Friday, 31 January 2014

Give the unemployed a break

One of the great degrading experiences in life is to be without a job, apply hopefully for one, and not even get a response. The sense of emptiness, the feeling of no hope, is a low point in life. If you are in a position of being able to hire, at least send a rejection note politely worded and pointing out why they didn't fit your requirements. Call as many as possible for an interview (just the mere fact of being called is a climb out of the pit of despair) . Treat them fairly even if you are not going to hire them. Please.

When there is a clear discrimination against you, it becomes even worse, and really hard to bear. All through the past, gender discrimination was a big issue. It's now still there, but has at least reduced, so much so that its not the biggest discriminating factor I believe. Two other categories suffer worse discrimination

- The "old". If you are above 45, you have no hope of getting a new job if you have lost your current one
- Those with a gap in their CV - either because they lost a job and couldn't get another one for some time or , for women, for taking a career break for children.

The former will be the subject matter of a future post, but this time I want to highlight the plight of those who have been unemployed for some time. A month or two is OK. When it crosses six months, then you virtually have lost all chance of  getting another job. This is especially acute in Europe and the US - research after research has shown that those unemployed for 6 months or more don't even get called for interviews even if overqualified for the job.

Obama has struck a deal with US companies who are agreeing to review their hiring practices to eliminate this discrimination. This is a good move in a country where post the financial crisis, many people lost their jobs and have had great difficulty in finding another one.

My argument has long been that companies should actively seek out such people rather than discriminate against them. Other things being equal, people to whom life has dealt a blow, are invariably better workers than those who have had a smooth time. When you have faced the bitter experience of unemployment, you will value the job much more. You work diligently and try your best to keep it rather than go on strike. You have a rounded attitude to life - you are likely to treat colleagues and business partners with more regard and respect. You are likely to take a more long term view. All extremely desirable qualities in employees. My experience in my working life has invariably been this - people who have struggled to get jobs, or who faced personal tragedies or who suffered on some account or the other were, almost without exception, better performers pound for pound. So much so that I started to positively discriminate in favour of them !!

So here is a plea. Treat those applying for a job with greater sensitivity and care. Even if there are 1000 applications for every job. And do not discriminate against the unemployed. Its a small cost to do this and it's the human thing to do. Especially if you mouth inanities as "people are my greatest asset" and crap like that. HR types - are you listening .

Its also a smart thing to do, for you never know when you would be on the other side of this equation.

Friday, 24 January 2014

Bring on the Indian names

In Rendezvous with Rama, arguably the greatest science fiction book of all time, the spacecraft is called Rama. Arthur C Clarke, the legendary science fiction writer, casually throws in that since all the names of the Greek and Roman Gods had already been taken in astronomy, they had turned to Hindu names - and hence Rama. Arthur C Clarke was a great predictor of future events, although he wrote fiction.  He was the predictor of geostationary satellites, long before it became a reality. So perhaps his  prediction of Hindu names might come true as well.

Well, astronomical names are still monopolised by the Greeks and Romans, but at least in the field of computer engineering, Indian names have started to  peep in. Kaveri, AMD's latest APU (whatever an APU means) is really the inspiration for this post. - what a nice and easy sounding name Kaveri is. Intel chips are boringly named (madam, are you listening) - Pentium, x86, Core and LGA are sleep inducing as hell. Apple is horrendous - iPhone, iPad, iPod, iTunes,  and what next iWatch, iPants, iShirt, iUnderwear ?? Google, that funky company of Ice Cream Sandwich, Jelly Bean, KitKat, etc etc is still strictly for kids .  Android sounds so intimidating - surely a team which is led by a guy called Sundar Pichai can  think of a better Indian name. In that pathetic conundrum, Kaveri stands out.

Auto guys are another interesting bunch for names. Unfortunately that's a masculine macho bunch, but still, Corolla, Accord, Sunny, Elantra,  and, horribly, 3 series, 5 series - what the hell.  Granted nobody will buy a car named Gina Lollobrigida, but still, can't they come up with better names ? I am forced to choose between an i10, i20, i342, 800, SX4, City,  ......... Granted I wouldn't like to be seen in a Urvashi (note that the stated preposition is "in" and not "with" :)), but I wouldn't mind a Toyota Ganges.

Paradoxically, the most hilarious namers are the real estate companies in India. Take your pick on where you would like to stay - Chartered Beverly Hills, Nitesh Key Biscayne, Brigade Caladium, Brooklyn Heights and my favourite of all - Mugalivakkam Maami trying to stay in La Celeste !!!! Surely your address cannot be Flushing Meadows, Ramagondanahalli. Even more Ugh sounding are where a very obvious Indian family name is tied in to a supposedly "glamorous"  name. What about Purvankara Whitehall or Salarpuria Pentagon.  Yuk.

So wake up world. Anglo Saxon names are passe. French names are unpronounceable. Eastern European names won't fit into Twitter and have improbable combinations of x,z,w and q. Chinese names have no romance - surely Fang Cao Yuan doesn't sound interesting enough. African names are unknown.  So where else to go ? Come to India.

How about a Brahma chipset. Or a Krishna car. Indus watches. Yamuna mobiles. Maybe comet Ganesh. And wouldn't I love to live in Kailash.  Surely Uma Thurman would approve.

The only problem is if there is a Ramamritham mobike or a Rajalakshmi handbag !!!!

Sunday, 12 January 2014

Let's go to Vegas

Next January, I am thinking of going to Las Vegas. No; not for the showgirls, but to go to the Consumer Electronics Show - the annual jamboree of the tech industry. This has been a feature for a number of years, showcasing all the new technologies that companies are working on, or the new products about to be launched. I have little interest in all this new technology (seriously, we can do with a little less technology), but I would love to ogle at the weird and wacko stuff that these geeks think of. Take a sampling of some of the crazy stuff that was displayed at the just concluded 2014 event.

Let's start with the Kolibree toothbrush that is blue tooth enabled ! Apparently it has accelerometers and gyroscopes to accurately analyse your brushing habit and then relay the results via bluetooth to a smart phone app that will then tell you how to brush your teeth better.

Would you like a Mother ? Its apparently the controller that can sense everything that you do around the house - having coffee, snoring, whatever (I don't want to speculate  any further) and then nag you like a real Mother to improve your habits !

Ladies can opt for the Touchscreen friendly Elektra nails. Apparently lovely ladies who grow their nails have a tough time tapping at smartphones. Enter Elektra nails which can be fitted on and can do the job. Apparently you can colour them in whatever nail polish colour you fancy at that moment.

I also learnt that PointGrab which creates "gesture driven interfaces" , whatever that means,  has developed a new software solution that will enable you to mute your TV by saying Shhhh.

The big thing on the more serious side was the number of TV makers who were displaying curved TVs. I learn from reliable sources that seeing one will answer the question - Why on earth do we need a curved TV. One manufacturer went even better to showcase a flexible TV that can be curved and straightened. I haven't yet found if there is an explanation as to why on earth do we need a flexible TV.

What do you think of the Muse ? Its a brain sensing headband that can "calm your busy brain by seeing and hearing your brain activity". I think I need to buy that at this very instant.

You can opt for a Wifi enabled coffee mug. Not sure what this is for, but one wearable device  - a belt you put around a baby will monitor breathing, etc etc of a baby and  beam all this data to your Wifi enabled coffee mug.

People are obviously extremely keen to monitor their health all the time. Why else would something called Scanadu Scout be shown which can apparently detect 12 different chemical signatures in your pee by sniffing at it.

This blog is not an adults only space and so I will not elaborate on vibrating underpants that can apparently be controlled by a significant other through a smartphone app.

If you are tired by all the walking around to gaze at such wonderful devices, CES offered you free teeth widening (yes, widening and not whitening) for all delegates.

Now, do you see why I am saying Let's go to Vegas. Wanna come with me next January ?

Wednesday, 8 January 2014

Everybody loves a freebie

When I am given a freebie, its a perfectly justified economic act (and I will riot on the streets if it is withdrawn) , but if you are given a freebie, then its economic mismanagement, populism, wasteful expenditure, etc etc. This is the economic philosophy of most Indians, and in reality, most of the people in this world.

This post is a response to the criticism of the raft of freebies granted by the Aam Aadmi Party in Delhi. For non Indian readers, the Aam Aadmi Party, a completely new political outfit formed by non politicians and riding on an anti corruption platform has come to power in the state of Delhi. This is a huge breath of fresh air in the murky politics of India. But they are left of centre and desperately need an Economics 101 course. The two first acts on assuming power was to grant everybody 666 litres of free water and then to halve the power tariff for low volume users. In this blogger's opinion the Party is brilliant politically and disastrous economically.

The learned and the wise of the land have strongly criticised the freebies - populism, wasteful expenditure, etc etc. While there is no denying all of that I am going to train my guns on the accusers and take them to task on the freebies that they get.

One of the worst freebies in India is the cooking gas subsidy. Cooking gas is exclusively used by the middle class and the rich. A poor man in India can hardly afford a gas stove - his fuel is firewood or kerosene. And yet cooking gas is subsidised by more than 50%. I am yet to hear of a single Indian willingly foregoing the cooking gas subsidy - in fact you can't if you are buying from the state oil companies, the chief distributors of cooking gas.

The second absolutely awful subsidy in India is the subsidised price of diesel for cars. Under the guise of needing to subsidise diesel for transport and the impossibility of two tier pricing for diesel, there is a massive unintended subsidy for those owning diesel cars. Diesel cars outsell petrol cars in India by a whopping amount.  Its very difficult to argue that diesel cars are owned by the poor !!!!  Anybody who criticises the Aam Admi Party freebies driving around in a diesel car should be shot.

Take the absolute farce of the Board of Control for Cricket in India. Easily one of the richest organisations in the land. They are hardly able to count the cash that is coming in - that's the rate at which it is flowing. And they pay no taxes - Why ? Because they claim they are a charitable organisation. You and I, the idiots who pay income tax, are subsidising the BCCI.

I am not singling the urban well off. His rural cousin is equally complicit. No rich farmer pays income taxes - one of the most unjustified freebies is the exemption of agricultural income to income tax. He can earn an income of a million (and many do). He pays no income tax.

I can go on and on. Everybody who is criticising freebies is a complete hypocrite  - its all a game of how much anybody can loot from others. Every single citizen of India is complicit in this.

As I said, this is not a peculiarly Indian disease. The non poor who avail of Medicare in the US ,  the rich farmer in France who is cossetted with all sorts of subsidies, the Chinese rich who are taking advantage of the hukou .......... everybody has his hand in the till.

The Aam Aadmi Party's economics deserve to be roundly criticised. But before anybody does that, it would do well if he could forego the boondoggles he is enjoying.  That includes this blogger !

Monday, 6 January 2014

Corporations and human rights

This blogger was listening to his favourite programme From Our Own Correspondent on the BBC - easily one of the finest radio programmes the world has ever seen. One of my favourite correspondents, Humphrey Hawksley was filing from Hyderabad on the plight of those who work in brick kilns.  And then he casually hinted that British companies might somehow be held accountable for this ! This set me thinking on the thorny issue of global corporations (alright, the appropriate dirty word is multinationals ) and the issue of human rights.

What is a business corporation really responsible for ? - that it should not condone human rights abuses in its operations is indisputable. That is should likewise do so in its supply chain is also in principle correct, but in practice, where do you draw the line of its supply chain ?

Humphrey Hawksley was hinting at the following logic. Let us construct a hypothetical example. GlaxoSmithkline, a "British company", outsources its back office work to Genpact an Indian company. Genpact delivers this service from Hyderabad. They do so from a building that, let us say, they rent from one of the major builders. The builder, when he constructed the building, bought bricks from the local brick kiln. This brick kiln was abusing human rights - so Glaxo is responsible.

I can extend the logic further. The builder bought cement from L&T. L&T bought limestone , a raw material from a nearby quarrie. The transporter who moved the limestone, employed children as cleaners - so Glaxo is responsible.

There has to be some sanity and reasonableness in what you expect corporations to be responsible for. The issue has really arisen because nations, which are the prime guardians and  responsible for checking human rights violation in their territories, are abysmal in their jobs. This is  not just a third world problem only - American agriculture for example will come to a standstill if illegal Mexican workers paid less than minimum wage, working way beyond beyond an 8 hour working day and subject to sundry abuses were not in operation (Mr Preet Bharara -  please note ). Multinationals, the dirty word again, are soft targets. Therefore it is easy to go after them. In the case of the brick kiln workers, the Indian government and the Indian society is responsible - not Glaxo.

Equally, consumers are, largely unconcerned with anything else other than the price of their product. They want the cheapest price for a product, and if this was achieved by abusing the rights of a worker in a faraway land, tough luck . Why faraway land - every American who drinks milk has a greater than a 50% probability that he has condoned human rights abuse - somewhere in the milk producing chain in the US, an illegal immigrant was used and was exploited..

A test of reasonableness has to be applied when we hoist human rights responsibilities on corporations. Some principles are black and white - you will obey the law, you will not bribe, you will conduct your operation where safety of those working is accorded the highest priority, etc etc. You can also say that you will  demand your suppliers to conform to these and conduct periodic audits at major suppliers to verify that this is so.  But it s practically impossible to ensure that every supplier's supplier's supplier is adhering. Common sense has to prevail. For eg if Walmart is sourcing garments through an American agent, who in turn is sourcing through a Bangladeshi agent who in turn is buying from a garment manufacturer who has appalling conditions for his workers - you can reasonably say that Walmart should stop buying from them. It is the germane buyer even though intermediaries are involved, and it is a direct piece of Walmart's main business. But to say Glaxo should stop its operations with Genpact, because the building it is operating in was built using bricks whose supplier violated human rights  is carrying things too far.

Corporations have certainly been guilty of much evil in the past. They should rightfully be held to account. But when you forsake reasonableness in setting what you will hold them to be accountable for, you are violating their human rights ! After all, the learned wise men and women from the US Supreme Court have said that corporations are also people !!

Saturday, 4 January 2014

China's debt problem

If you have seen, or heard about, China's wonderful infrastructure, have you wondered where the money is coming to finance all this ?  The laws of economics apply equally to China, as to the rest of the world. There is no free lunch. So where is the money really coming from ? This is a complicated question ; China's economic model is not easy to grasp for any outsider, but perhaps we can take a peek at it.

Infrastructure spending is not necessarily a profitable business - returns to investors are meagre from roads, railways, etc etc. In China, as in most countries, the government is the one that invests in, and builds infrastructure.  Since 1980, China has been growing at double digit rates. That growth resulted in big increases in tax revenues to the government. Chinese are also a nation of big savers. With growing incomes, came growing savings which were all vacuumed into the state banking system. The government spent a lot of it on infrastructure - banks are all under government control anyway and they were told to lend to industry and infrastructure. Since all land is owned by the government and since land prices rocketed, governments made huge money leasing land to the private sector. All in all a massive party, if you'll pardon the pun.

Came 2008 and the global financial crisis. China being an economy that relied heavily on exports, the effect was instantaneous. However, China could not afford to slow down; the political legitimacy of the Communist Party is predicated on continuing high growth and economic prosperity. So it turned the tap on investment - banks were told to lend, no matter what and growth rates continued to be high. Cities built shiny buildings, huge metros, big highways, added manufacturing capacity etc etc much of which is underutilised and certainly not providing decent economic returns. If you invest with little or no return, some day or the other you have to pay the bill.

Now the chickens are coming home to roost. China suffers from the same problem as India - the central government is largely fiscally prudent, but state and local governments indulge in the worst form of profligacy. Out came the data a few days ago that China's local public debt has exploded from very little to US$ 3 trillion - 58% of China's GDP. Since 2008, 80% of bank lending has been to local governments. And much of this money has gone into spending that will generate no return. While 58% of GDP is itself not a very high figure and much lower than say US or Japan, the rate of growth in debt is staggering (70% in 3 years) and if it continues like this, it will reach unsustainable levels.

China has a debt problem. The Chinese government knows this very well and a year or so ago forced banks to contract lending.  The impact on growth was immediate - it alarmed the government and they turned the tap on again.  A few weeks ago, China faced a short term liquidity crisis and the central bank was forced to pump cash into the economy.

The world will watch China's actions carefully. They will fiddle with the tap turning it on and off and adjusting the flow to check the growth in public debt and at the same time not let economic growth go down too much. This is an inexact science and to manage this at a national level, and that too for the second largest economy in the world, is extremely tough to do. If they get it wrong, the consequences will not be just economic - given China's system,  it will be political as well.

Longer term, the cliche of an investment led economy turning to a consumption led economy is the medicine economists prescribe for China. Easy to prescribe, not easy to administer. Unlike in say India, where political legitimacy is not dependant on macroeconomics, in China it is. If the economy wobbles, so will China's Communist Party. Any political turbulence in China will be painful, not just for China, but for the whole world.

I know economics is a dull and boring subject, but watching what China does and what the outcome is, will be fascinating if you are interested in such things. China is not a gold mine anymore. There are significant risks to the global economy from China. The party may not be coming to an end, but the music is sounding a bit off key and not so loud at the moment. Funny, you could also say that about the Communist Party.

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