Saturday, August 11, 2012

Blood on the runway

You know you’re going wrong when fashion trends transform your wardrobe from being cool to terribly cruel...

Fashionistas were purring in delight when designers at the recently held New York Fashion Week made models strut down the ramp in animal furs that ranged from a dyed silver-fox on a coat, to a leather trench-coat with mink’s fur running down its back, to hoods and skirts with fur trimmings and even leggings made out of leather! Designer Michael Kors, who has faced the ire of animal rights activists earlier, got plenty of applause for his ‘quintessential American sportswear’, which spared not even sports apparel from using real fur. As fashion critics are doling out appreciation for the innovative creations that have made fur more wearable, it is apparent that from hoods to shoes to suits, which boast of fur will now be among the must-haves of the fashionable set. This is perhaps the point when we should remind ourselves of the PETA warning – “Fur on your back, blood on your hands.”

“Cave-people-like designers who still use fur are chasing headlines from the controversy. It does not take one ounce of creativity to rip the skin off of an animal’s back,” said Poorva Joshipura, Chief Functionary, PETA India. Describing the cruelty of this industry Poorva added, “Because fur farmers care only about preserving the quality of the fur, they use cheap slaughter methods that keep the pelts intact but which can result in extreme suffering for the animals. Small animals may be crammed into boxes and poisoned with hot, unfiltered engine exhaust from a truck. Engine exhaust is not always lethal, and some animals wake up while being skinned.


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Friday, August 10, 2012

ABOLISH IMPORT DUTY

THIS IS THE ONLY WAY TOWARDS A SUSTAINABLE CEMENT INDUSTRY

Cement is certainly an important raw commodity / input for the infrastructure & real estate sectors. However, in the cement sector, import duty on inputs is higher than its finished goods that include high import duty on coal, petcoke and gypsum which are major inputs for the production of cement.

I expect reduction or complete abolishment in the present import duty on our input costs. The budget should also include some special schemes for boosting exports, which is the need of the hour. In fact, India’s exports could witness a significant improvement in coming years if the government adopts proactive measures.

I am also hoping for some reduction in the railway freight rate and more wagons to be added to the fleet in this year’s budget. Further, I expect the finance minister to target the GDP growth of at least 8% or higher for the next three financial years.

On tax reforms front, I would be very happy to see the reduction in individual income tax levels as it leaves the consumer with more spending power hence builds consumption leading to higher economic growth.


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Wednesday, August 08, 2012

Who’ll call warren’s bluff?

He’s bluffing. Period! The man is a master of contrarian logic and knows how to call a spade an ox and even gets away with it. Warren has no intentions to give away his position in Berkshire and all talk about a successor should be relegated to the bin. Steven Philip Warner in a delightful analysis...

The last time I tried to meet up with Buffett to convince him I could be the one, I was stopped at the New Delhi airport itself (alright, I’m lying; I couldn’t even afford the air ticket). But think about it; we’ve all been had. A handful of months back, when we ran Warren’s (and his son’s) exclusive interview in B&E, we had forecasted bang on that Ajit Jain (Berkshire Hathaway’s Reinsurance Business Head) was amongst the nine probable candidates who could be successors to Warren Buffett. And we’d regimentally recommended to Warren that he should give up his position sooner than later. Oh, how dumb could we have been...

“I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt... Furthermore, I made some errors of omission, sucking my thumb when new facts came-in that should have caused me to re-examine my thinking and promptly take action...” Thumb sucking adjectives aside, these are the actual words of confession from Warren Buffett in his annual letter to Berkshire Hathaway shareholders (Purely due to ethical journalistic policies, I have not bought Berkshire’s shares; one share cost Rs.60,00,000 last year; they say it’s down this year).

But what left me sucking my thumb (sorry Warren, if you can use it, then this is a global usage now) was his one announcement in the above mentioned letter to his shareholders (where he also made the confession written before) where Buffett overtly praises Ajit and paints a picture that most definitely points towards Ajit donning the top hat at Berkshire. In his own words, “There is no one like him and his business is never the same. Ajit came to Berkshire in 1986. Very quickly, I realised that we had acquired an extraordinary talent. So I did the logical thing: I wrote [to] his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn’t anyone like Ajit...” And guess what, it is Buffett’s custom to call up Ajit Jain every evening to discuss ‘business matters’. I never could imagine that I’d live to see the day when Warren would be doodling over a guy. Has Warren finally fallen in love? Well, despite my unfathomable bubbling eagerness to say yes, the answer is a clear no. This is Warren at his impressive bluff best.

Surely, every person even slightly informed about the world’s richest man knows that succession planning has always been questioned critically when it comes to Buffett. Realising that he himself goes against many imperative corporate governance policies (separation of ownership from management, for one), Buffett too cleverly chooses to keep the beach bikini on, revealing much frivolous skin, but hiding the most essential parts. “There are four potential successors to me within the company, but I would never discuss their names,” is what he gloatingly told Daily Telegraph some years back, “I have got this letter which actually goes out the day I die. And it says: Yesterday, I died. That’s bad news for me, but it’s not bad news for you, the shareholders of Berkshire...” Yeah, right Warren! And we all can then go meet up with Monica Belluci!

But for argument’s sake, let’s move to the realm of logic. At present, Ajit heads Berkshire’s Reinsurance business, which is only the ‘third-largest’ amongst Buffett’s insurance empire – indeed a small fragment of the vast Berkshire empire. And if you considered that insurance segment contributes to more than 50% of Berkshire’s annual revenues in 2008, we would rather have Tony Nicely, CEO of GEICO (Berkshire’s largest insurance player) or Joseph Brandon’s successor at General Re (the second largest in the segment) as the more ‘logical’ choice. As far as leadership and manpower count is concerned, Ajit only has 31 people in his company. For records, that is just a negligible 0.01% of the total count of manpower at Berkshire Hathaway! Can a person with that little ‘leadership’ experience head a group with more than 300,000 people?

Alright, if we play to the grandstand – as Warren has mastered over the years – and simply choose Ajit because “Warren has mentioned him in his letter,” then allow the blundering me to inform you, Warren does that ever year. Not counting this time, Buffett had flattered Ajit 5 times in the past 13 years (in his annual letters to his shareholders)! And if I go by the same logic, then the world would have had 21 prospective Berkshire CEOs since 1995. Wonder how? Besides praising Jain 5 times, the grandiose Buffett has praised Tony Nicely (CEO, GEICO) 9 times, Kevin Clayton (CEO, Clayton Homes) 2 times, Richard Santulli (CEO, NetJets) 3 times, Joseph Brandon (Former CEO, General Re) 2 times! If efficient succession planning policy was to be decided on the count, all is lost.


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Friday, August 03, 2012

Malnutrition in Africa is more of a political conspiracy – Ethiopia is a crying example

Malnutrition is neither a disease nor is it a phenomenon. It is a man made conspiracy, leading to genocide as, unlike other social malaise, malnutrition does not kill the victim instantly but drives him closer to a life of destitution and ultimately death, with every passing moment. It is a chronic and permanent shortcoming that not only destroys an individual’s future but cripples the entire demography of the nation. Conventionally, malnutrition and other similar problems are attributed to climatic changes, natural disasters and other uncontrollable factors, but then a detailed analysis makes it evident that such a problem creeps up only on account of policy failures and political reluctance. I would like to go a step ahead and blame it on the conflict between the scientific and political community, and more on the growing greed for ownership of resources amongst the underdeveloped nations, wherein the incidence of malnutrition is also the highest. To put it in simple words, it is relatively easier to own resources in a country that is socially challenged rather than in a nation that is otherwise. This is what is happening in the whole of African continent.

The dark clouds of hunger in Africa are ever more ominous as the rulers themselves have turned their backs towards their own countrymen! Dr. Robert Mwadime of Uganda Action for Nutrition inferred the problem by commenting that “children don’t vote”, there is no urgent need felt in the rulers to feed their hungry mouths! This very outlook has escalated the food crisis situation in Africa – with a staggering 50.9 per cent of the population of sub-Saharan Africa living with below $1.25 a day! Drought in Africa this year again has caused havoc with 14 million pushed to the edge of starvation and malnutrition! Most of sub-Saharan Africa is facing an emergency with an immediate need of 270,000 metric tonnes of food – no more than 120,000 metric tonnes is available! Sudan, Uganda and Somalia are the worst affected apart from Ethiopia. The World Food Program (WFP) has penetrated deep into South Kordofan with food from Humanitarian Aid Commission (HAC) reaching out to 4,000 displaced people in Kadugli and 3,000 in Heiban in Sudan. For the records, there are an estimated 60,000 Internally Displaced Persons (IDPs) in Sudan, and this number is continuously increasing! Uganda, to a large extent, depends on international aid for adequate food supply – because of the lack of livelihood diversification, reduced wages, and over dependence on agriculture! Thus, a drought in the region (as is the situation at present) leads to large scale food insecurity and malnutrition. The clutches of famine penetrating deep into Somalia have created such trepidation that tens of thousands of Somalis are fleeing to neighboring Ethiopia. But then, conditions in Ethiopia are something that is beyond what words can describe.

In Wag Hamra district of Ethiopia, more than 10,000 children under the age of 5 died between 2001 and 2006 because of malnutrition and hunger, while tens of thousands were found massively suffering malnutrition-related diseases. On an average, 50 per cent of all children in Ethiopia are malnourished. Most of these children do not have the fortune of finding the easy escape of death, but get stuck in the grasp of chronic malnutrition and related diseases. Their physical and mental growth gets decelerated and most of them end up spending years in dilapidated hospitals and ill equipped clinics. The saga doesn’t end here. Even if a child struggles and reaches school, his/her performance is very dull and slow. Most of the children, due to lack of nutrition, find it tough to concentrate and learn, and thus fail to get promoted to a higher grade. This results in early dropouts and incomplete education. As of 2010, around 25 per cent of elementary school students quit schooling (between grade 1 and 8) and 7.3 per cent of all students failed to get promoted to the next grade compared to 5.3 per cent in 2005. This clearly indicates the dwindling education level of the nation. Moreover, given the fact that these poor areas have no industries and Ethiopia at large is a backward nation, these children – even if they manage to grow up safely – find it tough to make a living. Also, since the nation has more labour-intensive jobs, which require physical fitness and strength – most of these children are left jobless even at their productive age.

With Ethiopia’s population growing at 3 per cent every year, the per capita availability of resources is getting increasingly sparse and dispersed. However, the bigger problem here is about the population distribution and population density. Population in Ethiopia is not homogenously distributed, but is the exact converse. Around 40 per cent of all Ethiopians prefer staying in the Oromyia region, thus increasing the demand of resources in this very place. Around 25 per cent of the population resides in the Amara region – where the food shortage is at its peak; and the rest are scattered all across the nation. These two regions, in particular, are more vulnerable to diseases and malnutrition. Overpopulation (high population density) has increased the burden on the local administration. The huge food shortage and increasing unemployment have worsened the situation here.


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