Nov 22, 2008

Business - India;Four Indian realtors lose $33bn in 8 months;Forbes

Hit by the turmoil in equity and property markets, India's four richest realtors have lost nearly $33 billion (over Rs 1,50,000 crore) since March this year, with the richest of them, K P Singh of DLF, alone accounting for about two-thirds of it, Forbes magazine said.

Listing out the losses suffered by richest property owners in Asia in the ongoing turmoil, in a new report Forbes has named DLF's Singh, Unitech's Ramesh Chandra, Chandru Raheja of Mumbai-based Raheja group and Housing Development & Infrastructure's (HDIL) Rakesh Wadhawan among the eight realty barons from the region.

While Singh has lost $22.2 billion alone since March, Chandra has seen an erosion of about $8.6 billion in his fortune during the same period, when Raheja and Wadhawan have lost about $1.5 billion and $500 million, respectively.

In the latest list of India's 40 richest people published by Forbes earlier this month, K P Singh was ranked at the eighth spot, while Chandru Raheja and Ramesh Chandra were placed at the 20th and 27th positions, respectively.

Realty stocks have been among the worst hit in the ongoing meltdown at the bourses and a number of them registered losses even today when the overall market benchmark Sensex ended with significant gains.

While the Sensex today surged by 464 points or 5.5 per cent, the BSE Realty index dropped by two per cent. Unitech shares dropped by 9.4 per cent, DLF slipped 3.4 per cent and HDIL shed over four per cent.

"K P Singh's fortune is still a hefty $7.8 billion, but that's just a fraction of his previous worth. In March, we pegged his fortune at $30 billion. Shares of DLF, his real estate company, fell steeply over the past year despite Singh's attempts to boost prices through a buyback," the business magazine Forbes said in its report titled 'Asia's Collapsing Real Estate Fortunes'.

Business - India;Fog of uncertainty covers Delhi Airport this winter

Air travellers to Delhi airport, which handles over 35 per cent of the country’s air traffic, may expect the usual harrowing times this winter with a thicker fog expected.

Yesterday, the airport witnessed five hours of fog, the first time in the last decade that fog conditions started in November. “Last year was the best, we had only four days of fog in the two months of December and January. One cannot predict what kind of fog we will have this year but the situation will not be as good as last year,” said R K Jenamani, director-in-charge, meteorological department, Delhi airport.

An analysis of the last 24 years shows that the fog lasts from December 10 to January 31 for an average time period of 80 hours, he added. The worst case of fog at the airport was in January 2003 which saw 147 hours of fog.

“The fog may affect 60 per cent of the flights,” said Andrew Harrison, chief operating officer, Delhi International Airport Ltd, the GMR-led consortium developing and operating the Delhi airport.

On the positive side, the airport now has two runways that can operate under CAT III conditions (visibility below 350 metres) against only one runway last year. The new runway will be used for arrivals and the older one for departures. The secondary runway will remain unused.

Also, the airport has seven RVRs (instruments for measuring visibility ) this year instead of three last year, which will provide a better idea of the visbility.

However, the third runway has been facing problems with its instrument landing systems (ILS). It had closed within a week of starting operations earlier this year when the ILS collapsed. Also, according to sources, the surface movement control radar system, which monitors an aircraft after it lands or before it takes off, does not cover all three runways.

The fact that the net increase in passenger traffic this winter will be a mere 8 per cent over last winter might actually be a blessing since it will mean fewer choke points at the airport.

Meanwhile, capacity on the terminal side has been increased to accommodate around 1,000 more people (including travellers and visitors), and apart from customer care executives who were positioned last year to help visitors, the airport will have valets to take care of the luggage and trolleys.

On the airline side, though carriers like SpiceJet continue to lag in terms of CAT III trained pilots, Jet Airways has geared up to add to its CAT III trained crew.

“We have 330 Indian commanders 45 per cent of whom are CAT III trained this year compared to last year, when we had just three,” said a senior Jet Airways pilot.

“We do not have CAT III trained pilots because we do not have CAT III-equipped aircraft to begin with. None of our Boeing 737s are CAT III-equipped. If there are CAT III conditions at the airport, there might be delays in our landings,” said JS Dillon, EVP, flight operations, SpiceJet.

Last year, only two out of every ten domestic CAT III landings were made by private carriers and the rest by Air India, which continues to have the best trained crew in terms of CAT III flying

Business - Citi may replace Pandit;report

Citigroup's board is considering firing its Chief Executive Vikram Pandit, who was appointed as CEO late last year to infuse confidence, as the banking giant finds itself searching for hope all over again.

Replacing Pandit - an enthusiastic defender of the company's existing mix of businesses - is one of the options being considered by Citi executives, along side selling all or part of the company, a public endorsement from the government or a new financial lifeline to stabilise the banking behemoth, after its shares took a sharp plunge this week.

In a series of tense meetings and telephone calls, the executives weighed several options, including whether to replace Citigroup's chief executive Vikram S Pandit or to sell all or part of the company, the New York Times reported.

The paper reported that the company's executives on Friday entered into talks with federal officials about how to stabilise the struggling financial giant.

The report came amidst some analysts saying that infusion of $50 to $100 billion might be needed to bail out the bank.

The course of action, however, remained uncertain on Friday night, the people involved in talks were quoted as saying, and other options may yet emerge. But after a year of gaping losses and an accelerating decline in share price, Citigroup, which has $2 trillion in assets and operations in scores of countries, is running out of time, analysts were quoted by The New York Times as saying.

The paper said, Citigroup's management and some board members held several calls with Henry M Paulson Jr, the Treasury secretary, and with the president of the Federal Reserve of Bank of New York, Timothy E Geithner, who later emerged as President-elect Barack Obama's choice to be Treasury secretary.

Mktg - Ad that tickles back to concepts

S. Ramesh Kumar

Humour/fun in advertising should be relevant to the offering and can either have a humorous theme or just histrionic overtones that lighten the spirit of the consumer but get the brand’s message across.

Humour and fun in advertising is an interesting proposition for marketers if used in an appropriate manner. Whether it is an impulse buy such as Mentos (showing a student who cleverly deals with a professor) or a proposition for a product such as Itchguard (which showed a prospective bridegroom itching and scratching during the traditional bride-choosing event) that conveyed a functional benefit, humour can be used in a variety of situations depending on the product or service category.

Normally, the humour/fun needs to be oriented towards the market’s culture to ensure that interpretation serves the purpose and also to make sure it is not perceived in an offensive manner.

Culture has a bearing on what kind of humour/fun consumers will and will not accept in a particular market. Humour that hurts the religious sentiments of consumers will not be well received. It need not necessarily mean, either, slapstick comedy of the class of P. G. Wodehouse.

Humour/fun in advertising should be relevant to the offering and can either have a humorous theme or just histrionic overtones that lighten the mood of the consumer but get the brand’s message across.

A good example is Airtel’s TV spots involving topical celebrities. One shows a “mock” quarrel between them but effectively conveys the brand’s proposition of ease of paying bills. Of late, using film celebrities to convey the humorous proposition is gaining ground.

A brand of fabric softener (a new category that needs consumers try its product) used a voice in its audio that is similar to that of a film celebrity who is a rage, especially in the South.

Cinema is a part of a market’s culture. The brand with its new offering needs to capture the attention of the viewers in a cluttered advertising context of TV commercials.

A few brands, such as Fanta and Preeti appliances, have also used film comedians to effectively convey either the fun proposition or the functional proposition.

Shah Rukh Khan’s comical mannerisms have been used in a range of categories that includes the Santro brand of car.

Ericcson’s (mobile phones) “One black coffee please” advertisement will evoke smiles among consumers familiar with this advertisement of a few years ago. The brand’s proposition of “smallness” was woven around a man in a restaurant believing that he was being propositioned by an attractive young woman sitting next to his table, only to discover she was speaking into her mobile phone which was so small it couldn’t be seen and worse, had mistaken him for the waiter! It is also equally important that the humour in the ad should ensure that it does not distract consumers from the brand’s proposition.

The Indian context and humor

There are broadly four ways in which humour and fun have been applied in the Indian context. One approach is to introduce them in family relationships, another through relationships at an individual level, the third to associate fun/humour with group associations and the fourth through the usage of celebrities. These applications range from consumer durables to impulse products such as chewing gum.

The recent advertisement for Center Fresh shows the episode between father and son in the context of the father reviewing the marks scored by the son and the brand’s proposition of good taste conveyed humorously through the proposition “Mouth is busy”.

Hamam’s TV commercial shows the “skin glow” proposition being conveyed by the young girl’s statement, “In which direction does the sun rise?” Water purifier brand Pureit introduces the conversation between the mother and son and the brand’s proposition of prevention from diseases conveyed during this conversation in a light-hearted manner with the son’s expression adding to the appeal.

The advertisement of Vicks for Rs 5 too makes use of the mother-son relationship. The Eno antacid advertisement shows a family leaving out the male member from picnic because of an upset stomach only to make him well in a few seconds to join the party.

At the level of individual relationships, humour and fun can be used in different situations to convey the brand’s proposition. 3 Roses’ proposition of “Good time to talk” between a young couple or the Quaker Oats ad announcing the product variants with the husband proclaiming that for the first time he would frame the rules at home (with the brand’s offering for breakfast) are examples of such an approach.

Group associations with humour are widely used when the target segment is youth. Axe Temptation’s TVC, which has a robot made out of chocolate, is a good example of fun with a group association. Sachin Tendulkar in the Aviva insurance advertisement playing cricket with children and breaking the window pane before the proposition of the brand is conveyed is an interesting example in the services category. MotoYuva’s (Motorola) advertisement showing a college professor being fooled into posing for a caricature made on the phone and distributed is in tune with the “youth-mobile” trends.

Close-up’s proposition of a ‘Close-up smile’ was humorously conveyed between a youngster who is suppressing his laughter and another who is able to freely laugh out among a group of friends.

Celebrity use may be incorporated with any of the approaches depending on the type of product/brand.

Samsung uses a celebrity to convey its karaoke feature using a lighthearted execution.

There may also be other variants in which humour can be used to convey a brand’s proposition other than the four approaches using a creativity that blends with the proposition. Fevicol’s advertisement shows an unbreakable egg that is laid by a hen that feeds from a container on which “Fevicol” is inscribed.

The brand’s proposition, the extent of relevance to the target segment and the scope offered by a category for humour (chocolates vs washing machines, for example) are some of the important criteria that should be taken into consideration before humour or fun is used in the brand’s advertising.

(S. Ramesh Kumar is Professor of Marketing, IIM, Bangalore)

Business - Where clicks cut carat costs

Sravanthi Challapalli

The site makes it sound all so swift and simple – select a diamond, the setting and place your order – and there are great savings to be had. But is it so easy, especially when you haven’t touched and felt the diamond first, and you don’t know what it might look like when it ultimately reaches you?

“It is easy,” aver Srinivasa Gopalan and Mithun Sacheti, Directors of the Chennai-based CaratLane, a Web site to sell certified and high-quality diamonds as well as readymade and custom-made diamond jewellery. “Even when you want to buy a solitaire, about 50-60 per cent of the solitaire-based jewellery is ordered by the jeweller after the customer confirms the transaction, so there is no touch-and-feel anyway,” says Srinivasa Gopalan.

CaratLane, which was soft-launched in August after being in the making for over a year, promises to provide high-quality diamonds, solitaires, in large part, at “incredible” cost savings for the Indian consumer. In the retail process, the diamonds are passed on from the manufacturer to the consumer with brokers and wholesalers in the chain contributing their bit to the ultimate cost, but in this venture, there’s only one intermediary – CaratLane – between the manufacturer and consumer, which shaves off as much as 5-7 per cent on jewellery that could otherwise cost over Rs 4 lakh (the savings are greater on smaller pieces of jewellery), say the administrators.

Usually, jewellery stores don’t have more than 5-50 solitaires in their inventory. A consumer would find it hard to get the right combination of factors – price, cut, colour, clarity, caratage – that she wants within that limited choice.

CaratLane, on the other hand, will have an inventory of nearly 40,000 diamonds of all shapes, colour, cut and clarity at prices starting from as low as Rs 15,000 and going up all the way to a few crores, claims Srinivasa Gopalan.

The suppliers, nearly 4,000 of them, are located in India, the US, Belgium and Hong Kong.

All the diamonds are certified by international agencies such as the Gemological Institute of America, American Gemological Society, International Gemological Institute, Belgium and Hoge Raad voor Diamont, Antwerp.

While the diamond is being sourced, the mount chosen by the consumer is prepared and the finished product shipped to the customer within 5-7 business days. CaratLane says this is another unique proposition it offers – most jewellers usually take twice that time to deliver.

“It’s a disruptive business model,” says Srinivasa Gopalan, “the choice is mind-boggling, the prices are lower. If you demystify the diamond part of it, it’s yet another product driven by specification.”

But what about all the superstition and sentiment associated with buying jewellery, especially precious stones? Won’t the idea of a family jeweller weeding out flawed and unsafe diamonds struggle with the temptation of savings in money?

“The jeweller is more emotional comfort than anything else. As for ‘dosham’ (flaws), we’ve addressed this typically South Indian sentiment by offering dosham-free diamonds too,” says Srinivasa Gopalan, adding that the savings in price will win over or convert quite a few.

The pricing is so attractive that even jewellers are eyeing it, bringing in a B2B angle to the business, says promoter Mithun Sacheti, whose family owns the Jaipur Gems jewellery business and stores.

Haggling over the price of the jewellery is a tradition, sometimes even a pleasurable ritual that customer and seller participate in. Where does that figure in a Web site such as CaratLane? Sacheti says haggling is on its way out, what with corporate jewellery stores selling their wares at fixed prices and people getting used to the idea.

Concerns of whether the diamond is genuinely that which was ordered are addressed by having the certifying laboratory testing the finished product and certifying it, as well as having it delivered to the customer in a tamper-proof box. As for returns, the Web site now offers the option of exchanging within 15 days what the customer has ordered, no questions asked. The solitaires can also be re-listed on CaratLane by the customer if she wants to dispose of it at a later stage.

There are various payment options – credit card, wire transfer, demand draft, cash deposits in various banks. The prices are more or less stable unless there’s a huge spike in gold prices.

Srinivasa Gopalan says CaratLane is a “market-defining portal which is redefining the way a traditional product will be bought in the future”. A call centre staffed by 15 people to educate and serve consumers works every day of the week. The jewellery is made at Jaipur Gems’ facilities.

In the US, online jewellery sales accounted for $4.5-5 billion or 7.4 per cent of all the jewellery bought in the US in 2007. In India, the e-commerce market is expected to reach a size of Rs 9,020 crore by the end of fiscal 2008, according to a survey conducted by the Internet and Mobile Association of India and IMRB.

Since the soft-launch in August, CaratLane has had 22 buyers from India and the neighbouring countries, the highest two spends being Rs 3.6 lakh and Rs 10.4 lakh. “The diamond jewellery market is estimated at Rs 20,000 crore. We don’t expect every customer to convert, but even if 5 per cent shop online, we’re looking at Rs 1,000 crore in the next few years,” says Srinivasa Gopalan.

It’s not just the diamonds but also the savings that can put the sparkle on your face.

HR - Incentives for Innovation

Radhika Chadha

How can organisations ensure that short-term business goals are met while encouraging managers to experiment for the long-term?.

Very few innovation systems recognise the need for aligning the performance management system to innovation strategy.

‘An incentive is simply a means of urging people to do more of a good thing and less of a bad thing. An incentive is a bullet, a lever, a key: an often tiny object, with astonishing power to change a situation. We all learn to respond to incentives, negative and positive, from the outset of life.’

Steven Levitt and Stephen Dubner, Freakonomics

I was recently invited to watch a creativity workshop being conducted by a consultant visiting from abroad. The client was a software company that had decided its employees needed to be trained to deliver innovative solutions – the idea was tomove beyond pricing as a differentiator in these increasingly competitive times.

The audience was junior to lower-middle level managers and software engineers who huddled around the huge conference table in eager anticipation. The table itself looked like a kid’s playroom, chock-a-block with interesting thingummyjigs — furry wire worms, rubber bands of all shapes and sizes, Lego bricks, cards with provocative statements on them — meant to add an element of additional zest and fun to keep them creatively engaged.

The fun and games part went off well as the consultant enthralled the team with his stories about ideas that worked and bombed, and about tools for idea generation. Towards the end of the day, the facilitator started the wrap-up by stating emphatically that it was quite simple for these techniques to be used in their day-to-day jobs and that each employee should think about how to perform their role differently.

At this, the hitherto chatty group fell silent and shifted about uncomfortably. There was a palpable sense of unease and you could actually feel the charged up energy dissipating rapidly. Finally, one brave soul voiced the collective concern — “Why?” Slightly taken aback, the consultant threw back the question: “Why what?”

“Why innovate, why be creative?” asked the self-appointed representative. “We’ve got our operational goals and those are tough enough to meet. I work 24/7 just to keep up with my targets. Now you are asking us to do our jobs differently and that will take even more effort and maybe I will not achieve the outcome I plan because I am experimenting with innovative approaches. If I ignore all this and continue as normal, I will get my salary and my bonus anyway. If I try all this and I succeed, at the most I will get a badge or a jacket as a reward. Why bother?” The rest of the group nodded in agreement while the trainer and the senior management looked at each other uneasily as the conversation segued into unplanned territory.

Probably, this is what many feel at the end of such workshops — it so happened that here was someone willing to articulate their unease. The point is, it is not enough to simply exhort employees to “be innovative”, or run initiatives for changing culture or mindsets. Organisations that wish to be disruptive, to change their professional DNA, need to consciously provide incentives for innovation.

Very few innovation systems recognise the need for aligning the performance management system to innovation strategy. In the innovation context, the bullets that Levitt and Dubner talk about should cover two aspects — first, a set of metrics that make sense for new products and businesses and incentivise new business creation rather than current profits or revenues — my last column discussed this. The second, and equally important, is how organisations use incentives to change managerial attitudes towards innovation and risk-taking.

This is easier said than done — creating incentives to change organisational behaviour with regard to creativity and risk-taking is one of the most challenging tasks on the innovation agenda. On the one hand, we need innovation for long-term survival. On the other, short-term business-as-usual demands incentives that trigger efficiency and profitability improvement. Balancing the two is tricky — but essential.

An effective innovation incentive system would spur idea generation and innovative behaviour. A bad system can give rise to unwanted projects, or, what can be worse, many ‘unborn babies’ — valuable ideas that should have been given birth to, but were squelched in the minds of their creators. These negative outcomes could be because of fear, disinterest, or lack of encouragement, many of which can be traced back to the way incentives are planned and evaluated. An example: EVA (economic value added)-based performance management is fast becoming the system of choice. However, its focus on short-term financial measures is the opposite of what innovation incentives should be. Indeed, a substantial proportion of managers believe it affects their risk-taking ability.

When we get into the details, one debate that always comes up is whether financial incentives are better than non-financial ones. There seems to be a universal belief that innovators prefer recognition to monetary rewards. Actually, it would be a rare manager who would refuse a financial reward, but let that pass. Most innovation incentives appear to revolve around schemes (but without rewards), and an annual award for the most innovative idea. As the HR head of a large conglomerate, says, ‘These are signals to the team of what is important to top management.’ Perhaps, but one award a year may not be enough when the desired outcome is a flood of innovation across levels — the equivalent would probably be to hand out a bonus to just one employee each year.

In fact, there is a body of research that questions whether extrinsic rewards work at all in stimulating creativity, arguing instead that this is better spurred by the curiosity, challenge, interest and satisfaction in the job. Ideally, incentives should feed into career growth with innovative thinking treated as a critical component of managerial competency while awarding upward mobility. The manager who sticks his neck out hopes to get recognition and climb the corporate ladder in reward. Career advancement is the most obvious way in which organisations can reward innovative thinkers — and this would offer both recognition and financial benefits in one stroke.

Here are some questions for incentive designers to ponder — does the organisation walk the talk? What sort of an example is being set at the top? Who are the heroes in the organisation — the innovators or the harvesters? What sort of behaviour does senior management demonstrate?

If an organisation wants to celebrate risk-taking and innovation, then it should also reflect this in the appraisal and career planning at every level. If employees are to live and breathe innovation then they should also see tangible evidence of how such behaviour is being rewarded.

(Radhika Chadha is a consultant in strategy and innovation and co-author of Innovative India: Insights for the Thinking Manager. Karate-gy is the proprietary name of the strategic exercises conducted by Paradigm Management Knowhow Ltd.)

Business - India - Radio-More buck for the bang

Purvita Chatterjee

FM radio in India believes it is finally coming of age as an efficient and cost-effective medium of advertising. That belief manifested itself as a 15-20 per cent hike in ad rates in the last couple of months after a gap of more than a year. Also, th e launch of more radio stations during that period gave rise to much unsold inventory which had to be disposed of at throwaway prices and established radio stations had to compromise on their rates to take on the new competition.

The price hike is as much reward as rationalisation, all the more so as measurability, missing in most other media, is an advantage, say players in the Rs 750-crore industry. The slowdown of the economy has its advantages, too — the lower cost of radio advertising relative to other media can hopefully help sell more air time than ever.

B. Surendar, National Sales Head, Red FM, says, “A lot has changed in the markets in the past one year; the erstwhile perception-based market leaders have been toppled and there is greater accountability with the entry of RAM (Radio Audience Measurement).”

Red FM radio claims it has shown consistent performance in RAM both in terms of market share and cumulative listenership and that it is well-known for setting benchmarks when it comes to creative 360-degree solutions for clients as proved by consistently improving advertising shares, and boasts of a repertoire of award-winning campaigns, properties and the number one and most awarded radio jockeys in the country.

Radio City FM, which has also increased its airtime rates by 15-20 per cent, justifies it because of its ‘robust increase in listenership, reach and listener equity’ and that it is commensurate with the consistent, innovative delivery of quality of SEC AB audience to advertisers.

According to RAM data, Radio City has seen a consistent 10 per cent increase in reach in RAM markets alone at a time when the category witnessed a 2 per cent decline. The FM brand also enjoys sustained leadership across SECs in Mumbai with the highest ‘time spent listening’ (TSL) across audiences since February 2008.

Apurva Purohit, CEO, Radio City, said, “That radio delivers has been amply demonstrated by RAM. Be it having the lowest CPT (cost per thousand), having as high as a 15 per cent multiplier effect used in conjunction with a TV campaign or being three-fifth as effective as TV in raising awareness at one-seventh the cost, the power of radio is truly one to reckon with. As clients increasingly look at improving the delivery of their media rupee, there is no longer any doubt that radio is repeatedly proving its efficacy. Radio City’s increasing reach in the RAM markets and its robust TSL clearly makes it one of the best mass media vehicles for clients to invest in today.”

As for Radio Mirchi, this may not be the first time it has raised rates but is doing so after a long gap and claims that its pricing is in line with its deliveries.

As Prashant Panday, CEO, Radio Mirchi, says, “Price hikes happen usually once a year. This time, on account of the severe competition in the last couple of years, the price hike comes after nearly two years. It is to really take into account the much higher reach and TSL that we are delivering compared to two years ago when we were still trying to prove our effectiveness. Today, we have proven that we deliver. If you are to compare our deliveries with almost any TV channel or newspaper, we do far better. Our rate hike is only to align our pricing in line with what we deliver.”

With this, the share of radio in media is also expected to cross the threshold level of 4 per cent this year. As Panday says, “After growing at more than 50 per cent for the last two years, I see a growth of more than 100 per cent this year. This should take the share of radio in total media past the 6-per-cent-mark. In 2007, the share of radio is expected to have crossed 4 per cent.”

Others estimate an even higher share for media spends on radio. As Ashit Kukian, Executive Vice-President and National Head (Sales), Radio City, observes, “Radio might seem to be only a 4 per cent medium today but unlike television, it is primarily dominated by 3-4 top players and the size of these players garnering a large chunk of advertising is significant. Today, radio is making its presence felt and in two years, I see it touching the 7-8 per cent mark.”

Kukian points to a recent IMRB study on the radio industry, which says adding radio to an existing television campaign is expected to give the campaign a 15 per cent multiplier effect. Besides, if 10 per cent of a given TV budget is re-deployed to radio, the campaign’s efficiency is expected to increase by 15 per cent. Radio in isolation was measured to be three-fifth as effective as TV in raising awareness at one-seventh of the cost. The research has also shown that radio has the lowest ad avoidance compared to any other medium.

Radio’s share of the ad revenue pie is between 4 and 5 per cent today and it is expected to grow by 25-30 per cent this year.

While RAM has brought in measurability into the medium and is thus now attracting more advertisers, the economic downturn could also prove to be a boon for the medium. According to Panday, “The real challenge is to convince advertisers that in an economic downturn like we are witnessing now, the best medium to use is radio. This has been proven worldwide, but it will take a little time for advertisers in India to also realise the full potential of radio in adverse conditions. The fact is that radio is an extremely cost-effective medium. Today TV companies can claim higher reach than radio – but that’s only when they measure reach on a 1-minute minimum viewership basis. Ask any TV channel to provide reach on a minimum 5 minutes viewing basis and see how the numbers dwindle. In fact, our analysis shows that many popular TV channels may have reach as low as a few lakhs across the country!”

But can radio replace print as the immediate best option for advertisers? Yes, says Abraham Thomas, COO, Red FM. “Radio,” he continues, “is a high-tech, low cost option, which makes it so much more cost-efficient than print.” In spite of radio stations hiking ad rates, radio is inching closer to becoming the preferred medium. As Panday says, “Advertisers are responding favourably. Remember the overall media environment in the country. The biggest media business — print — has seen a price hike of between 25 and 50 per cent. This is unprecedented. With the ever-growing fragmentation in the TV space — now in the GEC space — the inflation in the TV business is extremely high. Outlays higher by 25 and 50 per cent are required today compared to a year ago.”

Business - Q&A COO,Oriflame Cosmetics;Jesper Martinsson

Bindu D. Menon

Meera Mohanty

Recession doesn’t worry direct selling company Oriflame. For one, it helps more people come into the direct selling business and second, cosmetics sales also rise as people like to pamper themselves, says Jesper Martinsson, Chief Operating Offi cer, Oriflame Cosmetics.

With over one lakh consultants and a plan to triple the sales in the next five years, the Swedish company has set its focus on India. Martinsson tells BrandLine that the growing middle class in the country is exciting and the company is planning to reach consumers in smaller towns besides the bigger towns and cities. The North-East is already seeing a quick growth. Oriflame has to now work out a distribution model that can tackle the economics of the large expanse that’s India.

At times of economic slowdown, how is the cosmetics industry doing?

The cosmetics market is growing, but we (Oriflame) are growing six-seven times faster than the market. So, we are clearly gaining the market share

Can you put a figure to that?

No. We don’t talk about individual markets. But if we are talking about the Asia region, we are growing at over forty per cent. We are present in six markets in Asia, and India is one of the biggest and also the fastest growing markets for us.

Oriflame is also doing well, on the whole. As many other European companies, we were founded and headquartered in Sweden. We are actually the fastest growing cosmetics company in the market, and were last year too, growing globally at 26 per cent. Oriflame Europe is very well penetrated, we have a good presence in world markets and are still growing well. But we will come to a point where we cannot grow that fast and therefore, we are looking at Latin America and Asia, where we see big growth opportunities.

Is the European market saturated?

No, but it’s becoming more and more difficult to grow. Even as we are growing at a steady pace, there isn’t a growth opportunity that we see in the future in European markets. The cosmetics industry is growing 3-4 per cent and we also have quite a big sales force relative to the population. In Europe, if you take the number of consultants we have and compare that to the population, each consultant will be serving around 250 consumers. But if that figure has to come down to 100, it will become a big issue.

But the opportunities in Latin America and Asia are very, very big. There are many more markets for us to open and also to improve penetration where we are present. And India is the most important market for Oriflame in Asia, and as we all know, the market is growing fast.

Have the input costs and the feedstock, which have gone up in the last couple of months, had a bearing on your sales?

No, not at all. We haven’t noticed anything. We are in the direct sales business and are not that affected by the current crisis. People will still buy cosmetics and amongst the products we are offering is also a business opportunity for people to earn some extra money. It is almost like, it should become more attractive to people during a crisis. We have been through various crises and recessions before and have not been affected.

We have actually had our best quarter in Oriflame globally this year, a fantastic third quarter. So, we are doing well, but of course you never know. We don’t see any issues, any slowdown anywhere in the world right now. You will still need your mascara, lipstick and cream during a recession. Actually, some say consumers buy even more during such times because they like to be nice to themselves.

Are you planning to launch any new range or line of products here?

We are looking into wellness. I don’t want to get into specifics, but there will be products like supplements and nutrients. The wellness industry is the fastest growing industry in the world, as you know. Another area for which we have products is oral care — we have successfully launched this in Europe. We have received lots of request for this range from India.

Could these be sold through retail, maybe?

We don’t know how to do retail and are not interested in learning new things at the moment. We are focussed on direct sales.

We are gradually looking to introduce more and more products. We have, today by far, the largest portfolio amongst direct selling companies. We have twice the number of products as our competitor, but we are looking to broaden the portfolio. We are looking to develop special products, colours for the Indian skin type. It’s a project that our research and development team is working on.

We produce more than a hundred products. In fact, one of the first products that our founders started with 41 years ago is produced in India for all the sixty markets. It’s called Tender Care.

We have talked about the cosmetic products, but what we are even more proud of in Oriflame is the business opportunity that we offer. We have 2.6 million active sales consultants in the world leading and building their own businesses within the Oriflame framework. The way we pay our remuneration and the way the system works is something that we are proud of. I have been with Oriflame for 12 years and one of the most fun things in the job is to see people changing their lives and fulfilling their dreams. Coming back to India we feel there is a good match between the cosmetics and directs sale.

What do you think of your price points here?

I think we have a good positioning. We are not the cheapest but we maintain good quality. Quality is very important in any business and even more important in direct sales, where selling is from a friend to another. When you are selling to a friend you don’t want to fool them.

What is the investment for the coming year? What are the challenges?

We cannot share figures but we are increasing our investments in marketing in 2009. What we can say is that in the next five years we should have at least tripled our sales in India.

One important thing for us is to spread geographically. The challenge for us is to work out smarter distribution systems because our consultants can’t pay higher freight charges — those cost more than the product. That’s a key area we will be investing in.

Do you ever see yourself being a mass product?

Probably not. Not to that extent as you see some of the retail brands. On some products on the toiletries which is on the heavier price, it’s very hard for us to compete.

In colour cosmetics, I think we offer value for money. Skin care is really the heritage of Oriflame, that is how we started, it’s the most complex product and we have developed several break-through technologies.

One range that we have been very successful with in India is the whitening range. Swedish people like to be brown.

I, for example, am going on a holiday and am looking forward to sunbathing. In Sweden, we sell creams so that people can become brown and in India we sell creams to make people fairer.

Lifestyle - India;Youngsters finding themselves under scrutiny in Virtual world

Namitha Handa

As the older generation gets Net-savvy, youngsters are finding themselves under scrutiny in the virtual world

“I was doing a good job of hiding my relationships from my parents, but I guess my happy days are over,” says Niharika Singh. The nemesis of Niharika’s happy days was not real; it was a digital demon, one that lurks in almost every house in urban Mumbai. It was a social networking site.

“Everything was going smoothly,” she says, “And then I announced, on my social networking site, the relationship I was having, with a boy.”

All of Niharika’s friends knew of her relationship, but what she had forgotten to take into account were the newest ‘friends’ on her Facebook account. “My uncles and aunts began to send me ‘friend requests’, and I had no choice, but to accept them. As soon as they read my Wall, my relationship information was conveyed straight to my mother, from whom I had kept this information.”

Niharika is not alone in Mumbai, as the older generation links-up with the Internet age, a growing number of youngsters are finding their cyberspace “violated”, especially by relatives.

But like Darwin postulated... things evolve, and the youth have been taking precautions: “I have put my aunts and uncles on hold, in the sense that I haven’t accepted their invitations. I use the simple excuse: ‘I don’t go online that often’. The truth is that I have some photographs that I would rather they not see,” says Sonia Nath.

But with Niharika the breach of trust still rankles: “It is so irritating. Now you don’t even have freedom on the Internet.”

Most youngsters, however, believe that putting relatives’ request on hold simply adds to the suspicion levels. “If you don’t add them; or use the highest level of security they sense something is wrong, and will inform your parents anyway. So you actually can’t do much, but delete all photographs you don’t want your relatives to see,” says Saloni Dabas.

Of course, as the Mumbaikar diaspora spreads across the globe, not everyone is reluctant to have relatives among their social networking ‘pals’. “This is one of the cheapest ways to keep in touch with your relatives who have settled abroad. It’s like being part of their life, even when you are far away,” says Gayatri Shrikande.

Gaurav Gupta agrees with Gayatri, but also empathises with Niharika. “Social networking sites enable people to know you better. But, at the same time, I believe the people we are with our friends, is different from whom we are with our families, so that can be an issue. And what is cool with friends might not go down well with relatives,” he says.

Eventually it’s up to site members to decide whom they give access to. But familial ties are beginning to bind the digital sphere, and that has got kids surfing the grey matter. A no-relatives-allowed networking site? Give it a few months.

Entertainment - India;The fanatic for Good films

Priyanka Joshi

Priyanka Joshi chats up Sunil Doshi, who is treating Indian audiences to films that are heady in content, to animation titles and the best of world cinema.

I f you are a fan of intelligent, multiplex cinema, you may know Sunil Doshi as the man who bankrolled Mixed Doubles and Bheja Fry. But for this session, the producer-distributor is expecting to talk of newer things: In fact, what he is expecting perhaps is yet another, slightly boring, session spent “educating” yet another journalist on some of his new acquisitions from Japanese cinema — animation films.

As director, Alliance Media & Entertainment, Doshi has just acquired 11 animation titles from Japan’s biggest production house, Studio Ghibli: Films like Princess Mononoke and Academy Award-winner Spirited Away, successful and acclaimed the world-over — if not in India, just as yet.

Having set himself the task of educating cinegoers (and journalists) as to this genre of filmmaking, Doshi brightens up when I mention that not only do I know of these films but have even seen them! “Aren’t they just great?” he asks, excited like a child, er, may be not. Because when I point out that animation is seen as a kiddy pastime in India, his frustration is visible: “That’s the biggest misinterpretation we have in India.”

Cue to launch into a lengthy monologue: “Studio Ghibli, Japan’s premier animation studio, was founded by two of animation’s greatest creators, Hayao Miyazaki and Isao Takahata,” he says, “Many of their films have not just won commercial success but have even won numerous awards and I am glad that I can help good cinema reach out to individuals,” he finishes.

On the other hand, even the cynics among us would be hard put to escape Doshi’s enthusiasm. He manages to convince me that “concept-driven” animation and children’s films are good business propositions. That’s why, he says, he will invest around $10 million on his latest business venture, Junior, that will produce children’s films as well as TV content. “And don’t expect my children’s films to have larger-than-life stars,” he says, with a hint of derision before quickly adding, “I am not averse to them but I make my films on my terms.”

For starters, Junior will release Azur & Asmar, an animated feature film by writer, director and artist Michel Ocelot. “It’s an Arabian Nights-style story about two re-united half-brothers, one white, one black and their genie-seeking adventures in a far-off land,” he lists. Justifying how the animation is not just for kids, he explains that the fairytale addresses themes of racism, nationhood, inheritance and idealism. A little prodding and he admits that the success of Azur & Asmat may establish whether Indian audiences take to animation at all.

Doshi also wears the hat of director, NDTV Lumière, an initiative to bring world cinema to India. He has been involved in building an impressive film collection of over 450 movies. “They are the best and have been handpicked by my team and I,” says the movie buff, who confesses to spending hours at end watching films.

Lumière has been organising corporate screenings and providing films to international film festivals in India, including in Mumbai, Kolkata, Thiruvananthapuram and Goa. When he is not negotiating rights for Oscar- nominated titles, Doshi returns to his production company — Handmade Films — and gets busy, well, “giving opportunities to newcomers”. “The new guys are bringing their ideas to the front and this will fire up filmmaking in India,” he forecasts.

His self-belief is well-rooted in films like Bheja Fry, now a case study for small filmmakers. This was a film with a budget of just about Rs 55-70 lakh. But it went on to make several times its production cost. He continues to invest in similar ventures but says that he refuses to look at the accounts sheet after the release of every film. “We look at long-term creative benefits. If there are some financial profits at the end of a year or two, we’re happy. Otherwise, the companies will continue to release and distribute films we believe in,” he says.

Doshi has extended his passion for cinema into production, acquisition and distribution of different genres of films at various film festivals abroad too. This explains why he’s at Cannes and other places on the festival circuit regularly. Feature-length fiction films that Handmade promoted in Cannes this year included Jaideep Varma’s comedy Hulla, Maneej Premnath’s thriller The Waiting Room, Rupali Guha’s Aamras, and Bela Negi’s Driving Lessons. He points out that all these have been directed by first-timers.

Doshi ends the interview on an assuring note: “We’ve the crème de la crème of cinema coming soon to theatres and homes.” We’ll wait and watch.

Business - Bollywood in recession ?

Gaurav Malani & Reshma Kelkar

The usage of the term recession has never been so common as it has been in the past few months. The younger generation might have theoretically Fear factor in Indian cinema

studied the syndrome in economics classes but are practically experiencing its effect only now. The recession has extended its range globally and India is no exception. While we keep reading about the market crunch across various industry sectors in the daily news, the Indian film industry, too couldn't evade its sting.

"While a worldwide recession has hit every business and industry at large, the Indian motion picture business felt it particularly hard because it has been long overpriced. Production, acquisition and talent salary costs had illogically shot through the roof with no commensurate returns for distributors sitting at the end of the value chain." remarks Tanuj Garg, Head - UK & Europe (International Marketing, Distribution & Syndication) at Studio 18.

But how is the recession affecting the movie world? Budding filmmaker Aniruddh Mitra explains, "The bad paymasters have got the opportunity to openly say 'no funds hence no payment', while the good ones are asking their unit members to charge less to reduce the price so that they can sell the films or at least find a buyer".

Though the crisis clearly carries negative vibes, some believe there could be positive outcome from the recession as well. "The bad side is the obvious i.e., workers not getting their dues, loss of work opportunities and some producers taking advantage of the crisis and faking no funds", says Mitra. "However the good part is that the bubble of over pricing would burst now and bring sanity to the budgeting of a film. Meaning, there is no justification in an artist getting Rs 64 cr for a film while the cinematographer has to be contended with Rs 20-40 lacs."

But hasn't the industry always been artist-oriented and our scripts been hero-bound? "The scene was always like this but has worsened in recent times. Picture this - an artist demands 7 cr after the success of his début film and sticks to his remuneration despite giving continuous flops thereafter. Where is the reward for hard work and consistency in our industry? Now if the overpriced artists charge less, there could be some sanity and scope for more films to be made even if couple of them bomb at the box office."

Who will be affected the most from the recession - actors, producers, distributors or exhibitors? Tanuj says, "With the credit crunch, the situation deteriorated as the principal revenue generators for a distributor became cash-strapped. Consequently boutique producers and actors on a honeymoon phase are among the most affected with the pricing nose-diving and an inevitable correction on the anvil,"

However the bigger belief is that the producers are the most affected lot. The distributors and exhibitors can throw their hands up and say 'sorry Fear factor in Indian cinema

I can't take your films as my funds have dried up'. But then what does the producer do? He has committed the film, paid people advances and gone ahead with shooting. He is in no position to force his colleagues to reduce their price, nor can he dump the project - in which case he loses both face and his investment.

As per industry buzz, the films where the buyers have withdrawn while the producers have gone ahead shooting based on the buyer's initial assurances include Vipul Shah's London Dreams, Sanjay Dutt - Akshay Kumar starrer Blue and all the three films starring Himesh Reshamiya.

Also affected are middle level workers and technicians. Their source of income has dried up with the producers appearing in a surrender mood.

But while on one hand we talk about cash-crunch and cost-cuttings, on the other hand we do see recent films doing encouraging business and the better ones like Golmaal Returns, Fashion and Dostana have even celebrated their grand success through lavish parties. Trade analyst Atul Kumar explains the paradox saying, "Celebrating success of Golmaal Returns and Fashion can be welcomed as an oasis in desert of crisis, which is looming largely over Bollywood. We need some reason to celebrate to forget tension. Otherwise global recession is definitely affecting our industry and don't be surprised to hear about some stars actually accommodating makers at much lower fees than their initial inflated price."

While adversely affecting the investing power, the recession is also inadvertently stabilizing Bollywood's internal economy. The early effects have already started showing but only time will define the long term damage.

Nevertheless as showman Raj Kapoor always maintained 'the show will continue to go on' in Bollywood. How else can you explain the likes of Bipasha Basu and Katrina Kaif being paid in crores for few minutes of performance on the New Year's Eve? That's what you call having one's cake and eating it too...

Business - India;Google sees strong shift towards online ads

Sravanthi Challapalli

Chennai, Nov. 21 Google India is seeing a very strong shift towards online advertising, and more so in the face of a slowdown, says Mr Parminder Singh, Business Head (Technology), Google India. Speaking to Business Line, he said that advertisers are now more cautious of how they spend their money and conscious of ways to make it go that extra mile.

Online advertising offers better targeting and flexibility to control ad spend as it need not be committed to a campaign upfront as in traditional advertising. It also provides the facility to gauge the extent of the impact. Google has several kinds of advertising — search ads, gadget ads, display ads and click-to-play video ads — which advertisers could customise to their needs and get information on how Internet users used the ads. The advertising model also allows for advertisers to pay lesser and lesser as the clicks on their ads rise. As the placement of the ad is determined through the auction model, the advertisers decide how much the cost of the click should be, Mr Singh said.

“Even for companies doing well, there is some uncertainty these days, so online advertising — which is measurable, targeted more accurately and served up at the moment of relevance (as in an ad for a camera phone appearing on a web site concerned with mobile phones) — comes in handy at times like this,” he explained. Google conducts Digital Days, which are fairly exhaustive sessions that are an effort to educated and convince advertisers to invest in online advertising.

“Brands are being built online. Online advertising’s advantage is not restricted to lead generation. People are realising that online and offline ads have their own value. It’s not an either-or situation — all media have an impact on each other,” said Mr Singh.

Travelguru, a portal for hotel and air ticket booking and an advertiser which uses the Google platform, says the approach now is strictly driven by return on investments. “There is complete focus on marketing/advertising platforms which are measurable and have clear returns. As we are able to acquire customers at a good CPA (cost per action), there is no need to curtail this investment,” says a spokesperson.

Travelguru’s predominant media of promotion are print and TV, considering that much of India’s population isn’t very computer-literate. “However, mass media advertising does not have the same ROI focus as online advertising and is more of a ‘brand building’ play,” says the spokesperson. “With less measurability, it often gets heightened scrutiny at such periods of slowdown.”

Business - India;Liquor industry raising a toast to slowdown

M Padmakshan

MUMBAI: Here’s one industry that’s on a high even in the times of slowdown. The liquor industry has not only bucked the financial crisis affecting most other sectors, but has managed to post a higher growth rate of 18-20%, against its normal growth rate of 10-12%.

It is no wonder that industry players are raising a toast. “My industry is recession proof,” said Vijay Mallya, who controls 70% of the spirits market through his UB Group.

UB has reason to cheer. The April-October sales figures show a 18% rise over the corresponding period last year. Sales grew by 13% in the same period last year. Vijay Rekhi, who heads United Spirits, the spirits behemoth of UB Group, said: “This is an unprecedented growth.”

It has been seen that in times of gloom, alcohol consumption goes up. This boosts sales of the Indian Made Foreign Liquor (IMFL) segment which offers hundreds of brands in various ranges of price, style and quality to consumers. Industry sources peg current average monthly sales figure at 13-14 million cases, a rise of 17% over the average monthly sales figure for last year.

The spirits industry has a penchant for reading recession as boom. This view has its origin in the bootlegging boom during the Great Depression of the 1930s, which was necessitated by an increased demand for alcohol that could not be catered to by legal channels.

But this consumption trend is not unique to recession. A similar pattern is seen during the times of boom too, when tipplers drink in celebration of the good times. The last few years of boom have seen the spirits industry growing from 90 million cases to 160 million cases, with an average rate of growth of 12%. This year the industry saw the pace of growth moving upwards to over 18%.

Deepak Roy, director of Kishore Chhabria-led ABD (Allied Blenders & Distillers) which manufactures Officer’s Choice whisky said: “We are set to cross 9 million cases of Officer’s Choice whisky this year. There is a 17% growth this year for the brand against the 12% growth last year.”

Raju Vaziraney, chief operating officer (COO) of Radico Khaitan, the second-largest spirits company in India that owns 8 PM whisky brand, said that onsite drinking has come down to 10-15%, while offsite drinking has gone up by about 20%. Offsite drinking constitutes almost 80% of total liquor sales. Offsite drinking is preferred over onsite drinking because the latter is costlier.

In the liquor industry parlance, onsite drinking refers to drinking at bars and restaurants, while offsite drinking refers to people drinking at home. Usually, 80% of the sales are for offsite drinking and this is where the sales have gone up considerably. This has helped to boost overall sales by 15-18% despite a decrease in sales at bars and restaurants.

Zoraster Zend, owner of Peekay Wines, Mumbai, one of the largest distributors of spirits and wines in the country, confirms the rise in sales. “The sales are definitely higher. We, however, have not quantified it so far,” he said.

Personality - Arun Sarin;Pushing frontiers across continents

Joji Thomas Philip

Arun Sarin isn’t a man who rests on his laurels. After stepping down as CEO of Vodafone in July 2008 with the hosannas of the City of London ringing
pleasantly in his ears, he certainly hasn’t walked off into the sunset.

To the inevitable ‘what next’ question, his answer is succinct yet discreet: “My next venture will definitely have to do with something global, but it will involve India, it will be related to technology and will also be linked to investments.”

“I’ve been keeping busy...I’ve trekked in the Himalayas across Nepal and Bhutan, caught up with friends and moved back to California,” he says of the preceding months, but that is obviously a sabbatical, a breather he’s taken several times in his 30-year professional career, just before taking on a new challenge.

Much has been said about 54-year-old Sarin’s military school background in Bangalore and his prowess as a boxer in his youth, but even his later interest in surfing may have contributed to his near-legendary pugnacious ability to stand up to sustained battering.

Though best known in India for pulling off the acquisition of Hutchison Essar, Sarin earned the reluctant admiration of his peers in London’s corporati when he exited markets where Vodafone was not making headway, fought off a coup led by shareholders opposed to his decisions, embraced convergence, and most importantly, turned the company’s Euro-centric worldview towards emerging markets (especially India) and putting it back on the path of profitability.

Even the Hutchison Essar deal was ‘touch and go’ as Vodafone was unsure of whether it could beat its competitors, especially, the ‘Indian players’ till the last moment. More so since Sarin had to also battle his own shareholders to bid for it in the first place.

“In hindsight, Hutchison went to the right company but it could have gone either way,” he told ET. By the time Sarin announced he was stepping down in March 2008, he had the satisfaction of showing naysayers that he had steered the world’s largest telco towards a dramatic improvement in its financial results, buoyed by its performance in the emerging markets, led by India.

When he stepped into the shoes of Chris Gent at Vodafone in 2003, very few people knew, let alone thought much of, the small-built, wiry Indian from California with a curiously trans-continental accent. By the time he stepped down in 2008, Sarin had become a global Indian icon, a chief executive known around the world for effecting a spectacular, if tough turnaround, based on his belief in emerging markets.

“When I took over, Vodafone had very little exposure to emerging markets. But now, we are well spread and are no longer a predominantly European player and have operations across Asia and Africa,” he says.

Sarin’s business acumen may never have come to the fore had he followed the family tradition and joined the Armed Forces. He got admission to the National Defence Academy, but his mother put her foot down. So the disappointed brilliant student turned to engineering. “IIT Kharagpur was an accident,” says Sarin modestly. “I filled up the forms because a friend had an extra one.”

The IIT degree honed his already-sharp mind even more, leading him to a double masters in engineering and management from University of California at Berkeley in 1978. He then headed for a job in, what he calls “the most happening sector of those times”, the oil industry. But he already had his sights on the next big thing, telecom. Believing that mobile telephony was the boom area, he joined the Pacific Telesis Group.

“This was the time when there were so many doubts about this technology,” Sarin recollects. A decade later, when he was at the helm of Pacific’s AirTouch business, it demerged the mobile phone operator. Consequently, Sarin played a key role in AirTouch’s $66.5-billion merger with Vodafone and headed the combined entity’s operations in the US, Asia and Australasia. He left in 2000 when Vodafone merged its US interests into Verizon Wireless.

For the next two years, Sarin remained as a non-executive director at Vodafone while exploring the dotcom space. “The internet was very hot. I was fascinated by infospace and after oil and mobile telephony, this seemed to be the next big boom before the bubble burst,” he recounts frankly. So it was back to familiar territory for Sarin, telecom. There was also an emotional quotient: “When you sell your company, you also want to ensure it is doing well. This tempted me back.”

His mantra for Vodafone was to ‘push the boundaries’ and he became CEO at a time when both analysts and investors had started questioning the company’s aggressive takeover-driven expansion plans. Sarin fought pitched battles with them to push ahead with his agenda. It didn’t help as he had to back out of the auction for AT&T and announce a £23-billion writeoff in 2006, the biggest-ever loss in British corporate history.

In June 2006, he survived a “substantial protest vote” to stay at the helm and got further flak in August 2007 when he decided not to exercise Vodafone’s rights to sell 45% in Verizon Wireless. He was proved right when the value of the Verizon investment doubled but he does say that the failure to bag AT&T taught him valuable lessons.

“We went for it because we needed our own company and brand in the US. This was the same strategy for India. While we had a 10% in Bharti, we needed our own asset here,” he adds.

“If I had quit then, shareholders would have been worse off. In three areas, strategically, operationally and from people’s point of view, there was lot to be completed. Leadership required clear execution and I left as soon as we got a grip on these three key issues,” he says but adds that his resignation wasn’t because Vodafone had finally reached full-year profitability after several years, but because he was convinced that he had put a stable and forward-looking system and strategy in place.

Sarin’s leadership skills are readily acknowledged by competitors and friends alike. Vodafone Essar MD Asim Ghosh, for instance, says Sarin has an easy charismatic manner and the ability to cut through complex issues for a simple solution. “Most importantly, he has the courage to stick his neck out on big decisions. Without doubt, he is a great leader, not only in telecom, but also in global business,” says Ghosh.

Sarin’s salutary tale, and his ultimate vindication, came at a time when there were very few India-born CEOs on the high table. In a sense, he forged the template of the tough-talking, visionary Indian CEOs, paving the way for others.

“When I took over, there were no Indians in such roles. There are several now, (PepsiCo’s) Indra Nooyi, (Citigroup’s) Vikram Pandit, Lakshmi Mittal and Ratan Tata among others. They are the best of the breed and I see a lot more Indians in such roles of being global leaders over the next 5-10 years,” says Sarin.
Dheeraj Tiwari & Aman Dhall

NEW DELHI: Time was when paypackets separated the men from the boys, with public sector bosses falling way behind their private sector peers. Now,
CEOs of government-owned companies can give some of their private sector rivals a run for their money.

According to an ET analysis, the chairman & managing director (CMD) of a public sector oil major will now be earning a respectable Rs 5,76,000 per month, thanks to the pay revision bonanza, factoring in a 200% performance-related bonus.

That means a huge leap of 450% over his current monthly salary of Rs 1,02,500 per month and will put him (pay-wise at least) ahead of Infosys chairman NR Narayana Murthy, who earns Rs 4,16,666 per month (as on March 2008). He, however, would still be far behind Wipro chairman Azim H Premji’s monthly salary of Rs 10,95,726.

Even so, this salary hike is a representative picture of the new pay scenario in the higher echelons of the public sector companies. At present, CMDs of public sector undertakings (PSU) draw a basic pay in the range of Rs 27,750-Rs 31,500.

They are also entitled to get 68.8% of basic pay as dearness allowance (DA), 30% house rent allowance (HRA), 30% statutory allowance, 30% fitment benefit and 50% other allowances. So, for example, if a PSU CMD is at the upper-end of the basic salary bracket (Rs 31,500), his total emoluments, excluding the performance-related pay (PRP), will be Rs 97,272.

The PRP is taken from the 5% distributable profit, or profit after tax. And then there is the added sweetner that the salary revision carries, the retrospective effect. This means the CMD of a navratna PSU may get arrears of around Rs 20 lakh as well.

According to the ET analysis based on the figures as on March 31, 2008, the top earning CMDs of PSUs include NTPC’s Ram Sharan Sharma (Rs 1,62,145), Bhel’s K Ravi Kumar (Rs 1,61,285), Gail’s UD Choubey (Rs 1,56,666), IOC’s Sarthak Behuria (Rs 1,40,750), SAIL’s SK Roongta (Rs 1,34,024) and ONGC’s Radhey Shyam Sharma (Rs 1,02,500).

Clearly, while the market capitalisation of some of these PSUs are much higher than private sector companies, the salaries of their CMDs are much lower. Take the whopping difference in the paypackets of the bosses of telecom major Bharti Airtel and ONGC, India’s largest oil & gas company.

Bharti’s market capitalisation is Rs 1,12,411.67 crore, while ONGC’s Rs 1,39,112.27 crore. But there’s a gaping Rs 1,61,90,343 difference in the salaries of their top honchos, RS Sharma’s Rs 1,02,500 per month to Sunil Bharti Mittal’s Rs 1,62,092,843 per month.

In fact, even after the pay revision, Mr Sharma would be far behind some of the other leading private sector bosses, who are not promoters, such as L&T CEO AM Naik, whose remuneration as of March 31, 2008, was Rs 69,93,083

This, despite the fact that PSUs top the list in terms of market capitalisation, with ONGC weighing in at Rs 1,39,112.27 crore, NTPC (Rs 1,13,869.86 crore), Bhel (Rs 58,458.48 crore), Power Grid (Rs 29,146.23 crore), which makes them much larger than some of their private sector competitors such as Reliance Petroleum (Rs 31,477.5 crore), Tata Power (Rs 14,033.77 crore) and L&T (Rs 41,690.74 crore).

After the new pay scales kick in, the basic salary of a PSU CMD will move into the highest end of the new bracket (Rs 80,000-1,25,000), while dearness allowance will be calculated at around 13%. The rest of the allowances will remain the same.

In addition, a profitable PSU can now give up to 200% as PRP. Assuming that a CMD of a blue-chip PSU falls into the highest bracket, his salary without PRP will be Rs 3,16,125, which will go up to Rs 5,76,125, if the company gives 200% as performance pay.

Similarly, for CMDs of miniratna companies, the revised pay will mean an increase of around 200%, even without the 200% PRP, which a CMD of a profitable PSU will be entitled to.

Business - Goldman Sachs not interested in buying Citibank

NEW YORK: Goldman Sachs Group Inc is not interested in buying hard-hit Citigroup Inc, even with substantial US government financial support, a Competitive economies
Ghosts of 1929
2008: Year of global financial crisis
Other Fed tools against downturn

person familiar with Goldman's strategy said Friday.

Citigroup shares tumbled for a fifth straight day, closing Friday at a 14-year low and giving the once-mighty bank a market value of just $21 billion.

The plunging stock price fueled speculation Friday that the bank would have to find a buyer quickly or sell businesses to stay afloat. Citi's board met Friday to consider these and other options, though the bank ruled out a sale of brokerage unit Smith Barney.

Yet Goldman -- whose stock rose 2.5 percent Friday and which now has about the same market value as Citi -- continues to resist such a deal because it would be disruptive to Goldman's culture and could make it vulnerable to big losses from some of Citi's assets, the source said.

That reluctance has not changed since Goldman Chief Executive Lloyd Blankfein was encouraged by government officials to call Citi CEO Vikram Pandit. The call, which took place in September, lasted less than a minute and neither side was interested, people familiar with the matter said.

Even with the possibility of US government financial support, Goldman is reluctant, the source said. Goldman declined to comment, citing its policy of not responding to market speculation.

The US Treasury and Federal Reserve could still put pressure on a large bank -- only a few remain -- to carry out a private-sector rescue.

That power of persuasion was evident in March, when JPMorgan Chase & Co was urged to acquire Bear Stearns, with the Federal Reserve agreeing to absorb losses on a mortgage portfolio.

Mktg - McDonald's launches new flavour of French fries

NEW DELHI: McDonald’s has launched a new flavour of French fries by the name Shake-Shake Fries.

Shake-Shake Fries has been introduced for a limited period only, from 20 November to 31 December, 2008.

Says McDonald’s head marketing – North and East India Jyoti Rakheja, “Launch of Shake-Shake Fries is a part of our continuous endeavour to deliver great taste and value to our customers. With the newly launched Fries, it's not just about the flavour, but also about the experience of popping the fries into the bag, adding a chatpata seasoning in it and shaking it up and down. It is an extension of the basic French fries with an added flavour to it. The idea is get the consumers to have fun while enjoying their favourite fries.”

Leo Burnett has created the 25-second television commercial that introduces the new flavour of fries.

The newly launched fries will be available across 155 McDonald’s restaurants at a price of Rs 60 for large fries and Rs 55 for medium fries.

Tech - US develops tiny flying robots

DAYTON: If only we could be a fly on the wall when our enemies are plotting to attack us. Better yet, what if that fly could record voices, transmit
video and even fire tiny weapons?

That kind of James Bond-style fantasy is actually on the drawing board. US military engineers are trying to design flying robots disguised as insects that could one day spy on enemies and conduct dangerous missions without risking lives.

"The way we envision it is, there would be a bunch of these sent out in a swarm," said Greg Parker, who helps lead the research project at Wright-Patterson Air Force Base in Dayton. "If we know there's a possibility of bad guys in a certain building, how do we find out? We think this would fill that void."

In essence, the research seeks to miniaturise the Unmanned Aerial Vehicle drones used in Iraq and Afghanistan for surveillance and reconnaissance.

The next generation of drones, called Micro Aerial Vehicles, or MAVs, could be as tiny as bumblebees and capable of flying undetected into buildings, where they could photograph, record, and even attack insurgents and terrorists.

By identifying and assaulting adversaries more precisely, the robots would also help reduce or avoid civilian casualties, the military says.

Parker and his colleagues plan to start by developing a bird-sized robot as soon as 2015, followed by the insect-sized models by 2030.

The vehicles could be useful on battlefields where the biggest challenge is collecting reliable intelligence about enemies.

"If we could get inside the buildings and inside the rooms where their activities are unfolding, we would be able to get the kind of intelligence we need to shut them down," said Loren Thompson, a defense analyst with the Lexington Institute in Arlington, Virginia.

Lifestyle - Malaysia's top Islamic body bans yoga for muslims

KUALA LUMPUR: Malaysia's top Islamic body on Saturday banned Muslims from practicing yoga, saying the Indian physical exercise contains elements of
Hinduism and could corrupt Muslims.

The National Fatwa Council, which has the authority to rule on how Muslims must conduct their faith, issued a fatwa, or edict, saying yoga involves not just physical exercise but also includes Hindu spiritual elements, chanting and worship.

Council chairman Abdul Shukor Husin told reporters that many Muslims who practice the globally popular yoga failed to understand that its ultimate aim was to be one with a god of a different religion.

``We are of the view that yoga, which originates from Hinduism, combines physical exercise, religious elements, chanting and worshipping for the purpose of achieving inner peace and ultimately to be one with god,'' he said.

``It is inappropriate. It can destroy the faith of a Muslim,'' he said.

The Fatwa Council's decisions are not legally binding on Muslims, who comprise nearly two-thirds of Malaysia's 27 million people, unless they are enshrined in national or Shariah laws.

However, many Muslims abide by the edicts out of deference, and the council does have the authority to ostracize an offending Muslim from society.

The fatwa reflects the growing strain of conservatism in Malaysia, which has always taken pride in its multiethnicity. About 25 per cent of Malaysians are ethnic Chinese and 8 per cent ethnic Indians, mostly Hindus.

Recently, the council issued an edict banning tomboys, ruling that girls who act like boys violate the tenets of Islam.

The issue of yoga came into the limelight last month when an Islamic scholar expressed an opinion at a seminar that it was un-Islamic, prompting the Fatwa Council to step in.

Local newspapers have received several letters from Muslims, expressing indignation at the scholar's view, saying yoga is simply a way to maintain health and has nothing to do with religion.

There are no figures for how many Muslims practice yoga, but many yoga classes have a sprinkling of Muslims attending.

In a recent blog, social activist Marina Mahathir criticized the council for even considering a yoga ban, calling it ``a classic case of reacting out of fear and ignorance.''

``Yoga may have spiritual roots but most of us do it for the exercise, both for the mind and body,'' Marina wrote.

India - Widows sold as bonded labourers 100 kms from Bangalore

Rishikesh Bahadur Desai

TUMKUR/BANGALORE: If Bangalore has entered e-age, barely 100 km from the city stone-age practices still persist.

Unbelievable though it may sound, widows are treated like cattle, are 'bought and sold' in a custom treated as sacred by the 'Handi Koracha' community. Worse, local authorities well aware of the issue are not lifting a finger to help the victims of this de-humanising tradition.

Selling widows is a routine custom of the pig-rearing Kunchalu Koracha or Handi Korachas. The centuries-old 'Ruka' tradition is a norm with the community that lives in hamlets along the Karnataka-Andhra Pradesh border.
Widowed women thus sold, are used as bonded labourers to rear pigs or make brooms by their new owners.

They run errands and do menial household work. Of course, similar rules do not apply to men. Unfortunately most community members don't think of 'Ruka,'as evil and few victims protest.

"This is a common practice. Even today, women are bought and sold," Sunkappa, an elderly member of the community, told TOI. His sister Nagamma was sold by her in-laws four years ago. When this news hit the headlines, it created a sensation. The state government promised to help her and uplift the backward Handi Koracha community.

A caravan of officials descended on R Hosakote village September last. The villagers were promised free houses, loans and pigs at subsidized rates. "Over 300 applications were received. But not a single one seems to have been processed. No one has got any assistance till now," says Sogadu Venkatesh, a social worker who is campaigning against the practice.

The community

Kunchalu Koracha or Handi Korachas live in Kolar, Tumkur, Davanagere and Bellary districts. They are a sub-sect of Korachas, listed under the Scheduled Castes in Karnataka and under Scheduled Tribes in Andhra Pradesh. Their occupations are pig-rearing and broom-making.

None among the commmunity has ever been to college. Around 20 students are in school now with girls outnumbering boys. They have had no political representation till now. No Handi Koracha has made it to the panchayats or the assembly or parliament.

What is Ruka?

It is a counter-dowry practice in which the parents of the groom pay money to the bride. During marriage, a bunch of coins tied in a piece of cloth is given to the bride to keep for life. This is treated as a solemn promise from her that she would serve her husband and in-laws for life. This provides her parents-in-law absolute control over her life. In case of her husband's death they can sell her if they feel it is expensive to keep her and her children in their household and feed them.

Government shocked

Social welfare minister D Sudhakar said he was shocked to hear about such practices. He said he would provide a free house, loan to Nagamma for self-employment and free education for her children. He said the matter would be investigated and the guilty would be brought to book. He also said educational programmes would be taken up to wean away the community from such practices.

When reminded that similar promises were made by the government four years ago and that they were not met, he said he would call for details on their status and take up follow-up action. He may have to start from the fundamentals as the state government is yet to appoint chairpersons for the state women's commission and the state SC/ST commission.


G K Karanth, director of the centre for multi-disciplinary development research, feels all the stake-holders - the government, community and the civil society - have a role to play in abolishing this practice.

The government should assess why such barbaric practices persist. What are the hindrances to ending them; whether it is ignorance, exclusion, economic opportunity, or die-hard preservationism. Solutions can be evolved based on such data, Karanth who is the joint editor of the book 'Challenging Untouchability: Dalit Initiatives and Experiences from Karnataka' said.

He also felt that evil practices should be condemned even if they are part of community or tribal customs. "While I uphold the cultural rights of indigenous communities, I feel the need for a cultural ombudsman to look at these things and suggest what can be done," he said.

NGOs ready to help

Bangalore-based women's rights group Wimochana conducted a fact finding study about the practice last year.

They could not get much material as many people did not speak about it openly. "However, we are in touch with some local groups that are working at creating awareness against such practices," Wimochana's Madhu Bhushan said.

She said long term measures were needed to tackle such issues. "The government should take more responsible steps towards educating the communities and ending poverty among the community members that is the root cause of such practices," she said.

Health - Avoid bad cholestrol to shed fat

An easy way to burn fat - and lose weight - could be the avoidance of bad cholesterol, according to a new study.

The study, by researchers at Sweden's Karolinska Institutet, has found that LDL, or bad cholesterol, is also a regulator of fat turnover besides its well-established detrimental effects in promoting atherosclerosis.

Johan Björkegren and colleagues found that LDL slowed the rate of fat breakdown in adipocytes, the peripheral cells responsible for fat storage, open-access journal PLoS ONE reported.

Earlier studies have shown the fatty acids released from the peripheral fat to the blood boost the synthesis of LDL precursors in the liver.

The current study suggests that high levels of LDL could inhibit the releasing fatty acids of the peripheral fat.

“The results of our study provide evidence of a reciprocal link between the liver and peripheral fat regulating fat turnover", said Björkegren.

This finding suggests that lowering cholesterol in the blood may also affect build-up of peripheral fat.

The study was conducted on cell cultures and tissue from humans as well as in animal models with different levels of LDL.

Columnists - Khushwant Singh;Wrapped in ochre,damned in deed

We are told that India is the homeland of sants, mahatmas, rishis and sadhus. We believe we are guided by those who have spent years introspecting or meditating to find out the truth about themselves and the world. After that, they achieve peace of mind and are qualified to become gurus entitled to preach peace and love for humanity. To show that they have no worldly ambitions, they wear saffron or ochre robes, symbolising renunciation. Does this hold good in today’s India?

I give three instances of women who wore saffron and style themselves as Sadhvis. One is Rithambra. Sudhir Kakkar, India’s leading psychiatrist has quoted her speeches spouting hate against Muslims. She is also the author of the slogan ‘ek aur dhakka’ — one more push — to bring down the Babri Masjid. On TV channels, she preaches love and understanding. She is also seen with children, to create the impression of being a loving mother.

Then, there is Uma Bharati, who does not call herself a Sadhvi but wears saffron. She has not made up her mind whether she wants to be a politician or a spiritual leader. She celebrated the demolition of Babri Masjid by embracing Murli Manohar Joshi. She has been the Chief Minister of Madhya Pradesh. She is also seen hugging cows and calves, a living image of a gau-rakshak (protector of the cow). We saw her sitting in the front row in one of Asaram Bapu’s congregations and proclaiming in English, “I love you”. That was before Bapu lost his aura and was accused of amassing property. Whatever her other achievements, she is unable to control her temper. We saw her fling her papers and storm out of a meeting of the top-brass of the BJP. And recently, in full view of thousands of her admirers she slapped an important supporter. Realising what the political outcome would be, she ran after him to apologise and kissed him (on the forehead).

Most of all I am disillusioned by the charges laid against Sadhvi Pragya Singh Thakur. Her doctor father is a member of the RSS. She was an activist of the Akhil Bharatiya Vidyarthi Parishad (ABVP), the student wing of the BJP. She evidently has a personality problem: a girl with masculine tendencies. She wears a turban, rides a motor cycle, and ticks off strangers she thinks are making passes at girls. What she needed was psychiatric guidance. What she is accused of is being one of the gang that planted bombs in Muslim localities, which took six lives. She is in dire trouble if she fails to clear her name of this diabolical conspiracy. She has shaken my confidence about saintly men and women in saffron or ochre robes. We may have to change the name of our beloved Hindustan to Pakhandistan — the land of humbugs.

New lingo

India and Pakistan have invented a new language that I have named IPA, short for Indo-Pak Angrezi. In Pakistan, it is English mixed with Urdu and Punjabi. In India, it is English mixed with Hindi, Punjabi and Mumbai Hindustani. In both countries, grammar is ignored, as is spelling. In India, the pioneers were the late Devyani Chaubal of Bombay and Shobhaa De of Mumbai. In Pakistan, it is Moni Mohsin. Her weekly column in the Friday Times of Lahore is the most widely read in IPA in both countries. She is the maharani of this bastard language. She made her name to fame with her novel The End of Innocence (Penguin), based in a country estate close to Lahore. Now, a selection of her articles in IPA have been published in India: The Diary of a Social Butterfly (Random House). It makes hilarious reading for those who know a little Urdu and are not fussy about spelling. I give a few samples. This one is on her organising a protest march against the US-British intrusion in Iraq and her family’s reaction. “I’ve chup karaoed everybody — The Old Bag, the Gruesome Twosome, Janoo, even Bush and his English chaprassi, ‘Tony the Phoney’ as Janoo calls him. I’ve chup karaoed them with anti-Iraq war jaloos, which has come on CNN, BBC, even Fox. After all, five thousands women and children marching through Gullberg is no joke, And all khaata-peeta khandani types who are doing it for their principles and not for the hundred rupees the rent-a-crowd types get. Nobody can say after this that we Gullberg-wallahs don’t stand out and speak out — or was it stand up and speek out ? Khair, whatever. Sab ko hum ne impress kar diya hai, and that’s that.”

Again, this is from the impending visit of the Indian Polo team to Lahore: “So much of mazza!! I’m tau going off my rocket with all the parties-sharties, shaadi-vaadis and khannas galore. And the Polo: voh tau even more better. So many polo functions, and all by special invitation only so that no aera-vagheras could get in. Serves them right, I tell you. Trying to muscle in where they don’t belong.

But what a pity keh no glam Indians showed up at the polo. Itna main look forward kar rahi thi, na, to entertaining Shahrukh Khan and Salman and Hrithik in my new sun room with its pink wall-to-wall and apple green velvet curtains. Chalo, next time.”

Columnists - Barkha Dutt;Seize the moment

For all those who went into a hysterical overdrive after Barack Obama hinted at a more aggressive American role in Kashmir, take pause. The first phase of the Assembly elections has not just belied the prophecies of the pundits and the punters; it has conclusively shown that the sentiment in the Valley is far too complex to be slotted into easy categories. But even more compellingly, the quiet, almost crafty way, in which Kashmiris have bucked all expectations, proves that no one can claim ownership of what they really feel or think. Not the Indian government, not the Pakistani patrons, not journalists like myself who thought we understood, not the cynical commentators who said it was time for India to let go, not even the azadi proponents who argued that no compromise was palatable or possible, and certainly, not America.

Salman Rushdie, who dedicated the book to his Kashmiri grandparents, may have first captured this instinctive rejection of foisted knowledge, in Shalimar the Clown. In a thinly disguised allegory of Western intervention in the region, this is
what the Jewish-American Ambassador to Kashmir is told by the woman he has courted, seduced and then abandoned. “You took beauty and created hideousness,” says Boonyi Kaul, a Pandit, to the European born, Max. “Look at me. I am the meaning of your deeds. I am the meaning of your so-called love, your destructive, selfish, wanton love. I was honest and you turned me into your lie. This is not me. This is not me. This is you.”

It could almost be what the Kashmiris are saying to all of us today — no matter where we stand along the political or ideological axis. When we hold up a mirror to them, they don’t see themselves; instead they see variations of what we want them to be or what we have pushed them to be.

So, how does one understand what’s happened last week? First, these are the bare, indisputable, facts. More people voted in the Valley than anyone thought was possible, given that the state was just emerging from the violent shadow of the Amarnath controversy. The turnout was significant, not just in border areas like Gurez (which has traditionally been out of step with the pro-azadi sentiment), but also in the two other sensitive seats of Bandipore and Sonawari. By and large — and this is the most miraculous achievement of all — there have not been any complaints of coercion and no stories of troops making reluctant citizens vote at gunpoint. But yes, separatist politicians, who gave calls for the elections to be boycotted, have either been locked up in their homes or made to keep shut. The year 2002, widely accepted as a watershed election for its fairness and transparency, still had to grapple with the gun. Militant violence tailed candidates and voters alike. This time, so far at least, those guns, too, are silent.

Could we be looking at this as the biggest shift in the Valley? Is there a possible transition from violence to non-violence, both by those who take to the streets to protest the idea of India and those whose duty it is to defend it? It’s probably too early to draw firm conclusions, but increasingly it looks like the new battlefield in J&K is going to be intellectual, ideological and emotional. We may witness a clash of ideas more than a clash of armies.

Does the fact that people participated in the political process mean they no longer want azadi? No, it doesn’t, much as mainstream politicians would have us believe. But, does it mean that they have finally begun to feel like stakeholders who have invested in the system? Yes, it does, much as the separatist lobby would like to deny it.

The power to vote out a politician in an election that gives them the space to do so has made people believe that the Assembly does have some meaning. The Amarnath controversy may have divided the state, but ironically as J&K fought over allegations of an economic blockade, both sides realised that they needed to be heard inside the political system. To that extent, the polls became more, not less important. Azadi definitely remains a philosophical and sentimental aspiration in the Valley, but the leaky drain and the schools without teachers also matter, and in a tactile and more immediate way. Neither cancels out or displaces the other, and that’s what makes it all so complex.

It may be too early to say, but it also looks like India and Pakistan have made some headway in back-channel talks on Kashmir. The meeting between the two national security advisors is said to have turned the tide. Indo-Pak watchers know that peace is usually a temporary lull in a stormy relationship. But if the relative peace holds through the length of the Assembly elections, it could be transformative for both sides.

The lesson from the first phase of elections is a modest one. There is an opportunity for another chance to mend and build broken trust and then, possibly, the relationship. It would be a mistake for hawks in policy-making to gloat and think a resolution is around the corner. It would be an equal mistake for the hawks in the separatist camp to cry foul in an election that has been transparent and has shown that people would rather participate in the system than remain on its margins. A window has opened; New Delhi must not let the curtains drape over it.

Barkha Dutt is Group Editor, English News, NDTV

World - Recession & Strategic realities in East Asia

P. S. Suryanarayana

Several countries hope to ride out the current crisis by banking on the growth trajectories of China and India despite their new concerns over the emerging scene.

East Asian states, which planned to prevent a future shock in their own backyards when the current financial crisis first hit other regions several weeks ago, are coming to terms with reality. It is now recognised across East Asia, home to a number of one-time economic tigers, that the gathering ‘global crisis’ may no longer be warded off in this region.

Japan, still the world’s second largest economy, has now formally declared recession. And, Singapore, the main financial centre in the Southeast Asian sub-region, is also not fighting shy of acknowledging a similar economic slowdown in the city-state. In some contrast, Malaysia, another key economy, has so far managed to stay above the recession mark by shaping a stimulus package. More importantly, the big East Asian picture is dominated by political-level expectations that China’s huge economic stimulus may work wonders. These expectations have not so far been neutralised by China’s new assessments that the worsening global conditions had now begun to “weigh on [its own] job market.”

On balance, though, the actual and potential fallout along the Asiatic rim of the Pacific Ocean is still far from clear. Lacking still are definitive data from the different national authorities and varied interest groups.

Anecdotal evidence in this situation is indicative of job losses in not just the financial sector, more especially banks. Here, too, no discernible pattern across this vast region is being talked about at the moment. As informally identified by interlocutors, some key sectors, where recession has already set in or is taking hold in the region as a whole are shipping and aviation. Tourism, construction industry, and information technology are also being mentioned among those already affected in different measure in different states.

Although the practice of employing foreign workers is prevalent in many countries globally, Southeast Asian states like Malaysia and Singapore are in the top bracket in this category. Indian professionals are present across the high-end spectrum in this region, while skilled and unskilled workers from South Asia, including India, are very conspicuous, too.

Instances of a sudden increase in the home-bound remittances by Indian workers have come to light, especially in Singapore, indicative of a possible winding-down of their work. Nonetheless, the available anecdotal evidence in this regard is insufficient to draw any definitive conclusion one way or another about actual or potential job losses in the unskilled sector.

Of greater certainty, as of now, is that East Asia is free of gory stories such as acute-distress deaths among native and foreign workers and professionals. The impact of job cuts by multinational companies, especially banks, is of course being felt among foreign professionals, including Indians, in East Asia, too.

Yet, braving the predictions of a ‘global economic crisis’ beyond the financial domain, India and Malaysia are engaged in what can be seen as exemplary South-South cooperation. An India-Malaysia Capital Markets Forum, a thematic anti-thesis to the current fears of a global financial meltdown, was launched on November 20. And, the coincidental awarding of a Mumbai monorail contract to a consortium of corporate players from India and Malaysia could not have been better timed to buck the doomsday prophecies. Malaysia sees India as a major partner for economic engagement, and New Delhi is reciprocating such sentiments and deep interest, says Indian High Commissioner Ashok Kantha.

On a different plane, the Association of South East Asian Nations (ASEAN), which includes Malaysia, can tap the resources of key dialogue partners – China, Japan, and South Korea. Besides Malaysia, the 10-member ASEAN has in its fold key sub-regional economies like Indonesia, Singapore, Thailand, and Vietnam. In 2000, these eight countries helped evolve the Chiang Mai Initiative for inter-state cooperation of the kind relevant at this stage to prevent or bust economic crises in East Asia.

International envoys, including India’s S. Jaishankar, call for a close look at the nuances of economic diplomacy by Japan, China, and India in the context of the recent Group-20 Summit. While larger strategic considerations will obviously determine state-sponsored diplomacy in the evolving global situation, non-official experts are, as can be expected, divided in their opinions.

A dominant view, outside the ambience of official diplomacy, is that China, despite its stunning growth in recent years, wants to be counted only as a developing economy in the G-20 equations. After Barack Obama’s election, a Chinese official said China, the largest developing country, and the United States, the largest developed economy, must engage each other more meaningfully.

So, several Southeast Asian countries hope to ride out the current crisis by banking on the growth trajectories of China and also India, despite their new concerns over the emerging scene. Much will depend on how far China, now under growing economic pressure from the U.S., can fulfil such hopes by accommodating the relatively less developed countries.

Unsurprisingly in these circumstances, Japan has pledged $100 billion towards the International Monetary Fund. Beyond Japan’s intentions of signalling its solidarity with the developing bloc, it is obvious that the game-plan is also to show that China, with huge foreign exchange reserves, hasn’t done so. Of course, Japan has often been accused of resorting to cheque-book diplomacy to earn points as a responsible stake-holder in the international system. However, a top Japanese official has told this correspondent that it is better to be “damned” for cheque-book diplomacy rather than for not resorting to it! And, Tokyo can now argue that such diplomacy to meet a global financial crisis is not at all out of place and may indeed be a ‘creative’ way.