Rumination and Reflection

Photos of Beijing tea house scam

2010-04-11T15:10:00.005+08:00

Back from a 4-day trip to Beijing. One of the highlights was losing over RMB1000 in a tea house scam, and getting it all back! I have posted the details of this on Lonely Planet's Thorn Tree forum to warn all travellers / tourists. You can read it at http://www.lonelyplanet.com/thorntree/thread.jspa?newPost=true&threadID=1899000

The photos are posted below:

In defence of books

2010-02-12T19:24:00.006+08:00

A few days back, I went to the National Library and came back with four books. Four books to read in six weeks without paying a fine – quite a tall order given the demands of the workplace and other sources of entertainment that have left reading behind for most people. I, however, have always been an avid reader. And at times, voracious. It started at a young age, and I was fortunate to grow up among people and in an environment who considered reading one of the more desirable leisure activities. Be it fiction or non-fiction, I have had a soft corner for reading.

These are interesting times for books. With Apple launching its iPad – which can be a e-reader among other things – and Amazon already in the market with its e-reader Kindle, many feel books may lose their allure. But will they? Without getting into a discussion on technological features of online reading devices, let us examine if books will continue to be as important as they have been.

All of us are exposed to books at a very young age. As the world becomes more competitive – and more so in the developing world with Darwinian logic egging parents to make their children geniuses at a young age – I see several young minds continue to be initiated into the world of books. Access to technology has become more widespread, easier and cheaper over the last three decades, but to a vast majority of people the old-fashioned “hard copies” still matter more than electronic “soft copies”. It will take a couple of generations, if not longer, for people to become completely comfortable with reading, editing and storing masses of information entirely in electronic form. If you consider that impossible, think about the number of times you have taken print-outs of documents to read and mark up (either to revise or to remember) at work. Or for that matter, tried to print a view-only online piece, and be disappointed. In short, we are simply not comfortable reading anything longer than tens of pages online in a single sitting.

Then you have the issue of reach and the associated cost factor. It will require high broadband speeds in large parts of the world - which currently do not have electricity for 24 hours - for books to go out of fashion. And for each e-book to be priced competitively, publishers and hardware providers would require significant economies of scale. We are quite a long way off from those days. In all likelihood, we will be for many decades in a state where e-books and other “for sale” copyrighted online content will carve out a niche only for the most popular and timeless literary works, while for the vast majority of readers, the paper versions will rule.

Finally, you got the “soft” factor that may tilt the scales in favour of the “hard copy”. The level of comfort that people have with books in their current form is difficult to quantify, and easy to underestimate. If a book were a companion, the sense of touch associated with turning and feeling each page lends a personal flavour to every copy. The fresh smell of a new book, or the old but familiar smell of a dog-eared version of years left behind can evoke and nurture memories of familiar things, events and people. The warm feeling of being surrounded by books in a library, or the very act of curling up with a book on a rainy day is difficult to imagine being replicated soon with an e-reader. Books are here to stay for a long, long time.

In the eyes of a fourth idiot

2010-01-10T01:25:00.004+08:00

Finally, I watched 3 Idiots. The movie has been creating history in India. And if you believe the marketing machine behind it, abroad as well. Of course that includes Singapore. In the Lion City, your choice in Hindi movie theatres boils down to one - the Jade theatre which has recently upgraded to improve its standing from "worst by a mile" to "worst by a few meters". Not that it deters the Bollywood faithful; in fact occasionally it manages to attract the less enthusiastic, but by no means uninterested, such as yours truly.

So one evening, having devoured a home-cooked dinner at a Subway cafe table, I found myself settling into the theatre seat. My wife was with me, ever ready to witness Bollywood history being made. What followed was an enjoyable 3-plus hours. Without getting into the oft-repeated story, I would just pen down my Top 5 take-aways.

1. Preaching through comedy works:

It is easy to be drawn into a pedantic discourse on rights and wrongs, and thereby bore the audience to death. But throw in comedy, and the audience becomes more receptive to the positive message that lies wrapped in the jokes, one-liners and funny situations. That's definitely a smarter and more effective way for the director / scriptwriter to appeal to an audience that is overwhelmingly made up of entertainment-seekers.

2. An unpredictable ending is not welcome in Hindi cinema, and an unhappy ending is even less so:

I believe this goes back to the concern with robbing the audience of "entertainment" by making the ending less than picture-perfect. And how can a perfect ending be sad, or even tinged with a dash of melancholy? So even after a roller-coaster ride along the road of good karma and bad, good luck and bad, all the key characters seem to somehow "manage" in the end, true to Indian character. It would have been interesting to see how the makers of 3 Idiots dealt with an ending where "Aal izz" not "well" for all the protagonists.

3. Melodrama well-packaged is still melodrama:

Even the best of films cannot risk not adding the customary dose of melodrama that has been the trademark of Bollywood movies, and indeed of any genre of so-called commercial Indian cinema. So even an Aamir Khan movie has to have an escape from a wedding that is just not destined to be, and a desperate attempt to melt the strongest hearts during a childbirth scene (it at least succeeds in melting the heart of the movie's most no-nonsense character). The saving grace is the comic treatment of poverty in one of the "idiots'" family - which strikes a perfect balance by lampooning the self-pity that many of us suffer from, at the same time not trivializing hardship.

4. You still need to appeal to the lowest common denominator, if only occasionally:

To appeal to the masses, even if they are the urban educated lot who throng the multiplexes, film-makers do not and cannot rely purely on wit, deadpan humour and puns. The film's desperate and repeated use of a character's malfunctioning digestive tract as a source to elicit laughter is a case in point. But then, I guess one cannot lose sight of the commercial success that the minds behind the movie had set their sights firmly on.

5. The target audience is wider than it appears:

At first glance, the movie is aimed at the 15-40 age group of middle-class and upper middle-class Indians who have grown up under direct or indirect pressure to perform in a highly competitive educational environment. That surely explains the stupendous success of the movie in urban India and also in the West where Indian-origin students have been seen queuing up outside theatres, braving the cold. I do suspect, however, that the big hit that the movie has reportedly become has resulted from capturing the imagination of other non-overlapping groups as well. These include parents, for whom it is one more reminder to let their children have a say in what they want to do in life; or school teachers and college professors, for whom it is a timely reminder to think beyond cramming-oriented, system-acing, exam-cracking variety of education. It is by appealing to this large universe of viewers that the movie has hit the bull's eye.

So is it a good movie? Definitely, and a very enjoyable one at that. Is it a great movie, deserving of an Oscar entry? No. But eminently watchable for some excellent performances including from the ever-reliable Aamir Khan, its funny moments and for dealing with a subject that most viewers, especially Indians, can identify with.

PS: Can anyone tell me why Mukesh Ambani has been thanked in the credits of a movie that is distributed by Reliance Big Pictures, owned by his dear brother Anil?

Ramblings of an ocassional insomniac

2009-11-18T01:22:00.005+08:00

I am back writing this blog after two-and-a-half months. And it took me a bout of insomnia to get here. Fortunately I am unable to sleep only once a month on an average, so I am happy blaming it on the ocassional 5pm coffee or a bout of work-related hangover. And I am relieved it's not a Sunday night, or a Monday morning rather, when many of us dread the start of another week of work.

Not that it helps, however. Sleeplessness has been attributed to a number of reasons over the years, as life gets more hectic and stressful. Tension, pressure in personal and professional life, frequent long-distance travel as well as excessive exercise have been blamed for this. A recent story that has been in circulation relates to the death of Ranjan Das, who headed SAP's Indian operations, and by any measure was considered a healthy and active individual till he succumbed to a heart attack in late October. Successful, hard-working and a fitness freak with a marathon under his belt, Das is said to have survived on four hours of sleep a day. Not for long, sadly.

It is events such as these that make us stop and think at times. What is the right balance to strike between work and play and rest? How much is good-to-have, and how much is a must-have? Do our views of wants and needs change beyond recognition at times? If yes, what are the costs that we have to bear as a result? There are no easy answers, and the answer that seems right to me may not seem right to someone else. Like most things in life, it is up to us to draw our lines and set limits while resisting the temptation of benchmarking against all and sundry.

But let me leave that for some other. Not today, since the morning is not far away, and I need to rest to fight another day.

Matchday in Singapore

2009-08-23T21:23:00.013+08:00

The British Premier League (BPL) has completed its first week of the 2009-10 season, with its fair share of shock results (Manchester United’s defeat to minnows Burnley) along with more predictable and widely predicted ones (Manchester United’s thrashing of Wigan) and “I told you so” results (Liverpool’s defeat to Tottenham). The BPL is one of the most widely-watched annual sporting events under the sun, with fans from Birmingham to Bangkok.

And of course, Singapore. By far the most popular sport in this part of the world, Singapore’s low ranking in the FIFA list (just like India’s) and limited support and passion around domestic football (definitely less than some parts of India) has spawned a number of fan clubs for ManU, Liverpool, Arsenal, Chelsea and maybe others. This has not escaped the highly commercial minds that run most of the large football clubs these days. Which means every year there is at least one major club that gets its footballers to fly halfway across the world to play a “pre-season friendly” in Singapore, with a bumboat ride on the Singapore river and sampling the local cuisine thrown in.

This year the club happened to be Liverpool, which is my favourite team in the BPL. Now don’t ask me why an Indian guy living in Singapore supports Liverpool, which has no player in its squad that calls any place east of Ukraine home. Maybe I will write about it some day. But suffice to say I am not alone. And of course, I am not in the die-hard category, the type whose photos you see in The Straits Times – proudly displaying a mini-encyclopedia of the club in the form of tattooes.

Photo source: www.flickr.com

A few weeks before the game, I managed to get tickets from the offices of Strategic Sports Investment. SSI is a division of The Profitable Group, a British-owned and British-managed business with interests in sports, real estate and everything in between – basically, anything where there is profit to be made by overcharging unsuspecting Asians. Singapore began gearing up for the game well in advance, and I was not surprised to see the Adidas outlet at Suntec City mall doing a brisk sale of the club’s new black “away” jerseys. So much so, they gave me a poster of Steven Gerrard along with my purchase of a rather tame pair of sandals.

There was no Gerrard in the team that came to Singapore, though, with the talismanic captain busy defending himself against charges of beating up a fellow patron at a pub some time back in his homeland. He escaped without any punishment, though the judge, and the sporting world, could see footage from closed-circuit television that clearly showed him punching away in satisfaction. But let me not digress. The team that came had all the other big names – Fernando Torres, Jamie Carragher, Pepe Reina, Javier Mascherano, Dirk Kuyt and the want-away but wildly popular Xabi Alonso.

So one hot and humid late afternoon in July (which is not saying much, since Singapore is hot and humid for at least 11 hours a day all year round) I found myself on the stands at the Singapore National Stadium – a ten-minute walk from my condo. For company, I had my wife, who came “for the atmosphere”, and two friends decked up in Liverpool jerseys, ever ready for an argument on which player was worse – Lucas or Voronin. By the time the game started, there were more than 40,000 in the stadium, including Singapore President S.R. Nathan. Going by the crowd reception, he was no match in terms of popularity for Rafa Benitez, Liverpool’s headstrong but astute manager of more than five years.

As I said earlier, the main objective behind the pre-season tours is to ensure that merchandise gets sold and television audiences continue to swell in Asia. For the players, this is a good opportunity to get back to match fitness, readying for the grueling season ahead after a month or two of beach holidays. At the same time, avoiding injury is high on the agenda. Also, it is the youngsters and the fringe players who are usually more enthusiastic about impressing the manager. No surprise, then, that we had the usual sprinkling of Dominguezes and Deggens who do not even figure in the 16-member team in a BPL match. The game had its moments in the first half, but it took a deflected goal from the much-maligned Voronin just before the break to rouse the crowd.

Speaking of the crowd, they had two reasons to be at the stadium that evening, apart from of course watching the game. First, was to be seen as much to see. So you had a sprinkling of weird hair-dos and groups holding placards pleading with Xabi Alonso to stay with the club (Xabi joined Real Madrid a few days thereafter, so the plea didn’t work). We also got to see middle-aged ladies in headscarves wearing Torres’s No. 9 shirt and waving a large cut-out of the absent Gerrard. Secondly, there were some who came just to have a good time. There were two girls sitting behind us who spent the entire time singing the team and player-specific songs, which they knew by heart. While in such a setting I didn’t mind the assault on my eardrums, I couldn’t help wondering how much of the game they managed to watch in between their singing.

The game itself, by the way, did liven up in the second half as the temperature dropped a celcius or two lower. The bigger stars came on, and you could see in Dirk Kuyt’s endless running and drive that for the blond Dutchman, it doesn’t matter who he is playing against. To him, all games have to be attacked with the same level of energy and enthusiasm. That, along with the distinct difference in quality that the introduction of Torres, Alonso and Riera brought along, resulted in Liverpool drilling in a handful of goals past the hapless Singapore keeper.

We got our money’s worth, the players got their practice and surely the organizers made some profit.

We didn’t stay till the end of the evening, but if the standing ovation that I saw on TV the Liverpool players getting during the victory lap was any indication, they must have gone home with happy memories from this corner of the world. And surely, the club’s debt-laden American owners, if they cared to watch, would have got a reassurance that the franchise they had bought into was truly global.

On the road to Bandung

2009-06-23T22:20:00.004+08:00

In spite of several business trips in South East Asia over the last three years, my last trip was one I was especially looking forward to. Because it was different. Rarely does one get an opportunity to travel on road to smaller cities while travelling on work, and my meeting in Bandung promised exactly that.

Well, Bandung is not exactly a small city, with more than 2 million people. In Dutch times, it was the seat of the government. But today, especially from a commercial or business point of view, it is way behind Jakarta. Some of us also remember Bandung from the Nehru-inspired school books in India, where Bandung is mentioned as the city hosting the eponymous Bandung Conference for Asian and African countries in 1955.

The Jakarta-Bandung highway is a six-lane toll road, with some stetches of four lanes as well. Not of the same standard of finishing and beautification that one gets to see in Singapore or Hong Kong, or the western countries for that matter, but a nice stretch of no-nonsense tarmac. Our driver started at a comfortable 60 to 90 km / hour, depending on whether it was an unruly large truck or a small zippy car ahead of us. Though it is a toll road, one could see an odd urchin or a lazy villager whiling away time sitting on the divider. And the relatively large number of vehicles overtaking from the wrong side did throw a bit of nostalgia for India in the mix.

With its democratic political system, large young population and tolerant society which has had its shares of sectarian violence, some observers have hailed Indonesia as the "next India". A recent publication talks about how we should think of adding another "I" to BRICs, the term used to describe the large emerging economies of Brazil, Russia, India and China. And I think there is an element of truth in both observations.

Indonesia is going through an eventful period politically. After the parliamentary elections in April, the presidential elections are due in July. Along the highway, one cannot miss the large blue flags proclaiming "SBY - Bodieono" . The centrist, clean image of Susilo Bambang Yudhoyono makes the incumbent president the odds-on favourite to win. Even though his choice for Vice President - central bank Governor Bodieono - is a political lightweight. Some say SBY, as Yudhoyono is popularly known, made it a point to ensure his VP would be from a non-political background, after his uneasy relationship with incumbent Jusuf Kalla of Golkar Party. It is a healthy multi-party democracy, though, as I could see a shining black car ahead displaying a bumper-sticker with SBY's rival Megawati and her running mate waving at us.

But back to the highway. With traffic thinning as we long left the Jakarta suburbs behind, our driver had sped up to 120 km / hour. And it cetainly helped that the trucks for once were sticking to the left lane. However, the highway to Bandung passes through a landscape of low hills, and with quite a few gentle curves in the road, Pak Tono decided to settle on 100 as the ideal speed.

Outside Jakarta, rice paddy seemed to be the most popular crop. The bright green of the fields, interspersed with the red and white houses, were not very different from what you would see in many parts of India. As we drove through the rolling hills, this gave way to small patches of tea gardens. The banana and coconut trees, however, were omnipresent throughout the route, due to some quirk of botany that cannot be explained by my untrained mind.

Close to two hours after we started, billboards advertising hotels show up as the first signs that we were approaching Bandung. From The Majesty to The Novotel, all of them were predictably promising a comfortable stay. Apparently, the low to mid-20s temperature of the city makes it a weekend retreat of choice for those sapped by the heat and humidity of the capital. The other favourite message of the billboards seemed to be advertisements for apparel factory outlets, a tourists' favourite given that the Bandung area is the centre of Indonesia's textile industry. Very soon, narrower roads and slower traffic signalled that we had entered city limits. The client's office was not far away.

We returned soon after the meeting, so I did not get a chance to explore the city. All I can say is that the Dunkin Donuts outlet nearby serves a decent cup of coffee. For more of Bandung, I have to return some day.

Young MPs in India - beyond the euphoria

2009-05-28T03:42:00.006+08:00

The Indian elections have been in the news globally for a number of reasons - from the way more than 400 million people voted over a month, to the impact the results had on the Indian stock market on that Manic Monday - May 18. So before the topic goes stale, I must jot down a few lines related to this epic event in the history of
democracy.

Let me focus on one of the most-discussed themes of these elections - the so-called emergence and prominence of the youth. This has primarly centred on two issues; firstly, that there is greater representation of the youth among the elected legislators, and secondly, that this election has seen greater participation by young voters. I will dwell on the first.

The issue has been in the limelight since Rahul Gandhi, the scion of the Nehru-Gandhi family, took an active and leading role in campaigning for the Congress Party. As every commentator has mentioned, the result of the election has been influenced to a significant extent by Rahul Gandhi's winning back large chunks of
India's largest state Uttar Pradesh for his party. No less significant has been the contribution of his cousin - Varun Gandhi - who managed to diminish whatever chance his party (BJP, the key and only national rival of the Congress) had by his hateful speeches insulting the Muslim community. So youth did have a role to play if pure impact is anything to go by.

Around 12% of the legislators in the new Parliament are what can be called "young" in Indian politics - below 40. Let us look at the young MPs who have been in the news. What is common to Mausam Noor, Nilesh Rane, Supriya Sule, Agatha Sangma and Hamidullah Sayeed? They are all relatives, in most cases sons or daughters, of established politicians. Along with their more well-known and visible counterparts Jyotiraditya Scindia, Milind Deora or Sachin Pilot, for that matter. Indeed, the young MPs without a political connection in the family are in a minority. And like Kerala MPs P.K. Biju and M.B. Rajesh, they are mostly from the Left Front - the Communist-led coalition - with a background in student politics.

So is this emergence of young politicians as great a news as it is made out to be by the mainstream media and television anchors with verbal diarrhoea? Surely not. It is indeed unfortunate that the old Indian bane of "connetions" and "all in the family" has been so prominent where it can have the maximum influence. Not very different from large swathes of Indian business, where untested and often unworthy offspring get a fast-track to the corner office. And more experienced and more accomplished lesser mortals have to clear the way for the crown princes and princeses.

But there is a silver lining. Most of these young MPs are well educated, often in the best institutions in India and abroad. Some of them are well-travelled globally, and therefore have a broader perspective that is no doubt only further broadened when they hit the dusty village roads in sweltering heat to ask for votes. They have spent most of their adult life seeing India open up to the world, and starting the slow but sure journey to a more meritocratic society where equal opportunity for all, no matter what the background, is the ultimate goal. So maybe they can be the catalyst of change that Indian politics sorely needs. For all his experience, expertise and statesmanship, Dr Manmohan Singh is not in the best physical health to lead the country for long. And neither would be L.K. Advani, his prime ministerial rival in this election.

Drawing a parallel from Indian business, we can look at Wipro, where Azim Premji inherited a consumer business by virtue of being born into the right family. But he used the opportunity to transform the company into a leader in IT services. Not as romantic as the first generation entrepreneurs at Infosys, but a terrific achievement nevertheless. India's young MPs from privileged backgrounds have had a relatively easier, and surely shorter, route to Parliament House. What they do now will determine how they will be remembered.

India will be watching.

The Singapore cabbie in his many avatars

2009-05-02T18:00:00.003+08:00

Taxis were never my favourite in India. I always found them stuffy and overpriced compared to their lighter but more nimble cousins - the auto-rickshaws. While the ancient Ambassadors of Kolkata gave you more space than the claustrophobic Fiats of Mumbai, the smell of fuel mixed with the grime of these huge cities didn't make for a pleasurable ride in either.

Photo source: Wikimedia Commons

Singapore taxis are, of course, much more comfortable - though they are not cheap by any standards, especially in peak hours with the plethora of surcharges slapped on. What makes a taxi ride in Singapore entertaining, though, is the readiness with which most drivers engage in small talk. On many occasions, this rapidly develops into either a teach-in session on life in Singapore, or a discourse on any number of topics under the sun. Following are some snippets:

Avatar 1. The cabbie as the ambassador for Singapore

It was our recce trip to Singapore a month before moving here. The purpose - looking around the city, with a bit of house-hunting thrown in. And I suppose our words and actions made the above very clear; at least, clear enough for our cabby friends. So each of the four taxi rides that weekend, the cabbied gladly announced: "Singapore is a multi-racial country". It was as if they had taken on the mantle of ambassadors of the city-state (and from my experience I can vouch they were indeed right). And of course, we did get quotes which ranged from the stereotypical - "Most Indians are IT preofessionals" - to the accusatory - "Indians come and take our jobs"

Avatar 2. The cabbie as the gourmand

It is a typically sultry afternoon, but we are tempted to hop on to a taxi and get a taste of Indian food in Little India. Our cabbie is smart enough to put two and two together, and launches into what can qualify as a "2iminute guide to Indian cuisine". Not only does he offer tips on Indian restaurants in Singapore, but also explains the difference in "roti prata" (the Malay/Singaporean dish that comes closest to Indian bread) as preferred by North Indians vis-a-vis that prefereed by South Indians. I gather he was explaining the difference between the naan/chapati family of breads from the North and the dosa/appam family from the South.

Avatar 3. The cabbie as the Hindi song buff

Yet another taxi ride, and we are pleasantly surprised by a Kishore Kumar number from a good forty years back playing. After exchanging surprised glances, my wife enthusiastically enquires if it is some radio station that the driver is listening to. "No" - pat come the answer. Our good friend is playing a CD of Hindi songs. Now that was a big surprise! And no, he doesn't understand Hindi, but he does understand the "mood" of the song. It was "Happy listening" for the rest of the journey through the weekend traffic.

Avatar 4. The cabbie as the financial journalist

A late night at work, and it is a sleepy and tired yours truly that embarks on the 10-minute ride home. But I am intrigued by the driver's knowledge of the financial markets. After expressing his surprise at my working late even though I don't cover the European markets, he launches into a little speech on the right hours for work depending whether you cover New Zealand or Iceland. I find that he keeps himself abreast of the latest financial news - proven by a short commentary on the UK banks' results announced that week. He also shared with me his theory of how his passenger volumes are correlated with the stock market, and the latest on which bank is laying off employees in Singapore. It was only because we reached my condo that I was deprived of more nuggets of information and analysis.

I am told that many taxi drivers in Singapore are retired from government or private sector jobs and look at this vocation as a source of steady income. And after paying the rental to the taxi company and buying the fuel, there is a decent amount of profit to take home. So the cabbie in Singapore need not be from the poorest section of society, as in many other places. The recession is starting to bite, though. On another late night ride back home, a cabbie bitterly complained that with passengers using buses and the MRT more and more, and many expats leaving the city-state, earnings have dropped. Even working 18-hour days is not proving to be enough. The good news is that he still has his sense of humour intact, and is ever ready to engage in small talk to lighten up your day.

PS: The rumour mill has it that some taxi drivers are "informers" for the Singapore government. It is unlikely we will ever know for sure if they are. But how does it matter, as long as they keep you entertained?

Dusk

2009-04-15T23:01:00.004+08:00

Photo source: Author

Dusk, they say, is the hour of the defeated. As the sun dips below the horizon, and nature signals a transition from day to night, there is at times a lingering sadness that seems to float in the air. Some distant dream that is not yet achieved, some faraway destination that has not been reached -the relative quiet of dusk does raise troubling questions in our minds after the hectic activities of the day cease to be a diversion.

City life makes us oblivious to the change in the diurnal motion of the earth. Most of us work in offices lit up by electricity, while the same electricity powers our televisions that provide evening entertainment, and can convert a sports stadium to day-like luminance, making a small white ball as visible to us as in the mid-day sun. Somewhere, someday we seem to have lost touch with how nature wanted us to live.

It was, therefore, with quite a bit of interest that I took a short walk around this time on a rare weekday that I was home before dark. From the quiet promenade along the Kallang river, it was indeed remarkable to see and hear the sights and sounds of day give way to those of the night. As the sky turned from a palette of orange and purple to first a light, and then darker, shade of grey, street lights and home lighting seemed to gradually glow bright one by one. The odd chirp of a bird or two slowly gave way to the low, monotonous drone of insects. Far away, you could hear the sigh of relief from homebound traffic, eager to return to something or someone that waits at home. A few walkers and joggers passed me - for some, a necessary diversion from home or office, and for some others maybe a hurried attempt to check the "exercise" box for the day.

I was convinced dusk was not only a hour for the defeated - it was an hour for contemplation. It is the time when a small chapter in our lives comes to a close; every day, day after day. It gives us a chance to pause and ponder over what we have done, and which direction we have been travelling. How far are our goals, and how many dusks will it take to reach there. Or is there any goal? Should there be one? Is it not an amazing experience to just get a chance to marvel at nature's beauty, and quietly rejoice at how mankind has harnessed nature's gifts?

And I realized that dusk is as much a hour of hope and forgiveness. This is the time when you can see how the same sky can be as dark in the east as it can be softly bright in the west. And there is no boundary where day meets night. Nature seems to be telling us not to get blinded by the light of day or misled by the darkness of night. Because life, just like the sky at dusk, is a melange of black and white and everything else in between. Each of us, in every way, is like the sky at dusk - a mix of different traits and qualities. It is up to us to decide how we want to travel from darkness to light. Or for that matter, choose that little spot in the middle where we are comfortable. Sooner or later, we all will certainly get our place in the sun. Equally certainly, there will be times when the darkness will seem to be all-encompassing. But as long we do not forget the sky at dusk, there will be colour in our lives.

Harmless stimulants for the non-adventurous type

2009-04-05T19:54:00.009+08:00

“Chocolate, men, coffee – some things are better rich” ~ Author Unknown

While men – rich or poor – are best left to women to discuss, it is worth spending a bit of time on coffee and chocolates, though the latter is arguably a domain for women as well. And with stimulants and performance boosters in the news again this year (thanks to Michael Phelps and Alex Rodriguez), it is perhaps time to look at a couple of items at the “harmless” end of the spectrum.

Part 1: Musings on coffee, and how Captain Ahab’s first mate is changing the world

In spite of growing up in a typical eastern Indian home where at least two cups of tea a day – with generous amounts of milk and sugar is de rigueur – I never took a great liking for tea. Coffee was an occasional luxury at best, and maybe that is why held a greater attraction for me. But it was only with the exposure to the hard-driving, energetic workplace at the banks I have worked in, and the necessity to be alert and enthusiastic in spite of myself, that I realized the true magic of coffee. No less was the influence of the rapidly growing culture of coffee shops in India in the last ten years.

By any standard, I am not a heavy coffee drinker. In fact, my average consumption of 2 – 4 cups a week will qualify as moderate in any consumer survey of my peer group. However, I cannot deny the instant, if short-lived, impact it has on me. Now there can be a discussion on whether coffee is good or bad, or how much of coffee is just about the right amount to drink. But keeping that aside for a moment, the uses of coffee are quite diverse:
• Wake-me-up coffee: After a long night, to get ready for a new day. Needs to be strong enough to give a jolt to your senses. And yes, the aroma matters
• “Timepass” coffee: For those of you not familiar with Indian English, this is just an excuse to catch up with a friend in a lazy afternoon, or to just kill time at the office water cooler
• Anything-but-coffee: When this is just a ruse to meet someone, where coffee is just an excuse for conversation (In fact, Singapore has a coffee shop chain called Coffee & Conversation). And in this camp we find an interesting mix of players, looking for a wide range of professional and personal alliances and deals.

Photo source: www.freefoto.com

Given the supposedly robust nature of the business, you would imagine that the Starbucks’ of the world would do a steady business and not be affected by the ups and downs of the economy. Going through their corporate disclosures, I found that revenues grew from US$1.3bn in FY1998 to US$10.4bn in FY2008 (the company’s fiscal year ends in September), a whopping eight-fold growth in ten years. Year-on-year quarterly growth (e.g. 2008 Q3 compared to 2007 Q3), which is a good indicator of regular growth adjusted for seasonality, was positive for each of the quarters, every year since 1993 when they started disclosing this information after going public. Now this is as much a result of their continuous global expansion as it is of the growing strength of the brand and coffee-drinking as a habit. However one exception – Q1 2009 ending December 2008 – when year-on-year revenues dipped 6%, probably shows that they are not immune to the macro environment. Delving one level deeper, when you look at “comparable store sales” (which strips out the effect of opening of new stores), the impact of the downturn is more visible. Revenues were flat in 2008 compared to 2007, while the last time it shrunk – by 1% - was in 2002. Remember the aftermath of the bursting of the dotcom bubble?

And what about profitability? After growing every year for five years, earnings per share (EPS) dropped in FY2008 to 71 cents. Research analysts at stock brokerages expect a further dip in FY2009 to 68 cents, before recovering in the subsequent years. Sounds unexpectedly coupled to the global economy, does it not?

The Starbucks stock has also moved in the same broad direction as the market in the last few years, though both outperformance and underperformance has been significant.

Chart source: www.starbucks.com

So are people happier than ever in the middle of the recession and don’t need coffee to perk them up?

Certainly not. Starbucks is as much about marketing and supply chain management (think new-sounding products and cheap sourcing) and portfolio management (think opening new stores at the right time, and shutting loss-making ones, as well juggling the right mix of coffee and non-coffee offerings, including merchandise) as it is about coffee. Paying as much for a cup of Starbucks coffee as a decent lunch in a Singapore food court is not everyone’s idea of how money well-spent. And if you really crave for the brew, why not make yourself one at home or get your free cuppa at the office coffee machine?

Clearly, the business of coffee is as interesting and absorbing as business over coffee. Maybe the Starbucks website says it all – “It’s bigger than coffee”.

P.S: the world’s most famous coffee chain got its name from Captain Ahab’s first mate in Moby Dick – Starbuck

Part 2: Bitter water from Mexico, and hoardings at Patel Bridge

If you have travelled along Marine Drive in South Mumbai on your way to work, or frequented the nearby Chowpatty Beach, you cannot have missed Patel Bridge. An otherwise nondescript structure, Patel Bridge has probably the two most coveted advertising hoardings aimed at people connected with finance and investments. And it is, in a way, the barometer of the Indian economy in general, and financial markets in particular. At any point in time in the last four or five years, Patel Bridge has hosted at least one advertisement that sells a financial product, especially new initial public offerings (IPOs) from companies.

It was, therefore, no great surprise last December as my taxi approached Patel Bridge, a large advert for Tata Capital – the Tata Group’s new improved financial services foray –caught my attention. Turning back after five minutes, however, I noticed the other advert – for Cadbury’s new brand of chocolates Bournville.

Now that was interesting. But maybe not unexpected. Financial markets were down in the dumps, so what else to keep the citizens of India’s financial capital in the right mood than the first offering in India of “fine, dark chocolate” from Cadbury’s?
It has been a long and victorious march across the globe for what the Aztecs and Mayas in Mexico associated with the goddesses of fertility. The word “chocolate” is derived from the words xocolli (“bitter”) and atl (“water”) in the Nahuatl language spoken by the Aztecs. Cultivation of cocoa beans in Central and South America led to drinking of chocolate. It was only in the 1700s, however, that solid chocolate was first manufactured, and that has since been the primary form of consumption across the world.

Fans of chocolate tout its benefits to the circulatory system, and its stimulating effect is often romanticized, especially by women, as nothing less than a morale booster. Detractors point to its high fat content, and chances of over-consumption resulting in obesity and even poisoning from its lead content. However, it remains one of the most loved food items, and is an all-time favourite as a gift item that you can rarely go wrong with.

It is interesting to note that prices moved lockstep with the mood in the global economy for the better part of the last seven months. Retail prices of chocolate do not, of course, fluctuate wildly; so we look at the iPath Dow Jones – AIG Cocoa Index, which in simple words is a measure of the expectation of cocoa prices at any given point in time. Also, given the impact that the upheaval in the financial markets has had on the public at large, the state of the market and the economy may be used as a proxy for the mood of the masses.

Chart source: Bloomberg

Note the spike in cocoa prices in the aftermath of the Lehman Brothers bankruptcy (September 15, 2008) and the immediate fear that gripped the financial world. In October, however, governments across the Western world injected capital into the financial system, and coordinated intervention raised hopes of a recovery – note the plunge in cocoa prices. Late into the fourth quarter of 2008, the world realized this may not be enough, and cocoa prices go up. As we enter 2009, the early-January bounce in stock markets again brings the Index down. In short, bad news make you run to the fridge for a bite of chocolate to convince yourself that this is not the end of the world, after all. Conversely, good news reduces the need for another bite.

However, correlation does not necessarily imply causation, and I am certain there are other factors related to the weather, global trade and technical factors in the global commodities markets that have resulted in this seemingly high connectedness. In addition, the recent rally in the global stock markets in late March, and accompanying positive macro-economic news, has not had a meaningful impact on cocoa prices.

For believers in the potency of chocolate, however, this could just be the sign of the times, to be ignored at your own peril!

Encounters with the Indian public sector

2009-01-28T20:08:00.001+08:00

As mentioned earlier, I will write, in my first blog of 2009, on the oft-debated issue of the efficiency, or the lack of it, of Indian government-controlled organizations. The Indian public sector is one of the largest in the world. Indeed, an important arm of that – Indian Railways – is often mentioned as the single largest employer in the world. Of no less importance is the fact that among the larger countries in the world, the Indian government agencies and government-controlled companies are the most vilified. There are two other countries which have populations of at least 5% of humanity – China and the USA. Several Chinese state-owned companies are indeed world leaders, while for many others, as well as several non-corporate arms of the government, you would hardly find an objective study allowed or available. Their American counterparts, while fewer albeit admittedly superior, are surely no match for the world-class private-sector organizations that the USA can boast of. That leaves India, where people do not miss a chance to criticize the public sector player in any field that is competitive. Are we unduly harsh on a soft target, or is there a merit in the avalanche of criticism directed at the Indian public sector? If my recent experience is an indicator, the latter is surely true.

Since the 1980s, the public sector has faced increasing challenges from strong, aggressive and nimble competitors from the private sector. These organizations can be broadly classified into three categories. First, where monopolies exist, and probably will continue for the foreseeable future, such as the railways and the postal services. Second, in sectors such financial service and telecom, where the public sector incumbent is still the leader, but has to constantly innovate and reinvent itself to hang on to the top spot. And finally, where the changed market dynamics have enabled newer entrants to pull away from the erstwhile leader from the public sector. Think airlines. Some day, the third category may mutate into one with no meaningful public sector player. Remember those government-owned television manufacturers from the 1980s – EC, Konark, Webel and others?

I am not worried about the last two categories, where market forces and governmental intervention will ensure that the consumer – or to use that uniquely Indian word “public” – gets a minimum level of service. It is in the areas of public sector monopoly that Indians are at the mercy of the government apparatus. Take the Department of Posts, for example, which I had the misfortune of coming into contact with late last year. The post office in India serves several purposes. It is, naturally, the channel for all mails and postal cargo and therefore one of the key lubricants that keep the huge machinery that is India running. In a country where telephone penetration is just over 30% and internet penetration is a measly 5%, postal services are of paramount importance. Equally important is the role that post offices play as a quasi-bank – you can borrow and invest through a post-office, and I reckon more Indians have access to a post-office than they have to a bank. Sadly for the institution, and more so for Indian citizens, the Department of Posts has not been able to break away from the shackles of bureaucracy and inherent customer-unfriendliness that dogs state-owned Indian organizations.

The very first impression that I got was that the employees, with honorable exceptions, are not aware that they are in the service industry. The simple fact that the person across the counter is a customer seems to have escaped them. Be it in answering simple queries, or patiently listening to complaints – our friends at the post office have a thing or two to learn from the private sector. On my asking an official as to why the interest rate on a certain financial product worked out to be lower than that advertized when I had invested six years back, all I was told was that they just read it off the computer screen. On top of that, I was accused of questioning the scruples of the official and his colleagues. All in return for asking a simple question that deserves a short and simple answer.

Second, these organizations always seem to employ more people than they need. At any given point in time, a significant percentage of the employees can be found chatting, reading the newspaper or enjoying their cup of tea or cigarette. Several others appear busy, but then anyone can be kept busy in a place where sub-optimal use of technology has resulted in most of the records being handwritten. The woefully low efficiency level is common knowledge in India. So much so that the Postmaster of a post-office I visited complained that with several colleagues away on leave and for training, he did not have enough resources. It does not take a human resources guru to figure out that we had a leader of a team of more than fifty people who is utterly incaapble of, and probably has no control over, allocating his resources.

And finally, can someone teach them basic manners? I almost had papers snatched from my hand by one of the employees, while another (at a different post office) purposely walked over from his desk with the sole intention of arguing with me. I guess it stems from a misplaced sense of entitlement; a belief that they are the best thing that happened to India since the country got independence and therefore deserve differential and deferential treatment. The common man should just be thankful that he gets an opportunity to be served by this genetically superior specimen of the human race!

For reasons alluded to earlier, the Department of Posts can play a very important role in the development of the country. It can tap into its vast pool of employees to more aggressively market financial products, thus boosting revenues and increasing productivity. It can even go a step further and market insurance policies of its public sector cousin – the Life Insurance Corporation of India – or mutual funds from its clearly superior public sector relatives from the fund management industry. It can take advantage of its geographic reach to provide services such as centralized Internet connectivity to villages. The list goes on and on, and I am sure similar stories are true for other state-controlled institutions. But does anyone care what the “public” thinks or wants?

Mumbai - one month later

2008-12-31T12:42:00.001+08:00

My Mumbai trip is just a month after the ghastly attack by terrorists. Coming to the city for the first time since March, I have been on the lookout for changes in the city and its people. Sitting right now in the lobby of The Trident, I am probably best positioned, in more ways than one, to jot down my thoughts.

First - the obvious. Security is much stronger and is evident. I had to enter the hotel through the only gate currently open. Just like several other places in the city, and indeed in the country, temporary stations for armed police have been set up outside the entrance. My bag was checked diligently, and while the customary greeting from the staff was as smiling as ever, I can sense a general feeling of "differentness". As I sit on the sofa overlooking the Arabian Sea, I see a plainclothes policeman in black pacing the floor. Several others are roaming, keeping an eye on people around. Does it help being in plainclothes when it is obvious they are from the police? Maybe to identify themselves in case another shootout starts. And it does help in making guests feel a bit more secure without making the lobby look like a police station. There are foreign tourists around, and I can see a few strolling on Marine Drive as well. Hopefully, things will get back to normal soon. Hopefully, this time it will be different in that people remember the lives lost, and the hundreds wounded, and everyone does their bit in making this city a better, safer place.

Speaking of the police, one of these guys in black just approached me and requested me to move to the cafe area since I am not meeting any hotel guest. Which means I need to get going. I am impressed by the polite and helpful nature of the police and security personnel in the last 2 days. How refreshingly different from those from some other arms of the State. More on that in my next post.

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On the 4:46pm slow local to Andheri, I can't help throwing a glance at the luggage racks to see if there is any suspicious package. The faces in the second class compartment don't seem to have changed in the last few years, but I guess the fear and suspicion among people have increased manifold. As a commentator mentioned in the aftermath of the terrorist attack, it is striking how the appearance of the terrorists was "ordinary". It is the ability of such "ordinary" people to have a devastatingly extraordinary impact that should bother the common man and, indeed, our lawmakers and law-enforcers.

In contrast with the Oberoi, security at the Churchgate station was highly "leaky", if I may use the word. Not a thread of khaki to be seen at the entrance to the subway, and the metal detectors at the entrance to the platform happily glowed "WALK" in green all along. A few policemen were loitering nearby, but their ability to act quickly and decisively, should the situation demand, could be seriously questioned. So much for protecting a place which is way more vulnerable than the Tridents and the Tajs of the world, with potentially huge threat to human lives should a tragedy similar to 26/11 occur.

Not much seems to have changed so far as the Mumbai local trains are concerned. The train did leave Churhcgate at 4:46pm, with several young and not-so-young individuals geting their daily exercise through the 50-metre sprint from the station entrance to the nearest compartment. Standees competed for space as usual, with noses close to others' armpits creating a perfect setting for the next deodorant ad.
Earlier at the station, I could see a couple of relatively new First Class Ticket Validating Machines announcing they were "Out of Service". Isn't it inhuman to expect machines to work 24x7 when their creators and users are enjoying their Xmas break? The monitors next to the ticket windows, though, seem to have caught the city's workaholic mood, and tirelessly relay stock market news to millions. First class or second, Mumbaikars do seem to love the stock market. So what if once in a while it makes them lose money?

As I look up, I can see the train approaching Dadar station. A few square feet of the coach get new occupants. This will go on till we reach Andheri. And then another horde of people will board the train for a journey in the opposite direction. It is as if the train swallows a mass of people at each station, spitting out a few at the same time to ensure it doesn't choke. This seems to be working fine for years. In and out, out and in. I wonder what amazing source of information and stories the seats and windows of Mumbai local trains must be. If only we could listen! But then, we are either too tired, or in great hurry to reach home or workplace. Maybe we should all listen to the phone of the guy in front of me. Right now, it is announcing an incoming call with a rather shrill rendition of the Bollywood number - "Just chill, chill ... Just chill"

Singapore - first impressions

2008-12-27T15:17:00.001+08:00

A month is a milestone by any standard. And time away from a place always helps to get a better perspective of the same. So with more than a month spent in Singapore, and an additional week on vacation in Kolkata, it is time for me to pen down my first impressions of the "little red dot", as an Indonesian Foreign Minister (in)famously described the city-state.

Having spent 3 years in Hong Kong and being born, raised, studied and worked in India, it is perhaps natural to draw comparisons with these two places.

The single most frequently quoted characteristic of Singapore is that it is a marvellously neat and clean place. Well, neat and clean it is, compared to any Indian city. But one does find the odd Coke can and plastic bag lying on the sidewalk. Hong Kong, in fact, is today at par with Singapore in cleanliness. The cleanest places, and the dirtiest, of the two cities can be considered at par. On mentioning this to a friend - an Indian living in Singapore - I was told that the city was much cleaner a few years back. So has it got something to do with the influx of migrant workers from South Asia and China to sustain what was the trade and real estate boom? Or is it that the people are changing? Only time will tell...

For any recent arrival from Hong Kong, one of the first things to strike me was the pace of the city. Singapore seems to be a pace slower. Not that I am complaining; the benefit of merely going from Point A to Point B at a breakneck speed is often overestimated. In the hurly-burly world of big business and commerce, being hyperactive and appearing busier than your neighbour is often seen as a competitive edge. Singapore, however, stands as successful example of "relaxed efficiency". Hong Kong, or even Mumbai, have more buzz with people always running around and things always happenning around you. As we go through the global economic cycle of boom and bust, Singapore's success or failure will give a pointer to how meaningful or superficial the "buzz factor" is.

A definite plus for Singapore is its greenery. Hong Kong has its country parks, but for most of its 7 million people life consists of shuttling from a small matchbox they call home to a bigger matchbox at work - all inside the proverbial concrete jungle. Singapore is refreshingly different. Apart from its parks, there are several green patches sprinkled across the residential and even business areas. Not only does the foliage provide respite from the oppressive heat and humidity, but it also makes the air more breathable. A welcome change from the emission from the factories of Guangdong province that hang over Hong Kong.

And finally, no discussion on Singapore is complete without its national pastimes - shopping or food. Since the former never fails to evoke strong reactions, depending on the subject's gender, I will leave it for a later date. Food, however, is easier appreciated. Singapore scores in the variety of food available at different price points and at easily accessible locations. While Hong Kong is as good in sheer breadth of cuisine, Singapore's hawker centres offer affordable Chinese, Malay, Indian, Japanese, Korean, Indonesian, Western and other dishes at several locations close to public transport and residential or business areas. Regular consumption may adversely impact your waistline, but once in a while it should be savoured. My personal favourite? Lau Pa Sat Festival Market - right next to my office.

Terrorism and the "aam admi" (common man)

2008-12-05T13:23:00.001+08:00

As I write this on the flight from Jakarta to Singapore, I cannot help wondering why India has not been able to control terrorism in the same way as Indonesia – a country where radical, and therefore potentially violent, Islam is easier to get public sympathy. Since the Bali bombings around 5 years back, there has been no major incident of terrorism in the country. The key reason is of course single-minded resolve in the political and bureaucratic circles to deal with terrorism with an iron fist, which has been missing in India. Looking beyond the Mumbai blasts, however, I have been thinking of what the common man and woman can do to make our lives and our country more secure. This aspect deserves as much attention as the legislative, judicial and military measures that have been widely discussed.

· Be alert and aware

Every day, on their way to work, Mumbaikars come across unattended bags or boxes lying in train luggage racks or hangers-by loitering in railway stations. Parallels can be found, I am sure, in other Indian cities. Sometimes these objects or incidents arouse our suspicion, but more often than not, we ignore them. Typically, the rationalization takes the form of “I am too busy, rushing to a meeting” or “It’s not my problem; why bother?” or “It must be harmless – let me not get worked up”. In most cases these would raise a false alarm, the only benefit perhaps being someone getting bag his lost bag. But in a very small minority of cases, alerting those around us and in particular, the authorities can save several lives or prevent harm. Hopefully, the recent terrorist attacks will make us behave as more responsible citizens, when we will stop offering excuses like being busy or behave as if we are “in control” in situations which demand action

· Choose your leaders, or you have to accept those thrust upon you

Politicians are being blamed for the current lack of security in India, and rightly so. Think of the politicking in the name of “human rights”, concentration of resources in protecting ministers and MPs while the country burns, and the utter failure of leadership when the terrorists struck. However, blaming politicians is at best a temporary “shock therapy” for the white kurta clan, and at worst, just an easy way of giving vent to our anger. To every person that goes overboard with accusing politicians, I ask: “Do you vote in the elections? If not, should you not plan to next year?” My guess is that many Indians will not be able to name their local Member of Parliament. And as Lola Kutty has demonstrated on Channel [V], some of the younger generation struggle to name our President or some key ministers. In short, political awareness is sorely lacking among Indians, especially among many of the youth. Not that the system does not require reforms. I, for example, have voted just once in my life because my voter Identity Card registered in Kolkata would not work in Mumbai. And if you are an NRI, forget about voting! But then, countries like the US have postal ballot. In India itself, voters can go to the voting booth and get their vote "cancelled" by, say, marking all the names, so that their name is not used in bogus voting. I am sure that appropriate steps, and more awareness of our political rights, will improve the quality of the politicians in power.

· Do your bit in “giving back”

One of the overlooked aspects in analyzing the terrorist attack is the background of the lone captured terrorist. If news reports are true, this man comes from a poor family and did not even finish school. Needless to say, many of the young men who get drawn into radical organizations are from the poor, illiterate and marginalized sections of society. As Indians, we can all contribute, in different degrees, to better the life of children who are not as fortunate as we have been. It can be in the form of monetary assistance, or time spent – directly or through NGOs. The impact will be small, but over a period of time and multiplied by millions of contributors it can indeed make a big difference. Apart from the obvious benefit to the recipient of our time or money, it can be a source of immense satisfaction to us as “givers”.

Thoughts from SQ917

2008-11-28T13:01:00.001+08:00

A couple of days back, I was on a flight from Manila to Singapore. My first overseas business trip since moving to the Lion City two weeks back, and it was a new experience of “coming home” to a new city. What I will remember the flight for, however, was that the left side of my face went numb for almost the entire duration of the flight, accompanied with a throbbing pain. This is the fourth time in the last year, and the second time in the last month, that this has happened. Naturally I was a bit worried, but from what a flight attendant told me and subsequent online research, I gather it is likely a case of sinus inflammation aggravated by difference in pressure in the cabin. More on this after I seek professional advice.

For now, a couple of observations from the rather uncomfortable three hours:

First, I noticed how my training – formal and informal – has made me very analytical. Yes, even under stress. My first thought was to link it to something I had eaten, since last time I had thrown up. This time, though, it was different – so Hypothesis 1 was out. Next up was Hypothesis 2, which attributed the phenomenon to the often-uncomfortable low temperatures in the cabin. I reached out to the cooling vents above the window, and realized that due to my good fortune or sound judgment on part of the cabin crew, temperatures were actually higher than usual. So the only likely reason would be something to do with air pressure at high altitude. The positive side-effect of this analysis was that it proved to be a welcome distraction for me.

Secondly, this kind of incident changes how you look at small turn of events and otherwise "normal" incidents. For example, a plane starting its descent and ultimately landing is rather mundane and routine for regular travelers. In this case, however, I was actually looking forward to the pilot’s announcement with an eagerness and anticipation usually reserved for more momentous events. The simple fact that the plane’s touchdown would coincide with an end to my discomfort and pain made me think about the small things in life that we take for granted. The same experiences, happenings or material objects appear invaluable at times when we realize what their absence means. Take the recent terrorist attack in Mumbai, for instance. For those who survived, the very escape is something they would probably treasure and will be thankful for for the rest of their lives. Huge as the financial loss maybe, the newly-weds who had thrown a wedding reception at the Taj hotel that night, or the businessmen who were about to close a deal when the terrorists struck, will realize that they were lucky. Just the fact that they are alive, and can look forward to continuing with their lives full of possibilities and hope is a gift in itself.

Lessons from the financial crisis

2008-10-21T19:57:00.001+08:00

You know the world is not quite the same when your wife says, “I would rather tell someone that my husband is a stripper in a gay club than say he is a banker.” Yes, bankers the world over have been subject to ridicule, scorn, pity, sympathy and schadenfraude – depending on their levels of under- or unemployment – in the aftermath of the global financial crisis. Of course, bankers are to blame, but so are governments, regulators and anyone who mistook this upcycle to be the new world order. Much has been said and written about why this happened and what could have stopped it from happening. Equally extensive has been the coverage of the response of different stakeholders – from governments to the taxpayers – to this situation. Without getting into these areas, I would like to share some thoughts on what we can learn from the recent events and how that can help us lead a better life.

Surprisingly, all of these are simple axioms and principles that we have learnt from parents and teachers, but had forgotten. The banker in me cannot resist a disclaimer: I have been guilty of some of these mistakes myself. Thankfully, I have been able to spot these. Hopefully, I was not too late. So in no particular order, here is the list of do’s and don’ts …

Do not live beyond your means:

The root of the current financial crisis lies in individuals, financial institutions and companies borrowing way more than they could afford to. You must have heard the golden rule of banking: “Lend only to those who don’t need the money”. What we should realize is that the other side of the argument is as true: “Borrow only when you can afford not to”. A rather strong assertion, but let me elaborate.

When we borrow, we postpone our expenses by paying a price in the form of interest to the bank. This is essentially a bet on our future earning potential, as well as a vote of confidence in the liquid nature of our present and future assets. When I take a loan to buy a house, I am expressing confidence that my future earnings will be sufficient to service the periodic installments to repay the loan with interest. Linked to this is the belief that, if required, I will have assets, such as gold, equity shares of companies, or even another property, which I can easily sell to generate cash for repayment of the loan. The mistakes we make are twofold: one, we overestimate the quantum or certainty of future income; two, we perceive present and future assets to be more liquid than they really are. What we conveniently forget is that we may not have our jobs tomorrow, or may be engaged in lower-paying professions. Or the plot of land that we own in our hometowns may find no takers in a recessionary environment, resulting in its disposal only at a very low price. Therefore, we should borrow only when we are certain that our future earnings, adjusted for the risks of illiquidity, low prices or unforeseen events, will be sufficient to retire the loan.

No rocket science there – did you say? Well, that is true, but is it not surprising the number of people who seem to recognize this simple fact? The reason behind this is our tendency to often live beyond our means. That is what leads us to borrow more and more, and spend money on goods and services that we actually cannot afford. The solution: know what you can afford, and what you cannot. And when you borrow, do it sensibly. As a matter of policy, I use my credit card only when I am sure that I can pay for the same good or service in cash. In fact, I view credit card as a convenience – for example, it makes it easier to book flight or movie tickets online – than as a credit line.

Keep your head in the clouds, but feet firmly on the ground:

In times such as these, the refrain one hears the most at work and elsewhere goes along these lines: “cut all excesses”, “stay down-to earth, you never know what the future holds”, “be humble” and the like. The risk lies in getting too pessimistic about the state of affairs. Whatever happened to the gung-ho, can-do optimism that has spawned entrepreneurialism and laid the foundation for talented and resourceful men and women to flourish the world over? The answer lies in the middle path. It is indeed a delicate balance that one needs to strike to stay focused yet grounded, ambitious yet realistic, hungry yet satisfied.

Over the last couple of years that represented the height of the bubble, I have noticed a tendency of my fellow Indians to get carried away by the success that individuals and the society have achieved, especially in the large cities. They had come to think that India was on the path of overtaking China, just as many Chinese suffered from the misplaced overconfidence leading to the belief that they had bested the United States. The Sensex was being taken as the barometer of India’s development, and the massively overpriced commercial rents of south Mumbai were considered representative of the country’s position in the global league tables. The same excesses were rubbing off on the young Indians who thought that making thousands of rupees by answering phone calls at the ripe old age of twenty was the be-all and end-all of life.

Now, make no mistake – I am as patriotic as one can be, and I do not mind young guys making a lot of money at BPOs or trading stocks. Nor do I believe that celebrating our successes is necessarily a bad thing. But in these matters, it easy to confuse ends with means, and the substantial with the superficial. The best way to guard against any missteps is to be firmly grounded. Whenever you feel you have achieved a lot and have arrived on the world stage, remind yourself where you would be if you were to lose your job tomorrow, or you were to start your own company on zero salary. Now that is a sobering thought! For those of us who were not born with a silver spoon, think of where your roots are. Think of the sacrifices that you and your loved ones made to enable you to reach wherever you are today. In fact, those acts of sacrifice and struggle themselves are good enough reasons to always aspire for something greater and better. In fact, knowing where we came from and knowing how we reached where we stand today is the best way to stay grounded yet ambitious.

Always question the salesperson:

A key reason behind the collapse of several financial institutions and banks in the Western world is that they bought complex financial instruments that promised high returns in return for taking on higher risk. Sure, greed played a part, and these supposedly smart individuals either thought that the chance of them getting hit was small, or they thought their risk management systems were foolproof. None of these turned out to be true. But of no less importance is the fact that many of them did not understand what they were getting into. They were persuaded by the smooth-talking salesman at the other end of the phone line or across the table.

Familiar, is it not? How often have we been tricked into buying a product we do not need by a salesperson whose income is linked to – you guessed it – how much she sells? Or in the hope of earning “bonus points” which you would be lucky to redeem in twenty years’ time? How about instances when the “free gift” was more important to you than the original product or service which, by the way, cost you a fortune?

I cannot escape feeling a tinge of hypocrisy here, since I spend a good deal of time doing work which centers around getting clients to hire our bank for advising on raising funds. The good news is that this gives me a decent feel of the whole circus. The key question to ask when faced with anyone trying to sell you stuff is this: will this person be comfortable selling this to his best friend or parents or family? If the answer is “no”, you should probe further. Things to watch out for include selective disclosure (what you are not told is as important as what you are told) and the fine print (sometimes these masquerade as “risk factors” which, from a purely legal point of view, can make the seller get away with murder). It is also perfectly legitimate to ask the seller or marketer how he stands to be rewarded on a successful sale. Sometimes, the answers are obvious. It is in those cases where they are not that you should be doubly sure of what you are signing up to. Your reward will be peace of mind, as well as better use of your hard-earned money.

Read the history books:

It is not everyone’s favorite subject in school, but history does tell us as much about the future as about the past. In the credit bubble of the past few years, as well as in the other bubble I distinctly remember – the late 90s’ frenzy around tech stocks – commentators have tried to justify the excesses by proclaiming: “this time it’s different”. Different in the nature of the bubble and some of the dramatis personae, but surely not in the way things fall apart. As any student of economic and social history would know, similar fate had befallen investors during the “Tulip craze” of the 16th and 17th centuries, and in the run-up to the 1929 crash. History does repeat itself, and at times it is merciless.

So for those of us who were repelled by the history taught at school that rewarded memorizing long chapters full of names, dates and events, here is an interesting exercise. Go back to those texts, or read books on historical events; or for that matter historical novels. You will be surprised to know how much of the present and the future is written in the past.

When the travel bug bites, look at the positive side-effects

2008-10-10T13:59:00.002+08:00

Did you know that in 2007 Indians made close to 350 million trips to destinations across the country? Add to that the 5 million foreign tourists visiting India, and the 7.5 million Indians travelling abroad, and you get a pretty large travel and tourism industry. Most of these people travel on leisure or business, apart from a smattering of trips to meet friends and family. Indeed, travelling during holidays has become a growing phenomenon in India in the last 5- 7 years. While increasing incomes and greater awareness are the key reasons behind this uptrend, I suspect it has also got a lot to do with people discovering the joys of traveling.

To most of us who remember the holiday outings and trips to relatives during summer vacations, the joys of traveling are obvious and have been evident for a long time. However, of no less importance is the association of travel with learning and discovery of the self and others. This factor in itself can be as satisfying as the escape from our routine life and as enlightening as what we learn at school or at work. Let me, therefore, share some thoughts on this aspect of travel. These are primarily drawn from experiences of my own, and those of friends and acquaintances around me. But I imagine some day this may be yours as well, if this has not been already.

The biggest benefit of travel is that it opens your mind. Usually we are brought up in an environment that provides us only limited exposure to the outside world. More importantly, we are more often than not used to a specific way of thinking, a particular approach to solving problems and our familiar ways of responding to new situations. Travelling to new places and exposing ourselves to different social and cultural environments helps us to understand that the life that we know of may not be the be all and end all of existence. It teaches us that social and cultural mores that we know may only be a particular way, among many others, of looking at life. It makes us aware that there are people who look different from us and there are cultures that look at social conventions in ways other than we do. For example, the “thumbs up” gesture, which is considered a sign of approval and agreement in most Western cultures, is considered rude or even offensive in some Asian cultures. Calling older people by first names is considered unacceptable in many parts of Asia, including India, but is perfectly acceptable in most Western countries, especially the US. Closer home, an example that we can all identify with is the difference in eating habits of people in one part of the country from another. It takes only a bit of interaction with people outside our immediate circle to realize that food habits have evolved according to availability of plants or animals, or from the climate or landforms of a state or region. Travel, therefore, teaches us to be more accepting of diversity and makes us more open to new or unknown things. This, in turn, helps us better understand people from states or countries that are different from ours and leads to a more efficient and enriching interaction, whatever be the context – social or professional.

The second benefit – at first glance a contradiction of the first – is the realization that in spite of the differences, we are all similar in certain aspects. In Italy and some other Mediterranean countries, for example, it is perfectly acceptable for grown-up single men or women to live with their parents well into their thirties. Very similar to India, and perfectly normal, did you say? Then again, we were given a very motherly treatment, hugs and kisses included, by a lady in a small Egyptian desert town where we had stopped for lunch. The lady apparently did not see any difference between us and her own offspring. So what does this tell us? There are certain values and emotions that are universal and transcend boundaries. It is up to us to tap into these at appropriate times in our lives. Sometimes, this will help us deal with unfamiliar situations; in some others, it will simply contribute to a more fulfilling exchange with other people.

Travel can also make our school and college education system more complete. While this is true for almost all the subjects that we get to learn, I would pick out history and geography as particularly relevant in this case. Reading about the Ajanta and Ellora paintings and sculptures is one thing, but seeing them with your own eyes makes for a completely different experience. And is the study of the Mughal Empire at all complete without getting a glimpse of the magnificent Taj Mahal? Do not tell me it requires expensive travel to far-off lands. We all study different types of soil, but how many of us take any interest in examining the difference in the soil of your hometown and a place four hour’s bus ride away? Or bother about undertaking a short trip to see for ourselves formations such as river deltas or levees? It is one thing to memorize text and graphics and regurgitate in the examination, and another to actually see for ourselves how things are.

A related, and often overlooked, benefit of travel is that it brings us closer to the real world. Several of us lead cocooned, comfortable lives where physical or mental walls, sometimes self-imposed, separate us from the world outside. The student who knows only the home, school bus and school, or the busy executive who knows only the “cold chain” from home to office with the weekend cinema or clubbing or eating out thrown in – both suffer from this malady. Travel at times helps one shake off these barriers and enables us to know things the way they are. No, you do not need to sign up for the latest war-zone holiday package to Afghanistan or Sudan, as I am told some tour companies are offering! I am referring more to the knowledge of how the “rest of the world” lives. Reading that most Indians survive on less than Rs100 a day do not mean a thing unless you see for yourself how they actually live. A trip to the film sets of Mumbai opens our eyes to the labour and hard work that goes behind shooting a Bollywood blockbuster – not obvious when the drama, the music and the popcorn conspire to transport us to a different world for three hours.

Finally travel can help us discover ourselves better, and bring out skills that are either suppressed or we never knew about, if not both. Like this article, which after a long time, gives me the joy of writing which I had almost forgotten. Or it may give you enough raw materials to capture endless shots of nature and human life, if photography is your passion.

So next time you have some spare time, make sure you set off for some other place – near or far. It may be a long flight across continents to an unknown land, or a day-trip to a place outside your city limits. It need not be in a group – sometimes the best travel experience is when the only company is your own. Trust me – that extra couple of hours of holiday slumber or the latest movie or live cricket telecast can wait. It is indeed no match for the thrills of the unknown, the unseen and the unheard.