makes him, and that without this fostering care of government he would become extinct. The truth being, that he has been pressed down to the condition of a coolie cultivating at subsistence allowances the State property.
The Kashmiris are called cowardly because they have lost the rights belonging to the peasantry elsewhere and tamely submit to be driven like sheep before a sepoy. But it is useless to expect that a small population forming an isolated state that looked only to its hills for protection could withstand powerful neighbours, like Afghans or Sikhs, or that so distant and inaccessible a province would not be ruthlessly ground down under the endless succession of Governors that have enriched themselves in this valley. The Kashmiri is strong and hardworking, but his spirit is dormant, and he is grudged the quantity of food the climate makes necessary but which a short-sighted policy considers gluttonous, and consequently, he is being closer pressed every harvest. (page 19)
Last year I found in the cash-settled tehsil the standing crops, reaping, and threshing, as strictly guarded as if there was batai assessment with this serious difference that the cultivator did not know what share of his shali would be left to him. (page 25)
Peasant Loot
It may be easier now to understand why the Kashmiri cares naught for rights in land, why his fields are fallow or full of weeds, and manure and water neglected, why he has, as I can well believe, even to be forced to cultivate? The revenue system is such that whether he works much or little, he is left with barely enough to get along on till next harvest. He is a machine to produce shali for a very large and mostly idle city population. The secret of the cheap shali is because if the price were allowed to rise to its proper level, the whole body of pundits would compel the palace to yield to their demands. (page 26)
An early twentieth-century photograph showing a group of extremely beautiful Kashmiri women, disempowered and in poverty. The photograph has been taken in the Kashmir periphery.
The ignorant Mohammadan cultivator has not only no one he can call friend, but everyone, whether Hindu or Mohammadan, of any influence, is against him, for cheap bread by the sweat of the cultivator’s brow is a benefit widely appreciated. The Mohammadan cultivator is compelled to grow shali, and in many years to part with it below the proper market rate, that the city may be content. If the harvest is too little for both, the city must be supplied and is supplied by any force that may be necessary and the cultivator and his children must go without. That is the explanation of the angry discontent that filled the valley during the famine. The cultivator is considered to have rights neither to his land nor to his crops. The pundits and the city population have a right to be well fed, whether there is famine or not, at rupees two chillki per kharwar. I said everybody of influence was against the cultivator. (page 26)
Enforced Weave
The anti-climax is reached when cotton is served out to the villagers to be made into army clothing, and when the villagers can make nothing of the rotten commodity, they are charged for the cotton supplied at Rs 14 chilki per kharwar, with interest at over 14 per cent. (Page 27)
Internal Displacement
It has been described how the revenue system leaves the cultivator, without protection. His one concern is to get enough to eat and when he fails in one tehsil he betakes himself to another. Consequently, hereditary occupants are few and if any proof were wanting of the unsatisfactory condition of agriculture it is the fact that large numbers have only cultivated their present lands for a few years. In a highly fertile valley to find the peasantry roving from village to village is a clear sign that the administration is faulty.
This constant search for a rest never found, leads to two things; first, that much valuable land is annually thrown out of cultivation, and secondly that the people endeavour to shelter themselves behind any influential name. Consequently, since the death of Maharaja Golab Sing, from which date central authority appears to have been weaker, there has been a steady and latterly rapidly increasing transference of land from the cultivating to the non-cultivating classes and a landlord element is intruding itself between the cultivator and the State. (Page 27)
The Modus Operandi
As soon as a man has got any land he proceeds first to oust all the old cultivators so as to destroy any proof of the land having been cultivated when he entered upon it, and second to extend his ownership over every bit of land in the neighbourhood he can lay hands on. An instance will speak for itself. A tehsildar cast his eye upon a fine village within his charge, close to Srinagar. There, were six or seven kharwars fallow and waste, which supplied a pretext for developing the country and improving the revenue by applying for a chak. He had good influence at headquarters and his friend the Diwan, about five years ago, gave him a mukarrari patta for 20 kharwars at the usual rates of Rs 12 for wet and Rs 6 for dry land, but the tehsildar took care to get it inserted that all the land was dry… For some such trifling sum he is in possession of 29 kharwars of fine land of which 20 kharwars are irrigated and chiefly shali, so that even at the nominal rates of the patta, he should be paying about Rs 300. Some of the villagers objected to their land being thus appropriated and specially to the water supply being controlled for the benefit of the land seized, but the tehsildar speedily reduced them to reason by getting their revenue demand raised by between 30 and 40 per cent, and the village is now labouring under heavy outstanding balances. This leads to cultivators disappearing and as they disappear their fields are quickly added to the chak. He is now trying to turn the villagers out of their abadi and to house his own cultivators there instead.
One of the major jobs of a Kashmir home was to grind the paddy for rice, the main staple food. In this photograph taken somewhere in the twentieth century, an entire village family is recorded in the process of grinding paddy. The process involved using stone mortar (Kanz) and pestle (Mohul) to pound the dried rice. Both men and women would do it.
Another cultivator dies, his children are young. The neighbouring chakdar immediately takes possession under an agreement to be answerable for the revenue and to restore the land when the children grow up. Another chakdar makes a quarrel about his boundary and works in a few kharwars of land that way. One cannot ride in any direction without hearing complaints of these annual accretions to chaks. (page 30-31)
When I saw the village its fine lands were mostly lying unsown and its houses empty. If it is inquired why the old cultivators do not now return it is because the outstanding balance against the village is enormous, and last year I found the tehsildar trying to secure the entire crops of the miserable few who were left in a vain attempt to reach a sum equal to about one-third of the demand, but with the more likely result of ensuring the complete desertion of the place. As I pointed out villages do not tumble down in this fashion without a cause and the cause is bad administration, and that I fear sometimes with a definite purpose. (page 32)
The son of an influential official took a contract in the old days for two villages. Next year he petitioned the Vazir Wazarat that he was being hindered paying the revenue of the villages which are his property. The Vazir Wazarat submits the case for orders and an endorsement is written across a corner that petitioner is to be allowed to pay the revenue of the villages, and here the writer takes care to repeat the words of the petition, which are his, in milkiyat and zumindari. Now whatever rights cultivators may have it is certain that ownership of villages, unless conferred by the Darbar by sanad, does not exist in Kashmir. Having got so far, the next step was to take an ikcrarnama or agreement from the villagers that he is the proprietor. Armed with these documents, he requests me to record him as proprietor of both villages. On inquiry, of course, it is ascertained he is a mere contractor of revenue and that one-half the villagers deny his claims, and the other half were bought over by a promise that they should be protected from seizure for forced labour. (page 32)
A 1900 photograph showing Sir Walter Lawrence in Kashmir. Agha Sayed Hussain as the young Tehsildar is standing behind him (third from right)
It is to be clearly understood that the interests of the Darbar and the interests of the cultivators are identical and that the interests of all middlemen whatsoever, whether revenue farmers, telisildars, or quasi-proprietors, are inimical to both. The cultivators desire more food and the Darbar, more revenue, and the whole pundit class live by stinting both. (page 37)
The Commission Crisis
I cannot conclude without representing that the conditions which environ my department are most unfavourable to good work. Your Highness’s back is no sooner turned than the measurers again suffer from obstruction. Coolies arc seized, not only from villages under survey, contrary to your Highness’s positive command, but even the parties are interrupted, and chain drawers and flag bearers are dragged away. Recently the judge has begun to receive complaints against my subordinates for assault and the like and to issue process against them. Considering they are Punjabis working for your Highness in a country where they cannot even understand the language, and that a dozen Kashmiris can be made to give any evidence an offended chakdar or official instigates, my subordinates are not likely to consent to work absolutely alone in isolated villages with the prospect of appearing in Criminal Courts. My subordinates have a most difficult task and are exposed to every temptation. (page 45)
BERLIN — In an earlier life as a reporter in Moscow, I once knocked on the door of an apartment listed as the home address of the boss of company that, our year-long investigation showed, was involved in an elaborate scheme to siphon billions of dollars out of Russia’s state railways through rigged tenders.
To my surprise, the man who opened the door wore only his underwear. He confirmed that his identity had been used to register the shell company. But he wasn’t a businessman; he was a chauffeur. The real owner, he told us, was his boss, one of the bankers we suspected of masterminding the scam. “Mr. Underpants,” as we called him, was amazed that it had taken so long for anyone to take an interest.
Mr. Underpants leapt immediately to mind when, nearly a decade on, I learned that a sulfurous academic dispute had erupted over whether foreign companies really are bailing out of Russia in response to President Vladimir Putin’s invasion of Ukraine and subsequent international sanctions.
Attempting to verify corporate activity in Russia — a land that would give the murkiest offshore haven a run for its money — struck me as a fool’s errand. Company operations are habitually hidden in clouds of lies, false paperwork and bureaucratic errors. What a company says it does in Russia can bear precious little resemblance to reality.
So, who are the rival university camps trying to determine whether there really is a corporate exodus from Russia?
In the green corner (under the olive banner of the University of St. Gallen in Switzerland) we have economist Simon Evenett and Niccolò Pisani of the IMD business school in Lausanne. On January 13, they released a working paper which found that less than 9 percent of Western companies (only 120 firms all told) had divested from Russia. Styling themselves as cutting through the hype of corporate self-congratulation, the Swiss-based duo said their “findings challenge the narrative that there is a vast exodus of Western firms leaving the market.”
Nearly 4,000 miles away in New Haven, Connecticut, the Swiss statement triggered uproar in Yale (the blue corner). Jeffrey A. Sonnenfeld, from the university’s school of management, took the St. Gallen/IMD findings as an affront to his team’s efforts. After all, the headline figure from a list compiled by Yale of corporate retreat from Russia is that 1,300 multinationals have either quit or are doing so. In a series of attacks, most of which can’t be repeated here, Sonnenfeld accused Evenett and Pisani of misrepresenting and fabricating data.
Responding, the deans of IMD and St. Gallen issued a statement on January 20 saying they were “appalled” at the way Sonnenfeld had called the rigor and veracity of their colleagues’ work into question. “We reject this unfounded and slanderous allegation in the strongest possible terms,” they wrote.
Sonnenfeld doubled down, saying the Swiss team was dangerously fueling “Putin’s false narrative” that companies had never left and Russia’s economy was resilient.
That led the Swiss universities again to protest against Sonnenfeld’s criticism and deny political bias, saying that Evenett and Pisani have “had to defend themselves against unsubstantiated attacks and intimidation attempts by Jeff Sonnenfeld following the publication of their recent study.”
How the hell did it all get so acrimonious?
Let’s go back a year.
The good fight
Within weeks of the February 24 invasion, Sonnenfeld was attracting fulsome coverage in the U.S. press over a campaign he had launched to urge big business to pull out of Russia. His team at Yale had, by mid-March, compiled a list of 300 firms saying they would leave that, the Washington Post reported, had gone “viral.”
Making the case for ethical business leadership has been Sonnenfeld’s stock in trade for over 40 years. To give his full job titles, he’s the Senior Associate Dean for Leadership Studies & Lester Crown Professor in the Practice of Management at the Yale School of Management, as well as founder and president of the Chief Executive Leadership Institute, a nonprofit focused on CEO leadership and corporate governance.
And, judging by his own comments, Sonnenfeld is convinced of the importance of his campaign in persuading international business leaders to leave Russia: “So many CEOs wanted to be seen as doing the right thing,” Sonnenfeld told the Post. “It was a rare unity of patriotic mission, personal values, genuine concern for world peace, and corporate self-interest.”
Fast forward to November, and Sonnenfeld is basking in the glow of being declared an enemy of the Russian state, having been added to a list of 25 U.S. policymakers and academics barred from the country. First Lady Jill Biden topped the list, but Sonnenfeld was named in sixth place which, as he told Bloomberg, put him “higher than [Senate minority leader] Mitch McConnell.”
Apparently less impressed, the Swiss team had by then drafted a first working paper, dated October 18, challenging Sonnenfeld’s claims of a “corporate exodus” from Russia. This paper, which was not published, was circulated by the authors for review. After receiving a copy (which was uploaded to a Yale server), Sonnenfeld went on the attack.
Apples and oranges
Before we dive in, let’s take a step back and look at what the Yale and Swiss teams are trying to do.
Sonnenfeld is working with the Kyiv School of Economics (KSE), which launched a collaborative effort to track whether companies are leaving Russia by monitoring open sources, such as regulatory filings and news reports, supported where possible through independent confirmation.
Kyiv keeps score on its Leave Russia site, which at the time of writing said that, of 3,096 companies reviewed, 196 had already exited and a further 1,163 had suspended operations.
Evenett and Pisani are setting a far higher bar, seeking an answer to the binary question of whether a company has actually ditched its equity. It’s not enough to announce you are suspending operations, you have to fully divest your subsidiary and assets such as factories or stores. This is, of course, tough. Can you find a buyer? Will the Russians block your sale?
The duo focuses only on companies based in the G7 or the European Union that own subsidiaries in Russia. Just doing business in Russia doesn’t count; control is necessary. To verify this, they used a business database called ORBIS, which contains records of 400 million companies worldwide.
The first thought to hold onto here, then, is that the scope and methodology of the Yale and Swiss projects are quite different — arguably they are talking about apples and oranges. Yale’s apple cart comprises foreign companies doing business in Russia, regardless of whether they have a subsidiary there. The Swiss orange tree is made up of fewer than half as many foreign companies that own Russian subsidiaries, and are themselves headquartered in countries that have imposed sanctions against the Kremlin.
So, while IKEA gets an ‘A’ grade on the Yale list for shutting its furniture stores and letting 10,000 Russian staff go, it hasn’t made the clean equity break needed to get on the St. Gallen/IMD leavers’ list. The company says “the process of scaling down the business is ongoing.” If you simply have to have those self-assembly bookshelves, they and other IKEA furnishings are available online.
The second thing to keep in mind is that ORBIS aggregates records in Russia, a country where people are willing to serve as nominee directors in return for a cash handout — even a bottle of vodka. Names are often mistranslated when local companies are established — transliteration from Russian to English is very much a matter of opinion — but this can also be a deliberate ruse to throw due diligence sleuths off the trail.
Which takes us back to the top of this story: I’ve done in-depth Russian corporate investigations and still have the indelible memory of those underpants (they were navy blue briefs) to show for it.
Stacking up the evidence
The most obvious issue with the Yale method is that it places a lot of emphasis on what foreign companies say about whether they are pulling out of Russia.
There is an important moral suasion element at play here. Yale’s list is an effective way to name and shame those companies like Unilever and Mondelez — all that Milka chocolate — that admit they are staying in Russia.
But what the supposed good kids — who say they are pulling out — are really up to is a murkier business. Even if a company is an A-grade performer on the Yale list, that does not mean that Russia’s economy is starved of those goods during wartime. There can be many reasons for this. Some companies will rush out a pledge to leave, then dawdle. Others will redirect goods to Russia through middlemen in, say, Turkey, Dubai or China. Some goods will be illegally smuggled. Some companies will have stocks that last a long time. Others might hire my old friend Mr. Underpants to create an invisible corporate structure.
A stroll through downtown Moscow reveals the challenges. Many luxury brands have conspicuously shut up shop but goods from several companies on the Yale A list and B list (companies that have suspended activities in Russia) were still easy to find on one, totally random, shopping trip. The latest Samsung laptops, TVs and phones were readily available, and the shop reported no supply problems. Swatch watches, Jägermeister liquor and Dr. Oetker foods were all also on sale in downtown Moscow, including at the historic GUM emporium across Red Square from the Kremlin.
Swatch watches, Jägermeister liquor and Dr. Oetker foods can all be bought in downtown Moscow, including at the historic GUM emporium across Red Square from the Kremlin | POLITICO
All the companies involved insisted they had ended business in Russia, but acknowledged the difficulties of continued sales. Swatch said the watches available would have to be from old stocks or “a retailer over which the company has no control.” Dr. Oetker said: “To what extent individual trading companies are still selling stocks of our products there is beyond our knowledge.” Jägermeister said: “Unfortunately we cannot prevent our products being purchased by third parties and sold on in Russia without our consent or permission.” Samsung Electronics said it had suspended Russia sales but continued “to actively monitor this complex situation to determine our next steps.”
The larger problem emerging is that sanctions are turning neighboring countries into “trading hubs” that allow key foreign goods to continue to reach the Russian market, cushioning the economic impact.
Full departure can also be ultra slow for Yale’s A-listers. Heineken announced in March 2022 it was leaving Russia but it is still running while it is “working hard to transfer our business to a viable buyer in very challenging circumstances.” It was also easy to find a Black & Decker power drill for sale online from a Russian site. The U.S. company said: “We plan to cease commerce by the end of Q2 of this year following the liquidation of our excess and obsolete inventory in Russia. We will maintain a legal entity to conduct any remaining administrative activities associated with the wind down.”
And those are just consumer goods that are easy to find! Western and Ukrainian security services are naturally more preoccupied about engineering components for Putin’s war machine still being available through tight-lipped foreign companies. Good luck trying to track their continued sales …
Who’s for real?
Faced with this gray zone, St. Gallen/IMD sought to draw up a more black-and-white methodology.
To reach their conclusions, Evenett and Pisani downloaded a list of 36,000 Russian companies from ORBIS that reported at least $1 million in sales in one of the last five years. Filtering out locally owned businesses and duplicate entries whittled down the number of owners of the Russian companies that are themselves headquartered in the G7 or EU to a master list of 1,404 entities. As of the end of November, the authors conclude, 120 companies — or 8.5 percent of the total — had left.
The Swiss team was slow, however, to release its list of 1,404 companies and, once Sonnenfeld gained access to it, he had a field day. He immediately pointed out that it was peppered with names of Russian businesses and businessmen, whom ORBIS identified as being formally domiciled in an EU or G7 country. Sonnenfeld fulminated that St. Gallen/IMD were producing a list of how few Russian companies were quitting Russia, rather than how few Western companies were doing so.
“That hundreds of Russian oligarchs and Russian companies constitute THEIR dataset of ‘1,404 western companies’ is egregious data misrepresentation,” Sonnenfeld wrote in one of several emails to POLITICO challenging the Swiss findings.
Fair criticism? Well, Sonnenfeld’s example of Yandex, the Russian Google, on the list of 1,404 is a good one. Naturally, that’s a big Russian company that isn’t going to leave Russia.
On the other hand, its presence on the list is explicable as it is based in the Netherlands, and is reported to be seeking Putin’s approval to sell its Russian units. “Of course, a large share of Yandex customers and staff are Russian or based in Russia. However, the company has offices in seven countries, including Switzerland, Israel, the U.S., China, and others. What criteria should we use to decide if it is Russian or not for the purpose of our analysis?” St. Gallen/IMD said in a statement.
Answering Sonnenfeld’s specific criticism that its list was skewed by the inclusion of Russian-owned companies, the Swiss team noted that it had modified its criteria to exclude companies based in Cyprus, a favored location for Russian entrepreneurs thanks to its status as an EU member country and its business-friendly tax and legal environment. Yet even after doing so, its conclusions remained similar.
Double knockout
Sonnenfeld, in his campaign to discredit the Swiss findings, has demanded that media, including POLITICO, retract their coverage of Evenett and Pisani’s work. He took to Fortune magazine to call their publication “a fake pro-Putin list of Western companies still doing business in Russia.”
Although he believes Evenett and Pisani’s “less than 9 percent” figure for corporates divesting equity is not credible, he bluntly declined, when asked, to provide a figure of his own.
Instead, he has concentrated on marshaling an old boys’ network — including the odd ex-ambassador — to bolster his cause. Richard Edelman, head of the eponymous public relations outfit, weighed in with an email to POLITICO: “This is pretty bad[.] Obvious Russian disinformation[.] Would you consider a retraction?” he wrote in punctuation-free English. “I know Sonnenfeld well,” he said, adding the two had been classmates in college and business school.
Who you were at school with hardly gets to the heart of what companies are doing in Russia, and what the net effect is on the Russian economy.
The greater pity is that this clash, which falls miles short of the most basic standards of civil academic discourse, does a disservice to the just cause of pressuring big business into dissociating itself from Putin’s murderous regime.
And, at the end of the day, estimates of the number of companies that have fully left Russia are in the same ballpark: The Kyiv School of Economics puts it at less than 200; the Swiss team at 120.
To a neutral outsider, it would look like Sonnenfeld and his mortal enemies are actually pulling in the same direction, trying to work out whether companies are really quitting. Yet both methodologies are problematic. What companies and databases say offers an imprecise answer to the strategic question: What foreign goods and services are available to Russians? Does a year of war mean no Samsung phones? No. Does it mean Heineken has sold out? Not yet, no.
This has now been submerged in a battle royal between Sonnenfeld and the Swiss researchers.
Appalled at his attacks on their work, St. Gallen and IMD finally sent a cease-and-desist letter to Sonnenfeld.
Yale Provost Scott Strobel is trying to calm the waters. In a letter dated February 6 and seen by POLITICO, he argued that academic freedom protected the speech of its faculty members. “The advancement of knowledge is best served when scholars engage in an open and robust dialogue as they seek accurate data and its best interpretation,” Strobel wrote. “This dialogue should be carried out in a respectful manner that is free from ad hominem attacks.”
With reporting by Sarah Anne Aarup, Nicolas Camut, Wilhelmine Preussenand Charlie Duxbury.
Douglas Busvine is Trade and Agriculture Editor at POLITICO Europe. He was posted with Reuters to Moscow from 2004-08 and from 2011-14.
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( With inputs from : www.politico.eu )
JAMMU: The Lieutenant Governor, Manoj Sinha today inaugurated Special Governance Camp for Kashmiri Migrants at Jagti Colony.
The 12-day long camp at 6 locations is aimed to ensure 100% saturation of Social security schemes for Kashmiri migrants. 18 departments have put up their stalls at the camp including the facilities for enrolment of youth for self employment, skilling and up-skilling.
Speaking on the occasion, the Lt Governor said, Administration is sensitive to the issues of Kashmiri Migrant families and PM Package Employees.
“Few unfortunate incidents had occurred. These attacks were not only on individuals but also on the integrity of India. There are a handful of people, who on the behest of the neighboring country are targeting innocent civilians. Under the guidance of Hon’ble Prime Minister Shri Narendra Modi Ji, we are working with full sensitivity and commitment to address all the issues,” the Lt Governor told the gathering.
The Lt Governor also observed that many PM Package Employees have resumed their duties and the direction has been issued to release their pending salaries without delay.
The Lt Governor strongly refuted the quote by the Congress Leader Rahul Gandhi, and asserted that he has made no such statement and it has been attributed to him with malicious intent.
“It is completely fabricated and full of lies. I have never used such words for anyone in my entire life. It is my firm belief that anyone who needs help should always be given priority. My doors are open 24 hours for those who has any problem. We are creating an environment to address your issues, efforts are being made for welfare of your children and families to ensure that entire community can contribute in the progress of J&K like it did in the past,” Lt Governor said.
The Lt Governor said, directive has been issued to organize such special governance camps for POJK brothers and sisters to ensure saturation of social security schemes, self-employment and skilling.
He also highlighted that almost all the posts under PM Package have been filled and the UT Government has made all the arrangements for construction of 6000 dwellings.
“Except two, the construction is underway on all the sites. I am personally monitoring the progress. By this April, 1200 houses and till December 2700 houses will be ready. All the pending promotions were completed recently. The process of promotion from Non-gazetted to gazetted is going on and I hope that it will be completed by the end of this month,” the Lt Governor said.
He also said that 80% to 85% PM Package employees are posted at district headquarters. Some are posted at tehsil headquarters after the security audit of the areas. We have ensured that no one is posted at any office or school situated in remote isolated area, he added.
“We are committed to fulfill the expectation of people. Earlier, the laws were formulated to retrieve the properties of Kashmiri Pandit brothers but it was not implemented. We have taken immediate action and out of 8000 applications received on Migrant Portal around 6000 cases have been resolved. The administration and the security forces are working with dedication to ensure your safety,” the Lt Governor said.
The Lt Governor directed the concerned departments for the up-gradation of community hall and a playground.
Nazim Zai Khan, Secretary, Disaster Management, Relief, Rehabilitation and Reconstruction; Ramesh Kumar, Divisional Commissioner, Jammu; KK Sidha, Commissioner, Relief & Rehabilitation and other senior officers were also present.
JAMMU, FEBRUARY 04: The Lieutenant Governor, Manoj Sinha inaugurated Special Governance Camp for Kashmiri Migrants at Jagti Colony.
The 12-day long camp at 6 locations is aimed to ensure 100% saturation of Social security schemes for Kashmiri migrants. 18 departments have put up their stalls at the camp including the facilities for enrolment of youth for self employment, skilling and up-skilling.
Speaking on the occasion, the Lt Governor said, Administration is sensitive to the issues of Kashmiri Migrant families and PM Package Employees.
“Few unfortunate incidents had occurred. These attacks were not only on individuals but also on the integrity of India. There are a handful of people, who on the behest of the neighboring country are targeting innocent civilians. Under the guidance of Hon’ble Prime Minister Shri Narendra Modi Ji, we are working with full sensitivity and commitment to address all the issues,” the Lt Governor told the gathering.
The Lt Governor also observed that many PM Package Employees have resumed their duties and the direction has been issued to release their pending salaries without delay.
The Lt Governor strongly refuted the quote by the Congress Leader Rahul Gandhi, and asserted that he has made no such statement and it has been attributed to him with malicious intent.
“It is completely fabricated and full of lies. I have never used such words for anyone in my entire life. It is my firm belief that anyone who needs help should always be given priority. My doors are open 24 hours for those who has any problem. We are creating an environment to address your issues, efforts are being made for welfare of your children and families to ensure that entire community can contribute in the progress of J&K like it did in the past,” Lt Governor said.
The Lt Governor said, directive has been issued to organize such special governance camps for POJK brothers and sisters to ensure saturation of social security schemes, self-employment and skilling.
He also highlighted that almost all the posts under PM Package have been filled and the UT Government has made all the arrangements for construction of 6000 dwellings.
“Except two, the construction is underway on all the sites. I am personally monitoring the progress. By this April, 1200 houses and till December 2700 houses will be ready. All the pending promotions were completed recently. The process of promotion from Non-gazetted to gazetted is going on and I hope that it will be completed by the end of this month,” the Lt Governor said.
He also said that 80% to 85% PM Package employees are posted at district headquarters. Some are posted at tehsil headquarters after the security audit of the areas. We have ensured that no one is posted at any office or school situated in remote isolated area, he added.
“We are committed to fulfill the expectation of people. Earlier, the laws were formulated to retrieve the properties of Kashmiri Pandit brothers but it was not implemented. We have taken immediate action and out of 8000 applications received on Migrant Portal around 6000 cases have been resolved. The administration and the security forces are working with dedication to ensure your safety,” the Lt Governor said.
The Lt Governor directed the concerned departments for the up-gradation of community hall and a playground.
Sh Nazim Zai Khan, Secretary, Disaster Management, Relief, Rehabilitation & Reconstruction; Sh Ramesh Kumar, Divisional Commissioner, Jammu; Sh KK Sidha, Commissioner, Relief & Rehabilitation and other senior officers were also present.
Jammu and Kashmir has one of the highest unemployment ratios in India. To overcome joblessness, the government initiated job fairs and invited a lot of companies to hire the unemployed. In 23 fairs, 9743 unemployed youth offered their services to 205 participating companies but only 623 got jobs, reports Fahd Khan
Jobless: A huge crowd of boys and girl job-seekers in a job fair in Srinagar’s mini-indoor stadium in late 2022. KL Image: Hilal Shah
Amid an all-time high unemployment rate and joblessness, Jammu and Kashmir government’s much-hyped job fairs have provided jobs to around six per cent of the participants in 2022 in Kashmir. Lack of technical and communication skills was termed to be the key deficits preventing them from getting hired.
The observation of skill deficit raises doubts about the working of the skilling system, which is apparently a top governance priority.
Background
The Centre for Monitoring Indian Economy (CMIE) had highlighted the skyrocketing of the unemployment crisis in the past few years. Till mid-January 2023, it stood at 14.8 per cent, which is the sixth highest in the country. Though the survey outcomes had its own factors including Covid19, it generated a lot of debate over the state of joblessness.
Jammu and Kashmir’s Department of District Employment and Counselling Centres in collaboration with some non-governmental organizations hosted a number of job fairs across Kashmir’s 10 districts. It brought potential human resources face-to-face with potential employers from the private sector.
Officials who arranged these events revealed a total of 9743 unemployed youth participated in 23 job fairs that were organized across 10 Kashmir districts in 2022. Of them, only 623 were provided with on-spot placements. Officials said a total of 205 local and national companies participated in these recruitment rallies.
Srinagar hosted two major events and 2900 youth participated along with 67 local and national companies. Eventually, 25 candidates got on-spot placements, officials said.
In the Pulwama district, one job fair was held that attracted the participation of 213 candidates. At the end of it, nobody got a job order.
In Budgam, two fairs were organised in which 381 youth participated, of whom only 20 got placements. A total of 13 local and national companies participated in the event.
In Ganderbal, only one event was organised in which nine youths out of 900 got on-spot placements. Eleven companies participated in the event.
Anantnag hosted two fairs in which 28 youths got placed among 1211 who participated.
In the adjoining Kulgam district, nine job fairs – the highest among all the districts – were conducted in only 474 got placements among the 3117 youth who had participated. A total of 31 local and national companies participated in the event.
In the Shopian district, two job fairs got 13 people recruited among the 450 youth who had participated.
In Baramulla and Bandipore districts, two job fairs each were organised in which 52 youth from the former district got placed out of 325 total participants while just two received placements in the latter district out of a total of 246 participants.
No job fairs, however, was organised in Kupwara.
As many as 211 youths were recommended for skilling and as many as 3928 on-spot registrations were made on the state employment portal.
Rozgar Mela’s
Apart from these Job Fairs that the Department of District Development and Counselling organised, many similar Job Fairs were organized by non-governmental organizations in view of the surge in the unemployment rate.
In one of such event that the Goodwill Non-governmental organization hosted at Indore Stadium Srinagar, more than 20 MNC’s including local companies participated.
Thousands of youths across Kashmir had thronged the venue to get themselves enrolled in the mega recruitment drives that were being organized both by the government and the NGOs. Some of the companies that participated in the event included SBI Life, HDFC, Jio Care, Tata Motors, Peaks Auto, Kashmir Motors, Himalayan Motors, Shuhul Motors, Ashoka Leyland, LIC, Wishfin, KY Motors, Exide NEO and Fair Deal Motors. Many people even got recruited by US-based companies and are working from home right now.
Problems
Government claims notwithstanding, all these job-linked events provided jobs to only six per cent of the total participants. Many youths who had participated in these fairs alleged that despite aspirants possessing higher qualifications and skills, they were not recruited as the companies didn’t have enough vacancies. As per the participating youth, the low salary was also one of the reasons for them not taking up jobs for which they had to move out of Jammu and Kashmir.
Skill proved to be a major setback for the participating youth not getting jobs in the mega recruitment drives. Many youths claimed that despite coming from far-flung areas with the hope of getting jobs, they were offered loans by participating insurance and banking companies.
In a video on social media, a girl who had participated in an event is heard saying: “With a master’s degree and four diplomas, I had very little hope of getting a job in this event. What more qualifications should I possess to get a job? Even we can’t start our own business as banks provide loans against property only or they charge huge interest rates. Even some companies seek experience for jobs. How come an unemployed youth is experienced when he is never provided with a job? Even we don’t have such an exposure here in Kashmir, where we are trained at the grassroots level to start our own businesses”.
“Many of the jobs being provided in these events are routine basic jobs, “one insider said, talking in anonymity. “Jobs being offered are an insurance agent or marketing persons which one can easily get without participating in these events. There were many schemes like this earlier as well.”
The average salaries fixed during the job fairs were Rs 10000. Whether those who got jobs are satisfied and continuing it is the question to be asked.
Officials Speak
“Most of the companies recruit candidates based on their skills only but the majority of the people who had participated couldn’t meet the required criteria set by these companies,” a senior official in the Directorate of Employment said: “To keep up the pace in today’s world and to get hired by companies, one should possess both communication and technical skills which our youth mostly lack.”
The officer said they were shocked to see that in one of the recruitment drives at the University of Kashmir, only one could make it up to the interview. “The reason being the communication barrier,” an official at the District Employment and Counselling Centre said.
“We mostly deal with the sale and services of automobiles, most of the students were either overqualified or under-qualified for the Jobs we were providing,” one of the recruiting executives in a local automobile concern, who participated in these fairs, said. “For sales, we particularly needed people having good communication skills and those having experience in the service sector. We too aren’t a big company and have already been under a financial crunch since Covid19 and another crisis. Still, we hired around four to five students and they are currently working in our company under probation. Skill was the main reason that we couldn’t provide jobs to the people”.
Developments
It is pertinent to mention that the government has included numerous skill-based courses like IT, management, and tourism at the college level in the past few years, which seems to have a questionable outcome. The government is also imparting job-oriented skill-based courses through polytechnics, hotel management institutes and NIELIT.
“To impart skills to our youth many candidates who had participated in these job fairs were registered for the skill courses being organised by the Tata Consultancy Services (TCS),” an officer at the Directorate of Employment said.
There are many government schemes aimed at up-skilling youth. Himayat was a major flagship scheme under this category under which the youth were trained and later deployed in the market. NIELIT also provided many IT-related courses.
Another scheme was launched by the government in Public Private Partnership mode. It was aimed at improving the quality of the vocational training in the Country and making it demand-driven, so as to ensure better employability of the pass-outs. It covered 32 ITIs in Jammu and Kashmir. Other courses that were launched for the general public also included Sewing, Henna Art, cookery etc.
It seems as if the candidates are yet to be adequately trained or are lacking the actual skill that the employers require.
