Tuesday, December 25, 2012

New imperialism

Why the WTO remains a non-starter

There are always moments in history when the optimists start thinking that the meek might actually end up inheriting the earth. But no such illusions accompanies the conceptualisation and actual formation of the World Trade Organisation (WTO). Even from the days when debates about its composition and structure started, it was very clear that the First World had decided to keep two sets of double standards. One double standard was hectoring the Third World to lower import tarriffs even as it found new ways to keep away Third World imports. The other double standard was to hector and pressurise Third World nations to open their industry and agriculture to global multinationals even as First World farmers were molly coddled with hundreds of billions of dollars in subsidies every year. Unjust and prejudiced regimes are not meant to last long; and no wonder the WTO has spluttered and struggled to survive.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Friday, December 21, 2012

New imperialism

Why the WTO remains a non-starter

There are always moments in history when the optimists start thinking that the meek might actually end up inheriting the earth. But no such illusions accompanies the conceptualisation and actual formation of the World Trade Organisation (WTO). Even from the days when debates about its composition and structure started, it was very clear that the First World had decided to keep two sets of double standards. One double standard was hectoring the Third World to lower import tarriffs even as it found new ways to keep away Third World imports. The other double standard was to hector and pressurise Third World nations to open their industry and agriculture to global multinationals even as First World farmers were molly coddled with hundreds of billions of dollars in subsidies every year. Unjust and prejudiced regimes are not meant to last long; and no wonder the WTO has spluttered and struggled to survive.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles. 
 
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Wednesday, December 19, 2012

Spot on Tom!

Malthus debate surges on today

Since centuries, experts have predicted that human needs would outpace the earth’s growing resources. This is what Thomas Malthus published in his research named An Essay on the Principle of Population in 1798, popularly known as Malthusian catastrophe. In simple terms, Thomas predicted that the tendency of population to grow faster than the food supply will eventually keep most people at the edge of starvation. During the Industrial Revolution, the first escape from the Malthusian trap occurred when, in England, around 1790, the efficiency of production accelerated to outpace population growth; thus allowing average incomes to rise and purchase the increased production. In the rest of Europe and East Asia, populations had also long been trained to handle the Malthusian trap of their stable agrarian economies. Their workforce easily absorbed new production technologies.

But Julian Lincoln Simon’s criticized the Malthusian philosophy and argued that population is the solution to resource scarcities and environmental problems, as a decrease in per capita availability of resources makes [or forces] people and markets innovate.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Sunday, December 9, 2012

Poor man’s labour lost

The UPA announced some schemes for the working class, but largely ignored the issues that really needed to be urgently addressed, says vikas kumar

When the Manmohan Singh-led UPA government assumed office, hardly anybody had expected drastic steps in the direction of the much contentious labour reforms. This was because the oxygen for the government’s survival was being supplied by Left parties. However, its performance on many accounts was even below the modest expectations.

The National Common Minimum Programme specifically mentions about the implementation of minimum wage laws, “ The UPA administration will ensure the fullest implementation of minimum wage laws for farm labour. Comprehensive protective legislation will be enacted for all agricultural workers.” Minister of Labour and Employment Oscar Fernandes says to B&E, “Whatever we had promised in the CMP for the organised or unorganised sector, we have fulfilled it.”

Labour laws face severe challenges at the grassroots level. One major problem is that there is a paucity of clear statistics on the number of people working as domestic labour. The estimated number of domestic workers in India is 90 million, but this is probably an underestimate as there has been hardly any systematic study to document such workers throughout the country.

The other issue which haunts a majority of the labour class is lack of a credible social safety net. This forces them towards bonded labour-like situation under appalling conditions for less than decent wages, often from childhood to old age.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Friday, December 7, 2012

The dark side of a bright idea...

NREGA is at fault but not for the reasons stated by World Bank...

Recently in its ‘World Development Report 2009, World Bank has described the much hyped UPA’s flagship program NREGA as a social barrier. According to the report, since NREGA is confined to rural areas and promises 100 days of employment, it in turn forces the unemployed rural crowd to remain in their villages and await their turn. This eventually reduces the rural migration, which (according to the report) is very important to uplift people from poverty. Now this is where lies the fallacy of World Bank Report. One of the most important reasons for the existence of the slums in India’s urban centres is the huge influx of rural people that happen in all these places all the time. For a country as big as India, it has too few big cities. And in the absence of any vibrant economic activity or infrastructure in most parts of rural India, people over there have no option but to migrate. Yet there is a limit on how much India’s cities can withstand the pressure of the influx. Thus, it becomes important that the right kind of economic activity is created in rural India. And for that to happen it’s crucial to create infrastructure in rural India and to empower the villagers with the right kind of education and health facilities. What actually is being done with NREGA is nothing but the creation of disguise unemployment as there are several restrictions on the use of machines and raw materials in the works done under NREGA. The objective seems not to create social assets like schools and hospitals with local labour or impart skill sets to make them employable but just to keep them engaged with labour work which would never benefit rural India in the long run. This is where NREGA is at fault and not the way as World Bank states. More migration would mean more slums.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Thursday, December 6, 2012

VENEZUELA: POLLS

Chavez may have won the right to relections, but it would be in vain if he cannot revive the economy

But then, the future will not be very easy for Chavez as much as it seems to him. Despite the current victory, opinion polls have suggested that people are actually against his getting re-elected. While his recent win does put a question mark on how much reliable these opinion polls are, it can’t be denied that Chavez is sitting at the helm of all the activities in Venezuela. The reduction in poverty and all the economic growth that Chavez talks about has been possible because of the high rate of Venezuelan oil in the market and the way he has given Venezuelans equitable share of the oil bounty. Now that the prices have fallen from $90 last year to below $40, it would be tough for Chavez to go with his economic talk.

Moreover, inflation is now touching the 30% level. As per projections by the Economist Intelligence Unit, the Venezuelan economy is expected to contract by 3% in 2009 and 5.4% in 2010.

“What Venezuelan voters decide is their business,” said John Walsh, Washington Office on Latin America, an independent think tank, “but a threshold does seem to have been crossed.” Chavez often jokes that he wants to stay in power till 2049! But if his governance model falls flat, he may have to cut down on that hugely ambitious target by quite a bit!


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Wednesday, December 5, 2012

Don't look dude, we are changing!

Obama's brigade promises a fresh perspective to the Middle East issue, but is treading on a difficult terrain

With a near thunderbolt pace, American President Barack Obama has transformed the line of US foreign policy in less than a week. After taking the oath to the Oval office, the new President made it clear that America’s aspirations and objectives will be in accordance with its ideals and the rule of law. By saying “we have no time to lose,” Obama summarised in a curt reply how pressing he deems it to bolster American foreign relations. In the first two days, the new-fangled government has been taking actions at a pace that were unheard and unseen in the previous administration. Giving orders from the White House and State Department headquarters, Obama pronounced the shutting down of the Guantanamo Bay confinement centre in Cuba; the selection of two extraordinary diplomatic envoys to aid in achieving Arab-Israeli amity; the issues in Afghanistan and Pakistan are also being addressed. However, some experts believe that the Guantanamo step has been taken in haste. Reacting on the decision, Michael Scheuer, a previous CIA agent and an old hand on al-Qaeda told B&E, “It is pretty unclear what will happen to the detainees. I don't make out where they would be taken. We have two choices with us. Either we can gun them down in the combat zone or treat them as POWs and discharge them when the conflict is over; so possibly never!”

Meanwhile, Secretary of State Hillary Clinton declared that ex-Senator George Mitchell would join the Obama bandwagon as a special envoy for the Middle East peace process, particularly the resolution of Arab-Israeli issues.


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

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Monday, December 3, 2012

This is my road ahead...

Bill Gates writes about his theory of creative capitalism... inputs coordinated by B&E’s Ruchika Chawla

Capitalism has improved the lives of billions of people – something that’s easy to forget at a time of great economic uncertainty. But it has left out billions more. They have great needs, but they can’t express those needs in ways that matter to markets. So they are stuck in poverty, suffer from preventable diseases and never have a chance to make the most of their lives. Governments and non-profit groups have an irreplaceable role in helping them, but it will take too long if they try to do it alone. It is mainly corporations that have the skills to make technological innovations work for the poor. To make the most of those skills, we need a more creative capitalism: an attempt to stretch the reach of market forces so that more companies can benefit from doing work that makes more people better off.

There’s much still to be done, but the good news is that creative capitalism is already with us. Some corporations have identified brand-new markets among the poor for life-changing technologies like cell phones. Others – sometimes with a nudge from activists – have seen how they can do good and do well at the same time. To take a real-world example, a few years ago I was sitting in a bar with Bono, and frankly, I thought he was a little nuts. It was late, we’d had a few drinks, and Bono was all fired up over a scheme to get companies to help tackle global poverty and disease. He kept dialing the private numbers of top executives and thrusting his cell phone at me to hear their sleepy yet enthusiastic replies. As crazy as it seemed that night, Bono’s persistence soon gave birth to the (RED) campaign. Today, companies like Gap, Hallmark and Dell sell (RED)-branded products and donate a portion of their profits to fight AIDS. (Microsoft recently signed up too.) It’s a great thing: the companies make a difference while adding to their bottom line, consumers get to show their support for a good cause, and – most important – lives are saved. In the past year and a half, (RED) has generated $100 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria, helping put nearly 80,000 people in poor countries on lifesaving drugs and helping more than 1.6 million get tested for HIV. That’s creative capitalism at work.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Sunday, December 2, 2012

Promises of the Promised Land

The magical city of Jerusalem presents an exceptional amalgamation of spirituality, ancient history and colourful cultures. Nestled in the Judean Hills, Jerusalem, the capital of Israel, is one of the most extraordinary cities in the world. The beauty of this holy place lies in its pristine natural settings, presence of old and new cultures, fine craftsmanship and architecture, and of course in its sacred and religious shrines. This fascinating city of contrasts and diversities was established 3,000 years ago by King David. Jerusalem is sacred to the world’s three main religions, namely Judaism, Islam and Christianity.

A visit to the Old City of Jerusalem usually starts at Jaffa Gate – going clockwise towards Lion’s Gate, ending at Dung Gate. The Dung Gate provides the best access to the Western Wall, the holiest site for Jews. A vacation at Jerusalem would offer more than just holy sites – in the New City, the famous King David Hotel, main shopping areas, recreational and entertainment activities are just a short ride away. Shopping at the Shuk is blissful for the shopaholics, but one should remember that it's also home to plenty of dishonest vendors.

A visit to Mount Scopus and Montefiore Windmill – a famous Jerusalem landmark – is a must. If you’re looking forward to a spectacular evening, the Nahalat Shiva Street should be a good place to head to. For those who love nature, a tour to the Western outskirts of Jerusalem would be a pleasurable and captivating experience.


Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

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Friday, November 30, 2012

Ah! Chuck freedom!

Rate cuts imposed on all banks isn’t the right move for the moment...

RBI has never been so active before, and it is this very enthusiasm that unquestionably highlights the severity of the financial crisis that is becoming more visible in the country, every passing day. With a slew of measures including the 350 basis points (bps) slash in the Cash Reserve Ratio (CRR), reduction in the Statutory Liquidity Ratio (SLR) by 100 bps et al, it has been successful in infusing enough capital into the financial system, thereby bringing about an unprecedented change in the dynamics of the banking business. Banks on the behest of the FM have readily agreed to slash the interest rates by 75 bps and this raises an extremely pertinent question – should bankers have the first say on interest rates or should the ministers and bureaucrats?! True that with improved liquidity condition and rate cuts, the confidence in the banking system can be shored up, but excessive loosening could also boomerang by igniting fears about the soundness of the economy and fundamentals of the financial system.

It is also true that higher lending rates dent the borrowers’ abilities to repay and the probability of default rises, but providing money at lower interest rates (thereby decreasing the risk spread) could very well hurt the profitability of the banks. As a warning, Sherman Chen, Economist, Moody’s Economy puts his fears in words as, “Cutting rates now and rapid capital outflows could lead to disastrous outcomes such as a further tumble in the stock market and a deep depreciation of the domestic currency.”


Source : IIPM Editorial, 2012.

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Thursday, November 29, 2012

Pollution is not a natural outcome of evolution...

The best environmental practices of leading countries, should be replicated in India too...

In developing the list of 25 pollution control and natural resource management metrics that comprise the Environmental Performance Index (EPI, we made a careful review of the scientific literature as well as a broad-based understanding of the challenges that face environmental policymakers. We developed a “model” based on six core categories of environmental activity with a set of six additional sub-categories on which we also report results. This framework was peer reviewed by leading environmental scientists.

With a set of issues to track defined by the theory and practice of environmental science, we then looked to see which of these areas of concern had data to allow us to track results. Where data was limited, we looked for “proxy” variables that provided some gauge of the issue in question. In each case, we look for “output” measures based on actual, on-the-ground environmental results, measured in terms of the distance from established policy targets, such as those set out in the Millennium Development Goals. We draw data from a wide variety of sources including international organisations such as the World Health Organisation, the World Bank, the UN Environment Programme, and the UN Development Programme as well as leading universities and research centres. In every instance, we rely on the best available data in the world. Our effort remains hampered, however, by a lack of reliable metrics available on a comprehensive and methodologically consistent basis across the nations of the world. We are unable to track important categories such as chemical exposures, proper waste disposal, and protection of wetlands due to a lack of data collected across countries on a comparable basis. In other important areas of emphasis like water quality, we rely on data sets that are shockingly incomplete and poorly constructed. As a result, one of our core conclusions is that the world community needs to invest more in developing a solid data foundation for environmental decision making at every level from the community scale to the state, national, and global levels.


Source : IIPM Editorial, 2012.

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Monday, November 26, 2012

Who re-coded the world...?

steven philip warner, assistant editor, b&e, collides with many people within the gates fraternity for a stunning insider account of the man who re-coded the world... and we follow it up by a smashing one-on-one interaction with the man himself, the one they call...

Having said that, the question always remained in my mind, why would a man like Gates – who was not so far back criticised ad nauseum for being a ruthless competition slayer and monstrous wealth collector “whose sole objective was to rule the world” [I read that amusing one too] – decide on turning full circle [or ‘half’, for those thousands of logical binary nerds in Microsoft who’ll read this piece and jump on the first logical mistake] to donate almost all his billions? Why in heavens would Buffett, the world’s richest individual [as on September 6, 2008, Buffett had $62 billion; Bill is 3rd richest with $58 billion] trust this man who’s well known for only making money, not giving money? Would the minutes of the meeting hold the answer?

Gates comments therein, “We’ve known Warren since 1991 and it was his thought that wealth should go back to society that got us thinking about doing our foundation in the first place... I hope people have learned from Warren’s philosophy about how we really owe it to society to give the wealth back... When I think about Warren’s record in business, I think the impact is much more than the specific returns he’s had but the way he goes about business, the integrity, the belief in people. You know, that’s a huge impact... I hope that today when the world looks back 50 or 100 years from now, they think about the Oracle of Omaha [Warren Buffett] as being the most generous philanthropist... Warren will not only be known as the world’s greatest investor, but also the world’s greatest investor for good.”

Melinda Gates adds, “I just wanted to start by saying Bill and I are absolutely honoured and humbled by Warren’s gifts. It’s really unprecedented in terms of what we can do to do good in the world, and it’s something that we take very seriously. We feel an incredible responsibility. I think when you give away your own wealth it’s one thing, but to give away the body of somebody else’s life work is really quite something. So, it’s something that we look forward to working with Warren on as a Trustee.”


Source : IIPM Editorial, 2012.

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Sunday, November 25, 2012

Let’s head to a ‘Spice’y Hot Spot

After selling off his telecom business to Idea and speculations rife on the sale of his mobile business to Sony Ericsson, B. K. Modi is still betting big on mobile retail. surbhi chawla analyses what makes this business worth keeping for the Modi camp?

It couldn’t have been easy for Bhupendra Kumar Modi, the man who brought mobile phones to our country, to exit the telecom sphere, and that too at a time when the sector is growing exponentially. But even after selling Spice Communications to Idea Cellular, he stands tall and states unabashedly that, “Our Spice brand and the mobile retail chain – Hot Spot would remain with us.” In fact, B. K. Modi is so bullish about the mobile retail venture that big plans are being charted out and an IPO by the end of this year is also on the cards.

With India becoming the second largest telecom market of the world with about 212 million GSM connections (for June 2008 by COAI), and still growing steadily at 18% per annum, there seems to be plenty of scope for the handset market too. The market is pegged at Rs.750-Rs.1000 billion and is growing at a whopping CAGR of 60%. Little wonder that players like The Mobile Store (promoted by Essar & Virgin) Motostore (promoted by Motorola), mbazaar (promoted by Future Group), RPG Cellcom and Subhiksha Mobile have already joined the mobile retail bandwagon.

The handset retail market in India is largely unorganised. According to Mohit Khattar, President Marketing, Subhiksha Trading, “The organised mobile retail market is still small in comparison to overall mobile retail market at a national level. In metros, however, 30-40% of mobile retail is now happening through modern trade.” This untapped potential was first realised by B. K. Modi in 2005 who started Hot Spot with only 15 employees. In less than three years, Hot Spot now boasts of 357 mobile stores in the country with plans to take this number up to 1,000 odd stores by the end of this year. In the National Capital Region alone, Hot Spot has a dense network of 116 stores – by far the largest number of stores by any retail network in a state. What’s more? Hot Spot plans to be a Rs.10 billion company by the end of 2008. But the company seems to have lost the first mover advantage. Given the growing competition from other players & margins in the handsets segment shrinking to less that 3-4%, it could be as tough than the mobile communication business, or tougher.


Source : IIPM Editorial, 2012.

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Saturday, November 24, 2012

How will they manage nuke power?

Our policy makers can’t even manage thermal power. How will they manage nuke power?

There are even more scandalous facts. Of all the major nations of the world, India boasts of the worst Transmission & Distribution (T&D) systems. Even in the capital city of Delhi, T&D losses are in excess of 40%. If you give up the jargon, T&D losses simply mean outright theft of power. When power supply was privatised in Delhi in 2002, theft and loot accounted for almost 50% of the total supply. Six years after ‘efficient’ operations by private players and umpteen hikes in rates, theft and loot in Delhi is still more than the national average of about 30%. In effect, honest households are paying higher tariffs to subsidise thieves and inefficient private players, who cannot or will not stop the loot. The total installed power capacity in India is more than 1,40,000 MW at the moment. If T&D losses are brought down to global levels of about 10%, there will be 28,000 MW more of electricity available to honest users. Ask our ‘power’ hungry politicians why they don’t allow this to happen by shielding thieves.

In 2003, the Parliament passed an Electricity Act that required all state governments to reform their bankrupt and moribund electricity boards. The Act also required that consumers must pay for electricity consumed. Five years down the road, the boards remain unreformed and bankrupt and politicians keep announcing new schemes to give ‘free’ power. That’s a joke because bankrupt boards have no power to supply.

Then again, regulation is routinely caught up in corporate feuds. The huge reserves of gas found in the Krishna Godavarai basin will be a crucial raw material for new power plants being planned. Anil Ambani wants to use gas to produce 15,000 MW of power as soon as he gets his hands on gas supplies. But elder brother Mukesh Ambani is not happy and the Ministry of Petroleum has jumped into the fray, prohibiting Mukesh from supplying cheap gas to Anil. The matter is in Supreme Court and all gas-based power projects have been stalled. 


Source : IIPM Editorial, 2012.

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Thursday, November 22, 2012

Sorry, you injuns

An apology is good; money, better

Like the US, Canada’s treatments towards its aboriginal people was equally harsh, cruel and inhuman. But unlike them, Canadian President Stephen Harper (above) made a formal apology to his nation’s natives followed by Australian Prime Minister Kevin Rudd [who also apologized February this year to Australian aboriginals].

Indigenous people, whether they are Canada’s 1 million aboriginals, Mexico’s 6 million indigenous people or over half of Latin American indigenous population, have a similar story of torture, harassment and exploitation.


Source : IIPM Editorial, 2012.

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SUB-PRIME LENDING: ECONOMIC PARADOX

The occurrence of the sub prime crisis and oil price hike at the same time defies conventional theory and logic

Things wouldn’t have been as bad, had the US not failed to invade Iran and finish off the remaining threats to its dollar hegemony – as Iran too has been planning to trade in the euro. But the US found the Iranian resolve a bit too tough to handle. Further, its anti ballistic systems, for all their hype, might be good for outdated Iraqi Scuds, but not for Iranian systems.

A control over Iran would have made the US control on global oil trinity absolute. What happened instead was the sub-prime crisis leading to the losses of more than a trillion dollars (IMF data) for US financial giants, with many on the verge of bankruptcy. A closer look at the chronology of the oil price hike in the last one year reveals that it has gone hand in hand with the sub prime crisis. Rationality would demand that a near $1 trillion loss in sub prime would invariably mean economic slowdown and the eventual fall in the price of oil as demand recedes. But that didn’t happen. And incidentally, some of the biggest losers in the sub-prime crisis, like CitiGroup, Morgan Stanley, Merrill Lynch and JP Morgan are also some of the biggest players in the oil futures markets. Noted analyst Michel Morkos writes in Dar Al-Hayat, “Oil price speculations are a security valve for financial institutions, speculators and oil companies even. Through long-term deals, speculators cannot but pass through a financial institution, which opens credits, turning buying and selling into book activities. Hence, profits go to credit-opening institutions.”

He further states, “Hence, we cannot ignore daily heated speculations of oil, led by major financial institutions, aiming at compensating their losses.” It’s quite evident that all this is happening in open political connivance with Bush and Saudi Arabia, who are quite content waltzing around while their cohorts loot the world. And if the world smells something fishy anytime in the future, be sure, they’ll just blame it all on Bush’s bad breath! And all he requires for resolving that is mint... a money mint for Chrissake!


Source : IIPM Editorial, 2012.

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