Saturday, May 25, 2013

A Socialist's Baptism By Fire

Francois Hollande's adventure in Mali has signalled that the French policy of "Francafrique” is all but over, says Saurabh Kumar Shahi

It feels like only yesterday when Socialist Party candidate for the French presidency, Francois Hollande, while trying desperately to outsmart incumbent Nicolas Sarkozy, was promising a complete overhaul of French foreign policy, including clamping down on military adventurism in Africa, which France has historically seen as its playground. To give him his due, he did expedite troops pullout from Afghanistan. More importantly, just weeks ago, Hollande refused permission to intervene militarily in its former colony, Central African Republic, where President Francois Bozize was forced to accept a power-sharing deal with insurgents who looked set to take over the state. However, something changed this winter.

Mali, another former French colony, has been in the line of fire for quite some time now, mostly because of some inadvertent indirect actions of France itself. France under Sarkozy had enthusiastically supported Islamists against Gaddafi. These Islamists then ethnically cleansed the Tuaregs, a sort of Berber people, who were part of the rainbow Libyan armed forces. The Tuaregs were then driven back to their traditional homelands in Northern Mali. Armed with the leftover Libyan army weapons, these Tuaregs assembled in northern Mali to claim their own state. As the Mali government dithered, the Algerian Islamists saw an opportunity to shift their base away from Algeria where they were being hunted by the Algerian forces. They moved to northern Mali to apparently support the Tuareg revolt, but then  took over themselves. France was quiet until last week when the Islamist forces advanced into positions in central Mali and captured Konna, that left the capital Bamako, still 600 km away, vulnerable, if  the French are to be believed.

With the Mali government still dithering, Hollande ordered the first military strike of his career. As this story goes to print, France has deployed 550 troops; C-160 transport aircraft and attack helicopters and has carried out several sorties of Rafale jets bombarding the rebel bases and frontline, managing to slow the speed to their advance. However, the retaliation was more severe than the French commanders had thought and France lost one attack helicopter and some men in the initial fight. Three other helicopters were damaged and rendered out of action. Sources suggest that the French decision of strategic bombing and other air attacks without decent ground support will prove to be disastrous.

In days to come, Hollande is going to face problems on several fronts. First, the almost complete and across the board support inside France will change if the victory is not swift. According to sources, the victory will not only be late to come but might not come at all. The quality and training of French Special Forces was exposed just weeks ago when a French mission to rescue a French hostage, an agent of the French secret service DGSE, from Somali Islamists was botched up, leading to the death of another personnel and capture of another without recovering the first. It was later revealed that the French special forces involved in the botched mission were spotted the moment they landed in Somalia, a couple of kilometers from where the hostage was being held, leading to a tip-off that helped the rebels quickly arrange men and machines. It just added another embarrassing legend to the reputation of an Army that has historically shown great enthusiasm for surrenders without a fight.

Second, Hollande's policies have increasingly started matching those of Centre and Centre Right parties. His last eight months have been disastrous with ratings comparable to what Sarkozy had. The more he turns right, the more he loses his traditional votes. Says John Rees, an independent political analyst based in Paris, “There is very little difference between Sarkozy's response over Libya and Hollande’s response over the Mali crisis. That is sad because Hollande promised so much. Its his inability to deliver on the domestic front, his inpability to live up to the high hopes that many in France hoped that he would deal with austerity, which has driven him into an incredibly reckless foreign policy in the hope that it would bolster his poll ratings. These gambles sometimes work but in recent history in Europe they have often turned out to be incorrect.”

In fact, the admission of mistake has already started coming with an unnamed Elysee Palace official  being quoted to have said, “What has really struck us is how up-to-date their equipment is, and the way they've been trained to use it. At the start, we thought they would be just a load of guys with guns driving about in their pick-ups, but the reality is that they are well-trained, well-equipped, and well-armed.”


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles

Friday, May 24, 2013

Cashing on the cash

Direct cash transfer schemes are still quite perforated

After series of debates and arguments, over the decades, the incumbent government has finally realised the flaws of direct subsidy and thus announced their intentions of implementing direct cash transfers to the people. There is not even an iota of doubt that the subsidies were always vague in nature and rarely reach the actual beneficiaries, these are meant for. Most of the time, the subsidies meant for the bottom of the pyramid trickle up and reach to those who are at the top of the pyramid. There are innumerable examples of government employees and rich villagers carrying BPL cards and thus availing the benefits meant for the poor and needy popula. This is a major reason for the money collected as annual taxes from common Indians got redirected to the coffers of the rich and not for who it was collected from and the real poor. Eventually, the band of bottom of pyramid kept on widening and never saw any breakthrough. In spite of several economic measures, the gap between rich and poor never got bridged. Be it fertilizer subsidy, gas subsidy or oil subsidy, most of these services were majorly availed by those who had enough and by those who belonged to the upper category of haves and not by those who struggled as have-nots and are lingering in poverty!

After six decades of policy making, the policy makers adopted the globally practised direct cash transfer scheme. No doubt, this very scheme is million times better than the currently practised subsidy scheme. At least, the money paid by tax payers would reach the families. If one goes by global examples, cash transfers have helped many nations reach their target audience directly. For instance, a huge paradigm shift was brought in Sierra Leone through cash transfers to farmers with an intention of aiding them to purchase agricultural tools and inputs.

However, there are lot of misses between the cups and lips when it comes to implementation of the said policy. Firstly, there are still hundreds of villages where banking facility is not inclusive. As per the latest Census, merely 60 per cent of all households have access to banking services and the formal banking system. Still, more than 60 per cent of the rural population does not have bank account and only 25 per cent of rural dwellers uses banks for availing credit facility. In such a bleak scenario, direct cash transfers through bank transfers would fall flat. Thus the first and foremost challenge to the policy makers is to bring these villagers under the ambit of conventional banking system ensuring that every single individual has bank account. Moreover, there still exists a huge task of opening a bank account for all these villagers and even before that providing them with relevant documents (read: identity and address proofs) to do the same. Further, every village, through numerous channels, have to be educated about the benefits of banking system and thus have to be roped into the concept of ‘financial inclusion.’

The next issue with direct cash transfer is in the access to cash itself. Most of the households in villages are male dominated. In simple words, the financial decisions are sole proprietary of the males in the family. This would not only become victim of gender discrimination but also may dilute the very objective of cash transfer. It has been widely seen that if cash handling by men is quite skewed as compared to women. Even in NREGA schemes, the cash disbursed to workers are used more for household by women and more for alcohol and tobacco by men. In a classic case of Malawi (published in a paper titled, ‘Cash Transfers in the Context of Pro-Poor Growth’), it was found that “the value of cash transfers was undermined by the exceptional increase in maize prices during the 2001-2002 season: in May 2001, the monthly cash transfer purchased 70 kg of maize, but only 16 kg by February 2002. As a general lesson, cash transfers are likely to be inadequate in the absence of measures to address wider economic instability.” Going by various precedence, there is a huge probability of the money being used for anti-social and non-essential purposes. This may lead to alcohol abuses and other form of misuse and thus leading to incidences of domestic violence too.

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Friday, May 10, 2013

PAUL BRACKEN: PROFESSOR OF MANAGEMENT AND POLITICAL SCIENCE, YALE UNIVERSITY

China, too, is shifting its nuclear forces to mobile missiles and submarines. These weapons can be put on alert in a way that would be highly visible to US satellites and the global media. Thus, the Chinese can easily “nuclearise” a crisis with US or anyone else. They do not have to detonate a nuclear weapon, but only alert adversaries to the dramatic increase in the political stakes and dangers of a showdown.

Russia, not wanting to be left out of the act, has recently staged the largest nuclear exercises in decades to remind everyone that it remains a serious nuclear player, too. These individual developments are troubling. But they cannot be understood in isolation from the larger multipolar system of major powers that is forming. To a great extent, this is a nuclear multipolar system: possessing nuclear weapons contributes to a country’s global status as a major power.

To see this, consider the following question: When was the last time that the US or anyone else seriously proposed that India sign the Nuclear Non-Proliferation Treaty (NPT) – that is, that India give up the Bomb. Given America’s economic problems and looming defense cuts, as well as growing Chinese power, there is no longer even a remote possibility that this demand will be made. India has become an accepted, legitimate member of the nuclear club, the fiction of the NPT notwithstanding. It is even less likely that China or Russia would disarm for the sake of a nuclear-free world.

But the most urgent problem stems from the breakdown of major countries’ one-time nuclear monopoly and the empowerment of smaller countries like North Korea, Pakistan, Israel, and, quite possibly, Iran. A new set of rules for diplomacy, military strategy, and arms control is needed to stabilize this emerging nuclear order. Pretending that it does not exist is not a strategy.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Thursday, May 9, 2013

Who let the street down?

As Yet another turbulent year draws to a close, it’s time to see who quashed investors’ hopes on the street. Though the second half of the year saw share prices of a number of top companies coming back on track, some stocks still remained painfully low. B&E finds out the top value destroyers for the year among the BSE 100 constituents

Slow demand hits all


IT giant Infosys topped the chart biggest wealth destroyers (in %). Affected by a slowdown in revenue from Western clients remained the biggest problem for the company. Between Jan 2, 2012 and December 15, 2012, it lost 15.91% of its m-cap. ONGC stood second with 15.66% reduction in its m-cap due to slow oil and natural gas discovery in the new fields and poor yield from existing assets. Two companies from Adani group made it to this not-to-be-proud list. Adani Enterprises suffered due to increasing international prices and a forced 7% promotor’s stake sale to meet compulsory share holding norms, while Adani Power faced issues due to low margins. GMR infrastructure suffered various bottlenecks including sectoral and its own internal issues.

Western disturbances hit Infy


In absolute terms, Infosys and ONGC lost market capitalization to the tune of Rs.178.94 billion and Rs.106.60 billion respectively between Jan 2, 2012 and December 15, 2012. Among others Bharti Airtel saw its m-cap coming down by Rs.39.42 billion due to lower user base and less than expected average revenue per user. However, it is expected that the capex made by the company may soon bring a change in its fortune in the next financial year and a good recovery is on cards for the telecom giant. Rising non-performing assets troubled Punjab National Bank to a great extent during the year. During the given period, the bank’s market capitalisation fell by Rs.3.38 billion.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Wednesday, May 8, 2013

Has Russia chosen the wrong guy once again?

With inflation cooling down to a post-Soviet record-low of 3.8% and real wage growth improving, some may wonder why is there an expectation of growing opposition to Putin during his upcoming Presidency? His reluctance to implement structural reforms coupled with his refusal to openly tackle rampant corruption in Russia could be contributing factors – but election fraud in the recent elections, surely not

Almost six months ago (on September 24, 2011), while addressing his party’s members at a congress, Russian President Dmitry Medvedev proposed that his predecessor, Vladimir Putin, should stand for the presidency in 2012. Clearly, this wasn’t a bombshell by any quarters; in fact, the announcement was quite expected. But that day, post the announcement, two things were more or less certain – Putin would win the elections and the opposition would protest the results. The definiteness in the above certainties was not because Putin was expected to win the March 2012 Presidential elections through fraudulent practices, but ironically because he was expected to win despite such practices. In other words, Putin’s popularity had held strong at such high levels over the past few years and especially as of recent times, that even international observers had expected quite a reduced form of ballot fraud.

It isn’t that Putin himself wasn’t aware of his massive popularity. His decision to allow the installation of more than 182,000 web cameras at 91,000 odd polling stations and admittance of thousands of independent, international election observers during the March 2012 elections should have convinced even critics that the man was changing. This is not to say that irregularities did not occur – a Chechnya polling station even documented a 107% voter turnout – but Putin’s final overall vote tally of about 64% matches closely with exit polls conducted by multiple agencies (like Public Opinion Foundation and All-Russian Public Opinion Research Centre) that forecasted that Putin would obtain around 58-59% of the polled votes. If at all Putin’s supporters abused the election process, to be fair, it couldn’t have mattered beyond a few handful of percentages in the final tally. And one really would be strongly given to believe that Putin would not have undertaken underhand election practices for such a puny advantage.

It’s abundantly clear that Russians en masse are supporting Putin’s candidature, more for the way he has stabilized the country from the pits it had reached in the 90s Yeltsin era, than for his dictatorial prances. Then why is there an expectation of growing angst in the upcoming Putin presidency? Like we said, election fraud surely can’t be the reason.

And even peddling Russia’s ‘impending economic downfall’ as the reason may, on the face of it, sound quite eccentric – while Russian real wage growth has returned to near double-digits (9% y-o-y in January 2012), inflationary pressures too have cooled down to a post-Soviet record-low of 3.8% in February. With 4.3% y-o-y increase in GDP in 2011, Russia’s economy has broadly even recovered from the global economic crisis. But a deeper look, and some questions around Russia’s remarkable growth, led clearly by ‘black gold’ (oil accounts for nearly 20% of Russia’s GDP, over 66% of its exports and 50% of its government revenues) surely start gaining locus standi.



Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Tuesday, May 7, 2013

Bid adieu to these 10 WMDs!

The only thing that can perhaps be worse than hiring the wrong employee is hiring the wrong leader. In this incisive analysis, Prof. Arindam Chaudhuri, Honorary Director, IIPM Think Tank and Prof. A. Sandeep, Group Editorial Director, Planman Media, identify 10 CEO traits that are an agglomeration of bad news for the companies that they lead.

It’s the position that makes the most bucks. But then, it is also the position where the buck stops rolling. The CEO is answerable to every stakeholder imaginable for the success or failure of any operation/division; be it marketing, HR, operations or finance. He takes decisions, sets the direction and sets the organisation up to execute on his strategy; and can be the critical difference between a company that ups the ante and one that falls of the cliff.

The traits that define a good CEO have been the subject of scrutiny and debate over several years, but it remains largely unresolved. That’s certainly bad news for corporate boards, who would want to go to any extent to ensure that they have the right man. Based on exhaustive research and industry interface over the years, we present an expansive primer of 10 typical traits of unsuccessful CEOs, which should act as red flags for any company.

#1 the best one-trick pony you met

To be true, multi-tasking is a way of life today, but one really wonders if it is the trait that should be associated with CEOs. If you look at expert analysis, CEOs looking to specialise in one area, with the belief that it leads to better efficiency and performance, need a very urgent reality check. Dr. Louis Csoka published a benchmark report titled ‘International Communications Research in December 2006, which proved that multi-taskers were not only more educated in comparison (78% more) but were also better paid (200% more!). It is also affirmed in a research by Dr. Levenson (University of Southern California), Dr. Gibbs (Chicago Graduate School of Business) and Professor Zoghi (Bureau of Labour Statistics) titled, ‘Why Are Jobs Designed The Way They Are?’, that in world leading organisations, ‘multi-tasking’ “leads to greater productivity” as compared to specialisation. One case in point is highlighted in the NHS Report from Institute for Innovation and Improvement, which wrote of Microsoft founder Bill Gates, “Gates is the original multi-tasking man...” In fact, Gates’ belief in multi-tasking is so supreme that “once, Gates hung a map of Africa in his garage, so he could have something to occupy his mind for the precious seconds spent turning on the engine of his Porsche.” In other words, there is a significantly high probability that single/limited tasking CEOs would easily find their way into the ignominious list of worst performing CEOs.

#2 let’s be history together!

Does your organisation revolve heavily around one power figure, with his immediate deputies leading the rest in following his cue blindly on every occasion? If that be the case, you must delink from this organisation at the earliest opportunity. The right CEO is one who identifies potential insiders and grooms them relentlessly into leadership positions, and keeps a list of potential successors ready. The wrong CEO, simply put, is one who does not do that. Global HR consultancy Heidrick & Struggles reveals an interesting research finding, which states that “merely announcing who your next CEO will be, can move the market value of your company by 5% or more!” Centre for Economics & Business Research also proved in its benchmark research of 350 FTSE firms in 2005 that firms with unplanned succession planning for CEOs underperformed their counterparts, who had proper succession planning in place.
 

“I want Chhattisgarh to scale new heights”

He claims that Chhattisgarh has been witnessing an unprecedented growth ever since he took over its reins in 2003. In this exclusive interaction with B&E’s Sray Agarwal, Chief Minister Raman Singh defends his claim apart from discussing what all is he doing to make Chhattisgarh the most developed state in India

B&E:
It’s been over eight years since you took charge as Chief Minister of Chhattisgarh. How would you rate your governance when it comes to the economic development of the state?

Raman Singh (RS):
There are certain norms to scale the growth of the state. You will be happy to know that we have been maintaining a double-digit growth rate for the last seven years. A remarkable growth rate was registered in FY2009-10. In that year, the Gross State Domestic Product Growth (GSDP) rate was 11.49%, which was the highest among all states. Even the average GSDP rate of the past seven years was around 11%. In FY2010-11, Chhattisgarh has again proved the strength of its vision, policies, programmes and schemes. Sustainable environment of development has increased the state’s GSDP rate in FY2010-11 over FY2009-10. In fact, as per a recently issued report, Chhattisgarh was among the three fastest growing states in the country – Bihar (14.79%), Tamil Nadu (11.74%) and Chhattisgarh (11.57%).

B&E: How is Chhattisgarh tackling the fiscal deficit?

RS:
Initially, when the state came into being we faced the problem of fiscal deficit. But the whole scenario changed when I took over as Chief Minister. There has been a remarkable improvement in major financial indicators of the state. Our revenue deficit turned into revenue surplus. In compliance with the 12th Finance Commission recommendation, the state’s fiscal deficit has been within 3% of GSDP since FY2005-06. While plan expenditure has increased by around seven times, non-plan expenditure has risen less than three times. All targets mentioned in the FRBM Act have been achieved. In fact, Chhattisgarh has never resorted to ways and means advances (WMA) from RBI due to better financial management.

B&E:
Chhattisgarh has been at the forefront when it comes to agriculture. How has it been possible?

RS:
Right from the beginning we were clear that for the all-round development of Chhattisgarh condition of the farmers needs to be improved. We therefore took various practical measures to reduce the production cost. Firstly, we reduced the interest rate on farmers’ loan from 14-15% to just 1%. This automatically encouraged farmers to take loans. Earlier, farmers in the state used to avail loan worth Rs.100 crore in all. Now, our target is to distribute loan to the tune of Rs.1,700 crore. For the last 60 years, there were only 72,000 irrigation pump connections. Today the number has gone up to 2,90,000. In fact, we provide free electricity supply of 6,000 and 7,500 units for pumps up to 3 and 5 horsepower respectively. Farmers using these pumps are exempted from fix charges, meter rental and other fees. The paddy procurement at support price is also going on at large scale. Last year, we procured almost 60 lakh metric tonnes of paddy, and stood second in paddy procurement behind Punjab in the country.

B&E: About a decade ago, Chhattisgarh lacked quality roads and highways which are essential to development of any state. Even the power scenario wasn’t that good. What has your government done to improve the situation?

RS: Chhattisgarh has been a backward state for various historical and geographical reasons. We had crisis in electricity, road, drinking water, housing and other sectors. Breaking the deadlock of over two decades in the power sector, we established two thermal power plants of 500 MW capacity. Simultaneously, we decided to make Chhattisgarh a power hub. At the time of the state’s formation, the total power generation capacity was 1,360 MW, which went up to 1,925 MW by the end of 11th Five Year Plan. In fact, a couple of new power plants, with a collective capacity of 1,500 MW, are nearing completion. Moreover, some more power plants, having total capacity of 30,000 MW, would be installed during the 12th Five Year Plan. We have targeted to contribute more than 30% of the country’s total power generation by the end of the 12th Five Year Plan. The infrastructure is being developed accordingly for the distribution and transmission of the expected capacity of power generation. Through such initiatives, we have already become one of the few states in the country to have 24-hour power supply. Our per consumer electricity consumption has also gone up from 354 units to 1,547 units, which is the highest in the country. As far as roads are concerned, the situation is far better than what it was a decade ago. When the state was formed, the density of roads was 17.5 Kilometer per 100 sq. km., which has now increased to 21.40 km through various efforts. Apart from the general schemes, we have also launched special schemes for villages, which includes Chief Minister Gram Sadak Yojana for human habitats. This scheme does not come under the Pradhan Mantri Gram Sadak Yojana. About 4,100 km long roads have been proposed under this scheme an outlay of Rs.2,000 crore. We wish to touch the national average very soon in the area of road construction.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA