India-Japan: Poised for Partnership and Waiting...

If there is a code that needs to be cracked, it is the enigma of India-Japan relations.

In a recent discussion with a retired Indian diplomat, one angle of this enigma was articulated - "For more than three decades now, there has been no doubt in the Japanese government about where they want the India-Japan relations to go, and they have almost always stood by us: Construction of Bombay High, 1991 Forex Rescue, Maruti-Suzuki, and Delhi Metro...Somehow, we Indians seem to have always fallen short of our own expectations."

So, as with a cart which has one one wheel moving faster than the other, we seem to be going round and round, in slow, large circles.

Over the years, there has been no dearth of grand promises -- A network of 12 Japan Industrial Townships across India; A Dedicated Freight Corridor flanked on either side by smart new industrial cities stretching all the way from New Delhi to Mumbai; There has been talk of greater defence cooperation, including the supply of Japanese amphibious aircraft (US2), to the Indian Navy; A deal paving the way to "clean" N-power; ...and yet, for all those bilateral declarations, and lofty commitments, there is precious little to show on the ground.

What explains this yawning gap between intent and action?

A recent book by Rohan Mukherjee and Anthony Yazaki (Oxford, 2016), titled "Poised for Partnership", seems to be analysing some of these issues.with the seriousness it deserves.

Mukherjee and Yazaki see a recurrent pattern where "lofty commitments of increased cooperation were often not matched by sufficient attention to the minutiae of how such promises would be turned into reality."

The reviews look good but the pricetag seems rather forbidding. I wonder in which library I could get my hands on a copy of this book.

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REFERENCES & LINKS

* Book Review - Business Standard India - http://www.business-standard.com/article/opinion/india-japan-poised-for-a-great-leap-forward-116041301148_1.html
* Anthony Yazaki -  http://cpr.unu.edu/author/yazaki
* Rohan Mukherjee - http://scholar.princeton.edu/rmukherj/home
* Chapter-I - https://scholar.princeton.edu/sites/default/files/rmukherj/files/mukherjee_and_yazaki_-_poised_for_partnership_-_chapter_1_introduction_0.pdf 

* http://www.vccircle.com/news/finance/2016/04/08/india-looks-japan-achieve-its-disinvestment-targets
* Fitzpatrick, Michael (2015):  Why is hi-tech Japan using cassette tapes and faxes? BBC Business, URL - http://www.bbc.com/news/business-34667380
* http://dinakarr.blogspot.in/2014/01/india-japan-looking-into-hazy-skies.html
* http://dinakarr.blogspot.in/2010/09/rare-earths-vs-common-sense.html grin emoticon

Countervailing Buying Power

In India, the Competition Act, 2002, was amended in 2007 to create two new agencies: the Competition Commission of India (CCI) and the Competition Appellate Tribunal (CAT). CCI is expected to promote, regulate and sustain competition in the market while CAT is to help resolve any disputes.

Article 19 (4) of the Act states that CCI shall, while 'inquiring whether an enterprise enjoys a dominant position'...have due regard to a number of criteria, one of which is  "countervailing buying power".

What is Countervailing Buying Power?

Buying Power is "the ability of a buyer to influence the terms and conditions on which it purchases goods”. This is fairly straightforward. Large supermarkets like Walmart are in a position to drive a hard bargain from its suppliers. In exchange for large volumes and access to developed markets, manufacturers (eg., Knitwear from Tirupur) are forced to strip down their margins to the bare minimum, and this, is supposed to help the supermarkets offer sharp discounts to their customers.

The word 'Countervailing' is a little more complicated. It is most often used in the context of international trade, as in Countervailing Duties (CVD), which are taxes imposed by a government to prevent cheaper imports from running the domestic manufacturers out of business. In India, CVD is additional duty of customs is levied to offset the disadvantage to like Indian goods due to high excise duty on their inputs.

So Countervailing Buying Power is something that helps bring down the cost of a product when manufacturers (sellers) seeks shelf-space in a supermarket. It is often used as a defense in merger cases, to paint a picture of powerful buyers rising up to seller power. For instance, Walmart and Ikea often proclaim that they are able to supply relatively cheaper groceries or furniture because they are able to able to drive a hard bargain with their suppliers.

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REFERENCES / LINKS

http://www.investopedia.com/terms/c/countervailingduties.asp
http://business.gov.in/doing_business/customs_duty.php
Central Excise Act, 1944 -- http://business.gov.in/outerwin.php?id=http://www.cbec.gov.in/excise/cx-act/cx-act-idx.htm
Why is Countervailing Duty Important? (MoneyControl) - http://www.moneycontrol.com/news/advertising/why-levycountervailing-duty-is-important_822635.html

C for Chocolates

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Out in the markets today, florists and chocolate shops were seen doing brisk business...tomorrow, after all, belongs to them - its Valentines Day.

The rush for tiny bits of sweets packaged like jewelery brings to mind a nagging old question: why is it that West Africa produces over 70% of the worlds' cocoa, and yet, it is the Swiss and Belgians who take all the credit for making the finest chocolates?

In 1957, when Gold Coast became an independent country called Ghana, it supplied two-thirds of world cocoa. Today the largest exporter is another West African country - Côte d'Ivoire - but still, Ghana continues to hold the second position at 379,000 tonnes (1997/98). And the irony is that even while companies like Meiji-Japan maintain a brand-line of chocolates named "Ghana", its customers are assured (on the wrappers) that a fraction of the retail-price is being sent back to Ghana... as charity.

Why does the second-largest producer of cocoa need charity from chocolate manufacturers?

A part of the answer is that cocoa producing countries are poorly governed, leaving their agriculture-commodity traders rather disorganized. Gervase (2000) points out that it was the planters in tropics who did the most to reduce returns from cocoa exports, through misguided attempts to force up prices in the short term.Their governments worsened the problem through harmful policies which included:

...failing to protect the forest, favoring estates, allowing labor coercion, discouraging savings, restricting immigration, allowing cartels, and interfering in marketing. Over and above all this, many governments taxed heavily and indiscriminately, while failing to provide essential public goods.

Ghana, in fact, figures as a typical case where, in addition to all the above problems, ethnic and tribal rivalries (Akan-Ashanti) killed the proverbial goose that laid golden eggs. Now the country just figures on chocolate wrappers while international commodity traders rake in all the profits.

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REFERENCES / LINKS

• Federation of Cocoa Commerce - http://www.cocoafederation.com/education/produce.jsp
• Easterly, William (2002). The Elusive Quest for Growth (MIT Press)
• International Cocoa Organization (ICO) - http://www.icco.org/
• Gervase, William Smith-Clarence (2000). Cocoa and Chocolate, 1765-1914, Routledge-London (preview on Google Books)
• World Bank - Ashanti Region Cocoa Project (2000)
• Richard Asante & E.Gyimah-Boadi (2004). Ethnic Structure, Inequality and Governance of the Public Sector in Ghana. UNRISD.
• Fair-Trade International - Cocoa. http://www.fairtrade.net/cocoa.html

Infosys – 25th Annual Report

Excerpts

“Make no little plans; they have no magic to stir men’s blood”

- Daniel Hudson Burnham, Visionary Architect

A few 'major lessons' learnt by N Murthy:

Aspiration is the main fuel for progress. Aspirations transform a set of ordinary individuals into extraordinary achievers. They provide the mental and physical energy for people to convert plausible impossibilities into convincing possibilities.

An enduring value system based on openness, honesty, integrity, fairness, transparency and excellence, helps raise our confidence and the confidence of customers in the company. It gives courage to handle tough situations with confidence, and sacrifices become easy and natural.

Our experience has demonstrated that respect and dignity, challenging work and a promising career growth path are more important motivators than just money. People want to part of a defining moment that transforms the society and the world. Emotional energy is an invaluable asset for a corporation.

Performance leads to recognition. Recognition brings respect. Respect enhances power. Humility and grace in one’s moments of power enhances the dignity of an organization.

Leadership by example is, perhaps, the most essential instrument to encourage youngsters o demonstrate commitment and dedication towards any cause. Role models are powerful catalysts in raising the confidence, enthusiasm and energy of an entire generation.

An environment of openness, meritocracy, speed, imagination and excellence in execution are the five context-invariant and time-invariant attributes for the success of a corporation.

Progress is possible only if we measure improvements in every dimension of our operations and take timely corrective action.

Openness to new ideas encourages the youth; shunning biases and using data in every decision; and learning and adopting good practices from other cultures help a company become more confident and effective.

Global benchmarking has helped us emulate the best companies in the world in specific attributes, and in some cases, improve upon them to serve our customers better.

Staying relevant in a changing market and creating greater impact on customers are the only means of strengthening our relationship with clients. Innovation is an important instrument for this. Proactively obsoleting our own innovations by widely disseminating them creates good incentives for employees to continue innovation.

Following the best practices of corporate governance attracts the best investors. Investors understand that every corporation will go through lean days. Bringing bad news to investors early and proactively enhances their trust in us.

It is better to focus on growing the wealth pie of every one of us rather than focusing on how to preserve it for a few.

Profit is just an opinion. Real wealth is cash in the bank. Cutting our coat according to the cloth is the surest way to be financially strong.

Ships are safest in the harbor, but they are not meant to be there. They have to sail long and hard and face stormy seas to reach the comfort of a desirable destination. Hence, progress requires us to take calculated risks and make bold moves.

Corporations must reach out to the society if they want longevity. It is important to build a fund of goodwill among the people.

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Voltaire’s much –celebrated statement:

I disapprove with what you say, but I will defend till death your right to say it.

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You Raise Me Up --- Russel Watson

When I am down and, oh my soul, so weary;
When troubles come and my heart burdened be;
Then, I am still and wait here in the silence,
Until you come and sit awhile with me.

You raise me up, so I can stand on mountains;
You raise me up, to walk on stormy seas;
I am strong, when I am on your shoulders;
You raise me up….To more than I can be.

There is no life – no life without its hunger;
Each restless heart beats so imperfectly;
But when you come and I am filled with wonder,
Sometimes, I think I glimpse eternity.

You raise me up, so I can stand on mountains;
You raise me up, to walk on stormy seas;
I am strong, when I am on your shoulders;
You raise me up….To more than I can be.

You raise me up ...To more than I can be.