Monday, May 31, 2010

Corruption in India

The following article by Mohan Murti is worth reading: (Courtesy: The Hindu Business Line)

Europeans believe that Indian leaders are too blinded by new wealth and deceit to comprehend that the day will come when the have-nots will hit the streets.

Mohan Murti
A few days ago I was in a panel discussion on mergers and acquisitions in Frankfurt, Germany, organised by Euroforum and The Handelsblatt, one of the most prestigious newspapers in German-speaking Europe.

The other panellists were senior officials of two of the largest carmakers and two top insurance companies — all German multinationals operating in India.

The panel discussion was moderated by a professor from the esteemed European Business School. The hall had an audience that exceeded a hundred well-known European CEOs. I was the only Indian.

After the panel discussion, the floor was open for questions. That was when my “moment of truth” turned into an hour of shame, embarrassment — when the participants fired questions and made remarks on their experiences with the evil of corruption in India.

The awkwardness and humiliation I went through reminded of The Moment of Truth, the popular Anglo-American game. The more questions I answered truthfully, the more the questions get tougher. Tougher here means more embarrassing.

European disquiet

Questions ranged from “Is your nation in a coma?”, the corruption in judiciary, the possible impeachment of a judge, the 2G scam and to the money parked illegally in tax havens.

It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades. The questions and the debate that followed in the panel discussion was indicative of the European disquiet. At the end of the Q&A session, I surmised Europeans perceive India to be at one of those junctures where tripping over the precipice cannot be ruled out.

Let me substantiate this further with what the European media has to say in recent days.

In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”

Banana Republic

One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”

An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.
A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.

“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”

The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”

Blinded by wealth

This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while travelling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.
My father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be Asatyameva Jayete.

Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.

In a way, it seems to have already started with the monstrous and grotesque acts of the Maoists. And, when that rot occurs, not one political turncoat will escape being lynched.
The drumbeats for these rebellions are going to get louder and louder as our leaders refuse to listen to the voices of the people. Eventually, it will lead to a revolution that will spill to streets across the whole of India, I fear.
Perhaps we are the architects of our own misfortune. It is our sab chalta hai (everything goes) attitude that has allowed people to mislead us with impunity. No wonder Aesop said. “We hang the petty thieves and appoint the great ones to high office.”

(The author is former Europe Director, CII, and lives in Cologne, Germany.


Saturday, May 29, 2010

Craig Venter's "Synthetic Cell"

The ever-adventurous Craig Venter is known to announce transformational scientific achievements every now and then. So when he recently claimed that he has created the first ever artificial life, no one was surprised. The details released by him reveal that he and his team designed an artificial genome that was then placed in a natural bacterium where the synthetic DNA ( the genome is a string of DNA) outsmarted the bacterium's DNA and therefore further replication of the bacterium has a synthetic origin.

We may say that the scientist has come up with a semi-synthetic cell. Creation of a totally artificial life may be aeons away or may never occur. Nevertheless this achievement has enormous potential with weighty ethical implications. As we await Venter's next announcement,  ethical ambivalence will continue to punctuate our healthy scepticism about life and its meaning.

Saturday, May 22, 2010

The runway tragedy at Mangalore

The Dubai-Mangalore Boeing 737-800 flight crashlanded in the Mangalore airport on 22nd May resulting in the tragic death of 158 persons. This airport has a tabletop runway and is referred to as a tricky airport by the NewYork Times.

In aviation terminology, this event is called "Runway excursion". Runway excursion is an incident involving only a single aircraft where it makes an inappropriate exit from the runway. This can happen because of pilot error, poor weather, emergency, or a fault with the aircraft. According to statistics compiled by IATA, there are 1.6 runway excursions per million flights in AsiaPacific region. (This compares with 0.36 in North America and 3.85 in Africa.) Nearly one in four air crashes occurs during landing.

Black Box and Voice Recorder are yet to be retrieved. Therefore views on what could have led to the crash continue to be conjectural. But one thing is certain. Aviation authorities need to pay more attention to safety of passengers.

Thursday, May 20, 2010

ICICI Bank's Risk Appetite

Everyone knows that ICICI Bank's appetite for business volume and therefore for risk is humongous. So nobody is surprised that ICICI Bank is keen to take over Bank of Rajasthan (BoR) with the latter's warts and all. BoR is any regulator's nightmare.The quality of its credit portfolio is suspect and its reputation is in tatters. How come ICICI Bank is interested?

BoR has 463 branches, most of them in Rajasthan where ICICI Bank wants to strengthen its footprint. For a bank that has only recently opened its 2.000th branch, acquiring 463 branches at one go is apparently attractive. But agreeing to pay nearly Rs.6.7 crore per branch and 4.8 times BoR's Book Value even before due diligence is completed is indicative more of desperation for business than of eagerness for profits. Topline growth does not guarantee growth in bottomline and in fact is likely to increase the pressure on profitability.

ICICI Bank had earlier taken over Bank of Madura Ltd and Sangli Bank. Therefore ICICI Bank must have the expertise to manage the transition without hassles. It can easily optimise the utility of nearly 4,500 employees of BoR. However it should be conscious that it is walking into a regulatory quagmire.

Tuesday, May 18, 2010

Chinese credibility (contd.)

In the post dated 1st May a comment was made on Chinese government's unwillingness to subscribe to universally accepted ethical system. Thomas Friedman in his column titled "A question from Lydia" appearing in The Hindu Business Line dated 18th May has opined that "our values and ethical systems eventually have to be harmonised as much as our markets". This column ofcourse is not a reference to China in particular.

In an adverse report on quality of Chinese products, AFP states that 2.2 m young Chinese die every year from health problems related to indoor air pollution. The study released by the China Centre for Disease Control and Prevention traces this malady to dangerous indoor pollutants including formaldehyde, benzene, ammonia and radon used indiscriminately by local manufacturers of furniture and building materials.

Wednesday, May 12, 2010

Anand vs Topalov

Viswanathan Anand has retained the World Chess Championship defeating Vasily Topalov. This demonstrates that age does not necessarily blunt the thinking faculty. Prior to the match, Topalov had said that minus 5 was his biggest plus. (He is 35 and Anand 40).

Anand's pleasant manners also indicate that one need not exhibit an overly aggressive and unpleasant countenance to be a winner even in a game like chess which is partly psychological warfare. It is noteworthy that Topalov preferred not to shake hands with or even speak to Anand throughout the twelve games. In one game, when Anand offered a draw, Topalov simply mumbled something and chose to speak through the arbiter. Topalov also espoused the tactless "Sofia Rule" and claimed not to accept any offer of draw. Arrogance does not necessarily beget success.

Sunday, May 09, 2010

Jairam Ramesh, a Chindian ?

Jairam Ramesh, Minister of State for Environment and Forests has done the unpardonable a la Shashi Tharoor. He has criticised our Home Ministry while on a visit to China.

He has discovered that there are two dimensions to India's relationship with China. The Copenhagen spirit dimension is what the minister endorses. He is against the "Huawei headache dimension". According to the overly articulate minister, our Home Ministry's suspicion that possible malware / spyware in imported telecom equipment , particularly from China, could severely threaten national security is "needless" and "paranoid". "We are imagining demons where there are none". Even Pandit Nehru and Krishna Menon would not have been so naive !

The minister has committed a double fault. One, what is the expertise at his command to give a clean chit to Huawei ? Secondly, is a foreign territory the right place to castigate another ministry in the Indian cabinet ?

Saturday, May 01, 2010

Chinese credibility

There is obviously no doubt that China has become the locomotive of world's economic growth. Its huge population and economic infrastructure guarantee its continued dominance in the foreseeable future. However the country seems to be failing miserably on the ethical front. This lapse may prove to be China's undoing in the long run.

Google belatedly took umbrage at Chinese government's alleged connivance with the hackers and also baulked at government - sponsored censorship. Indian government has blacklisted the Chinese telecom equipment manufacturers suspecting embedded spyware. Unethical conduct stifles economic progress. Modern economy and antediluvian ethical paradigm cannot co-exist. Ethical deficit will impoverish the economy sooner or later.

It will be unfortunate if the potential of the most populous economy is thwarted and therefore fails to bloom fully on account of the government's unwillingness to subscribe to universally accepted ethical system. The major loser in the bargain will be China itself.