Wednesday, November 30, 2011

Arun Jaitley's selective amnesia on FDI in retail

Arun Jaitley has produced an eloquent opinion piece on 'FDI in Retail' for the Economic Times. In it, he carefully blends rhetoric and opinion to create 'fact'.

Here are two points I picked up on immediately. (Read the comments section on his piece for other rebuttals).

ONE
"Majority items to be sold by international retailers are going to be sourced from cheaper manufacturing economies like China. Clothes, shoes, toiletries and other items of daily use are not likely to bear Indian signature. The fall in manufacturing sector jobs is likely."

Ok, this one's easy. For starters, Jaitley ignores the fact that Chinese manufacturers have already flooded the Indian market place. We're already buying their toys and cellphones. Jaitley also ignores the fact that global chains already source a LOT of their wares from Indian manufacturers. Wal-mart - alone - targeted $600 million-worth of sourcing from India in 2006.

Also, one of the conditions for FDI in Retail is the company must source at least 30% of its products from small and medium Indian companies. This is a clear sop for Indian manufacturers who were worried about losing to other countries.

You say 'Only 30%'? I say it's a start. The government must, as Jaitley rightly argues, create a better environment for domestic manufacturers to operate in through reforms. But why must Indian consumers - who outnumber small & medium sector employees and kirana store owners - wait years for those reforms to take effect?


TWO 
"The pace at which domestic retail is growing is modest and it is able to co-exist with small retail."

Here, Jaitley implies Kirana stores have survived the entry of the Subhikshas and Vishal Megamarts and Spencer's only because the latter haven't grown too quickly. He again ignores a ground reality.
In many neighbourhoods, my own included, Indian retailers co-exist quite happily with kirana dukaans

In fact, take my neighbourhood of Sector 27 in Noida. It is similar to most urban Indian neighbourhoods in that it includes high-, middle- and low-income households. Within 150 meters of my home, I can choose between three kirana stores and one medium-sized Indian retail outlet - a Sabka Bazaar.
If I expand that radius to 500 meters, the kirana stores outnumber the Sabka Bazaar 10-to-1. I am not exaggerating. I've counted.

This is notwithstanding the fact that there is a VERY large Big Bazaar less than 2 kilometers from my home. This is roughly the kind of India we will live in post-'FDI in retail'.

By Jaitley's logic this should be impossible. And yet it exists; and has been this way for several years. How? Because not everyone buys from the Big Bazaar or Sabka Bazaar. And most people don't always want to travel or shop at the larger retailers all the time. Ergo, there will always be sufficient demand to keep Kirana stores going strong.



The BJP's logic on FDI in retail is flawed because it is selective. It is obvious whom they seek to appease with their stance. Whether their ploy helps them in the elections, only time will tell.

Tuesday, November 29, 2011

My first half-marathon

In late August I took what was at the time, a poorly-conceived decision. I would run the 21.1 km Airtel Delhi half-marathon. Why was it poorly conceived? Well, it ignored a few facts. Until then, the longest distance I had ever run was 8 kilometers. That was 6 years ago. It didn't seem to matter that it took me 70 minutes to complete that distance and it also didn't seem to matter that I spent the next 24 hours in bed. In pain.

The websites said I had to train for at least three months. Fantastic! Time was on my side. Long story short, I managed to stick to my training schedule. By race day I was fairly confident I would finish well within my target time.

So here's how 'Race Day' went. After getting through security and dropping off my backpack, I walked towards the holding area. Being a first-timer, I was in section C. I later heard that's also where the slowest runners from the previous year were placed. Some were jogging around, others stretching; even more were waiting in interminable queues outside the few mobile toilets. Some couldn't wait and we were treated to the fine sight of grown men unburdening themselves behind trees. Some were so burdened they didn't bother hiding behind trees. 

I was so far back in Section C, I didn't even hear the gun go off. Possibly, I'm told, because they opted not to have a gun and just shouted 'Go'. I did hear the crowd cheer. After that, it took five full minutes to reach the starting gate. Yup, LARGE crowd.

Almost immediately, I ran into trouble. Here, trouble took the form of a few runners who noticed that Bipasha Basu had flagged off the race. These fine athletes stopped dead in the middle of the track to photograph her. Once past them, my half-marathon actually begun.

In a way, I'm kinda glad there were so many runners. It kept me from running faster than I should at the start. Naturally, the crowd thinned out further into the race.

Some highlights along the way.

Right after the 4km mark, we passed the Blind Relief Association. Standing outside the gates were a few of the pupils, cheering us on. That was heartwarming and I got quite a mental boost seeing them. Hundreds of other people lined the route to cheer us on but the blind students stayed in my mind.

Just before India Gate came one of the most phenomenal things I've ever seen. I first noticed a silver-gray SUV with a large clock on top speeding by on the other side of the road. At first I thought: 'How considerate. They've arranged for a car to tell us how long we've been running'. Then I saw 3 African runners blitz past behind it. Their pace was frightening. They finished exactly 11 minutes later. At the time, I was only about a third of the way in.

My next big memory was running past India Gate itself. It was the day after 26/11. I saw the flame and the soldiers standing guard. Memories of those terrible three days and the sacrifice of so many brave securitymen came back to me. A poignant moment.

Then came my first glimpse of Major DP Singh. I didn't know who he was then. He had a prosthetic on his right leg and was moving along faster than many other runners. Guts, I thought and waved a thumbs up to him. I found out later that he'd been injured by a Pakistani shell in Kargil. As I read that, memories of India Gate came flooding back.

By the time I got off Mathura road and back onto Lodhi road, I had just 2 kilometers to go. OK, time to up the tempo I thought. Bad move. While I was hydrating every 15 minutes and popping energy gels every 30 minutes, I wasn't getting enough salts. 500 meters into my burst, my left hamstring cramped up. Exactly what happened two weeks earlier on a training run. This forced me to slow down to a brisk walk for about five minutes. I knew my chance of making it in less than 2h20m was gone.

Once I hit the 1K-to-go mark, I picked up the pace again.

With 500 meters left, I was in a world of hurt.

At the 100m mark, I gave it all I had and managed to finish right between two packs of runners. 2h:22m:44s was the official time. I wasn't doubled over in pain and I felt like I was walking on clouds.

As expected after the bout of cramps, I missed my pre-race target by 2h20m. Then again, it wasn't that big a disappointment. At the start of training I was hoping to finish in less than 3 hours. By mid-training I figured 2:40 was a good goal. So in retrospect, 2:22:44 wasn't a bad time. Even better, I saw later that my timing placed me in roughly the 70th percentile of all runners that morning. Not bad for a first-timer.

Hours after the race, I had a massive headache from the dehydration. Two days later, my thighs and calves are sore as hell and walking is painful. So, would I do it again? Absolutely. ADHM 2012, here I come! :)

If anyone from the organising committee is paying attention: I'd advise a few small changes the next

year.
1) Walkers should keep to the sides. Many crowd around the middle and force runners to weave in and out. That's not safe or good for the joints.
2) Have clear instructions for bottles to be disposed right to the side of the road if dustbins are not available. Several runners slipped and fell on bottle-caps and empty bottles. It's not safe for barefoot/ minimalist runners either.
3) And yes, please tell Bipasha-photo takers not to crowd around the start! :)

Other than that, perfect race. Great organisation and great atmosphere!       

Thursday, November 24, 2011

Big Box retail: Observations in China

I can't comment on how FDI in retail will pan out in India. The best I can do on the Indian context is point you to this very informative blog post by twitter user @GirishLN.

What I can do though, is narrate my experience as a customer in China, where I lived for more than a year. If I'm right it will be quite similar to what we're going to have here.

In my time there I lived in two apartment buildings. Both had something I've never seen in India. Down in the basement, both buildings had what was essentially a mini mart. These shops had everything from instant noodles, bread and milk to 100-year-old eggs and toothpaste. In short, if I was either hungry or very urgently in need of a course of dental hygiene, these shops were literally only an elevator ride away. I'd liken them to the kirana dukaan; the good ol' mom & pop store. They're not far from you and they've got pretty much everything you'd need to keep the house going a few days. I reckon I did about 50% of my shopping at these places.

What these shops did not have were things like fresh vegetables, fruits and meat. For those, I went to dedicated stores, which were slightly further away; perhaps a 5-minute walk at most. I didn't eat meat everyday. So, if I did, I was prepared to take the short walk to these stores. These shops accounted for a further 30 percent of my budget.

Occasionally, I needed a bit more - sauces or winter shoes or a bottle of wine. This stuff I couldn't get either in our basement or at the neighbourhood store. That's where Carrefour came in. It was a 20-minute subway ride away. I didn't particularly enjoy going that far to shop. But it was the nearest place that sold everything under the sun. If I needed it and no one else had it, I'd find it in Carrefour.

One reason it was so far is because it needed so much space to stock everything. Space isn't cheap. Carrefour makes money by selling a lot of stuff at low prices. So it needs to rent cheap. That's only possible a relatively long distance from most homes.

The vast majority of my money and time was spent in smaller stores, closer to home. It's not that these small shops provided me fantastic service. It was just easier to take a 5 minute walk to buy fruit than take a 20-minute subway ride.


Carrefour is basically what we in India call "FDI in retail". But there's also Subhiksha or Spencer's or Big Bazaar; DI - domestic investment - in retail. And all of us know how often we shop at such places. For example, I don't buy milk at Big Bazaar; or bread or eggs. There's a shop 2 minutes from my house in Noida that stocks all of that for me.


What I'm trying to say is this. The fears of the Carrefours & Wal-marts taking away mom-&-pop jobs is simply not true. In all my time in China I went to Carrefour five, maybe six, times. I'm likely overestimating. If anything, more stores create more jobs, more efficiently. They're likely to be higher-paying too, especially for the store assistants.

Yes, mom-&-pop stores immediately around the Big Boxes may shut down. But remember, these Big Boxes can't - thanks to sheer rental costs - be located in every neighbourhood. So, this is job disruption, not destruction. Frankly, more jobs will be created in these stores than ones lost around them.

Opponents of FDI in retail also cite a serious impact on farmers from big retail. I simply don't see how that's possible. Yes, large-format retail, pressures suppliers to sell to them at low prices. Those suppliers (farmers) also have the option of selling to mandis at minimum support prices (and we all know they're cheated here). They don't HAVE to sell to the big-box guys. Why not let the farmers decide whom they want to sell to? Big Boxes that offer them steady demand or mandis that frequently cheat them.

In fact, Big Box retail will hasten the introduction of cold-storage to reduce wastage of food. It will streamline delivery from farm to store, meaning we consumers food fresher and cleaner than before. And it will give consumers wider choice at lower prices.

Friday, November 11, 2011

8 reasons why there won't be a war over the South China Sea

A quick one. This summer, an Indian warship sailing between two Vietnamese ports received a radio call warning it about crossing Chinese waters.

Numerous articles since then have speculated about a confrontation between India and China in the South China sea. Here's why I think this won't happen.

1. Virtually all of China’s energy imports go past the very countries it is antagonising in South China Sea. Beijing needs these sea lanes open and conflict-free. UPDATE - there's also a phenomenal amount of trade going through here: $5.3 trillion worth. That's 80% of the combined GDPs of India & China. Imagine the disaster if that much of the world's "real economy" goes offline.

2. The US also has numerous trade routes running through the region. On more than one occasion, Washington DC has called freedom of navigation in the South China Sea a "vital interest". Let's not forget, the numerous defence treaties of the US in the region. Then there's this more-recent development.

3. A part of China's unfettered rise depends on how much (or little) energy, time & money it expends on conflict. That is the heart of its 'Peaceful Rise' slogan. The recent beating of war drums - particularly from party mouthpiece Global Times - has alarmed every country from the Philippines to Vietnam, Japan & Malaysia & China is acutely aware of this.

4. China’s claims in these waters are tenuous, at best. Many of the islands it lays claim so it can expand its exclusive economic zone are rocks that get covered during high-tide.

6. Beijing could, at worst, harass ONGC's exploration missions using 'fishermen' (really PLA-Navy sailors in disguise). Off the record, Indian officials say their security concerns are "well taken care of".  by Vietnam. It should be remembered, Vietnam has fought a war with China and won (just about).

7. If there is more-than-unreasonable "harassment", Vietnam can activate its hot line with China to thwart emergencies.

8. Finally, a former Naval officer has confirmed to me that India will soon initiate a new round of Track II dialogue on this matter; one that he is part of. That should help to find unconventional solutions, if received well by all parties.


Simsats and All That

Ok, so I finally saw the "live" debate that CNN-IBN ran with Sri Sri Ravi Shankar. The offending bit is around the 9 minute mark, if you haven't watched it. My first thought: I'm surprised such an incident didn't happen earlier.

Everyone probably knows what a simsat is by now. There are differing views on whether it is ethical. Before I get to those, let me explain why simsats happen.

In one word: timing. Some guests like Sri Sri Ravi Shankar frankly deserve to have their views aired only during a 9 pm bulletin. Not only do they attract eyeballs (aka TRPs); they also provide sane arguments.

Unfortunately, with so many TV channels around, scheduling conflicts are legion. Guests may promise to appear on a show at 9:30 but get tied up in another studio until 9:45. Ruins the show, doesn't it. So we have the simsat. And yes, American & British channels also do it for the same reasons Indian ones do. 

The uninitiated should know that many TV-savvy guests request simsats, themselves so they can appear on multiple channels in one night or spend the evening on other engagements. That's how a Ravishankar Prasad or Manish Tewari can *appear live* on all channels at prime time, when in fact they may not be live on any one of them.

Here's how a simsat should work. The guest sits before a camera at say, 5 or 6 pm. The anchor asks him or her questions in the same order as they would appear at 9 pm. The guest's responses are then 'packaged' (with mild editing to remove stumbles and stammering, etc). At 9 pm, the anchor repeats the questions live, while a producer plays out the relevant packaged answer.

At their best, simsats appear 'live' and keep the viewer engaged. In a one-on-one situation where it's just the anchor and the guest, simsats pose no problems. The anchor asks his/her questions and the guest responds with full answers. Fair play. Some channels even pre-record the anchors questions and play these out in order. Now, I'd personally still prefer a disclaimer saying "this was recorded earlier", but as long as the content remains unchanged there are no serious problems in calling these live.  

But simsats have limitations. And the biggest one was exposed on Wednesday.

In a multi-guest debate, guests should have the right to respond. In an ideal world, Sagarika Ghose would have told her audience and panel that Sri Sri's responses were pre-recorded. It avoids misrepresentation & the live guests know they cannot make statements or ask questions that the simsat guest won't be able to respond to, as is their right.

She didn't. That's where things began to unravel. Arun Bhatia believed genuinely that Sri Sri was present during the debate and posed him a question. Sagarika should have taken the difficult option then of explaining that Sri Sri was not present live. It would have been super embarrassing but it would have prevented things from getting worse. She didn't. In a move I can only describe as "Whiskey Tango Foxtrot", she proceeded to direct Mr Bhatia's question to Sri Sri. The producer - whom I don't blame at all - played out the answer s/he thought would fit best. Of course it didn't. The game was up.

That's my view on simsats. I see no problems with one-on-one situations if a guest's responses haven't been manipulated. In multi-guest situations it is best to tell the audience that X or Y guest's interview was recorded earlier. Some anchors already do this. I suspect many, many more will do so going forward.

Fun aside if you're interested in knowing more about simsats. Most channels now record what are called "noddies". These are 10-15 second shots of the guest nodding their head as if they're listening to the debate or question being asked. They're played in those infamous six-windows with all the guests faces being shown. One channel once had four guests as simsats. Each had noddies recorded. It was hilarious to watch the noddies skip a few frames as they hit the 10-second loop. 

Yeah, there are limits to trickery. And when those limits are exposed, it can border on the unethical as it was in the CNN-IBN case or downright embarrassing as it was in the "noddies" case.

UPDATE: Sagarika Ghose has repeatedly apologised for the screw up. I'm inclined to let it rest. Afterall, even the best batsman in the world can't avoid a few ducks in his career. I think she had brain explosion at that moment and couldn't recover. As I said, it was a "WTF" moment. People make mistakes. If they own up to them unconditionally - as Sagarika has - just move on.




Sunday, November 6, 2011

Thoughts on the Atlantic/National Journal piece on Pakistan

Two days ago, I read this superbly-reported article on US-Pakistan relations and the security of Islamabad's nuclear weapons. That the military/ISI has been playing a double game is not unknown. So I will focus on two points that stood out most.

1. Pakistan moves its nuclear weapons around in "vans with a modest security profile".
2. Some of these weapons are tactical devices that are already "mated" to the warhead. They're ready to use and so, an attractive bounty for terrorists.

I am hugely alarmed by the casual attitude of Pakistani authorities displayed by Point One. Vans are easy to break into or steal. That there's low security doesn't inspire any confidence. Not too long the Telegraph reported on the inevitable infiltration of Pakistan's nuclear weapons program by jihadis. Put these two facts together and we're on the slippery slope towards a jihadi group getting nuclearised.

Of course, tactical nuclear weapons have in-built security measures. You'd need a high degree of skill to detonate them. The easier option is to turn the weapon into a dirty bomb. Basically, a regular bomb that's packed with radioactive material.

Fortunately, these are not as bad as they sound. There are no mushroom clouds that wreck havoc across miles. A dirty bomb is designed to spread radioactive material, much like an IED would spread shrapnel. This poses some health hazards that can be mitigated with quick treatment and decontamination.

The problem is the general public does not know this. Terrorists exploit this ignorance to spread mass panic. While a dirty bomb may at worst contaminate a few city blocks, the psychological effect of being hit by a radioactive weapon will spread panic nationwide. Chaos is inevitable.

So, how India can prepare
1. Dirty bombs are not hard to transport. Trying to stop one at the border may be impossible. So there's the standard practise of keeping our intelligence agencies' eyes and ears open. 

2. Terrorists will almost surely use dirty bombs in a crowded, metropolitan area for maximum effect. A quick response is essential. Planners should identify likely targets, and equip them with radiation sniffing devices. If we're very lucky, these will alert authorities to the presence of a radioactive device before it goes off. More than likely, it will at best help speed up the appropriate response teams for decontamination and treatment.

3. Border and maritime security should be tightened. Surveillance planes, ships, ports, etc should be equipped with radiation sniffing devices.

4. Security personnel, particularly the police, should be equipped and trained to deal with a dirty bomb.

5. The media should be educated on the true nature of dirty bombs so they don't complicate matters with talk of a "nuclear attack". Language & tone is critical in managing crowds. The media should choose its words carefully.

Tuesday, November 1, 2011

Why Pawan K. Verma's argument doesn't work

Pawan K. Verma writes beautiful weekly columns about Indian culture and the arts. I enjoy his insights.

A few days ago he wrote this op-ed, leveraging his expertise on Indian culture to suggest Shashi Tharoor's frequent assertions on Indian diversity are wrong.

First, he writes, "We are a part of a civilisation that goes back to the dawn of time. The British were, for understandable reasons, unwilling to concede this". Then, he calls our diversity a "colonial argument... to argue that India was at best a collection of disparate diversities, and became some kind of a nation only because of the uniting benevolence of foreign rule".

I disagree with these statements on two counts.


At the outset, let me say I don't intend to suggest India is a fractured state. I only intend to show that the examples and techniques Mr Verma used are inherently flawed.

In his piece he says Sanskrit was the proto-language for all other Indian languages - proof, therefore, of an underlying Indian unity. This theory works if you stop at a certain point in history. Let me use his same technique to prove that it's flawed. If you take the Proto-Indo-European language, one could just as easily argue that Eurasia should be one nation.


Similarly, he points to India's 33 crore gods and goddesses and says they all "ultimately represent the Trinity - Brahma, Vishnu and Mahesh". Vishnu plays an important role in the story of Manu & the Great Flood. No less than 35 independent civilisations - that's right, 35 - have similar flood legends. Are we one nation with the Cree, the Babylonians and the Malay? 

Mr Verma's use of history/mythology segues nicely into my second disagreement on his description of our inherent diversity a "colonial argument". Well, it wasn't the British who divided modern Indian states on linguistic lines. And it wasn't the British who established the kingdoms of the Marathas or the Sikhs or the hundreds of other kingdoms and principalities across the country. The Empire's divide-and-rule policy worked because of the pre-existing distrust among kings and princes; something the British shrewdly manipulated. These divisions were not British creations, although I am willing to concede they were perhaps amplified by them.

Either way, the argument doesn't hold water. Nor does Mr Verma's attempt to find a unifying factor by retreating to history.