Zero tolerance on corruption was exactly my attitude before our Ethics class yesterday.
I changed my mind. It seems to me now that there is in many cases no clear distinction between tipping and bribing. Nor between a widely accepted "give and take" approach and corruption.
Doing an MBA means questioning one's attitudes, indeed.
Tom.
Sunday, November 29, 2009
How did "The Economist" get it so wrong?
Dear "Economist",
claiming that "New Moon, a tale of vampires, werewolves and the women who love them, earned more in a single day at the American box office than any film in history"
supports the hypothesis that you did not attend Hans-Theo Normann's MAEC course at GBS. Otherwise you would probably be aware of the fact that it is still a long way to go for the vampires and werewolves to catch up with "Gone with the wind" and "Snow White and the seven dwarfs" in real terms.
Your faithful reader Tom.
claiming that "New Moon, a tale of vampires, werewolves and the women who love them, earned more in a single day at the American box office than any film in history"
supports the hypothesis that you did not attend Hans-Theo Normann's MAEC course at GBS. Otherwise you would probably be aware of the fact that it is still a long way to go for the vampires and werewolves to catch up with "Gone with the wind" and "Snow White and the seven dwarfs" in real terms.
Your faithful reader Tom.
Zero tolerance on corruption and the Harvard Biz School MBA Oath
Continuing the discussion of Patrick Sullivans Ethics Class(which btw I noticed we all as a class thoroughly enjoyed albeit being a saturday) ;-
There are few issues which makes my Blood Boil -
1) missing my BP Tablets in the morning
2) Losing a cricket test match to Australia
3) Any one who rationalizes any form of corruption as a cost of doing business. (Esp in India! or other Developing countries)
Although in terms of adrenaline effect I would name (3) as the top most!
Corruption was written off as a cost of doing business in developing countries. But it is a fact that has emerged thanks to the recent crisis(a crisis can have positive impacts too) today corruption is rightly deplored as a political, economic and moral cancer that robs entire nations of a more prosperous future.It really should be so basic that one need not state it: Public corruption is not justifiable, under any circumstances (and in the case of India this is the 'only' reason for economic backwardness, actors who want 'status quo' to prevail on corruption)
Indian MNC's as Change Agents
A few Indian companies such as the Tata group or Wipro, have taken the
high road, but most firms find it impossible to get anything done without greasing palms. Wipro,headed by Azim Premji, is India's third-biggest global tech services provider (behind Tata Consultancy Services and Infosys). In Bangalore Tiger: How Indian Tech Upstart Wipro Is Rewriting the Rules of Global Competition, business journalist Steve Hamm writes that "Wipro is not just a company, it's a quest." That quest, according to some observers, is as much about moral rectitude as it is about business success. For example, according to Hamm, the company pays no bribes and has a zero tolerance policy for corruption.
Add to the above economic effect the real serious problem,is the the prevalence of corruption in the economy ends up distorting 'cultural' norms within the society.The extent that change in cultural norms will be needed to root out corruption, it will take a persistent, long, drawn-out effort. While economic change or even Stable growth is easier to achieve, cultural change is much slower and more difficult. This is compounded by the rearguard actions of those who are beneficiaries of the status quo and would prefer a laisez faire approach.
In India we had a case where a fresh MBA student,Manjunath who was working for Indias largest Oil company, was Gunned down, there was this case of an MBA Professional who was killed for the principles&values that he stood for. , as long as there a section of 'civil' society which continues to think that corruption is indeed a 'cost of doing business' the externalities of such consequences would always make Manjunaths sacrifice go in vain.
I think this is where we as MBA students can really play a very important role, and I cant be without mentioning what the students of the 2009 MBA batch at the Harvard Business School initiated.The MBA 2009 HBS created the mbaoath.org.
The MBA oath is a voluntary pledge for graduating MBAs and current MBAs to “create value responsibly and ethically”.At last count There were about close to 1700 MBA graduates who have signed up for this.(They also maintain a page on Facebook for this).Rightfully so this was named in the Top Good 100 most important exciting and innovative people ideas that would contribute to a better world. News week featured this as are Business Schools to be blamed for the current financial crisis ?
Tschus
Venkat
There are few issues which makes my Blood Boil -
1) missing my BP Tablets in the morning
2) Losing a cricket test match to Australia
3) Any one who rationalizes any form of corruption as a cost of doing business. (Esp in India! or other Developing countries)
Although in terms of adrenaline effect I would name (3) as the top most!
Corruption was written off as a cost of doing business in developing countries. But it is a fact that has emerged thanks to the recent crisis(a crisis can have positive impacts too) today corruption is rightly deplored as a political, economic and moral cancer that robs entire nations of a more prosperous future.It really should be so basic that one need not state it: Public corruption is not justifiable, under any circumstances (and in the case of India this is the 'only' reason for economic backwardness, actors who want 'status quo' to prevail on corruption)
Indian MNC's as Change Agents
A few Indian companies such as the Tata group or Wipro, have taken the
high road, but most firms find it impossible to get anything done without greasing palms. Wipro,headed by Azim Premji, is India's third-biggest global tech services provider (behind Tata Consultancy Services and Infosys). In Bangalore Tiger: How Indian Tech Upstart Wipro Is Rewriting the Rules of Global Competition, business journalist Steve Hamm writes that "Wipro is not just a company, it's a quest." That quest, according to some observers, is as much about moral rectitude as it is about business success. For example, according to Hamm, the company pays no bribes and has a zero tolerance policy for corruption.
Add to the above economic effect the real serious problem,is the the prevalence of corruption in the economy ends up distorting 'cultural' norms within the society.The extent that change in cultural norms will be needed to root out corruption, it will take a persistent, long, drawn-out effort. While economic change or even Stable growth is easier to achieve, cultural change is much slower and more difficult. This is compounded by the rearguard actions of those who are beneficiaries of the status quo and would prefer a laisez faire approach.
In India we had a case where a fresh MBA student,Manjunath who was working for Indias largest Oil company, was Gunned down, there was this case of an MBA Professional who was killed for the principles&values that he stood for. , as long as there a section of 'civil' society which continues to think that corruption is indeed a 'cost of doing business' the externalities of such consequences would always make Manjunaths sacrifice go in vain.
I think this is where we as MBA students can really play a very important role, and I cant be without mentioning what the students of the 2009 MBA batch at the Harvard Business School initiated.The MBA 2009 HBS created the mbaoath.org.
The MBA oath is a voluntary pledge for graduating MBAs and current MBAs to “create value responsibly and ethically”.At last count There were about close to 1700 MBA graduates who have signed up for this.(They also maintain a page on Facebook for this).Rightfully so this was named in the Top Good 100 most important exciting and innovative people ideas that would contribute to a better world. News week featured this as are Business Schools to be blamed for the current financial crisis ?
Tschus
Venkat
Monday, November 23, 2009
An Apple a day is worth two in the bush!
Coincidentally it was today that I was discussing at the Mensa with Gaurav(The Rt. Hon. Editor:)) that we must use the blog to take our class room discussions 'offline' and Lo we had "Apple" to discuss as a part of our Innovation management Case Study.
First I again reiterate ,I Love my iPhone!I switched my half decade+ loyalty from Research in Motion to Apple(Frankfurt converted me! Frankfurt they say always gets to you!),but at the same time as some one who is just passionate to keep track of technology and technology trends I must say with utmost humility, things do look very bleak for Apple,if they dont mend their ways!(pardon my Arrogance but I intend to make my case here)
First let me start with the irrational exuberant' :)! who quote Apple stock prices over the last one year to say that things are very bright at Apple;
1.There has always been a run up in stock price towards the Macworld announcement linked to the Holiday Shopper(Thanksgiving&Christmas Sale) (also with amazon & pleasebuymymommymadesnacksforyourpet.com)
2.iPhone had a bit of accounting 'surprise' for 2009(good ole Zaks : actually bad creative accounting! their stock prices could have rallied much much earlier,they had the best free cash to price ratio in the Industry!) they 'moved' their accounting standards(Refer accountancy binder), so much of what happened this year on their stock prices was infact not a reflection of what is in store for the future but more to the fact of adjusting with 'REALITY'(read PAST)!
Apple is exhibiting the kind of overweening arrogance that is almost always cataclysmic in the long run to the entire technology sector. It is a well know fact that 'VICTORY' tends to breed abject arrogance.A backlash against Apple is not only inevitable but also some where in the near horizon, albeit will take time before it translates into its stock price.
1)Every developer who is worth his/her salt(read some one who can do atleast 36 Ctrl C Ctrl V per minute) is cribbing about Apple’s 'closed systems.Think about it 'Apple insists on locking non-iTunes music out of the iPod'.
2)There’s been crib about the reliability of the iPod line(add to the overwhelming fact of iPhone Canabalizing right into its own 'profitable' iPod market).
3) There has even been a corporate scandal swept under the carpet over stock option backdating, that the company has failed to explain candidly and which could result in serious legal problems sooner rather than later.
Yet somehow Apple continues to be viewed as an underdog and gets a nod on polemical issues that would subject other companies to flak and litany. Dell, for example, has received an enormous amount of flak for shoddy customer service(The best joke- Apple offers essentially no customer service without the expensive AppleCare service plan try to take your machine to an authorized dealer if it is under warranty its ok,but when try it with say a local dealer,he would not take the machine and bet you he would say that he has to ship it back to Apple, which would take him a week or two, and you might get your computer back in about 30-45 days.
Apple customer service will tell you that both you and Harry Potter don't exist especially if you hadn’t bought AppleCare; this for a brand-new computer that cost more than $2,000 and had what the industry refers to as a cut-and-dried factory goof up.
Similarly, the way Apple uses digital rights management software to keep iPod/ITunes as a closed system would be considered a blasphemy if tried by Microsoft. Apple is basically the only meaningful player in the online music business, but not to many people criticise because it faces plenty of competition from 'businessmen' at Chandni Chowk & Wangfujin Street.
Apple' strategic marketing and online sales of music in the European Union-in the EU as a single market, customers should be free to purchase goods and services from any member state. iTunes Stores restricted users to only allow the purchase of content from the country to which their payment details originate, which also forced users in some countries to pay higher prices(Brussels can you hear me!).In 2004 the British Office of Fair Trading referred the iTunes Music Store to the European Commission for violation of EU free-trade legislation. Apple commented that they did not believe they violated EU law, but were restricted by legal limits to the rights granted to them by the music labels and publishers. PC World commented that it appeared "the Commission's main target is not Apple but the music companies and music rights agencies, which work on a singular national basis and give Apple very little choice but to offer national stores"
It is a well known fact that Bill Gates’ arrogance had everything to do with the company’s legal problems(Btw I personally love Bill gates for two reasons one his Melinda Gates foundation and two he plays fantastic bridge online on BBO(bridgebaseonline.com) some times with his partner Warren Buffet who has never put a pie in any tech company but has put a lot of money to the Gates Foundation!). Every one hated Bill for his extremely aggressive business practices, and that attitude helped turn a lot of people against them. While the anti-trust case ultimately resulted in only limited sanctions(look its Simple! Bill didnt want to create a monopoly he just wanted to control the world!), it had all kinds of negative effects that a company with a bit of humility might have avoided.
Apple since time immemorial was a been there in the tech business, a volatile firm that couldn’t figure out how to leverage its technological strengths.
According to the 'valley' pundits,Steve Jobs, for his part trying to prove that his early success wasn’t a fluke, was relentlessly ingratiating in his efforts to make a go of Next Computer.Apple loyalists similar to dead heads(Grateful Dead) cult followers, could still be counted on to show up and cheer at MacWorld, and to spew venom on any one who differed in their views.
Apple was the anti-Microsoft, and that was enough to instill pride into the average techie!! Do check out the popular Anti Microsoft Ad of Apple (just google!):)!
in a nut shell what am I trying to say on AAPL,
1) Apple is staring at an empty R&D Cupboard which was infact the 'driving factor' all along(gegenuber)their time line
2) Their Distribution strategy sux! they dont stand a chance in India & China, thats the market for mass customization! the future!
3) They have serious Leadership sucession issues(any one who saw how aapl fared the day Jobs announced in public that it was not a small ailment but infact Cancer treatment) stands testimony!
4) Lack of Barriers to entry.
Lets now see whether I am going to open my mouth to change my feet(not that I have not done that in the past)!
V
P.S: Btw smokers who own an iPhone or for that any Apple product Beware your warranty might no longer be valid
P.P.S: the views expressed on this post is mine and my copy paste alone! so if any of you guys at Apple want to sue me! remember I am just a poor student who travels on S-Bahn using the free pass issued to him by his college!(btw 6 of my classmates are brilliant lawyers doing their MBA' so THINK!)
Saturday, November 14, 2009
Preliminary meeting and Sharing of Ideas on the proposed GBS Investment club
Hi All,
It would be a good idea if we all get to gather and discuss about forming a student initiated Investment club at the GBS.
The idea of the club would be to improve members'understanding of the science/art of Investment and the Investment management Industry, with help of professors and experts in GBS (and outside) and to help members develop practical investment skills and test them in the markets.
The above would in the long run facilitate access to career opportunities in the investment industry.(in a nut shell basically meet every month(online/offline) and discuss about the current state of markets and also on Investment opportunities(after all as MGEE prof was telling us in just about a year we all would be MBA' and hence 'stinking rich').We can also take it offline and have a facebook page/blog on which one could discuss on these lines.)
The most important value which we would gain in this is that it would give us all a chance to apply in real life the concepts we have so far learnt(also what we will be learning).The club would also try to educate members by organizing events such as financial Boot Camps, Speakers Series, and advanced industry workshops. It would also be a good idea if in the long run we could evolve a GBSI ( Goethe Business School Global Investment Index -Sounds really ambitioous and flashy right!) an Index that would track global investment opportunities! Knowing that the GBS has a real bunch of extremely talented people(across all courses) I wont be surprised if this index turns out to be on the watchlist of Global Investors and come out with an annual or half yearly publication.
Such a club can also be used with help from the corporate relationship team to connects prospective employers with some of the brightest and most eager MBA graduates in the world.We should also try to organize trips to Borse Platz.
Those interested in volunteering/being a part of this club please do drop in for the first meet scheduled on December 1st after the MAEC Class needless to add this thing will work only if there are a lot of diverse intelligent minds getting to gather(will confirm venue after consulting and taking permission from Operations/GBS).
Please do bring your laptops as well for the first meeting ,Since if we have the time and are interested,I plan to conduct a very interesting 'live' Investment game(thanks to Ogive Technologies) that would last for about 40 minutes.
Cheers
Venkat
P.S: after the first meeting we should be able to take things to a logical end and submit a proposal to GBS asking for their Ideas/Support as well, knowing them I am sure they would encourage such student driven activities.
P.P.S: i have set up a Facebook RSVP page for this event and have invited all, please do add names if I have inadvertently left out some one(not all are yet on FB)
It would be a good idea if we all get to gather and discuss about forming a student initiated Investment club at the GBS.
The idea of the club would be to improve members'understanding of the science/art of Investment and the Investment management Industry, with help of professors and experts in GBS (and outside) and to help members develop practical investment skills and test them in the markets.
The above would in the long run facilitate access to career opportunities in the investment industry.(in a nut shell basically meet every month(online/offline) and discuss about the current state of markets and also on Investment opportunities(after all as MGEE prof was telling us in just about a year we all would be MBA' and hence 'stinking rich').We can also take it offline and have a facebook page/blog on which one could discuss on these lines.)
The most important value which we would gain in this is that it would give us all a chance to apply in real life the concepts we have so far learnt(also what we will be learning).The club would also try to educate members by organizing events such as financial Boot Camps, Speakers Series, and advanced industry workshops. It would also be a good idea if in the long run we could evolve a GBSI ( Goethe Business School Global Investment Index -Sounds really ambitioous and flashy right!) an Index that would track global investment opportunities! Knowing that the GBS has a real bunch of extremely talented people(across all courses) I wont be surprised if this index turns out to be on the watchlist of Global Investors and come out with an annual or half yearly publication.
Such a club can also be used with help from the corporate relationship team to connects prospective employers with some of the brightest and most eager MBA graduates in the world.We should also try to organize trips to Borse Platz.
Those interested in volunteering/being a part of this club please do drop in for the first meet scheduled on December 1st after the MAEC Class needless to add this thing will work only if there are a lot of diverse intelligent minds getting to gather(will confirm venue after consulting and taking permission from Operations/GBS).
Please do bring your laptops as well for the first meeting ,Since if we have the time and are interested,I plan to conduct a very interesting 'live' Investment game(thanks to Ogive Technologies) that would last for about 40 minutes.
Cheers
Venkat
P.S: after the first meeting we should be able to take things to a logical end and submit a proposal to GBS asking for their Ideas/Support as well, knowing them I am sure they would encourage such student driven activities.
P.P.S: i have set up a Facebook RSVP page for this event and have invited all, please do add names if I have inadvertently left out some one(not all are yet on FB)
Wednesday, November 11, 2009
St Martins Day, Comparative Mythology & MBA
For people who might have not known or noticed Levis Strauss(not the Jeans)passed away recently, I knew about Levis Strauss from my Grandmother a brilliant lady to whom I owe most of whatever I know (or dont know) till date, she taught me a bit about comparative mythology.
I learnt something today from Laura(super mom) today, she had to leave class early today because today was the day when her kids were going to be walking around streets in Sachenhausen along with a lot of other kids with lanterns singing songs(Sigh! I wanted to go and see that! you Frankfurters must tell us all this early so that we can plan and go and see these kinda' stuff!I strongly believe that we can get to learn as much observing such symbolism(yeah I am a Carl Jung junkie) as we can in a Classroom),today was St.Martins Day.St. Martins day or the feast day of Martin of Tours, St Martin started out as a Roman soldier. He was baptized as an adult and became a monk. It is understood that he was a kind man who led a quiet and simple life. The most famous legend of his life is that he once cut his cloak in half to share with a beggar during a snowstorm, to save the beggar from dying of the cold. That night he dreamed that Jesus was wearing the half-cloak Martin had given away. Martin heard Jesus say to the angels: "Here is Martin, the Roman soldier who is not baptised; he has clothed me." From the late 4th century CE to the late Middle Ages, much of Western Europe, including Germany, engaged in a period of fasting beginning on the day after St. Martin's Day.This fast period lasted 40 days, and was, therefore, called "Quadragesima Sancti Martini", which means in Latin "the forty days of St. Martin." At St. Martin's eve, people ate and drank very heartily for a last time before they started to fast. This fasting time was later called "Advent" by the Church.
What excited me and Well what is comparative about is that this has 3 (or 4) similar comparatives for Indians/South Indians, today is Kirthigai or Karthika Deepam where people light lamps outside their home in South India and also today is the day when believers of Lord Ayyapan begin their 40 day fast( yeah the Same 40 day FAST) where Devotees observe traditional austerities (vruthams) before their pilgrimage to sabarimala to lord ayyappa also this St.Martin is similar to that of Karna) of the Mahabarath(Ramayan and Mahabhart are to Indians what is Homer' Ilayad or Odysseys to the Greek ^about a million!
Great Man think Alike and of course Fools seldom differ!
But what made me really appreciate what Laura told me today, was when I realised that an MBA degree(or most MBA') has been cleverly designed by extremely smart 'lazy people' who know that students would learn more from themselves thanks to our interaction,diversity and background than probaly the course itself(Just kidding it is actually the COURSE+peer Learning)! thats extremely intelligent on part of the course designers Indeed!
I have so far learnt as much from my MBA classrooms as I have from the city,people of the city/country,my brilliant team mates who bear with my mood swings(INSURANCE against future free rides!) and of course my really talented classmates(this is inspite of my first term distraction on studies! :)).But my gut feel says the later would overtake!
P.S: I am sorry for hogging blog space ,I was an inveterate blogger)...(JUST COUGH) but at the same time I must add that his blog would be extremely interesting if we just take time and write or better still post whether for Smyth Pie Market 1 or Market 2 is better to enter before the assignment due date!
I learnt something today from Laura(super mom) today, she had to leave class early today because today was the day when her kids were going to be walking around streets in Sachenhausen along with a lot of other kids with lanterns singing songs(Sigh! I wanted to go and see that! you Frankfurters must tell us all this early so that we can plan and go and see these kinda' stuff!I strongly believe that we can get to learn as much observing such symbolism(yeah I am a Carl Jung junkie) as we can in a Classroom),today was St.Martins Day.St. Martins day or the feast day of Martin of Tours, St Martin started out as a Roman soldier. He was baptized as an adult and became a monk. It is understood that he was a kind man who led a quiet and simple life. The most famous legend of his life is that he once cut his cloak in half to share with a beggar during a snowstorm, to save the beggar from dying of the cold. That night he dreamed that Jesus was wearing the half-cloak Martin had given away. Martin heard Jesus say to the angels: "Here is Martin, the Roman soldier who is not baptised; he has clothed me." From the late 4th century CE to the late Middle Ages, much of Western Europe, including Germany, engaged in a period of fasting beginning on the day after St. Martin's Day.This fast period lasted 40 days, and was, therefore, called "Quadragesima Sancti Martini", which means in Latin "the forty days of St. Martin." At St. Martin's eve, people ate and drank very heartily for a last time before they started to fast. This fasting time was later called "Advent" by the Church.
What excited me and Well what is comparative about is that this has 3 (or 4) similar comparatives for Indians/South Indians, today is Kirthigai or Karthika Deepam where people light lamps outside their home in South India and also today is the day when believers of Lord Ayyapan begin their 40 day fast( yeah the Same 40 day FAST) where Devotees observe traditional austerities (vruthams) before their pilgrimage to sabarimala to lord ayyappa also this St.Martin is similar to that of Karna) of the Mahabarath(Ramayan and Mahabhart are to Indians what is Homer' Ilayad or Odysseys to the Greek ^about a million!
Great Man think Alike and of course Fools seldom differ!
But what made me really appreciate what Laura told me today, was when I realised that an MBA degree(or most MBA') has been cleverly designed by extremely smart 'lazy people' who know that students would learn more from themselves thanks to our interaction,diversity and background than probaly the course itself(Just kidding it is actually the COURSE+peer Learning)! thats extremely intelligent on part of the course designers Indeed!
I have so far learnt as much from my MBA classrooms as I have from the city,people of the city/country,my brilliant team mates who bear with my mood swings(INSURANCE against future free rides!) and of course my really talented classmates(this is inspite of my first term distraction on studies! :)).But my gut feel says the later would overtake!
P.S: I am sorry for hogging blog space ,I was an inveterate blogger)...(JUST COUGH) but at the same time I must add that his blog would be extremely interesting if we just take time and write or better still post whether for Smyth Pie Market 1 or Market 2 is better to enter before the assignment due date!
Sunday, November 8, 2009
Information overload and Progressive Compromise
It was 130 am local time,and my head was bursting at seams! tried skyping once,twice but in vain!
Well i didnt know the real life name of that sexy bi sexual killer catherine trammel, the woman who crossed her legs in the movie Basic Instinct.At 0230 local time(700 am IST) "Sharon Stone" is what my wife responds in an instant to the question on skype,to which my reaction was "AAh! you are right".
When one completes thirty five years ! one does get a bit old and the brain does slow you a bit(thanks to the uncountable amount of booze and pot plus parties as an irresponsible single- these have slowed you down &tends to hurt ones senses)! however the fact is that I can clearly remember the Boltzmann constant 1.380 x 10 raise to -23 (or its confusingly similar avogadro number 6.023 x 10 raised to 23) or clearly remember the holidays that I have had as 6 year old to Elephanta and Ellora caves or the lovely Shimla hills(Himalayas) but when I enter into another room I forget what I entered the room for when looking at my shelf what was I searching for? this is what biologist(and later on economist who wanted to make a career in financial markets) define as "Progressive Compromise".
That in local parlance is the incredible ability to remember unrelated information but the inability to remember simple things like Sharon Stones name.
I try to spend my weekends here at Frankfurt with senior citizens so that I can at least remind my self that I am really young,I managed to get in touch with a few Sri Lankan tamils who have made Frankfurt their home after their troublesome past. On the banks of the Main I walk with these guys and spend time with them joking in my mother tongue, Ulagaalantha Swaminathan approached me today and asked me "you are going to business school come on use your intelligence and guess what is my age ? "
I told ok, "sir lift your right hand and left leg and point your nose to the river", well he did it.
Now sit down and put your right hand under the left and left hand under your right and make noise as though you were a hen", well he did it.
Finally i told him "stand on the bench keep your right hand on the top the left hand in front of your mouth and act as though you were a train engine with chugh chugh noise", he did that also.....
I said" Sir this September you completed 70 and you are now running 71"!
"WOW they must be teaching you something at the University business school !you are a GENIUS Vengudu" Swaminathan said.
"No genius sir only last weekend at the same place you told me your age and your entire family history"! so much for progressive compromise
V
thanks to writer sujatha!
Well i didnt know the real life name of that sexy bi sexual killer catherine trammel, the woman who crossed her legs in the movie Basic Instinct.At 0230 local time(700 am IST) "Sharon Stone" is what my wife responds in an instant to the question on skype,to which my reaction was "AAh! you are right".
When one completes thirty five years ! one does get a bit old and the brain does slow you a bit(thanks to the uncountable amount of booze and pot plus parties as an irresponsible single- these have slowed you down &tends to hurt ones senses)! however the fact is that I can clearly remember the Boltzmann constant 1.380 x 10 raise to -23 (or its confusingly similar avogadro number 6.023 x 10 raised to 23) or clearly remember the holidays that I have had as 6 year old to Elephanta and Ellora caves or the lovely Shimla hills(Himalayas) but when I enter into another room I forget what I entered the room for when looking at my shelf what was I searching for? this is what biologist(and later on economist who wanted to make a career in financial markets) define as "Progressive Compromise".
That in local parlance is the incredible ability to remember unrelated information but the inability to remember simple things like Sharon Stones name.
I try to spend my weekends here at Frankfurt with senior citizens so that I can at least remind my self that I am really young,I managed to get in touch with a few Sri Lankan tamils who have made Frankfurt their home after their troublesome past. On the banks of the Main I walk with these guys and spend time with them joking in my mother tongue, Ulagaalantha Swaminathan approached me today and asked me "you are going to business school come on use your intelligence and guess what is my age ? "
I told ok, "sir lift your right hand and left leg and point your nose to the river", well he did it.
Now sit down and put your right hand under the left and left hand under your right and make noise as though you were a hen", well he did it.
Finally i told him "stand on the bench keep your right hand on the top the left hand in front of your mouth and act as though you were a train engine with chugh chugh noise", he did that also.....
I said" Sir this September you completed 70 and you are now running 71"!
"WOW they must be teaching you something at the University business school !you are a GENIUS Vengudu" Swaminathan said.
"No genius sir only last weekend at the same place you told me your age and your entire family history"! so much for progressive compromise
V
thanks to writer sujatha!
Saturday, November 7, 2009
eine frage bitte,Ich bin aus Indien,
I did note the huge amount of irritation and consternation on faces right after the first class on Macro in which the planned syllabus was not completed there were too many questions to start with and then 'Kosfelds 1/(1-Beta)' effect manifested affecting all!(I do agree the team that presented on friday was at a disadvantage because multipliers was taken only on Friday but come on they anyways rocked on their presentation)
SORRY! but you guys must understand that there were 3 main villains to this-
1. Cultural
We come from a culture in which historically we never have asked back question for centuries due to the 'Hindu' way of life and respect for elders, according to the Hindu thinking the teacher was the third most important god!ahead of the "GODS" themselves!
Matru Devo Bhava,Pithru Devo Bhava, Acharya Devo bhava, Athithi Devo bhava (Translates in Rankings for God 1- Mom,2-Dad,3-Teacher,4-Guest and finally came the "REAL GODs") , to ask question or question the teacher was not only a taboo it was SACRILEGE!
2. Historical -Ironically the first "global university" which attracted scholars world wide was in India at a place called Nalanda or Taxila 500 BC but it just vanished.The British education system(still followed to a great extent in the Indian sub continent) which albeit taught us all very good English hardly allowed thinkers or original ideaters and abohrred people who questioned.This unfortunately stood ground for almost 5-6 decades even after Independence(till the new education policy came 'informally some time back' and formally recently, things are now completely different) Afterall the objective of the British education system was only to dole out large number of clerks(or Glorified clerks also nowadays referred to as CEO').Colonial exploitation had created a new imperative for the colonial lords. It could no longer be truthfully acknowledged that India had a rich civilization of its own - that its philosophical and scientific contributions may have influenced British scholars - or helped in shaping the Renaissance. Britain needed a class of intellectuals meek and docile in their attitude towards the British, but full of contempt towards fellow citizens. It was thus important to emphasize the negative aspects of the Indian tradition, and obliterate or obscure the positive. Indians were to be taught that they were a deeply conservative and fatalist people - genetically predisposed to irrational superstitions and mystic belief systems(which lead to stereotyping outside including the fact that most still believe that we go to our work place in suits and turbans on Elephants and the second most popular career in India right after IT programmer is that of the Snake Charmer).
That they had no concept of nation, national feelings or a history. If they had any culture, it had been brought to them by invaders - that they themselves lacked the creative energy to achieve anything by themselves. But the British, on the other hand epitomized modernity(got nothing to do with Gordon Browns suit which I think is from Shakesphere' plays) - they were the harbingers of all that was rational and scientific in the world. With their unique organizational skills and energetic zeal, they would raise India from the morass of casteism and religious bigotry. These and other such ideas were repeatedly filled in the minds of the young Indians who received instruction in the British schools. Schools in which you couldnt question?(add to the above paragraph a slight tilt to left based "socialism" from 1947 till about 2000!)
3. Technical-(and personally according to me this is a very important factor!)-Economics till date is only consdiered an "ART" in India the degree' awarded are still B.A or M.A and mostly all exams were in the lines of what Iris writes as Blah blah blah (Refer Iris' blog on 1960 break dance) to many of us this suddenly is a shock to see slopes and double derivatives!( for the majority of minds who post British education system belives only English/Math/Science/Engg/IT is the way forward!) hence you see class activity similar to that of Tejas'(my son) on days he has had an extra dose of sugar!
On the Whole,THIS EDUCATIONAL ENVIRONMENT (atleast for most of us who have not had taste of the 'western' western education) this is NEW FOUND FREEDOM (similar to a bunch of teenage kids first time in a vegaslike 'topless' bar) & COMPLETELY A NEW APPROACH TO EXPERIENTIAL LEARNING!and it will take a little bit time for the honey moon to get over! (in the mean time if some one (read SOMEONE) goes overboard and you feel is slowing down the class just nudge or cough:)!)
Just like the Brits have been epitomized by the famous play "No Sex Please we are British", I think in our case it would be "eine frage bitte,ich bin aus Indien"
V
P.S: For the Grade Chasers - We will be seriously undermining the intelligence of the professor' if we think the 'who speaks most gets most' for class participation! or that profs dont have the inability to cut and weed out nonsense of questions :)
P.p.s: In order to do this writeup I decided to do an observation preparatory trip I went about observing shoppers (mostly pretty Woman about mid 30') who questioned the stores sales person to understand how can one ask good questions in the future, this was done at a couple of malls on Zeil (Hauptwache and Konstablarwache) on Thursday & Friday(alone with no help),Saturday (with help- a lovely Srilankan Woman along with her fired up teenage daughter as my Deutsche interpreter just in case I didnt miss the nuances(Sri Lankan Tamils are from a different country however we share the same mother Tongue).
@Galleria
Rugs - observation- just a few features and specs on the stupid board is not sufficent.
Yes - that rug color looks nice and she knows a natural weave is what she's looking for - but is it soft to bare feet of toddlers?
does it stain when Aunt Buela spills her red wine?
is it durable when lots of traffic pounds the rug fibers?
Towels - sure, they're made of soft cotton - but will they stay soft through hundreds of launderings?
Will they maintain their color or fade?
Will they unravel or will they remain intact even though they're used every day.
@Saturn
DVD Players -
does it record or just play back?
what media does it use?
what's the difference between DVD +R and DVD -R?
What's thisdual layer technology they're talking about?
"I have also heard of the Jazz singer Blue Ray ! oh sorry thats not the name of the famous african american Jazz Singer" ?
Can I copy a DVD to a DVD?
How does it hook up to my TV?
Do the cables I need come with it?
@the shop that started with Z on Zeil forgot the name suddenly!
Shoes - you say your color is "midnight" but is that blue or black?
is your shoe soft leather or that really stiff leather?
what size is your heel?
I"m on my feet all the time, but I want enough of a heel to look stylish?
so is your shoe comfortable?
@ Karstadt Outdoor sports sections(had a big sign 10 Euros buy 60 Euros and hence had a huge mad rush)
Climbing ropes - I am an indoor climber but now I'm going to try outdoor climbing. What ropes do I need? are indoor ropes different
from outdoor ropes? Do I need different shoes? If I'm just starting out, exactly what do I need? Can you tell me which products
are best for novice climbers? and can you instruct me on how to use them?
SORRY! but you guys must understand that there were 3 main villains to this-
1. Cultural
We come from a culture in which historically we never have asked back question for centuries due to the 'Hindu' way of life and respect for elders, according to the Hindu thinking the teacher was the third most important god!ahead of the "GODS" themselves!
Matru Devo Bhava,Pithru Devo Bhava, Acharya Devo bhava, Athithi Devo bhava (Translates in Rankings for God 1- Mom,2-Dad,3-Teacher,4-Guest and finally came the "REAL GODs") , to ask question or question the teacher was not only a taboo it was SACRILEGE!
2. Historical -Ironically the first "global university" which attracted scholars world wide was in India at a place called Nalanda or Taxila 500 BC but it just vanished.The British education system(still followed to a great extent in the Indian sub continent) which albeit taught us all very good English hardly allowed thinkers or original ideaters and abohrred people who questioned.This unfortunately stood ground for almost 5-6 decades even after Independence(till the new education policy came 'informally some time back' and formally recently, things are now completely different) Afterall the objective of the British education system was only to dole out large number of clerks(or Glorified clerks also nowadays referred to as CEO').Colonial exploitation had created a new imperative for the colonial lords. It could no longer be truthfully acknowledged that India had a rich civilization of its own - that its philosophical and scientific contributions may have influenced British scholars - or helped in shaping the Renaissance. Britain needed a class of intellectuals meek and docile in their attitude towards the British, but full of contempt towards fellow citizens. It was thus important to emphasize the negative aspects of the Indian tradition, and obliterate or obscure the positive. Indians were to be taught that they were a deeply conservative and fatalist people - genetically predisposed to irrational superstitions and mystic belief systems(which lead to stereotyping outside including the fact that most still believe that we go to our work place in suits and turbans on Elephants and the second most popular career in India right after IT programmer is that of the Snake Charmer).
That they had no concept of nation, national feelings or a history. If they had any culture, it had been brought to them by invaders - that they themselves lacked the creative energy to achieve anything by themselves. But the British, on the other hand epitomized modernity(got nothing to do with Gordon Browns suit which I think is from Shakesphere' plays) - they were the harbingers of all that was rational and scientific in the world. With their unique organizational skills and energetic zeal, they would raise India from the morass of casteism and religious bigotry. These and other such ideas were repeatedly filled in the minds of the young Indians who received instruction in the British schools. Schools in which you couldnt question?(add to the above paragraph a slight tilt to left based "socialism" from 1947 till about 2000!)
3. Technical-(and personally according to me this is a very important factor!)-Economics till date is only consdiered an "ART" in India the degree' awarded are still B.A or M.A and mostly all exams were in the lines of what Iris writes as Blah blah blah (Refer Iris' blog on 1960 break dance) to many of us this suddenly is a shock to see slopes and double derivatives!( for the majority of minds who post British education system belives only English/Math/Science/Engg/IT is the way forward!) hence you see class activity similar to that of Tejas'(my son) on days he has had an extra dose of sugar!
On the Whole,THIS EDUCATIONAL ENVIRONMENT (atleast for most of us who have not had taste of the 'western' western education) this is NEW FOUND FREEDOM (similar to a bunch of teenage kids first time in a vegaslike 'topless' bar) & COMPLETELY A NEW APPROACH TO EXPERIENTIAL LEARNING!and it will take a little bit time for the honey moon to get over! (in the mean time if some one (read SOMEONE) goes overboard and you feel is slowing down the class just nudge or cough:)!)
Just like the Brits have been epitomized by the famous play "No Sex Please we are British", I think in our case it would be "eine frage bitte,ich bin aus Indien"
V
P.S: For the Grade Chasers - We will be seriously undermining the intelligence of the professor' if we think the 'who speaks most gets most' for class participation! or that profs dont have the inability to cut and weed out nonsense of questions :)
P.p.s: In order to do this writeup I decided to do an observation preparatory trip I went about observing shoppers (mostly pretty Woman about mid 30') who questioned the stores sales person to understand how can one ask good questions in the future, this was done at a couple of malls on Zeil (Hauptwache and Konstablarwache) on Thursday & Friday(alone with no help),Saturday (with help- a lovely Srilankan Woman along with her fired up teenage daughter as my Deutsche interpreter just in case I didnt miss the nuances(Sri Lankan Tamils are from a different country however we share the same mother Tongue).
@Galleria
Rugs - observation- just a few features and specs on the stupid board is not sufficent.
Yes - that rug color looks nice and she knows a natural weave is what she's looking for - but is it soft to bare feet of toddlers?
does it stain when Aunt Buela spills her red wine?
is it durable when lots of traffic pounds the rug fibers?
Towels - sure, they're made of soft cotton - but will they stay soft through hundreds of launderings?
Will they maintain their color or fade?
Will they unravel or will they remain intact even though they're used every day.
@Saturn
DVD Players -
does it record or just play back?
what media does it use?
what's the difference between DVD +R and DVD -R?
What's thisdual layer technology they're talking about?
"I have also heard of the Jazz singer Blue Ray ! oh sorry thats not the name of the famous african american Jazz Singer" ?
Can I copy a DVD to a DVD?
How does it hook up to my TV?
Do the cables I need come with it?
@the shop that started with Z on Zeil forgot the name suddenly!
Shoes - you say your color is "midnight" but is that blue or black?
is your shoe soft leather or that really stiff leather?
what size is your heel?
I"m on my feet all the time, but I want enough of a heel to look stylish?
so is your shoe comfortable?
@ Karstadt Outdoor sports sections(had a big sign 10 Euros buy 60 Euros and hence had a huge mad rush)
Climbing ropes - I am an indoor climber but now I'm going to try outdoor climbing. What ropes do I need? are indoor ropes different
from outdoor ropes? Do I need different shoes? If I'm just starting out, exactly what do I need? Can you tell me which products
are best for novice climbers? and can you instruct me on how to use them?
Thursday, November 5, 2009
A lesson on Brazilian Banking from Marcos
First did not understand and then just refused to believe , when Marcos told me what was the rate of interest -for retail Public for Loan products in Brazil, well the publicly diplayed rate on the Central Banks website was indeed 48% per annum(COMPOUNDED)! (that was an average and meant only for people who had reasonable credit standing (or of course knew the Manager so any guess on what the active 'private' lending rate would be?).
Was further shocked to know that 'foreign banks' on some of their asset products like creditcards go right upto 12% (Not annum PER MONTH)
Decided to check their Deposit rates well whats reffered to as a Selic rate was about 8.75 % (thats per year) well that should make the Brazilian Banks the most profitable financial institution' anywhere in the Universe(*- Refer Foot note).
Really wanted to know more on this just dumped my Macro Pre Reading and did a half baked google re - search, hit upon the fact that the unusually high cost of financial intermediation in Brazil, as measured by the reported difference between bank lending and deposit interest rates is in fact due to levels of Intermediation and 'multiplier tax effect' on these Intermediates.
Brazil is an international outlier in terms of published interest spreads—it is one of only four countries in the world that reports average spreads above 30 percentage(30 x 100 = 3000 Basis points). The phenomenon of high interest rate margins has had a long history in Brazil, and a stubborn one at that. While Brazil is not alone in having had very high inflation in the past and having successfully reduced it to single-digits, it is rather unique in not having achieved a reduction in interest spreads to moderate levels, as other countries with hyperinflation histories have managed to do. This is despite an admittedly impressive improvement in fiscal and monetary performance over the past years. The high level and persistency of intermediation spreads has become an important source of concern for Brazilian policy makers and researchers, with good reason!
My question is not high spreads a much more than a nuisance to the conduct of business. They would mean high,volatile&lending rates, leading to a higher cost of capital, reduced investment, and a bias towards short-term high-risk investments, away from long-maturing investments with higher societal returns. Moreover, high banking spreads can disproportionately hurt small and medium enterprises and encourage informality.
With the Olympics ahead at Rio I definitely intend to watch this space meanwhile just close your eyes and Invest in equity stocks of Brazilian Banks and Marcos check which of them are going to be hiring you ASAP(also check if they Hire Indians tech job,it back office anything just check if they do!)! Afterall Executives of these Banks need to be paid S#$t load of money to continue this ...and meanwhile I just hope none of my Indian Bankers ever bump either onto this info or Marcos!
V
P.S: (* Foot note Why I say Universe -As Paul Krugman' interviews given as a part of our pre readings points out, one of the central points made in the IMF World Economic Outlook was that recessions caused by financial crises tend to get resolved on the back of export-lead booms, with countries normally emerging from the crisis with a positive trade balance of over 3 percent of GDP. The reason for this is simple, since consumers are so laden-down with debt from the boom period, they are naturally more obsessed with saving than borrowing during the initial crisis aftermath. So much then for the typical crisis, and the typical exit. But musing on this point lead Krugman to an additional, rather disturbing, conclusion: since the present financial crisis is truly global in its reach, the habitual exit route to recovery will only work after we are able to identify another planet to send all those exports to (shades of Startrek) SPOCK Can you check where we could send this iPhone or Brazilian Sugar To ?
Was further shocked to know that 'foreign banks' on some of their asset products like creditcards go right upto 12% (Not annum PER MONTH)
Decided to check their Deposit rates well whats reffered to as a Selic rate was about 8.75 % (thats per year) well that should make the Brazilian Banks the most profitable financial institution' anywhere in the Universe(*- Refer Foot note).
Really wanted to know more on this just dumped my Macro Pre Reading and did a half baked google re - search, hit upon the fact that the unusually high cost of financial intermediation in Brazil, as measured by the reported difference between bank lending and deposit interest rates is in fact due to levels of Intermediation and 'multiplier tax effect' on these Intermediates.
Brazil is an international outlier in terms of published interest spreads—it is one of only four countries in the world that reports average spreads above 30 percentage(30 x 100 = 3000 Basis points). The phenomenon of high interest rate margins has had a long history in Brazil, and a stubborn one at that. While Brazil is not alone in having had very high inflation in the past and having successfully reduced it to single-digits, it is rather unique in not having achieved a reduction in interest spreads to moderate levels, as other countries with hyperinflation histories have managed to do. This is despite an admittedly impressive improvement in fiscal and monetary performance over the past years. The high level and persistency of intermediation spreads has become an important source of concern for Brazilian policy makers and researchers, with good reason!
My question is not high spreads a much more than a nuisance to the conduct of business. They would mean high,volatile&lending rates, leading to a higher cost of capital, reduced investment, and a bias towards short-term high-risk investments, away from long-maturing investments with higher societal returns. Moreover, high banking spreads can disproportionately hurt small and medium enterprises and encourage informality.
With the Olympics ahead at Rio I definitely intend to watch this space meanwhile just close your eyes and Invest in equity stocks of Brazilian Banks and Marcos check which of them are going to be hiring you ASAP(also check if they Hire Indians tech job,it back office anything just check if they do!)! Afterall Executives of these Banks need to be paid S#$t load of money to continue this ...and meanwhile I just hope none of my Indian Bankers ever bump either onto this info or Marcos!
V
P.S: (* Foot note Why I say Universe -As Paul Krugman' interviews given as a part of our pre readings points out, one of the central points made in the IMF World Economic Outlook was that recessions caused by financial crises tend to get resolved on the back of export-lead booms, with countries normally emerging from the crisis with a positive trade balance of over 3 percent of GDP. The reason for this is simple, since consumers are so laden-down with debt from the boom period, they are naturally more obsessed with saving than borrowing during the initial crisis aftermath. So much then for the typical crisis, and the typical exit. But musing on this point lead Krugman to an additional, rather disturbing, conclusion: since the present financial crisis is truly global in its reach, the habitual exit route to recovery will only work after we are able to identify another planet to send all those exports to (shades of Startrek) SPOCK Can you check where we could send this iPhone or Brazilian Sugar To ?
Tuesday, November 3, 2009
Why my crazy Entreprenurial Idea sounds Good now ?
Why I want to be an entrepreneur and start a Business School In India !
Nowadays no demographer worth his salt seems complete without a reference to the coming "demographic dividend".
What really is this demographic dividend?
The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population. This usually occurs late in the demographic transition when the fertility rate falls and the youth dependency rate declines. During this demographic window of opportunity, output per capita rises. It has been argued that the demographic dividend played a role in the "economic miracles" of the East Asian Tigers and that the economic boom in Ireland in the 1990s (the Celtic tiger) was in part due to the legalization of contraception in 1979 and subsequent decline in the fertility rate. In Ireland the ratio of workers to dependents improved due to lower fertility but was raised further by increased female labor market participation and a reversal from outward migration of working age population to a net inflow. Africa, on the other hand continues to have high fertility and youth dependency rates, which contribute to its economic stagnation. The magnitude of the demographic dividend appears to be dependent on the ability of the economy to absorb and productively employ the extra workers, rather than be a pure demographic gift.
The basic idea is what biz school students in their jargon call as a No Brainer(not to be confused with Accountancy exam that makes people NO BRAINERS!)
India has a population of 1200 million(1.2 Milliade thanks to Dirk my German A1 instructor), of whom nearly 60% are in the age-group 15 to 60 years.This is the "working age population".Since outside of this age group very few people work, it is reasonable to think that the remaining,are "dependents").A nation's "dependency ratio" is the ratio of the dependent population to the working-age population. In the case of India this turns out to be 0.6.On this score India does not look too different from many other developing countries. Bangladesh's dependency ratio is 0.7, Pakistan's 0.8, Brazil's 0.5( I will not mention about Germany if you are really curios mail me!).What is different about India is the prediction that it will see a sharp decline in this ratio over the next 30 years or so. This is what constitutes the demographic dividend for India.
India's fertility rate - that is, the average number of children a woman expects to have in her life time - used to be 3.8 in 1990.
This has fallen to 2.9 and is expected to fall further. Since women had high fertility earlier we now have a sizeable number of people in the age-group 0-15 years.But since fertility is falling, by 2020,this bulge of young people would have moved into the working-age category. And, since, at that time, the relative number of children will be small (thanks to the lowered fertility), India's dependency ratio would be lower.
It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4.
This would lead to many benefits.
First is the exponential rise in the relative number of bread-winners but the classical twist here is that, with fewer children being born, more women will now join the work force;FOR WOMEN WHO NEED ADDITIONAL QUALIFICATION (every one know goes to college the ROI on education has been proved to have infinite ROI in India, however there would be sudden need for additional vocational as well as the upper end managerial and business skills.
Hear ye all GLFM Fans- A more indirect but vital benefit for the economy is the effect this can have on savings(knock knock rate!).
Human save most during the working years of their lives. When they are children, they clearly consume more than they earn, and the situation is the same when they get old,therefore a decline in the nation's dependency ratio is usually associated with a direct proportional rise in the average savings rate.
India's savings rate as a percentage of GDP has been rising since 2000. It now stands at 33% which is comparable to the Asian super-performers, all of whom save at above 30%, with China saving at an astonishing near 40% rate.This savings growth is driven by improvements in the government's fiscal health and a sharp rise in corporate savings.But even if these factors disappear, the decline in the dependency ratio should enable India to hold its savings and investment rate above the 30% mark for the next 25 years.
Well the only counter I heard to this was last week at the Waxy's irish Pub when we guys went to celebrate Teresa' & Illiyas Birthday, I couldnt argue back because that Irish Bartender was Bigger Than I. Well he said "Bull Sheet Maet",Ireland's legalised contraception in 1979.This caused a decline in the birth rate, from 2% in 1980 to 1% in 199o. This caused a rapid decline in the dependency ratio.The phenomenal economic boom in Ireland thereafter, earning it the sobriquet "Celtic Tiger", is very likely founded in this fertility decline.(P.S: there is a conspiracy theory related to the Vatican but an Atheist like me would refrain from commenting further :) on this.)
This also exactly happened in Japan post the world war II( The economic resurgence both in Japan and as a matter of fact even Germany(inspite of ordoliberalism according to a half baked google expert like yours truly was PRECISELY because of this).I also would say the same with China in the late 1980s and early 90' however since I have a lot of friends (including my chinese- ex boss,ex colleagues,ex gf',ex beermates etc etc I would refrain further).
This is too good to be true its like India qualifying for the World Cup Soccer ? will it ever happen in India?
I was a derivatives trader,I have made many of my bets on my gut feel(Many wrong and some disasterously wrong) My gut feel this time says that India will benefit from higher savings and investment rates and this will be the 'only' trigger to boost India's high growth rate.
But really benefits of this will depend on how the nation performs on primary and secondary education (to make sure that the larger working-age population conferred by the demographic dividend are an educated lot) the manufacturing sector (which is needed to create job opportunities for the larger labour force) and most importantly the specialized management training(read MBA,executive programs ,specialized trainings etc).
This for a change has been reflected surprisingly pro actively by Policy makers in India,when the Indian Education minister said I thought it was just a political gimmick but when yesterday I came to know that India' largest Business group Reliance Industry believes that this is the way forward I am seriously thinking now.
It is in the nation's interest to reap as much as possible from the dividend so that it is robust enough not stymied later by the 'demographic echo'.
Venkat
P.S: DISCLOSURE" I come from a family of educationists my Grandfather started Chennai(Madras) first college for education for Women, my mother was a math prof (is emeritus with Forum d Analyst) my wife a lecturer and possibly about a dozen of my relatives in Education field(YA YA I AM THE ONLY BLACK SHEEP who keeps talking a lot in my family!) now I got a chance to prove them wrong! I intend to pitch this in the form of a Business Plan and garner partnerships , I hope to start with the GBS :)
P.P.S: this is not an effect of a 9.5 hour day of continuous classes including a 5 hour session on Entrpreneurship!
Nowadays no demographer worth his salt seems complete without a reference to the coming "demographic dividend".
What really is this demographic dividend?
The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population. This usually occurs late in the demographic transition when the fertility rate falls and the youth dependency rate declines. During this demographic window of opportunity, output per capita rises. It has been argued that the demographic dividend played a role in the "economic miracles" of the East Asian Tigers and that the economic boom in Ireland in the 1990s (the Celtic tiger) was in part due to the legalization of contraception in 1979 and subsequent decline in the fertility rate. In Ireland the ratio of workers to dependents improved due to lower fertility but was raised further by increased female labor market participation and a reversal from outward migration of working age population to a net inflow. Africa, on the other hand continues to have high fertility and youth dependency rates, which contribute to its economic stagnation. The magnitude of the demographic dividend appears to be dependent on the ability of the economy to absorb and productively employ the extra workers, rather than be a pure demographic gift.
The basic idea is what biz school students in their jargon call as a No Brainer(not to be confused with Accountancy exam that makes people NO BRAINERS!)
India has a population of 1200 million(1.2 Milliade thanks to Dirk my German A1 instructor), of whom nearly 60% are in the age-group 15 to 60 years.This is the "working age population".Since outside of this age group very few people work, it is reasonable to think that the remaining,are "dependents").A nation's "dependency ratio" is the ratio of the dependent population to the working-age population. In the case of India this turns out to be 0.6.On this score India does not look too different from many other developing countries. Bangladesh's dependency ratio is 0.7, Pakistan's 0.8, Brazil's 0.5( I will not mention about Germany if you are really curios mail me!).What is different about India is the prediction that it will see a sharp decline in this ratio over the next 30 years or so. This is what constitutes the demographic dividend for India.
India's fertility rate - that is, the average number of children a woman expects to have in her life time - used to be 3.8 in 1990.
This has fallen to 2.9 and is expected to fall further. Since women had high fertility earlier we now have a sizeable number of people in the age-group 0-15 years.But since fertility is falling, by 2020,this bulge of young people would have moved into the working-age category. And, since, at that time, the relative number of children will be small (thanks to the lowered fertility), India's dependency ratio would be lower.
It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4.
This would lead to many benefits.
First is the exponential rise in the relative number of bread-winners but the classical twist here is that, with fewer children being born, more women will now join the work force;FOR WOMEN WHO NEED ADDITIONAL QUALIFICATION (every one know goes to college the ROI on education has been proved to have infinite ROI in India, however there would be sudden need for additional vocational as well as the upper end managerial and business skills.
Hear ye all GLFM Fans- A more indirect but vital benefit for the economy is the effect this can have on savings(knock knock rate!).
Human save most during the working years of their lives. When they are children, they clearly consume more than they earn, and the situation is the same when they get old,therefore a decline in the nation's dependency ratio is usually associated with a direct proportional rise in the average savings rate.
India's savings rate as a percentage of GDP has been rising since 2000. It now stands at 33% which is comparable to the Asian super-performers, all of whom save at above 30%, with China saving at an astonishing near 40% rate.This savings growth is driven by improvements in the government's fiscal health and a sharp rise in corporate savings.But even if these factors disappear, the decline in the dependency ratio should enable India to hold its savings and investment rate above the 30% mark for the next 25 years.
Well the only counter I heard to this was last week at the Waxy's irish Pub when we guys went to celebrate Teresa' & Illiyas Birthday, I couldnt argue back because that Irish Bartender was Bigger Than I. Well he said "Bull Sheet Maet",Ireland's legalised contraception in 1979.This caused a decline in the birth rate, from 2% in 1980 to 1% in 199o. This caused a rapid decline in the dependency ratio.The phenomenal economic boom in Ireland thereafter, earning it the sobriquet "Celtic Tiger", is very likely founded in this fertility decline.(P.S: there is a conspiracy theory related to the Vatican but an Atheist like me would refrain from commenting further :) on this.)
This also exactly happened in Japan post the world war II( The economic resurgence both in Japan and as a matter of fact even Germany(inspite of ordoliberalism according to a half baked google expert like yours truly was PRECISELY because of this).I also would say the same with China in the late 1980s and early 90' however since I have a lot of friends (including my chinese- ex boss,ex colleagues,ex gf',ex beermates etc etc I would refrain further).
This is too good to be true its like India qualifying for the World Cup Soccer ? will it ever happen in India?
I was a derivatives trader,I have made many of my bets on my gut feel(Many wrong and some disasterously wrong) My gut feel this time says that India will benefit from higher savings and investment rates and this will be the 'only' trigger to boost India's high growth rate.
But really benefits of this will depend on how the nation performs on primary and secondary education (to make sure that the larger working-age population conferred by the demographic dividend are an educated lot) the manufacturing sector (which is needed to create job opportunities for the larger labour force) and most importantly the specialized management training(read MBA,executive programs ,specialized trainings etc).
This for a change has been reflected surprisingly pro actively by Policy makers in India,when the Indian Education minister said I thought it was just a political gimmick but when yesterday I came to know that India' largest Business group Reliance Industry believes that this is the way forward I am seriously thinking now.
It is in the nation's interest to reap as much as possible from the dividend so that it is robust enough not stymied later by the 'demographic echo'.
Venkat
P.S: DISCLOSURE" I come from a family of educationists my Grandfather started Chennai(Madras) first college for education for Women, my mother was a math prof (is emeritus with Forum d Analyst) my wife a lecturer and possibly about a dozen of my relatives in Education field(YA YA I AM THE ONLY BLACK SHEEP who keeps talking a lot in my family!) now I got a chance to prove them wrong! I intend to pitch this in the form of a Business Plan and garner partnerships , I hope to start with the GBS :)
P.P.S: this is not an effect of a 9.5 hour day of continuous classes including a 5 hour session on Entrpreneurship!
Prof Guido Friebel on the Largest ever Rail Road Deal
Warren Buffett makes $44bn bet on US recovery with railroad deal
Billionaire investor Warren Buffett has made a $44bn (£27bn) bet on the future of America's rail network in the biggest takeover ever for his company.
Yeah, it’s amazing. I am all excited about it.
Let me give you my appraisal of it. I have been working since 2001 as an advisor to the German railroads which, at a turnover of roughly 30 bn Euro is more than twice as big as Burlington Santa Fe, which in turn is one of the big players in the US. One thing that has struck me during that period is that people are both very romantic about railroads, but that they know very little about how they operate and what winning strategies really look like.
Now, Warren Buffet is entering in the market and that is hopefully a signal to the public and to investors as well: yes, railroads are a modern technology, and, yes, likely, you can make money with railroads.
So, where does the misconception come from that this is a romantic, but sort of obsolete technology. Let me me give you some reasons: First, railroads were chronically overstaffed, but in the US and Europe alike they went through some major restructuring and they are now pretty lean. Second, at least in Europe, railroads were mainly transporting people, in particular on origins and destinations you can’t make money on, because when density is too low, you cannot make money. In Germany, this has been corrected for to some extent, by deregulating the long hauls (profitable) and contracting out many of the short hauls through competitive tenders, which makes subsidies transparent. The US has very little passenger rail (except for light rail that sort of works). Rail can be profitable for passengers in the North East corridor, but Amtrak is notoriously badly managed. Third, railroads have been politicized in the past, but again, this is changing although not at the speed I would like it to happen. Germany is a case in point: many good things are simply blocked by uninformed politicians and the public (for instance the privatization plans).
Now, what is the prospect really for rail. Warren Buffet is a philanthropist, yes, but he is known for his mart investment strategies. What may be driving his investment is first of all a simple correlation between economic growth and transport volumes. If we enter another period of massive growth by, say, 2011, then he may make good money. But that is not enough to put in this huge heap of money. But there may be a long term strategy: Burlington has a massive network that spreads to the West, but the East is not connected. One option would be to try merging with one of the easern companies, but competition authorities may not like that. Another option is to enter a market that currently is pretty much in German hands: worldwide logistics, combining sea, rail, road and air transport. Here the world leaders are, surprise, Deutsche Bahn and Deutsche Post.
So, this is an exciting thing for the US, for rail and for global logistics and maybe a new global entrant in this market which has both massive margins and the right size for a big fella like Buffet.
All the best from Auckland, Guido
Guido Friebel
Professor, Department of economics and business administration (FB 2)
Goethe University Frankfurt
Campus Westend
RuW Building, Room 4.224
Grüneburgplatz 1
D-60323 Frankfurt
Germany
+49 69 798 34826 Phone
+49 69 798 35021 Telefax
Billionaire investor Warren Buffett has made a $44bn (£27bn) bet on the future of America's rail network in the biggest takeover ever for his company.
Yeah, it’s amazing. I am all excited about it.
Let me give you my appraisal of it. I have been working since 2001 as an advisor to the German railroads which, at a turnover of roughly 30 bn Euro is more than twice as big as Burlington Santa Fe, which in turn is one of the big players in the US. One thing that has struck me during that period is that people are both very romantic about railroads, but that they know very little about how they operate and what winning strategies really look like.
Now, Warren Buffet is entering in the market and that is hopefully a signal to the public and to investors as well: yes, railroads are a modern technology, and, yes, likely, you can make money with railroads.
So, where does the misconception come from that this is a romantic, but sort of obsolete technology. Let me me give you some reasons: First, railroads were chronically overstaffed, but in the US and Europe alike they went through some major restructuring and they are now pretty lean. Second, at least in Europe, railroads were mainly transporting people, in particular on origins and destinations you can’t make money on, because when density is too low, you cannot make money. In Germany, this has been corrected for to some extent, by deregulating the long hauls (profitable) and contracting out many of the short hauls through competitive tenders, which makes subsidies transparent. The US has very little passenger rail (except for light rail that sort of works). Rail can be profitable for passengers in the North East corridor, but Amtrak is notoriously badly managed. Third, railroads have been politicized in the past, but again, this is changing although not at the speed I would like it to happen. Germany is a case in point: many good things are simply blocked by uninformed politicians and the public (for instance the privatization plans).
Now, what is the prospect really for rail. Warren Buffet is a philanthropist, yes, but he is known for his mart investment strategies. What may be driving his investment is first of all a simple correlation between economic growth and transport volumes. If we enter another period of massive growth by, say, 2011, then he may make good money. But that is not enough to put in this huge heap of money. But there may be a long term strategy: Burlington has a massive network that spreads to the West, but the East is not connected. One option would be to try merging with one of the easern companies, but competition authorities may not like that. Another option is to enter a market that currently is pretty much in German hands: worldwide logistics, combining sea, rail, road and air transport. Here the world leaders are, surprise, Deutsche Bahn and Deutsche Post.
So, this is an exciting thing for the US, for rail and for global logistics and maybe a new global entrant in this market which has both massive margins and the right size for a big fella like Buffet.
All the best from Auckland, Guido
Guido Friebel
Professor, Department of economics and business administration (FB 2)
Goethe University Frankfurt
Campus Westend
RuW Building, Room 4.224
Grüneburgplatz 1
D-60323 Frankfurt
Germany
+49 69 798 34826 Phone
+49 69 798 35021 Telefax
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