The Art of Going Glocal

Two Tuck School professors produce a deeply researched book of case studies to show what works and what doesn?t when MNCs tweak products for emerging markets

Govindraj Ethiraj / Jun 02, 2012, 00:39 IST Business Standard

>Energy drink Gatorade is as American as baseball and apple pie but is actually derived from a concoction that includes ingredients like coconut water, carrot juice, rice water, carob flour and dehydrated bananas. It was used to treat cholera patients in Bangladesh.
> In the developed world, you visit hospitals to get hooked to an electrocardiograph (ECG) machine. In India, the machine comes to you, particularly if you live in a village. GE’s MAC 400 (a result of some knocks and much marketplace learning) is an ECG machine that costs $500 (compared to its rich-world cousin that goes for $3,000 to $10,000), is battery operated and is meant to be carried around. It also sells the world over.

>Tractor giant John Deere waltzed into India with a product “glocalised” for the local market. It also assumed Indian agriculture would evolve like in the US, small land holdings merge into large ones and thus need big tractors. To its shock, there were no takers. It went back to the drawing board, to a clean slate and a local team that engineered a new product for Indian conditions at a much lower price. The smaller horsepower (35 HP) tractor is now a hit with Indian farmers who want, among other things, their tractors to be all-purpose vehicles and not just for ploughing the fields.
So go the many examples of “reverse innovation”, products and services created in the developing world for the developing world and then the developed world — by teams hailing from both worlds. These teams are mostly led by mavericks who have broken down or mowed through rigid corporate hierarchies and adopted a range of persuasive methods, from scavenging to plain bullying.
Management authors Vijay Govindarajan, professor of international business at Tuck School of Business at Dartmouth College, and Chris Trimble, innovation speaker also on the Tuck faculty, have written a useful multi-case study-cum-how-to guide on reverse innovation, an approach they argue will increasingly define how products and services, including cutting edge, are developed in and for the globalised marketplace.
While reverse innovation has been increasingly discussed in recent years, this is evidently the first book that puts down the process that companies have used (or not) to reverse innovate their way out of and into new markets.
An important learning is that reverse innovation initiatives are born out of failures, as in John Deere’s India comeback or Procter & Gamble’s feminine hygiene product Naturella which was seeded in Mexico.
In creating Naturella P&G accepted, willy nilly, that its global feminine hygiene brand Always was not the right product, something that does not come easy for a company this size. Mexico’s hard-working women commuted long distances, had limited access to public restrooms and lived in small houses. They were concerned about skin care, effective odour control and wanted a pleasing sensory experience. None of which Always delivered. Eventually, Naturella borrowed raw materials from other P&G business units like baby-care, and sourced lotions and creams for skin protection from the beauty products category. For instance, chamomile which was used in skin-care products to treat diaper rash and facial skin irritation found its way here. It even used a production line that was sitting idle in Canada.
Often the first challenge large corporations face to reverse innovation is within. The first reaction is: the market is not ready for this product. Second, maybe we haven’t marketed this well enough or advertised its benefits. After all, this product took time to develop in our (developed) market too. And many other developed markets. Finally, if most of the Nobel Prize winners are sitting in this part of the world, surely, the innovation answers are lying here.
But developing economies are different. Not just a little different, but “night-and-day different” the authors point out. Eighty-five per cent of the world’s citizens, or 5.8 billion people, live in poor countries. And the total GDP of the poor countries is $35 trillion, half the world’s GDP. So executives in rich countries should avoid the trap: “Why can’t we just export the products and services we already have?”
That’s because markets like India and China are following different trajectories. America went from horse carriages to cars. India has motorcycles and three-wheelers along the way and perhaps all the way. China will go from no power to solar power, thanks to crippling pollution. India went from no landlines to mobile phones. And so on.
So how does one nail it ? The authors suggest a Local Growth Team — LGT — approach to crack such problems. An LGT is a “small, cross-functional entrepreneurial unit” physically located in the emerging market. It has a full set of business capabilities, authority to set strategy and mostly have a direct line to the big boss.
It’s not that reverse innovation works only for a Western corporation. Mahindra & Mahindra is the flip-side story to John Deere. When it arrived in the US, it found that its small tractor could not compete with John Deere in the US markets (large tractors for large land parcels, remember?). But it turned out that it was actually ideal for hobby farmers, landscapers and building contractors. A few modifications were called for, though — supersized seats and larger brake pedals!
Bangalore-based Narayana Hrudayalaya (NH) hospital showed that open heart surgery could be done in $2,000 per operation, compared to $20,000 in the US. Guess what — despite the lower price, NH’s net profit margin is higher than the US average. Moreover, the mortality rate within 30 days of bypass surgery is 1.4 per cent at NH compared to the US average of 1.9 per cent. So now, NH is taking its process and business to the developed world by building a 2,000-bed hospital in the Cayman Islands, an hour from Miami. The target: uninsured Americans who will be offered surgeries at half US prices.
There are more case studies, including Harman International (economy car entertainment systems), low-cost Logitech Mouse and the Prevention And Access To Care & Treatment (PACT) healthcare programme developed in Boston for Latin American countries. This reviewer found many of them being showcased for the first time, at least in this detail.
Reverse Innovation is targeted mostly at multinationals who are trying to get a leg up in markets like China and India. The lessons apply equally to Indian companies, as the Mahindra and NH examples suggest. Moreover, a careful reading of the case studies would be useful for entrepreneurs and others sitting in India, keen to innovate new products and services for the global market.

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REVERSE INNOVATION
Authors: Vijay Govindarajan & Chris Trimble
Publisher: Harvard Business Review
Pages: 229
Price: $30

India ‘slowly’ inching towards GST: Sushil Kumar Modi

Satyanarayan Iyer

Beena Parmar

Source:Businessline   

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The Deputy Chief Minister of Bihar and Chairman of the Empowered Committee of State Finance Ministers, Mr Sushil Kumar Modi, flanked by MP Mr Piyush Goyal and IMC President, Ms Bhavna Doshi, at a conference on Goods and Services Tax in Mumbai on Saturday. Photo: PTI

Standing Committee of Finance will present the Bill before the monsoon session

Mumbai, June 2: 

India is inching towards the Goods and Services Tax regime, Mr Sushil Kumar Modi, Chairman, Empowered Committee of State Finance Ministers, said in his inaugural address at a conference organised by the Indian Merchants’ Chamber here.

Mr Modi, who is also the Deputy Chief Minister of Bihar, said that States are not fundamentally opposed to GST. However, there are a few concerns of the States that the Centre must address. “Hence, there cannot be a concrete deadline for introduction of GST.”

States fear that their fiscal autonomy might be compromised. This is because there is “trust deficit” between Centre and States. For instance, when the Central Sales Tax (CST) was cut to 2 per cent from 4 per cent on introduction of VAT (Value Added Tax), the States demanded Rs 19,000 crore for loss of revenue. The Centre, however, gave only Rs. 6,000 crore.

States have demanded that they be compensated for five years for any loss in revenue due to introduction of GST. They also demand that the compensation clause be included in the Constitution amended Bill. “This is the biggest challenge,” Mr Modi said.

Mr Modi said that even the Centre will lose some of its fiscal autonomy. There will be a GST council which will decide the central GST as well as the state GST. Since the council will have majority members from the states and only 2 from the Centre, views will be (more) representative of states.

Introduction of GST will make imports cheaper and make exports more competitive. It will add about 1 to 1.5 per cent to the gross domestic product (GDP). As of now, there is no national market in India. GST will make inter-state trade more seamless.

CONSTITUTIONAL AMENDMENT NEEDED

Currently, the Centre is not empowered to collect taxes on sale of goods. Similarly, States are not allowed to levy taxes on supply of services and imports. Hence a constitutional amendment is needed to empower the Centre and the States to levy taxes on both goods and services.

To protect the federal structure, the 115th Amendment Bill -- 2011 provides that both States and Centre will have the powers to levy taxes based on revenue considerations. The tax rates and other technicalities like avoiding dual taxation will be worked out in due course.

GST NETWORK – THE KEY

Mr Modi said, "Businessmen and traders are sceptical that the proposed GST, where both the Centre and States have the power to levy taxes, will lead to dual control."

To put fears like these to rest, a robust IT infrastructure is required so that the tax paid is reflected in the systems monitored by the centre and the state.

The implementation of the GST network, led by Nandan Nilekani, will be complete by August this year.

satyanarayan.iyer@thehindu.co.in

PM's Address at the Inception Ceremony as the General President of the Indian Science Congress Association

Following is the text of speech of the Prime Minister Dr Manmohan Singh at the Inception Ceremony as the General President of the Indian Science Congress Association: "I am delighted to join you at this ceremony to formally declare open the Centenary Year of the Indian Science Congress Association. When Council members of the Indian Science Congress Association elected me last year as the General President for the Centenary Year of this institution, I was deeply touched by their kind gesture. But I was also aware that, as a layman, my ability to lead the Association in the complex realm of science would be limited. Eventually, what made me decide to foray into the affairs of this privileged association was a judgement, made with humility and sincerity, that by accepting the onerous responsibility I would signal the full support and commitment of the government to Indian science as it passes through a critical decade of innovation. I wish to recall what Shri Ashutosh Mukherjee, the legendary Vice Chancellor of Calcutta University, once said: “……even the most enlightened Governments occasionally require to be reminded of the full extent of the paramount claims of Science upon the Public Funds.” It is entirely befitting that we are in the hallowed portals of the University of Calcutta to celebrate the Centenary. It was here that the Indian Science Congress Association took roots under the leadership of Shri Ashutosh Mukherjee. In many senses, modern science in India was nurtured in this city. I congratulate the city of Kolkata for nourishing an environment of learning and producing some of the country’s outstanding scientists, mathematicians and economists, including many of our Nobel laureates. Earlier today I was privileged to lay the foundation stone of the unified campus of the Bose Institute, named after one of the greatest Indian scientists of the last century, Jagadish Chandra Bose. These founders of modern Indian science did not let the burdens of colonial subjugation come in the way of their pursuit of scientific excellence. They complemented their brilliant scientific abilities with imagination, drive and patriotic fervour to write a glorious chapter in the annals of Indian science. I propose that the technical programmes of the Indian Science Congress in Kolkata in January 2013 begin with a special lecture in honour of Shri Ashutosh Mukherjee, who personified the national science movement that took shape a hundred years ago. The theme for this year’s Congress is “Science for Shaping the Future of India”. It is a theme that might have resonated just as well a hundred years ago when the Association came into being. Each generation, while grappling with the pressing problems of the present, has thought about the shape and character of the India they would bequeath to succeeding generations. We can all agree that we aspire to a future for India in which each citizen is able to meet his or her basic needs of food, clean water and shelter and is educated and skilled not only to earn a living but to benefit and enrich himself or herself from global cross currents of cultural, scientific and social advances. The journey of our development is marked by glittering scientific achievements whether in the field of atomic energy, space, agriculture or information technology. The burden on science in the future will only increase. Our problems are overwhelming and need scientific solutions. We have to use our abundant intellectual resources to find new pathways of development that use our scarce natural resources judiciously. But science has a greater role to play. In recent times, I have been observing a growing intolerance among our people of dissent and opinions that contradict the prevailing orthodoxy. We seem to be losing the ability to engage in a rational discourse where different points of view are expressed. Public debate is often hostage to sensationalism. I sometimes fear that a growing culture of narrow mindedness might affect the creative, innovative and imaginative instincts of our youth. Indian civilization has a rich tradition of preserving social harmony and promoting conciliation by accommodating different viewpoints, identities and cultural differences. We should strengthen these impulses through the propagation of a scientific temper and an enlightened understanding of the meaning of freedom of expression. I would urge the doyens of the scientific community to speak out and make more effective contributions to an informed and reasoned debate on the issues before the nation. The voice of our scientists is important and should be heard. I am happy that we have chosen this Centenary Year to declare the Year of Science in India. We should all work to make a success of it. I submit to this august audience that our government has invested as never before in Indian science. For many years the capacities in our higher scientific and technical infrastructure were stagnant. We built world class institutions that created islands of excellence that created new knowledge. But we did not use science and technology in our development processes as much as we should have. We did not build local capacities that could meaningfully address problems of development in a decentralised manner using this knowledge. I believe that the huge expansion in educational infrastructure that this government has overseen will create the building blocks of a modern knowledge economy and, more importantly, society. Of course we have to overcome many challenges such as producing qualified teachers in adequate numbers, devising a modern curriculum and teaching methods and building proper physical infrastructure. But it is certainly true that we have taken a quantum leap in our ambitions for Indian science. I hope that all our educational institutions and scientific establishments will mark the occasion with suitable events to raise the profile of science in India. Over the course of the year, we hope to formulate a new Science and Technology Policy that will update the existing policy document of 2003 in the light of a rapidly changing scientific environment in the country and the world. We have to keep pace with what is happening elsewhere in the scientific world and the evolving aspirations of the Indian people. Turning to the calendar of events planned during the Centenary Year, I find that we have a busy year ahead. In addition to the annual session at Kolkata, there will be three regional science congresses in the North, West and South of the country. We will organize special sessions on the use of high technology, renewable energy and public health challenges like malnutrition. We will emphasise themes that relate science to integrated rural development in the country. We will bring out a well-researched publication on 100 high impact-making discoveries in Indian Science during the last 100 years. We will also launch a Hall of Fame in cyberspace to portray globally the contribution of Indian science. We are, rightly to my mind, also focusing our programmes on what we can do to attract our youth to science. There has been some discussion on the setting up of a Science Academy for the Young during the centenary year. We should follow up on this proposal after due deliberations. At the Congress in Kolkata next year, we will invite outstanding Indian scientists under the age of 45 to deliver lectures to the youth. We will hold a special session in Kolkata for young scientists. To motivate young learners, the Association will bring out inspirational video documentaries highlighting the history of modern science. Starting from this year, a special scheme for 100 doctoral research fellowships every year will be launched under a Public Private Partnership between Ministry of Science & Technology and the Confederation of Indian Industries. Keeping in mind our obligation to promote science internationally and in our own region, we propose to introduce a scheme to invite 25 young scientists from our neighbouring countries to undertake doctoral research in India. The Department of Science and Technology will work out appropriate arrangements in this regard. I am happy that efforts are being made to rejuvenate the Indian Science Congress Association through additional building infrastructure and a resource mobilization drive to create a corpus of Rs. 150 crore on the occasion of its Centenary Year. I hope that the Centenary year events will be used by our scientific community to reflect on how we can frame a science and technology policy that reflects our aspiration for making science a spearhead of development in our country. I hope that by the time we meet for the Indian Science Congress seven months from now, we would be able to give concrete shape to ideas that can define our country’s future path. I conclude with a quote from Pandit Nehru, who said at the meeting of the Indian Science Congress in 1938: “…Even more than the present, the future belongs to those who make friends with science.”

New York Mayor seeks ban on big sugary drinks

NEW YORK: New York City plans to enact a far-reaching ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, in the most ambitious effort yet by the Bloomberg administration to combat rising obesity. 

The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas.

The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces - about the size of a medium coffee, and smaller than a common soda bottle - would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March. 

The measure would not apply to diet sodas, fruit juices, dairy-based drinks like milkshakes, or alcoholic beverages; it would not extend to beverages sold in grocery stores or convenience stores. 

"Obesity is a nationwide problem, and all over the United States, public health officials are wringing their hands saying, 'Oh, this is terrible,"' Mayor Michael Bloomberg said in an interview on Wednesday in City Hall's sprawling Governor's Room. 

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BaldevRajiv Gandhi and Sonia Gandhi eat ice cream near India Gate, New Delhi,
 in an undated photo ( SOURCE:NYTIMES)

An Assessment of Manmohan Singh’s Visit to Myanmar

Udai Bhanu Singh

Source:IDSA

June 1, 2012

A ‘scramble for Myanmar’ has begun in recent times. With the US Secretary of State Hillary Clinton signalling a change in policy, Myanmar has seen a steady stream of visits by heads of State or government, foreign ministers, and the like. India’s relations with Myanmar have waxed and waned as policy-makers steered their way between high idealism and pragmatic realism. India’s policy towards Myanmar has, however, stabilised over time and its preference for pragmatism has spanned governments led by parties of different hues. This was a consequence of a belated realisation, especially since 1993, that the pursuit of India’s strategic and economic interests could not await the prolonged political evolution of this important neighbour. As the political processes in Myanmar gathers momentum due to a host of domestic and international factors, it is time yet again to introspect on India’s policy towards its eastern neighbour. Whereas India’s policy of engagement was earlier at variance with the Western policy of disengagement and sanctions, a convergence seems to be occurring now. India’s policy perforce will need recalibration to the degree that Myanmar transforms or holds the promise of transforming.

A ‘scramble for Myanmar’ has begun in recent times in the wake of domestic political change starting with the promulgation of the 2008 Constitution, elections in November 2010, a new Parliament, and bye-elections in April 2012. With the US Secretary of State Hillary Clinton signalling a change in policy, Myanmar has seen a steady stream of visits by heads of State or government, foreign ministers, and the like.

The mood in Myanmar today is upbeat: the sudden opening up of the country has raised expectations which the political class may have difficulty meeting. Once again, the people of Myanmar are testing the limits of freedom. Large demonstrations to protest against power outages have been held in front of Sule Pagoda in Yangon and in Mandalay.1Threatening to spread to other cities, these protests evoked memories of the 1988 movement and the 2007 uprising sparked by the monks. The April 2012 bye-elections showed that the NLD is still popular. The real test is to come in 2015 when general elections are due. From India’s standpoint, a durable solution to Myanmar’s political transition lies in a reconciliation among its three stakeholders—political parties, ethnic groups, and the military.

As the political processes in Myanmar gathers momentum due to a host of domestic and international factors, it is time yet again to introspect on India’s policy towards its eastern neighbour. India’s relations with Myanmar have waxed and waned as policy-makers steered their way between high idealism and pragmatic realism. India’s policy towards Myanmar has, however, stabilised over time and its preference for pragmatism has spanned governments led by parties of different hues. This was a consequence of a belated realisation, especially since 1993, that the pursuit of India’s strategic and economic interests could not await the prolonged political evolution of this important neighbour. Whereas India’s policy of engagement was earlier at variance with the Western policy of disengagement and sanctions, a convergence seems to be occurring now. India’s policy perforce will need recalibration to the degree that Myanmar transforms or holds the promise of transforming.

It is in this context that Prime Minister Manmohan Singh undertook a three-day visit to Myanmar on 27 May 2012,2 the first such visit by an Indian Prime Minister in 25 years. During the visit, Singh met the new civilian leadership in the new capital, Naypyitaw, and NLD leader Daw Aung San Suu Kyi in the old capital, Yangon. The Indian PM’s first visit in 25 years almost coincided with Aung San Suu Kyi’s first visit outside the country in 24 years. However, the Nobel laureate postponed her Bangkok visit to meet the Indian Prime Minister.

Agreements Signed during the PM’s Visit

India and Myanmar signed 12 MoUs (Memorandums of Understanding) on matters of mutual concern, wherein development and connectivity were the key watchwords. The understanding is that improved connectivity would lead to greater access between the two countries, while cooperation in fields such as agriculture, trade, education and information technology would address Myanmar’s developmental needs. One of the important agreements reached was regarding cooperation between a Myanmar and an Indian University and cooperation between a Myanmar Ministry of Foreign Affairs think tank (MISIS) and two Indian think tanks, one of which is the Institute for Defence Studies and Analyses. Cooperation among strategic studies think tanks is especially welcome because while MISIS is connected with the ASEAN network of think tanks, it has no such link on an institutionalised basis with the think tanks of India or of the South Asian region.

Stability along the Indo-Myanmar border depends in large measure on economic stability that comes through planned development. For instance, Myanmar has many missing road and rail links and over 70 bridges requiring construction before the connectivity deficit can be overcome. It has been decided to initiate steps to upgrade road sections in order to make the trilateral Asian Highway (connecting Moreh in Manipur to Mae Sot in Thailand) a reality. Besides initiating improvements in road connectivity, a direct air service between India and Myanmar has also received the green signal. Similarly, hope has been generated for eventual freight transport by rail network extending to other South East Asian countries through Myanmar from India’s North East.

Myanmar’s energy sector would get a boost with Indian companies investing in that country’s gas and oil sectors. It is likely that Indian companies would be considered when more oil blocks are auctioned. In addition, border trade would be improved and the overall trade doubled beyond the current $1.2 billion. Myanmar also once again reassured India support for tackling safe havens of Indian insurgents in its territory.

Table 1: Memorandums of Understanding/Agreements Signed between India and Myanmar

1	Regarding $500million Line of Credit
2	Airline Services Agreement between India and Myanmar: with more carriers and more destinations (extending to other Southeast Asian cities)
3	India-Myanmar Border Area Development
4	Establishment of Joint Trade and Investment Forum
5	Establishment of the Advance Centre for Agriculture Research and Education (ACARE)
6	Establishment of Rice Bio Park at the Department of Agricultural Research in Naypyitaw
7	Setting up  Myanmar Institute of Information Technology
8	Cooperation between Dagon University and Calcutta University
9	Cooperation between Myanmar Institute of Strategic and International Studies and Indian Council of World Affairs
10	Agreement on Cooperation between Myanmar Institute of Strategic and International Studies and Institute for Defence Studies and Analyses
11	Cultural Exchange Programme (2012-2015)
12	Establishing of Border Haats across the border between Myanmar and India

India-Myanmar Relations: A Background

The two decades between India’s open support for the pro-democracy forces in the 1988 movement and the recent exchange of bilateral visits at the highest levels have clearly demonstrated New Delhi’s desire to pursue its strategic and economic goals in Myanmar. However, it has left unresolved the dilemma of how to pursue its stated goals without compromising its commitment to human rights and democratic principles.

A realisation began to dawn in New Delhi soon after 1988 that India’s support for the pro-democracy forces in the August 1988 uprising failed to find favour with the State Law and Order Restoration Council (SLORC) regime. It was only in 1991, however, that a decision was taken to discontinue criticism of the Myanmar regime in All India Radio’s (AIR) Burmese broadcasts. The visit to Yangon (then Rangoon) by the Indian Foreign Secretary in 1993 started the process of improving relations between the two countries. The Indian Government also made an attempt to curb the anti-SLORC activities of Myanmar students in India. These adjustments in Indo-Myanmar relations occurred in the backdrop of momentous changes on the Indian economic horizon. Liberalisation had been introduced in the early 1990s and the Look East Policy too had its beginnings around the same time. These developments helped in defining India’s objectives in Myanmar.

To begin with, Myanmar was seen as an important part of India’s Look East Policy for the simple reason that it is the only South East Asian nation with which India shares a land border. By ensuring smooth trade and connectivity between India and Myanmar, the objective of much needed development in India’s North Eastern states could be achieved. Myanmar was viewed as a land-bridge to the rest of South East Asia. A second important factor in India-Myanmar relations is the need to control the activities of insurgent groups in their bordering states. Thirdly, India is located between the “Golden Crescent” in the west and the “Golden Triangle” in the east and thus is confronted by the arms-drug nexus and faces a “silent emergency”. Myanmar still has the dubious distinction of being the second largest producer of opiates (after Afghanistan) and for having a high HIV rate. Opium poppy cultivation has increased in Myanmar every year since 2006, with cultivation concentrated chiefly in the Shan state in the east. The decline in opium production in 2010 due to a disease in the poppy plant in Afghanistan probably incentivised Myanmar poppy cultivators.3 Further, the traditional opium-based drugs have been replaced by designer drugs like amphetamine-type stimulants (ATS) (“speed”, “ice” and “ecstasy) and Myanmar happens to be a major centre for the manufacture of ATS, notably of metamphetamine.4 Given all this, India and Myanmar need to take steps keeping in mind a holistic view of security. Fourthly, India and Myanmar also need to work together to prevent the spread of epidemics across borders especially considering the threat of HIV/AIDS and recent outbreaks like swine flu and bird flu. Finally, flowing from all the above factors is the need to ensure the development of India’s North Eastern states.

India-Myanmar Interactions at the Bilateral and Multilateral Levels

The dynamics of Myanmar is such that interlocutors are forced to make adjustments to the evolving situation in that country, which itself is in a perpetually evolving/transitioning mode. Be that as it may, it is important that India not lose the momentum it has imparted to this relationship lest it surrenders whatever gains that have been made so far.

At the bilateral level, right through the phase of transition, the flow of official visits between India and Myanmar did not cease, although at the Prime Ministerial level India could be labelled a laggard. In July 2010, SPDC Chief Than Shwe came to New Delhi. When President Thein Sein representing the new “civilian” government visited in October 2011, two important documents were signed: first, an MoU on the upgradation of Yangon Children’s Hospital and Sittwe General Hospital; and second, a programme for Cooperation in Science and Technology for the period 2012–15. India also extended a $500 million line of credit to Myanmar. In December 2011, the Speaker of Myanmar’s Lower House of Parliament, Thura Shwe Mann, led a high level parliamentary delegation to India to learn about the functioning of Indian democracy. Foreign Minister Wunna Maung Lwin visited India in January 2012. Besides meeting the PM and the External Affairs Minister, he also gave a lecture at a think tank in the capital. Meanwhile, military-to-military cooperation continued with the Indian Army Chief visiting Myanmar in January 2012 and assuring a higher intake of Myanmar cadets in the NDA, among other things.

India and Myanmar have also continued to interact at the regional and subregional levels through ASEAN, BIMSTEC, the Mekong Ganga Cooperation forum and SAARC (Myanmar is an Observer since 2008). Myanmar became a BIMSTEC member in December 1997. It took over as the chair of BIMSTEC from India in 2006.5

Conclusion

India has quite dexterously handled the ongoing phase of transition in Myanmar based on its conviction that it needs to engage with the regime in power while gradually attempting to bring about a desirable change in the country. Given its deeper understanding of the ground situation as well as a policy that seeks to aid sustainable development and harmonious growth, India is likely to continue to enjoy a special position in Myanmar. Much goodwill will be generated if India were to work towards addressing the real needs of the people of Myanmar. This, in particular, implies strengthening the health and education sectors in that country’s border areas. There are many things that should work in India’s favour including geographical proximity, common colonial legacy, common cultural bonds, India’s democratic credentials and membership of common organisations/forums, which can be used by both countries to transform their experience of the past into a common strength.

El Nino's looming shadow

Planning for deficient monsoon must begin

Business Standard / New Delhi Jun 01, 2012, 00:04 IST

Now that the India Meteorological Department (IMD) has endorsed the fears expressed earlier by foreign weather bureaux about the emergence of the monsoon-unfriendly El Nino in the second half of the season, the government should begin preparing right away for mitigating its adverse impacts on agriculture, water reservoirs and other areas. El Nino, an anomalous rise in sea surface temperature off the Peru coast, has been observed to often cause the Indian monsoon to flounder, resulting in poor rainfall. Nearly 60 per cent of agricultural land is wholly rain-dependent. Most pulses and oilseeds, which are already scarce and are contributing to double-digit food inflation, are grown on such land. The weakening of the monsoon towards the end of the season also bodes ill for the build-up of residual soil moisture that is vital for crop sowing in the following rabi season, as well as for replenishing reservoirs that support crop irrigation and hydro-electricity. The repercussions of an aberrant monsoon are, therefore, far-reaching and long-lasting. In 2009, El Nino induced a net rain deficit of 23 per cent, lowering agricultural growth sharply to just 0.1 per cent and pushing up food inflation to close to 20 per cent.

Though the IMD is yet to come out with its regional rainfall forecast, the weather models in use abroad have already indicated low rainfall in August-September in the north-west as well as parts of the peninsular region. Arguably, the government may not mind some drop in the output of kharif paddy, given its burdensome grain inventories. But, going by the projected spread of the rainfall over time and space, paddy grown predominantly on irrigated lands in these regions may not be affected. The worst hit will be oilseeds, pulses and coarse cereals cultivated widely in the arid tracts of Rajasthan and Gujarat in the north-west; and Andhra Pradesh, Tamil Nadu and Karnataka in the south.

Strategies to combat the anticipated monsoon abnormalities will have to revolve around facilitating the planting of shorter-duration crop varieties that can mature by August-end or early September. For that, the government will need to arrange for the timely supply of seeds and other inputs. In the absence of such advance action, no contingency plan, however well-prepared, will help. Moreover, apart from crop management, prior planning will be needed to manage water stock in the reservoirs. While water releases will need to be regulated cautiously, the rainwater received in the first half of the season will need to be conserved. Madhya Pradesh has shown farmers can be incentivised to dig small ponds or pits in their fields to preserve water for providing life-saving irrigation at the critical stages of crop growth. This and other such examples need to be emulated elsewhere as well.

The Indian economy finally gave a numerical evidence of the slowdown. During the January-March quarter, the gross domestic product (GDP) is estimated to have grown at a meagre rate of 5.3%. This is the lowest growth rate in the last nine years. Today's chart of the day shows the quarterly GDP growth rate over the last two fiscals. Some of the main reasons for the slowing economic growth are high inflation, a declining rupee, messy government finances and policy paralysis, among others. It is high times the government gets out of its denial-mode and stops putting the blame on the eurozone crisis and other external factors.

Data source: The Economic Times

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  Ashoka Hotel (1957), Chanakyapuri in central Delhi, architect: B.E. Doctor:Source:New York Times

  
  

  
  

  
  

ARMY RESCUES STRANDED TOURISTS AT KYANGNOSLA

       On 30 May 12 an unexpected and sudden landslide occurred at 1730 hrs near Kyangnosla falls in East Sikkim. Approximately 418 civilian tourist vehicles with about 1900 tourists were stranded near MS 17 on JNM axis for whole night. Indian Army located nearby rose to the occasion and in the true military ethos of “Service Before Self” quickly commenced relief for the stranded tourist. The troops vacated their barracks so that the evacuated tourists could be accommodated for the night. In addition to heated accommodation to ward off the bitter cold, the Tourists were also provided hot tea, dinner and breakfast by the army troops. In addition approximately 100 tourists were given medical aid by the specialist doctors of Indian Army with patients having varied problems ranging from heart ailment, asthma, Acute Mountain Sickness and hypothermia.  The task was made even more challenging due heavy rainfall and harsh weather conditions.

Despite U.S. opposition, Iran to be transport hub for North-South Corridor

Sandeep Dikshit

source:the Hindu

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The proposed International North South Transport Corridor.

A multi-nation transport corridor that would radically reduce cargo transportation time between India on one side and Central Asia and Russia on the other with Iran being the pivot could see dry runs beginning next year.

A three-day meeting of experts from 16 countries discussed ways to smoothen the way for the International North South Transport Corridor (INSTC) and at least six supplementary routes despite the U.S. pushing its Silk Road proposal in which its bete noire Iran has been excluded.

In stark contrast, Iran plays a crucial role in the multi-modal North-South Corridor as its port Bandar Abbas will be the hub of all activity. Experts proposed the setting up of two four-nation groups to resolve many of the ssues. Iran along with Russia and India (all three initiators of the project) will be in both groups.

The meeting on the INSTC which ended here on Wednesday proposed a joint venture between Iran, India, Russia and Azerbaijan to find solutions to aspects such as infrastructure and funding. It also suggested a core group on customs — India, Russia, Iran and Turkey — consisting of experts from these countries, based in Delhi to sort out issues.

When India pointed to the missing link of 500 km in Iran that could impede the project, Tehran gave some good news. It said 372 km of the Quazvin-Rasht-Astra was complete and the contractor identified 163 km of the Rasht-Astra route. But there were technical problems in the last leg leading up to Azerbaijan. The experts suggested that a fund may be created to help Iran complete the route as quickly as possible.

The meeting was aimed at achieving progress on four fronts — identifying the residual construction on the main North-South Corridor and the time frame for completion of the work, identification of bottlenecks and action plan for the resolution, action plan along with the time frame for harmonisation of customs and insurance documents and procedures and identification of complementary routes and their status and actionable points for member-countries.

The experts indicated the need for funds to the tune of $700 million (over Rs. 4,000 crores) to ensure that portions of the proposed East-West corridor connecting the Persian Gulf to Central Asia and China could be linked to the North-South corridor. 

Enterprise

In Cambodia, a Start-Up Combines Web Sales Skills and Hair Extensions

By RON GLUCKMAN ( source:NYTimes)

Ron Gluckman for The New York TimesThe Arunji founder Janice Wilson showing a hair extension that is ready to ship from Phnom Penh, Cambodia.

PHNOM PENH, Cambodia — For an Internet start-up, Arjuni faces more challenges than usual.
The e-commerce site that sells hair extensions operates out of a five-story building here that lacks elevators and, sometimes, power. Employees typically have to travel to remote villages by motorbike or foot to pick up the goods that Arjuni sells. And the office floor is cluttered with piles of hair strands instead of computers.
But like many new ventures, Arjuni is harnessing the latest Internet tools like Twitter and social media to build a loyal customer base.
In just two years, the company, founded by Janice Wilson, has grown from a handful of employees to 80, and it now generates more than $1 million in revenue. The start-up is also slowly gaining market share from the industry’s dominant players in India and China, as well as retailers in the United States and Europe.
“We not only buy and collect the hair ourselves, but sell it directly to our customers. This makes us stand out,” Ms. Wilson said. “We’re small, but considered one of the top brands.”

Ron Gluckman for The New York TimesOn the rooftop of Arjuni, a hair company in Cambodia, workers begin sorting the natural-grown hair according to length and quality.

While hair extensions have been around for decades, they became a fashion craze in recent years, when stars like Paris Hilton and Britney Spears started using them to change their looks. A large proportion of Arjuni customers, like Ms. Wilson, are African-Americans seeking fuller styles for their tresses.
India has long provided much of the world’s natural hair, sold to wholesalers mainly in China, which in turn marketed their products to retailers in Europe and the United States. But Ms. Wilson found that Cambodians have similar hair quality, long with cuticles in alignment.
“Probably 99 percent of the world’s hair comes from India. Nobody had thought of Cambodia,” said Ms. Wilson, 39, straddling piles of hair on the floor.
It is a small but potentially profitable niche. The hair extensions business generates annual revenue of $250 million.
Ms. Wilson said it was important to her to have a business serve a social purpose. Many of Arjuni’s employees formerly worked in Cambodia’s notorious sex trade.
That effort helped attract seed capital from a Japanese investment fund, Arun, formed in 2009 by Satoko Kono to help social enterprises in emerging nations. “We like how Arjuni is employing women, and helping the needy,” said Ms. Kono, who spent a decade with development organizations in Cambodia.
Additional money came from the Cambodian Export Market Access Fund, which is a World Bank-financed project that helps companies trying to develop exports. The rest came from her savings, friends and family.
A lawyer by training, Ms. Wilson has built her business by making customers feel engaged in the product via the Internet.
Customers eagerly describe their orders on home videos that they upload on YouTube, with segments on topics like hair design, delivery and grooming. Clients are encouraged to send in pictures of starlets they want to emulate, like Catherine Zeta-Jones or Beyoncé. Arjuni also floods Facebook with testimonials and promotions.
“Our clients are fanatical about hair,” said Tiyana Peters, who oversees social media for Arjuni. “We get everything from wedding photos afterward to details on how the boyfriends react.”
By dealing direct with customers, Arjuni eliminates the added cost of working through another retailer or site. Extensions can cost thousands of dollars, but typically average around $500.
The Internet has helped with damage control, as well. After rumors spread online that Arjuni was stealing hair or forcing women to sell it, the company began regularly posting more information on its operations on networking sites.
“This was totally untrue. We buy the hair at fair prices, and tried to explain it, but there isn’t much you can do,” Ms. Wilson said. “Our company grew up in the age of social media,” she said. “Social media is huge, and has helped us, but these accusations really stung.”
Her idea for the start-up was an evolution of sorts. Ms. Wilson, originally from Green Bay, Wis., was on vacation in Cambodia four years ago, she began thinking about opportunities to start a business here.
Cambodia was in the midst of an economic boom and had the fastest-growing economy in Asia, after China, for several years running. One of the hottest sectors was real estate. Ms. Wilson, who was working for a real estate firm in Colorado, decided to move to Cambodia, and with local partners, planned a development near the temples of Angkor, the country’s top tourist attraction.
When Cambodia’s property market suffered along with the global economy, she faced a grim challenge. “I either had to give up and go back to America, or find something else to do,” she recalled.
The collapse of Cambodia’s textile industry largely as a result of cheap competition from China led to her idea. Cambodian workers with sewing skills were suddenly unemployed, and nobody had looked at Cambodian hair as a marketable material before.
“I was thinking, what is recession-proof?” Ms. Wilson recalled. The answer: “vanity.”
The best — and most expensive — hair extensions are made from natural human hair, which is cut, cleaned and sewn into individual pieces. “It was low-tech, they just needed to learn how to make them, and we just needed sewing machines. We could use the skills already here,” she said.
The business was also a way to help workers develop marketable skills. Ms. Wilson now provides employees with free English, computer and math classes. A third of workers come from troubled situations like sex trafficking or spousal abuse. “But we run everything as a business,” Ms. Wilson said.
Ms. Wilson acknowledged that she and her staff members were extremely ambitious at the outset, “trying to do everything at once — collection, fabrication and distribution.” But they have been able to keep up the frenzied pace as the company grew.
“It’s definitely been difficult to scale up,” Ms. Wilson said. “But it does make us better quality.”
This spring, Arjuni added yet another facet to its operation — a series of in-person events in the United States called Halo, where her staff could meet and help groom customers.
“Do I feel I have aged a lot? Definitely,” Ms. Wilson said. “But I love being an entrepreneur. I love the challenges.”
“When I worked in a law office, I was bored out of my mind,” she added. “When you have this entrepreneurial spirit, you just have to do it.”

According to a 2007 survey by KoPT, more than 1,20,000 vehicles and 500,000 pedestrians use the bridge everyday to cross the Hooghly river flowing between the twin cities of Howrah and Kolkata. 

PM IN MYANMAR

European Pressphoto AgencyMyanmar President U Thein Sein, right, talks 
with Indian Prime Minister Manmohan Singh, left, during their meeting at the
 presidential house in Naypyitaw, Myanmar, May 28, 2012. Mr. Singh is on
 a three-day visit to Myanmar.

Public Relations Officer                                                            Phone : 202756 (O )

                                                                                     Fax:       202756

Raj Bhavan

Gangtok, Sikkim

PRESS RELEASE

No. SKM/GOV/PRO/1523/12                                                        Dated: 28^th May, 2012

The Indian Army today at a ceremony held at Raj Bhavan, made a presentation of two majestic 5.5 inch guns to the Raj Bhavan, Gangtok. These guns were manufactured in the United Kingdom and are of vintage 1941-45. They were used by more than a dozen countries including the United Kingdom, France, Australia, Canada, Iraq, India and Pakistan. These guns were employed during World War-II, the Korean war and many other conflicts. Weighing over 6000 kgs, the gun fired 45 kg shell over 16 kms at the rate of 2 shells per minute.

These guns were released after a series of approvals at various levels, with final sanction being given by the Hon’ble Raksha Mantri, on behalf of H.E. the President of India. This was made possible, only due to the keen interest shown by H.E. the Governor of Sikkim, Shri Balmiki Prasad Singh, the diligence of 17 Mountain Division and the support and guidance provided by GOC 33 Corps, Lt. General K. Surendranath, AVSM,SM,VSM.

The ceremony was addressed by H.E. the Governor of Sikkim and by the GOC 33 Corps, Lt. General K. Surendranath, AVSM,SM,VSM. It was attended by a host of dignitaries, which included the Speaker of the Sikkim Legislative Assembly Shri K.T. Gyaltsen, the Chief Justice of the Sikkim High Court Shri Permod Kohli, members of the State Council of Ministers, MP- Lok Sabha, Chief Secretary, Additional Chief Secretary, DGP, Secretaries , besides others.

H.E. the Governor, in his address, thanked the Defence Minister and the Army Chief for this gift of the two guns which would now form an integral part of the Raj Bhavan complex. He also dwelt on the history of civil-military relations in the State which has always been marked by cordiality and mutual trust. He commended the Army Commander and his jawans for the swift response in undertaking relief and rescue measures and other assistance to the State during the aftermath of 18^th September, 2011 earthquake in the State.

The Governor took this opportunity to mention about two of his ideas which would go, a long way in cementing further the ties between the military and civil authorities in the State. First, he wanted the Eastern Air Command, which is located at Shillong should consider to set up a small base at Pakyong. This would help urgent requirements of the State in natural emergencies of this State which is located in a seismic belt. It may be recalled that an airport at Pakyong near Gangtok is under construction. Second, Sikkim is one of the few States left in the country where there is no Sainik school. He wanted that a Sainik school should be set up by the Ministry of Defence. Towards this, he also suggested that this could be an integral part of the Ranipool-Pakyong stretch where Naya Gangtok is going to emerge. He mentioned that his vision of Naya Gangtok is well known to the State Government and they have also taken some initial  measures in this behalf.

The Event further included, unveiling of the presentation plates on the guns by His Excellency. A scroll to commemorate the occasion was presented by the Army to His Excellency.

The ceremony concluded, with tea at the Raj Bhavan.

           PRO to Governor

Cost cut of 1% can boost SME profitability by 12.5%: CRISIL


CRISIL Ratings' study on 3000 of its rated small and medium enterprises (SMEs) across industries in India shows that a 1% (or 100 basis points) decrease in cost of raw materials could boost the SMEs' operating profit margins (OPMs) by 12.5%. In this study, CRISIL has analysed the linkage between cost of raw materials and net sales and profit margins of the SMEs.
For 2010-11 (refers to financial year, April 1 to March 31), the average OPM of these SMEs was 5.62% on average net sales of Rs.270.54 million. A decline of 1% in raw material prices could increase the OPM to 6.32% from 5.62%, indicating a rise of 12.5% (70 basis points).
Sachin Nigam, Senior Director, SME Ratings, CRISIL, says, "Given that the raw material cost accounts for about 70% of the overall cost of manufacturing for the SMEs, any positive or adverse movement of raw material prices has a major impact on their overall profitability. The SMEs operating in engineering, capital goods, textiles and chemical industries are most sensitive to movement of raw material prices."
Considering recent movements in price levels, which came off peak levels in end-2011 (refers to calendar year, January 1 to December 31) and have not seen much fluctuation through 2012, CRISIL believes that SMEs could look forward to declining raw material prices in the near future. Inflation based on the wholesale price index (WPI) declined to around 7.1% so far in 2012, compared to an average 9.5% in 2011. According to CRISIL, prices of the key commodities, such as steel, cotton, commodity chemicals, plastics and rubber, which constitute a major portion of the SMEs' cost structure, will decline in 2012. Cotton and rubber prices are expected to move down by around 20% and 9% respectively. Prices of other raw materials such as plastic, flat steel and commodity chemicals, are expected to decline within the range of 3 to 6%.
Explains Mr.Yogesh Dixit, Director, SME Ratings, CRISIL,"The recent decline in commodity prices, could ease cost pressures on SMEs. Additionally, with the Reserve Bank of India lowering interest rates, SMEs could also anticipate easier access to funds at lower cost of borrowing vis-a-vis that in 2011."
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions

Shri Ghatowar Addresses Conference of Social Welfare Ministers of North Eastern States

The Union Minister of State (Independent Charge) for Development of North Eastern Region and Minister of State for Parliamentary Affairs and Chairman of North Eastern Council (NEC), Shri Paban Singh Ghatowar has addressed thethe Conference of Ministers of Welfare/Social Justice of North Eastern States inShillong today.  The Union Minister of Social Justice & Empowerment Shri MukulWasnik was also present on the occasion. In his address, Shri Ghatowar said that as stipulated by the Government of India, the Ministry of Social Justice & Empowerment has to earmark 2% of their Gross Budgetary Support (GBS) for expenditure in the North Eastern States in case of schemes for SCs. For other schemes, the money to be earmarked is as per norms of 10% of GSB, he added. The Minister informed that the schemes of Ministry of Development of North Eastern Region pertain, mainly, to investment in physical infrastructure. He said that under major scheme of NLCPR, till date, 1393 projects worth Rs. 11529.17 crorehave been taken up in sectors such as roads & bridges, education, health, power, irrigation & flood control, water supply, sports etc. He outlined that under North Eastern Council (NEC), despite having limited outlay for Human Resource Development and Education, following projects/programmes have been funded: (i)          National Tournament on Cricket for Physically Challenged Players in Manipur during 2010-12; (ii)         Construction of School Building and Hostel at Lyntijam Welfare Development Association, Mawtnum, Ri Bhoi District, Meghalaya for the benefit of physically challenged students; (iii)        Part-funding of construction of De-addiction Centres; (iv)       Sponsored a Training Programme on Hearing Disability Sector organized by IGNOU at Shillong for disabled persons Shri Ghatowar expressed confidence that the Conference would prove to be an important milestone in journey towards achieving a just and equitable growth leading to all-round development of the nation as a whole and North Eastern States, in particular. **** NSK/DB

Gangtok, May 29: Sikkim Biodiversity Conservation and Forest Management Project (SBFP), Department of Forest, Environment and Wildlife Management has organised five days training programme for Range Officers and ACFs on joint forest management as an approach to forest management at the conference hall of the department from today. The training will be imparted by the resource persons from IIFM, Bhopal who will deliberate on objectives, structure, components and activities of Sikkim JICA Project and formation, process, functioning, activities, approaches of Joint Forest Management Committees etc. in the five days training programme.

Mr Bhim Dhungel, Minister for Forest who garced the inaugural session as the Chief Guest in his address mentioned that the world is following the concept of sustainable development and judicious harnessing of the natural resources for the benefit of the people while maintaining its inherent potential. He also briefed about the State Government initiativies in promoting sustainable biodiversity conservation and income generation activities including eco-tourism for the community development thereby contributing to environment conservation and harmonized socio-economic development of Sikkim.

Informing on the future course of actions of the department, the Minister said that there are important events which the department is going to undertake during this year. He informed that gathering that the World Environment Day celebration at Chemchey on 5^th June which will be followed by plantation drive between Damthang and Namchi on 6^th June. This year, the State Green Mission will be kicked off from Dentam and will be strengthened to other parts of the State, he added. Besides this, the Ten Minutes to Earth which is a regular feature of the state will also be observed throughout the state, he informed. Talking about the training the minister called upon the gathering to actively participate in the training programme which will be helpful for implementing schemes in result oriented manner.

The PCCF-cum- Addl. C.S. Mr Manjit Singh highlighted on the importance of Joint Forest Management which was formed in 1988 with the main purpose of people’s participation.

While presenting a brief overview of the training, the resorce persons from IIFM, Bhopal expressed that  it will be a good learning experiences even for the resource persons focusing on the experience of the joint forest management adopted by the state.

Earlier, Dr. S. Anbalagan, DFO(Ecotourism) SBFP presented the welcome address and the vote of thanks was proposed by Blen Tshering Targain, DFO, JICA(S/W).