Desicritics Category: BizTech: Development

Frankenstein or Frankincense Crops?

Dr Bhaskar Dasgupta — Tue, 17 Feb 2009 08:23:01 EST

Here is a quite interesting story about GM foods. Personally speaking, I like the idea of having more GM food around the world. Just because the prices are falling a bit, does not mean that the pressure for more food has gone away. The middle classes of the world are demanding higher quality food, meat and the lot. They still need to be fed and watered. Given the lack of additional farm land, water, the only thing to do is to improve productivity of the existing cropland. GM foods provides one with a way to do this. Here are some interesting quotes:

The International Service for the Acquisition of Agri-Biotech Applications (ISAAA) said the global area of GM crops increased from 114m ha in 2007 to 125m ha in 2008, producing a harvest worth $7.5bn. The number of farmers planting GM crops rose from 12m in 22 countries to 13.3m in 25 countries.
Clive James, ISAAA chairman, said the most significant development last year was the first commercial planting of biotech crops in two African countries: maize in Egypt and cotton in Burkina Faso. Both crops contain “Bt genes” from bacteria, which kill insect pests. In 2007 South Africa had been the only country on the continent with GM plants (cotton, maize and soya).

Look at some of the benefits:

Of the cumulative economic gains of $44bn over 10 years of growing GM crops, the report attributed 44 per cent to yield increases and 56 per cent to reduced production costs, including the use of 359,000 tonnes less pesticide.

Now isn't that just peachy? Good stuff to read that not only you increase productivity, but production costs are reduced and less pesticide is used therefore reducing pollution as well. Yes, there are quite a lot of issues in this relating to the sale of patented seeds, potential for gene mutation, and the lot, but I think the risks are well worth it. Here is a good report from Friends of the Earth as a counterpoint to this argument. Anyway, I really dont want to get into a head banging argument about this.

One thing which is quite interesting is that if you increase the usage of GM foods, then the sustainability size factor of farms reduces as well. What do I mean by this? Well, in vast swathes of the world, you will see that the actual plot sizes are tiny. Plus with more and more children, the plots of land become smaller and smaller down every generation, till the end where the land is practically too small to support even one family and poverty increases dramatically. But with increase in crop productivity, less production costs, the level at which land sizes are no longer sustainable or able to support even one family increases. So for countries like India and China, this is good news indeed.

But beyond that, countries are now getting desperate for food security. Here’s a great example of what South Korea is planning to do in Madagascar. I quote:

South Korea's Daewoo Logistics this week announced that it had negotiated a 99-year lease on some 3.2 million acres of farmland on the dirt-poor tropical island of Madagascar…….Daewoo plans to put about three quarters of it under corn. The remainder will be used to produce palm oil — a key commodity for the global biofuels market. A Daewoo manager, Hong Jong-wan, told the Financial Times that the crops would "ensure our food security" and would use "totally undeveloped land which had been left untouched."

Here is another example of how Saudi Arabia is doing the same in Pakistan. I quote:

To this end, the Saudis, the Emiratis, and the Bahrainis have been in talks with Egypt, Pakistan, Ukraine, Sudan, Turkey, Yemen, South Africa, the Philippines and Thailand to buy up or rent arable land and expand agricultural production in these countries.

This is actually good, I dont have an issue with this. This is pushing investments in poorer countries and combined with new types of crops, the food situation in the world will get a desperately needed fillip. So instead of these crops being Frankenstein type of horror for the world, I suspect they will more be frankincense.

Technorati Tags: agriculture, India, Egypt

Is China a Threat to Indian IT Outsourcing?

itonion — Sun, 8 Feb 2009 00:46:48 EST

Amidst the buzz in the Indian IT industry, articles have started to prop on whether India is a safe destination for outsourcing. The next obvious question is whether China will use the current situation to grab a piece out of the outsourcing deals. McKinsey has reported that China has an opportunity to grow its outsourcing industry at this juncture. It cites the reason that, in this economic crisis, many companies in the world are now looking to cut the costs by outsourcing their IT operations and China can benefit from this move. Along with this opportunity, the recent happenings in the Indian IT industry can be a bonus for China.

But, can China really pull deals that are being outsourced to India? Where exactly does it stand in IT Outsourcing? As of today, the Chinese IT sector is relying heavily on projects from the booming manufacturing industries in China and also from neighboring Japan. Since China's manufacturing sector (the heart of its economy) has slowed down due to less demand for exports, the government has identified the outsourcing industry as the next engine and has vowed to pull foreign money to China through outsourcing. Also, it has planned to improve the small-sized companies to grow from their current proposition by awarding them projects and by building cities and towns dedicated to the outsourcing industry. But when it comes to projects from US and Europe, Chinese companies were working on low-end applications and testing projects. When Western companies released products, Chinese companies were asked to test them before the deployment.

Now, things are changing. Companies have started working on mid-size application development projects which is very essential for developing domain knowledge and for getting bigger deals. Today, many of these development projects come to China from Japan and Korea. Also, if things improve, China can be a good alternative to companies that wants to de-risk their outsourcing strategy. Earlier today, SAP North Asia chairman joined Neusoft, the biggest Chinese outsourcing company. He is expected to oversee the International business. Neusoft on its website has called graduates and professionals to undergo its SAP training program. The Chinese companies are desperate on getting multinational deals to prove their expertise. All they need now is one success story in a complex enterprise project, which will trigger the next wave in their IT industry.

Now, as a competitor to India, China has a long way to travel to catch up on deals that are currently awarded to Indian companies. Having understood the booming manufacturing sector in China, Indian companies like TCS, Infosys, Satyam have setup shop in china to pull projects from the Chinese Industries. Some Indian companies even bought small sized Chinese companies, to understand the market and to merge themselves into the Chinese culture. These companies serve as threatening competitors to the home grown companies. Also, though Chinese companies get projects from the Western clients, the development work is more of product development (like networks, embedded systems etc..). For example, the biggest outsourcing company Neusoft, according to its website, offers IT services on Network support, back office, data center and asset management. But, to thrive with an Indian competitor, the companies should get projects that are executed in the in-house IT department of their clients. These kind of ADM(Application, development and Maintenance) projects generate money and also help in acquiring further development projects. They also help to gain knowledge in that particular business.

Another important factor where China has both advantage and disadvantage is 'cost' The per hour rate offered by Chinese is less than India's rate, about 30% less. But there are a lot of hidden costs which includes communication issues (More time, more rate), knowledge transfer time, data security protection and regulatory issues. These issues demand a completely new strategy for the companies to kick start their outsourcing plans.

The key issue in the Chinese IT industry today is the number of skilled professionals with good experience. Although, the number of computer graduates is more than India, the experienced professionals are far less and that prevents them from acquiring the big pie. Chinese companies are badly in need of senior project managers and they are looking outside China to recruit or poach them. More than 80% of the IT professionals in China have less than 5 yrs of experience ( 42% with less than 2 yrs). This was the situation in India, a few years ago. But as the market grows, maybe in another 10 years China will compete heavily with he Indian clients. At the same time, India would have produced more experienced professionals with higher domain (Finance, Retail, Telecom etc..) and architecture experience. But you cannot compare the China's current stage with India's early years. Indians' entrepreneurial approach helped to create thousands of small software companies, which later helped to produce skilled professionals. Also, the Y2K problem definitely served as a break point. Though, the Chinese are growing steadily, the backing of Chinese government is so strong that it can be a great trigger. Working under the multiple government projects in various domains will definitely improve their skill level.

If the Chinese companies grow at the current rate, there are more probable chances of India and China collaborating in the future. There are two main reasons:

1) Indian IT professionals' knowledge and global experience will be a great asset. Not using it will be a great mistake or it cannot be ignored

2) Indian companies' presence in China.

Today, Indian companies like Infosys and TCS have a good reputation in Chinese markets. For example, the website www.seecoco.com is a hub for the IT pros in China. Here they discuss about their company, Salary etc. Already, Infosys is third in the satisfaction survey and even Satyam is ranked among the top 10. Here,it should be noted that, Indian companies are now only in the investment stage. In future, you can see a great level of cultural mixture in these companies.

Considering the Pros and Cons, China cannot be definitely ignored in the outsourcing industry. So is India. We will see India gaining domain and execution expertise over the years and China growing on technical side. So, it is not India or China. It is India and China. After all, the Dragon and the Elephant can never fight against each other.

Iran Launches Indigenous Satellite

Aaman Lamba — Tue, 3 Feb 2009 07:37:15 EST

Iran joined the select group of spacefaring nations today when it announced the launch of a domestically-produced satellite, Omid ("Hope"), aboard its Safir-2 rocket and that it was "successfully set into orbit." This coincided with the 30th anniversary of the Iranian revolution that overthrew the Shah, and on the heels of President Obama's announcement of a new era of detente with Iran. This is Iran's second satellite, after Russia launched the Sina-1 in 2005.

In the recent book, The Inheritance by David Sanger, Washington Post correspondent, which deals with the legacy inherited by President Obama from the Bush administration, he opens with the Iran issue and how it was handled by the Bush team. Coming soon after their intelligence failures with Iraq, they were far more circumspect and cautious than they perhaps would have been otherwise. Far from harbouring active regime-change fantasies, the book reveals that the administration sat on compelling evidence that Iran was likely pursuing an active weaponization program (pp 64-69, "The Laptop of Death") that was broken by the New York Times in 2005, and was even shared with the IAEA earlier that year. Even so, the National Intelligence Estimate of 2007 showed that the design program for an atom bomb had been suspended ("Project 111") even as the civilian enrichment program continued. The author also reveals how skilfully Iran exploited American concerns post-Iraq and undermined the new Bush strategy to involve the other powers like Russia, China, and the Europeans by playing one against the other.

Iran's new launch comes after last August's launch of a similar rocket capable of carrying a satellite to orbit. The Omid is positioned as a data processing and television transmission satellite, although concerns of dual-use technology and the potential for the combination rocket to be converted to carry a warhead will likely raise fears around the world.

President Ahmadinejad was quoted as saying, "Iran's presence in space with the aim of expanding monotheism, peace and justice has now been officially recorded in history."

The Grand Bailout

Blokesablogin — Tue, 3 Feb 2009 06:55:03 EST

They say that the US is the capital of capitalism! Given the new numbers of Obama's bailout package, it certainly smacks of nationalization of banks - even if you do not call it that. The Congress has approved it and the Senate is considering it before more money can be printed and passed around.

The bailout tag is set at almost $900 billion. Let us divide this number by the US population. That gives us about $3000 per person (approximately), cash (if at all). But this will not help me pay my mortgage for more than a month, then what do I do for the next month? Let us say, each of my family member, 4 of them, get this, then, I can pay 4 months worth of mortgage and have nothing to eat, if I do not have a job. Already, the consumer debt per capita is an astronomical $38,000 (approximately).

I think this entire bailout business is very wise on Obama's part. He knows that the US economy can handle such a big bailout over and above the one burped down by Bush, before he left office. But there needs to be a new vision plan.

It may actually be better if America learns to pay its debts, stop all its war spending and learn to build a wise society based on educating its children and caring for its sick and protecting the environment. Enough of this macho game of being a "super power". Even the adoption of the fiat money accentuates this self-aggrandizement of self-worth. Let the feminine shakthi prevail until all this mess is cleaned up. That means getting down to WORK.

For too long, America has learned to "tell" others to work and stopped working themselves. Of course, they got paid by others to tell them how to work!LOL! Now it is time for America to roll up her sleeves and get to work- the way she has done every time she has confronted historical moments. Time for new barn raisings.

However, the time calls for human values of compassion, trust, hard work, sacrifice and service. There needs to be a return to bartering of skills and work. You clean my house for an hour and I will tutor your kid for an hour. Neither has to exchange "money". For a change, this valuable exchange will deflate the ridiculously high "salaries" of some people and certain professions.

(aside) The banks need to stop charging any fees for some transactions as long as you trust them enough to put your money in them. The CEOs and the rest can learn to make do with minimums (and return their gold waste paper baskets). The previous bailout that our friend Bush initiated ensured that the CEOs could redecorate their offices and order private jets with tax money. Oh well.

This can be taken as a great opportunity to clean up the inflated self-worthiness of "great" financial institutions who have gone around the world insisting on "their" way of business and "their" rules that furthered swindling across the globe with political support from those respective countries. Wow! Now the kid has cried, "The emperor has no clothes!"

HOWEVER, if we look at the amount of debt carried by America after WWII, the current debt seems paltry, when compared to its income. Of course, America exploited earth's resources the last time (after WWII) to get up and fly. Tis time around, she cannot afford to not be green. So, we have got to think "outside" the proverbial box.

Having heard stories from my neighbor, who is 82 and had lived through the depression as a child, I know the American spirit is unbeatable and can handle this mess. For an obese nation, eating humble pie for a while may be just the right diet ordered by the doctor for a healthy, wealthy life ahead. And I know she will soar up to the skies once more like her eagle.

Bimaru States In India

Dr Bhaskar Dasgupta — Wed, 21 Jan 2009 04:53:38 EST

States and regions also become sick besides companies and human beings. When they become sick, you get a doctor, then you dose the patient with some foul smelling medicine, and then you get better, and to stay better, you keep on doing good healthy things so that you do not fall ill. But then, there are some fellows who will smoke, drink, eat fatty foods, then get a heart attack, and then continue on with being a bad old egg.

But what's with Bimaru in the title? It is a play on words, the word itself stands for 4 Indian states, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. When you select those letters together, they mean sick (Bimar in Hindi means sick). And yes, Sir, they are sick in terms of almost every socio-economic indicator that is going.

Obviously, the reasons are multifarious, but mainly is because of the venality of the politicians of all stripes. Corruption is rife, illiteracy rampant, health is poor, economics horrible, generally a sad old reflection of what India's missed opportunities are. What makes it even worse is that these are poor states in a poor country, but other states have done much better. I realise that somebody has to come bottom, but when we are talking about poverty levels which are at or below starvation levels, then being at the bottom has severe implications for rest of the country. It does not also help that these states are some of the most populous in the country.

One would expect that every state would be hell bent in trying to improve its investment climate so that jobs are produced and better quality of life is achieved. But no, most of the leaders of these states are too busy being corrupt and feathering their own nests. By and large, they are a venal lot, seriously. And having had experience of living, studying, working, running firms in these states, I can personally say that the situation isnt improving fast. For entrepreneurs, it is tough, really tough. When you have borrowed money from your father's General Provident Fund (pension fund), and have invested in the anticipation that you will provide sufficient returns so that your old man is not left on the street, the last thing you need is your own government and its officials being like vultures, bent on capturing your hard earned money. Well, perhaps it is too much to expect, but what exactly are the problems facing entrepreneurs?

The World Bank recently released a paper comparing the investment climate in 16 Indian states for which they had data. Here's their main graphic which shows the investment climate in the 16 states.

So what did the author evaluate to make up the index? This is what I mean by saying that the issues with these states are simple but implementation needs just simple hard work. Nothing magical, just keep on plugging away at it. Here are some of the factors relating to infrastructure: Hours of power outages last year, Hours of telephone outages last year, Percentage of sales lost in transit, percentage of sales lost due to power outages, Days of inventories kept for main input (proxy for quality of transportation). What about inputs? Excess labor, Cost of finance: value of collateral required to obtain a loan, Proximity to raw materials (share of inputs bought by domestic sources) Proximity to domestic customers, Share of firms using new technology, Trade credit: share of sales sold on credit, Trade credit: share of inputs bought on credit.

Finally institutions make a huge amount of difference to the investment climate and the authors included security cost, losses due to theft , Manager time spent dealing with regulations, Days spent with officials to deal with regulations, consistent interpretation of rules, Tax evasion (% of sales not declared), Days to obtain a telephone connection, Days to obtain a electric connection, Days to obtain a construction permit, Bribes to "get things done", Share of firms reporting officials request gifts etc. etc.

While one can only exhort the states at the top to do much better, but its the stogy lump of undigested mass of states at the bottom which is the issue. Not only do the good state's get their tax revenues diverted to support these Bimaru states, the diversion of tax revenues is then not invested in productive matters. So, all in all, these are giant holes where a significant proportion of productive wealth generated by India disappears.

The concluding paragraph from the author is particular important but would not be particularly surprising.

The analysis of 46 investment climate variables shows that power, transportation, corruption, tax regulations and theft
remain the major bottlenecks policymakers need to address in order to improve the business environment in India.

Same old, same old. Long way to go, my friends, long way to go.

Technorati Tags: Corruption,Public Sector,Development,Economics,India,World Bank

Risk Manager Role With Afghanistan International Bank

Dr Bhaskar Dasgupta — Thu, 8 Jan 2009 00:45:09 EST

Sometime in the dim and distant past, I had registered myself with an India based job site. This was when my father was ill, and I was considering moving back to India. Anyway, I had forgotten all about it, till today when this email landed in my inbox.

Post Title: Risk Manager
Organization: Afghanistan International Bank
Location: Kabul - Afghanistan
Duration: Permanent
No. of Post: 1
Sex: Any
Nationality Any
Salary: 4000 US $ p.m.+ accommodation + travel+ other benefits.
Background: Afghanistan International Bank (AIB), a commercial bank incorporated in Afghanistan and managed according to international best practices is looking for an experienced Risk Manager for its Head Office in Kabul.
Job Summary: Overall Job Purpose:
Due to rapid expansions of its business and operations the banking is looking for a Risk Manager. The position allows the successful candidate to be part of the senior management team of the bank and play a major role in its continued development.
The successful candidate will be expected to build a risk monitoring systems complying with Basel II requirements thus additional experience in market and operational risk management will be a distinct advantage.
Priority will be placed on credit management and the successful candidate will have had experience in:
1. â€¢ Credit Policies & Procedures
a. Credit policy, review and development
b. Acquisition or development of decision support tools for commercial and retail credit
c. Risk rating framework review
d. Underwriting standards development
2. â€¢ Risk Asset Review
a. Review of individual credit risk ratings
b. Credit quality assessments
3. â€¢ Portfolio Management Unit
a. Profitability and risk analysis
b. Pricing policy
c. Develop predictive dynamic monitoring
Qualification â€¢ Master degree
â€¢ Minimum 10 years experience directly related to risk management where at least 5 years in senior risk management capacity.
â€¢ Fully functional in monitoring of documentation, portfolios & exposure limits of the bank.
â€¢ Excellent analytical, creativity and problem solving skills.
â€¢ Posses good presentation and organizational skills.
Interested candidates can send their CVs with recent photo to this address:

Few thoughts crossed my mind.

The package is a bit low for what is a hardship posting for international bankers, so I am curious to know why would they have selected that compensation level.
Its an interesting job all right, but very ambitious. Candidates for this role with the required background and experience will be relatively few globally.
But it is good to read that they are aggressive, and I wish them luck with their hiring.
I researched the bank on the net and I was not really that comfortable to see that the address of the bank related to some house. Here is the address: House no. 1608 Behind Amani High School Wazir Akbar Khan, Kabul. Reminded me of the addresses I would see in the tiny lanes old Bhopal.
One of the unsung success stories in Afghanistan is the steady development of the banking system. Considering that the Mullah's had effectively eviscerated the banking system, in a matter of 5 months, they have passed a series of banking laws, have presence of many international and local incorporated banks, got some good governmental backing from the Ministry of Finance.
Here is an interesting Afghan review report for the IMF. Gives you hope, no? and no, I am not suffering from the curse of low expectations. Give the country a break, it is starting from near zero.

I further quote some numbers on how Afghanistan has progressed since 2001 from this speech. (even though the verbiage could be a bit optimistic and is after all, coming from a US State Department Employee, the figures, even if adjusted, are noteworthy).

Reconstruction and development work remains on track in most of the country and the Afghan economy continues to grow at impressive rates, with licit Gross Domestic Product more than doubling since 2002. Thanks in large part to our colleagues in the U.S. Government, the lives of millions of Afghans have improved considerably: In 2001, just 8 percent of Afghans had access to some form of healthcare; now, more than 80 percent of the population has access to medical care. Almost 11,000 medical professionals have been trained. More than 680 hospitals and clinics have been built and outfitted. For the first time in 10 years, the grain harvest was sufficient to meet consumption needs inside Afghanistan. In 2001, 900,000 children – mostly boys – were enrolled in school; now, there are more than 5 million and more than 1.5 million of these (34%) are girls and young women. Since 2001, there has been a 22 percent decline in mortality rates for infants and children under 5 years of age – we are saving 85,000 more young lives every year. Two years ago only 35 percent of children were being inoculated against the polio virus. Now more than 70 percent of the population – including 7 million children – are inoculated. In 2001, there was a dysfunctional banking system. Now, Afghanistan has a functioning Central Bank with more than 30 regional branches and an internationally-traded currency. There are now 3 mobile telephone companies serving over 3.5 million subscribers – this is almost 11 percent of the population. In 2001, there were 50 kilometers of paved roadway in the country, now there are more than 4000 kilometers of paved roads.

The main thing which struck me was the sheer banality and normality of this advertisement. A very small thing, but something which gave confidence to me that Afghanistan is improving little by little, despite all the gruesome news coming out of Afghanistan and all the efforts by the Taliban to drag that benighted country back into the medieval ages. Sometimes, its good to see the good side of the story as well. I can only wish the country the best of luck and here's hoping that the Taliban are defeated. And if it keeps on hiring professionals of the type in the advertisement, it can only get better.

PS: then I read something like this and feel very depressed.

Technorati Tags: Afghanistan,Banking,Risk Management

Going Slow on Highways Development

Ashish — Sat, 20 Dec 2008 08:41:26 EST

The subject of this post can be captured using the word 'Critical'. Are the highways projects being undertaken by the National Highway Authority of India critical for the development of the country ? The current pace of development is so bad that it can also be termed critical. This outlines the problems that this country faces in terms of infrastructure.

The development of good, fast highways is an extremely important part of the infrastructure of the country; it helps in keeping the movement of goods across large distances, enables greater mobility of people, reduces the dangers of perishable items expiring, reduces cost fluctuations caused by distance factors, improves the life of vehicles and tyres, reduces fuel consumption, and a few others. In India, one of the best things that the BJP Government is remembered is for the massive road projects that it launched, and with the Highways Minister Col. Khanduri running it, the projects were on track. Given the importance of this area, one would have thought that the Congress Government would ensure that the projects are on track. However, for some time now, it has been clear that these projects are not on track, and here is a severe admonishment of the Government from the Delhi High Court:

The Delhi High Court seems to have hit upon the root cause of why crucial highway projects across the country have been moving at a snail's pace in the past few years. And the discovery has left the court both shocked and angry. The HC found that the ministry of surface transport and highways was indulging in "day to day interference" into the affairs of the National Highways Authority of India (NHAI), a statutory body granted functional autonomy by Parliament.

"The actions of the Union of India...indicates that not only autonomy granted to NHAI by Parliament through a statute enacted in this regard has been curtailed and eroded, but NHAI is sought to be reduced to a mere department of the ministry of road transport and highways," an anguished HC noted. The court discovered through evidence tabled before it how the ministry kept forwarding bidders to NHAI, asking the latter to re-evaluate their applications even though NHAI had finalized its bidding process for the Hyderabad project.

Unfortunately, this is not the only case where the Congress Government interferes with institutions. The strictures on the Health Minister over its interference in AIIMS, the severe crippling of the autonomy of the CBI, and numerous other cases are already there; in many of these cases, there has been adverse opinions from various courts that the Government shrugs off.

Book Review: Maria Misra's Business, Race, and Politics in British India

Vinod Joseph — Fri, 19 Dec 2008 01:01:58 EST

I came across this wonderful book while trying to learn a little bit more about managing agency houses which dominated Indian industry prior to independence and for a brief while after that. I heard the term ‘managing agency’ for the first time over 12 years ago while attending corporate law lectures as a law student in Bangalore. ‘Managing agency contracts,’ our highly respected professor told us with uncharacteristic brevity, ‘are banned. BANNED. Companies are not allowed to enter into such contracts any more.’

His eyes conveyed a sense of horror as if managing agency contracts were something very disgusting and dirty, akin to may be the slave trade, as if he could never explain to us youngsters, how horrible a managing agency arrangement was. We students left it at that, not particularly wanting to inquire into something not very relevant for us and add to our workload.

The second time I came across the term managing agency house was when I read Vikram Seth’s A Suitable Boy, the best book about India I have read so far. One of the characters in the book, snooty anglophile Arun Mehra works for a managing agency house. Seth takes some trouble to explain to the reader how a managing agency house functioned and how elitist and exclusive it was, even after India’s independence. However, even Seth does not manage to explain how managing agency houses dominated Indian industry during the British era. Maria Misra manages to do what neither my professor nor Vikram Seth could do (to be honest, they didn’t try to do so), that is, to convey to her readers an image of British India dominated by managing agency houses.

To explain in simplistic terms, a managing agency was a partnership which carried on the business of managing other business enterprises. A typical managing agency would enter into contracts with various companies for managing them. Under Indian company law, as it existed then, shareholders of a company could not challenge or override such contracts, even if they were contrary to shareholder interests. British India was dominated by 60 or so managing agency houses which controlled and managed most Indian businesses.

The usual modus operandi for managing agency houses was to start an enterprise with their capital, execute a managing agency contract with it for a term of twenty or thirty years and then issue shares in the company to investors, who would be stuck with the managing agent. These agencies were run by British businessmen, both English and Scottish, who believed in the racial superiority of the British over Indians, who epitomised the values around which the Empire was built and the ‘white man’s burden’ was discharged. Much more conservative than even the British Indian government, they were at the zenith of their dominance before the beginning of the First World War.

Misra explains in detail how these managing agency houses refused to change with the times and eventually lost out to multinational and Indian owned firms. Misra’s book is crowded with statistics. Misra tells us that senior assistants at these managing agency houses made INR. 3,500 per month, a huge amount of money for those days. Partners would typically retire with a fortune of around £60,000, whilst senior assistants could squirrel away an average of £30,000. Managing agencies paid their employees more than what the Indian Civil Service paid. The managing agents believed that the ideal businessman was a generalist, who would not be too ‘technical’ and who could take a holistic view of the business and its prospects. Technical people were distrusted.

As technology advanced, managing agents began to lose out on account of their technical incompetence. Misra gives us the example of Gillander, a leading managing agency, ordering railway engine paint which wouldn’t dry in the Indian climate for Duco Paints (an ICI subsidiary). Prudential, an MNC fired its managing agent since it did not understand the insurance business.

Managing agencies had so much contempt for Indians and their lack of ‘character’ that they refused to Indianise even after the Indian Civil Service started to do so. Few Indians were said to have the ‘character’ required to be a manager, with the exception of the Parsis. Indians were said to make good accountants and their rote learning skills gave them an unfair advantage in academic exams, though it was not of much use in real business. Frank Russell, a Calcutta businessman, took the view that Hindus had more brains that Muslims, but did not compare in character or physical courage. N. Macleod, a business witness to the 1913 Public Services Commission said that ‘instead of choosing men who are merely a bundle of bones and book-learning, the selectors should give preference to those men whose physical stature and appearance who be in keeping with the dignified and important position they are likely to be called on to fill in India. There is after all in the administration of Eastern countries, a great deal to be said for the man who looks the part.’

When an Indian businessman by the name Birla invited Basil Eddis of Gillander to join the Board of one of his cotton mills, the offer was coolly declined. When another Indian business house by the name Tata invited Gillander to collaborate with it in the production of steel, the offer was turned down. Misra’s book is filled with interesting anecdotes such as these. The most interesting aspect of the entire managing agency business was that managing agency contracts were void under English law whilst they were enforceable in India – until 1970.

Terrorism - What's Under The Surface?

Uma Ranganathan — Fri, 5 Dec 2008 01:45:43 EST

There is a good and a bad side to almost everything, when you think about it. Maybe this is part of life’s complexity, it occurs to me, especially in times of adversity. However, given the incalculable loss in human lives, destruction of property, and other resources could there be anything good about the fiesta of destruction on which ten young men from across the seas recently embarked, in which over 200 lives were lost and so much havoc was caused?

I look at this way. These are events, no matter how horrible, which give the rest of us a chance to think things over, to start life afresh, to wake up to changes that are crying out to be made. When you look at it in this light, at least you get the feeling that the lives which were snuffed out were not lost in vain. That the people who died, did so in order to give the survivors a chance to live differently, to improve their circumstances. One wishes there could have been another, less painful way but since we are so slow and so unwilling to open our eyes to reality perhaps this is the only way left to jolt us into waking up.

So what is it we really need to wake up to? Is it to the need to subject our already restricted lives to even more control? More policing? A huge announcement by one of our daily papers asks us to serve as the “eyes and ears of the nation” by reporting suspicious happenings wherever we go, pertaining not only to terrorist activities but to any “ills that plague society”. Just think of some of the possible repercussions if such a movement were to come into effect! Should we emulate countries like Israel (whose young visitors to India are so unpopular on account of their aggressive and crass behavior) - or the U.S. which so many of our fellow citizens have been citing as a prime example of a country which has fended off terrorist attacks since 9/11? Really? We should invade and destroy countries which we have convinced ourselves are the source of our problems and even risk the danger of nuclear war to make a point? Do we really think that military might or that turning India into a quasi police state is going to ensure us the health, wealth, safety and happiness we are all looking for?

Or could it be that events like the one we’ve recently witnessed are a call for us to wake up to, and address the gross inequalities in the world. Is not the violence which we are subjected to so often, ranging from city murders to wars, to acts of terrorism, inviting us desperately to redress the injustice and crazy distribution of wealth and the fact that there is a serious breakdown of values wherever we look, a dissolving of whatever it is that holds the community of human beings together? The horror which is unfolding before us everywhere, is it not begging us, among other things, to give back to the people who are slogging their ass off for the country, at a very concrete level, their dignity? Among others, our farmers, without whom we would not survive more than a few weeks at the most, the workers who put up our buildings, bridges and other constructions, or the coal miners who risk their lives to keep our electrical circuits running?

The lone terrorist to be caught alive following the recent onslaught – Mohammed Ajmal Kasab - according to newspaper reports, comes from a poor family in Pakistan. There are two reasons that seem to have motivated him to become a terrorist. One is, that his best friend Fayaz Ahmad who he believed was innocent, was killed in an encounter three years ago, by the Jammu and Kashmir Police. The other is that his father persuaded him to join the LeT in return for money, in order that the family back home might survive.

As long as there are people starving in the world, as long as a large number of deprived human beings continues to be not only confronted with existential problems but is simultaneously forced to watch crass indulgence by sections of the population, who ignore the basic needs of the poor, we can be sure of by being plagued by rebellion in various destructive forms since that is the only way apparently, in which the poor can make themselves heard. It is not enough to blame the criminal minds making use of the poor – be they slimy, mealy mouthed, manipulative politicians or hate filled, power hungry maniacs who brainwash and train frustrated youngsters to blow up public facilities and kill large numbers of people wherever it may be, leaving a trail of blood and gore behind them.

As far back as 1972 the disastrous consequences of our consumerist attitude and crazy way of life, was documented in a book called “Limits to growth”, published by the Club of Rome. Sadly, over thirty years later, when wars are actually being fought over oil, over water, and other natural resources in short supply, when the effects of the lopsided growth around the world is known to be leading to violence and destruction, we are still thinking in terms of the sort of growth which can only lead to further destruction and are hardly giving a thought to measures we need to take to save our resources and to use them in a way that benefits the maximum number of human beings in the world.

What is scarier than the terrorists is the fact that not enough people even now, seem likely to wake up to the urgent need for us to change the way we relate to each other in the world – politically, economically, and most significantly in the realm of personal relationships, which is where all transformation really begins. The fact that so many of us go through life like self satisfied zombies, indicates that by and large we are not leading happy lives, that we lack genuine fulfillment – because otherwise we would be longing to share our joy and to extend the sense of fulfillment to others – not to cut ourselves off from the world as we have done and to live in our own separate cocoons without caring about the rest.

Today I am wondering, who are the real terrorists? The people we think of as terrorists? Or is it all those who hold the world to ransom with their greed, their hunger for power, their exploitative attitudes? Are the real terrorists the men and women who have been seduced into joining criminal organizations in order to feed themselves or their families, or is it people who have unfairly amassed wealth and power and who now refuse to use it for the common good, to bring about a society which is peaceful and democratic in the true sense of the word?

Book Review: Imagining India - Nandan Nilekani

Ganadeva Bandyopadhyay — Sun, 30 Nov 2008 00:49:10 EST

Among the leaders and pioneers of the much feted and praised IT company, Infosys, Nandan Nilekani has given a window into his thought processes in this book.

A reader will have to acknowledge the clarity of thoughts that have gone into covering an extraordinarily wide swath of topics. This includes, among the many others, a very intense perspective on the English language and its undeniable love-and-hate relationship with Indians since the beginning of colonial rule, the analysis of democracy and its evolution in India and a scathing critique of our universities as they degenerated into getting into the center of politics rather than being the cradle of new ideas, opportunities, and movements to rejuvenate the national life.

While reading the book, among the many impressions that the reader may get is the immense sense of hope for India, sometimes in comparison with China and other countries . This happens while describing the potential demographic advantages available currently to India, and also the challenges in converting such potential into realistic scenarios.

Mr. Nilekani could have considered giving more space to the huge challenges that were faced by leaders other than Nehru in the decades immediately after independence, a more perspective view on the growth and success of non-IT companies in the same phase as Infosys and maybe viewpoints on the various strains of violence, terrorism and insurgency affecting the Indian state.

Readers would come to understand the big challenges that come with big numbers, which are more the norm than the rarity in our national space. As a people, we are frequently accustomed to hearing about a large population, large contradictions in terms of empowerment by education, and empowerment by political means or even the wide variations in wealth distribution. One of the realizations that this book will definitely give to its readers is the enormity of challenges that have been faced by leaders and politicians and the immense hard work and faith in a national concept that has kept converting such challenges into windows of opportunity.

The narrative gives much hope to readers by the end of the book and especially for the Indian readers that corporate leaders of the calibre of Nandan Nilekani have their head and heart in the right place and salso provide the inspiration for similar successes to be actually replicated across all fields of national life.