Virtually Jamaica

My 2 Cents:  You know it is really sad that this type of thing happens, but they do, and the funny think is that it does not only happen in developing countries…but this is where it hurts the most :O(

US tech companies Adobe, Dell, IBM, Intel, Microsoft, Yahoo and others all have homes in Bangalore, India, helping it account for $11.2 billion of India’s IT outsourcing market in 2007. Thanks to these companies’ demand for land, Bangalore office prices have gone from $1 per square foot in 2001 to as much as $400 per square foot now.

But here’s the problem, according to Wired: thanks to convoluted laws and corrupt officials, claiming ownership over a piece of property in Bangalore can be as easy as hiring thugs to paint your name on the side of a building. In Bangalore, might makes right.

The chaos makes gangsters who can impose order — like the murderous Muthappa Rai — very wealthy.  Wired‘s Scott Carney describes Rai’s home as "immense and gaudy, replete with gold ornaments and crystal chandeliers." Here’s how it got that way, a local lawyer told the magazine:

Asked to intercede by a prospective buyer, Rai checks out the parcel for competing owners. If two parties assert ownership, he hears both sides plead their case and decides which has the more legitimate claim (what he calls "80 percent legal"). He offers that person 50 percent of the land’s current value in cash. To the other, he offers 25 percent to abandon their claim—still a fortune to most Indians, given the inflated price of Bangalorean real estate. Then he sells the land to his client for the market price and pockets the remaining 25 percent. Anyone who wants to dispute the judgment can take it up with him directly.

Few dispute Rai’s "judgment," one of his lieutenants told Wired:

"All anyone needs to hear is his name," he says. "If a rowdy won’t back down, then we go to the person who is behind him and cut it off at the spine," Sangeeth explains. "In the hypothetical instance where it does need to come to violence, someone might need to be beaten up. The next day we would leave a message that we were behind it and that this was just a warning. The name alone has power."

Santosh Hedge, a former Indian supreme court justice now in charge of prosecuting corruption cases, told Wired that IT companies deserve a share of the blame. "Businesspeople want to get things done quickly, and they have no option but to bribe officials to shortcut the bureaucracy," he said.

"Certainly IT companies contribute to the problem," he says. "They work with people who have only a shady title to the land. Then they occupy buildings that are constructed illegally, without permission from the authorities. I don’t want to name specific firms, but huge companies build illegally here."

(Photo by Wired‘s Scott Carney)

How US Tech Makes Indian Gangsters Rich