Kudos For India's War Against Global Warming

India's current rapid economic growth is drawing increasing attention from far and near with projections released by reputed agencies that it would dislodge Japan from its third rank by 2032 and USA from its second rank by 2050.
A more deserving achievement by India, however, I feel, is its highest reduction in green house gas (GHG) emissions (which have been responsible for global warming) among the developing nations Brazil, Mexico, China and Chile. As per Kyoto protocol, these nations including India, though not bound to reduce emissions, have been encouraged to adopt measures and at the same time earn 'carbon credits' which are tradable globally so that those who cannot achieve reduction in emissions could buy such 'carbon credits' for offsetting. As per a report, India tops such a list with 155 projects registered out of a total of 492 followed by Brazil 88, Mexico 77, China 37 and Chile 14 projects. Some more projects are awaiting registration. It has been estimated that it may finally bring 350 million 'carbon credits' which on a conservative basis would generate a whopping $3.5 billion by 2012.
It has been like killing two birds in one shot. In my post

Do You Believe India's Economy Will Be Second Largest By 2050?

Yes, I do. After all, I am a hard optimist. Why should I doubt the findings of a study that places India in No2 position ahead of USA by the year 2050 especially when the report has been prepared by the internationally reputed Golden Sachs. It had earlier projected India to No3 position just after China and USA by 2032 overtaking Japan.
The sweet music now released also says that India's GDP will quadruple from 2007 to 2020 and the per capita income will increase 35 times by 2050. This will enable Indians to buy cars five times and increase consumption of crude oil by three times. I do not know whether to rejoice at such projections. The scenario of so many cars in congested cities polluting dangerously the already highly polluted environment besides causing other problems is nightmarish and has been touched in my post 'Small cars boom spell urban doom'.
How I wish each word of the projection comes out true by 2050. Many readers may be around then to determine how much of it was realistic and how much was hog-wash. Of course, it is well known that war, natural calamities, epidemics like AIDs and political upheavals may upset the applecart. Nevertheless, I have a wish-list which should materialise preceding what has been forecast by Golden Sachs. My wishes are:
1. India is a strong, vibrant democracy where honest and capable people get elected as their representatives - not by rigging elections, or by use of money or muscle power.
2. India has eliminated hunger and poverty.
3. Every Indian has access to education, health care and social benefits. Cast, creed, language divide created and perpetrated by wily politicians no longer matter.
4.Every village has electricity as well as drinking water and every citizen has a roof over his head
5. Every nook and corner of the country is easily accessible by modern transport.
6. Every citizen is conscious and concerned about environmental degradation and reaches out to do his part to fight air, water and noise pollution.
7. Corruption has been removed from the public life. No one needs to grease the palms of anybody for getting things done.
8. AIDs and other serious diseases have been controlled or eradicated.
9. Women empowerment is visible in every walk of life.
10. Merit has become the sole criterion for advancement and selection in all spheres of life. Political interference, nepotism and sycophancy no longer work. If my wish-list becomes reality, how glorious it would be for India even if the projections of Golden Sachs attain only 50% accuracy.
Is it not?

Rivalry Between India And China Exists Even In Diamond Industry

Everyday, I come across either in print or electronic media some news or the other about China's supremacy over India. The whole world is watching almost in total disbelief as both China and India are racing like Phoenix - the mythical bird in the Arabian desert rising again from the ashes to become second and third biggest economy. In every public platform and discussions, it is now routine to highlight the widening gap in various fields of industry and business of the two nations. I think we are harping on it wrongly as India should try to remove its own deficiencies to improve rather than lamenting all the time about its poor performance in comparison with China.
The latest news about rivalry between India and China came from a survey report of the global consulting firm KPMG which was released by Gems and Jewellery Export Promotion Council. It has made a disappointing projection for India that diamond processing industry in which it had a lion's share would be reduced from its present 57% to 49% by 2015 - a drop of 8% in value terms. It goes on to say that China will emerge as a strong player with a share of 21.3%. I thought both India and China are poor nations and since jewellery is used by only the rich and the very rich, market shares of these two nations would be insignificant. The figures tell a different story. While USA remained the world's biggest market for jewellery with 31% share in 2005, India and China registered their shares at 8.3% and 8.9% respectively. At least in this particular case of market for jewellery, India and China are running neck and neck.
Let us not forget that China got started with liberalisation and globalisation more than 15 years before India finally made up its mind. The Communist regime in China ensured easy implementation of plans and policies whereas in India its political parties with diverse goals cobble up wafer-thin majorities to rule democratically. So India predictably experiences hiccups off and on in adopting globalisation.
Diamond processing industry provides employment and earns foreign exchange. India must do everything to retain its predominant position.

High Growth Of Economy Of India & China Causing Sleepless Nights?

I always read about rapid progress of India's economy with avid interest but harboured some doubts at the same time. It excited me to imagine India being ranked the third largest economy in the world by the year 2010. Those forecasts have been made, after all, based on facts and figures; the international watchdogs and analysts corroborate the same even as I fail to get any glimpse as though the same might be taking place obscurely.
The annual deliberations between the Confederation of British Industry and the government of United Kindom, interestingly, have removed remaining doubts from my mind as I learnt who was saying what. The Chancellor of Exchequer, Gordon Brown, has warned "Over the next fifteen years, up to half the world's future growth will come from India and China. By 2020, the G-7 share of growth will fall just to one-third". I quote from The Times of India what George Osborne, the right-hand man of David Cameron, the leader of Tories had told the Confederation of British Industry - "How are we going to compete against countries with low wages and high ambitions? There are quite a lot of lazy assumptions out there that we need to confront. There's the assumption that we'll do the clever stuff and we'll move up the value chain, and leave the Chinese and Indians to do cheap things. Let me tell you no one has told them that." Paradoxically, U.K. and other developed countries are now getting scared of the economic boom taking place in India and China. As reported in Economic Times, the US treasure secretary, Henry Paulson, wailed "We cannot tell the developing countries that we benefited from free markets, but we will not allow them to do the same. It's morally wrong - we are condemning them to being a perpetual underclass."
The cat is now out of the bag. The globalisation mantra chanted for years to the developing countries like India and China for allowing MNCs and FDIs (to exploit the natural resources as well as to escape from the rigid claws of environmental controls in their own countries) has begun to backfire. The disciples i.e. India and China having mastered the mantra are now ready to take on their gurus.
I think India has to wait patiently for poetic justice to be delivered. What do you say?

Malls Threaten To Edge Out Small Retail Outlets

Swanky malls with their eye-catching interiors, cool comfort and convenience of shopping, huge spaces to move around freely and car parking as well as refreshment facilities are drawing huge crowds in India. However, the public accustomed to a entirely different style of shopping and small retail outlets known as 'kiryana stores' stand no comparison to the land, labour and investment made in malls. There are reportedly 12 million such small retail outlets for a population of 1.07 billion and buyers numbering 405 millions in India. The rich number 6 million having a purchasing power of $28 billion and the total purchasing power is estimated to be $230 billion. This gives India a dubious distinction of being known as 'nation of shopkeepers'.
Be that as it may, the retail is one of the fastest growing sectors in the economy. The world's biggies are waiting to spread their wings in India introducing their modern and western management style along with a lot of dazzle. The supremo Wal-mart - a 260 billion retailer has just inked a JV with India's leading Bharti group. The reason for their enthusiasm to have presence in India is understandable as India's GDP will cross a staggering $740 billion by end of this year and is already world's 4th largest economy likely to become the third largest after USA and China by 2010.
So the media hype and the palpable soaring interest among the rich, the urban population particularly the youths who are vulnerable to ape western lifestyles with plenty of cash at their disposal are becoming somewhat disgusting. I am not quite enamoured at the idea of such malls barging into our lives. That is because, I know, it would herald the death of thousands and thousands of small retail outlets. Those are mostly family-oriented business joints which employ least capital, land and labour. They are small in size but their services extend far beyond mere shopping. From giving credits to customers and personalised attention, these outlets serve as a place for social mixing. The shopkeepers know their customers and their families by name and at times discuss personal problems confronting them. Among their other services, home delivery is quite fascinating. In Western countries where the culture is different and almost every person possesses cars - malls are very convenient places for shopping. But why we have to go malls located far away for our daily needs when we can get them round the corner. Let us not forget that shopping is a part of our daily life unlike in the West where it is done weekly or fortnightly. Bargaining is a part of shopping experience in these market places. Moreover, when millions of job-seekers are looking for jobs, why should the millions already working in small retail outlets loose their jobs only for malls to flourish which will require much less hands because of mechanisation and automation. Malls may be very cozy place but you loose your identity and power there.
So all that glitters is not always gold. I cannot think of a life without those small retail outlets - Wal-marts or no Wal-marts!

Untangling Issues From China

When I wrote my last post titled 'China - The Unchallenged Victor', little did I know that my next post would also be on China and that too, so soon. That is because I am not a sinologist. But going through the newspapers in the morning today, I found serious contradictions in a few news items which forced my thoughts to culminate in this post.
Politicians are well-known for backtracking on their statements they make once any controversy arises. They usually take refuge under a refrain 'I have been misquoted'. But what surprised me was the latest example of contradictions being made in the same breath by the ebullient Steel Minister, Ram Vilas Paswan. He said "The government should frame proper policies on the entry of Chinese companies in India". Interestingly, the above plea was made as Indian steel companies are apparently apprehensive that allowing Chinese companies with their ability to make cheap steel may threaten their existence. Instead of India trying to be competitive cost and quality wise, the honourable Minister is trying to stop steel companies from China entering India and that too when we are swearing by globalisation mantra. The contradiction did not end there as he went on to say "SAIL should look for acquisitions, like Tata Group's acquisition of Corus".
The startling comments on another issue coming from the other extreme of the political spectrum are quoted from a news item titled 'CPM's fixation with China continues' appearing in Economic Times. "These are historical issues. These are disputes. That's why issues are being discussed", Mr Yechury told reporters. He even suggested a resolution to the dispute: don't transfer populated areas on either side. In other words, Mr Yechury does not think that the Indian government is correct when it says that the whole of Arunachal Pradesh belongs to India.
So we have a Steel Minister and Indian steel industry scared of competition from China and yet are interested in spreading wings as part of globalisation opportunities. Then we have a national party CPM - part of the present UPA government who are flexing their muscles after improving their number of seats in Lok Sabha that does not support the Indian government's stand that the whole of Arunachal Pradesh is part of India.
I am really flabbergasted at the political fare spread before us. What should I choose and what should I reject?

China - The Unchallenged Victor

Today, China is the cynosure of the whole world being the fastest growing economy. The enviable position was attained by attracting $72.4 billion foreign direct investment (FDI) during 2005 which is one fifth of all FDIs bagged by developing economies. It has also assiduously built a foreign exchange reserve of $1 trillion. It produces and consumes one third of the world steel so much so that the entire world steel industry seems virtually to be at its beck and call. There are plenty of other examples to showcase its invincible position for China to say deservedly to the world - "I am the monarch of all I survey".
India, too, has been hogging limelight for its spectacular GDP growth rate in excess of 8% for the last three years. Though next only to China in matters of recent rapid economic progress, India remains way behind. Being part of the same race, comparisons between the achievements of two nations are often made. The two most populous nations of the world are vast and part of Asia. Perhaps the commonality ends there. The social, political, cultural and linguistic differences between them are too significant.
Yet, I find a common tendency among analysts and some determined bloggers to compare and contrast the two on any issue. We must remember that India is the biggest democracy in the world and embraced liberalisation in 1991 after much dithering. Even today, the Left parties continue to throw a spanner at times in the government's policies whenever they consider it politically expedient to do so. It is a different matter that their counter-parts in China are giving smooth passage to inviting FDIs without any let or hindrance. And whereas any development work can be delayed or stalled in India by a small group of disgruntled citizens or vested interest, there is virtually one-party rule in China.
With both the two big nations trying to attain supremacy, there can never be total cooperation and trust among them though a lot is being expected out of the ensuing visit of the Chinese President to India. While bilateral trade is expected to cross $50 billion by 2010, there are some disturbing news that China will join hands with Pakistan to claim Siachen - a strategic military location for India. There was a war over border disputes in 1962 just before "Hindi-Chini bhai bhai" slogan became immensely popular with the Indians.
The future path, therefore, ought to be traversed with caution exercising wisdom gained out of past mistakes.The bureaucracy and the political mindset seem transfixed at China. It must be realised that India started the reforms process 15 years after China had started besides having constraints in framing and implementing policies unlike China. I read an editorial in Times of India that India is trying to put a man on the moon simply because China is also gearing for the same feat. Stretching competition to such extents can be self-defeating.
Let us work determinedly even if our pace is slow reminding ourselves of the saying "Slow and steady wins the race". More importantly, India must retain its own identity and refrain from playing second fiddle to China.

Posco Bitten By M & A Bug?

Whether it is the survival instinct or the ambition to climb higher, Posco - the South Korean giant and fifth largest steel manufacturer in the world is looking for acquisition opportunities in Asia. The move appears to have been triggered by the threat perception of the company itself becoming target for acquisition by bigger sharks like Arcelor-Mittal Steel which has emerged as the largest manufacturer with a capacity of 110 million tonnes. The corporate battle for merger of Arcelor the second largest steel manufacturer with Mittal Steels which was already in the top position was closely watched that lasted several months and created history of sorts. This classic M&A sent shock waves throughout the steel industry worldwide. Several leading manufacturers in China and even Tatas in India have already changed their holding pattern to pre-empt any hostile take-over bid.
Posco, on the other hand, appears more vulnerable at present as more than 60% of investors of the company are foreigners. Their strategy seems to bring change in ownership pattern by mergers and acquisitions. They are on the lookout for some companies in China and India. Fortunately for Posco, such plans can be translated to reality as they are cash-rich with an estimated $1.57 billion in reserve.They have already made a foray in India with a greenfield project to manufacture 12 million tonnes steel at an investment of $10 billion. As ill luck would have it, the project is hanging in the balance as land acquisition has not proceeded smoothly. The company has, however, embarked upon cross-holding ties with Japan's Nippion Steel Corp so that it does not become an easy prey to hostile take-over bids.
Let's see which way the wind is blowing.