Sunday, May 5, 2013

"It is one of the ideas I am most proud of"

Dr. Li Ka-Shing doesn’t really need an introduction. With a net worth of $25.5 billion, the Hong Kong business magnate has built one of the greatest business empires. In this interview, he speaks about the goals of his charitable giving and the role of his gifts in transforming lives through learning

Can we reflect a bit on the idea behind the Li Ka-Shing Foundation? It would be great to have some insight regarding your motivation to set up an independent foundation, and perhaps about the particular aims that the foundation’s projects have tried to further. You have referred to it in the past as your ‘third son’ Li Ka-Shing (LKS): It is one of the ideas I am most proud of. Maybe even the idea I am most proud of. I had made donations before [the Foundation was set up in 1980]and giving had been part of my life ever since my companies had achieved enduring success. But, I was worked over by thoughts about what would happen if times would turn bad and cash would be tight and scarce, and by the fact that without a system and an independent entity that implements it, this philanthropic work could not develop and grow on its own. Running a business is difficult work and takes a lot of time and attention, and there are additionally many temptations which could lead one away from the hard work that philanthropy requires. Then, early in the morning, I had the thought of creating the Foundation and thinking about it as a ‘third son,’ an independent, autonomous entity that would pursue its mission, stay true to its course and have the resources to do so.

The ‘third son’ metaphor is particularly suggestive for Asian cultures – educational, even.

LKS: That is true. In fact, I refer to the Foundation as a ‘him’ in some of my messages, to reinforce the imagery of personhood. It is a powerful metaphor in a culture where wealth is passed predominantly along family lines. Thinking about an instrument for doing social good as a child – as your child, in particular – focuses you as the giver on building an entity that is robust, one that has inner strength.

It is relevant that the over-arching goal of the Foundation is ‘to promote a culture of giving’ for which the Foundation itself is a paradigm example?

LKS: This is true. There is an example in the act of setting it up, especially in a culture in which these organizations are unusual. But, the Foundation tries to develop and nurture a culture of giving within its projects as well. For example, we have built and are supporting hospices for terminally ill cancer patients in China. To date, we have built 42 hospices that care for 20,000 terminally ill patients every year, enabling them to spend their last days in comfort and dignity.

I sense a strong commitment, a bias, even, towards projects – such as the hospice for the terminally ill and the surgical cleft lip and palate repair centres that address, and redress slights to human dignity. Would you agree?

LKS:
I do feel a special commitment to helping people lead their lives in dignity. As is often the case, it relates to a personal experience. I was 15, and my father had passed away a year earlier. A relative whose circumstances were even direr than mine and who was having a very difficult time making a living in Hong Kong said that she needed to bring her children back to Chaozhou. I gave her enough money for food for her whole family during their long boat journey back to mainland. This was a heavy burden for me at the time, as I was poor, and had to work hard to support my own family. But she had no one to turn to except me. On the day that they were to depart on the ship, she came to me, crying. She said that all the food they had prepared for the six-day journey had been stolen. I had no other resources. But I felt compelled to help her. So, I took the clothes that my father had left behind and pawned them for cash. It was my first and only time in a pawn shop. I took the cash, bought food, and returned to the pier only to see that their ship had just raised the first sail to set off. I hired a sampan to go after them, but a sampan is no match for a sailboat in terms of speed, and we fell farther and farther behind. But, I noticed that everyone on their ship had gathered on one side, waving to me and yelling something I could not understand. I was too far away to hear what they were saying. The ship finally raised all three sails and gained greater speed. We went after them for over an hour to no avail. Finally we had to give up and turn back. I was certain I had disappointed my relative and I felt heavyhearted. Later, I received a letter from her. She had returned to her home village. She said that my attempt that day to catch up to them to give them food had touched the captain and all the passengers. They all shared their own food with her family. My attempt had gained her their respect. The passengers on the boat were shouting at me to go back because they wanted to let me know that they would themselves take care of my relative and her children. They took care of her, because they saw that she was cared for by someone else. This episode will always stay with me. It shows how care can restore and even create dignity, which, once created, begets more care.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
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ExecutiveMBA

Friday, May 3, 2013

B And E This Month

share price
The world in thrall of Apple’s magical success
Nothing succeeds like success and the stratospheric rise of Apple’s shares in recent months defy the laws of business gravity. Its share price has been on a steroidal sprint ever since Apple became the world’s most valuable public company back in August, elbowing out long-time rival Microsoft from the tech pedestal. After the company announced its earnings for the first fiscal quarter of 2012, its share price picked even greater velocity, climbing 22% over the past three months, and sending its market cap gyrating above $650 billion. The past few days have seen its share price ascend to heart-stopping vertiginous heights, climbing over $700, in large part hopped up by the blockbusting sales of iPhone 5. Estimates say Apple would have sold between six and eight million units of iPhone5 in its first weekend on the shelves. So maddening has been the demand that over two million units sold out in the first 24 hours of its launch and they has been vanishing faster from shop shelves than would woolen sweaters from Antartica. Some analysts are predicting that the iPhone5 could eventually drive the price of Apple stock to a staggering $850 in the weeks to come. Apple’s stock price will have to to climb to $1067 for the company to hit a trillion dollars in market cap. If the success of its iPhones are an indicator, Apple can well keep marching ahead and sew up 30-60% of the mobile computing market, which seems like the easiset and fastest route for the company to touch the one trillion dollar milestone. If Apple becomes the first company on the planet to reach that goal, it would indeed be the most befitting tribute for its legendary former CEO and founder Steve Jobs.

on the hunt

Brazil could be its next big playground
China’s Lenovo Group, the world’s second-largest PC maker, will be buying out Brazil’s largest domestic PC manufacturer CCE. The deal is estimated around $150 million. Brazil is a promising consumer market where Lenovo will also be able to retail mobile phones and televisions as part of its growing product line. The company recently announced plans to build a $30 million factory there. The acquisition will also help Lenovo climb to third spot in PC sales in Brazil from the current seventh position. Many Chinese tech companies have set up base in Brazil like Foxconn, which has installed a local manufacturing facility to make phones and notebooks. Lenovo also plans to invest $100 million in research and development in its Brazilian facility over the next five years. The Brazilian technology market for smartphones, TVs, notebooks, PCs et al is worth roughly $124 billion. China continues to be Lenovo’s biggest market with 42% of sales coming from there, but due to slowing growth there, the company is rapidly scaling its operations in the fast growing and promising BRIC (Brazil, Russia, India, China) markets.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
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Thursday, May 2, 2013

TRAI: A woeful downslide

The Indian telecom sector’s current situation merits a more progressive line of thinking from the regulator to ensure that the sector continues to progress on the government’s stated agenda of inclusion. But TRAI’s recommendations for 2G auctions and spectrum refarming would actually end up achieving more of the opposite.

In July 2012, India’s mobile GSM subscriber base reached 679.05 million from just over 1 million in 1998 through just voice services for the most part. And by that time, CDMA subscriptions had reached around 230 million (AUSPI). This stupendous growth in subscriptions has been a revelation of sorts globally, along with the surprisingly low price points at which Indian telecom players are providing these services. From an ARPU of Rs.362/user/month for GSM players in December 2005, the figure has declined to Rs.100/user/month in March 2011 as per a PwC report. The report further highlights that India’s ARPUs are around 3 and 10 times lower than developing and developed countries respectively on an average.

However, the recent trends point to trouble in paradise. For a sector that is already struggling with low ARPUs, slowing penetration and high debt, the last straw would really be a lack of appreciation of its achievements and insensitivity towards its pressing issues. But unfortunately, that insensitivity is real, and it is coming from none other than the regulatory authority TRAI. By proposing a spectrum reserve price of Rs.36.22 billion per MHz on a pan-India basis in the 1800 MHz. band for the 2G spectrum bidding process planned in November, the regulator is imposing a burden that only serves to undo much of the good that has been achieved by the telecom sector in the past.

In February this year, the Supreme Court quashed all 122 licenses that were given out during the A. Raja regime, and TRAI came up with its revised recommendations as per the SC’s directions. The price it has proposed has united an otherwise intensely competitive industry against what they term as an atrocious figure. The price is 10 times higher than the benchmarks used under A. Raja. And at Rs.180 billion plus for 5 MHz, it even beats the 3G auctions that took place last year, where the reserve price was Rs.168.28 billion (and they were globally declared as atrociously overpriced!). The regulator has stuck by its argument and asserts that the new reserve price will impose a relatively insignificant burden on end consumers. Later on, the industry got some respite as an Empowered Group of Ministers (EGoM) panel led by then Home Minister P. Chidambaram brought down the reserve price to between Rs.141.11 billion Rs.151.11 billion for 5 MHz. on a pan-India basis. But players are far from satisfied. The level of competition this time around for the re-auctioning process is not as bullish as it was when the first auction was carried out. One has to keep in mind that licences of most of the telcos are up for renewal soon. Also, they would not be exempted from paying for the spectrum they gain through any source (direct buying via auction or M&A activity). Thus, the incumbents are feeling reluctant to join the bidding process. The same goes for the relatively new operators in India, for their investments have really not paid off well. TRAI is assured of 2-3 big telecom players participating in the process, but it already seems that the top circles may not see significant participation due to high prices.

There are legitimate reasons why such exorbitant pricing will do little more than providing some short term gains to the government. TRAI has gone on and on discussing how the price will have limited impact on the balance sheet and the impact will in fact come further down over a period of 20 years. But Franco Bernabè, Chairman, GSMA and Chairman & CEO, Telecom Italia Group, cautions with respect to the TRAI decision, “Efforts to squeeze money out of mobile operators for some perceived short-term gain will only reduce investment in networks, inhibit growth of mobile services and drive up consumer prices – limiting the value that the public will derive from spectrum resource in the long term.”


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Wednesday, May 1, 2013

No more the good guy

E. coli is now declared a human hazard as scientists are observing a discomfiting link to bowel & colon cancer. The world must act.

Beware! E. coli is a dire human threat now. Research done by medical scientists in Britain has revealed that the primary cause of one of the most common cancers is the E. coli virus.

As a matter of fact, Escherichia coli (commonly known as E. coli) happens to be the most studied organism in the world. It is a very complex group of gut bacteria that’s found in all warm-blooded animals including humans. The general theory and empirical evidence till date postulated that the bacterium was mostly harmless. This bacterium has even been deemed in some past studies as being essential for the survival of human beings and cattle as it helps to digest food. But recently, medical tests have revealed that E. coli might be the main cause of bowel/colorectal cancer (a disease which claims 600,000 plus lives a year, as per WHO’s International Agency for Research on Cancer). Tests have indicated that E. coli bacteria are more prevalent among bowel cancer patients than otherwise. A germ being the root cause of cancer may seem uncommon. However, it is not totally out-of-place, as it has been proved beyond doubt that there are living viruses that cause cervical cancer and bacteria that lead to stomach cancer.

E. coli reportedly has genes that are poisonous and lead to DNA damage that is common in cancer. However, it is not a sureshot cause of food poisoning and can remain dormant in the bowels with no ill effects. But the recurrence is high in patients. This is reflected in a study published in Journal Science. A sample size of 21 taken from bowel cancer patients revealed that two thirds of them were carriers of this bug; whereas among healthy individuals, that rate is just one-fifth. Experiments on these lines are carried out extensively on mice. They also show that bowel cancers are much more frequent when the bacteria with a particularly DNA damaging pks gene is present in the body.

It is also suspected by researchers that E. coli is a carrier of colon cancer, and its involvement is deeper than previously thought. Professor Jonathan Rhodes of Liverpool University is studying this with keen interest, and opines from his own analysis, “The bottomline message is that there seems to be a strong association between a type of E. coli and the development of colon cancer. And given that this type of E. coli is specifically able to damage DNA and inflict the sort of damage you get in a cancer, it is very likely that it has a causative role, at least in some patients.”

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
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Tuesday, April 30, 2013

Can the Dragon execute the ‘soft’ landing?

The world views with mixed feelings of awe, admiration, cynicism and even some apprehension, as the Chinese Communist Party undergoes a transition in leadership in August, as is customary in the country once in ten years. The 18th National Congress is now widely expected to see Xi Jinping and Li Keqiang as the new President and Premier of China, replacing Hu Jintao and Wen Jiabao respectively, a process which should be culminated by early next year.

It would be a gross understatement to call this the end of an era, besides the fact that it was the first peaceful regime change witnessed by the People’s Republic of China (Mao’s last years saw the Cultural Revolution accompanied by large scale violence and the end of Deng Xiaoping’s regime was marked by the infamous Tiananmen Square protests and subsequent military intervention). In the period since Hu Jintao first took over as General Secretary in 2002 and today, China has given the term ‘superlative’ a new meaning.

In 2002, China had a GDP (current US $) of $1.45 trillion, over 1/7th of US GDP of $10.59 trillion. The picture is starkly different now with Chinese GDP (current US $) at $7.29 trillion in 2011, which is a little less than half of US GDP of $15.09 trillion. Even in GDP per capita (PPP, current international $) terms, China has grown phenomenally, from $2,866 (less than 1/12th of US GDP per capita) to $8,442 (more than 1/6th of US GDP per capita). Net foreign assets (current CNY) have swelled from CNY 3.17 trillion to CNY 25.09 trillion. FDI (net BoP, current US $) has also surged from $46.78 billion in 2002 to $124.93 billion (2010). In 2010, China led the world in terms of exports of merchandise goods, which stood at $1.57 trillion (growth of 31% yoy) in value, and it cornered a share of 10.4% of global merchandise exports.

However, there is a catch, and a very critical one, and we are not talking about the malaise in China’s key export markets. Analysts have long argued that China’s ‘hard culture’ led by a one party top-down system will ultimately come face to face with its inherent limitations. This was evident to the world when Hu Jintao faced a massive rally from an estimated 4,00,000 protesters (as per the organisers) on his Hong Kong visit on July 1. They were protesting against the manner in which Hong Kong was run and also the way in which new Hong Kong Chief Executive Leung Chun-ying was appointed. In China, too, social unrest has been increasing quite alarmingly with rising social inequality. The Gini coefficient has breached the 0.47 mark, which is greater than 0.4, the accepted trigger for social unrest in an economy. The Chinese Academy of Governance estimates that the number of protests in China have doubled from 2006 to 2010 to 180000 incidents, which are over issues like corruption, forceful land grabs, Tibetan autonomy and environmental issues. The general mood is towards better people representation. Wen Jiabao himself commented last year, quite tellingly, that the Chinese government needed to embrace more democracy and implement wider political reforms to prevent the nation from descending into a chaos similar to the Cultural Revolution, which could undo much of the gains that the country has made over these years.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 

Adapting to climate change is key to food security

The impact of climate change on people and food systems is already being felt in more ways than one. To help vulnerable people cope with the effects of climate change, government needs to come up with strategies and adaptation measures that can minimise the risk. But the ground reality tells a different and deplorable story.

The impact of climate change is unfolding at a pace that’s much quicker than is being predicted. The risks of climate change loom ever more imminent for a country like India, where 70% of its agriculture is rain-fed and totally dependent on the vagaries of monsoon. Considering that over 65% of our 1.2-billion population depend on agriculture for a living and because people involved in agriculture tend to be poorer as compared to urban residents, the impact of climate change on the agriculture sector is far reaching with significant repercussions for our economy.

Various studies have shown that over 80% of farmers in India – who are mainly small and marginal farmers and contribute about 50% of the total crop production of the country – will be the most affected by climate changes. A World Bank report says incomes on the small rain-fed farms in Andhra Pradesh could decline by 5% under modest climate change and by over 20% under harsher conditions, bringing farmers closer to, and in many cases, under the poverty line. The report, while making a strong case for a shift in agricultural systems in order to overcome future climate change pressures, warns that if suitable measures are not acted upon to address the impact of climate change, the consequences would be grave and widespread. The report states that under the climate change scenario, sugarcane yields are expected to decline considerably (by nearly 30%) in Maharashtra, as a result of increased moisture stress caused by warmer climate in the future.

According to Germanwatch’s Global Climate Risk Index, India ranked 7th amongst the most affected countries on the parameter of extreme weather conditions between 1990 and 2008. None of the developed countries figure in the ten most affected countries’ list, which points to the fact that it is the poorer countries like India and Bangladesh (ranked #1on the Climate Risk Index) that are most vulnerable to climatic risks. For example, over the last 100 years in the state of Odisha, 49 years have seen floods, 30 have seen droughts, and 11 faced other extreme weather events like cyclones. Another study has shown that the number of villages in India experiencing drought is increasing. For example, in the state of Gujarat, only 2,000 villages experienced drought in 1961, but by 1988, over 145,000 villages were affected.

Although agriculture contributes only 20% to the GDP of Indian economy, its significance in terms of sustaining large swathes of population cannot be overstated. About 70% of the Indian population still live in rural areas where agriculture provides the only source of income and livelihood. Most of the rural folk live off small farms that are dependent on timely and sufficient rainfall during the monsoon months between June and September. However, with the changing climate, rainfall patterns have become erratic, leaving farmers exposed to the risks of drought and floods. “The agriculture sector in India is already facing problems relating to sustainability. To those daunting challenges, climate change adds further pressure on agriculture, adversely affecting the poor,” says economic expert S.K Dutta. “Climate change is already affecting the ecology and depleting the levels of soil fertility. Add to that the practices of over-drawing of water, decreasing forest covers and over-usage of pesticides and manures, which in turn adversely affect soil produce over the long term, and you get a very grim outlook for the future,” he adds. Experts have estimated that every one degree rise in temperature is likely to lead to a 5-10% decrease in crop yields. Thus, rice production in India could decrease by almost a tonne/hectare if the temperature goes up 20 degree Celsius, while each 10 degree rise in mean temperature could cause wheat yield losses of seven million tonnes per year.

When crop yields are adversely impacted by changes in the climate, it becomes almost unavoidable to keep food price inflation under leash. Already, shortage of food grains due to flood and drought in several parts of India is a big factor in food price inflation, which the country has been grappling with in recent months. Food price inflation stood at an uncomfortably high 9.94% in March this year, the most recent month for which figures were available when this story went to press. The most worrisome part of food price inflation is that it pushes marginal sections of the society, including poor farmers, under greater duress. A study by the Asian Development Bank states that at current levels of increase in food prices, India’s poor were likely to increase by 2.9% and 2.1% in the rural and urban areas respectively.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Saturday, April 27, 2013

An OPEC disaster moment!

Last month, for the first time in history, Saudi Arabia failed to control OPEC’s discrete members. The June OPEC meeting couldn’t reach consensus – and such a situation has happened only once before in history. For whatever it’s worth, OPEC’s cartelized unity was important for the global economy and oil stability. What now?

“It was one of the worst meetings we’ve ever had. We were unable to reach an agreement.” That’s how Saudi Oil Minister Ali al-Naimi described the 12-member Organization of Petroleum Exporting Countries (OPEC) meet that was held in June this year. The meet concluded with fissures emerging within the group. On one hand, Saudi Arabia, along with Kuwait, Qatar and the UAE, proposed an increase in group crude oil output by 1.5 million barrels a day to 30.3 million barrels a day; while on the other hand, member countries including Iran, Libya, Angola, Ecuador, Algeria and Venezuela warned OPEC of near-term collapse of oil prices. Critically, and dangerously, this is the first time that Saudi Arabia has failed to control the group! This diplomatic disaster gets further complicated when you consider the abysmal fall in OPEC’s market share over the last 6 years from 65% to 35%. The meeting ended sans consensus for the second time in OPEC’s history (the first instance was the meeting in the 1980s during the Iran-Iraq war)!

There seems to be a new power equation forming with Saudi Arabia on one side and Iran on the other. Interestingly, the member countries on Iran’s side have more oil reserves compared to member countries supporting Saudi Arabia. Venezuela (a prominent member of Iran-led group in OPEC), for instance, has more than 500 billion barrels locked under their part of the earth – around twice that of Saudi Arabia!

A close analysis reveals a pro-West and anti-West split. Undoubtedly, Saudi Arabia, Qatar, UAE and the likes would love to increase oil output to keep their dominance high and collect as many ‘petrodollars’ as possible. The other group is conceived to be a firm believer of an anti-West philosophy with Iran in the lead. As is known, US has imposed strict sanctions on Iraq and has very fragile terms with Libya (after NATO’s attack) and Venezuela (where US has imposed sanctions against state-controlled oil companies). These nations are more worried about international oil prices and demand-supply dynamics than America’s diktats. Moreover, for the first time in 36 years, Iran (the second largest oil producer in OPEC) was unanimously chosen for the presidency of OPEC last year. As a part of the rotation policy, the

baton has been passed to Iraq (a member of the Iran-led group) this year. This gives the Iran-led group an opportunity to defy US and its allies.

Moreover, the new hot spots of oil exploration across the world are threatening OPEC’s business at large. For instance, the Athabasca Oil Sands in Canada are estimated to have 1.7 trillion barrels of crude bitumen, out of which a large chunk is exported to US every day. Similarly, Jubilee Field in Ghana has reserves of more than 500 million barrels of oil; French Guiana recently found 700 million barrels of oil within their territory, the Aldous field of Norway is said to have 1.2 billion barrels of recoverable oil reserves and Mozambique discovered 7.5 billion barrels of oil in 2010.

Interestingly, OPEC, which has 78% of global oil reserves, produces only 35% of oil supply; while non-OPEC countries who possess 22% of global oil reserves, produce more than 60% of oil supply! Shockingly, OPEC collectively produces lesser oil now than it used to produce in the 1970s! A Wikileaks cable quotes Al-Husseini (former Executive Vice President for Exploration & Production, Saudi Aramco) thus, “It is possible that Saudi reserves are not as bountiful as sometimes described and the time line for their production is not as unrestrained as Aramco executives... would like to portray.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles