Friday, November 30, 2012

Destitution to development

From Wealth of Nations to Common Wealth of Nations

With the recent publication by Forbes magazine of the ranking of the world’s richest people, a new prospect comes into focus. According to Forbes, there are now around 950 billionaires in the world, with an estimated combined wealth of $3.5 trillion. That’s up an amazing $900 billion in just one year. Even after all the yachts, mansions and luxury living that money can buy, have been funded many times over, these billionaires will still have nearly $3.5 trillion to change the world. Suppose they pooled their wealth, as Buffett has done with Bill and Melinda Gates. By standard and conservative principles of foundation management, a $3.5 trillion endowment would have a 5 percent payout of around $175 billion, an amount sufficient to extend basic health care to all the poorest of the world; end massive pandemics of AIDS, TB, and malaria; jump-start an African Green Revolution; end the digital divide; and address the crying need for safe drinking water for one billion people. The group of fewer than one thousand people would outstrip the entire $105 billion development aid of the twenty-two donor governments that represent a combined population of nearly one billion people. In short, this billionaires’ foundation would be enough to end extreme poverty.

Similarly, companies can play a huge role not only as providers of technology but also as customers of local output from impoverished regions. When companies like Starbucks, Nike, or Gap source from low-income communities, they are not creating poverty (as is sometimes alleged) but reducing it. Of course, this is only true if these companies appease dedicated NGOs like Global Witness, Oxfam, the Interfaith Centre on Corporate Responsibility, Amnesty International and CERES and abide by internationally recognised labour standards and human rights principles related to community rights, workers’ health, and so on.


Source : IIPM Editorial, 2012.

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Thursday, November 29, 2012

UN on how member states must work together

Ban Ki-moon, Secy. General, UN on how member states must work together. A B&E exclusive...

The Millennium Development Goals are part of the solution. But progress here has been uneven. Pledges have not been honored. Yet we have achieved enough to know that the goals are within reach. The United Nations is the champion of the most vulnerable. When disaster strikes, we act. We did so this year in Haiti and other Caribbean nations hit by hurricanes. We did so after Cyclone Nargis in Myanmar, where the challenge now is to push for political progress, including credible steps on human rights and democracy.

We have helped people affected by severe flooding in Southeast Asia, and by drought in the Horn of Africa, where 14 million need emergency help. Since taking office, I have called for more strenuous action in Somalia. Must we wait – and see more children die in the sand? The global food crisis will not go away by itself. It may now have faded from the headlines. Last year at this time, rice cost $330 a ton. Today it is $730. People who used to buy rice by the bag now do so by the handful. Those who ate two meals a day now get by on one. The UN has focused on getting seeds and fertilizers into the hands of small farmers. We seek a new “green revolution” in Africa. But we lack new resources. The international community has not matched words with deeds.

In Burundi and Sierra Leone, Liberia and Timor Leste, our resources are under strain because UN peacekeepers are helping nations turn the corner to peace. Yet the UN’s preventive diplomacy is often critical. We see the fruits in Nepal, Kenya and, we hope, Zimbabwe. Likewise, there is a real chance to reunify Cyprus. In Georgia, the UN can help ease the tensions resulting from the recent conflict. In Cote d’Ivoire, we will help organize elections before year’s end – a major stride toward recovery and democracy.


Source : IIPM Editorial, 2012.

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Wednesday, November 28, 2012

POLICY:INDIA-US RELATIONS

Sans Bush, the nuclear pact would not have happened; it marks a paradigm shift in US's India policy

The Chinese in this case worked very closely with Pakistan in approaching members of the NSG over the past three years with the hope of persuading members to oppose this deal. The strategy was to delay the process till there was a valid criteria an for vindicating a similar exemption for Pakistan. The failure of these attempts were a slap on the face of Chinese in their efforts to contain India.

It is now evident that given India’s growing economic strength & its developing military potential, the world is not going to join them in trying to contain a rising power. This agreement makes a material difference to the strategic nuclear programme. In any case, the eight reactors that we were going to use to manufacture nuclear weapons remain outside the scope of international statements. I would not say this deal has given us any military leverage, but what it has done is to get 45 countries to tacitly acknowledge that India will essentially remain a nuclear power. The end of the sanctions came about primarily because George Bush has turned out to be the most India-friendly President we have seen. Unlike past US Presidents, who had focused their attention on forcing India to “cap, roll back and eliminate its nuclear weapons programme”, Bush has turned out to be the first US President who finds that the complementaries of interest are so much with India that India’s nuclear weapons programme should not come in the way.

In some ways it could be an asset to US’s interests. On our West, Afghanistan and Pakistan have become epicentres of global terrorism. To our east, countries like Bangladesh and Myanmar are hardly stable. And in the Indian Ocean region, where Somalia is becoming dysfunctional and Ethiopia is unstable, India is seen as constituting an essential partner for stability and economic growth.


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Monday, November 26, 2012

Shrewd, crude, definitely Russian

Post SCO's move on Georgia, it is a mere cakewalk for Russia to build support in other regional groups

Diplomatic lingo and lexicons used in international diplomacy leave enough space for warring parties to manoeuver and interpret declarations and claim tactical ‘wins’. Last week’s meeting of Shanghai Corporation Organisation (SCO) was no different. Whatever the decision was, both Russia and the West claimed tactical victory.

China and four Central Asian nations – members of erstwhile Soviet Republic – inked an avowal supporting Russia's position in the Caucasus, however, also putting across “deep concern” over the Georgia conflict and calling for a negotiated resolution. In a joint communiqué, the leaders of China, Russia, Kyrgyzstan, Tajikistan, Kazakhstan and Uzbekistan declared that they “support the active role of Russia in assisting peace and cooperation in the region.” In a clear rebuttal to Russia’s recognition to the Georgian breakaway province of South Ossetia and Abkhazia, the SCO also “express(ed) its deep concern over the recent tensions surrounding the South Ossetia question and call for the sides to peacefully resolve existing problems through dialogue." However, it is also true that the communiqué stopped short of an explicit citing of Russia's pronouncement to recognise the rebel provinces.

Russian President Dmitry Medvedev said the statement showed a “united position” on the Georgia conflict, and Kremlin officials specified they were happy with its phrasing. “The SCO statement is a great victory by Russia, which has so far been in a vacuum.


Source : IIPM Editorial, 2012.

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Sunday, November 25, 2012

Rising demand would ensure future oil price rise!

If you thought oil would run out, take a walk (no pun!). Oil isn’t running out, but your money would, given the fact that despite current oil price falls (!!!), rising demand would ensure future oil price rise! And worse, alternative fuel also sucks! virat bahri of B&E confounds [us too!]...

Let’s take the instance of hybrids firstly (combination of electricity and gasoline). They have seen the greatest success in developed world markets in particular due to the fact that they require no disruption of the existing oil infrastructure. In the US, some 347,102 hybrids were sold in 2007 (source: Green Car Congress), dominated by Toyota, with over 70% share of the market. Quite interestingly though, hybrids account for around 2.15% of the total new vehicle sales in the US that year. But considering the first hybrid to enter India, the Honda Civic, costs a whopping Rs.18-22 lakhs, one can’t see it moving into the common man’s realm very soon. Honda has in fact contemplated developing a hybrid hatchback, which will be smaller and cheaper than the Civic hybrid. Dick Colliver, Executive VP, Honda US, did admit to international media, “Our goal for this new hybrid model (is) to make it affordable to a new generation of car buyers.” Toyota has reportedly set up a stiff target for bringing in hybrid versions into all its models, and that target is... hold your breath... 2020!

Competitor GM’s hybrid plans have often been a subject of speculation. When I catch up with Larry Burns, in an exclusive to B&E, this Vice President of GM’s R&D and Strategic Initiatives, reveals, “By the end of the year, we will have eight hybrids on the market, and we will more than double that number by the end of 2011. Along with increased efficiency, hybrid systems give us additional engineering, manufacturing, and market experience with electric motors, power electronics, and advanced batteries – which are all critically important components in our future electric vehicles.” As per his viewpoint, electrically driven vehicles present the most compelling case as future alternative.


Source : IIPM Editorial, 2012.

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Saturday, November 24, 2012

Steel’ing prices

The sector needs more regulation

One fails to understand why has the government decided not to intervene in the decision of the steel companies to change prices. As the agreement between the steel companies and the government culminates on August 7, 2008, experts suggest that the companies would indeed increase prices, which would further increase inflation.

Steel and steel products contribute 21% to inflation and steel prices have already shot up by around 50%. And as Pawan Burde, Metal, Mining and Cement Analyst, Angel Broking, suggests to B&E, “Following the global steel prices’ upward trajectory, the domestic players have already announced a price hike thrice this year taking the price to Rs.40,000 per tonne.” Domestic prices have been suppressed by Rs.10,000-15,000 as compared to international prices by the government and are expected to rise as the demand within the country continues to rise.


Source : IIPM Editorial, 2012.

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Thursday, November 22, 2012

How India can get ahead of the rest...

Prashant Agarwal, Vice President, Technopak Advisors Pvt. Ltd. writes...

Textile manufacturing business is a pioneering activity in the Indian manufacturing sector and has a primordial importance in the economic life of the country. Indian textile industry is globally competitive considering not only cost but factors like vertical integration, raw material availability, manpower skills, product specialisation and service levels provided by the Indian manufacturers.

Global trade of textiles and apparel is increasing at a CAGR of 5-6 %, so competition is not about taking someone else’s share but it is all about creating our own niche and provide better service to be a preferred vendor for long term. India and China are long term competitive players in the Textile and Apparel Industry because of their large population base and also availability of land base. China has taken the headstart in the market from India though due to its impressive production capacities set up at the right time and also infrastructure development by setting up supply chain cities. So India has lot to learn from China, than talking about any competition.


Source : IIPM Editorial, 2012.

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Who SEZ so?

They’re the biggest loss makers

There was quite a lot of apprehension regarding Special Economic Zones (SEZ) since their inception. The recent review on SEZ by Comptroller and Auditor General (CAG) fortifies the same apprehension. CAG review concluded that these SEZ are favouring corporates at the cost of state revenue. The review further proves that there were systemic weaknesses that caused lost revenues to the tune of Rs.246.72 crores and an irrecoverable loss of Rs.1,724.67 crores.

Moreover, due to subsidy and tax holiday, the government had a loss of Rs. 8,842 crores [during the period 2000-01 to 2005-06] against an estimate of Rs.2,146 crores.


Source : IIPM Editorial, 2012.

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Poll khol!

How polls are becoming a national pastime

The voice of a RJ came over the radio, “A list of new seven wonders is being made, would it be right if the Taj Mahal was not on the list? Don’t let that happen, please cast your vote on these numbers right now!” This was the appeal that could be heard across all radio stations in India about a year ago, when Indians were suddenly and explicably gripped by ‘wonder frenzy’. Determined to get their ‘worthy’ contestant in the final list, it became a national mission for all to cast their vote multiple times, and exhort others to do the same. It was as if an international version of Indian Idol was being played, with Indians rallying behind their beleaguered contestant. The efforts paid off, Taj was on the list when the results were declared. Amid enthusiastic back-slapping and bouts of self-congratulations, it was forgotten that the poll was conducted by an obscure ‘for-profit’ organisation from Switzerland, which had no backing from any international body! After receiving a ‘cut’ from more than 100 million votes cast world over, New 7 Wonders Foundation (which had conducted the polls and had pledged to donate 50% of the proceeds to conservation of monuments of the world) quickly declared that it had hardly earned anything from the ‘world’s largest poll on record’ and hence was unable to fulfil its obligation. As for the grand poll, once the voting frenzy subsided, no one remembered the results, save for the fact that ‘Taj made it’!

So goes the story of these polls, conducted over phones or online, to maximise revenues and traffic, with the subject chosen to elicit maximum response. Take for example the recent online poll by FHM India on ‘100 Sexiest Women in the World’, which ended up giving this crown to apni Katrina Kaif, beating out the likes of Angelina Jolie and Gisele Bundchen, leading to a lot of chest thumping by over-excited anchors of news channels in India.


Source : IIPM Editorial, 2012.

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Tuesday, November 20, 2012

Playing with your child’s future

Pamper your child today and it could possibly ruin his tomorrow

Playtime is the most integral part of a child’s developmental stage. Not only does it help in keeping your child busy, but it also helps the child in stimulating his learning skills; for example building blocks not only keep the child amused and out of trouble, but also help in teaching them about different sizes and shapes and gravitation of course! In short, toys become a child’s expression of affection, they help in their development, teach them about sharing, and help arouse their sense of curiosity. But did you know that these same toys that your child plays with and so often puts in his mouth, contain dangerous levels of lead that could adversely affect his brain’s wiring and lead him to a criminal adulthood.

University of Cincinnati has recently brought forth a direct relation between pre-natal and early-childhood exposure of lead in toys and an increased risk of criminal behaviour in the child after the age of 18. “Lead ingested by pregnant woman can pass through the placenta and affect the child inside them,” says Deivyani Dheer, Consultant Psychologist, Apollo Hospital. Pre-natal consumption of lead affects the child’s behaviour while post-natal exposure occurs when toxic lead is passed on through mother’s milk and can cause serious damage.

Exposure to this venomous metal during a child’s early age can make the child violent in nature, cause behaviour and attention problems, learning difficulties and cognitive losses. As the child grows up, “Improper motor skills, a decrease in the volume of gray matter in the ventrolateral pre-frontal cortex, the anterior cingulate cortex, the post-central gyri, the inferior parietal lobule and the cerebellum could occur. All put simply – brain damage,” says Dheer.


Source : IIPM Editorial, 2012.

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The creator’s

7th day dream

God created the universe in six days and on the seventh day when he was resting, he thought of a place where, as an ordinary human being, he would like to relax, a place free of the thrust and parry of daily rivalries, a place where relaxation will be the deserved reward of six days of toil, where indulgence will be free of guilt and each pleasure will be a trophy well deserved... Come to Bora Bora and feel the bliss of a well earned holiday, a place where you would feel like swallowing the sun and drinking the sea. Bora Bora is an island paradise about 160 miles northwest of Tahiti, undoubtedly, one of the most beautiful islands in the world. Bora Bora’s most spectacular facet is its azure, jewel-toned lagoon and the twin peaks which stick out from it forming a gorgeous view.

If relaxing on the seashore and watching crabs scoot through the sand isn’t the only thing you are looking for, then there are a variety of water sports, activities and boat trips to take part in on the stunning Bora Bora island. The high on adventure quotient snorkeling and scuba diving are fun, and if you have the heart for it, one can also opt for an excursion to feed the sharks and sting rays, if you please. Bora Bora’s waters are filled with all sorts of marine life, fish (the most colourful of them), sharks, sting rays and other sea creatures. Apart from the various excursions, most hotels offer snorkeling from their personal beaches – or even from your own room – if you happen to be in one of their overwater bungalows.


Source : IIPM Editorial, 2012.

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Sunday, November 18, 2012

In your shoes

After the basic sensory functions, the action performed most by the body gets world attention…

If one can spare a little time from the manic modern lives, then going back to observe the pristine ways of life – kept alive by some tribes around the world – would be an interesting idea. Recently when I got lucky, I randomly selected the Masai tribe settled in the Kenyan and Tanzanian terra firma. To ponder upon some strange, or not-so-pleasant rituals of tribal life would be a clichéd exercise, I thought. So while looking around for something different, the lean muscular bodies of the Masais caught my attention, and their lifestyle leading to such well-endowed bodies couldn’t be easily ignored by this member of the all-of-a-sudden health conscious world.

The shooting cholesterol level across the world, backache, low muscular strength in the legs or just the perpetual desire to possess lean sexy legs have a solution in just one small way of life of the Masai – walking. Well, it isn’t walking that you and I can ever boast of since the Masai (even kids) walk almost 100 kms everyday. What a Land Cruiser covers in more than half a day, the Masai cover in 2-3 days on foot. As a result, their sense of distance can be so painfully misleading to an outsider. Even a place 100 kms away is mentioned to be just ‘around the corner!’ While the kids walk barefoot, the elders use heavy footwear made of old tyres. ‘Masai sandals’ made from Bridgestone tyres are supposedly the best, while the Michelin ones hold the second rank. (It is amazing how these brands face stiff competition even in their unintended alternate functions).

Today when it is almost impossible to imitate the Masai way of life, thinking about their 1/3 lower cholesterol level along with the stamina for walking unbelievably long distances is like inflicting unjustified torture on oneself.


Source : IIPM Editorial, 2012.

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Wednesday, November 14, 2012

BHUTAN: ELECTIONS

Only graduates were permitted to cast their votes in polls
 
For the period of elections, the monarch had ordered his Prime Minister, Jigme Y. Thinley, to resign and set up the DPT. While the DPT is all set to form a government, the bickering refuses to die down. PDP leaders and spokesmen have since then targeted the DPT for rigging the elections, including the charge that voting machines were tampered with. They also allege that civil servants "unduly" influenced the polls leading to such a one-sided results.

Thinley Penjore, President, Druk National Congress told B&E the elections were grossly unfair. Other activists and NGOs are equally miffed. Devendra Raj Pandey, member of South Asians for Human Rights told B&E: “As one-sixth Bhutan’s population is refugee, only graduates could contest elections and only two parties allowed to contest elections, in which dissent wasn't permitted. What is very distressing, says Pandey, "is the insensitivity of government, civil society and media of India towards bringing about 100% democracy in Bhutan."


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Saturday, November 10, 2012

No blitzkrieg this

Barclays must tread carefully

Can the British bull dog dance the Russian ballet? Barclays Bank, Britain’s third largest bank sure seems to think so, as it enters into a strategic move for expansion in emerging markets by buying up Russia’s Expobank.

Sure enough, it fell flat for its last bidding contest for ABN Amro Holding NV last year (offered $99 billion but lost to Royal Bank of Scotland Group Plc.), but Barclays is not giving up for sure! It has oozed out a whopping $745 million for Expobank, about four times its book value of $186 million, surely a red signal to analysts. Frits Seegers, Chief Executive, Global Retail and Commercial Banking, Barclays, prophesises, “Expobank’s existing relationships and infrastructure create the ideal platform for us to be one of the leading retail and commercial banks in Russia.


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Thursday, November 8, 2012

UNILEVER: RESTRUCTURING

Unilever continues to restructure its operations, but to truly revive, it must focus on market shares

The company had announced plans to do away with a whopping 20,000 jobs in August last year. Even emerging markets, long touted as a saving grace are facing the flak, evident from recent news of Hindustan Unilever Ltd. (HUL) doing away with 50 managerial positions. Comments K. Sudarshan, Managing Partner, EMA Partners India, “Earlier, HUL was insulated from the global parent and the company was designed for the high growth era.” He adds at the rates of growth prevalent at that time, they could carry non-performers.

Now the parent company is taking up more control, and redundancies are being created for jobs particularly in category innovation, manufacturing and even HR functions in India. The power brand strategy created further pressure. The bulge is mainly in the upper middle management, or 3A & 3B category. Also, it is no longer the top employer of choice in India’s key business schools.

With such tidings in one of Unilever’s key markets, it’s quite apparent that these are trying times for the company. More than restructuring and cost cutting, it’s important to get its brands back in the reckoning as far as market shares go. Perhaps that should be the most credible starting point to bring some vitality to this Anglo-Dutch behemoth. 


Source : IIPM Editorial, 2012.

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PROFILE: L.K. ADVANI

BJP’s strongman opts for a face-lift to achieve his ultimate political dream of being India’s PM

According to one strategy being planned, the virulent anti-terrorist rhetoric, at least at Advani’s meetings is going to be tempered down. The meetings, to be uniformly christened as anti-terrorist rallies, will be held throughout the country.

ptullah was first considered for the assignment, but since Naqvi is an old favourite of the Sangh, he got the nod over her. According to the BJP assessment, the fight in the next Lok Sabha is going to be a tough one and in a tight contest, it is important not to acquire the hostility of the Muslims. Even if a small but significant portion of that vote bank moves towards the BJP, the NDA would become a strong contender for the title fight. For the record, the BJP denies anything anything out of the way. “Advani does not need any props. He can win an election on his own,” Naqvi told B&E.

Senior leader and Rajya Sabha member, Arun Jaitley, told B&E: “Advani is our leader and we are going to go to elections under his leadership.” In fact, according to Naqvi, if all goes according to plan, then Advani would have toured all of the 500+ parliamentary constituencies by the end of 2008.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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