World Toilet Day, yes sir-ee, 19th November, a day observed as WTD since 2001. Come to think of it, how do you observe such a day. For us Indian this ain’t too far fetched, you can observe such a day by just heading to a railway station or a beach or the river banks or the streets and you get the idea that everyday in India is WTD.
Which probably brings about the significance of WTD!!!
But we in India don’t look at toilet issues as a problem maybe we have been inured to it. The average person visits the toilet somewhere between 6-8 times a day over the lifespan of a human this works to about 2-3 years of ones life. This probably ranks toilet issues with illiteracy, poverty, housing and how much wood would a woodchuck chuck if a woodchuck could chuck wood.
Some additional statistics pretty similar to the ‘woodchuck’ one referred above; of the billion and upward population that India has today about 700 million and upwards defecate in the open. The statistics for the entire world as concerning toilet issues were at 2.6 billion, which puts India squarely responsible for one third of the toilet problem.
Elsewhere I happen to read that India is exporting portable toilets for the Chinese Olympics; ones that can be assembled and disassembled maybe the need is greater outside than domestic. Another country paranoid about terrorist attacks has built bomb-proof toilets maybe toilets are more valuable than human life - bomb bombs but toilets intact.
I don’t know maybe we have a sense of humour despite our deplorable disposition about the dearth of toilets; we have a toilet museum in India.
In terms of a business perspective, I think the toilet business is one that would never run dry provided you have a real killer of an idea to tap the turd market.
Sunday, November 25, 2007
passion and plunge
There is a time when most things looks promising and there is a time when fewer things look as promising.
For most of us folks from business school, a good bunch of us these ideas remain where they are that is in the head while for a few who do manage to make that leap reality hits around the corner.
The key crux where most ideas fail is that the idea needs to make money.
And if we are in the 25 to 30 age bracket, we could get excited about such a thoroughly boneheaded idea that we should not be surprised that it can't as much as remain afloat.
If you're going to spend years working on some business, you'd think it might be wise to spend at least a couple days considering different ideas, instead of going with the first that comes into your head. You'd think. But most us don't.
In fact, this is a constant problem. Part of the reason is passion, not for the fact you should be any less passionate about your idea but most times passion does not make you look at things objectively, for the love of the idea, you hope and imagine that the idea is good and it will work.
Actually passion should arise as you dig in deeper into the domain of work. You find data supporting your idea rather than looking for data that could support your idea.
My experience tells me this takes from anywhere between 1 to 3 years which is a fairly drawn out time, the real passion will linger or grow if you are in a position to pursue the idea this far and for such a length of time.
But if you're so impatient to get started that ten minutes of rearranging and culling data feels very long. The outcome should be no surprise a year or two later.
Another offtake on the idea that grows over a longtime is that big projects tend to grow out of small ones.
The key crux is not against that plunge, but recognizing that plunging into an idea does not make the idea work. Some get this faster than others. A part of the game is that practise does make you better, but you can also play smart.
For beginers keep passion at bay and don't plunge at the first idea.
passion and plunge have a direct connection if you recognise it you will get patient with your idea.
For most of us folks from business school, a good bunch of us these ideas remain where they are that is in the head while for a few who do manage to make that leap reality hits around the corner.
The key crux where most ideas fail is that the idea needs to make money.
And if we are in the 25 to 30 age bracket, we could get excited about such a thoroughly boneheaded idea that we should not be surprised that it can't as much as remain afloat.
If you're going to spend years working on some business, you'd think it might be wise to spend at least a couple days considering different ideas, instead of going with the first that comes into your head. You'd think. But most us don't.
In fact, this is a constant problem. Part of the reason is passion, not for the fact you should be any less passionate about your idea but most times passion does not make you look at things objectively, for the love of the idea, you hope and imagine that the idea is good and it will work.
Actually passion should arise as you dig in deeper into the domain of work. You find data supporting your idea rather than looking for data that could support your idea.
My experience tells me this takes from anywhere between 1 to 3 years which is a fairly drawn out time, the real passion will linger or grow if you are in a position to pursue the idea this far and for such a length of time.
But if you're so impatient to get started that ten minutes of rearranging and culling data feels very long. The outcome should be no surprise a year or two later.
Another offtake on the idea that grows over a longtime is that big projects tend to grow out of small ones.
The key crux is not against that plunge, but recognizing that plunging into an idea does not make the idea work. Some get this faster than others. A part of the game is that practise does make you better, but you can also play smart.
For beginers keep passion at bay and don't plunge at the first idea.
passion and plunge have a direct connection if you recognise it you will get patient with your idea.
Thursday, November 22, 2007
Horse and Mount!
If a statue of a person in the park on a horse has both front legs
in the air, the person died in battle.
If the horse has one front leg in the air, the person died as a
result of wounds received in battle.
If the horse has all four legs on the ground, the person died of
natural causes.
in the air, the person died in battle.
If the horse has one front leg in the air, the person died as a
result of wounds received in battle.
If the horse has all four legs on the ground, the person died of
natural causes.
"longue lwisler"
The "sixth sick sheik's sixth sheep's sick" is said to be the
toughest tongue twister in the English language.
toughest tongue twister in the English language.
Wednesday, November 21, 2007
inebriating
Banta Singh walks into a bar in London and orders 3 glasses of Beer and sits at corner of the bar, drinking a sipout of each glass inturn.
When he finishes, he goes back to the bar counter and orders 3 more.
The bartender tells him, "You know, beer goes flat after I fill it in the glass; it would taste better if you buy one at a time."
Banta Singh replies, "Well, you see, I have 2 brothers, one in Dubai and the other in Canada and I'm here in London. When we left home we promised that we'll drink this way to remember the days we drank together."
The bartender admists that it is a nice custom and leaves it at that.
Banta becomes a regular in the bar and always drinks the same way.
One day he comes in and orders 2 glasses of beer. All the other regulars fall silent. When he comes back for the second round, the bartender says, "I don't want to intrude on your grief, but I wanted to offer my sincere condolences for your great loss."
Banta looks confused for a moment, and then laughs."Oh...no," he says.
"Both my brothers are alive, the only thing is I just quit drinking!!!"
by The Colonel
When he finishes, he goes back to the bar counter and orders 3 more.
The bartender tells him, "You know, beer goes flat after I fill it in the glass; it would taste better if you buy one at a time."
Banta Singh replies, "Well, you see, I have 2 brothers, one in Dubai and the other in Canada and I'm here in London. When we left home we promised that we'll drink this way to remember the days we drank together."
The bartender admists that it is a nice custom and leaves it at that.
Banta becomes a regular in the bar and always drinks the same way.
One day he comes in and orders 2 glasses of beer. All the other regulars fall silent. When he comes back for the second round, the bartender says, "I don't want to intrude on your grief, but I wanted to offer my sincere condolences for your great loss."
Banta looks confused for a moment, and then laughs."Oh...no," he says.
"Both my brothers are alive, the only thing is I just quit drinking!!!"
by The Colonel
Tuesday, November 20, 2007
Net Wealth
Question: Does an increase in the price of mangoes make you better off?
Answer: Only if you are a net exporter of mangoes, that is if you have more than enough left over to sell after your own consumption. If you do, then the additional mangoes fetch you good income at the increased prices.
If you are consuming all that you have or produce, you have no additional income as you have no additional mangoes to sell after consumption.
If you are consuming more than you have, then you would have to do so by buying mangoes from a mango exporter at the increased price of mangoes.
So an increase in prices of mangoes, is beneficial only to those with the surplus and who can sell this surplus after their own consumption.
The person who is buying mangoes at this time is doing so at an increased cost and is actually worse off.
The person who is consuming just as much as he produces is not better or worse off.
Question: However does an increase in price of homes make you better off?
Answer: Well, if you have just one and you are staying in it, then well not really as you are in a manner consuming what you have and you will continue to do so as long as you stay in that home. A housing boom leaves you no worse or better off if you own a home or are in the process of owning one vide a home loan.
The increase in price of homes makes you better off only if you have more than one home, that is when you have a surplus, just as in the case of mangoes.
The surplus home can be sold and part of the proceeds can be reinvested and part consumed. But in the absence of this surplus, regardless of whether there is a change in price of realty or even housing interest rates, the increase or decrease in prices does not affect the single house owner.
Notionally he can say he is richer in a housing boom, but that richness will never be translated to cash.
The crux is a house especially the one you are living in, does not add to you net wealth. It does not in anyway contribute an additinal income for your expenses, for all I am aware it will continue to make you expend on it.
In business this principle of net wealth is fairly straight forward, but in personal finances most people overlook this aspect. Only if a business does generate a surplus would it be called an asset, in the absence of this surplus it would be termed a liablity.
In contrast a home does not generate a cash inflow, infact it generates a cash outflow. Most single house owners would wrongly call a home an asset, well actually again it is not one as long as you are staying in it. It becomes an asset only if you sell that home.
Infact as long as you stay in that one home it is a liablity.
The liablity arising on account of expenses and maintenance.
If you sell the home, the liablity ceases, and you have the proceeds of the sale as an asset.
Today, most people take housing loans to the extent of 30 years, much of what they earn every year goes into repaying this loan, well the question is how does all this add to your net wealth?
Frankly it does not, notionally it does make them richer in the time of a housing boom, but realistically they still don't come to inherit the increased wealth till the house is sold.
So how does one add to ones net wealth, well anything that one can produce in surplus, over and above your consumption.
Rather if I can say, net wealth is the ability to produce that surplus and not the wealth itself.
Most people would attribute net wealth to the surplus wealth per se.
That too is a fallacy like adding the 'value of a home' to net wealth.
A case in point is inherited wealth, they have net wealth, but since they lack the ability the net wealth will reduce in time.
It is that ability to produce the surplus over and above consumption!
The question is now is what is that ability to make that surplus?
Answer: Only if you are a net exporter of mangoes, that is if you have more than enough left over to sell after your own consumption. If you do, then the additional mangoes fetch you good income at the increased prices.
If you are consuming all that you have or produce, you have no additional income as you have no additional mangoes to sell after consumption.
If you are consuming more than you have, then you would have to do so by buying mangoes from a mango exporter at the increased price of mangoes.
So an increase in prices of mangoes, is beneficial only to those with the surplus and who can sell this surplus after their own consumption.
The person who is buying mangoes at this time is doing so at an increased cost and is actually worse off.
The person who is consuming just as much as he produces is not better or worse off.
Question: However does an increase in price of homes make you better off?
Answer: Well, if you have just one and you are staying in it, then well not really as you are in a manner consuming what you have and you will continue to do so as long as you stay in that home. A housing boom leaves you no worse or better off if you own a home or are in the process of owning one vide a home loan.
The increase in price of homes makes you better off only if you have more than one home, that is when you have a surplus, just as in the case of mangoes.
The surplus home can be sold and part of the proceeds can be reinvested and part consumed. But in the absence of this surplus, regardless of whether there is a change in price of realty or even housing interest rates, the increase or decrease in prices does not affect the single house owner.
Notionally he can say he is richer in a housing boom, but that richness will never be translated to cash.
The crux is a house especially the one you are living in, does not add to you net wealth. It does not in anyway contribute an additinal income for your expenses, for all I am aware it will continue to make you expend on it.
In business this principle of net wealth is fairly straight forward, but in personal finances most people overlook this aspect. Only if a business does generate a surplus would it be called an asset, in the absence of this surplus it would be termed a liablity.
In contrast a home does not generate a cash inflow, infact it generates a cash outflow. Most single house owners would wrongly call a home an asset, well actually again it is not one as long as you are staying in it. It becomes an asset only if you sell that home.
Infact as long as you stay in that one home it is a liablity.
The liablity arising on account of expenses and maintenance.
If you sell the home, the liablity ceases, and you have the proceeds of the sale as an asset.
Today, most people take housing loans to the extent of 30 years, much of what they earn every year goes into repaying this loan, well the question is how does all this add to your net wealth?
Frankly it does not, notionally it does make them richer in the time of a housing boom, but realistically they still don't come to inherit the increased wealth till the house is sold.
So how does one add to ones net wealth, well anything that one can produce in surplus, over and above your consumption.
Rather if I can say, net wealth is the ability to produce that surplus and not the wealth itself.
Most people would attribute net wealth to the surplus wealth per se.
That too is a fallacy like adding the 'value of a home' to net wealth.
A case in point is inherited wealth, they have net wealth, but since they lack the ability the net wealth will reduce in time.
It is that ability to produce the surplus over and above consumption!
The question is now is what is that ability to make that surplus?
the way up...
At the recent Congress party national convention, there was a lot of talk and intent on building the incumbent organisation based on openess and relevance by ensuring that progress is linked to performance.
This is in stark contrast to the present lineage on which the Congress is heading to. Rahul Gandhi is generally accepted as the Congress' crown prince and he has now been taking active interest in politics, which does lead one to infer that he is gradually filling the family position.
I think these are important times for the Congress, if the intent mentioned in the national convention is to be true it would be well to institute internal elections within the party itself. Just as Sonia stepped down to for Manmohan Singh to take on the PM of the country, the act of internal elections would cut new ground for the Congress.
I think it is vital to know that the Congress has so far has not been based on any particular ideology tilted towards caste or religion. It has so far been neutral and unequivocal about such beliefs. It would help if it can extend such a belief to an internally elected democratic leader than one based on lineage.
Sonia Gandhi did do this once, it remains to be seen if her son Rahul Gandhi would follow suit.
If he does, it will seal his position as the democratic leader of the largest democratic party in India.
Which is to say, the way to the top starts down.
An umbrella can only do its job if firmly held by the bottom, not the top.
This is in stark contrast to the present lineage on which the Congress is heading to. Rahul Gandhi is generally accepted as the Congress' crown prince and he has now been taking active interest in politics, which does lead one to infer that he is gradually filling the family position.
I think these are important times for the Congress, if the intent mentioned in the national convention is to be true it would be well to institute internal elections within the party itself. Just as Sonia stepped down to for Manmohan Singh to take on the PM of the country, the act of internal elections would cut new ground for the Congress.
I think it is vital to know that the Congress has so far has not been based on any particular ideology tilted towards caste or religion. It has so far been neutral and unequivocal about such beliefs. It would help if it can extend such a belief to an internally elected democratic leader than one based on lineage.
Sonia Gandhi did do this once, it remains to be seen if her son Rahul Gandhi would follow suit.
If he does, it will seal his position as the democratic leader of the largest democratic party in India.
Which is to say, the way to the top starts down.
An umbrella can only do its job if firmly held by the bottom, not the top.
Thursday, November 15, 2007
encylopedia - Citizendium
But Larry Sanger is optimitic and going big on Citizendium, the expert-moderated alternative to the "open" encyclopedia Wikipedia incidentally which also he launched a year ago with Jimmy Wales of Wikipedia.
The results so far are modest: 3,700 articles since Novemeber 2006, compared to more than 2 million on Wikipedia. But the key difference is quality. The articles are moderated and approved, making them reliable.
It overcomes the biggest drawback that Wikipedia has - its lack of authenticity.
Moreover it also pins down the author and editor of each article, this allows for exchange of information between commentators and most importantly gets these informers accountable for the information they put up.
On the slow progress that Citizendium is making given the sheer volume of information available, Mr Sanger, is unfazed, as he comments: "At some point, possibly very soon, the Citizendium will grow explosively - say, quadruple the number of its active contributors, or even grow by an order of magnitude. And it will experience that growth over the course of a month or two, and its growth will continue to accelerate from that higher rate."
Well, he is right about the 'Tipping Point'.
The numbers of articles and users will grow exponentially, and I sure hope he gets the formula right.
I would though ask Larry Sanger to reconsider the present connotation 'Citizendium'.
Keep it simple, Larry, people don't want to go through an encyclopedia to find out about 'Citizendium'. If we can't pronounce it, there is a chance that we can't spell it, just too many phonetics.
The results so far are modest: 3,700 articles since Novemeber 2006, compared to more than 2 million on Wikipedia. But the key difference is quality. The articles are moderated and approved, making them reliable.
It overcomes the biggest drawback that Wikipedia has - its lack of authenticity.
Moreover it also pins down the author and editor of each article, this allows for exchange of information between commentators and most importantly gets these informers accountable for the information they put up.
On the slow progress that Citizendium is making given the sheer volume of information available, Mr Sanger, is unfazed, as he comments: "At some point, possibly very soon, the Citizendium will grow explosively - say, quadruple the number of its active contributors, or even grow by an order of magnitude. And it will experience that growth over the course of a month or two, and its growth will continue to accelerate from that higher rate."
Well, he is right about the 'Tipping Point'.
The numbers of articles and users will grow exponentially, and I sure hope he gets the formula right.
I would though ask Larry Sanger to reconsider the present connotation 'Citizendium'.
Keep it simple, Larry, people don't want to go through an encyclopedia to find out about 'Citizendium'. If we can't pronounce it, there is a chance that we can't spell it, just too many phonetics.
the guys in between...
Just read that CA (Computer Associates) is outsourcing R&D and future product development for part of its security portfolio to HCL. CA keeps control of the brand and handles all the sales and marketing.
It's one thing for a product to be outsourced but software is something proprietary, especially since it invloves product knowhow and/or source code.
I mean I can't think of Google or Microsoft outsourcing their software development activity to a thirdy party vendor.
This could be a harbinger of sorts:
1. Maybe retaining and developing inhouse software code is not as value additive as we think out to be. Maybe the field is being levelled and extrnal talent is available that can replicate as well as innovate software code as competent as one would expect.
2. Maybe the outsourcing of development itself could mean a commoditisation of the particular service. This maxim is generally true in manufacturing products which is why outsourcing began with products tending towards commodities.
3. Maybe marketing as a 'value add' creates a high enough entry barrier that may not be easy to replicate for a competing firm, CA at least believes so. To an extent this is true, marketing is about relationships, and though we know a better price wins, marketing is not that facile as better price, market presence and first mover advantage don't get the market.
There are relationships and nexus between the user and seller, and dislodging any one takes more than price and knowhow.
4. In effect all this outsourcing makes marketing itself a commodity. I mean if the marketer is not the user nor the producer but just the 'transporter', is it going to be that value additive being just a 'deliverer'.
Imagine a Pizza Business running on the skill and acumen of the Pizza delivery man.
That probably is what marketing is getting to be, today.
I think the next big paradign shift is 'delivery' and it is not going to be marketing as we know it.
I think Dell managed to do that wonderfully in its market.
I mean here the process and not the product. (I won't swear by a Dell.)
My point is when a product and service is tending to get commoditised, the innovation is in the 'process'/'delviery', unless we want to be the guys in between rather the Pizza delivery guy.
Maybe CA has the oneup in the market on 'delivery'.
It's one thing for a product to be outsourced but software is something proprietary, especially since it invloves product knowhow and/or source code.
I mean I can't think of Google or Microsoft outsourcing their software development activity to a thirdy party vendor.
This could be a harbinger of sorts:
1. Maybe retaining and developing inhouse software code is not as value additive as we think out to be. Maybe the field is being levelled and extrnal talent is available that can replicate as well as innovate software code as competent as one would expect.
2. Maybe the outsourcing of development itself could mean a commoditisation of the particular service. This maxim is generally true in manufacturing products which is why outsourcing began with products tending towards commodities.
3. Maybe marketing as a 'value add' creates a high enough entry barrier that may not be easy to replicate for a competing firm, CA at least believes so. To an extent this is true, marketing is about relationships, and though we know a better price wins, marketing is not that facile as better price, market presence and first mover advantage don't get the market.
There are relationships and nexus between the user and seller, and dislodging any one takes more than price and knowhow.
4. In effect all this outsourcing makes marketing itself a commodity. I mean if the marketer is not the user nor the producer but just the 'transporter', is it going to be that value additive being just a 'deliverer'.
Imagine a Pizza Business running on the skill and acumen of the Pizza delivery man.
That probably is what marketing is getting to be, today.
I think the next big paradign shift is 'delivery' and it is not going to be marketing as we know it.
I think Dell managed to do that wonderfully in its market.
I mean here the process and not the product. (I won't swear by a Dell.)
My point is when a product and service is tending to get commoditised, the innovation is in the 'process'/'delviery', unless we want to be the guys in between rather the Pizza delivery guy.
Maybe CA has the oneup in the market on 'delivery'.
Wednesday, November 14, 2007
the richest man and our economy
Reliance’s Mukesh Ambani is now the richest man in the world, or so the media has informed us, though Mukesh Ambani himself contests this fact, stating that the manner in which his net worth has been calculated based on his shareholding in Reliance group companies is circumspect. Estimated at $63bn, he is a notch above Mexico’s Carlos Slim with Bill Gates close on Slim’s heel. Mukesh Ambani’s fortune represents 1.5 per cent of the Indian GDP.
Are the vast fortunes being made in India the result of productive entrepreneurship or private monopolies? The answer to this question depends on where the economies are likely to go. The bigger the fortunes made by extracting rent from uncompetitive markets (monopoly), the greater the resistance to the introduction of fiercer competition and so the weaker competition itself is likely to be.
For the sake of comparison: The top five Sensex constituents are: Reliance Industries (12.31%), Infosys Technologies (11.14%), ICICI Bank (8.77%), Bharti Airtel (6.1%) and Larsen & Toubro (4.85%). The top five Nifty constituents are: Reliance Industries (10.38%), ONGC (9.32%), Bharti Airtel (7.34%), Tata Consultancy Services (5.91%) and Infosys Technologies (5.59%). Of these Reliance is the only private sector company in a product sector. With the exception of L&T (FI) and ONGC (Govt.), the remaining 7 companies are private and in services, they have come up in the last 20 years about the same time the Indian markets were thrown open to foreign investors and competition.
In industry and services, if we compare with China our closest competitor: China’s industrial growth rate was 11 per cent a year. Output per worker rose at 9.8 per cent a year. Meanwhile, India’s industrial growth was just 6.7 per cent a year. Output per worker was at 5.8 per cent a year.
Now turn to services. Here India’s growth rate was close to China’s: 9.1 per cent a year, against 9.8 per cent. Output per worker contributed 5.1 percentage points of the growth in China and 5.4 percentage points in India. Here is the one sector where Indian productivity growth matched China’s. Rising factor productivity contributed 3.9 percentage points to Indian growth and just 0.9 percentage points to China’s.
Perhaps, is there a connection, the underperformance in Indian industry could be on account of a monopolistic or protectionist outlook in products and commodities but better than average performance in service is on account of competition and free enterprise that is encouraged.
Our sensex sure reflects this so does the figures tabulated by NBER.
Back to Reliance, it has a huge dominance in the polymer market, infact this market is where Reliance has amassed its mass fortunes. It controls up to 80% of the domestic polymer market. Infact in a privatization initiative of the government, IPCL a erstwhile competitor to Reliance in the polymer market was hived of to Reliance giving it further dominance and monopoly in the market. The vast concentrations of wealth sure did politically influence this sale, in a manner that does undermine the very competition India is trying to purport, this move may have been beneficial for a Reliance to take on foreign major in the long run, but in the short run the SME in the polymer business have been held at ransom in India. Ergo the polymer market in India is far smaller and is less competitive as compared to its Asian competitors.
So where is our economy heading towards productive entrepreneurship or private-political hegemony.
Are the vast fortunes being made in India the result of productive entrepreneurship or private monopolies? The answer to this question depends on where the economies are likely to go. The bigger the fortunes made by extracting rent from uncompetitive markets (monopoly), the greater the resistance to the introduction of fiercer competition and so the weaker competition itself is likely to be.
For the sake of comparison: The top five Sensex constituents are: Reliance Industries (12.31%), Infosys Technologies (11.14%), ICICI Bank (8.77%), Bharti Airtel (6.1%) and Larsen & Toubro (4.85%). The top five Nifty constituents are: Reliance Industries (10.38%), ONGC (9.32%), Bharti Airtel (7.34%), Tata Consultancy Services (5.91%) and Infosys Technologies (5.59%). Of these Reliance is the only private sector company in a product sector. With the exception of L&T (FI) and ONGC (Govt.), the remaining 7 companies are private and in services, they have come up in the last 20 years about the same time the Indian markets were thrown open to foreign investors and competition.
In industry and services, if we compare with China our closest competitor: China’s industrial growth rate was 11 per cent a year. Output per worker rose at 9.8 per cent a year. Meanwhile, India’s industrial growth was just 6.7 per cent a year. Output per worker was at 5.8 per cent a year.
Now turn to services. Here India’s growth rate was close to China’s: 9.1 per cent a year, against 9.8 per cent. Output per worker contributed 5.1 percentage points of the growth in China and 5.4 percentage points in India. Here is the one sector where Indian productivity growth matched China’s. Rising factor productivity contributed 3.9 percentage points to Indian growth and just 0.9 percentage points to China’s.
Perhaps, is there a connection, the underperformance in Indian industry could be on account of a monopolistic or protectionist outlook in products and commodities but better than average performance in service is on account of competition and free enterprise that is encouraged.
Our sensex sure reflects this so does the figures tabulated by NBER.
Back to Reliance, it has a huge dominance in the polymer market, infact this market is where Reliance has amassed its mass fortunes. It controls up to 80% of the domestic polymer market. Infact in a privatization initiative of the government, IPCL a erstwhile competitor to Reliance in the polymer market was hived of to Reliance giving it further dominance and monopoly in the market. The vast concentrations of wealth sure did politically influence this sale, in a manner that does undermine the very competition India is trying to purport, this move may have been beneficial for a Reliance to take on foreign major in the long run, but in the short run the SME in the polymer business have been held at ransom in India. Ergo the polymer market in India is far smaller and is less competitive as compared to its Asian competitors.
So where is our economy heading towards productive entrepreneurship or private-political hegemony.
Friday, November 9, 2007
The Politics of Fear
If you’ve wondered how certain political groups retain power despite the fact that they have actually hampered development probably even hurt their own support base, this missive should be enlightening based on Gerard Miquel’s paper.
1. A ruler can maintain support from his ethnic followers even though he is extracting resources from them.
The reason is equilibrium; a leader steals resources not only from his own supporter group but extracts greater resources from the opposition group.
If the group in power decides to keep their leader, the stability of the regime maintains the status quo. If they decide to oust him they face a chaotic succession process in which they cannot guarantee the next leader will belong to their group.
Since their predicament under the leadership of a politician from another group is worse than under their own ruler, the latter can capture the support of his ethnic followers while reducing their utility.
This is the fundamental mechanism of the Politics of Fear: if succession is not fully controlled by supporters then they would be worse under the opposition leader, so the present supported leader tend to be not accountable to their own supporters.
2. A political party can enunciate on difference or exclusions based on religion, race, caste, social strata, social security, bloc of employees of govt. undertakings, etc - these fears of exclusion spread across groups and compound the ability of political leaders to extract resources.
Suppose group A has a strong comparative advantage in a particular activity that leaves it vulnerable to expropriation. Group A members thus know that a B leader would expropriate them. Hence Group A’s leaders will be able to extract large rents from their A supporters by virtue of the Politics of Fear. As noted
above, when leader A can tax his supporters heavily, he can also increase taxes on B citizens. This implies that B citizens also fear an A leader that cannot be reigned in by his A supporters. As a consequence, when a B leader captures power, his group will allow him to steal; group A’s fear of leadership change allows both A and B leaders to escape accountability.
This mechanism will allow any group leader to take advantage of the fear of leadership change that any group feels.
3. Ousting a leader initiates an uncertain process that involves potential change in the relative status of different groups. The ruler, if he falls, his relatives, friends, lieutenants, clients and followers also may fall, and the ensuing political disruption may threaten the political peace or status quo.
1. A ruler can maintain support from his ethnic followers even though he is extracting resources from them.
The reason is equilibrium; a leader steals resources not only from his own supporter group but extracts greater resources from the opposition group.
If the group in power decides to keep their leader, the stability of the regime maintains the status quo. If they decide to oust him they face a chaotic succession process in which they cannot guarantee the next leader will belong to their group.
Since their predicament under the leadership of a politician from another group is worse than under their own ruler, the latter can capture the support of his ethnic followers while reducing their utility.
This is the fundamental mechanism of the Politics of Fear: if succession is not fully controlled by supporters then they would be worse under the opposition leader, so the present supported leader tend to be not accountable to their own supporters.
2. A political party can enunciate on difference or exclusions based on religion, race, caste, social strata, social security, bloc of employees of govt. undertakings, etc - these fears of exclusion spread across groups and compound the ability of political leaders to extract resources.
Suppose group A has a strong comparative advantage in a particular activity that leaves it vulnerable to expropriation. Group A members thus know that a B leader would expropriate them. Hence Group A’s leaders will be able to extract large rents from their A supporters by virtue of the Politics of Fear. As noted
above, when leader A can tax his supporters heavily, he can also increase taxes on B citizens. This implies that B citizens also fear an A leader that cannot be reigned in by his A supporters. As a consequence, when a B leader captures power, his group will allow him to steal; group A’s fear of leadership change allows both A and B leaders to escape accountability.
This mechanism will allow any group leader to take advantage of the fear of leadership change that any group feels.
3. Ousting a leader initiates an uncertain process that involves potential change in the relative status of different groups. The ruler, if he falls, his relatives, friends, lieutenants, clients and followers also may fall, and the ensuing political disruption may threaten the political peace or status quo.
Tuesday, November 6, 2007
Emergency
For Pakistan since its inception, India has been enemy no#1.
If Pakistan does feel any insecurity it could be only on account of us.
I mean if they have gone nuclear it is because of a looming threat from us.
They feel undermined because of something we have or something we did, God only knows, I mean the average Indian can't quiet understand what would be the reason for such animosity or fear or paranoia.
I reckon if at any time any of us got about to spend more than a courteous time with a Pakistani, somehow or somewhere the conversation would have come down to Kashmir, and how we hoodwinked them of their share, and now they want Kashmir.
And now, they are on Emergency!
They are at 'WAR' with themselves.
Isn't it ironic?
All that paranoia on us was an utter waste...
It would be interesting to note a comment by the recently retired number two, General Ehsan-ul-Haq, “We consider extremism and terrorism to be the highest-priority threat to the security and well-being of Pakistan.”
Please note; a hiatus I presume nevertheless India has ceased to be enemy #1.
If Pakistan does feel any insecurity it could be only on account of us.
I mean if they have gone nuclear it is because of a looming threat from us.
They feel undermined because of something we have or something we did, God only knows, I mean the average Indian can't quiet understand what would be the reason for such animosity or fear or paranoia.
I reckon if at any time any of us got about to spend more than a courteous time with a Pakistani, somehow or somewhere the conversation would have come down to Kashmir, and how we hoodwinked them of their share, and now they want Kashmir.
And now, they are on Emergency!
They are at 'WAR' with themselves.
Isn't it ironic?
All that paranoia on us was an utter waste...
It would be interesting to note a comment by the recently retired number two, General Ehsan-ul-Haq, “We consider extremism and terrorism to be the highest-priority threat to the security and well-being of Pakistan.”
Please note; a hiatus I presume nevertheless India has ceased to be enemy #1.
Dutch Disease & Kerala
The short-term and even the medium-term outlook of growth in India is positive. That is, ironically, the crux of the problem. With growth rate expectations in the 8-9 per cent range, foreign funds will continue to pour in, in pursuit of returns from growth. We seem to show symptoms of an economic malady called ‘Dutch Disease’. It refers to negative consequences arising from large increases to a country's income. Dutch disease is primarily associated with a natural resource discovery, but it can result from any large increase in foreign currency inflows: including foreign direct investment, foreign aid or a substantial increase in natural resource prices.
This condition arises when foreign currency inflows cause an appreciation in the affected country's currency. This has two main effects for a country afflicted with Dutch Disease:
1. A decrease in the price competitiveness, and thus the exports, of its manufactured goods. Exports from the affected country become expensive vis a vis exports from a competing country.
2. An increase in imports, as the appreciating currency makes imports cheaper.
3. Labour begins to migrate to the sectors performing better or booming sector. This flux will create a labour shortage in the lagging sector and an artificial increase in wages in the lagging sector making the sector uncompetitive. This can snowball into other industries or even agriculture.
The cascading effects of increased imports is a killing of the domestic manufacturing sector as domestic firms are more expensive to operate in terms of labour and exchange rate. In the long run, these factors can contribute to manufacturing jobs being moved to lower-cost countries.
In the absence of action by the regulatory authority (Reserve Bank) to stem this inflow, the rupee, can only appreciate, if this keeps adding, rather than subtracting, to the returns earned by these foreign investors, then inflows will continue to cascade. Lesser rupees continue to provide more dollars to the foreign investor if the rupee continues to appreciate, thus reinforcing the incentive to the foreign investor to bring in further investment. This will happen as long as the rupee remains under-valued, and the pressure on it to appreciate will continue to increase.
As such there are many recommendations to immunize the Dutch Disease, however since I am no economist; it would worth our while to look at the effects of ‘Dutch Disease’ specific to the state of Kerala rather than endemic to the country as a whole.
Kerala has the largest inflows in foreign currency; manufacturing sector has gone for a toss, incidentally our agriculture industry too has gone for a toss. Labour is the most expensive and for all I know the best thing they do is ‘strike’. I would have hoped that our commie government would bring about some motivation or induce some supply in labour, but it is this labour that keeps these commies in power so our over-expensive labour serves the comrades vested interest to remain in power. We import all that we require from Tamil Nadu or Karnataka. We even provide our natural resource 'water' to Tamil Nadu.
Any inoculation please start with us!
This condition arises when foreign currency inflows cause an appreciation in the affected country's currency. This has two main effects for a country afflicted with Dutch Disease:
1. A decrease in the price competitiveness, and thus the exports, of its manufactured goods. Exports from the affected country become expensive vis a vis exports from a competing country.
2. An increase in imports, as the appreciating currency makes imports cheaper.
3. Labour begins to migrate to the sectors performing better or booming sector. This flux will create a labour shortage in the lagging sector and an artificial increase in wages in the lagging sector making the sector uncompetitive. This can snowball into other industries or even agriculture.
The cascading effects of increased imports is a killing of the domestic manufacturing sector as domestic firms are more expensive to operate in terms of labour and exchange rate. In the long run, these factors can contribute to manufacturing jobs being moved to lower-cost countries.
In the absence of action by the regulatory authority (Reserve Bank) to stem this inflow, the rupee, can only appreciate, if this keeps adding, rather than subtracting, to the returns earned by these foreign investors, then inflows will continue to cascade. Lesser rupees continue to provide more dollars to the foreign investor if the rupee continues to appreciate, thus reinforcing the incentive to the foreign investor to bring in further investment. This will happen as long as the rupee remains under-valued, and the pressure on it to appreciate will continue to increase.
As such there are many recommendations to immunize the Dutch Disease, however since I am no economist; it would worth our while to look at the effects of ‘Dutch Disease’ specific to the state of Kerala rather than endemic to the country as a whole.
Kerala has the largest inflows in foreign currency; manufacturing sector has gone for a toss, incidentally our agriculture industry too has gone for a toss. Labour is the most expensive and for all I know the best thing they do is ‘strike’. I would have hoped that our commie government would bring about some motivation or induce some supply in labour, but it is this labour that keeps these commies in power so our over-expensive labour serves the comrades vested interest to remain in power. We import all that we require from Tamil Nadu or Karnataka. We even provide our natural resource 'water' to Tamil Nadu.
Any inoculation please start with us!
Sunday, November 4, 2007
the marriage/divorce of greed...
2 years ago H D Deve Gowda was considered so advanced as a conspiratinal genius that he was dreaded as an enemy. Now he is dreaded even as a friend.
2 years ago, while chief Deve Gowda was talking of an alliance with the Congress, his second son H D Kumaraswamy, split the party and joined hands with the BJP to form the government in Karnataka. There was a public display of the chief expelling his son from Janta Dal, today 2 years later they have come together and are conspiring again.
To those who are fairly acquanited with the Janta Dal escapade, it becomes fairly certain that Chief Deve Gowda has lost his marbles & he is writing his epitaph.
Deve Gowda ditched the Congress vide his son for the BJP. Then he ditched the BJP to woo the Congress. Then he ditched the Congress to remarry the BJP. Then he virtually ditched the BJP again with a 12 point dictat.
If the BJP ever does get to rule, it would be unprecedented in Indian history, as the BJP has never ruled in any of the 4 southern states since Independence. Deve Gowda could seal his fate if he does give into a communal political party. Incidentally, even if the BJP do come to power with Deve Gowda's support, the BJP would have sleepless nights as Gowda is keen to bed with any party but does not sleep over with any of them.
This situation is very similar to the one we had in Kerala with Karunakaran and his son K Muraleedharan. This kind of escapade was what these 2 were upto in Kerala. Today they have no loyals for no loyalties; maybe that is the price of greed.
2 years ago, while chief Deve Gowda was talking of an alliance with the Congress, his second son H D Kumaraswamy, split the party and joined hands with the BJP to form the government in Karnataka. There was a public display of the chief expelling his son from Janta Dal, today 2 years later they have come together and are conspiring again.
To those who are fairly acquanited with the Janta Dal escapade, it becomes fairly certain that Chief Deve Gowda has lost his marbles & he is writing his epitaph.
Deve Gowda ditched the Congress vide his son for the BJP. Then he ditched the BJP to woo the Congress. Then he ditched the Congress to remarry the BJP. Then he virtually ditched the BJP again with a 12 point dictat.
If the BJP ever does get to rule, it would be unprecedented in Indian history, as the BJP has never ruled in any of the 4 southern states since Independence. Deve Gowda could seal his fate if he does give into a communal political party. Incidentally, even if the BJP do come to power with Deve Gowda's support, the BJP would have sleepless nights as Gowda is keen to bed with any party but does not sleep over with any of them.
This situation is very similar to the one we had in Kerala with Karunakaran and his son K Muraleedharan. This kind of escapade was what these 2 were upto in Kerala. Today they have no loyals for no loyalties; maybe that is the price of greed.
Framing the right rhetoric!
It now seems certain the television viewers are not adept at choosing equitably. In the now popular Star ‘Voice of India’ program, 5 judges had selected 12 able and talented singers from various town and cities pan India. These finalists would render a song each week, and SMS votes were solicited from viewers to the deserving candidate.
The producers of the program assumed that
1. Discerning viewers will vote.
2. Viewers can make the right choice
3. Viewers have no bias or prejudice in casting the vote.
4. Viewers cannot be coerced to vote for any single candidate on account of caste, creed or religion.
5. The poll itself cannot be rigged.
I don't know if the producers of this show considered these assumptions & limitations from inference it looks unlikely. I am certain that there could be more assumptions than what I have cared to mention above, but hope that the few indicated above does communicate the limitations in soliciting an 'open' poll from the public.
The producers of the show should have taken care to frame the question before soliciting a poll. The term 'framing' in pschology and sociology refers to an inevitable process of selective influence over the individual's perception of the meanings attributed to words or phrases. 'Framing' defines the packaging of an element of rhetoric in such a way as to encourage certain interpretations and to discourage others.
However programs in India or producers of such programs in India are a wee bit uninformed about ‘framing’ when soliciting responses from viewers.
Infact 2 deserving contestants were shunted out for lack of votes, but were brought back in vide wild card entry. Despite this fiasco, the producers still have not gathered their wits in framing the rhetoric to solicit an equitable poll. Infact this week, one of the two contestants who were brought in vide wild card entry, were shunted out. Next week the other contestant too will be shunted out for lack of votes. Quite naturally, there will be shock and surprise by viewers and producers alike, a retake of their ‘vote out’ a few weeks ago.
In fact in a program such as this the method to be employed should involve judges grading the finalists based on song renditions. Each week the producers chose the bottom 2 contestants in the grade score. The question should then be posed to the public. “Which one of these 2 contestants performed better? For Contestant A: SMS A for Contestant B: SMS B”. This process can be duplicated every week till the final 2 contestants.
Not everybody in the real world is a clear thinker sometime there is a clutter of information and not everybody can look through it. This is not to say people are daft; but it goes to say some look at it better than others. So choosing and framing the rhetoric is essential to curtail limitations and assumptions to reflect an accurate affirmative.
A similar case was raised a few years ago by Pakistan to conduct a plebiscite in Kashmir; raising the rhetoric ‘let the people of Kashmir decide if they would like to join with Pakistan or remain a part of India’. India moved this motion to the UN, and UN officials rejected this rhetoric on the grounds that the present populace in Kashmir does not reflect the actual populace so a plebiscite would not be an accurate representation of the people’s choice.
The producers of the program assumed that
1. Discerning viewers will vote.
2. Viewers can make the right choice
3. Viewers have no bias or prejudice in casting the vote.
4. Viewers cannot be coerced to vote for any single candidate on account of caste, creed or religion.
5. The poll itself cannot be rigged.
I don't know if the producers of this show considered these assumptions & limitations from inference it looks unlikely. I am certain that there could be more assumptions than what I have cared to mention above, but hope that the few indicated above does communicate the limitations in soliciting an 'open' poll from the public.
The producers of the show should have taken care to frame the question before soliciting a poll. The term 'framing' in pschology and sociology refers to an inevitable process of selective influence over the individual's perception of the meanings attributed to words or phrases. 'Framing' defines the packaging of an element of rhetoric in such a way as to encourage certain interpretations and to discourage others.
However programs in India or producers of such programs in India are a wee bit uninformed about ‘framing’ when soliciting responses from viewers.
Infact 2 deserving contestants were shunted out for lack of votes, but were brought back in vide wild card entry. Despite this fiasco, the producers still have not gathered their wits in framing the rhetoric to solicit an equitable poll. Infact this week, one of the two contestants who were brought in vide wild card entry, were shunted out. Next week the other contestant too will be shunted out for lack of votes. Quite naturally, there will be shock and surprise by viewers and producers alike, a retake of their ‘vote out’ a few weeks ago.
In fact in a program such as this the method to be employed should involve judges grading the finalists based on song renditions. Each week the producers chose the bottom 2 contestants in the grade score. The question should then be posed to the public. “Which one of these 2 contestants performed better? For Contestant A: SMS A for Contestant B: SMS B”. This process can be duplicated every week till the final 2 contestants.
Not everybody in the real world is a clear thinker sometime there is a clutter of information and not everybody can look through it. This is not to say people are daft; but it goes to say some look at it better than others. So choosing and framing the rhetoric is essential to curtail limitations and assumptions to reflect an accurate affirmative.
A similar case was raised a few years ago by Pakistan to conduct a plebiscite in Kashmir; raising the rhetoric ‘let the people of Kashmir decide if they would like to join with Pakistan or remain a part of India’. India moved this motion to the UN, and UN officials rejected this rhetoric on the grounds that the present populace in Kashmir does not reflect the actual populace so a plebiscite would not be an accurate representation of the people’s choice.
Thursday, November 1, 2007
independence and interdependence
motivation based on independence and/or interdependence.
There is a certain part of us that consists of a unique set of attributes which enables us to stand apart and to separate ourselves from others in an environment. This part of us would like to exude these unique attributes and be independent.
At the same time, a part of us wants to be interconnected with and inter related to other in a social context. Experiencing interdependence, recognizing that ones behavior is determined by, contingent upon and to a large extent expressed by thoughts, emotions and actions of others in the social relationship. This part of us would pursue demands and expectations of the social group.
most of us examine and act out decisions based on these 2 factors. Maybe one is dominant more than the other sometimes while at other times we call for compromise on one and choose the other.
There is a certain part of us that consists of a unique set of attributes which enables us to stand apart and to separate ourselves from others in an environment. This part of us would like to exude these unique attributes and be independent.
At the same time, a part of us wants to be interconnected with and inter related to other in a social context. Experiencing interdependence, recognizing that ones behavior is determined by, contingent upon and to a large extent expressed by thoughts, emotions and actions of others in the social relationship. This part of us would pursue demands and expectations of the social group.
most of us examine and act out decisions based on these 2 factors. Maybe one is dominant more than the other sometimes while at other times we call for compromise on one and choose the other.
selection impediment
HABIT is hereditary with us humans. In a familial bevy, we get acclimatized to inter-relations and these in-turns develop or evoke emotions or actions akin. If our existing inter-relations are kindred and we are getting acclimatized to a bequeathed inter-relation then there is a strong probability that we are developing habits causal to the acclimatized bequeathed inter-relation in effect duplicating behaviors, actions or emotions similar to the bevy. In a sense, habits keep us from differentiating.
In contrast in nature, generally in a genus, species that develop variations in character from each other; will have the best chance of seizing on new and different places in the polity of nature. The more diversified the descendants become, the better will be their chance of success in the battle for life. The small differences arise on account of the species struggle for existence and would be passed onto so that its survival is ensured.
How is it that when we know the latter is better suited to our survival and progress that we still consciously choose the former?
Frankly, I don't know...maybe it is something like: ice cream is fattening, but I still have it, I guess we are all entitled to a little lassitude.
In contrast in nature, generally in a genus, species that develop variations in character from each other; will have the best chance of seizing on new and different places in the polity of nature. The more diversified the descendants become, the better will be their chance of success in the battle for life. The small differences arise on account of the species struggle for existence and would be passed onto so that its survival is ensured.
How is it that when we know the latter is better suited to our survival and progress that we still consciously choose the former?
Frankly, I don't know...maybe it is something like: ice cream is fattening, but I still have it, I guess we are all entitled to a little lassitude.
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