Page 2 of 2

Geopolitical Uncertainty and Business

The end of Cold War saw opening up of a lot of emerging markets, where multi-national corporations found tremendous opportunities to expand their businesses and generate profits. A thought was born out of the view that free markets would see an increase in national growth which in turn would lead to stable governments. Yet, at the turn of century, events such as 9/11 terror attacks and the rise of governments in the nations across the globe with conflicting national and trade agendas led to a muddy geopolitical scenario where every state has both friendly as well as unfavorable views with one another. In today’s scenario, a “global business player” has not only to take into account the economic cycles but also the geopolitical situations that may arise in future which will affect its business. The large corporations having businesses across various nations slowly got incorporated into the foreign policies of different nations. The nations began to look after the interests of these corporations which sometimes led to geopolitical conflicts.

Let us look into the following examples. Today, the worst humanitarian crisis that the world is facing is the Syrian conflict. What started in 2011, as mere public protests slowly turned into a civil war and ultimately led to the rise of one of the most dreaded terror outfit, ISIS. But contrary to popular beliefs, the Syrian conflict has its roots in not only against the poor governance of the Assad family but also to control the energy supply(read oil and natural gas supply) to Europe. As of now, the main supplier of crude oil and natural gas to Europe is Gazprom, a state-controlled Russian company. But Gazprom has turned out to be an unreliable partner for the EU. The most recent case being the dispute between Ukrainian oil and gas company Naftohaz Ukrayiny and Gazprom during the Crimean crisis. As a result, the EU started to look for alternative options for its energy needs. Under the patronage of the US, in 2009, Qatar put forward a plan to supply gas to the EU by building a pipeline from the Persian Gulf via Saudi Arabia, Jordan, Syria and Turkey. At the same time, Iran, which has one of the largest proven gas reserves, formed its own plan to export gas to the EU via Iraq, Syria and then under the Mediterranean Sea to Greece. Russia, which traditionally has closer ties to Iran, pressurized the Assad government to reject the Qatari plan and sign the Iranian plan in 2012. The proposed pipeline was to be completed by 2016, which if completed would have given Gazprom and National Iranian Oil Company, a state-owned corporation under the Ministry of Petroleum of Iran, control of the whole of the European market. To counter this proposal and to safeguard the economic interests of their national companies, the Gulf countries along with the backing of Western powers, stirred trouble in the Syrian society by providing arms and financial assistance to the rival groups of the Syrian government with the main objective of toppling the Assad government and to place a friendlier “democratic” party in power, which would agree to the Qatari plan.

Let us look at another example. The United States had severed diplomatic relations with Taiwan under the “One China” policy of the People’s Republic of China. After winning the US presidential election, Donald J Trump shocked the Chinese government by becoming the first US president or president-elect to speak to a leader of Taiwan when he spoke to Tsai Ying-wen, the president of Taiwan. The call was first in more than 30 years. Naturally, China is rattled by this move. If Washington pursues to increase diplomatic relations with Taiwan, China can take a number of steps to prevent the island nation from declaring independence. One such move could be to restrict Chinese investments in Taiwan. Also, China accounts for 26% of overall Taiwan’s exports, which is the largest. If in future, there arises any geopolitical instability, Taiwanese companies would be badly hurt.

There are many such instances across the globe where geopolitical uncertainty and economic policies are intertwined such as the dispute in the South China Sea, political turmoil in Africa etc. As such, a truly global business corporation has to take into account the geopolitical scenarios which could play out in the near future to promote its business.

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.

Page 2 of 2

Powered by WordPress & Theme by Anders Norén