Author: Ravi Singh

Professional’s Guide to Understanding China

I had been hearing a lot about China for the past many years. Mostly, my understanding was based on the news from US & European media and to some extent from the Indian press. The news, either was dominated by over-optimism of the Chinese Economic miracle or by pessimism of an economic collapse or sometimes by concerns of national security & impending conflicts.

This swinging pendulum often confused me and I am sure many of you will agree. China for long had been a closed country and the cold war paranoia didn’t help. The sudden opening up of the economy has helped Chinese and global economies to establish deep ties. But the gap in understanding Chinese economy, business environment, politics, culture, and society still remains.

India & China are neighbors with the potential for bilateral trade to cross US & China’s in the coming decades. But I feel that people from both sides seem not to have a good grasp of the other. In fact, people from both countries have a far better understanding of US than each other.

China is here to stay. Sooner or later, most professionals will encounter Chinese as potential suppliers, clients, business partners, colleagues & even make a few friends. Although the best way to start understanding a different culture/society is by learning the local language. However, for a lot of working professionals with packed schedules taking a significant time out to learn Mandarin might be a bit difficult.  For the enthusiasts,  better get enrolled in the nearest Confucius Institute.

For the rest, I have shared my own experience of how I went about exploring China. It initially started as a curiosity, but later I became engrossed in learning more and more. It was quite haphazard for me….so, I have given it a bit of structure

China and the World

Books form an important component of this journey as Chinese history, society and political-economic system has evolved very differently. There is a need for depth to understand & analyze any news/information regarding the Middle Kingdom. My only suggestion is to keep an open mind.

Books that I have read:

Dealing with China by Henry Paulson Jr (By far the most comprehensive)

China’s Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies are Changing the Rules of Business by Edward Tse (Focuses on the changes happening in the Chinese Economy)

The Hundred-Year Marathon by Michael Pillsbury

Alibaba’s World by Porter Erisman

The China-Pakistan Axis: Asia’s New Geopolitics by Andrew Small

The Himalayan Face-Off by Shishir Gupta

 

Other Books that I recommend:

One Child  Policy: China’s Radical Social Experiment by Fong Mei

Taiwan’s China Dilemma by Syaru Shirley Lin

Will Africa feed China? by Deborah Brautingam

Apart from books, I really recommend watching Al Jazeera’s documentary series 101 East. There are quite a few episodes on China. The Wired UK documentary on Shenzhen was also interesting.

In addition, you can follow USC US-China Institute & Hudson Institute YouTube Channels. Discussions cover a variety of topic (although they can a bit boring sometimes). You can a shorter version of the above books in video discussions.

You can also follow Chinese state media like CCTV International (for the latest Panda Videos), China People’s Daily & Xinhua. Or get counter perspectives from NTD TV.

There a few issues which will decide the direction China is going to take. It is good  to get an idea to keep yourself up to date with them:

  • China’s Anti-Corruption movement
  • Chinese economic reforms under President Xi Jinping
  • One Belt One Road Initiative
  • Chinese business expansion in African Continent
  • China Debt Bubble (estimated to be 300% of GDP)
  • Overcapacity in Real Estate & Infrastructure
  • Aging Population (Negative impact of One Child Policy)
  • The South China Sea (Potential conflict with its neighbors Philippines, Vietnam and US)
  • The East China Sea (Potential conflict with Japan & US)
  • Indo-China border issue

 

Hope this helps !!

Lessons from the ‘Founder’ of McDonald’s

Recently, I  caught a movie about a 52-year-old  diabetic man, who is suffering from incipient arthritis. He has lost his gall bladder & thyroid gland to previous business battles and is struggling to sell a multispindle milkshake mixer (Multimixer) to restaurant owners across America in the 1950’s.

His name was Ray Kroc and he was the creator of what we know today as the omnipresent McDonald’s.

Although the movie was not well-received it was really interesting to watch the not sugar coated biopic. The movie got me interested in knowing more about this ‘Founder’

There had to be more to the story of the Godfather of the fast food business. So, I got my hands on his autobiography “Grinding It Out” and without a doubt, it is one of the best books that I have read.

It is a must read for budding entrepreneurs and professionals alike.

Book Review - Grinding It Out

 

Here are 6 powerful lessons that you can learn from Ray Kroc’s  life and career :

Persistence

Ray Kroc always believed that it was sheer hardwork and unrelenting perseverance that leads to success.

There is a quote in the movie as well as the book that sums it up –

” Nothing in the world can take place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. “

Persistence also includes your unwavering faith in your moral belief system. Ray Kroc said that his philosophy was one helping his customers, and if he couldn’t sell them by helping them improve their own sales, then he wasn’t doing his job. This philosophy is was carried on by Kroc is what drove the symbiotic relationship between McDonald’s corporate and the franchisees.

Age doesn’t matter

A lot of budding entrepreneurs and professionals want instant success and get frustrated when things don’t turn out the way that they had planned. Ray Kroc was not highly educated, but Grinded it out in the field, juggling multiple jobs as a salesman and a piano player. He grabbed opportunity wherever he could and was happy working hard day and night. Each and every phase in his life prepared him for what was going to be a once a lifetime opportunity. Age didn’t matter to him. He kept on working even when McDonald’s had become a success story and he was finding it difficult to walk. He went on to buy a baseball team “San Diego Padres” at the age of 72 and became a philanthropist.

His success story is an example of how opportunity can come knocking at your door any time. All one has to do is to see it and be ready to take advantage. Life is a roller coaster ride. Success is not an end goal, but an eventuality of the journey itself.

Life is not fair

Ray Kroc had tried and failed on multiple occasions. He was a successful salesman, whether it was selling real estate, paper cups or a weird looking milkshake makers. But he never could really taste success. Whether it was because the collapse of the real estate market or the bad deals that he was forced to make. Ray Kroc’s first wife Ethel was supportive initially but was flabbergasted at his decision to go all in for McDonald’s. Sometimes in your life you will be the only person who believes in something and life will not be easy – Don’t loose sight of your goal.

Learn & Adapt to changes

In the world of business you rarely get ideal situation to work. Ray Kroc was saddled by a deal with the McDonald’s brothers which he thought was unfair. However, he adapted to change his business model into leasing of land for McDonald’s restaurants than just franchising. This idea gave him a distinct advantage when it came to negotiations with franchisees and later on with the McDonald’s brothers

As Ray Kroc shared with MBA students of university of Texas in 1974 –

” We are not in the Hamburger business, we are in the Real Estate business “

They also continuously adapted to changes. One unique thing was how Ray Kroc and his team took ideas from franchisees across the country to create new menu items. The famous Filet-O-Fish, the Big Mac, Egg McMuffin are ideas that came from the franchisees and are served in almost every McDonald’s  in the world.

Ruthless Pragmatism

Maurice “Mac” & Richard “Dick” McDonald’s where the original founders of McDonald’s. But they were content with their original restaurant and afraid of franchising. They were also very conservative in their approach to changes in business. Ray Kroc saw the potential of the speedy service and family-oriented model of the McDonald’s brothers.   But he was saddled with an unfair agreement. After years of negotiating with the brothers unsuccessfully, Kroc took a drastic step to outwit them by gaining control of leasing agreements of all McDonald’s franchises. The McDonald brothers lost control of their corporation and had to settle for $2.7 million.

Although this can be characterized as being nasty, after reading his book I felt that his moves were dictated by his previous unfair agreement with his boss at Lily Cup when Kroc was forced to share his profits on the Multimixer sales with him. This led to the downfall of his last business venture and Kroc never wanted to repeat the mistake. Also, $2.7 million in the 1960’s was a lot of money and I feel that he was fair in this deal. In the end it was best for the business. As Ray Kroc himself said –

” I believe in God, family, and McDonald’s – and in the office, that order is reversed “

Gut feeling matters

Ray Kroc once fired a member of his staff because he didn’t wear the right kind of hat and didn’t keep his shoes shined. He agreed that this kind of decision seemed arbitrary, but it was based on his years of experience in the field. He explains that an astute judgment can seem arbitrary to everyone  but the man who makes it. A lot of his big decisions including the one to go all out and mortgage his home for the McDonald’s franchisee business was based on Gut feeling about an idea. Random & unstructured they might be, but do not ignore your gut feelings.

For all those who missed the film, Check out the Trailer

This article was originally published on YourStory.

From the Dragon’s Heart: The Rise of Chinese Entrepreneurs

The rise of China as a Global power has become are more visible in India today, as Chinese Businesses have made increasing inroads into the Indian market in the past few years. With India becoming the world’s fastest growing economy and poised to continue this path for a decade, Chinese Entrepreneurs are looking to invest in India & bring along their own way of doing business.

In such a scenario, I revisit the book – China’s Disruptors written by Edward Tse in 2015.

The book not only talks about well-known players in India like Alibaba, Xiaomi, Lenevo, Baidu (Search Engine) & Tencent (WeChat) but also not so well known companies like online supermarket Yihaodian, Noah Wealth Management started by Wang Jingo, Real estate giants like Wanda Corporation & Broad Group and China’s very own YouTube – Youku.

A lot of what the author had said about China’s Entrepreneurial culture and Chinese Entrepreneurs is more relevant for the Desi Players today. The reasons are multi-fold:

1. Chinese manufacturers are looking to set-up shop in India: With increasing labor costs in China and anti-dumping duties, major manufacturers of smartphones, solar panels are getting attracted to India’s labor pool and domestic market.

2. Chinese Investors: As Chinese economy slows down, investors are looking for new opportunities in growth. India is right now where China was in 2004 and is the destination to invest for the coming decade.

3. Chinese Internationalisation: Chinese SOEs & Entrepreneurs have been making huge in-roads in the US markets through big-ticket acquisitions. Their strategies will be replicated in India too.

4. Experience of Chinese Counterparts: Lessons from Chinese entrepreneurs who successfully challenged their western counterparts.

What we can learn –

1. A policy focused Forum: India has multiple traditional business forums like NASSCOM, CII & FICCI but it is time, that the new age entrepreneurs of India get a voice of their own in shaping the direction India moving in. The China Entrepreneurs form (CEF) with its serious policy focus even in a restrictive political environment is something we should take inspiration from.

2. Sustainable manufacturing practices: As “Make in India” initiative tries to make us the next manufacturing hub, let’s just take a step back and analyse the mistakes done by China when it comes to the Environment. Polluted cities, un-breathable air and rising healthcare costs are things we can avoid

3. Ditch the Jugaad: The cutthroat competition among Chinese companies made continuous improvement and innovation a necessity to stay ahead of the curve. Sometimes entrepreneurs are even forced to find new opportunities in different areas, as they were never sure of a safe source of constant revenue, which won’t be challenged. Indian traditional businesses have not faced such a challenge before. With increasing Chinese inroads into the market its time to change our approach or perish.

4. Focus on local needs: The author emphasised that the Chinese counterparts were able to outwit their western counterparts because they focused on creation of products & services, which are more in line with local needs rather than just copying the business models of the west. This is how Alibaba was able to beat Ebay and Hengan international challenged the likes of P&G and Kimberly-Clark. However, their Indian counterparts haven’t been so successful in creating such kind of new value-added services and are facing tough competitions – Ola vs Uber, Flipkart & Snapdeal vs Amazon.

What the author missed –

1. IP Laws: The author did mention the lax IP laws in China. But, even giants like Apple are facing issues in getting required help from Chinese Judiciary as they are challenged by little-known startups making knock-offs. In time as Chinese entrepreneurs grow bigger, they will demand better IP Protection. How this shapes up is yet to be seen.

2. The Real-estate Bubble & Overcapacity: China has become infamous for its Ghost Towns. Even private investors are raising alarm bells as the extent of the debt bubble is becomes clearer with estimates saying that the Debt to GDP ratio has crossed 250%. How will this impact the Chinese startup world, is not yet known.

3. Solar Industry: The one sector that the author did not cover was China’s push into Renewable energy – mostly solar PV manufacturing and installations. Chinese giants like Trina, Jinko, Yingli & JA Solar dominate the world PV market. China also added a staggering 34 GW of solar installations in 2016 alone (compared with around 4.8 GW in India). With increasing domestic as well as global for PV Panels, these giants are poised to be major revenue centres of the future.

4. SOEs & the State remain the dominant players: The author’s focus was on the decreasing importance of SOEs in China’s economy. While this was true for the domestic economy, SOEs will play even greater role in China’s outreach to the world. The famous One Belt One Road initiative (OBOR) is primarily driven by SOEs. Almost all major overseas investments were done by SOEs. These include $46 billion in China-Pakistan Economic Corridor and $15 billion mostly in Hambantota & Colombo Ports in Srilanka.

Nonetheless, Edward Tse’s book remains extremely important for Businessman, Policy Makers, Entrepreneurs & Professionals who wish to learn about how China’s disruptors are shaping our future.

The article was originally published on YourStory.

Donald Trump & Abortion rights

How the Trump Administration should approach Abortion Rights

I have been a keen observer of US Politics for quite sometime now. It always reassures me to see that Indian democracy is not the only one which suffers from ‘Policy Paralysis’, thanks to the unending bickering of 2 major national parties. However, ever since Donald Trump got elected the media coverage of what the President is going to do has captured people’s attention. Apart from Trade, Taxes & Obama Care, one major domestic issue on his radar seems to be overturning Roe v. Wade.

Abortion Rights has been one the most divisive issues in US politics. The Pro-life and Pro-Choice camp have been at each other’s throats since the judgment came in 1973. For now, the Democrats and Women’s right groups are worried that POTUS is going to appoint a “pro-life” Supreme Court Judge to overturn the case. Once that happens, individual states will get the rights to enact Abortion Laws, which means that women in quite a few states might loose their reproductive rights. State laws have already contributed to closing a number of abortion clinics thanks to the Planned Parenthood v. Casey case which allowed states to create restrictions as long as they don’t place a substantial obstacle in the path of seeking an abortion. John Oliver previously covered this in detail.

The objective of this article is not to go over the merits or demerits of the law or talk about Women’s rights vs the rights of the state. On the other hand, I have tried to look into this from strictly a “POLICY OBJECTIVE” point of view. Being from a foreign country, who is neither a Democrat nor a Republican, I am giving this a shot.

For many decades now the Right of center has been fighting the courts, Planned Parenthood and Democrats as they feel that abortions are akin to killing basing it on their religious views. The way they have gone about it is using “Dis-incentivizing” policy techniques. This included making abortions difficult or even illegal and putting legal, social, financial & medical hurdles in front of Doctors, Clinics and pregnant women. So, has this strategy worked?

Abortion figures USA

Well, it is very difficult to say. In the past decade (mostly during the Obama Administration), the number of abortions have dropped by 20%.

But at the same time, the number of teenage pregnancies (Age 15-19) have also dropped dramatically. The Atlantic looked into these figures, but came up with multiple reasons: abortion restrictions, Obamacare & access to birth control along with the decreasing teenage pregnancies.

Teenage pregnancies US

The Pro-Lifers should actually be looking at this as a major success. However, that doesn’t seem to be the case as the data is getting lost in partisan & religious politics.

However, for Pro-Lifers, messing up with Roe v. Wade, Obamacare & Planned Parenthood might backfire. If the Republicans actually overturn Roe v. Wade (which for 4 decades was only a political rhetoric), a future Democrat Administration will definitely try to overturn it again. And this time, the other side will make it more difficult for the Republicans to tinker with it. A future Democrat administration will definitely also try to weaken Planned Parenthood v. Casey case if they see the Republicans today getting too extreme under pressure from the Alt-Right & Pro-Life groups.

Getting in to the extremes and forcing laws which many Women see as trampling on their basic rights will negatively impact Republicans in the next election cycle. If the support for #WomensMarch is anything to go by, this a dangerous move.

So, what should Pro-Lifers? – Try Incentivizing policies than Dis-incentivizing

Objective of the Republican Party: To reduce the number of abortions in the US

Details: Convince more women to not undergo an abortions at any point during the pregnancy

Exceptions: Cases of sexual assault or Danger to the mother’s life

Catch: Create a system that can be accepted by Democrats & Women’s right groups

Views on Legality of Abortion – Gallup Survey May 2015

Views on Legality of Abortion – Gallup Survey May 2015

What forces expectant mothers to decide against having her child? Simple – Economics!!

Teenage mothers & many single women simply find it difficult to sustain financially. Breaking the costs down:

 

1)  Cost of deliveryAs Vox news recently found out : Hospital cost $16k , Insurance negotiated price was $8k and they paid $841. This is for a non-complicated birth and for women with insurance.

 What happens to the 11% un-insured women? (Declined from 17% in 2013)

What happens when Obamacare is replaced with something which reduces health insurance coverage? Or if the premiums go up?

2) If the mother is a single woman or working – Day care is absolutely essential. This costs $11,666 per year ($972 a month) on an average.

Who pays for all this?

3) For teenage pregnancies – they might have to choose between keeping a child and going to school/college and getting an education to get the right job.  74% of women who have abortions say that having a baby would interfere with work, school or other responsibilities. Only a few colleges and hardly any school provide these facilities.

The only way the Pro-Lifers can incentivize women to not have an abortion is by reducing the financial burden.

In the replacement for Obamacare, add compulsory low premium insurance for expectant mothers. The premium payments can also be deferred for a few years down the line giving the new mothers a financial breather.

The Pro-Lifers can also push for legislations to give subsidies to mothers having children below the age of 10 so that they could afford better day care centres. This will not only help the existing mothers but all also the day care industry as a whole, by increasing business and improving standards.

To reduce the abortions by teenagers in schools and college, make it compulsory for schools and colleges to tie-up with a day care centre and provide free child support to the female students.

If you want to reduce the number of unwanted pregnancies – just make contraception more affordable and available. This argument actually helps the “Family / Pro-Life” Groups who wants to reduce the number of single mothers. Reducing teenage pregnancies by better access to contraception is a no-brainer.

One last thing. Rather than dismantling Planned Parenthood, why not use the well-established institution with a nationwide network to actually implement the “Incentivizing Policy”.

Something to think about.

Full disclosure: I am not an American. Personally, I feel that the State should not interfere in such issues.

The book that I could never read

It’s Jan 19th and people are talking about Kashmir again. But today, the media will not be focusing on the ON & OFF protests in the valley, but on one of the largest internally displaced persons (IDP) group in India.

I took this opportunity to revisit a book that I had got my hands on a few years ago – Our Moon has Blood Clots by Rahul Pandita.

The book is about the exodus of Kashmiri Pandits who were Hindu minority in a Muslim majority Kashmir in India. The author himself is a Kashmiri Pandit and has clearly written the book from his heart. The book has multiple stories woven within the narrative of the 14 year old author who is forced to leave his home after terrorism in Kashmir picks up and morphs into ethnic cleansing.

The author describes the event on the tragic night of Jan 19, 1990 in detail. He then goes into parallel storylines of what was happening across Kashmir. He mentions stories of his family members, friends and acquaintances who are all warped into this. He also delves into the history of past atrocities against Kashmiri Pandits.

What makes the book difficult to read are the short personal stories that the author gathered from his years of interacting with the community. None of it ends well. There is violence, death, rape & betrayal of the worst kind. It signified the end of Kashmiriyat as the brotherhood that had earlier bound Kashmir together, had all but vanished.

Truth be told, I never had the courage to completely read this book. I just wasn’t able to read anymore. The pain seemed very real to me and I couldn’t bear myself to complete the book as I knew how it all ends.

As per the Internally Displaced Monitoring Centre (IDMC), more than 1 lac Kashmiri Pandits are living in and around New Delhi and 2.4 lac in Jammu city. The community has struggled a lot since the exodus with protecting their culture & language. Lack of recognition by the media, recognition as IDPs and little political backing has resulted in the community losing their claim in the ongoing Kashmiri conundrum. Over the past few years, Kashmiri Pandits have tried to come back to Kashmir, with some backing from the state. But unfortunately, this has been met with protests from politicians in the valley as well as the Pandits. The Pandits are demanding better security and more economic assistance from the rehabilitation package. The valley politicians on the other hand do not want them to live in “Exclusive colonies” but come live together as Pandits are also part of the “motherland”. However, no valley politician has been able to give security guarantees to the Pandits. With ongoing protests in the valley, many are refusing to go back to work.

I actually agree with the author that the media and the elites of India have forgotten the community. The community has been left to fend for itself by the government and the people of India and especially Kashmir. Even writing about all this here makes me disheartened. Because, I know…deep down, there is very little hope that the Kashmiri Pandits will ever be able to go back home.

Life Lessons : MBA from an Indian B- School

I completed my MBA (Major in Marketing) in the year 2015. Overall it was an enriching experience and one of the best 2 years of my life. However, it was not a carefree and reckless ride like grad school. When I look back, there is quite a lot that I learnt – Here are the 12 life lessons I learnt while doing my MBA.

  1. B-school is probably your last chance to live a slightly carefree college life. It will start and end before you might even realise. Whatever the stress or any number of assignments you have, enjoy this phase. It’s not gonna come back. Life is going to get a way lot tougher post MBA.
  2. You might be a big shot before joining B-school, but it might not sustain you when you land there. You will meet a lot of people who are smarter and more talented than you. Be humble!
  3. You might become a big shot in your B-School, but it might not sustain once you get back out to the big bad corporate world. Competition out there is way more cut throat. People who might have been nobodies in B-school might get phenomenal success. It depends upon which path you choose. Plan carefully when you are in college. That’s probably the rare time you will get to contemplate and create a tentative career plan.
  4. You might not get your dream job or dream company. Don’t loose hope. A lot of your friends will probably end up leaving their dream job/company within a year.
  5. B-school is not like grad school when it comes to making friends. In the load of classes, presentations, companies and assignments – there is less time to form a bond between people. But, if you are really lucky you might get a gang of mature friends who will last a lifetime.
  6. Networking is not what they say it is. People interaction is supposed to be natural. Ultimately it is about human relationship. Don’t be pushy, desperate or fake!!
  7. No matter what is happening in your life – Family issues, a breakup or even financial troubles. When you are in a B-school you have to keep yourself going, be calm & composed and always have a smile on your face. Don’t let anything affect your work. Believe me, this is just training you for the corporate world.
  8. Don’t over burden yourself with a ton of academic and extra-curricular activities. You might come across some of your friends becoming multi-tasking experts – try and avoid going that path. Choose what you want to do and do it well. Don’t try to do everything or else you will burnout
  9. People judge you by your summer internship company & your final placement company. Don’t let it get over your head. As I mentioned before – Be humble!!
  10. Try not to be arrogant with your juniors – in B-school and when you go out. Earn their respect.
  11. Try to keep in touch (not just WhatsApp) with atleast some of your batchmates and seniors. They are your actual network.
  12. Finally, at the end of the day managing your work life balance should take priority. Remember, the objective is not just to earn a fat paycheque. Your health, Family & friends matter – A lot more that you think and you will realise eventually.

 

This article was also published on YourStory.

CPEC – Real cost of Energy projects

Over the past year, many Pakistani, Indian, Chinese and Western experts have given their perspectives on the China-Pakistan Economic Corridor. It is a game changer for some and a strategic concern for others.

I have tried to analyze CPEC by removing all jingoistic and over the top claims from both sides of the border. I will try to minimize repetition, instead take a slightly different perspective and use an Indian example to put my point through. I have also tried to use Pakistani media and government sources to avoid appearing biased.

Positives:

CPEC is a significant investment into a country which urgently needs foreign investments in Energy (Due to consistent power cuts) & infrastructure development. Already China accounts almost half of the total FDI of $1.2 billion for the year 2015–16 and this is bound to increase. Foreign Investment is a far better way to develop the economy than depending on IMF loans.

All details of projects have already been mentioned below. For the Chinese, this new route through gives them overland access to the Persian Gulf through an allied country. Not only will it reduce costs but also act as a security bulwark for oil supplies to the Red Dragon of future conflicts. For Pakistan, this is a major win as it badly needs to develop its infrastructure. The project plan seems to be ambitious and good for Pakistan’s overall economic development. With increasing security concerns being raised by western nations and its neighbors, this surely comes as a boon.in-case

Negatives :

This is how the CPEC looks like as per the Planning commission of Pakistan

Eastern Route – There is a lot of internal political opposition as most of the projects seem to be concentrated in the Punjab province. I think eventually there will be some consensus on this. But, there will be delays. Most of the expansion work is actually happening on Karachi port rather than Gwadar.

The Western Road Way through Balochistan – The western route goes through the treacherous terrains of Balochistan. Apart from the issue of terrorism, the road connecting it to Gwadar has already been converted into single lane rather than the earlier planned six-lane highway.

Over Dependence on China – As per the Prime minister’s office, FDI in Pakistan has been declining over the last decade. China is expected to replace all other investors single-handedly. This combined with reports of Chinese companies planning to bring their own labor has caused some unease among Pakistani economists and planners.

The Energy Projects:

Most of the power projects under CPEC are going to be coal based power plants(investments worth $5.8 billion) which includes a1320 MW power plant in the Thar-I phase project. There is going to be another 1320 MW power plant under Port Qasim Power Project in Sindh . Also, CPEC includes $2.5 billion of investments in liquid natural gas pipeline from Gwadar to Nawabshah. The Quaid-e-Azam Solar Park is up and running, with expansion plans to 1000MW. This is the only solar power project and it has started generating power. Apart from this 100MW of energy is expected to be generated through wind energy.

This is expected to reduce the 5hrs power shortfall that Pakistani cities are facing today.

However, there is very little detail available on the specifics of these projects. Primarily, these were signed as bilateral agreements between Pakistan & China. The bidding process will be limited to Chinese Companies. This is also the first time that Pakistan is going to intake so much foreign capital in a short duration. The projects are funded through loans from China’s Exim Bank.

I tried to find out if India had any similar experiences with sudden large-scale foreign investments in Energy projects. And I came up with the (in-) famous Dabhol Power plant.

Case – Dabhol Power Plant (India):

It was the year 1992 when India had recently come out of a Balance of Payment crisis and was opening its economy through Structured Adjustment Plan under the guidance of IMF. Pakistan today is in a similar situation…only it has become much worse after multiple bailouts.

Dabhol is a place near Mumbai. The now infamously defunct Enron, GE and Bechtel (All US based companies) wanted to invest in India and decided to construct a power plant. The plant was to be Naptha & LNG based. From the beginning, the project was mired in controversy due to lack of transparency in the power purchase agreement. There were many allegations of corruption too. In 2000, when the plant started, the State electricity board ended up paying a per-unit rate of Rs. 4.67 when it was charging Rs.1.89 per unit to its customer. That’s a loss of Rs. 2.78/unit of electricity sold…for a 2000 MW plant, which was one of the largest power plants in the country at that time.

Over time Enron collapsed and the plant continued to be in shambles, still producing electricity and accumulating debt. The investment was not backed by any sovereign guarantees, but state-owned power companies had to take over. To this day, the plant is operating at a loss and accumulated thousand of crores in debt. The Indian government is still planning to revive the plant.

This case should have been the baseline for Pakistani Economic planners. Most of the power plants are going to coal based. The issue is not just environmental, it’s also economic. Although Pakistan has untapped coal reserves in the Thar desert, it might still have to import coal – Adding to the debt cycle. On the other hand, China is planning to reduce its dependence on coal to control pollution in its cities.

And more importantly, there is a lack of transparency in the power purchase agreement. Pakistan seems to have given sovereign guarantees on Chinese investments. So, even when the plants fail or produce unaffordable electricity, Pakistani Government will be ultimately responsible to pay the expected profits to Chinese companies through a contractual obligation. Until Pakistan is sure that they can make the plants profitable, this is an extremely dicey move.

Somehow, this issue has not received much attention in Pakistan (and even in India or the world) and the discussion has been dominated by issues in Balochistan, Pakistani opposition parties & Indian opposition. For China, this is a crucial part of One Belt One Road (OBOR) initiative. There is no doubt that Chinese companies are more than capable of executing big-ticket infrastructure projects overseas. Already, there has been concerns on the financial viability of some such projects – like the Srilankan Hambantota Port which has led to protests in the island. Hoping that this scenario is given due importance before Pakistan is unable to go back on its commitments.

Joy of Women Entrepreneurs

I recently watched the movie Joy on Hotstar. I had previously seen the trailer of the movie but didn’t pay any attention. I wasn’t really impressed by the trailer and knew nothing about the story. In addition, this movie was not that highly rated. Rotten Tomatoes gave this a review rating of 6.3/10 only.

Luckily I got some free time on a cold Sunday evening and decided to check this movie out. And I was in for a surprise.

The movie is based on the struggles of Joy Mangano, the inventor of the now famous Miracle Mop. A 33-year-old divorced mother of 2, working as a booking clerk in Eastern Airlines. She is in a dead-end job, living with her divorced parents and children. Her husband and thrice married father end up living in the basement with her. She is broke, frustrated and has almost given up on all her dreams. The only person is Joy’s grandmother who keeps her hopes up.

Inspite of a not so supportive family and no money, Joy gets unexpected help from her ex-husband, her longtime friend and a TV executive who places faith in her

Although parts of the movie has been changed, overall the story is very inspiring. It clearly deserved higher ratings than it got from reviewers

Joy Mangano

Joy Mangano

Here’s the original miracle mop infomercial with Joy Mangano on QVC :

This was a rare movie on a real woman entrepreneur. I think this might just be only movie of its kind.

There was a scene in the movie near the end, where Jennifer Lawrence as Joy Mangano is shown to have become a matriarch of the business and is investing in other women inventors/entrepreneurs. She says to a new mother who had come to show her invention, that she knows what its like to sit on the other side of the table. That scene stayed with me for a long time as it showed what is missing in the startup-world.

Apart from the western world, women are choosing the entrepreneurial struggles increasingly in China & India. But in India & to some extent in the west, there has always been a lack of existing women entrepreneurs acting as investors in other women entrepreneurs.

A bloomberg article, threw light on the changing dynamics in China where women are dominating the Venture Capital Industry. This includes the largest VC firmed with capital of over $500 million – H Capital founded by Chen Xiaohong

In the US, women make up about 10% of the investing partners and only half of the firms have any women as partners. China, on the other hand, has 17% female investing partners and more than 50% of the VC firms have at least one female partner. More than a quarter of all entrepreneurs in China are women, and 55% of new Internet companies are started up by them according to the Chinese Government. China is showing the example we should follow the lessons learnt from their experience. And this in country where sections of the society consider single women above the age of 27 as “Leftover women

The situation in India is extremely bad. All the major VC firms combined, I think there are only 2…..and I mean really, only 2 women investing partners. One is Vani Kola from Kalaari Capital and other is Bharati Jacob from Seedfund.

There are many reasons. There are fewer number of women in startups. women entrepreneurs who have exited successfully is also very low. Even women corporate executives with deeper pockets have shied away from entering into the VC world. Although, India is considered to be an entrepreneurial country, major women players have traditionally shied away from risk taking through Angel & VC investments in the startup world.

Feminist Movement & Reservations in India

Image source : oxford human rights hub 

Affirmative Action (Reservations) is a perfectly legal way to help disadvantaged groups who have historically suffered some or the other form of discrimination. The basic aim of reservations is to economically empower the disadvantaged groups so that they have a level playing field. Ideally, Reservations are supposed to be reviewed every few years. As the disadvantaged group gains, the reservation quota should reduce. This is supposed to based on NSSO Surveys, Census data (currently not captured), HRD Ministry & most importantly in case of women, from the National Commission for Women (NCW) .

However, in India this particular system of treating Reservations strictly as a policy tool is broken. Affirmative action, time and again has been used for politics. No policy rethink has happened on the effectiveness of the exiting affirmative actions and how much have succeeded in eradicating discrimination against target groups.

Women in most part of world history have suffered discrimination and denied opportunities. Reservations could be considered a possible solution to correct this.

In India – 1/3rd of the seats in all local bodies are reserved for women as per constitutional amendments passed in 1993. Over the years, 16 states have increased this quota to 50% in panchayati raj institutions. In addition some states allow women reservations in Education for eg: Maharashtra gives 30% seat reservations in Govt institutes.

So, has reservations helped women to break a few glass ceilings. Honestly, there has been little research to prove policy effectiveness. In local bodies, there has been constant allegations that most of the seats reserved for women are contested and won by wives/female relatives of popular politicians of the area. Reservations in institutes might have helped but there is hardly any collated data. Although I can say that, it is good to see more women participation in local governance.

Feminists in India as well as all(including Men) policymakers need to look at reservations dispassionately. Providing reservations to half the population might not be the best strategy, except in certain areas like education. When the goal is to strive for social change – reservations can only a small part of the strategy and not a panacea for all ills.

The feminist movement in India is also badly divided, with far fewer grass roots organisations than needed, especially in Rural India where women have traditionally faced more discriminations. There is great divisions across political lines, lack of collaborations among organisations and lack of agreement of policies. Feminists have also been slow to include ‘Men’ who are supportive of the movement into their fold. Many detractors have also used reservations as a plank to bash feminists.

As a senior female professor had told me – There is still a perception of feminists being “Home breakers” in rural India, which was shocking to me. And all this has hurt the feminist movement.

Ultimately it is about economic empowerment & equal opportunities. Property inheritance by the daughter and increasing participation in political parties could be other ways. The NCW needs to be given more powers to investigate or even prosecute certain cases. An aware women “vote bank” which fights misogyny at all levels might help in the long run more than just reservations.

But the jury is still out on female reservations and the feminists in India need to think hard & smart on this.

Book Review : The Kaoboys of R&AW

I was introduced to Late B. Raman sir by the website: South Asia Analysis Group

It’s a non-profit think-tank which writes India’s foreign relations, military and intelligence aspects. B. Raman was a regular contributor and his insights were very informative.

His book on Research & Analysis Wing was preceded by a book on Intelligence Bureau of India by Late Maloy Krishna Dhar. This book was a treasure trove of information on India’s contemporary political & intelligence history. It broke a lot of myths surrounding intelligence services of India. So, when the first insider account on R&AW came out – I was super excited

The book begins with an anecdote of his not so cordial interactions with the US State Department. This is the day he is retiring from R&AW. He mentions a particular US State department official within the first few pages who has caused trouble for India in Kashmir. That was a cheeky reference to the famous Robin Raphel.

The book begins with a flashback of him being positioned in Burma when he had joined IB. This was before R&AW was formed. His candid account of Indo-Burmese relations is rare.

R&AW was still a baby in 1971 and was trying to find its feet. The 1971 war gave a chance to the agency to prove its credentials. B Raman goes into detail about R&AWs work in the heady days of the crisis and how it contributed to India;s decisive win. The founding of R&AW’s Signal intelligence capabilities, PSYWAR division took place during this time.

The book follows events in independent India history – Bangladesh, Punjab – Khalistan, North-East & Srilankan insurgencies and the assassination of 2 Indian Prime Ministers. He has dedicated chapters on each PM from 1968 to 1994 and how they interacted with the agency.

The Indo-Iran-French intelligence co-operation to monitor the activities of the US in the Indian ocean was something completely new to me.

Throughout the book, B. Raman manages to maintain a neutral tone and still gives enough meat to keep any student of international relations engaged. He has not mentioned any intelligence trade-crafts or any operational aspect of his work. The book does include some anecdotes on the foibles of a few politicians and bureaucrats.

The author mentioned some details of his brief involvement as the Bofors scam was breaking. Although I was a bit disappointed when he restricted his experience during the Emergency to R.N. Kao’s attempts to keep R&AW away from any domestic involvement. In addition, the book does not cover KGB’s involvement in the Indian subcontinent or Indo-Russian relations in detail.

In the end, he mentions something profound:

Does India have the intelligence agency it needs? – NO.

Does India have the intelligence agency it deserves? – More than it deserves.

For long people as well as the political class has not demanded a more robust agency with the capabilities to deal with 21st-century threats. R&AW to this day is not covered by any Gov of India Act. Although few politicians have tried to bring oversight to R&AW, not many have paid attention. R&AW has been mostly delivered what it was created for, but ignorance for long has created chinks in its armor. As per the author, India can ignore it at its own peril.

My verdict: 4/5 star. A must read for anyone interested in intelligence services or Indian foreign policy.

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