The Coolies from India - Indian Indentured Labor - Follow On

In my blog of November 29th, The Coolies from India - Indian Indentured Labor I talked about the indentured labor from India.

By coincidence I came across this article  in a recent issue  in the online  Caravan Magazine


http://www.caravanmagazine.in/Story.aspx?StoryID=1058&Page=1

Some of you might find this article  interesting.

The Rumors About The Slow Decline Of The United States of America Are Highly Exaggerated

In my blog of  September 19th " Back To The Future",  I had mentioned that the United States would become less dependent on oil imports over a period of time. However, it appears to be happening much sooner than I had anticipated. There have  been some  news items which have surprised me . The Wall Street Journal recently  had  the following head lines  " U.S Nears Milestone: Net Fuel Exporter, " " Big Oil Heads Back Home ". This after a period of 62 years.It could be a aberration, but trend wise I do not think so.This was not the first article and there have been others which are similar in nature. In manufacturing also it appears that things are beginning to change. The Boston Consulting Group recently put out a report "Made in America Again "giving examples of the United States  regaining its edge in manufacturing. In my opinion, looking at the long term big picture over the next one or two decades , from a simple lay man's perspective and without doing a lot of academic research, there are signs that the twenty first century will not necessarily be the Asian century as is being predicted. Yes China and perhaps India will overtake Japan and Germany  in terms of the size of the economy, but  America will continue to be the eight hundred  pound gorilla.

Driven by the domestic production of both gas and oil over the next decade you will see the revival of the United States. By 2020 it is expected that almost one third of the domestic consumption is going to be from shale gas or shale oil.This has lead to the oil majors refocusing their investments to the United States. According to Exxon  by 2040  American crude  oil imports will solely be  from Canada.  Yes while you have to deal with the  environmentalists, it is better than dealing with with dictators and rulers who are into enriching themselves. No political risks to worry about. Besides no industry in the United States has a bigger lobby than the oil industry and who are normally supported by the Republicans.

At present  China is considered the workshop of the world, but according to the  Boston Consulting Group study and other anecdotal evidence which one reads from time to time, it is apparent that China is gradually loosing its  cost  advantage to countries such as Vietnam and Indonesia. After the war,  we saw  Japan playing a similar role that China has been doing over the last couple of decades, but by the late seventies and eighties Korea had replaced Japan. The ship building  industry is  a good example. In the sixties and even in the seventies, Japanese ship yards were the lowest costs producers out manufacturing the United States and Europe. Starting the eighties and into the nineties Korea overtook Japan. Presently China now appears to be overtaking Korea. However within a within a couple of decades China will start to face the same problem which Japan facing presently - the graying of the population. According to a study done by Prudential Foundation and the Center For Strategic & International Studies,  in 2004  ( "The Graying Of The Middle Kingdom" ) , it is expected that the number of senior citizens  ( over sixty years ) in China will overtake that of the United States by around 2030. However unlike Japan , China's citizens might not have accumulated the wealth to jump into the higher income category. However this could change if China changes its one child policy.

We all get mesmerized by China and  the outsourcing industry in India, but  what  we overlook is  that  a lot of the new technology which will impact world economies and their ability to dominate is still coming from America. This might be in the form of weaponry or computer chips or in medicine. The so called innovations from outside the United States  are  marginal at the best. In the areas of shale oil and gas which will play a major role in the  energy space, the United States is in the forefront of the of extraction technology. China and India will continue to play supporting roles.

In my opinion the reasons for this are two fold, the educational infrastructure and the immigration policy which the United States follows.

The excellent universities in  the United States are difficult to replicate.In almost all the countries in the world, the educational infrastructure is devised, built and subsidized by the governments and you cannot prevent the politicians and the bureaucrats interfering in the running of the institutions. In the United States while the  state does play a role in some institutions , the majority of the schools which are generally ranked among the top ten, are private institutions. The business model  is unlike any other in the world. Linked to this is the philanthropic nature of its citizens who happily give ( with a little help from the tax authorities) to their educational institutions. Surprisingly these institutions also receive contributions from overseas benefactors who instead of donating to the institutions in their own countries which need the funding much more, happily write a check for millions of dollars to the Ivy League or other  top universities, particularly if their children are studying there. In addition the institutions work closely with business to encourage practical research. This model is difficult to replicate within  a short period.

While we read about some of the draconian policies followed by  the states bordering Mexico and the complaint by e prominent business men such as Bill Gates, the United States immigration policies combined with its universities  has enabled the country to continue to retain its dominant role in the world economy. There continues to be a stronger push for the government to tweak its policies further to allow the best and the brightest of the world  who study in certain disciplines to stay on.If this goes through it will give it a further edge and America will be hard to beat.

Again taking a rather simplistic view of the world rather than on relying on complex computer models, if the dependencies on external oil and with some of the  manufacturing moving back , from a long term point of view you will see the resurgence of the American economy .The Asian giants will likely overtake the rest of the world, but America will continue to dominate for the foreseeable future.

With that you will see the overseas investors investing in American financial and physical assets.If I have to make a long term bet - ten years and beyond, I would bet on the United States and the  dollar.

The Coolies from India - Indian Indentured Labor

I recently read the Sea of Poppies by Amitav Ghosh.While the book is primarily about the little known  but extremely important role which India played during the Opium war between Britain and China, it is  the role which Britain played in dispersing the Indian diaspora thousand of miles from their home land which got my interest. Interestingly enough last week's Economist also  had a cover story of  the Diaspora which focuses primarily on the overseas Chinese and Indian  but viewed from an economic aspect

When slavery was abolished in 1833 ,  the British were faced with a dilemma as to how to staff their various plantations ,( whether these were sugarcane plantations in South East Asia or the  Caribbean or Mauritius or Fiji or in places such " British Guiana " in South America or work in tea and rubber plantation in Sri Lanka and Malaysia ) and various projects such are railroads across the world. By this time Britain had already colonized India.However they were not to first to start the process of indenture. That " honor" goes to the French who in 1830 took indentured laborers from Pondicherry and Karikal to the French Indian Ocean Island of Reunion.

 Theoretically the indenture was for a limited period after which they were supposed to be shipped back to India, but  in a lot of cases that never happened. They were given some small amounts to forfeit the passage back or in places such as Trinidad allocated land . By 1870 almost 1.2 million Indians were shipped abroad. Their transportation conditions were marginally better than the slaves, although  they were not shackled.

Where they appeared to have differed from the African slaves in the United States was that the Africans were from different regions and from different tribes. Once they reached their destinations they were dispersed and subsumed into and adopted a sub-culture of their own but which was aligned to the Christianity. There were of course areas such as Louisiana,Haiti, Brazil, where they retained some of their native culture particularly in terms of voodooism.

With regards to the  Indian indentured laborers or coolies as they were referred to,  it appeared that people were sent in batches from a particular province. These included a  provincial mix and hence retained their own caste, religion and culture. This again was intertwined with the cultures of the people they interacted with. However what was interesting that even after  many decades and in some cases generations later, their social norms , their language all seemed to be  in a time wrap. Their  home land India had changed and moved on, but their vision  and memories were that of what  their forefathers had left behind.

We are all familiar with  slavery and how the Africans  were shipped to the Americas and the Caribbean and the trials and tribulations they suffered.The discrimination which they have faced in the United States and which some of them feel they still face even though the President is black. There have been numerous books written, along with television shows and movies produced about the difficulties they had to go through.

On the other hand  there appears to be very little literature in the common domain about the discrimination suffered by the Indian indentured laborers.Apart from some academic papers and historical records in the Archives in India and perhaps the respective countries, there has been  very  little written about the suffering and discrimination these " coolies "  suffered The only thing I have read about the life styles of the descendants of  these people are the books written by V S Naipaul  such as A House for Mr. Biswas, The Mystic Masseur and so on and by his brother Shiva Naipaul. These were in a humorous tone rather than about the hardships suffered by their parents and grandparents.Yet they persevered and built a life for them selves and prospered in spite of being minorities and being treated as second class citizens.

It is interesting that the Indian academics and historians have not focused on this aspect of "Indian history" . I for one would be fascinated to read about the history of these migrants. Hopefully one of these days......

New York - Random Observations

Recession - What  recession ?

Just came back from a two week trip to the United States. New York City is obviously not part of America. We keep reading about the recession and the unemployment but we did not see any sign of that in the Big Apple.

Everywhere we went there were crowds. The stores were all chock a block full with  people not just looking but buying. Restaurants were packed  with people waiting to get into the more trendy places. Retailers such as Uniqlo of Japan are opening up large flag ship stores. Madison Avenue is seeing a revival of trendy stores. The Apple Store near Central Park was packed and this was during a week day.

The streets crowds on Fifth Avenue reminded me of the sidewalks of Hong Kong during lunch hours. The museums  were full. Granted a large number appeared to be tourists - even though it was not the season.

I am told that the property prices did not go through a big correction during the financial crises. Some of the seedier parts of New York such as the Bowery are now going upmarket with some new apartments selling in the tens of millions. Based on my limited knowledge I had always viewed the Upper East or West Side as the place to stay and would have expected them to be the more expensive places, but for smaller places, prices appeared to be much higher in the areas between mid-town and downtown  as it is popular among the younger generation.

If this is New York during recession I wonder what it would be like during boom times ?

Just Like Us

This time when we reached JFK we saw a mad scramble for the immigration counters. The lines were huge . As is always the case we ended up in the slowest moving queue. It took us almost an hour to pass through the counter. This was something we are used to when we return to Delhi, but by contrast this time we sailed through the immigration in less than 10 minutes. What a change.

Of the taxis and limousines we took during our visit almost ninety five per cent of the drivers were from Punjabi's ( Indian or Pakistanis )  or from the sub-continent.  Much against my nature , I surprised my family by actually making an attempt to chat with a Punjabi driver  who has been there since the mid-eighties . He said his elder brother was a lawyer by training and a retired bureaucrat and had now migrated from India  to Canada. Upon being told that my daughter was a lawyer, he wanted some advice as to how his brother could come the New York and start a immigration practice.

The Americans like the Indians ( certainly the North Indians) love to eat and snack throughout the day. While in the past we had our traditional sweets and snacks, we now add  in  pizza's , burgers and and other eatables. Our  obesity levels will soon be matching those in the United States.

The aggressiveness of the New Yorker is well known.We have definitely overtaken them. When we have a traffic altercation it is not unusual for one of the parties to whip out a pistol, shoot the other party and flee the scene.

Just a week or so before our arrival in New York the East Coast of the United States had a unexpected snow storm. Some parts of New York  and adjoining states had black outs lasting over a week. Increasingly houses in the suburbs are now installing generators to avoid black outs which apparently are becoming common. Sounds familiar ? 

New York vs London

This is the first time I have spent this much time in New York. I have been to London more often  and always regarded is as my favorite city . In a lot of ways they are very similar. Both of them are their country's and global financial centers. Over the last century and a half  both the cities have benefited from  wealthy patrons who have donated to build up their cultural institutions particularly their art galleries, their museums, their cultural performance centers. Both of them offer a rich variety of global cultural events - art, plays, dance and music performances . They are both the favorite cities for the global rich, and aspiring young global professional whether they are  Indians, Chinese,  Russians,  Middle Eastern,  Africans or South Americans. London however  is more expensive than New York in every way.

In my personal opinion, where they differ is that in that in London the various ethnic communities appear to comfortable in their own skin  and retain their own national identity. Walking  down Oxford street you see Africans in their bright colorful national dresses, the Arabs in their robes, an occasional Sikh bhai ji  in his flowing beard and kurta pajama. They are all equally at home and no body gives them a second look . I did not see too much of that in New York. Here  everyone gets Americanized. They all want to appear to fit in, to wear the same stylish clothes and for those who have been there long enough adopt a veneer of New York aggressiveness in their mannerism.

If it was not for the long flight I could consider switching my loyalties to New York especially since my daughter is there. 

Quote Of The Month

The Economist dated October 1st-7th,2011 in an article on "The Pakistani army's complex relationship with jihadists"

Clutching a glass of distinctly  un-Islamic whisky, a retired senior Pakistani official explains at a drinks party in Islamabad , the capital, that his country has no choice but to support the jihadist opposition  in Afghanistan. The Indians are throwing money at their own favorites in Afghanistan, he says, and the Russians and Iranians are doing the same. So Pakistan must play the game too. "Except we have no money at all. All we have are the crazies. So the crazies it is ".

Poof ... And There Goes Poverty

The Planning Commission of India should be nominated for the next Nobel Prize, or perhaps even be canonized for its ability to create miracles.

In a affidavit The Planning Commission has stated that if a persons daily income was  Rupees Thirty two ( Sixty seven cents in US currency ) in the urban area and Rupees Twenty five  ( Fifty two cents )  in the rural area , would no longer be considered poor.

So with a stroke of a pen the Planning Commission has reduced poverty for a few hundred million people, something which normally takes decades of economic development. If that's not a  miracle then what is ? Mother Teresa did not even come close.

Incredible India never ceases to amaze !!!!
 

Is Anybody In Charge - Anywhere ?

As I read the newspapers daily, I am increasingly concerned about what is going on in the world. It is frightening to  to see the politicians and the bureaucrats fighting and dithering over decisions which should be made to get the world back on track.But no one appears to be able to do that.

Starting with my own country India we have a well meaning Prime Minister who is the figure head with the real power being vested in the Head of the Congress Party. Perhaps of her recent illness,we  are beginning to see the squabbles , first with the coalition partners  and now increasingly within the party itself itself. It is no longer limited to junior ministers or  party functionaries, but senior figures such as Pranab Mukherjee, PC Chidambran, and  Kapil Sabil. You then have have the party mavericks such as Digivijay Singh and Mani Shankar Aiyar who emerge occasionally  to make outrageous soundbites. You get the impression that people are beginning to position themselves for the next term and each trying to do their best to trip up the other.

Unfortunately things are not much better on the Opposition Bench.Under normal circumstances the term the Grand Old Man would apply to a senior figure such as LK Advani but unfortunately his behavior, his outbursts and his continued lust to be the next Prime Minister prevents you from giving him the sobriquet. You then have the other senior leaders such as Narinder Modi  ( NaMo) , Sushma Swaraj , Arun Jaitely  and others who are now being talked about as potential candidates , assuming of course that the Bharatiya Janata Party emerges with enough votes to be able to form a government . Perhaps the dark horse will be Nitish Kumar from Bihar who might emerge as the acceptable face for the BJP to rule even though he might be only a coalition partner.

In the meantime the country's growth rate has now slowed down to below 8%. The decision making has been paralyzed. Projects are getting delayed . 

Pakistan on the other hand continues its games and finally even its closest ally the United States  is beginning to say " enough is enough" . In the meantime the leaders both civilian and military  continue with the threats to stop the support to the Nato allies in dealing with the Taliban and other terrorist outfits. The trump card which Pakistan holds is  the nuclear arsenal.Instead of focusing on the economy the civilian military leaders are running to their all weather friends and allies.

In  the Middle East,  Israel is gradually getting  isolated. The only prediction I will make is that if the Jasmine revolution continues as mentioned in my last blog " Back To The Future " , Beirut and not Dubai will  in a few years regain its spot as the financial and fun capital of the Middle East as it was until the seventies.

Meanwhile across in Europe they continue to wring their hands about what to to about Greece ?  The Greek sovereign bonds appear to be as radio active as the  sub-prime bonds. Here again the banks bought the bonds for their higher yield without doing the  due the diligence and relied on the rating agencies. What reinforced their faith to invest in these bonds was the fact that it was issued by a country in the Euro zone and that they would get bailed and they shoveled them into the wagons.. It was different from Iceland which had to bite the bullet and sort out its problems.

Then you had the perfect storm where it was not just Greece ( which now  has to be force fed the medicine), but also potentially Portugal, Ireland, Spain and perhaps maybe even Italy could be sucked into the default vortex . The impact on the banks in European is too horrifying  to imagine. Meanwhile the European Central Bank , The International Monetary Fund both headed by French citizens   go from meetings to meetings with the Finance Ministers, the Central Bankers and the Heads of State  without reaching any decisions. In the meantime the investors in the markets continue to be whip-sawed .

In Britain  the Economist magazine  says  the co-coalition government is looking leaky. The recent riots have left the social workers trying to figure out the cause of the riots. There is increasing  talk about  talking action against the social networks which fanned the flames. Again the double standards. When it is used in China, Middle East to fan the flames, loud voices of support  are raised about freedom of speech, but now that the shoe is on the other foot,  there is talk about  how it can be controlled.

In the United States, with the forth coming elections both the Republicans and the Democrats continue to position themselves and every decision gets down to the wire to see who will blink first. The Federal Reserve Governor  Ben Bernanke in the meantime continues to tweak the economy to see if the green shoots will grow or will they wilt and will America catch the Japanese disease ?

On a relative basis, Australia , Latin America and Africa overall ( if you ignore the Arab countries) are the  continents where it is pretty much business as usual. There are isolated countries where there are problems but nothing which could be considered contagious unlike what is happening in the areas mentioned above.

There is a Chinese proverb or curse depending on your interpretation   " May you live in interesting times" . Certainly for all us who are  Midnights Children, have had more than our share of  " interesting times". Perhaps it is just  a sign of my  getting old, but I for one  would like the excitement to slow down.

Back To The Future

Today's New York Times had an article about oil discoveries in South America . It will be interesting to see how it affects the Geo-political situation in the Middle East ?

Historically  Mexico and Venezuala have been "the two traditional energy power houses" with the latter  having more oil reserves than Saudi Arabia. According to the article, recent discoveries and step up in production in Brazil and Colombia has enabled them to surpass Kuwait in terms supplying oil  to the United States.

What this means is that over the next couple of decades America's dependency on oil from the Middle East from countries such as Saudi Arabis, Iraq, Kuwait, Algeria, and Libya will gradually start declining. This will accelerate when  with  the improvement in technology, it starts  the exploitation of the  huge shale oil reserves  in  the United States on a  large scale as its  neighbor Canada which is now the largest oil exporter to the  United States followed by Mexico. The cost of recovering shale oil is high, but over a period  with improved recovery methods it will come down. 

Its impact will likely be two fold. Prices will drop . Yes increased  demand from China and India will to some extent offset the decline in supply to the United States. With  the pool of  global oil reserves having gotten larger and with the costs of  shipping oil from Canada and South America  going to be cheaper than from the Middle East ,this will take the United States back to the situation prior to sixties as it started becoming more dependent on oil from the Middle East . This does not mean that the prices will go back to the same level. It will not, but certainly be peaking out or stay at this level for some time if not slightly lower. 

Also there have been articles about shale oil reserves in China and India along with oil reserves in South China Sea and in Africa. Of course exploitation of these will take decades, but looking at it simplistically from a layman's view of  " The Great Game " played among nations, what is the long term future of the Middle East , particularly the oil producing states with modest populations,  depleting oil reserves  and no other resources? I am sure the governments are already  positioning themselves but how many of them can re-invent themselves to be the Singapore or Switzerland of the Middle East ?I would place my bet on Beirut than any of the Kingdoms.

Secondly with the fix  for oil  from the Middle East becoming less needed,will the United States loose interest in ensuring the status quo in the Middle Eastern kingdoms? Will we see the "Jasmine", "Spring " populists revolution tsunami now rolling into the neighboring countries ? What about Israel ? Will its status revert to being a pariah in the Middle East as it was in the sixties ? Seeing the recent change of behavior among its old friends Egypt and Turkey  and with  Palestine  now  lobbying for recognition as a state in the United Nation, will Israel become more amenable towards a settlement ?
 
It will be fascinating to watch the political  clock hand going backward towards the fifties and sixties for the Middle East  rather than forward as it will be for Asia , South America and Africa.

Be Careful What You Wish For !!!

One of the justifications for the invasions of Iraq was the bringing of democracy to the Middle East.

A few years ago there were elections in Palestine and Hamas won, but was not allowed to govern.

Now in the last twelve months following the Jasmine revolution in Tunisia we have seen the strong men of Tunisia, Egypt, Yemen and now possibly Libya and perhaps even Syria being moved out.

It will be interesting to see what happens a few years from now. Already in Egypt we are beginning to see the effect on Israel's relationship with that country. Israel might again find itself isolated as it was in its early days of  nationhood.

There is  also concern that Islamist might move into power in Libya. In the mean time there is still some confusion in the other countries. If this does happen will the United States still be able to count on support of  its allies among the rulers ?Will they be around in about ten years time ?

The ripple effect is being felt not just in the Arabian Peninsula. Turkey which also had a good relationship with Israel and is a member of NATO,  is now pushing for a more prominent  role in the Middle East. This could be a sign of its moving away from the European Union club which has snubbed it for so long and which itself is now in shambles.

This is yet another sign of the re-alignment of the economic power away from the West to the East. Keep watching this space.  You might get more than what you wished for. !!!

Mirror Mirror On The Wall - Who Is The Role Model For Us All ?

The last few weeks have been interesting.We have been seeing stories in The New York Times, The Financial Times, The Wall Street Journal  which we would normally have associated with the emerging markets rather than the developed world.

Europe is in a state of disarray.The European Union which was supposed to bring prosperity and create a market bigger than the United States finds itself on the edge of a cliff . The question remains " will she or wont she" the she being Chancellor Merkel. Will she put Germany's resurgent economy at risk by continuing to pump money into the economies of nations whose spending habits mirrored that of countries in Latin America in the seventies and eighties ? Unfortunately if the Chancellor pulls her finger from the dyke, it will likely start a possible tsunami of defaults, not just among the PIGS ( Portugal, Ireland,Greece, Spain) but possibly  Italy as well. Also the financial institutions in the better managed  economies will not escape  and will take huge hits as well and it will likely be beginning of the end of the Euro. The IMF, the ECB, and the governments concerned all are scrambling to protect the banks rather than letting them swallow the bitter medicine as they  recommended the Asian governments do during the late nineties.

The United Kingdom in the meantime is enthralling  the world with its drama, which could perhaps be called the The Last Days of the Murdoch Empire. The cast of characters include a strong willful patriarch who starting with a  newspaper in a small town in Australia, went on to become the most powerful media baron and kingmaker in a number of countries. The supporting characters include his son and heir apparent, second wife decades younger than himself, a flaming red head, the head of the ruling political party , the law keepers (rumored to be have been wined and dined)  who while resigning insisted that they were not the only ones, after all the politicians used to meet journalists more frequently than they did. Adding a bit of mystery was the unexplainable death of the whistle blower. The only thing missing is a hint of sex, but then the show is not over yet.Keep watching the space.

In case you were not titillated, you had the former head of the IMF's peccadilloes with the hotel maid- whether by  consent or force remains to be seen. In the meantime, he is once again being regarded as a possible candidate to be the next President of France. On the other side of the border  you have the Prime Minister of Italy  in his seventies  trying to  inherit  Hugh Hefner's Bunny crown with his bunga- bunga parties.

Across the pond, you had the sub-prime crisis about which many books have been written. This was  followed by biggest Ponzi scheme in history and the insider trading scandal. Where were the regulators and the auditors?

With that over, you now have the world's biggest economy  together with the rest of the world being held to ransom by the two political parties to see who will blink first. We would all like to think that at the last minute there will be a compromise, but in the meantime it continues to be a cliff hanger. This is supposed to represent the best of democracy and a two party system ?

These are the countries, the  politicians and bureaucrats who come to emerging markets  and tell us how we should free the markets in terms of currency flows and trade, we should  allow democracy and  be more transparent and do something about corruption. Yes we have our share of problems, scandals, corruption, unexplained deaths, dynastic politics and so on, but perhaps we are better off muddling our way through. After all  the Asian countries ( including India in the early nineties) while going through the financial crises bit the bullet and moved on and since then have made a remarkable comeback. Perhaps it is time the roles are reversed and the developed world look closer at the developing countries and learn from them.

Quote of the Year

 Wall Street Journal July 14th, 2011

Indian Home Minister P. Chidambaram said the three bomb blasts in Mumbai were the result of stealthy work by terrorists and don't signal a breakdown of intelligence-gathering by Indian security officials and police authorities.

"Whoever planned this attack worked in a very, very clandestine manner," he told reporters in a Thursday morning televised press conference. "It's not a failure of intelligence."

How Much Is Enough ?

This is a  question  which comes up frequently as we talk to friends  and as we see the level of greed among politicians and bureaucrats and business men.Also of late Bill Gates and Warren Buffet who have given away a substantial portion of their wealth have been going round the globe asking people to follow their example.

Over the last century there have been numerous examples of wealthy families Rockefellers, Fords, Andrew Carnegie, Tatas,  Birlas who have all endowed charities with substantial sums for the good of the community.

However my favorite is Charles Feeney one of the two founders of Duty Free Shoppers. Both the partners are total opposites. I remember from my days in Hong Kong reading about his co-founder,  Robert Miller's lavish parties at his house on the peak with guests flown in from around the world. He had big fat  weddings for his  daughters all married into European royalty or other similarly wealthy families.

Charles " Chuck" Feeney, at one time among the top 50 richest men has been giving away all his wealth through his Atlantic Philanthropies. The total amount is believe to be around $9-$10 billion  Unlike Bill Gates he has done so quietly. He does not fly around in private jets. He travels by subway and lives extremely modestly. I am sure there are numerous other examples such as this - the royal family of Travancore  who gave their wealth to the temple.

However on a lower level over the years I have had this conversation with my friends and colleagues during my life as a banker and now as a wannabe entrepreneur. Is  one million  enough  or is it five  million,or more ? At that time we referred to it as FY money - enough to be able to walk out of a job where you were not happy . For us  the yard stick was to be able to ensure that our children had a good education, no debt  and  to be able to maintain the life style we were used to plus have a nest egg for emergencies.

That was then. However when we meet now we dance around without mentioning  a specific number. The reality is that once you have covered  the basics mentioned above then everything beyond that  is to leave behind an inheritance for your children unless you totally change your life style.

Recently I was chatting with two of my oldest friends from  Hong Kong and that got me thinking .Both  are around my age plus or minus a few years  They have been very successful .

One was an entrepreneur who started a business and sold it off a few years ago. His wife  has ventured off  successfully on her own business. Together with a friend he started another business in a totally unrelated field. That is doing very  well. While talking I suggested another add on alternative to what he was doing. His reaction was " Yes I know and my clients would love me to do that. I could easily double my revenue, but frankly I have enough on my plate to keep me busy. I do not want the hassle"

The other friend a bachelor, is a successful professional who dabbles on the side by investing in  ventures which attracts his interest rather than from a  pure financial investment point of view.. He is a partner in a  business  which has a high profile in Hong Kong  catering to the rising aspirations and prosperity of Hong Kong's middle and upper class. They have over the last few years moved into China. I suggested that they look at India, as it was on the same growth pattern and would be a good market. The response was  similar . " I am in this to  keep busy and to enjoy what I am doing . I really do not want to be bothered ".

Perhaps the best story I have read and which very nicely summarizes the difference of opinions about how much is enough,  is an often quoted anecdote about Joseph Heller - the author of  Catch 22.

During a commencement address at  Houston's Rice University in 1988,  Kurt  Vonnegut ( Slaughter House Five)  recounted a conversation he had with his good friend Joseph Heller.

Joseph Heller and he were at a party given by a billionaire on Shelter Island. Kurt said, "Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel 'Catch-22' has earned in its entire history?" Joe said, "I've got something he can never have."What on earth could that be, Joe?" His response was "The knowledge that I've got enough."

Do we all know when we have enough ? Unfortunately in most cases we do not.

RIP - Joseph Heller - the man who knew he had enough.
 

Observations on Wimbledon

I know I am going to get into trouble here, but having watched tennis matches over the years,it is interesting to see how the physique of the top women players has changed .

In the past going back to the days of Evan Gollagong, Billie Jean King, Martina Navratilova, Steffi Graff the women players were all  slim, played without grunting and won their matches.  Over the last five to seven years the younger women players tend to be stouter and much more vociferous . The men players have not changed. They tend to be slim and while there might be an occasional grunter, it is quite a contrast to the women players. Having said that in spite of their physical appearance the women players tend to move just as fast and probably volley harder then their predecessors from the seventies and eighties.

While Ascot might have its share of strange hats, Wimbledon has its women and occasionally men walking the courts making their own fashion statements. Beating everybody hands down are the William sisters. Their dresses and their "dont give a damn"attitude makes them very different from the other players. Not that they are just about attitude. They have a fantastic track record and now choose the matches they want to play.

On the mens side  the Federer - Nadal duo continue to dominate , but of late Djokovic has been  trying to gate crash the party. The loudest fashion statement is Nadal's sleeveless shirts and his long shorts. Both  have their own slight distracting  mannerisms. Federer gently pushing his hair back toward his head band and Nadal constantly tugging at his wedgies. On the doubles side the players with their high fives, their chest bumping, and bottom patting are a sight.

Having said that the tennis players, particularly the men are a contrast to the other athletes - if I may use the term - in soccer and cricket  and are much lower keyed.The exception to this were the the temper tantrum throwers such as Ivan Lendl, John McEnroe and Andy Rodrick among  others . While their purses and endorsements might be just as big, they tend to be much lower profile and do not strut around or make  the headlines  with their shenanigans.

It is  amazing how over the decades the three gentlemanly games, tennis, gold and cricket have diverged. Tennis and golf  still  continue to be  elitist games whereas cricket has been democratized and now is a common man's game.  Will this also change or stay the same. My guess is it will remain as will golf , both not being team games and only person you are trying to outshine is your opponent.

Flavour Of The Year

Last week I was at the airport on my way to Kolkota and picked up two magazines because the headlines attracted my attention.

It was the first time I have ever bought an issue of Sports Illustrated ( not even the annual swimsuit issue)  May 20th issue. This was  the Indian edition. Its cover read as follows:

DIRT IN CRICKET
Undercover with the betting mafia for over half a year and face to with the biggest threat to the integrity of the game. SI India finds the sports is caught in a web of money, politics and organized crime.

The second magazine was Telekha long known for its bold investigative journalism. Its cover had the following headlines :

Maharasthra Sold

The Politician-Builder Nexus
Sharad Pawar
Vilasrao Deshmukh
Ashok Chavan
Supriya Sule
Ajit Pawar

Thousands of acres of land. Thousands of crores of profit. This is the shocking story of how political leaders turned a state into a private treasury.

What are the odds of the people mentioned suing the magazines for libel ?

In addition to the above,  you cannot pick up the newspaper or switch on the news without the image of the bare-chested, private jet flying yoga guru Baba Ramdev  being flashed at you. He has jumped on to the anti - corruption bandwagon first initiated by a group of activists led by Ana Hazare. Baba Ramdev is threatening to go on a fast to death if the government does not declare war on " black money" among others items included in his list of demands.

There have been numerous marches, and support groups, including web based groups , all actively rooting for them.

We all hope that this will be the turning point which comes in the country's stage of economic development and will result in the decrease of corruption.  However the more cynical among us, are questioning whether Baba Ramdev is the Trojan Horse being used  to dilute the efforts of Ana Hazare ?

Will it result in any significant action being taken or whether as Paul Beckett the Indian Bureau Chief of the Asian Wall Street   predicts that this is a choreographed play and is taking bets against the Baba starving to death.

Keep watching the headlines.

Its Reigning Women In Indian Politics

As has been said many many times, India is a land of contradictions. It it probably the country with some of the states having the highest rate of  female infanticide. At  the same time it probably has the highest number of  serving women politicians among all the countries in the world.

Go figure.

For the record

Pratibha Devisingh  Patil - President of India
Sonia Gandhi ( Madam) - President of the Congress Party - the party in power
Sushma Swaraj - Leader of the Opposition Parties in the  Lok Sabha (House of Parliament)
Meira Kumar - Speaker of the  Lok Sabha
Mayawati Kumari ( Bhanji) - Chief Minister of Uttar Pradesh - the largest state in India
Shiela Dixit ( Auntie) - Chief Minister of Delhi - the Capital of India
J Jayalalithaa ( Amma) - Chief Minister of Tamil Nadu
Mamata Banerjee ( Didi) - Chief Minister of West Bengal
Ambika Soni - Minister of Information & Broadcasting

There are numerous other ministers of state and ministers in the states.A recent development is the government reserving almost 50% of gram panchayat seats in the villages for women and women are being elected as sarpanches.

The Cross Dressing Sari Salesman And Other Experiences

About a year ago there was a television commercial  for mens  underwear which showed how people in crowded circumstances managed to "adjust"  or squeeze their backsides  in to find a spot . I feel that way quite often having to adjust to life in India or compromise on things  on a daily basis. 

Over the last five years we have had numerous experiences , some funny, some sad, some good, some bad. Here are a few. Some of them are generalized, since it is repeated whereas some are one off.

Indian sales men are among the best and the worst in the world.

Have you ever been sari shopping with your wife ? The sales men have no hesitation about taking out as many as you want. When she is not sure about a particular sari , he orders a junior sales man or some time get up himself and tucks the sari into his trousers  and hold out his arm with the pala draped on it.He models it for you in different colors or fabrics - great job opportunity for cross dressers.After seeing fifteen or twenty you might walk out and there would be no acrimony unlike Hong Kong, where the sales man would make a rude comment.

Similarly if you go to a shoe shop, you will find that all the salesmen are men and you will find that they will happily show you shoe after shoe in different styles and shapes.Invariably as it happens with my wife, after seeing eight or ten we walk out and the salesman goes on to the next customer without a word of protest . 

I have been to the best book stores in London and New York  such as  Foyles , Hatchards, Borders and you ask the sales staff for a particular book. They will quickly tap into the computer and say "its in the basement in the history section"and you are on your own. You go to a book store in Delhi or Mumbai and ask the sales staff ( who are probably not as well educated as their London and New York counterparts) or the book owners  and immediately get a response and will be taken to the specific location or have the book handed to you.This is even for a difficult to get book.Incredible service.

Similarly if you visit a pharmacy . It might be a tiny hole in the wall or there will be a person on a specially built mezzanine floor. The medicines will be stored in little Tupperware  boxes. Ask the salesman for a particular medicine. He does not need to check the computer. He will automatically reach for the right cubicle where the medicine is stored or ask his colleague on the mezzanine floor and it will be dropped down. I am willing to bet that most, if not all of them have not had any training in pharmacy , but they will know the generic version which have similar salts and will be much cheaper.

However, having said that, if you wish to buy anything electrical or a computer or the new gadgets which are now available, you will find smooth talking salesmen who will assure you that what you are looking is the latest model and at a price you will not able to find anywhere. If you do not know what you are buying and mistakenly make a payment, then you are on you own. Prior to receiving your money, he will call you, he will smile, he will be pleasant, but once he has your money, even if it is not the full amount, then the roles get reversed. This is  not just for local brands. This holds true even if you are buying products or services sold by multinationals.Instead of trying to raise the standards of the local market, the multinationals lower their standards.

When we first came back we rented a flat on the second floor of  a small block of flats in Central Delhi. It was newly constructed , had a nice terrace and faced a lovely park. No sooner had we moved in then problems started. It was owned by a lady who traveled frequently. Our contact was her father. He was probably in his late seventies. Every time we had a problem such as our living room getting flooded because the balcony sloped   inwards, or our roof leaking or seepage through the walls because the waterproofing had not been done properly, we would contact him. He would appear diligently and be polite and try and fix it.However his attempt at fixing was a patch work to minimize the expenditure rather than fixing the problem once and for all.After the first few times, however when I started loosing my temper, he would tell my wife "Please tell Mr.Bindra that he has to adjust to India"or "This is India". However the rent was at the top end and on par with some of the international cities ( ok, not Hong Kong or London) but that point was ignored.

When I started my software firm, a friend of a friend introduced me to an individual running a  small head hunting firm for my modest hiring needs. He kept sending me resumes of young technical professional who kept changing jobs every six months. After about a dozen such rejections, he came to see me. His advice to me was that you have to lower your standards as "This is India ". I said I was paying at market or above. I had to spend six months or more training them and then only to leave. I was not paying people to attend my training school.I wanted to build a firm with professional international standards. I never heard back from him.

After buying a flat, we decided to gut it and redo it. We hired an architect and she brought in a group of sub-contractors . They were a mixed bunch. The air conditioning supplier was very professional and even now we would highly recommend him. I was initially very impressed with the contractor who  was going to redo part of  the wiring. He talked the talk.  In a introductory meeting at our place over a cup of tea quoted a line from Nancy Sinatra's "Summer Wine" . I thought to myself, fantastic. We should be in good shape.However that mood did not last too long. He assigned two individual's who had almost no experience , who could not read drawings and I could go on. Once the initial payment was made, it was very difficult to get hold of him especially when he knew I was calling with a complaint. After a few months he  walked out without completing the work. He then had the nerve to send me a legal notice for unpaid dues.

Now that we have  been back over five years now, we have " adjusted" and we squeeze ourselves in , expressing our frustration  mentally  and sometimes verbally. Based on referrals and our own experiences we are gradually building  up a list of of reliable tradesmen /shops where we  have developed a relationship ( at least we like to think we have ) and hopefully sound less like the  returned NRI's we see in the shopping plazas loudly  expressing their unhappiness.Gradually we are accepting people have similar stories of their experiences of life in Hong Kong, London and New York. Delhi is not that much different.

Why should one buy art ?

When buying art should one view it from buying something that is creative or should it be from the perspective of it being an investment such as buying equity ? This thought came to me recently because of a number of recent conversations.

A few weeks ago, my wife and a  friend visited a Delhi based " senior artist " with a view to buying one of his paintings. While discussing the pricing, he mentioned the price was Rupees xxxx per square inch, instead of pricing each individual painting.  

While talking to an old friend about art his view was that one should only purchase established artists or " masters".

Also one of our friends who is an artist herself, is  initiating an effort to promote some of the up and coming younger artists. Thanks to her, we are beginning to see their works. One day while visiting one of the artist which she wanted us to see, she mentioned that the artist is now willing to sell his work  at one third or one quarter of what his work was selling a couple of years ago. She felt bad that the artist was being forced to sell his work at these prices.

I did not respond but my feeling is that art is increasingly becoming a business which depends on marketing and it is a question of demand and supply. After all if the established  artist quotes you a price on a per square inch basis, you know that it is no longer an issue of creativity, but a matter of producing enough to meet the demand. ( " I think I have painted six square inches worth Rupess Two Lacs today - time for me to take a break "). If you are an artist who is reasonably well established, you will produce only a limited number of pieces every year to maintain its market rate.After all you don't see established artists lowering the prices when times are good.In buying their works you are investing.

In my opinion if you look back in history you will find that art has always been a form of  flaunting your wealth whether it was by the Romans or Greek emperors or the religious orders by building huge temples and Churches.. As the Church accumulated wealth and built huge cathedrals whether it was in Italy or Russia, they decorated it with  icons or religious symbols initially made out of gold or silver. Gradually they decided that these huge edifices needed some color and began to commission artists. During the late fourteen hundreds and early fifteen hundreds, the Italian Renaissance period you had among others,  the “trinity of great masters “Raphael, Michelangelo and Leonardo da Vinci. Their greatest and best known works were for the Church.It was the ultimate patron.The Cathedral was your gallery and your greatest marketing medium with a guaranteed daily footfall. The bigger the Church where your works adorned the walls or ceilings the more visibility you got and became more marketable which lead to further commissions.

Following the Italian Renaissance you had the emergence of the merchant princes such as the Medici's who became art patrons. From glorifying God the artists began to glorify their patrons through portraits or family portraits.  By painting for one of these families you could be sure of getting such commissions from others who wanted to keep up with the Medicis.

Even in India, the patrons of the arts were the rulers and nobility . Some  Islamic art painting which have recently commanded record prices are books of paintings such as Baburnama or Shahnameh, done by anonymous painters,  glorifying   the rulers and their achievements. Most miniature paintings were about the life style of the rulers at work or play,  whether  they were the Mughal emperors, or the hill rajas. The artists were anonymous but employees of the court. They did not have to worry about feeding their families. 

In the eighteen hundreds you saw the emergence of the art dealers and the galleries who represented or knew  rich and powerful patrons whom  they could convince to buy your art. That is when art became an organized  business. These included people such as the famous German family Thurn und Taxis , who made their fortunes in the postal service and breweries, the Rockefeller's and of more recent times, the Satchi brothers.If you sold your painting to one of these "collectors" you could be sure that you were established .


Based on my limited knowledge of art , the patronage is now by the collectors and well established galleries and museums. If you are able to have one of your paintings in their collections, or have a solo show by one of the prominent galleries or auction houses you can leave the line of starving artists. If you are Damien Hirst and you can stuff a dead cow or a shark, or like Subodh Gupta weld a collection of stainless steel utensils and get the Satchi's or one of the collectors  to buy it ,  you will  have other wannabe's wanting to do the same ( " you know one of  his works  is in the MOMA collection ") and  you would be laughing all the way to the bank.  I have seen toilet bowls in museums being displayed as art and if you let your imagination run wild and are able to convince some sponsor to fund you , you could go around the world  like Christo  wrapping  islands in plastic or curtaining a valley  in the name of art. 

I have reluctantly come to the conclusion that buying  art  in today's market is akin to an  investment in the financial markets and hence the emergence of art funds.Most artists,  like every body else are in it for making money. Nothing wrong with that since we all have families to feed, but when they start spinning stories about  what went on in their mind or what it represents, it becomes a bit difficult to accept. Perhaps  the " senior artist" has the right attitude. So don't expect me to shed tears for artists when times are bad. In financial investments at least  you get a dividend or there is liquidity. That is not necessarily the case for art. 
 For that reason I am not keen to pay a large amount for a "master" but would rather buy something that I like particularly if it is reasonably priced. 

Having said that and totally  contradicting myself, if I did hit the jackpot, I would like to gift  my self an Anish Kapoor stainless steel sculpture.

Two Similar Countries But Different Paths

In this blog I have  decided to look at two different, but very similar countries - The Philippines and Pakistan. Although they have similar historic socio, cultural, economic structures they started going down different paths in the eighties.

Both are former colonies. Philippines was a colony of Spain and subsequently The United States of America. Pakistan together with Bangladesh and India was part of the British ruled Indian sub-continent.They  have strong ties with the United States.

Pakistan and Philippines both  have a large group of landed feudal aristocracy who protect their economic interests by participating in politics. The seats are dynastic in nature and remain within the family. It could be the Bhuttos, the Mehrs ,the Cojuangcos, or the Magapacals. Surprisingly in these male dominated societies, it is the feudal aristocracy which has produced female leaders who came from similar backgrounds. Corazino Aquino who was from the wealthy Cojuangco family from the Tarlac province, became the President of the Philippines when her husband Benigno “ Ninoy”  Aquino was assassinated. Her son  Benigno “Noynoy” Aquino is now the President. In Pakistan Benazir Bhutto whose family was from the Sindh state inherited the political leadership of the Peoples Party when her Father Zulfiqar Bhutto was hung by General Zia ul Haq. Benazir herself was subsequently assassinated in December 2007.

Religion, be it the church or the mosque, plays an important part in the lives of the majority of the population. In the Philippines, the Catholic Church is active in the education sector through schools and universities. While religion plays an important role in the schools the emphasis is on a well rounded education.  In Pakistan the mosques run the madrassas. While most of them provide decent education, there are some institutions which try and influence the male students politically and encourage them on the jihadist track.

Corruption is an endemic problem in both the countries.Charges were frequently made against the former husband of President Gloria Magapacal's husband. Similarly allegations are made against President Zardari going back to the  days when he was the First Husband. 

The armed forces in both the countries play a very important role. It provides an alternative path to the top for individuals who do not belong to the land owning class or the business families. The armies have at various instances taken it upon themselves to take over the ruling of the country.

In both the countries you have a small group of business families who control a large portion of the GDP. They dabble in politics directly or indirectly by having the politicians in their pockets. In Pakistan the Sharif brothers who come from a business background are the leaders of the opposition party and effectively dominate the state of Punjab. They have a better relationship with the senior Army officers since a large number of them tend to be from the same state.

Because of the state of their economies both the countries are heavily dependent on their overseas workers for a sizable portion of the foreign exchange earnings. In Pakistan these tends to be predominantly male, whereas in the Philippines it tends to be of both sexes.

Regional insurgencies continue to be a thorn in the side for both countries. In the Philippines after the war , these included the HUK movement, the PKP and more recently the New Peoples Army. It also has the Muslim insurgents such the Moro faction and the Abu Sayyaf group. In Pakistan over the years there have been different groups, with the most recent being the militants in the Swat valley loyal to Mullah Fazlullah  and the  Baluchi movement lead by the disgruntled tribal chiefs among others.

However the countries went down different paths in the eighties. In both, the religious leaders played a major role or heavily influenced the politicians in the decision they made.

In the Philippines, the Church lead by Cardinal Sin lead the country in seeing off the dictator Ferdinand Marcos and down the  path of democracy. The Church still plays an important role.  No politician can afford to offend it  if he wants to get elected Since then there have been a number of feeble attempts by the military to regain its role, but the civilian government has been dominant.

In Pakistan without a single religious leader being able to play a leading role, General Zia Ul Huq took it upon himself to take the country down the Islamic path. The civilian governments have been given a number of opportunities to run the country but inevitably the military has had to intervene. It continues to play a dominant role behind the scene and influences the decisions of the civilian government. It also decided to go down the nuclear path - to keep up with India.

The reason for the change in the role of the army in both the countries is perhaps because of their history and their geographic location and it also reflect on the spending on military. In the Philippines it accounts for 0.9% of the GDP and in Pakistan it officially  accounts for over 3% of its GDP.

The Philippines  is on friendly terms with all its neighbors, and the role of the army seems to be restricted to dealing with internal insurgencies. Over the years they seemed to have considerable success in this area.

Pakistan however has fought three wars with its giant neighbor. It has seen its country split with the creation of Bangladesh .It is concerned about further splits and its armed forces feel that if it lets its guard down it will be dominated by India. As a result it also developed nuclear capability.

Also Pakistan was used as a proxy by the United States in getting Russia out of Afghanistan without getting directly involved. This rag tag bunch of Pashtun guerrillas viewed this as an Islamic Jihad and are supported both physically and financially by the Islamic fundamentalists from the Middle East. After the ouster of the Russians, the guerrillas morphed into the Taliban and seized power in Afghanistan which became a safe haven for the Al-Qaeda while they wreaked havoc in various parts of the world.

The Army in turn directly and indirectly, has also been using this  and its various splinter groups as an unofficial guerrilla arm, to disrupt and create havoc in India and as a vehicle to be able to control its other neighbor Afghanistan which they feel is in their back yard and which  they should be able to dominate. Of recent, some of these splinter groups have begun to bring the war into their own homes by suicide bombers targeting not just other religious minorities, but other Muslim sects including Shias, Ahmadis, and even their own religious or political leaders who preach a path of tolerance. Their nuclear capability also acts as a deterrent for foreign interference and forces the Western powers to treat Pakistan with kid gloves. These Islamist unable to get the numbers during elections rely on terror tactics to get their way.

With the recent events in the Middle East  and  the movement towards democracy , it will be interesting to see from a long term perspective as to how it impacts Pakistan. These countries are beginning to look inwards and towards protecting their own regimes rather than supporting the overseas militants. In the meantime Philippines seems well entrenched on its democratic path and its new President Benigno Aquino appears to be determined to root out corruption.
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Its All In The Implemention

A few weeks ago while responding to questions on the 2 G spectrum scam, Prime Minister Manmohan Singh said that the right policy was in  place, but the problem was in the  implementation. Perhaps unintended but he hit the nail right on the head.

The fast by Ana  Hazare has caught the  people's imagination and the Jan Lokpal Bill  is being held up as the magic cure for the corruption which prevails in our society. Unfortunately the problem is not that there is a shortage of laws, the problem is in the implementation or enforcement.

As I mentioned in one of my earliest blogs, we follow the laws when we go abroad, but do not do so when are in India because we know we can get away with it. A simple example  is paying  a traffic ticket. Rather than paying the full penalty we offer one quarter or half the amount to the concerned constable and drive off. We are all guilty of that. I doubt if there are too many of us who can put our hands on the hearts and say I did. Sometime the rules are skewed such that you tend to take the easy way out. Its not a question of the amount of the ticket involved.  In most countries you can just mail in a check for the  ticket. Here at least in Delhi, you are required to appear before a court. Do you want to waste a day finding the right court and then pleading guilty to pay the fine ? You pay the constable. We all  have our reasons for doing so.

Similarly even if the Lokpal Bill is passed ,we still rely on the the government investigators or prosecutors to bring the guilty party justice. The official track record in persecuting politicians and bureaucrats  does not necessarily inspire  a great deal of confidence. Cases drag on for years and files  mysteriously disappear. The witnesses pass away,  some of old age, others due to  health  reason and some  choose to end their lives.

Narayana Murthy the former Chairman of Infosys suggested in the newspaper of April 9th, that the Central Ivestigation Bureau  and Central Vigilance Commission should also report to Lokpal and not to the government.Also that it should not just be restricted to just  going after the politicians, but should also include the bureaucrats. This is the only way to make this effective. 

Hopefully the Lokpal Bill addresses this issue, otherwise all this effort will have been in vain.

Observations On Riding the Lift In Gurgaon

My office is on the fourteenth  floor of a high rise office building  in Gurgaon. The occupants tend to be  a mix of  multinational, (American,  European, Korean, Japanese) and Indian companies. Over the last few years I have been riding the lift ( elevators) up and down at least three four times a day and it is interesting to see the social interaction in the short time you reach your floor.
 
Reflecting the population  demographics most of my fellow passengers  tend to be young ( by my definition that's under forty). with a slight majority of males. The offices they work for tend to be names such as Reebok, Hays Consulting, Lowes/Linta,some technology companies and a Hong Kong based  buying company.

At five feet seven and a half inches  ( my wife  insists its seven and three eights) I thought I was average or slightly above, but standing next to the males, I positively  feel short. The younger Indian male tends to be getting bigger, not just in terms of height , but also around the middle. At the rate we are going, India in a few decades will catch up with The United States and South Africa in terms of adult obesity. The woman however tend to be considerably shorter and  the younger ones slimmer.

The back pack is the new office accessory . Very rarely do you see anyone carrying a briefcase.What I find most annoying is when the person standing in front of you with  a back pack  strung across  his shoulders starts backing into you and  his huge bag pack pushes  into your chest. You try to gently push back but when that does not work you have to tap the individual concerned and tell him to stop pushing. While most accept that you have a occasional person who stares at you  and you have to respond.

Sometimes you are standing in a crowded  lift and suddenly  you  hear a  loud Muni Badnam Hoi, or Sheila Ki Jawani, or a Om Hari Om, or a  Wahe Guru Sat Nam.You get disoriented for a split second, until the person next to you reaches into his pocket takes out his cell phone and starts a loud conversation with his wife,mother, business associate, boss or supplier with no attempt at keeping his voice soft.On occasion when he is talking, his other phone rings.

The riders who get  in on the floor where one of the largest property companies in India has its marketing office are a study in contrasts. Some of them enter  with a triumphant look on their face, which means that they finally been able to get possession of the flat. The others look depressed with an expression of anger and frustration, meaning that they have been told once again that the delivery of the  property for which they have paid fully years ago,  is going to be delayed yet again for the nth time.

The worst time to get in the lift is right after lunch in summers.It is crowded with sweaty bodies  and you have  someone's pot belly pushing into your back. You can have a pretty good guess as to what he had for lunch as he breathes down your neck and occasionally belches.

At times  you  have a person or a group complaining about a boss or a colleague with no attempt to speak softly or not mentioning the persons name. In our time we were a bit more discrete .

With increasing prosperity you see examples of one upmanship. Once a working couple ( probably in their mid thirties ) got in together with some colleagues. It was the sale season. The couple mentioned that they were not  going to the Armani boutique sale ( I did not know there was one in Delhi) , because " everyone is wearing Armani". I looked down at my  tee shirt - it  had the Giordano frog !!!

The Koreans, Chinese and Japanese talk to their own group, unlike the Americans or Europeans. I have  rarely have seen them talking to their local colleagues.

Depending on the time of the day , the lift stops on many floors, but my favorite stop is when the lift doors open on the thirteen floor. It is where the Hong Kong based William Connors office is and you see them packing samples of goods to be sent to Ikea, or William Sanoma, or The Pottery Barn.Some of them are quite interesting. I have made a number of attempts to buy an occasional item but without any success.

Finally in closing I have to say the younger generation all seem to have a lot more attitude and confidence in their mannerisms, their behavior and their speech ( might not be grammatically correct English, but spoken with confidence ) you know that they are sure of themselves and in their own skin. This is what New India is all about - the blending  of the Indian and  the West.

The Great Indian Cricket Tamasha

I was not a big fan of sports. However since  returning to India I have  developed an interest in cricket.Where possible I  watch the matches whenever  the Indian team is playing. Like all arm chair specialists I do not hesitate to give my opinion on the incompetence of a fielder or a batter, even though I haven't the foggiest of what is a leg bye or a mid off or the difference between a googly ( a Google derivative perhaps ?) or a doosra. Whenever the Indian team collapses during batting as it did recently ( although it eventually won the match) I express my doubt as to whether the match has been fixed ?

Having watched these matches for almost five years I have noticed the following :

- In the past cricket in India was a middle and upper class sport played in the elitist schools, but now with its popularity it is now a common man's sport with the players coming from a broad spectrum of backgrounds all across India.

- How the country unites ( no issues of  religion,  language,  regionalism - with the exception of the Shiv Sena occasionally playing the spoilsport) behind team India with Indian flags on shirts, faces, bodies leaving no doubt that it is a united India regardless of where the match is played.Bollywood movies  are perhaps the only other unifying events. Perhaps one should start a party consisting of only Bollywood actors and cricket players. In the South of course the movie players have been very successful in transitioning from movies to politics.

- The ascendance of the  Indian  team to the top rung of the cricket teams in the world. This is partly driven by the financial clout of the Board of Cricket Control of India ( BCCI) which was also responsible for the cricket league in India called the Indian Premier League which perhaps should be relaunched as a reality show  following the drama surrounding it over the last year and the rumored cash generated.

- The rise of the sports celebrity - particularly the cricket players who are now on par with the film stars and
  get large amounts for product endorsements, are seen at openings of new stores, walking the fashion ramp
  and of course on the society pages of the news papers.

- Of course in India you cannot have a good thing going without the politicians being involved, whether it is on the governing board or  at the various matches commanding the best seats.
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 In yesterdays World Cup  semi-final between India and Pakistan, it was interesting to note the difference in style between the two captains . India's Dhoni was captain cool displaying no emotion during the pre-match or post match interviews or during the match itself. No signs of worry when things were not  going the Indian way or showing any feel good emotions when things started to fall in place for his team. Pakistan's Afridi on the other hand wore his heart of his sleeve on all occasions. During the match you could see him encouraging, advising, and occasionally reprimanding his team players when they did not perform. As it became evident that Pakistan was about to loose, you could see him trying to hold back his tears. Post match he was gracious towards his team and his opponents.
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Generally I am not into adulation of sports persons or movie stars or any such persons. However I do make a exception for Sachin Tendulkar. If there is one person who stands out in terms of total commitment,team player, and all around decent person, I do not think there is any other sportsman who comes close to Sachin.
A few years ago when he was going through a bad patch I used to express my frustration and felt that it was time for him to make a exit. He had achieved most sports men would have hoped to achieve in a lifetime.I was wrong.

With his dedication he has come back stronger and better. He is the rock on which the Indian team stabilizes . Time and time again, when the rock stars of cricket, the Sehwags and the Yuvrajs let their egos take the better of their performance and let the team down, Tendulkar never lets that happen. In the semi-finals against Pakistan, you could see from his face that it was requiring quite a lot of effort on his part to make the singles but he hung in there. His modesty and humility is well known. Unlike  the old film star , who is way past his prime and who endorses anything from cement to hair oil , there are certain products which Tendulkar will not endorse based on his principles. You do not see him giving his opinion on political or economic events. He keeps a low profile when he is not playing. To misquote the words  of a  Mughal Emperor on Kashmir, I feel that if there is a all around  Indian  super star Sachin is it, Sachin is it, Sachin is it.
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Finally as I said that you cannot keep politicians away from sports, Prime Minister Manmohan Singh yet again took the opportunity of the semi-final to invite his Pakistani counterpart for a bit of cricket diplomacy. In this case perhaps the Urdu couplet which he had used as rebuttal to Sushma Swaraj ( the opposition leader)  in Parliament,  would be equally appropriate in his desire to put India and Pakistan on the path to peace, in spite of the various snubs and rejections he has received in the past .

“Maana ki teri deed keqaabil nahi hoon main; tu mera shouq to dekh, mera intezaar to dekh "

(I understand that I am not worthy of  your gaze; but have a look at my keenness, have a look at my anticipation for you).

Hopefully his attempt will be rewarded this time.

The New Royalty

Last year I finished reading a couple of interesting books.The first was about the Mughal rulers of India by Abraham Eraly  and  the second  about  the last Sikh ruler Maharaja Ranjit Singh by Patwant Singh.The book about the  Mughals  described in detail how Babur having lost his tiny territory in Central Asia, drifted  and eventually established the Mughal dynasty in India.Similarly the book about Maharaja Ranjit Singh described how he united the  twelve Sikh Misls ( clans) and established the Sikh Kingdom which at its height stretched from Afghanistan to Delhi. Both these empires were built with frequent battles,assassinations, constant betraying of allies or masters for personal benefit, bribing enemies or trusted lieutenants, and undoing by incompetent off springs.The hundreds of kingdoms in India ceased to exist upon Independence. They further lost their rights and privileges guaranteed to them under the Constitution  when they dared to politically  challenge Mrs.Indira Gandhi.  

However the royalists at heart in India  need not fear.There is a new generation of royalty .Looking at the present political scene in India, it appears that nothing has changed, expect the rulers are no longer called Maharajas but for all practical purposes are very similar.The are now called Ministers, Members of Parliament and Members of Legislative Assembly .The new royals   include the Gandhi's  at the apex of the political royals and worthy of a  36 gun salute , the Abdullahs,the Badals, the Pilots, the Scindia's ( a double royal )  and so on. They did not win their right to rule by brawn , but by vote or by inheritance. The royals  to retain their kingdom had to fight off invaders or align themselves with the stronger rulers and pay them annual tributes.  In today's world anybody who aspires to be part of the new royalty has to align him/her self with the more established parties and also be prepared to  pay  tributes  but in the form of funds for fighting elections or other purposes. Since they can no longer levy taxes directly on the citizens, they do so indirectly through corruption. At the end of the day the citizen pays one way or the other.

When the Royals traveled, roads were cleared and there was security escorts in front and back . In today's world its even worse .It would be a loss of face for even the most  minor politician  if he did not have some sub-machine gun toting guards  and escort cars with the red flashing beacon.Instead of the number of guns salute which determined your ranking among the rulers, in the political royalty  your place in the  hierarchy is determined by the different level of security category  assigned  by the government.

The royals really knew how to throw a bash to celebrate a coronation or a wedding or when they celebrated a festival. The politicians are no less. Recently newspapers were full of articles about a Delhi politician who is rumored to have spent almost Rupees One hundred crores ( or about Dollars Twenty million ) and was apparently given a helicopter worth Rupees Thirty five crores ( Dollars Seven point seven million). But then
he is supposed to be independently wealthy because he has large land holdings which has appreciated considerably over the last decade and a half. Receptions for almost five to ten thousand guests are not unusual.

As in the past whenever it appeared that their  grip on the reigns of power began to look shaky, support was bought  by carving out the equivalent of principalities , but in this case ministries are allocated  to the smaller party  or defectors who provide support. These are selected ministries which  can generate enough revenues, but steps are also taken to  ensure that tribute is shared proportionately.

The political royals are also above the law in most cases with very few instances of them actually having to serve a prison sentence regardless of their crime. In the minor principalities ( provinces) actually having a criminal charge or a having served a prison sentence is actually a badge of honor.

Serving the political royalty as in the case of the royalty are their administrators, the Indian Administrative Services . Like the prime ministers of the larger states , a few  of these administrators have grown wealthy beyond their means by exploiting their positions.

Whenever the royals overspent on baubles and toys and  ran into a spot of trouble, they went to the money lenders or hocked their family jewels or future income. Nowadays the political royals go their business houses and once elected repay the favor by providing preferential treatment. 

I could go on and on but I think you get the picture, so let me end with the time honored  toast, The Maharaja is dead, long live the Maharaja!!

Migrant Labor

Two recent conversations a few weeks apart got me thinking about the impact of immigrants on the development , economic and cultural  of the recipient region .

The first one was at a friends son's wedding. One of the guests  a Sikh who has large farm holdings in  Punjab was bemoaning the fact that the economic prosperity in India and the governments policy of providing guaranteed employment for a certain number of days to the majority of the population ,was making it difficult to find workers on his farm. Previously migrant labor from Bihar and other states would come to the prosperous states such as Punjab and Haryana during certain times of the year to find employment and it would be a "buyers market "for  the farmers.Also some of these immigrant labor would settle in Punjab and in some cases even convert to Sikhism.

Things have now changed. With the governments minimum employment programme, some of the migrant would prefer to stay at home even if they get paid slightly less. This  has caused problems in the farming states, as it  has now become a "sellers market " from the  job seekers point of view. The farmers representative now wait at the railway station and offer not just higher wages , but offer other incentives such as mobile phones, days off etc. to get the best workers. This particular  gentleman said that he had instructed his foremen to offer  twenty percent  above the market straight off,  so he was able to get the workers he needed. With one of the major input  now going up, together with the gradual removal of subsidies for other inputs such as  fertilizers, gasoline, diesel, electricity, are you surprised that the costs of your vegetables and grain are on a upward trend ? This is just the start. This will ultimately force the farmers to use more automation.

This is ironical because the youths in Punjab from the working class , and in some cases to the middle class all dream of going abroad - illegally if  necessary , and  where they are quite content to do manual labor in inhospitable climes. This  has been going on since the sixties but one would have thought that with the increasing prosperity and opportunities  at home, they would prefer to stay home, but that is not the case.

On the other hand the recent prosperity and the boom in land prices is enabling the harder working farmers to sell their land and with the same amount of money buy perhaps ten times or more farmland in places such as Canada and settle down there.The more adventurous have been  taking long term leases on farms in places such as Madagascar !!

This brings me  to the second conversation which I had over a dinner with a diplomat from Canada. We were talking about Japan and how the graying of the population in that country was the cause of the gradual decline of the second largest economy in the world. He said that during his posting he tried at various forums to convince the Japanese to open immigration but to no avail. According to him Canada allows in on an average two hundred and fifty thousand immigrants into the country and this enables them to grow. The United States , the United Kingdom and to a slightly lesser extent Europe have rejuvenated - if I may use the term , by opening their doors to immigrants from Asia, Africa , South America and now recently from Eastern Europe. They are willing to work at the bottom of the ladder. Over the decades this has caused problems in terms of the need of the immigrants to adhere to their own religions and their own cultures. Also the longer term impact is that with a higher birth rates they will change the character of the countries. I have written about it previously.

Unfortunately , as it happens during every economic downturn, the politicians make the immigrants the whipping boys and accuse them of  stealing jobs, which they were not interested in doing in the first place.In Arizona where the state police is now authorized to stop and search any person whom they suspect of being an illegal or in the United States  or Europe or the United Kingdom where you see random acts of " Paki bashing" or Indians getting shot or killed, purely for being who they are, which is very unfortunate.Fortunately in the long run they  will be overruled and the there will be integration whether they like it or not and they will find them selves in the minority.

What we all forget , if anthropologists are to be believed , is that we ultimately all came from one place - Africa and none of us are different.  Every country goes through a cycle of prosperity and decay depending on whom we select as a ruler. To think that there is a certain privileged class , as the Nazi did because of their race, is deluding yourselves.

Why Financing India's Infrastructure Is Not A Problem ?

Almost every week there is an article or some minister or a senior bureaucrat saying how we will need trillions of Rupees over the next decade to finance India's infrastructure ( used in a broad sense including power, toll roads, bridges, rail roads )  and  how difficult it is to obtain the funding.

Having seen the Asian economies grow in the eighties and nineties and being involved directly or indirectly in the financing of  some these projects I feel that the persons making these statements do not really know what they are talking about. The issue is not obtaining the money. The world is flush with liquidity.

At this stage however let me digress a little at this stage and take you back over a hundred years when American railroads where being built. At that time, Europe and particularly the United Kingdom  was the center of the world. Banks and investors in Europe financed the construction of the rail road systems. I also have bonds issued by the Kingdom of Siam and China during the late eighteen hundreds. I have no idea whether all of them were repaid or not. With the world now more linked together and with liquidity pools in the United States, Europe, the Middle East and now Asia and with  markets being more open,  funding is not the issue. The issue is transparency.

For any project financing , whether it is infrastructure or offshore production facilities or a real estate project, you have to recognize that they are capital intensive and that they are long tailed. The basic risk factors you have to take into considerations are as follows :

1. The reputation and financial standing  of the sponsors of the project
2. The reputation and financial standing  of the contractor
3. The political , regulatory and environmental issues
4. The reputation and financial standing  of the off taker or the end user market
5. The technology used and the reputation of the firm providing it

If you are able to tick off all of the above , you will have no shortage of funding.

I read a lot about how capital markets, particularly the bond markets, should be developed to finance infrastructure projects. While this attempt has been moderately successful in a small way, keep in mind that bond issues have to be rated. How do you rate a greenfield project, particularly in  emerging market countries including India,  when you know that the odds are very much in favour of the project not being completed on time, or it being over budget or running into political turmoil. In Asia the only country which seems to have had some success in financing project financing through the bond market  is Malaysia. I take my hats off to the local rating agencies there in their ability to rate these projects.However if you look globally in terms of infrastructure projects financed through the bond markets, you will  see that the number is extremely modest.

For the bond markets to be involved in the financing of infrastructure projects it will probably be in the form of a take out financing when the project has been completed and it starts generating cash. If you do want to go to the bond market right from the beginning the banks or the government agencies have to provide some sort of interim financing or provide a guarantee or a put which allows the investors to put the bonds in case the projects are not completed in the period agreed on with a allowed grace period. Also the initial proceeds of the bonds will have to be placed in a escrow account and released gradually. This will of course add to the cost of financing as the borrower will have to start paying financing from day one.

Obtaining   financing from banks is probably a better approach since banks have the  experience in project financing and the borrower has to pay only a commitment fee rather than full interest on borrowings. Banks  are better able to deal with restructurings then bond investors in case the project runs into genuine difficulties.

If the government wants to obtain overseas bank or institutional  financing for infrastructure it needs to set up a legal entity  which provides guarantees until the project is completed . The legal entity needs to have a very transparent set of guidelines and a strict list of  approved consultants, contractors, and water tight contracts which imposes penalties on  firms if deadlines are not met. It also needs to ensure that there is single window for all government approvals ( including environmental and other regulatory approvals) which are binding even if the state government changes, to avoid a project being stopped mid-way. It needs to ensure that the Equator guidelines are followed.

Finally the bank financing can be supplemented  with financing from the multilateral agencies and the export credit financing agencies if substantial equipment is imported from a particular agency.

With the above in place there should be no problem with obtaining financing for projects in India.