Vinayaka Chavithi Panduga

Happy Vinayaka Chavithi

Atanu had nice post on Ganapati along with a link to Shashi Tharoor's article on Ganasha. Enjoy. And don't forget those yammy ondrallu.

Don’t Look for an Economic Mahatma

A Classic Indian Solution?

Amit Verma writes in TCS (via The Acorn) about transforming Indian mentality landscape, presumably about economic matters. While his diagnosis is valid, his solution, which he concurs with Gaurav Sabnis and Nitin Pai, that of waiting for an economic Mahatma is a simplistic one.

It’s simplistic because one, there can never be an economic “Mahatma”. I can’t imagine someone who says “being rich is glorious” or a Milton Freidman unfettered free market (who, by the way, advised Nehru to follow a different economic model in early 50s – unfortunately Nehru chose to listen to the recently deceased John Gilbraith) ever conferred a Mahatma status. The person who comes closest to an economic Mahatma was an 18th century Scotsman. The current so-called socially liberal institutions will not allow it. Even the messages of original Mahatma with regards to social, such as on untouchability and religious tolerance, and economic, such village economic microcosms, matters were, and continue to be, largely ignored.

And two, creating sound market and incentive based economics policy, unlike independence from imperialism, is not a one shot deal. It is continuum. Sure it would have helped to an Alexander Hamilton to set the right economic framework soon after independence (while Indian constitution framers studied US constitution, which was supremely important, they seems to have ignored Federalist Papers where the meat of US economic frame work lies). But one Nehru or Mao or Mugabe can destroy decades of established economic framework in just few short years. Getting the right economic environment is not just for one time prime minister, but it is an on going process, as the Japanese and, especially, Europeans societies and leaders have show so vividly in recent decades.

Borrowing and extending one of Peter Drucker’s management theories – that a successful company is one that does not rely on extraordinarily talented people to function, but rather is one that rely on ordinary people to be productive and be successful - an economically successful country can not rely on a Mahatma to make it productive. It needs ordinary policy makers who can make incremental policy changes to increase incentives for productive economic behaviour and disincentive for bad ones. It is needs ordinary entrepreneurial people who are willing to take risks. It needs ordinary bureaucracy to enforce the policy incentives. India has all three ordinary groups that are getting larger and increasingly more successful.

I guess I am more sanguine about the state of Indian economy in the long term. And I don’t wish for an economic Mahatma. I agree we have long way to go, but a Mahatma can do more harm than good economically.

Latest Chinese Export!

Can you tell which one is fake by looking at them?





Well the bottom one is $640 a bottle real Italian red and the top one is $100 a bottle fake Chinese red. Everything of the top one is fake - the bottle, the label, and the wine.

But here is the kicker...

"Claudio Gufoni, a 59-year-old wine enthusiast who lives in Santa Croce sull'Arno, east of Pisa, was the client who was duped into buying more than 100 bottles of the bogus Sassicaia. Although prosecutors confiscated most of his fake bottles as evidence, a few were left behind. Mr. Gufoni says he now serves them to unsuspecting guests: "No one has noticed the difference." WSJ (Subscription required)

Isn't that the dirty little secret of Robert Parker's world. Not many people can actually tell the difference between wines (at least the decent ones!). It's all in your head (or is it your mouth)?

How Jihadi Groups Are Taking Over Bangladesh Economy

Selig Harrison, a long time Washington Post South Asia correspondent, writes in an op-ed in WP on how Islamic jihadi groups with the support of Pak ISI and Bangla intelligence agencies are turning Bangladesh into terrorists haven. While the current PM Khalida Zia turns a blind eye to jihadi groups to stay in power (kind of like what DMK is doing in Tamil Nadu and Communists are doing in Kerala), Jamaat-e-Islami, a jihadi political party, has created not only terror infrastructure but also spreading its hands into the entire economy.

"In return for the votes in Parliament needed to form a coalition government, Prime Minister Khaleda Zia has looked the other way as the Jamaat has systematically filled sensitive civil service, police, intelligence and military posts with its sympathizers, who have in turn looked the other way as Jamaat-sponsored guerrilla squads patterned after the Taliban have operated with increasing impunity in many rural and urban areas.

To the dismay of her business supporters, the prime minister gave the coveted post of industries minister to Matiur Rahman Nizami, a high-ranking Jamaat official who has helped promote the growth of a Jamaat economic empire that embraces banking, insurance, trucking, pharmaceutical manufacturing, department stores, newspapers and TV stations. A study last year by a leading Bangladeshi economist showed that the "fundamentalist sector of the economy" earns annual profits of some $1.2 billion." Link

No wonder they don't want a lucrative gas pipeline from Myanmar to India and don't want anything to do with $3 billion investment that Tata contemplated. And the jihadis are laying a ground work for winning the next democratic(?) elections. US is again turning a blind eye to the developing situation because Pak's ISI has a lead role in nurturing Jamaat. And we all know how US wants "proof" that the ISI is nothing more than a day-care center for the children of Pak Armed forces.

US analysts always talk about not allowing jihadi access to nuclear weapons and oil. Now the jihadis will soon have access to gas – and lots of it. With ISI in charge of these jihadis, nuclear weapons are no problem. A deadly combo is in the making.

Saudi NRI Funded Mumbai Blasts

TOI reports anti-terror squad officials’ investigation revealed that Saudi based NRI funneled Rs. 1.2 Crores to recruit, practice, and bomb Mumbai commuter trains that killed 200 people on July 11, 2006.

The 53 that were killed at Gateway of India and Mumbadevi bomb explosions were also part of the same program. LeT, official terror group of Pak's Army and ISI, used local Muslim group, SIMI, to plan and implement the Mumbai carnage.

"The modus was simple. The planters waited for the chief co-ordinator to give a bag and a 'go-ahead' signal following which they walked up to a platform and boarded a train. While one went in and kept the bag, the others provided a camouflage.

The trio got down just as the train left the platform and returned to the subway, where they picked up the next bag. Four bags were planted on platforms 3 and 4 and three on platforms 1 and 2. The four then escaped from the subway, police said." Link

I am sure Manmohan and Shivraj Patil has something to say about this.

Ease of Doing Business - Comparison

World Bank study on easy of doing business for 2006 is out. And India is still at the bottom of the pile. The report is aptly named as Doing Business in 2006: Creating Jobs. Link

Here is comparison between #116 India and #1 New Zealand. The differences are obvious. While there many economic factors that impact employment, ease of doing business - starting a new business, closing a failed business, cost and ease of hiring and firing, and trading across borders - has a direct impact on job creation in a economy. And India is moving a glacial pace with even the talk of reform shut out recently. Expect no change in any of these factors for three more years until a new government comes in.

(Click to enlarge)