The world awaits an Indian Product

Apple and Nintendos of the world create a feverish hype across world whenever they launch a product. Even Asus managed to get that sort of hype with their Eee PC. Now for the first time, an Indian Company has managed to capture the world's attention for their product launch.

Yes. It is the Tata's People's Car which is set to be unveiled in the next 20 days. This event should be remembered by all Indians. At least from now on, no one can claim that a world class product can not be created in India. Kudos to the Tatas.

Ramsey Clark - Some Insights on Globalization

I had just read about Ramsey Clark in the Hindu, through his interview with the newspaper. Several of his insights are really illuminative. some excerpts from this interview..

1. The sweep of globalisation, strongly associated with accepting U.S.-style capitalism, has spawned fresh inequities across the world. How do you perceive the phenomena?

It’s a terrible threat to civilisation, to humanity: not only a political threat, an obviously economic one, but at the most fundamental human level a threat to distinct cultures — the same technology, the same entertainment, the same fast foods so to speak. Based on economic power, it is pushing itself into different parts of the world. Consumerism and materialism have a power of their own and perhaps the greatest victim is culture that in a way represents the accumulative imagination, the pains, suffering, and history of the people

2. Globalisation is often perceived to be a mirror image of neo-colonialism. Would you agree?

The difference between the old imperialism and the new globalisation process is illustrated well in India. The country suffered the brutalities of foreign domination, the impoverishment that resulted from it. But until globalisation, if you look at the Indian movie industry for instance, its facial aspects remained Indian. Now, with the intensity of globalisation reaching into every little corner of life, even the comedians, the jokes, the rhythm of the music has started changing.

This really makes consumerism and materialism deadlier than armed occupation.

In the old colonialism you at least knew who your enemy was, you felt the knife on the back. You knew what had to be done if you wanted a better life. In the new consumerism you are captive and unaware. When the prisoner is unaware of his chains then it’s hopeless. If you look at globalisation you are completely captive in imagination and desires and this is where the greatest danger lies.

3. Why this fear of Islam? The U.S. government, its critics argue, is seized by paranoia. During the Cold War it was the threat of Communism. Now you say it is Islam.

As for Islam it is a faith that has served people well at a time when there seems to be no values, no principles, when economic power, greed and force prevail.

In the U.S. it has touched the lives of African-Americans who have had lives caught in street violence and are fighting for their lives. Suddenly Islam comes to them and they find peace, dignity and a faith they can believe in.

The fear is very real. The underlying value of globalisation is material. In this proliferation of unnecessary necessities, as Mark Twain said, you want to create more things, build more things, sell more things, accumulate more money. And the effect, the deadliest thing that can happen, is the enrichment of the rich and the greater impoverishment of the poor, in every country. Globally, the numbers of the poor are increasing fast, the concentration of wealth is greater. That is an unlivable position.

The U.S. government’s need for an enemy, its search for new enemies is really a way of uniting the country, covering its real motives and appealing for patriotism that is called the last refuge of the scoundrel. Patriotism is not the real motive. The real motive is domination and exploitation, and to get away with it you have to have a rallying ground, an enemy. That is where the military comes in. The U.S. spends more on arms than all other countries combined. While it is threatening countries with obliteration if they try to develop a nuclear weapon, it is developing a new generation of its own nuclear weapons, its own new rocketry that can hit any place in minutes.

Violence in Indian Schools

It's an uncanny coincidence that some events that happen in US after sometimes repeat itself in India. When a space vehicle fails in US, the next space vehicle launch in India does the same. Once a Pilot crashed his aircraft during an air show in US. The same thing happened in India that too within a short time.

Now, here comes a shooting incident that reminds us of the US incidents. The Gurgaon School incident tells us that the cultural environment across the globe is getting very similar. Our Media Diet is the same across the world now. Here is another sad incident :

Recently two class eleven kids in small-town West Bengal killed themselves. Saurav Das of Bishnupur High School had declared undying love for Mahima Jalan. The girl rejected him. The boy treated his friends and asked them to remember how badly he was treated if anything were to happen to him. Then he went home to die. Less than a week ago when Mahima returned to school, her friends started questioning her right to live. She too then committed suicide.

The IndiaDaily author blames it on the criminal negligence of the parents -

"The mainstream media are churning out endless clichés like increased violence on the television, increased consumerism and the decline of general morality as causes for the violence in kids.

There is another much simpler explanation. William Golding, a long time school master who won the Nobel Prize for Literature, in his twentieth century classic Lord of the Flies, had written of children turning violent and cannibalistic when left to themselves. He debunked the myth of the innocent child. His contention was that aggression is so innate that without adult support kids revert to pre-human times of animal predatorial behavior. The two kids who killed Tyagi just followed their instincts. Civilization failed to affect them. How is that billions who are watching violent movies are not being affected and only these two got touched by evil? They most probably had the seeds of evil in themselves to begin with. All this talk about outside influences affecting them is secondary and irrelevant."

Highflying Bridgeroom

In North India, Bridegrooms usual take a procession on a horse before arriving at the wedding hall, with great funfare. With growing affluence, some Indians are thinking big.. this farmer just boarded a chopper for his procession.. <link>

Infra spending to touch 9% of GDP to sustain growth rate

" Though investments in infrastructure have picked up significantly over the last few years, the pace of development has to accelerate if India is to meet its target of raising infrastructure investment to 9 per cent of GDP during the 11th plan (2007-12), said Planning Commission deputy chairman Montek Singh Ahluwalia. “Investment in infrastructure is now no more a trickle but has become more of a stream,” Ahluwalia said while addressing the ongoing three-day India Economic Summit in the city today. “This investment now has to become a flow. Bottlenecks in infrastructure will be a critical constraint to growth in the future.”

The construction of the National Highways had accelerated India's economic growth. It also increased the value of the land/real estate along the road ways throughout India. The Infrastructure Construction Industry is the prime sector today in India. The Government is now announcing more investments, upto 9% of the GDP for the next five years. If this plan is implemented properly, would transform the Indian Landscape to that of the European / Chinese style.

Delhi has 1.38 lakh millionaires

: Delhi has more households earning over Rs 10 lakh a year than any other city in India, but Chandigarh has the largest concentration of such families with every seventh household there having a seven-figure annual income.

Contrary to what you might expect, even ranked by the absolute number of households with incomes of Rs 10 lakh or more per year, the metros aren’t all on top of the list, with Chennai ranked 9th, Hyderabad 12th and Kolkata a lowly 26th.

On top of the list are Delhi with 1.38 lakh such households and Bangalore with 1.05 lakh families. Mumbai comes in third at just over one lakh millionaire households, but if you add the roughly 74,000 millionaire families that Thane has to Mumbai’s tally, it would jump right to the top of the list.

Rupee to appreciate to 36-37 per dollar - Morgan Stanley

Morgan Stanley on Tuesday said Indian currency will appreciate further to reach the level of Rs 36-37 per dollar by the end of next year.

"Indian rupee will be appreciating further. We expect rupee to reach to the level of Rs 36-37 per dollar by the end of next year," said Morgan Stanley's Managing Director Jonathan Garner.

He said long-term capital inflow and India's growth would result in appreciating Indian rupee over the period. "Exchange rate appreciation is happening in many emerging markets and not in India alone," Garner said.

Cautious on India's share valuation which is currently trading at 22 times, he said, 'some easing is possible'.

New Low in Karnataka Politics

‘Gowda resorted to black magic’

he former Chief Minister B. S. Yeddyurappa on Monday charged the former Prime Minister H.D. Deve Gowda and his sons with resorting to “black magic” to finish him off. “I am facing a threat to my life. I know the places where they did pujas under black magic. I will write to the Home Department on Tuesday complaining against the black magic of Mr. Gowda and his sons. They will be responsible if anything happens to my life,” he said.

<Link>

Dollar Crisis : Economic Pearl Harbour

If China abandons the dollar for the euro, Americans will surely suffer. So far, that prospect has sparked mainly U.S. indignation <Link>

Small Exporters hit hard by Rising Rupee

As the cry for help due to the rising rupee becomes louder from various industry quarters, Finance Minister is under increasing pressure to intervene and provide monetary and fiscal relief.

The Finance Minister P Chidambaram on Thursday met textile exporters in the presence of public sector banks and took the pleas of garment exporters on board.

The government has tailored a specific export package for the sector increasing the duty rebate called drawbacks. It will cost the Finance Ministry about Rs 5,000 crore but exporters say it is simply not enough.

The duty rebate will give exporters a saving of about three per cent of their revenues. But this is nothing compared to the 20 per cent hit they have taken because of the stronger rupee.

Small players most hit

"It is only large players that are able to manage costs to some extent as well as diversify into the branded segment. Small players dominate the textile and apparel sector with high volumes and low profitability, where the real cutting back is taking place," said Premal Udaani of Kaytee Corporation.

The Indian garment exporters are finding it tough to compete in the American market especially at a time when the US economy has started slowing down. If an Indian shirt was selling for $10 in the US last year, now because of a stronger rupee it costs about $12.

The net result is that India's textile exports sector, which is the biggest single employer outside agriculture, has started cutting back on jobs and even laying off workers.

"Tirupur, Mumbai and Delhi have been witnessing factory closures and the workers are being sent on extended leave. It is tough to give a figure but over the last 3 to 4 months, I would say about 70,000 people have been let go and about 70,000 have not been hired so directly or indirectly employment is affected," said Rahul Mehta, President, Clothing Manufacturers Association of India.

Duty drawback

"The duty drawback is the only genuine measure otherwise there has been no real benefit given. The smaller players are simply shutting shop. This is the worst possible time for the textile industry in India," Udaani added.

The Indian textiles also have to compete with cheaper products from Pakistan, China and Bangladesh where exporters face a much more liberal tax structure.

The companies say old customers in the US are now considering switching loyalties, which would mean that India's export slowdown could last for a very long time.

[link]

BA Systems EN 3500 - Made in India Internet Router

India is more of a Software Player in the Global IT Market. Here and there, some good initiatives are taken. Congrats to the BA Systems which has successfully developed the First Internet Router in India.

Janata's Guide to Stock market

The Indian Stock Market defies all logic : It rises when everybody expects to fall and falls when everybody expects to rise. Market Manipulation is rampant. Here is a Janata's Guide to the Stock Market:


Once upon a time in a village, a man appeared and
announced to the villagers that he would buy monkeys
for Rs10/-.

The villagers seeing that there were many monkeys
around, went out to the forest and started catching
them. The man bought hundreds at Rs10/- and as supply
started to diminish, the villagers stopped their
effort. He further announced that he would now buy at
Rs20/-. This renewed the efforts of the villagers and
they started catching monkeys again. Soon the supply
diminished even further and people started going back
to their farms. The offer rate increased to Rs25 and
the supply of monkeys became so little that it was an
effort to even see a monkey let alone catch it.

The man now announced that he would buy monkeys at
Rs50! However, since he had to go to the city on some
business, his assistant would now buy on behalf of
him. In the absence of the man, the assistant told the
villagers. Look at all these monkeys in the big cage
that the man has collected. I will sell them to you at
Rs35 and when the man returns from the city, you can
sell it to him for Rs50." The villagers squeezed up
with all their savings to buy the monkeys. Then they
never saw the man nor his assistant, only monkeys
everywhere!!

Welcome to The Stock Market !

ICICI Bank fined for hiring goons to recover loan

Several Banks have been using the goons as a tactics to recover their bad debtors. But now, the Indian courts have given a stern warning against this by fining ICICI to the tune of Rs 55 laks.
<Link>

UAE to deport 4,000 Asian workers after strikes

Last Saturday, A set of Indian labourers who have been working under stressful conditions had revolted and carried out a strike, angering the UAE authorities. The UAE authorities have now responded harshly by deporting them back to India.

Analysts point out that labour laws in the UAE have evolved, but more attention needed to be paid on the contracts governing salaries and working conditions of employees operating in the economic free zones.

So far, the contract in the free zone, such as the one existing in Jebel Ali, is signed only between employers and employees. In general, its copy is neither sent to the UAE’s Labour Ministry nor the Indian embassy or consulate for attestation. Because the contract is usually drafted in Arabic, Indian workers, unacquainted with the language, end up signing it, often without the full knowledge of its contents. Consequently, they become parties to a binding contract, on terms which they later find hard to implement.

Sources in a voluntary organisation that operates in labour camps, but did not wish to be identified, said that unskilled workers in the UAE earn a monthly salary anywhere between Dirham 650 (approximately Rs.7,000) and Dirham 800 (around Rs 8,500).

However, the rising inflation in the country is drying up the saving capacity, especially among blue collar expatriates, sharply increasing financial and social pressures on them.

Health Tourism - yet another driver for chennai's growth

The Hindu has been reporting articles about the growing health tourism in Chennai. Chennai's hospitals are providing world class health services and foreigners have started to flock Chennai for health care. As a result, lot of suburbs of Chennai are bustling with providing accomudation and other services for the patients and their accompanying caretakers.

What a striking contrast to the trend just a few years back when all the politicians after getting elected would fly to US to get their surgeries done at government's expense.

No Stops for Mamata Bannerjee

Mamata Bannerjee has made West Bengal come to a full stop again on the Nandigram issue.

Here is extract from the hindustan times :

Most parts of West Bengal shut down on Wednesday as a dawn-to-dusk protest by the Trinamool Congress over the continuing violence in Nandigram evoked near total response across the state.

In most parts of the state, including Kolkata, shops and business establishments were closed while train services were hit badly.

However, flights operated normally, said airport director VK Monga. Kolkata's metro service also functioned as normal.

Trinamool Congress chief Mamata Banerjee had said on Tuesday that her party would "paralyse" West Bengal on Wednesday for the sake of peace and the right to live in Nandigram -- where trouble continues despite the government scrapping a proposed industrial complex following stiff opposition to the takeover of their land.

Two sides of the Indian Economic Boom

As Moneycontrol.com is reporting the boom side ,

The bull run in the Indian markets continues with Sensex eyeing the 20,000 mark. Nifty has hit 5,900 levels scoring over a double century. Strength is seen coming from all quarters. Cues from Asia and rest of the equity markets were robust which has helped in such a rally.

BBC is reporting the opposite :

Police in the Indian capital Delhi, have prevented tens of thousands of landless farmers and indigenous people from marching to protest at parliament.

Some of the landless have been on a month-long protest to demand land reform and ownership rights laws.

The protesters, mostly low-caste tenant farmers and landless indigenous people, say they have been left behind by India's economic boom.

The government has promised to set up a commission to examine land reform.

link :http://news.bbc.co.uk/2/hi/south_asia/7066884.stm

Obesity 'epidemic' turns global

BBC reports that People are getting fatter in all parts of the world, with the possible exception of south and east Asia, a one-day global snapshot shows.

http://stuffedandstarved.org is a blog/book/story of the global food system, about why there are one billion overweight people and 800 million going hungry, and about the millions of people who are fighting back.

Nandigram caught in political crossfire

Mamata Bannerjee is trying to exploit Nandigram for her own political mileage. Fortunately, in Tamilnadu, these sort of politicians who put same side goals are less, and hence we are seeing some progress here and there.

link: http://www.dnaindia.com/report.asp?newsid=1130477

More Globalization Blogs
http://globalab.wordpress.com/
http://www.poptech.org/
http://stuffedandstarved.org/drupal/frontpage

Honda too jumps into small car manufacturing in india

It won’t just be Jazz music for Honda in India. Even as it readies to formally premiere the GeNext Jazz at the Tokyo Motor Show, the Japanese auto major is working on a brand new platform for a small car that will use India as the manufacturing hub.

The new platform will be for a global car like all Honda platforms but will be primarily sourced and manufactured out of India. This will be a first for Honda which has a handful of basic platforms worldwide from which it spins out new models.

When contacted, a Honda Siel spokesperson said, “Honda is looking at two cars in the compact segment in the next few years but we don’t have details right now.”

The second small car will, along with the soon-to-debut Jazz, help Honda attack the biggest volume segment in the Indian car market. India’s booming small car market has prompted Honda to start work on a new car platform which will help it fight best-selling models like the Hyundai Santro and Maruti Alto.

Larry Lessig on Corruption

Larry Lessig, is a leading thinker and activist. He says, " In US , so much of politics is determined by money". As Americanism, is spreading its wings in India also, his views are very much relevant in India.

Winds of Change

Here is yet another indication that India is rising indeed:

The career choice of the current youth has changed from the default software jobs to other careers which mix work and pleasure - such as travel, hospitality, media etc.

Here is a report summary from the Hindu

Hotel management and aeronautical engineering are emerging as most sought after disciplines in the broadening spectrum of career choices among Indian students.

Even though higher education preferences continue to be dictated by engineering, medical streams, IT and business administration, the areas of hotel management and aeronautics are earning increased patronage among Indian students, says Siddharth Jain, chief (marketing), Global Events and Expositions which organised a two-day Education Worldwide India in Chennai last week.

Animation and design, pilot and air-hostess training and marine engineering are also moving up the ladder of choice, trends indicate.

The education show fielded 45 participants, including 16 foreign institutions. The next edition of the India International Education Fair due in November, in Chennai, will have more participants, going by the success of the event, organisers said.

The Simpsons on outsourcing

Outsourcing the outsourced

Indian Companies are now outsourcing some of the IT work it gets to smaller US states and other countries.

link: India tries outsourcing its outsourcing

(+) A good globalization blog here

From Heir Apparent to Heir Manifest

This was the editorial response from the Hindu for Rahul Gandhi's ascent to Congress Party General Secretary Post. Yet another episode of Dynasty Politics.

Meantime, Most Indians are happy celebrating the success of Indian Cricket Team.

War is a profitable business - The Bush legacy

Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today's president

Link : How Bush's grandfather helped Hitler's rise to power

Matrimony sites tie Indian surfers in a knot

I have heard several "Met at Orkut" Love stories, which have ended in Happy Weddings. Matrimony sites are becoming huge hits in India and Dating through the net seems to have arrived in India.

While, almost 51 per cent of all internet users undertake dating/friendship activities, 48 per cent of them are into matrimonial searches. “Online matrimonial search has come to establish itself among the ‘mainline’ online activities.

In number terms, almost 12 million online urban Indians are undertaking it, making it the 13th most popular online activity among Indian surfers,” says India Online 2007, a survey conducted by JuxtConsult.

The survey sampled 10,000 households in 31 cities across all the four regions. Interestingly, one in five online matrimonial users is a woman. Only 18 per cent of the net users are women, forming a low proportion of the online matrimony usage base.

US Dollar Pegging coming to End

The US Dollar is the unofficial world currency now as most countries have pegged their currencies to the US Dollar. However, things could change as more countries have started to abandon their peggies strategy.

Saudi Arabia, one of key US allies, has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

Link : Fears of dollar collapse as Saudis take fright

Mobocracy in Bihar

Well written article about bihar lynching and brutality here :

It all started eerily with a mob molesting a girl and disrobing her at the Gateway of India, Mumbai, on New Year's eve. And as if on cue, the first day of the year pretty much decided the tone for the rest of the year to follow.

Sample these:

September 12, Vaishali, Bihar: Ten alleged thieves were lynched to death by villagers in the Vaishali District of Bihar on Wednesday. The band of thieves was spotted by a villager who raised an alarm. Within minutes, nearly 200 villagers collected and lynched the men. (Theft incidents have been on the rise in the area with eight being reported in the last three months. People had asked for police deployment, but no action was taken.)

September 10, Nawada, Bihar: An angry mob in Nawada district blinded three youths on Monday after they tried to steal a motorcycle. All three, who have been admitted to hospital in Nawada, have criminal records. (Complaints had been made, again the police had not responded).

September 4, Wazirganj, Lucknow: An angry mob beat a man to death after a two-and-a-half year old girl was allegedly found raped and murdered in his house. The girl's death sent shock waves among the locals, who turned their ire on the neighbour, who was facing charges of raping a 12-year-old girl two years ago and was recently released on bail.

August 29, Agra: Violence erupted in Agra after four people were mowed down by a speeding truck, with angry protesters torching 20 trucks prompting authorities to clamp curfew in Nai ki mandi and Mantola area.

Link : http://www.ibnlive.com/news/mobocracy-india-metes-out-instant-justice/48594-3.html

Digital Car to be designed by India

Here is a really positive story from India ..

This e-auto initiative was reportedly kicked off at a Confederation of Indian Industry (CII) conference titled 'e-Automotive R&D 2007: The Opportunities Ahead' by R Chidambaram, principal scientific advisor to the Goverment of India, and B Ramalinga Raju, chairman and founder, Satyam Computer Services.

The digital car initiative aims to bring together the IT industry, the automotive industry, R&D groups, various industrial associations, and universities and educational institutions with Satyam Computers to act as prime integrator. A consortium of different players will combine efforts towards bringing out India's first car of this kind.

Raju said the 'HERA FxV', once completed, would be a demonstration of India's technological capabilities, and draw much needed attention of global players towards India as an innovation-led design hub.


Source : Techtree

West Bengal Government to go after mass retail-protesters

West Bengal Government to pursue criminal cases against protesters who attacked Western-style grocery stores in eastern India in an attempt to delay the company's foray into Calcutta. - Link

Globalisation made small occupations unviable

Ford Foundation-sponsored study focusses on several issues vital to rural economy

---

Growth of crop output has gone down significantly

Scope for scientific management of PDS

---

Article Excerpt from Hindu : Globalisation made small occupations unviable”

CHENNAI: Globalisation has further impoverished the poor and rendered several small and traditional occupations unviable, an empirical study on seven sectors in rural Tamil Nadu has revealed.

The study was done over two years by the Rajiv Gandhi Chair for Panchayati Raj studies of Gandhigram Rural University, Dindigul, to map the effect of globalisation on the lives of poor farmers, handloom weavers, rural artisans and fisher folk.

The project on “Globalisation and Decentralisation,” was funded by the Ford Foundation, New Delhi. It focused on seven issues key to the rural economies: handloom, water, agriculture, food security, tea and coffee plantations, rural artisans and fisheries, G. Palanithurai, who occupies the Rajiv Gandhi Chair for Panchayati Raj Studies at the university, said.

Migration

“Developments that have followed liberalisation have only created a situation in which the rural poor have had to find ways to protect their livelihood resources from being exploited by private commercial interests,” he said. Whenever they failed, a large number of them started migrating from rural areas, abandoning their traditional professions and lands.

This was of great concern in agriculture, especially. The study covered three major crops in Tamil Nadu — paddy, cotton and sugarcane — in three districts and showed a “significant deceleration in the growth of crop output and yields, affecting farmer profits.” The rising input costs compounded the problem, leading farmers into debt traps, or to the cities and towns in search of employment. The government investment in agriculture had also dwindled over the years, Prof. Palanithurai alleged.

Alongside, the study dealt with the problems of local communities whose natural resources, especially water, were being exploited by large companies.

While Tamil Nadu performed better in food security issues, there was no room for complacency, he said. Eighty per cent of the poor depended on the public distribution system for their food requirements, but there was scope for better scientific administration of the PDS to eliminate bogus cards.

Rural artisans, including potters, from Sivaganga, Madurai, Tirunelveli and Dindigul had nearly been wiped out, Prof. Palanithurai said. With neither skill nor infrastructure upgrade, they could not take advantage of the demand created by globalisation. Small plantation growers were the worst affected, having lost their labour to agriculture and other daily wage employers, the study showed. With a scale up in operation impossible, they were forced to stop cultivation.

In fisheries, the technology, marketing and storage linkages had been of immense advantage to those who used motorised boats, but had left the catamarans floundering at sea. However, if devolution of power to local bodies was effective, solutions could be worked out by the elected panchayat leaders at each village.

Walmart saves the world

MNCs are now Economic Entities big enough for Political entities to take note of. Checkout the clout of Walmart from this statement:

"If Wal-Mart were an individual economy, it would rank as China’s eighth-biggest trading partner, ahead of Russia, Australia and Canada,” Xu [Jun, Wal-Mart China’s director of external affairs,] said.

By the end of September, 2004, the top seven trading partners to the Chinese mainland are the European Union, the United States, Japan, Hong Kong, ASEAN (Association of Southeast Asian Nations), South Korea and China’s Taiwan Province, state statistics from the Ministry of Commerce.

Last year, the firm bought US$15 billion products from China, half from direct purchasing, the other from the firm’s suppliers in China."

Link : Walmart saves the world

50 factors that affect the Dollar

Excerpts from 50 factors that affect the Dollar

Balance of trade and investment

The balance of trade and investment is often cited by analysts as the most important influence on the value of the dollar, with good reason. The balance of trade, related to the current account, represents the difference between what the US exports and imports in terms of goods and services.

The balance of investment, or financial account, represents the difference in exports and imports of capital. If exports exceed imports, in either the current account or financial account, it is called a surplus. When imports exceed exports, on the other hand, it is referred to as a deficit. The following points elaborate on how the current account and financial account affect the USD.

1. Balance of trade: Otherwise known as the current account balance, the trade balance is equal to the difference between imports and exports. The US has been running a trade deficit with the rest of the world for most of recent memory. At $2 billion a day and growing, the trade deficit is making foreign investors increasingly nervous and can affect the dollar significantly.
2. Falling prices on foreign goods: When the prices of foreign goods decrease, they become more attractive to American consumers, creating a larger trade deficit. Conversely, a rise in the prices of foreign goods, through natural price inflation or because or increased demand, can make American goods look more attractive and help to narrow the trade deficit. This also supports American industry and the economy. All of this serves to help the dollar.
3. Balance of investment: When the US imports more than it exports, it means investors from other countries have to buy US assets to keep the dollar from falling. Simply stated, if the US imports more than it exports, foreign investors must buy dollar-denominated assets like bonds or treasury securities in order to offset the difference.

Politics

Government policies often have a great impact on the value of the dollar. Savvy foreign investors know to keep an eye on the state of our political affairs, especially as they impact the strength of our economy and our ability to service the national debt.

4. Budget deficit and national debt: The US government’s budget can affect the dollar’s value, too. If foreign investors see that the government is spending more money than it currently has, they know that it will be forced to borrow from future generations as well as from the private sector from foreign entities. The US national debt currently stands at $9 trillion and is growing by over $1 billion per day.
5. Little or no default on debt: When the government keeps a good credit history, risk goes down and the dollar goes up. Fortunately, the US is currently considered the world’s most credit-worthy borrower, which in large part explains why the dollar has remained strong.
6. President’s popularity: Often, the popularity of the US president is tied to the value of the dollar. Experts debate whether or not the two have an effect on each other, but reports point out that “international investors like to a see a strong U.S. executive because they prefer a single national decider setting the agenda and fear a fractious, parochial Congress.”
7. Terrorist attacks and war: Attacks damage consumer and business confidence, hampering economic growth. They also increase the likelihood of war, and consequently, a budget deficit to support associated spending. An ongoing war can quickly become expensive. It makes investors nervous because it will likely increase our national debt, and slightly increase the risk of default.
8. Geopolitical events: Anything that could be seen as precipitating a conflict or foreign involvement can affect the dollar negatively. The value isn’t necessarily about what it’s actually worth, but rather what investors think it’s worth. Perception is often reality in the forex markets.
9. Consistent policies: If investors feel that things will largely stay the same, they’ll flock to the dollar because it’s a safe bet. This increases demand and thus, the value of the dollar. Remember, unlike many other investment vehicles, forex is hurt by volatility. This is especially true with regard to financial policy: if investors believe US policy is on the right track, they’ll want to put money in dollar-denominated investments. Conversely, investors can lose faith in an economy that can change with new policies, so they’ll see the dollar as less of a safe bet.
10. Government expansion: New departments and increased government functions cost money, too. Like other government expenses, expanding or creating new groups like the TSA and the Department of Homeland Security can lower the dollar’s value due to their opportunity cost against other expenses in the budget.
11. Elections: Confidence in or wariness of a new administration can cause investors to flock to or flee from the dollar. Also, as new members of Congress are elected, new laws are passed which can affect our economy. Foreign investors may react positively or negatively to these changes, affecting the dollar’s value.
12. Tax cuts for consumers: Tax cuts for consumers fuel spending, which can improve the economy of our country as well as others, like China. This can be good for the dollar as long as it does not deepen the trade deficit or our budget deficit. On the other hand, increases in taxes discourage personal spending, but they help with government spending and debt. This can slow the economy, but at the same time lessen our deficits.

Other countries

Political impact on the dollar does not originate entirely from the US; it can come from all over the world. Trade, conflict, consumption, and other issues can affect the dollar from outside our country.

13. Turmoil in other countries: When other countries are in a state of conflict, their respective currencies may be perceived as unstable. In this case, investors may flock to the dollar because it is considered a safer bet.
14. Stability in other countries: On the other hand, if other countries are consistent in their policy-making as well as politically and economically stable, the dollar may weaken because investors have more confidence in these alternative currencies. They’ll see them as less risky and diversify into non-dollar denominated assets.
15. A change in foreign reserves: The USD benefits strongly from being the world’s reserve currency. Most central banks hold more dollars than any other currency, but the dollar faces problems when they decide to diversify their currency investments. This could mean that they sell dollars, or simply just stop buying more. This is especially damaging when a large purchaser like China decides to stop adding to its foreign reserves.
16. A strengthening Euro: The dollar faces competition from the rising Euro. It’s an attractive alternative to the dollar when investors choose to diversify or if the dollar becomes unstable.
17. Acceptance of oil in dollars: As long as the majority of world oil contracts are settled in USD, other countries have to use the currency. This increases demand for the dollar and therefore, its value. Additionally, most oil exporters hold a significant portion of their oil proceeds in dollars.
18. Strong foreign economies: If other countries’ economies are booming, the dollar may fall because it will become a relatively less attractive place to invest.

Entitlements

As a significant government expense, entitlement programs can have a large impact on the way investors view the value of the dollar. If it looks like the US is letting things get out of hand, these programs can shake the confidence of investors. These are a few of the programs and issues that affect the dollar.

19. Social Security: It’s apparent to Americans and foreigners alike that Social Security is a sinking ship that will only get worse with time. Clearly, this causes investors to lose faith in the US money management system, but when the US works to reform the program, some of this confidence is restored and the dollar can benefit.
20. Medicare/Medicaid: Like other costly entitlements, government sponsored-health care programs are becoming difficult to maintain, which could drive investors to seek countries with more stable budgets.

Economic theory

The laws of supply and demand are ever-present in economics, and currency trading offers a prime example of this law in action. These are a few of the effects that supply and demand exert on the value of the dollar.

21. Demand for dollars: This factor can be tied to most others, but it can function on its own as well. For example, “if French investors saw an opportunity in the U.S., they might be willing to pay more francs in order to get dollars to invest in the U.S.” More francs per dollar means the dollar’s value has risen.
22. Demand for physical currency outside the US: Some countries accept dollars as a physical currency, so they need a supply. For example, “large international demand for US currency bills in the 1990s gave the US government a unique and inexpensive-to-produce export.” Although it requires supplying more currency, this is a factor that can strengthen the dollar’s value.
23. Increase in money supply: With every new dollar printed, each one is valued less than before. The more dollars there are in circulation, the less the currency is valued because the supply has been increased. In practice, this usually causes inflation, which directly eats into the value of the dollar. While this would seem difficult to measure, the Federal Reserve periodically publishes M2 and M3 data reports on the US money supply.

Interest rates

Just like consumers might shop around for the highest-yielding savings account, foreign investors look for the best deal in currencies. Here’s how interest rates affect the dollar’s value.

24. Rise in interest rates: Higher interest rates mean more profit for investors, so a US rate hike will generally strengthen the dollar. In the long-term, however, the law of interest rate parity dictates that currency valuations and interest rates should move in opposite directions. The opposite also holds true. If the Fed lowers interest rates, investors might drop the dollar in the short-term because there’s not enough profit in it.
25. Attractive interest rates in other countries: Regardless of whether US interest rates are rising or falling, the dollar’s value also depends on how US interest rates stack up to those of other countries. If US rates are lower, investors may switch to different currencies that can offer a better return. On the other hand, if other currencies have unattractive interest rates, that allows us to entice investors with a better deal.
26. News about interest rates: Investors like to be ahead of the game, so if news of an interest rate hike or fall is released, the dollar may fluctuate in response to the coming inflow or outflow of investments that are expected to happen in the future.

American consumers

American consumers have the most at stake in the dollar’s value. A fall in the dollar makes consumers’ money worth comparatively less, putting a squeeze on the budgets of the Average Joe. Yet there are several things that consumers do that serve to drive down the buying power the dollar. Here’s how Americans do it.

27. Consumer savings: Americans aren’t big on savings. In fact, most families have a negative net worth. While this has contributed to a strong economy in the short-term, it means the US is ill equipped to support the economy in the long-term. Additionally, negative domestic savings drives us to import foreign savings, which harms the dollar.
28. Gas prices: Rising gas prices leave consumers with less money to spend elsewhere, or worse, drive them to borrow money to keep up their standard of living.
29. The Walmart/Honda factor: When Americans buy foreign goods like items at Walmart or Honda cars, we contribute to an economy that supports more imports than exports. This creates a trade deficit that weakens the dollar.
30. Slow spending: Just as too much spending can hurt the dollar, too little spending can have a negative effect as well. Analysts report that when we hit a slow shopping season, “the Fed might see that as a sign of consumer fatigue and choose to cut rates in an attempt to stimulate growth. That could hurt the dollar.”

Housing

Recently, we’ve seen how a housing boom and subsequent bust can cause problems for families, investors and lenders in the form of defaulted loans and drops in the value of homes. These same issues cause problems for the dollar, too.

31. Slow housing market: A slow housing market creates a domino effect. Sellers are forced to lower their asking prices, which creates a decline in household spending and results in slowed economy growth, all of which hurts the dollar.
32. Strong housing market: A growing, steady housing market builds the equity and net worth of home owners, spurring spending and growing our economy. This supports the dollar.
33. Overinflated housing market: This kind of housing market results in a fall of equity and personal wealth, but it doesn’t stop there; it makes the dollar fall as well, as the effect of declining home prices ripples throughout the economy.

Industry and economic indicators

American industry both affects and reacts to the value of the dollar. When the dollar falls, our goods become cheaper and more attractive. However, when we have a strong dollar, our industries have to compete harder against cheaper foreign labor and goods.

34. Low growth in manufacturing: Manufacturing levels serve as an indicator for the health of the US economy. An industry slowdown means a general slowing in the economy and can cause investors to become wary of the dollar.
35. Strong manufacturing growth: Conversely, strong manufacturing growth can indicate that the economy is picking up, creating a more attractive dollar.
36. Outsourcing: Outsourcing creates a trade deficit and causes US employment to suffer, resulting in a fall of the dollar. However, outsourcing also makes US companies more profitable and more attractive targets for foreign investment.
37. Entrepreneurship: Entrepreneurship creates attractive investment opportunities for foreign investors, supporting a stronger dollar.
38. Employment growth: Like manufacturing growth, employment growth is a good indicator for the overall health of the economy. Positive employment growth will attract more investors and create a stronger dollar. Unnaturally high unemployment causes the dollar to drop because the government loses tax revenue that could help with the deficit. It also takes consumer purchasing power away, which causes the economy to suffer.
39. Wage data: Higher or lower wages can either attract or scare off investors, creating a fluctuation in the dollar’s value.

US capital markets

US stocks, bonds, and other investments can be appealing no matter where you are in the world. The performance of US capital markets can either attract or reduce foreign investment, which directly affects the dollar.

40. Bear markets: Falling values create investment losses that shake investor confidence and cause them to diversify or liquidate their portfolios, resulting in a loss for the dollar if the diversification involves an exodus from dollar-denominated assets.
41. Bull markets: Strong market values have the opposite effect, creating profits that attract new investors and encourage current investors to put more money into dollar-denominated assets. A booming market can attract investors, but it can also cause the dollar to fall when it corrects itself and investors pull out.
42. Accounting scandals: Accounting scandals like Enron can burn investors and cause foreign investment in US stocks to fall.

Economy

The current performance of the US economy is synonymous with the financial health of our nation. It signals to investors our ability to pay back debts as well as the profit level they may earn.

43. Economic growth and stability: In general, a strong economy will raise confidence, assuring foreign investors that they’ll earn a good profit on a stable investment. Economic growth is even better, attracting investors who hope that their investment will grow, too. A boom in the economy can cause an investment rush that results in a temporary overvalue of the market. This can lead to a dollar loss when it corrects itself in a slow of the economy.
44. Economic recession: What goes up must come down. A slowing economy hurts the dollar, causing investors to pull out for fear that their investment will lose value.
45. Outperforming other economies: Economic performance is all relative. If the US economy is stronger than others, investors may turn to the dollar as a safe bet.

Weather

Weather affects the agricultural industry, energy consumption, and local economies. Any change, for better or for worse, can create a ripple affect that impacts the economy as a whole and causes the dollar to fluctuate.

46. Unfavorable farming conditions: Unfavorable farming conditions can result in slow crops and force grocers to turn to other countries to satisfy US agricultural needs. This further opens up the trade deficit and weakens the dollar.
47. Unusually hot summers: An unusually hot summer can cause a rise in energy costs for both consumers and industries. This can create a strain on the economy and cause the dollar to fall. Just like an unusually hot summer can sink the dollar, an excessively cold winter can do the same thing. It can cause energy costs to rise, and since must of our energy is imported, the dollar may be adversely affected. Additionally, consumers will presumably have less disposable income to pour into other areas of the economy.
48. Natural disasters: Natural disasters like Hurricane Katrina create a strain on local economies as well as the local and federal government as we work to repair damage and spend money on relief and rebuilding. This can cause the dollar to struggle.

Inflation

Inflation directly eats into the value of the dollar. The law of purchasing power parity (PPP) holds that a nation’s currency and its general price levels should move in opposite directions.

49. Slow in inflation of foreign goods: A slow in inflation of foreign goods keeps prices of those goods steady, allowing American consumers to purchase the same amount or more of the same goods. This does not help to close the trade deficit and can weaken the dollar.
50. News about inflation: Of course, any news about possible inflation of the dollar or foreign goods can cause the foreign exchange market to react preemptively and fluctuate the dollar one way or another.

Growth rate set to blaze soon

1. Double-digit growth is no longer the preserve of China or some small oil economies. India’s growth rate for 2006-07 is likely to be revised upwards from the current estimate of 9.4% to almost 10%. This is because growth has been more robust than estimated in both agriculture and manufacturing, according to highly-placed government sources.

2. While releasing the growth figures for 2006-07, the finance minister had remarked, “The time has come to shed lingering doubts about the sustainability of high growth and scepticism about the shift to a higher growth trajectory.”

If indeed the growth rate is revised to about 9.8-9.9%, the base effect could be somewhat daunting for fiscal 2007-08. The question is if a near-10% growth can be sustained on the back of a similar rate of growth the previous year. Economists say growth in 2007-08 will reflect recent attempts by the RBI and government to tighten money supply by hiking interest rates.

3. A deliberate policy to somewhat cool down the economy may marginally decelerate the growth rate, even though we are in the middle of a new investment cycle. The chairman of prime minister’s economic advisory council C Rangarajan is fairly confident India is now experiencing an investment-driven rather than consumption-driven growth. This is the one critical factor that might deliver a consistent GDP growth of 9%-plus for another few years, officials believe

Source : Economic Times

French President Concerned by Autoworker Suicides

It seems there is a epidemic of suicides in the auto sector of france and french pyschiatrists says that this is symptom of modern times. Epidemic of suicides is a recurring incident in India. It seems this epidemic is now a global phenomena.

US Dollar : On the Edge of the Abyss and Back to Gold Standard

The US Dollar's value has been steadily eroding over the recent past. Intervention by US government and other countries like China has stopped in free fall. But it seems China is slowly evolving a strategy to reduce its exposure to the dollar by buying US stocks. Experts say that this could level GOLD being considered as the standard currency once again.


1. US Government : there is one fan of the USD, a fan that will try and keep the dollar u1. p or at least “manage” its invertible collapse. That of course is the US Government. Armed with Ben Bernanke’s Plunge Protection Team, you can bet you bottom dollar (although shortly it might not be worth much) that they will do everything possible to make sure their currency does not have a full blown crash. They would rather that USD gradually floated down in a way that would benefit US exporters. Trying to manipulate the market is a dangerous game, as no person, company or government is bigger than the market and eventually the market will fight back and win.

In fact the more an entity tries to suppress something, whether this be the financial market or something as simple as an idea, the more drastically the suppressed force will fight back. Therefore all the Plunge Protection Team are doing by trying to prop up the dollar or the stock market is delaying the invertible and making the backlash reaction all the more dramatic. You can try to push the bad times back, but this will just make the bad times worse when they eventually come around.

2. China Factor : It is crucial to remember that the United States on America is not the only government with an interest in which way the dollar goes. With their hands on over $1.2 trillion dollar bills, the Chinese Government must also be watching the USD like hawks having lost $100 billion of value in less than a year. The government in China is very concerned at keeping “social unrest” at a minimum so how do you think the Chinese people will react if the USD continues declining further and further down bringing their foreign currency reserves closer and closer to worthlessness. China must be looking to transfer their dollars into something that retains its value or perhaps even increases in value, after all isn’t that what investments are supposed to do?

China will look to get out of dollars and into anything that isn’t falling as fast as the USD. The private equity group Blackstone, made the biggest US IPO of the year recently and Beijing swiftly swooped in and bought a 9.9% stake in the company, using $3 billion of its foreign exchange reserves. It is likely that we will see more examples like this of China buying companies, commodities and whatever they can to get out of the dollar. Gold and silver bullion or the mining companies in the precious metals industry are obvious candidates for a piece of China’s USD pie as they move up and as the greenback moves down so they are the most logical hedge against a declining dollar.

3. GOLD as the Basis : If China and other countries holding large USD reserves shift even a small proportion of their dollars into the precious metals, it will have massive effect on gold prices and silver prices. Governments aside, individuals around the world will be looking to trade any dollars they have for a piece of gold or some gold stocks rapidly increasing in value.

Reference :

US Dollar : On the edge of abyss

Globalization Blog link

Here is another globalization blog link:

Compelling argument in favour of Indian Retail Revolution

1. some of the data on the retail sector in India makes for interesting reading. For instance the CII-AT Kearney retail study shows that retailing is the largest contributing sector to the country's GDP. Besides, the retail sector contributes about 10 percent to the GDP compared to 8 percent in China, 6 percent in Brazil and a matching 10 percent in the US.

2. Data clearly shows that the retail sector is not only extremely large but provides a huge amount of jobs in this country. The entry of the organised large retail chains may not have an immediate impact on the trading community. But in the long run, it is clear that small traders and retailers will be affected and the government cannot ignore the issue.

3. wastage estimated in the Indian food chain is around 40 percent, valued at over Rs.500 billion ($10 billion) annually. A study by the Indian Council for Research on International Economic Relations (ICRIER) has also shown that only about 2 percent of fruits and vegetables are processed in this country. In this backdrop, it is felt that there is no option but to allow big retail chains to make huge investments needed to create an efficient and modern agro processing industry.


Link : India's retail explosion: boon or bane?

Bikini vs Burka

On my wall, I have a picture of a Muslim woman shrouded in a burka. Beside it is a picture of an American beauty contestant, wearing nothing but a bikini. One woman is totally hidden from the public; the other is totally exposed. These two extremes say a great deal about the so-called "clash of civilizations"



The role of woman is at the heart of any culture. Apart from stealing Arab oil, the impending war in the Middle East is about stripping Arabs of their religion and culture, exchanging the burka for a bikini. I am not an expert on the condition of Muslim women and I love feminine beauty too much to advocate the burka here. But I am defending some of the values that the burka represents for me. For me, the burka represents a woman's consecration to her husband and family. Only they see her. It affirms the privacy, exclusivity and importance of the domestic sphere. The Muslim woman's focus is her home, the "nest" where her children are born and reared. She is the "home" maker, the taproot that sustains the spiritual life of the family, nurturing and training her children, providing refuge and support to her husband.

In contrast, the bikinied American beauty queen struts practically naked in front of millions on TV. A feminist, she belongs to herself. In practice, paradoxically, she is public property. She belongs to no one and everyone. She shops her body to the highest bidder. She is auctioning herself all of the time. In America, the cultural measure of a woman's value is her sex appeal. (As this asset depreciates quickly, she is neurotically obsessed with appearance and plagued by weight problems.) As an adolescent, her role model is Britney Spears, a singer whose act approximates a strip tease. From Britney, she learns that she will be loved only if she gives sex. Thus, she learns to "hook up" rather than to demand patient courtship and true love. As a result, dozens of males know her before her husband does. She loses her innocence, which is a part of her charm. She becomes hardened and calculating. Unable to love, she is unfit to receive her husband's seed. The feminine personality is founded on the emotional relationship between mother and baby. It is based on nurturing and self-sacrifice.

Masculine nature is founded on the relationship between hunter and prey. It is based on aggression and reason. Feminism teaches woman that feminine nature has resulted in "oppression" and that she should convert to male behavior instead. The result: a confused and aggressive woman with a large chip on her shoulder, unfit to become a wife or mother. [...] Feminism is another cruel New World Order hoax that has debauched American women and despoiled Western civilization. It has ruined millions of lives and represents a lethal threat to Islam. I am not advocating the burka but rather some of the values that it represents, specifically a woman's consecration to her future husband and family, and the modesty and dignity this entails. The burka and the bikini represent two extremes. The answer lies somewhere in the middle.

Reference:

1. Henry Makow, "The Debauchery of American Womanhood: Bikini vs. Burka"
2. Politics of the Female Body

Outsourcing 'to earn India $40bn'

Indian software and services exports are expected to earn about $40bn (£19.9bn) in the year to March 2008 as demand for outsourcing remains strong.

The National Association of Software and Service Companies (Nasscom) added that the sector should achieve $60bn in export revenue by 2009/2010.

"We are confident and I think we will get there," said Nasscom president Kiran Karnik.

"The overall demand is strong... the headroom for growth is huge."

BRIC’s Are the Next Global Powers

According to Goldman sachs, The Bric Countries have already become a superpower

As per the study, at the end of the first Gulf War in 1991, out of the 20 largest companies in the energy sector, 55% were American and 45% were European. In 2007, 35% of them are from BRICs countries, 35% are European and only 30% are American.

The U.S. is now lagging with the smallest percentage number of energy companies worldwide. If you think about the global resource industry typically being a leader in terms of global trends, we’re starting to see this replicated in the mining industry where 20 percent of the top 20 companies are now from BRICs countries. We believe this sort of pattern will be repeated industry by industry.

The BRICs are now expected to venture into the food and pharmaceutical industries.

Nissan-Renault CEO looking at $3000 car in chennai

BusinessLine reports as follows:

Mr. Ghosn, CEO of Nissan-Renault tells " We are investigating,at alliance level, how can we can make a $3000 car. We will be part of this competition".

Nissan-Renault is opening a factory in oragadam, west chennai, with the Government handing over the first parcel of about 1,100 acres of land to the officials.

Also, another news item in Business Line related to low cost car :

Bosch's marquee products like common rail direct injection systems (CDRi) and anti-lock braking system (ABS) would find their into new low cost passenger car models.


It is surprising that the TN government is not having any issues in acquiring such large plots of land while West Bengal Government keeps stumbling.

More Trouble in Little Singur

Mamata has rejected the renewed package offered by the West Bengal government. Is she just playing dirty politics to garner the voteshare from the Communists?

Companies would slowly walkout of West Bengal and it would be loss not only for West Bengal for entire Eastern India.

Dharavi makeover: Global developers invited

Just read this newistem from expressindia.com ;

With Government of Maharashtra advertisements published in New York, London, Tokyo, Dubai and other major world cities, global tendering process is finally rolling

From London to Tokyo, readers of the Wall Street Journal and Financial Times in 20 cities across the world found on Wednesday morning a message about Mumbai’s ambitious makeover project. It was an advertisement announcing that the Government of Maharashtra is inviting international developers to transform Dharavi, “one of the largest slum pockets in the world,” into an integrated township.

Project details furnished, projected cost of Rs 9,300 crore or “approx US $ 2.3 billions” stated, it then asked: “Is it enough to turn you on?”

India, Asia's fourth-largest economy, is facing a crisis of "slumification" according to experts, with numerous people leaving the countryside in search of jobs in the booming cities. The Indian government's own figures show the number of people living in its slums has more than doubled in the past 20 years to more than 60m.

Dharavi, the mother of all slums, is a symbol of poverty in India. If Maharastra Government is doing a makeover and sets a role model for other states to follow, Indian cities would undergo a great transformation.


My best wishes for this project.

Chomsky on Globalization

Here is summary of Chomsky's take on Globalization:

1. Globalization means International Economic Integration
2. "Globalization" is the term for "Investor Relations version" of International Economic Integration
3. Free movement of labour is restricted more
4. Free movement of investment is increased more
5. When declaring trade volumes, generally distinctions are not made between actual trade and inter-corporate transfers.

Hiked Interest Rates May Pull Back Indian Growth This Year: IMF

"Indian growth story may go low this year because of the hike in interest rates proposed by the Reserve Bank of India. According to the International Monetary Fund (IMF), India had touched 8.7-growth rate last year, but the growth rate would possibly go down to 8.1 percent in 2007.

However, the IMF has also accepted said that Indian growth would remain rapid as the manufacturing and services sectors are showing strong momentum. But, there is a urgent need to restrict the strong inflationary pressures to retain the good growth rate in the country.

The current policy of higher interest rates will have its impact on consumer demand and the housing market this year and in next year too. It would possibly result in 7.5 percent growth rate in 2008."

Eventhough the rise in interest rates and the media stories about them have dampened the upbeat spirit of Indian Consumers, Industrial Growth is continuing. People who are bullish about the long terms prospects of India and the India Rising story might stand to benefit this current phase of bearish mood of the consumers.

Tata 1 Lak Rupees car triggering a global car war

When Tata announced the plan for 1 Lak Rupees car, everyone was wondering how it would be possible. Even before the launch of this car, it has however have triggered seismatic changes on a global scale. BusinessWeek is reporting on the Race to build Really Cheap cars for the BRIC (Brazil, Russia, India and China) Countries where the demand for such cars are estimated to be in hundreds of Millions. BusinessWeek is predicting the change to be as big as the introduction of Henry Ford's T Model.


Chennai is supposed to a global manufacturing hub for these cars and could be well on course for being the next Detroit. But if Indian Driving as bad as the previous video, how would low cost cars going to impact the traffic conditions? Road Taxes might be raised high enough to make cars unaffordable to the very market segment these car manufacturers are targeting.

Also, it is going to highly impact the global climate which is already worsening.

India rising vs.India driving

Forget India rising stories which one keeps hearing again and again. It is going to take a himalayan effort to transform India into a country which upto its potential.

A seemingly clip can sometime tell the truth succinctly than a 1000 words

Nail House - A Great Story from China

Chinese People are believed to very submissive people. Rarely comes a story of defiance. Here is an interesting story about a guy who refused to vacate his house even when his immediate neighbourhood was dug up for basement of a big complex.

Eventhough his house was finally demolished, Chinese authorities are now enacting a new law giving more rights to private property.

India's Hidden Civil War- Naxal Terror Watch

According to our Indian PM, Dr. ManMohan Singh,"Naxals are the single biggest internal security challenge ever faced by our country".

Here is a blog that is focused on tracking the Naxal related stories : Naxal Terror Watch

Retail Revolution - Arguments and Counter-Arguments

That India is now under going a retail revolution is a known fact. Whenever Reliance Retail, Airtel/Walmart and other smaller retail outfits face opposition to their rollout, they rubbish their opposition claiming the success of Walmart and other retailers. Opposing them means being "UNINDIAN" similar to how Open Source is "UNAMERICAN".

Take a look at this article : Walmart Gives Up: No Stores For New York City

Retail Poster Boy Walmart itself is stopped from entering New York and other major cities by the Unions in New York. If Walmart could be stopped in US, can they stopped similarly in India?

In Chennai, already small vendors/retails have started protesting the entry of Reliance into the retail business. It would be quickly spreading to other cities as well. Can these minnows stop the retail juggernaut like what the Nandigram folks did to land acquisition?

However, at this moment, I think odds are in favour of Retail Giants as the consumer public are all crazy over the supermalls.

Bill that stops government to acquire land for private companies

As a consequence of Nandigram, A Bill is currently tabled in the Indian Parliment to stop state governments acquiring land for private companies.

Private Organizations might have to cough up more money to acquire land for their projects in India. As the Indian Real Estate prices are on the rise, Companies might find that their projects might not be viable anymore because it would be a nightmare for anyone to acquire large pieces of land stretching 1000s of acres.

This Bill would surely affect the overall economic growth of India in an indirect way.

Houses cheaper than cars in Detroit

Here is a newstory from Yahoo.. Houses cheaper than cars in Detroit

As US Car manufacturers are struggling, Detroit - the automotive hub of US is vanguishing. This is in stark contrast to the booming real estate scenario in Chennai, which is fast becoming the automotive hub of India.

Just to Compare - even a 5 cents of vacant land in Vandaloor (about 10 laks), a place about 20kms aways from Chennai, is more than twice costlier than a 4 bed room house in Detroit..

Will Nandigram incident setback Indian industrialization plans

Under the threat of withdrawal from the Left Front government by the RPI, CPI and the Forward Bloc, the Left Front government in West Bengal announced that no land would be acquired for industrialisation in Nandigram.

The decision was taken at the Left Front meeting in Kolkata. The West Bengal government had announced that all special economic zones (SEZ) in the state were being put on hold until a "socially balanced" decision was taken.

As demanded by its allies, the government has also ordered withdrawal of the police force in phases from the area, which has been witnessing relentless agitation by protestors against land acquisition.

In a related development, The Jharkhand government has put a brake on acquisition of land for industrial use in the aftermath of the killings at Nandigram in West Bengal due to protest against land acquisition for a similar purpose.


The state government has signed Memoranda of Understanding (MoUs) with more than 54 companies to set up steel plants, power plants and other industries.

In Tamilnadu, the PMK leader Ramadoss has declared that his party would oppose the SEZ plans for Tamilnadu.


However, unfazed by Nandigram violence Industry Minister Kamal Nath today said the UPA Government remains committed to the Special Economic Zones.

So, We can expect a great drama to unfold in the near future and witness new scenes that are awaiting going to be happen.

Nandigram Tragedy

West Bengal is becoming the battlefield where all the players of the globalization saga are stagging war against each other. Nandigram Tragedy is yet another episode in this ongoing saga. It seems the government is hellbent on acquiring land without giving proper compensation.

11 People have been shot dead in violent clashes with police forces. This tragic event might not deter the Government from pressing forward. Is "Grapes of Wrath" like scenario the next episode in this yet another greek tragedy?

Butterfly Effect

The Butterfly Effect has once again take place in the global stock markets.

World stocks tumble on US fears - This is the second fall in as many weeks.

In India, The markets continue to trade weak in noon deals with the benchmark index trading 12,568 levels with a loss of over three per cent or 414 points.

Even though experts believe that long-term growth story is intact, they suggest that investors are interested in company specific investment ideas rather that buying the macro economic story.


The impact of these events on Indian Growth Story is anybody's guess.

Services Business Model for Maid Servants in India

Bodyshopping was the derogative name given to companies that were doing placement services for Indian Software programmers. These companies took 40-60% of the programmers salaries. Infosys and other companies then positioned themselves as companies whose business model is the same as that of consulting companies like Accenture etc. but in software domain.

The success of this business model is now set to proliferate across several other domains, including for Maid Servants. In India, Maid Servants are paid dismally low and they reciprocate by doing a shoddy job. It has been a lose-lose situation for all. Some shrewd Entrepreneurs have adopted the Service Business Model for this domain.. These entrepreneurs assure professional quality service and in turn ensure that the maids are better paid, inducing a cycle of win-win situation for all. Also, hopefully these maids are also provided other benefits related to social security.

As India is vying for a service oriented economy, this business model has to be successful in many many domains, creating win-win situation for all. This adoption is also critical for shifting the large population that is currently underemployed in the Agricultural Sector.

I have been visiting several farms across Tamilnadu. One recurring compliant from small farmers is that it is now very difficult to get labour these days. The Textile Industry has successfully lured the agricultural labourers by providing additional benefits related to social security. If this trend continues, other industries would grow at the expense of agriculture. This would threaten the self-sufficiency of the Country.

My solution for this problem is that someone start a major service agency for agricultural labourers, which would provide benefits on par with other industries. There is seriously lot of money to be made in this space.

The recent walmartization of the Indian retail industry could also be thought of as the adoption of the service model for retail industry. Currently, those working in the retail industry (especially in kirana shops) are more or less like bonded labourers. Streamlining this industry with the service model would lift millions out of poverty.

The adoption of the Service Business Model across domains is inevitable and seems unstoppable.

Jetix Hero Wins Local Body Elections in Tamil Nadu

An independent candidate contested the local body elections in a village called Veerapandi, near palladam, a town in Tamil Nadu. He had selected Jetix heros as his election symbol and started distributing jetix heros branded balloons and other toys..

It happened that he scored a resounding win in the election, beating leading political parties like the Ruling DMK, AIADMK and others.. But why did the public vote for him?


This is what they have to say :

"We have voted listening to leaders for a long time.. In this election, we listened to our kids who were cheering for this Jetix guy.."

Globalization making the world a better place

Here comes a research report that states that violent conflicts in the third world countries are declining.. making the world a better place..

"Without new superpower "proxy wars" starting in the Third World, overall armed conflicts have fallen by more than 40 per cent, and extremely violent conflicts -- those with 1,000 or more battle deaths -- have dropped by 80 per cent... International arms transfers, defense budgets, armed forces personnel and refugee numbers have also all decreased."

Good News?

But the interesting part of this story is : Andrew Mack, the Report's Author finds people reactions to his report as curious..

Reaction to his report ranges from disbelief to relief to scornful dismissal. Those on the political right and left each accuse him of siding with the other."

Tamil Remix

Tamil Popular Culture has been monopolized by Cinema for more than 5-6 decades.. Internet has not been able to impact pop culture till now.. but YouTube and its cousins are going to chance this situation very soon.. It is going to give millions strong audiences to artistes who want to experiment and explore venues themes..

This Tamil Video is a precursor for things to come.. YouTube stats say about 58,000 visitors which is quiet a good audience.. As YouTube is going to pay for its contributors, it is going to provide a business model also for supporting the emerging tamil Rap and new art styles..

Tamil Culture desperately needs new voices ..

so may a Thousand Videos Bloom..

Of the world's 100 largest economies, 51 are now global corporations, rather than countries

• Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries. (see chart)
• The world's top 200 corporations account for over a quarter of economic activity on the globe while employing less than one percent of its workforce. (source)
• The richest 1 percent of Americans own 40 percent of the nation's household wealth (as of 1997). (source)
• The assets of the world's 358 billionaires exceed the combined annual incomes of countries with 45 percent of the world's people. (source)
• The average CEO in the U.S. made 42 times the average workers pay in 1980, 85 times in 1990 and 531 times in 2000. (source)
• The courts have given corporations the basic Constitutional rights of persons, but workers lose those rights on entering the workplace.
• The corporate share of taxes paid has fallen from 33 percent in the 1940's to 15 percent in the 1990's. Individuals' share of taxes has risen from 44 to 73 percent.
• The World Trade Organization effectively gives corporations veto power over our U.S. environmental and labor laws, weakening your right to protect ourselves and our land by our legislation.

This is How the System Works

These facts give lot of insight into the state of Global Economic Scenario..