Desicritics Category: BizTech: Globalization

Butchermania

Dr Bhaskar Dasgupta — Thu, 19 Feb 2009 10:38:12 EST

It was an invite to attend a luncheon of the Worshipful Company of Information Technologists. But this time, the luncheon was at the Worshipful Company of Butchers. A beautiful place. Unfortunately, I had to take a call in the middle so I was shown into an office.

Here’s the back of a leather backed chair with the logo emblazoned on it.

Here’s me during the call, with the laptop open. Can you see the chair? Beautiful handiwork.

The luncheon was held in the Great Hall.

Can you see the table plan? pretty complicated. I was sitting half way up the middle table on the left. Then, after the call, I hot footed it back to the lunch. The food was absolutely delicious. The Angus Beef was so smooth, I think it has to be rated to be one of the best steaks I have eaten in London. But to be expected, if you dont get good beef in the Butcher’s hall, where else would you get it?

I took a sneaky picture of the main window as I was leaving. Can you see the stained glass showing the butchers on the bottom? The top window shows the various animals which are used in the trade, like sheep, lambs, cattle, etc. It was full of grandees and thus felt a bit embarrassed in clicking away…

But outside the hall, down the stairs and the hall has the most amazing dioramas. This was showing a butchers diorama, with cuts of beef, pork and lamb hanging.

I am afraid this photograph did not come out quite right, but shows some kind of a letter of patent relating to the fact that the Princess Royal became some kind of member.

Turning my head, there was another diorama with a huge cleaver on the top.

Took a close-up of the note. There are two flags, first the flag of New Zealand and then the flag of the United Kingdom, some kind of an association, I guess, established in 1809. It says:

“This chopper was used by Mr. Edward Jeffreys at Buckinghamd Palace to cut up the first New Zealand Lamb carcasse shipped to the United Kingdom in the S.S.Dunedin and presented to Her Majesty Queen Victoria in May 1882”

Pretty neat, no? to capture all this history? I know this is not big news or a big historical event, but it actually is very big news once you think about it. This lamb trade has impacted the history, economy, and culture of New Zealand for more than 100 years. And this cleaver was there when the trade was born.

Another diorama with the tools of the trade.

Here’s the Hall.

And here’s the Smithfield Market where you would get the butcher’s with their stalls.

And on the way, saw this, the Kinky Barber, who gives you a beer with every haircut! :) As long as you dont worry about the type of haircut, you should be happy with the beer :).

But lets take a side trip, its the history which interested me. The history of this company goes back to 975AD. Now that’s impressive and goes deep back into the hoary mists of time. When we eat a steak or a chop, do we know that there is this level of history of professional attention paid to how to deal with meat? I did not. This company is deeply involved with the meat industry, it deals with a variety of industry issues ranging from hides to food hygiene, etc.

It is a fine art, this bit about dealing with meat. You simply cannot kill an animal and hack it about. Oh! no. You have to know the physiology of animals and there is a whole terminology around which cuts of beef comes from where?

I was taught how to carve meat by my ma, she used to hunt in her childhood with my grandfather. So dealing with poultry, goat and beef was very interesting. It was almost like surgery. Which you should not find surprising, after all, for quite a long period of time, barbers and butchers used to be the surgeons of those ages. Anyway, it was quite interesting to sit there looking around at the crests, the stained windows, and know one was sitting amongst the ghosts of butchers past for a thousand years. The next time one see’s a big juicy medium rare sirloin steak on the plate, one would know that there is quite a strong possibility that the way it was prepared had some links of some sort to the Worshipful Company of Butchers.

The full slide show here.

Technorati Tags: London,History,Buildings,Animals

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.

Nations Turn to Barter To Secure Food

Dr Bhaskar Dasgupta — Fri, 6 Feb 2009 10:52:33 EST

A curious situation is emanating in the world of international intra-governmental trade. I quote:

Countries struggling to secure credit have resorted to barter and secretive government-to-government deals to buy food, with some contracts worth hundreds of millions of dollars. In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil. The revival of these trade practices, used rarely in the last 20 years and usually by nations subject to international embargoes and the old communist bloc, is a result of the countries’ failure to secure trade financing as bank lending has dried up.

But before you think that this is too strange, it is not, this is quite common. Take a look at this deal. In return for up to 600k barrels of oil per day to the UK, the UK promised to provide a ton of aircraft and other defence benefits to the Saudi Arabian Government.

Here is another example. The Venezuelan government promised to give oil to London (to use in running its buses), in return for London providing free consultancy and advice on policing, tourism, transport, housing and waste disposal. But you have to remember this, when barter deals are not denominated in currencies, the chances of getting a corrupt hand in the till is massively increased because you simply cannot compare (or mark to market if you will) with international prices. In this particular case, the people who lost out were the people of Venezuela who were not able to get the money that they could have earned in return for some dubious advice on those aspects. In the interests of transparency, its best to sell the oil and buy services clearly and transparently. But then, politics trumped and a bad deal signed.

Same thing happened with the Al Yamamah deal, it is absolutely a stinker for corruption and something that I have complained bitterly about before. Deals like that have corrupted this country and have made us a laughing stock. Why barter? Just lay the costs out in public, its not like anybody else will complain, would they?

Another example of corrupt, trade distorting and silly deals were the oil for sugar deals signed between Russia and Cuba. Here is a great overview of this spectacular failure. I quote:

The fall of the Berlin Wall in November 1989 and the breakup of the Soviet Union in December 1991 became the precursors for the collapse of the Cuban economy, central to which were the Soviet oil-for- sugar swaps over the preceding three decades. At its
zenith, this barter arrangement provided the financial basis for Cuba to sustain the agricultural inputs necessary to produce sufficiently large annual harvests to permit significant sugar export levels and oil re-ex-port revenues. At its nadir, the systemic failure in the oil-for-sugar arrangement created shortages through- out the Cuban economy including fuel, fertilizers, herbicides, and spare parts for farming equipment
and sugar mills. Over the past decade, this is marked by the simultaneous downward spiral of Cuba's oil imports along with its sugar exports. Cuba's historic energy dependence and limited oil resources coupled with the sudden disruption of the oil-for-sugar barter arrangement severely impacted the Cuban economy
from which it has yet to fully recover.

Here is another example of an African Country, Uganda, starting to face issues with its barter deals. Here is a good overview of the Barter Trade and how it is changing. While private firms are better suited at doing barter trade, I am certainly not in favour of having barter trade done by Governments. Also, these barter trades crystallise the generally bad subsidy scheme. You pay tons of money to your farmers to grow stuff that nobody wants to buy, so you then do a barter trade with a country who does need that stuff, and you underprice your agricultural stuff. Which means that the international trade in that agricultural commodity is distorted as one market has its price driven down. See here for an example of what India is trying to do with Russia relating to its wheat crop. Here’s another example of the domestic sugar lobby moaning about its bad economics and trying to resolve it using another bad economic barter deal. See how much they demand subsidies and help and all that? All classic signs of people who cannot compete in the open market and thus want to suck on the taxpayer’s tit.

The costs relating to corruption, lack of transparency, lack of built in productivity agreements, and so on and so forth means that these agreements are generally bad in the long run. Going for bartering further lets the governments off from taking necessary decisions. For example, the fact that governments are not getting sufficient financing is neither here nor there, there are international funding agencies (government owned, such as IMF, or Import Export Banks etc.) who can provide funding, but because going to these agencies would mean exposing their bad economic policies, they tend to hide their faults by pitching barter as a way of doing trade. Bad, bad bad.

Technorati Tags: trade, agriculture, economics, subsidies

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.

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

How Companies React To Major Crisis Events

Dr Bhaskar Dasgupta — Sun, 4 Jan 2009 20:17:29 EST

The infamous Mohammad cartoons crisis had reached global proportions. One of the most common reactions by Muslims was to embark on a consumer goods boycott against firms which were primarily Danish, but other firms were involved as well, all the way from New Zealand. Similar situations like these keep coming up, whether it relates to boycotts of Israeli made/associated firms/products, or environmental disasters, or religiously oriented issues, corporate firms keep on getting in the crossfire. Unfortunately and unlike nation-states, they are not organised to handle political, religious and other crisis like this. So it was instructive to read how various firms reacted in different ways to the Cartoon crisis.

The paper was quite interesting indeed. Crisis management of this scale is not something that firms do very well. Take for example the recent news story that Lehman Brothers so totally mismanaged their bankruptcy and demise that it cost creditors up to $75 billion US Dollars. The authors quote some interesting events such as:

Environmental catastrophes such as the Union Carbide/Bhopal industrial accident and the Exxon Valdez oil spill had long-term ramifications for the companies involved. Criminal and terrorist acts such as the Tylenol poisonings, the Lockerbie/Pan American disaster and the 9/11 World Trade Center attacks have sensitised the public to a world of intense danger. Some crises, such as the Perrier water contamination crisis, seem largely of the company's own making through quality control failure.4 Others, such as the Belgian Coca-Cola crisis, seem to have arisen out of nowhere, apparently attributable to mass hysteria triggered by the previous dioxin scare, but intensified by corporate mismanagement. According to Johnson & Peppas: “A senior Coca-Cola Enterprises official, Phillippe Lenfant, did state that the scare had been mishandled, that communication was inadequate, and that the company was unprepared for a crisis of this magnitude

But religion is perhaps the one which is most difficult to deal with. Usually religion is the furthest from the minds of corporate executives (with perhaps the exception of praying for divine intervention when sales tank or losses mount) and the authors point to some events:

In 1994, the McDonald's fast-food restaurant chain, during its promotion of the Soccer World Cup, printed the flags of participating nations on its disposable bags. Included was that of Saudi Arabia, which bears the Shahada (Islamic creed) including the name of Allah. Muslims were outraged that the name of God was printed on material to be crumpled up and thrown away.18 A similar situation arose when Amstel, the Dutch brewer, printed the flags under the caps of beer bottles, in contact with alcoholic beverage. In India, Reebok encountered huge controversy over its brand champion, Indian cricket captain Mohammed Azharuddin, autographing footwear – including on the sole – resulting in the name Mohammed being trampled in the dirt, which was seen by some as particularly offensive.

The authors have given a nice timeline for the Mohammad Cartoons crisis.

30 September 2005: Danish newspaper Jyllands-Posten publishes editorial cartoons depicting the prophet Muhammad.

12 Oct: Eleven ambassadors from Islamic countries complain to Danish prime minister and request a meeting with him.

17 Oct: Egyptian newspaper El Fagr reprints six of the cartoons together with an article strongly condemning them.

21 Oct: Danish PM replies to the ambassadors, indicating that freedom of expression is the foundation of Danish democracy and the Danish government has no means of influencing the press. (Refusal to meet the ambassadors has been subsequently condemned by 22 Danish former ambassadors).

28 Oct: Coalition of Danish Muslim groups files criminal complaint. A regional prosecutor investigates but decides against prosecution.

10 January 2006: Norwegian Christian newspaper Magazinet reprints the cartoons, greatly inflaming the situation.

26 Jan: Saudi ambassador to Denmark recalled; retaliatory boycotts against Danish products initiated in Saudi Arabia with supermarkets displaying signs indicating that Danish products have been removed. Norwegian foreign minister condemns publication of the cartoons in a Norwegian newspaper, on the grounds that they incite hatred or hateful expressions.

30 Jan: Jyllands-Posten publishes open letters in Danish and Arabic: “In our opinion, the 12 drawings were sober. They were not intended to be offensive, nor were they at variance with Danish law, but they have indisputably offended many Muslims for which we apologise.”

31 Jan: Danish Muslim group says the apology is “ambiguous” and demands a clearer one.

1-2 Feb: Media in many European countries (France, Germany, Spain, Iceland, Italy, Belgium, Switzerland etc) and in Jordan reprint the cartoons.

2 Feb: Boycott again mentioned in Friday prayers in Saudi Arabia and Kuwait; in Qatar, the Grand Mufti calls for boycotts of Danish products; in Yemen, posters of Danish PM set alight; in Lebanon, the boycott situation “has worsened significantly”; in Morocco, “the affair continues to run in the media”; in Egypt, “the controversy is the main topic in the media and Danish products have been removed from all Egyptian supermarkets”; in Sudan, “the president has issued a statement forbidding buying or trading in Danish products.”

3 Feb: Wellington NZ newspaper Dominion Post indicates an intention to republish the cartoons in spite of the outrage in the Middle East and the already-significant losses reported by Danish dairy giant Arla.

4 Feb: New Zealand ministers warn that the decision by New Zealand newspapers to publish the cartoons is irresponsible and could threaten NZ trade. Specific mention is made of Fonterra which “sells much of its product in Muslim countries”. NZ meat industry officials lambast the media for placing trade at risk. Danish and Norwegian embassies in Damascus and Danish embassy in Beirut torched.

6 Feb: Supermarkets across the Middle East remove Danish products from their shelves. Arla is losing €1.3m a day in sales.

7 Feb: The Iranian government sets up a committee to look at possibly annulling trade deals with countries that have published the cartoons, threatening more than NZ$100m-worth of New Zealand exports.

8 Feb: Politicians in Jordan call for cancellation of trade worth NZ$70m. Prime Minister Helen Clark condemns the publishing of the cartoons and refers to New Zealand's reputation as a “peaceful and understanding nation”. Arla – Fonterra's partner in the UK butter market – closes its factory in Riyadh as the boycott bites. Fonterra publishes advertisements in Middle Eastern newspapers emphasising the NZ origins of its Anchor brand milk powders. NZ diplomatic posts are placed on high alert.

By April 2006: retailers across the Middle East were beginning to restock Arla's products, although uptake was slow, with only 20 per cent of pre-boycott sales being recorded by the end of May. Market recovery proved slow in spite of Arla investing heavily in advertising campaigns in selected markets such as Algeria.

Dec 2006: The cost to Arla Foods of the boycott of Danish products in the Middle East amounts to approx. DKr400m for 2006. This equates to a loss of DKr40,000 for each of Arla's 10,000 Danish and Swedish co-operative members. “It's a relief that the boycott has come to an end … many products have been sold at discounted prices.” According to Finn Hansen (divisional director, Arla), “the boycott will have pushed back Arla's development in the Middle East two years.”

March 2007: Arla chairman Knud Erik Jensen was able to say: “We're back in the Middle East and expect to return to previous levels of sales by the end of 2007.”

What I found amusing was the last line, all that outrage and foaming and what was the result? Not much and not for long. But time heals all wounds, so to say, and all it needed was a bit of courage and lots of communications to heal those wounds. Arla went after the crisis with a perspective of doing something is better than doing nothing. They tried to communicate the fact that freedom of speech was part and parcel of western life and supporting the Danish stance. This did not work, and then Arla tried to distance itself. On the other hand, the New Zealand firms simply refused comment or tried to comment as little as possible, keeping heads down hoping that it blows over.

I have certain issues with this. Letting things blow over, especially when you are talking about quarterly financial reporting cycles, free flow of capital, footloose capital, fast changing credit ratings and the like is just not possible. Firms cannot absorb losses over such a long period of time. So one thing which corporates should remember is whenever governmental or Societal related boycotts hit you, you should immediately ask you’re your government’s support so that the firm can endure the boycott or survive the event. Public memory is short and as they say, a week is a long time in politics. It might take longer when we are talking about religion, specially considering that religion is the opium of the masses, but pass it will. You just need capital to ride over the issue.

Second is that corporates should not tie themselves to government or political stances. That is dangerous. Firms are not organised to handle political issues nor can they spin news as is required in today’s 24 hour news and media management. So they will simply stumble and cause issues for themselves. Keeping the head down is a good idea indeed.

Third is the use of gatekeepers. The authors recommend using gatekeepers to link into the populace. Looking at this cartoon issue itself, who would be the gatekeepers? I wrote some essays on this issue.

So go to Al Azhar or to Qum? Or start debates on Al Jazeera or MBC? Or get some fatwas in your favour? Or start dealing with the famed Muslim / Arab Street? And how do you keep them listening to the message? This area is highly emotional, charged with religious symbolism, prone to minefields, subject to linguistic interpretations, full of politics, in short, everything that a corporate executive will never have had handled before in his life. So how on earth would the executive or the corporate communications team know how to handle such aspects? I mean, they themselves make heavy weather of investor relations with bog standard corporate disasters such as losses. Can you imagine them working with a religiously sensitive topic such as this? That said, there is nothing like getting some discreet conversations underway with the gatekeepers and opinion formers directly (and be prepared to pay out of your nose, as these opinion formers are not going to be cheap), but put them on retainer and see what comes up.

Oh! Also pray.

All this to be taken with a grain of piquant salt!

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?

Citibank - The New State Bank of America

Aaman Lamba — Mon, 24 Nov 2008 08:03:44 EST

The United States Government took a giant step towards nationalization of the American banking system by announcing a plan to fund and backstop Citigroup, the beleaguered financial giant that has lost over $160 billion in market cap. The guarantees being provided include an additional capital infusion of $20 billion, loss guarantees up to $306 billion in a layered manner between Citi, the Federal Reserve, and the FDIC.

In return, Citi would issue $7 billion of 8% preferred stock to the government and additional stock warrants of about $2.5 billion. It would also promise not to pay out more than 1 cent dividend on common stock for the next three years. Finally, and most notably, the government would have final approval over all executive compensation and bonuses.

This last point is perhaps the most far-reaching, and as we all know the adage about paid pipers and their tunes, Vikram Pandit is henceforth a Federal Government employee, with hopefully greater job security than he had before this weekend. This mechanism gives government regulators a greater say over banking operations, and potentially opens the door to similar measures being adopted for other banks, or even other industries.

President-elect Barack Obama might end up appointing an auto czar, a music supremo, and perhaps even look to employ Bill Gates as CIO. The corporatization of the state will have an impact on the way it is run, which could work positively, but states have been corporatized for a long time, and this will only accentuate the incestuous relationship between neo-liberalism, corporatism, and statism.

Unfortunately, the victim in this circle jerk will be liberalism. Friedrich Hayek put it well when he noted,

If we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject.... The monopoly of government of issuing money has not only deprived us of good money but has also deprived us of the only process by which we can find out what would be good money.

Consider a humble bank manager in the Midwest a year from today having to evaluate between a loan to a start-up promising to improve productivity by over 20% with more efficient outsourcing automation. He is about to sign on the dotted line when he gets a call or a buzz from his friendly neighborhood Congressman, suggesting it might be a better idea instead to fund the local chapter of the UAW.

Welcome to Citibank, the new State Bank of America.

Swiss Bank Accounts

Blokesablogin — Wed, 12 Nov 2008 09:57:02 EST

This small article in the Washington Post brings yet another angle to the economic crisis that the US is facing. Hopefully, part of the money salvaged from these accounts can reduce the bailout money put up by taxpayers.

According to Transparency International, an anti-corruption agency, the estimated value of Indian individuals' worth of "funds" stashed away in Swiss Banks are to the tune of over $ Trillion. It is not surprising that the poor and rich divide has increased in the past few decades.

Reading these articles makes me wonder what anyone can DO with these "ill gotten" wealth? We all have an expiration date invisibly stamped on us. So, we cannot carry any material wealth along with us. The Reliance story is one of many that shows how money, left behind, creates schisms amongst the most cordial of relations.

Why, then, the insecurity of wanting to stash funds away for whatever purpose? Like the story of Tolstoy reminds us, at the end of the day, all we need is 6 feet of land (not even that if you are cremated!).

I sincerely hope that people who have these mysterious accounts put that money in circulation. If auction houses like Christie's existence are to be validated, many of these account holders use grand sums to buy art and such that have very little value in the "real" world and are "dead" investments. A vacation, on the other hand, would help support the tourism business including travel, stay, food and other activities.

Sometimes, when I see the pro-rich agendas of law and policies, I wonder if it is not a bad idea to ensure the demise of the poor by starving them or working them to death and the few remaining rich can have the earth to themselves- It sounds like a good plan. A perfect epilogue to the small-scale genocides we are reading about world-wide. And someone like me will not be there to write such a blog either!