This editorial comes at this crucial juncture when the ruling government and the opposition (that includes some Congress allies in the government too) have locked horns over the entry of foreign private players in the retail segment. The debate was imperative as the retail industry has always been considered as the nervous system of any nation, and this industry has in most of the cases even helped nations revive themselves during bad times. So it was interesting to evaluate the entire debate from an analytical dimension as well. Currently, the organized retail in India is only 2 per cent of the retail industry; clearly, a huge opportunity is waiting to be unleashed. The opportunity can be gauged from the fact that the American organized retail market is 80 per cent of the overall retail market, Thailand is at 40 per cent and China at 20 per cent! If on one hand organised retail is a global reality, then on the other, the Indian middle class has the given power to splurge, making the proposition viable. Then why is there a protest? The fact is that the ongoing nationwide protests against foreign entry in retail are a bit too late, too baseless and based more on a campaign by emotionally charged political parties which lack pragmatism. After allowing FDI everywhere else, why at all these recent dramatics against retail? Every government in the past has made deals and allowed FDI to enter systematically into India without a plan in place to make Indian firms competitive beforehand. We systematically ruined Indian competitiveness; yet, now for publicity, are creating a hullaballoo against the opening up of retail. The fact is, FDI in retail is inevitable. And not that there are no benefits.

If things go right, then the entry of foreign firms in the long run should benefit the overall economy by subsuming farmers, producers of finished goods, creating mass scale employment, increasing government revenue and hopefully cleansing the muck that lies in our storage and distribution. If all falls into place, then organized retail market is then expected to reach approximately $260 billion by 2020. It would augment income levels of all stakeholders to the tune of $35-45 billion a year, new employment generation to the tune of 3-4 million directly and 4-6 million indirectly. With foreign multinationals setting up shop across the country, the government exchequer would likely bloat up by $25-30 billion per year. The Small and Medium Enterprises (SMEs) are likely to prosper too and learn the concepts of enhanced production, higher productivity, assured supply, quick payment and better quality. It will further boost the organized sector growth – a sector that is already growing at an impressive 24 per cent in the last 3 years. The retail sector would also increase the farmers’ income – who at the current stage are on the threshold of marginal living at best or on the verge of committing suicides at the worst. So, of course, it is inevitable for India to allow FDI in retail and the writing on the wall is also very clear. But amongst all this, almost everyone is missing out one moot question, which is fundamental to the success of the Indian retail story.

Amongst other clauses that the government has put, one interesting clause is that these large retailers have to essentially source their supplies from the small and medium enterprises to the tune of 30 percent. But then, this is a universal clause and does not essentially mean that it is the Indian SME segment that is going to benefit from the same. And this is where we have our biggest threat. The question is: would Indians take pride to pick up Indian brands from these stores? The bigger question is: do we have enough Indian brands which can stock the shelves of these monstrous giant outlets? In fact the entire debate of organized retail short-changing the farmers and producers is all baseless, simply because retail survives finally on what sells. And if Indian producers and manufacturers are able to produce brands which are in demand, then they definitely would get shelf space. It is no secret that more than 60 per cent of what Walmart sells in the US is sourced from China. The same holds true for the Tescos and the Carrefours of the world.

The British always prefer home-grown apples over imported ones, especially the Cox variety; and thus the retailers are seen selling the domestic varieties more than the imported varieties. In order to avoid mass resistance, it is general practice that many luxury brands take their goods for finishing to their home nation and then tag the product as a domestic output. In this light, a survey by Harrison Group showed that around 65 per cent of rich American consumers buy ‘domestically made’ products whenever possible. Japanese too prefer the products to be finally processed at local units than to be imported finished goods. This is true for most of the east-Asian nations. To some extent, American companies such as GM and Chrysler were bailed out because they represented Americanism – evident from the way these are used in American movies – of course, apart from other economic reasons. As recent as in August 2011, the South Korean tobacco association campaigned against Japanese products; and in October, Iranian Ayatollah Ali Khamenei asked the government to purchase only domestically produced goods and requested the President to ban foreign items in the nation if the same were being produced by local companies.
 
In fact, with respect to national pride, the best case in point is South Korea. It’s perhaps the country I appreciate the most throughout the world; more than China, more than Japan.When compared to India, it is a dot of a nation, but thanks to their sense of national pride, they have made unprecedented strides in all sectors. South Korean schools promote usage of local-brand purchases among students and a criticism to this is perceived as criticism to the nation. In spite of worldwide success, Nokia and Blackberry are still not able to gain substantial market-share in South Korea and Samsung Electronics dominates the market with over 48 per cent market share. In fact, the Republic of Samsung (as it is popularly called) touches almost every aspect of life in South Korea. Google has merely 20 per cent market share in South Korea while domestic search engines namely Naver and Daum dominate 90 per cent market share. In automobiles, the top car brands are either from Kia or Hyundai or SsangYong, which out-compete the BMWs and Mercs of the world. On the roads of Seoul, spotting an American or a Japanese car is a total rarity – and I am saying this from the personal experience of trying to estimate the ratio! It’s not that the Korean cars look bad or are of bad quality. They look stunning and each one is better than the other. So the fact is that consumers don’t buy their national products by sacrificing quality. The government policies were such that the local manufacturers were given all the support and a very competitive environment to improve quality by competing locally – unlike in India where we opened up our markets like cheats allowing the legacy Ambassadors to compete against the snazzy then post-modern Hondas. It was similar to allowing players to compete in the Olympics without having held good quality national games to nurture talent.     Read More....

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Growing up in a Bengali neighborhood, in Delhi's C.R.Park, meant even at an early age of ten, there were friends who knew the basic difference between capitalism and communism, and had clear-cut preferences! Of course, these preferences would be heavily influenced by their parents! And my father is perhaps the only Indian who did a full fledged Master’s Degree in National Economic Planning from an erstwhile communist nation, the erstwhile East Germany. Needless to say, my first story books were on Lenin's life and I had been totally charmed by him into believing in the positive aspects of communism, and till date remain so. And on the giant world map that hung in front of his study table, the country that I heard and studied most about till I passed out of my school in 1989 was a country many of my readers today aren't even aware of! A country called the Union of Soviet Socialist Republics! Ruled by leaders who followed and most importantly understood to a large extent the ideology of Karl Marx – voted by the BBC as the world’s greatest intellectual of the last millennium – USSR on the world map looked like half of the world; and for Indians then, they were the nation which was there to protect us finally in the eventuality of any real war.

They had given us steel plants, military aircraft and were our biggest friends. And for those of us who used to hate the Americans for their military aid to Pakistan, celebrating every success of USSR was a must! Actually, India still was a distant ally, if one were to take a look at the East European countries that USSR protected and developed like their own nation. Those who have visited the East European regions in those days, would swear that the benevolence of USSR was such that they gave those countries invariably a better standard of living than that enjoyed by the Soviet people. To understand what USSR was in all its glory and magnanimity, one really needed to compare its development with that of USA till 1989! From CIA to topmost economists and historians of that time, all used to agree then that USSR had become 40% of the Americans in terms of standards of living. What it meant in essence was that despite bearing the biggest brunt of the second world war, thereafter investing about 33% of their GDP on defense, taking care of the entire Eastern Europe – from East Germany to Poland – USSR, in a short span of 45 years, had reached the enviable position of being 40% of the American per capita income; but more importantly, absolutely equal, if not superior, as far as military might and space war were concerned. It also meant that it was technologically extremely advanced, just that it had not yet started using that ability to make the consumer’s life more luxurious. But on the streets of USSR you could never spot a malnutritioned child, someone without full access to education or healthcare! That was USSR, the saviour of the world from greedy capitalist aggression, humane in terms of its development priorities and a country that was reason why the world spent 45 years in complete peace; compare that with the next 20 years that we have seen of unbridled capitalist greed driven aggression.

This difference between the far, far more peaceful time post the second world war and now, is a direct result of what happened exactly twenty years back! History was literally rewritten on December 25, 1991, at 7:20 pm when Mikhail Gorbachev – doubted by many as an ideological spy of CIA, if not an actual one – aired his speech announcing his resignation as President of the Soviet Union. A couple of minutes later, the flag of the Soviet Union from Kremlin was replaced with a new tricoloured flag of Russia. And thus, the whole world map was reconstructed with a demise of not only a union, but the demise of a political ideology in itself. The massive Soviet Union that had stood tall for seventy four years acting as a bulwark to the hegemony of United States and its allies, was broken to pieces as Mikhail Gorbachev (the General Secretary or the first secretary of the Communist Party of Soviet Union) could not handle a pro-democratic wave in the streets of Moscow and elsewhere led by Boris Yeltsin – later clearly branded as a fun-loving drunkard devoid of any ideology. Boris Yeltsin aspired to become the President of independent Russia, a country which till then was ruled by a spate of extremely ideologically driven leaders, who, albeit authoritarianism, were committed to not just their country but the globe on the whole.

During Gorbachev’s rule, the iron curtain and strict state control of political, economic and administrative machinery that was beyond all pedestal of criticism was liberalized under the set of reforms Gorbachev named “Perestroika" (restructuring) and "Glasnost" (openness); these were brought into the Soviet system in 1985. Concurrently, the oil prices dropped sharply in 1985 and 1986, thus lowering the country’s revenue and foreign exchange reserves that led to the import crisis of grains, attracting widespread public ire. The dried up revenue stream eventually portended the country’s bankruptcy and the end of the regime! In a nutshell, the bumbling rush to enjoy the glitters of prosperity that the US-led West enjoyed, along with the influence of Yeltsin who was a diehard crusader of democracy, brought the Soviet era to an unfortunate end.

Contrary to the popular belief, and despite him being a key factor in the disintegration of USSR, Gorbachev did try to keep Soviet Union united and bring in a transition through economic, social and cultural reforms – but was thwarted by Yeltsin’s intent who wanted a drastic change to democratization – the pro-West groups keep on hammering the point that it was an inevitable trajectory; yet, one should take lessons from China on how they managed the transition that the Soviet Union couldn’t. Gorbachev concurred with this point as he emphasized again and again on August 21, 1991 (the day the coup was orchestrated) that the Union could be preserved! Even though the coup didn’t last more than two days, it brought in the death knell for the Communist Party and demise of Soviet Union. Gorbachev couldn’t prevent the Soviet Union from being splintered, and history was made.     Read More....

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The cracks are already visible all across Europe. It was first Greece, then Portugal and Italy, with Spain waiting in the queue. The current situation of Europe reminds me of the situation post World War II – wherein most European economies and societies were in complete anarchy! Since the last five years, European nations have been facing major economic setbacks, which have been triggered by political mismanagement and have impacted their entire social structure to a large extent. Today, fallouts of erstwhile strong economies are leading to a cascading effect and sending tremors across the continent!

Amongst all of them, Italy makes an interesting case because as a nation, it has been ranked among the top 25 most developed nations, has one of the best quality-of-life (features among the top ten in the quality-of-life index) and has a per capita GDP at par with other developed nations of the world. This fourth largest European economy is today struggling with a $2.2 trillion debt which is more than 120 per cent of its GDP. In spite of being one of the major manufacturing hubs of the region and boasting of big labels in the fashion and automobile industry, it has miserably failed to keep a balance between expenditure and income. UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP) – two of Italy’s biggest banks – recently collapsed while five other large Italian banks have lost around 30 per cent of their share value since the beginning of 2011. Today, 20 per cent of their GDP is made up by the parallel economy and corruption ails the system. So much so that investors too are now shying away, which is evident from the fact that today Italy ranks lowest among OECD countries in the ‘Ease of Doing Business’ index; for that matter, Italy has seen a fall in all attributes since the last year’s ranking, with a drop of 10 points. The overpaid bureaucracy and corrupt political system have been instrumental in systematically destroying the nation, bit by bit!

The situation in Italy has been worsening with every passing day. More than 500,000 youths (aged less than 30 years) lost jobs between 2009 and 2010, in a nation that once had the lowest unemployment rate (around 8.5 per cent) in the entire Europe. Among this, the worst hit were pregnant women (around 800,000 pregnant women left the job as they were denied medical leaves) and low-cost skilled labourers. This not only led to a drop in family incomes, but also prevented hundreds of parents from sending their children to school. As a result, in the last year, the average school drop-out rate was around 20 per cent! And mind you, in Italy, the first six years of primary education are free.

Italy also fears that in the next few months to come, around one-fourth of the entire population may get trapped in the clutches of poverty. As per official figures released in July 2011, the poverty rate increased by 5 per cent and touched a figure of 29.9 per cent among households of 5 and more members. This is evident from the fact that in order to meet their daily consumption, the household savings rate in Italy has been experiencing a steep decline.

The savings rate that once oscillated between 25 to 34 per cent is now around 8-9 per cent! Needless to state that given the state of the socio-economic condition, societal crime too has increased in the nation. More and more unemployed youth attempted suicide in 2009 and 2011. On an average, 250 additional cases of suicides were reported in Italy every year starting 2009 – and 75 per cent of all cases were attributed to youth who were unemployed or lost their jobs. This is not all; kidnapping, assaults and sexual crime too saw a huge surge – around 25 per cent – since 2009. The cases of drugs abuse, teen pregnancy, drug addiction, alcohol abuse and depression have also seen an unprecedented rise in the last couple of years.

Add to this the problem of demographic replacement. According to a report published by the ISTAT (The Italian National Institute of Statistics) this January, the population growth is into a deep mess. Previously, due to migration, the population growth and the natural dynamic (the gap between birth and death rate) were positive. But then, after a huge protest against immigrants (due to the indigenous population losing jobs) the population growth started to decline. ISTAT reports that since the last four years, the natural dynamic is negative with the death rate surpassing the birth rate by 30,000 units; the average birth rate of women fell down to 1.40 by the end of last year. More and more parents are opting to not produce babies as they fear the high cost of medical and child-care. The government is also incapable of giving incentives for reproduction, as it did earlier, and had to discontinue their “fund for the newly born” scheme.     Read More....

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When I went to China a decade back, what I saw hit me very hard. I felt that if all of us in Delhi were to work 24x7 for 25 years, it would still be tough to convert Delhi into Beijing. That’s the China I was expecting to see when I went there again last month. What I saw instead was an extra 25 years of growth in the last 10 years!!! If ten years back, there were gigantic roads but less cars, this time the roads were filled with American cars; brands which American companies haven’t even cared to launch in India! If the last time I saw high-rise buildings, then this time I saw ten times more of them! If the last time I was amazed with Beijing, then this time I realized that we couldn’t even become Guangzhou if we worked 24x7 for the next 50 years. I believe that every Indian politician must have a visit to China as a mandatory part of his induction process into the Parliament (especially the Communists of India who have also so shamefully cheated their respective states year after year), so that they are firstly aware of how they and their predecessors have cheated this country and secondly to know where a country can reach in no time!

They say now that the Chinese economy has caught up with the American economy. In our book The Great Indian Dream, we had written ten years back about the same concept; and today I write that the Chinese economy has left the American economy far behind. Their products are so undervalued that no kind of calculation can show the real value of their humongous economy! And come to think of it, even a few decades back, China was seen with lot of scepticism owing to their political structure and a gargantuan population which was increasing by the day! But when we look at the nation today we realize that it took China just a few years’ time to give this huge population a purchasing power and lifestyle that even many in the West are deprived of and to create an unfathomable miracle! What China did and is doing now is beyond the imagination of many nations; they created this gigantic economy by systematically planning at every micro level – and most importantly, taking its citizen along this growth path! Today, an average Chinese living in Beijing, or Shanghai is almost as well off as an average American living in New York or an average British living in London! So what exactly did China do?

Amongst a host of other things, China’s opening up of its Iron Curtain and freeing its economy from the shackles of central control in the late 1970s while still retaining its commitment to the poor literally brought about the miracle. Unlike in India, their very carefully planned liberalization allowed the nation to experience rapid strides in growth and above all lifted more than 500 million people out of poverty! Millions of peasants were granted freedom from the massive poverty by being allowed to follow their dreams. This freedom and shackle-free life led to rapid development in the� manufacturing and service sectors in the last 20 years! All this came as a celebration of new hope for Chinese masses and a new beginning of entrepreneurial freedom! The new spirit and the new mission were well supported by increasing investments in infrastructure, education and various other social sectors that symbolized the Chinese rise in world forums and made China one of the most sought-after investment destinations. The freedom from poverty in turn also helped develop the agricultural sector – as the policy of ‘farmers can make their own economic decision’ led to millions of farmers’ poverty cycle being alleviated! The rural household income doubled from 343.4 RMB ($55) in 1978 to 735.7 RMB in 2003. Between 1990 and 2005 the average per capita growth of Chinese economy was a staggering 8.7 per cent (highest among major economies)! The World Bank’s stipulated poverty line of $1 a day in Purchasing Power Parity corresponds to around 2,836 RMB per year (as per 2007 estimate)! As per this definition, China’s proportion of population below poverty line was 64 per cent in 1981; this dropped to an unbelievable 10 per cent by 2004 (India still has more than 40% of its population languishing below the poverty line as per purchasing power parity)! That’s Chinese poverty eradication – an exemplary and remarkable performance which is often quoted as a miracle – and an inspiration and case study for all developing countries across the globe.


The poverty alleviation programs undertaken by the authorities in the last three decades have contoured the modern China that is sparkling with confidence. Today, every Chinese is free to travel to any city to try and make a living there (Of course, cities do have resident permits; holders of such permits get subsidies in health facilities etc). Yet, one cannot find a single, real, poor person in the cities. No beggars, no slums and nobody sleeping on the streets! When poor can migrate freely, cities are bound to have slums if real poverty exists. In China, people come to cities for a better life and not because they were dying in the villages. The programs for poverty alleviation in China are carried out in 592 key counties over and above 74 counties in Tibet. In the distribution of prosperity, the Central and Western counties were the weakest links always. To address the economic gap, the central authorities from 1986 issued subsidized loans to the poor people – that was augmented from 1.05 billion RMB in 1986 to 5.5 billion RMB in 1996! Similarly, the “Food for Work” scheme was another flagship program in China where government spent 33.6 billion RMB between 1986 and 1997. Unlike other parts of the world where most of such programs are littered with corruption, the Chinese were successful in creating productive assets like roads, bridges, dams and other infrastructures across the nation. In the agricultural sector, reforms in agricultural taxes and other fees were implemented to relieve the farmers. In 2000, all the fees were abolished and replaced with a single slab agricultural tax – and later on in March 2004, amidst fear of WTO repercussions, the central government decided to eliminate the agricultural tax completely within the next 5 years. In the same year, more agricultural subsidies were introduced, which was followed by increased spending on rural infrastructure amounting to $25 billion!      Read More....

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A few days back, the world population touched the 7 billion mark. No wonder the debate has gained momentum about how this growing population would put unprecedented pressure on already scare resources. The riots over food (in Egypt), water crisis and deaths due to curable diseases in developing countries have raised concerns over the population explosion. With the 7 billionth living child hailing from a country like India (and some other nations, symbolically chosen by the UN), the blame of populating the world and causing the global crisis is being shifted back to the developing nations and citizens of the Third World! But then, the moot question is – is the earth really not ready for 7 billion people and is nature really stretched for generating resources for all? Are the citizens of developing nations consuming more and is the population expansion in these countries the real reason behind the growing resource crunch?

Last year in August, Obama blamed India and China for the global food prices hike and commented, “As you see more and more demand placed on our food supplies around the world; as folks in China and folks in India start wanting to eat more meat and commodity prices start going up...” In 2008, a Wall Street Journal article concluded how human population growth will get limited with “the rising consumption trends of large developing nations such as China and India.” On hindsight, the answers to the questions I asked one paragraph above are – as often touted by heads of developed states – yes! But then, the analysis reveals a completely different picture.

The stark truth is that the total food grain consumption of an average American is more than 5 times that of an Indian (per capita Indian consumption of food grain is 178 kg per year, while it is 1,046 kg for an American) – this was revealed by the US Department of Agriculture in 2007. According to the same source, an American’s grain consumption per capita per day is thrice as much as an average Chinese’s!

According to WHO, the per capita per day grain consumption figure for the developing countries is a measly 2681 kcal in 1997-99; estimated to be slightly better in 2015 at 2850 kcal – while the developed countries were way ahead with 3380 kcal as far back as in 1997-99, a figure that’s expected to be 3440 kcal in 2015. The most repugnant situation is in sub-Saharan Africa which has a per capita food consumption as low as 2195 kcal; South Asia has a slightly better figure of 2403 kcal per capita per day! With a per capita per year food grain consumption of only 162 kg, Africa is a land of the hungry and destitute, and a showcase for the world to see the plight of the hungry in harsh contrast to the luxury of the developed world!

The entire hypothesis gets more transparent with the fact that the entire shortage and hue and cry over the food crisis is a gift of the West.

Researches by Stockholm International and the Food and Agriculture Organization show that the world is not facing any food crisis; but in reality, the food crisis is due to wastage of food. The total food produced across the world is enough to feed the world comfortably. A 2002 report by FAO substantiates the above hypothesis by stating that across the globe, “agriculture produces 17 per cent more calories per person today than it did 30 years ago, which is enough to provide everyone in the world with at least 2,720 kilocalories (kcal) per person per day...” A Stockholm International reports states that US alone wastes around 30 per cent of food and water that can fulfil the needs of around 500 million people – or shall I say, a figure equal to the population of a country like Singapore or two Botswanas or four Swazilands for that matter. As per the latest study conducted by the Swedish Institute for Food and Biotechnology (in 2011), the total food wasted by consumers in developed nations is equal to the entire food produced in sub-Saharan Africa. For the uninitiated, around 239 million people sleep hungry every night in Sub-Saharan Africa.      Read More....

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After seven odd assassination attempts over the last four decades, it was on October 20, 2011, that one of the most successful Libyan leaders Muammar Gaddafi kissed the most brutal and disgraceful death. Libyan fighters snapped him out of his ‘hole’ and shot him to death. His body, half naked, completely wounded, shambled hairs and bloodied was then delivered as prized possession to Misrata (a city near Sirte) where it was put on public display as a token of victory for the rebels. And with it came an end of the era, which Gaddafi built over 40 years. And with his end, the US again proved its double standards to the world!

Yes Gaddafi was a ruler who made a lot of personal wealth the way perhaps many other rulers in India and many other countries try to do. He ruled with an iron fist but then many other rulers across the world do the same. But here are some facts about Gaddafi. Under his rule and his economic policies, Libya’s human development indicators improved so much that it was ranked as a nation that had highest per capita GDP in Africa, best education index and also an exceptional human development index.

During his rule, women had the best of access to equality in the whole of Arab world. Yes, many people did revolt against him due to his iron fist rule, but that doesn’t necessarily make him the kind of evil that the western media has been trying to portray in the last few months. The ire of the west lies actually in the fact that Gaddafi was the real mastermind behind OPEC that virtually transferred billions of petro dollars from the western coffers to the Arab world. And that is something that the west hasn’t been able to forget or forgive.

Let me state clearly that this is no way an attempt to defend Gaddafi or his iron fist policies. The attempt is to bring forth the American double standards by taking a simple look at the three regimes which have been overthrown in Libya, Egypt and Iraq because there can be nothing more shameful than what US is doing to the entire Middle East and Africa. Not only they have been supporting the dictators with arms but with this act, they have overthrown three most successful regimes of the region to quench their lust for oil.

It is no secret that since decades, US has been a chief supplier of arms to the Middle Eastern countries and especially to those nations where the regime needed it most - to most autocratic and ruthless rulers. In 2009, President Obama has asked Pentagon to sell most advanced weapons to governments of Bahrain, Egypt, Iraq, Jordan, Kuwait, Saudi Arabia, and Tunisia. Between 2006 and 2009 US supplied arms worth $47 billion to Middle Eastern nations, which was 54 per cent of total arms purchased by the region. It was the American weapons that were used in Bahrain, Saudi Arabia, Yemen and Egypt to curb the pro-democratic movements. And why not; it is these countries that collectively provided US with $70 billion through arms trade.

The Obama administration last November struck a deal with King Abdullah of Saudi Arabia wherein Saudi Arabia agreed to purchase arms worth $60 billion over the next 20 years including F-15 fighter aircrafts. This is the same country which is criticized for suppressing women’s rights and discriminating against foreign workers. The nation has also come under international human rights radar for practicing unfair trials and arbitrary detentions.

Similarly, US support to Jordan’s government is omnipresent. Last year it gave aid worth $300 million that the government eventually used for curbing political resistance and violating basic rights. Interestingly, the US had made its tie stronger with Turkmenistan that last year received military aid worth $2 million a jump from $150,000 in 2009. This jump is credited to the fact that it eases the flow of arms into Afghanistan and Pakistan and this is in spite of the fact that the 2009 State Department report of the US itself claimed the regime to be an abuser of human rights. Similar is the case of American relations with Uzbekistan (Sanctions against the brutal regime were lifted in 2006 and the Obama administration is all set to refurbish the relationship).     Read More....

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United States’ finely tuned images of ‘land of opportunity’, ‘land of the free’ and ‘home of the brave’ – all have in recent time received a major jolt with protestors pouring in from all over the country in thousands. It is probably the biggest protest since anti-Vietnam-war demonstrations in the 70s! Finally their police are finding it tough to control their own people. This time they are failing to smoke them out, because the enemy lies in every other house. I wrote about the coming end of capitalism – the way we know it – in 2008 itself as an aftermath of the latest recession that has hit the world due to its blind belief in free market profiteering and was surprised why (despite people around the world, from countries in the Middle East to a laid back country like India, showing a tendency to come out on the streets to press for their rights) people in the western world were delaying coming out in the streets to press for what was their right – the right to stable and dignified living. But finally the streets in the western world are slowly starting to look like streets of Egypt, with thousands out on the streets, protesting against the shameless profiteering of the Wall Street – the symbol of capitalism at its greediest best. It is a movement of the working class – which forms overwhelming majority of the American population – being deprived, ignored and cheated by the greedy corporations, which forms the top one per cent of the population. The growing protests that have spread its tentacles all across the nation indicate a serious problem in the financial districts of the American cities. The conservatism that has put unchecked and deep crony capitalism to almost heavenly pedestal is the root cause for such economic injustice, which has literally forced thousands to come out on the streets to protest. No wonder, the gradual transition of American capitalism to crony capitalism is a result of inherent shortcomings that the financial system and capitalism on the whole has been experiencing since decades.

For the last 30 years, the United States is suffering from erosion of jobs and corporate big shots renouncing the values and spirit that once made America as great as it is perceived today because of short term profits – a classic case of uncontrolled deregulation practised in this crony capitalist system. This system has made a class of minuscule super rich even richer, driven by the Wall Street, but has marginalised the vast majority who faced the albatross of dead end jobs, lay-offs, lack of future and other destruction of the very tenets of any functional democracy!

One of the reasons that led to this out-cry is irresponsible lending by the banks and very high consumer debt. It has eroded the purchasing power of the common man. Lack of consumer demand is halting new investments and preventing new job creation. Obama’s steps to steer the economy to safer ground – mortgage refinancing, healthcare overhaul, student’s loan minimisation programmes – have not seen any breakthrough so far. The reasons are Republican’s opposition and consequent blocking of government’s intervention in the economy.

The Gini coefficient (that measures the income divide in a country) of the US is at par with that of undeveloped countries of Africa like Uganda. In 2010, the top 20 per cent of all Americans owned 49.4 per cent of the nation’s income. The top one per cent of all Americans owned 40 per cent of the total wealth of the US and 24 per cent of all income – most importantly an increase by 31 per cent in the last four decades. Moreover, in these four decades the income of wealthy Americans have increased by 300 per cent while that of middle class has increased by merely 20 per cent and that of lower strata by merely five per cent – thus increasing the Gini coefficient from 39.7 in 1967 to 46.0 in 2005. A report by IMF titled ‘Leveraging Inequality’ published back in December 2010 concluded that ‘long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises’ in the way it did during the Great Depression of 1929 and the Great Recession of 2007. This income gap kept many poor Americans away from schools and proper medical facilities, eventually affecting their productivity and income per se. The executives at the Wall Street enjoyed hefty pay packages and impressive compensation while others had to struggle for a decent salary. Studies show that in 2004 the top 25 highest paid hedge fund managers on Wall Street collectively earned more than the combined income of all of the CEOs from the top 500 large-cap American companies. The employment rate still lingers around 9.1 per cent with 4.5 million people still unemployed, which is at a historically high!

More than 6,000 protestors gathered on October 15, 2011 at Times Square and around 100 were arrested after the protest went violent. The protests have just been gathering steam. Chicago police also arrested more than 150 protestors. Similar phenomena was seen in London too and the police had to debar people from entering Paternoster Square (London Stock Exchange). The protests have crossed the domestic borders and reached almost all the continents of the world. Recently protestors were found displaying their anger outside Reserve Bank of Australia. Similarly, protest rallies have graduated into violent riots in Rome and other European nations and more than 100 protestors were arrested. People also got violent in Japan, Hong Kong and Korea.      Read More....

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This December, I am supposed to be speaking on education in a summit in Africa. As I was researching on what to speak, I realized that while the entire world is leapfrogging to state-of-art technology to impart education to their children, there are a few unfortunate countries – rather, almost an entire continent – still struggling with blackboards and chalk pieces. On the one hand, developed nations are all set to impart knowledge through varied technology platforms, and are modernizing their syllabi to suit the new learning curves; on the other, we have Africa, a continent that has still not been able to teach basic reading, writing and arithmetic to its children. The continent is still lagging behind the rest of the world in school enrollment – evidence to the fact that dramatic global improvements in education haven’t touched the continent yet. In the last 40 years, while most of the world improved its enrolment trends by leaps and bounds, Africa could only showcase discomforting educational profiles – only about half of Africa’s children are enrolled in primary schools, most drop out; and more than 60 per cent of the adults and over 50 per cent of women are rank illiterates!With these kinds of figures, Africa doesn’t stand a chance to harness its human capital, leave aside meeting the challenges of the 21st century. There are 15 countries (Angola, Burkina Faso, Chad, Djibouti, Eritrea, Ethiopia, Guinea, Guinea-Bissau, Liberia, Mali, Mozambique, Niger, Rwanda, Senegal and Somalia) with less than 50 per cent school enrolment rates – these have been targeted by the UN System-wide Special Initiative on Africa, by providing educational support for a ten year period. The focus on these 15 countries has become an imperative as their performance in education has been appalling. Enrolment of boys in these nations ranges from 23 per cent to 49 per cent and for girls the figure ranges from a pathetic 13 per cent to 31 per cent! The plan of action is being prepared separately for each country taking into account the fundamental problems of educational access for each of them. The mesh of problems includes very poor students-to-teacher ratio, unqualified teachers and poor provision of text books. This has engendered poor learning methods and poor learning accomplishments. Further, the apathetic governments are doing little to bridge the rural-urban divide and the gender gap (In a set of 19 African countries, female literacy was found to be below 30 per cent). The penetration of educational institutions in rural areas has been a major blotch – with figures suggesting that more than 80 per cent of children without the access of education live in the rural areas. The widespread HIV (even amongst children) epidemic in mostly rural belts has spelled its curse on education too. Western and Central Africa is the worst hit with food crisis, epidemics, violent conflicts, and natural disasters – all have a cascading effect on enrolment rates. On top of that various social taboos and ills, like early marriages, sexual aggression on women and early pregnancies have contributed to gender disparity on education. The little rise in enrolment rates among children is often offset by poor retention rates and early dropouts.Yes, rising enrolment in higher education lately has been a silver lining for Africa. At present, there are 4 million students pursuing higher education in the continent – that figure can’t be compared when viewed relative to other developing regions in Asia and Latin America. But even among the students pursuing higher education in Africa, there is a low Students’ Course Completion Rate as pursuing education becomes unaffordable to many and hence they drop out. The dropouts are becoming more common because of budget constraints – because unlike in the past, the impoverished African states cannot finance the educational programs anymore; as a result of which, they are increasingly getting dependant on IMF, which puts forward the capitalistic conditions of cost sharing. This is increasing the number of students who need to self-finance themselves! Sensing the opportunity, private players have started mushrooming; with more than 450 ‘private’ colleges and universities in the continent today. In spite of this progress, the millions in need cannot avail of this opportunity as the cost for such programs is beyond their affordability. Besides the high cost of private education, ‘donations’ are also rampant across Africa. Around 90 per cent of parents in Morocco for example pay extra money to get their children admitted to schools.     Read More....

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Planman Technologies
IIPM Contact Info
IIPM History
IIPM Think Tank
IIPM Infrastructure
IIPM Info

IIPM: Selection Process
IIPM: Research and Publications
IIPM MBA Institute India

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