Tuesday, May 29, 2012

Market Dynamics or Disproportionate Assets

Vasu Reddy from Chicago
vasureddy@aol.com

Last night’s arrest of Jagan was expected by everyone who was watching his political life especially since the death of his father in 2009.  He was behind the scenes and worked away from the spotlight building his businesses and enterprise, and never a public figure until his father’s untimely death.  His troubles started when his defiant stand against the congress in Delhi, and formation of an independent party to challenge the incumbent congress in the state.  To begin an analysis of his meteoric rise in business and politics, and what lead to his arrest on disproportionate assets is the making of a blockbuster.

His continued insistence that market dynamics and not favors doled out by his father to help build his businesses has merits if other high flying Indian enterprises can be compared to his own business expansion.  There are dozens of cases similar to Jagan’s business enterprises, raising extraordinary amount of private capital from investors, and naming them will not serve any purpose for this column, but just about every Indian who follows the economics and politics of India can easily name a few in every state.  Every one of them requires help from the private markets as well as the government in the state and the country.  Private enterprises cannot flourish without government favors and benefits that are otherwise unavailable to normal citizens.  Who you are and who you know is of 100% value to developing an enterprise.

Signaling out this one man for disproportionate assets after e rebelled against the ruling party is a signal for anyone who is a businessman with inordinate growth in the business enterprise, who is against the wishes of a ruling government.  They can dole out sops and as easily send the CBI after you.  The case of Jagan is that his father is dead and the son doesn’t want to tow the ruling congress party’s line.

The interesting case here is that they are also after industrialist’s who prospered in the congress regime under YSR, and they certainly were well connected in congress to receive favors and also invest in companies owned by YSR’s son.  They did not lose money by investing with Jagan; rather they have received fantastic returns on their investments, while making great progress on their own enterprises which were put in place during the time of YSR.  Now they are targeted as paying for favors received during a dead man’s regime, and further questioning the investments they made in Jagan’s companies, from which each of them have benefitted.

When YSR was alive and well and in the chair, no one questioned him on the decisions he made along with other politicians and bureaucrats.  He was given high praise for the schemes he introduced and programs he undertook, and every one of the congress politicians were at his call.  His death has caused not only his son to walk away from the ruling party, but pose a threat to the government, and within the next month there is a show of strength which the ruling party is bound to be defeated with wide margins.  There is a threat to the party’s position in the state and the outlook is not so great for it countrywide.

The precedent being set for the case of Jagan is really unprecedented.  Here is a young man who rose in business and politics quickly, and his influential father helped him to get into the business and get the basics in place quickly.  Jagan developed his network quickly and was successful in doing whatever he did, along with throwing his hat into politics.  No crime committed here, but using influence as does everyone else in the place of power and influence.  His ambitious political play is what is stressing the government which had to find ways to stop him from power.  For now it doesn’t seem to be working and with his arrest the public sympathy to his family and his father’s continued popularity will only further dent the ruling party’s chances in the next month’s elections, and eventually the case/s against Jagan will get their fair hearing.  In the mean time the congress would have lost their seat of power in the state, and have created a vast emptiness for investors who are looking for politicians t help with businesses, and investing in high flying ventures.  Nothing is won by the ruling party or the state for the drama being played out, and everyone one is a loser here: congress, state, people, investors and general public who are witnessing the drama.

Tuesday, May 22, 2012

Investor’s Nightmare

Vasu Reddy From Chicago
vasureddy@aol.com

It must be frightening for an investor to even consider making a valued investment in the Indian market.  Every aspect of the country’s economy is being pulled sideways by the continued impact of political witch hunting and uncertain policy making.  Even some policies that have been successful in implementing are being overturned to go back to the time when the country was run more or less as a socialistic state.

The never ending scams are the highlight of daily news in the country.  From the center to the states, and to local governments, they have become so common; it is difficult to imagine there will be any segment of the policy making or business that doesn’t involve a scam.

The government has no qualms in making changes to policy and procedures, despite the implementation of approved procedures for industry.  Some of the latest developments to change tax structure and make it retroactive to encompass the past transactions are beyond reasoning.  Such decision making by the government shows disregard for global investors, and will be of little value to global investors.  Incompetence in framing guidelines should not penalize the investors who have put money into the economy in good faith.

The entire process of government’s day to day survival is so uncertain that no one wants to make any predictions on what can be done and what cannot be done.  In democratic societies elected officials have fixed time in office until they commit serious offence to be terminated from office, and even then there is back-up to fill in the shoes of an elected official who has done disservice to the office.  India seem to suffer from constant back stabbing by the parties own elected officials, and definitely by the opposition.  The day after they get elected they don’t want to take-up the agenda of the people. They start plotting the down fall of the government.

There are distinct differences in center and state agendas, and often conflict with the policy making.  If the elected officials of the state are different from the center, there is constant bickering and posturing about their individual party agenda, and most times there is rhetoric rather than action on public needs.  It is amazing that the country survives despite these agendas that are often destructive to public’s interest.  Also with so much uncertainty in the government, and disregard for policy nothing gets done, and whatever gets done is undone when a government changes.

The constant investigations are taxing on the system and people who are looking at them.  There is not a single person in government both elected or appointed who is not under the scanner.  What will be investigated if everyone is under the scanner?  Who is determining the investigation initiative, or is it politically motivated to get people who don’t listen to the government to get under the scanner?

Politicians show total disregard and indifference to reality even after they get caught red handed with money or assets in their homes.  They simply claim innocence or say they don’t belong to them, and walk away from the possessions.  It takes enormous amount of investigative time and money to show the connection between the inappropriate assets and the person, and most times the changes in government erases the impact of the findings.  Even when a person gets caught with the stuff on hands they will plead ignorant, and with a straight face deny that they have done wrong.  Better yet when someone goes to jail and comes out there are celebrations and utter disregard for what the person did to go to jail.

The media gives outrageous attention to every detail and the media itself is divided in their coverage, where the person who is responsible for a scam or someone who got caught with money, is given spin after spin either positive or negative.  There is disregard for the truth, and it is hammered into the media outlets that the person is guilty or innocent in public opinion, irrespective of what they did.  There is so much attention given to time but not reality, and no one cares to check the facts of what they are reporting.  Most times the media outlet is aligned with a specific party, and they will invariably side with their political affiliations.

Everything that lead India’s economic drive for 20 some odd years seem to unwind as quickly as it was embraced.  Hundreds of billions were invested into the Indian economy as it was being opened up for investment and economic openness (so called reforms), and all of them are evaporating as quickly.  How can anyone without help get into big business and not have an affiliation or association with someone or the other?  If it fails to reform the system that has been globally embraced, India may go back to pre-independence stages of the Raj where everyone is looking for a handout.  Better shape up and start behaving like an open economy that doesn’t politicize every business interest, and every business interest doesn’t involve a scam.  The politicians should focus on their people’s agenda, and businesses on running the business, and stop the witch hunting and everyone should clean their own house.

Tuesday, May 15, 2012

Utopian Dreams

Vasu Reddy From Chicago
vasureddy@aol.com

Elections are coming again and we will start hearing promise of a great place with benefits for all and uplifting of the poor and everything for everyone.  It is not just in India but all over the world the election time promises of Utopian life for everyone, and the best promises typically gets the majority of votes.  The just completed elections in France saw a change in leadership, the about to come USA elections are gaining momentum.  There is no stopping the election cycle in India, with continues mid-term or by-elections and the soon to come general elections.

The title includes dreams along with Utopia, so there is no promise of delivering Utopia as a dream, but simple promises which brings the moon to the hearing public, but not very sure even the person who is making promises believes in what is spoken.  The promises are so farfetched that they are unrealistic to implement and impossible to sustain.  They sound melodramatic and so filmy when promising everything to people, and villainous when criticizing the opposition, and sometimes the people of one’s own party.

The days of canvassing for votes with promise of good governance and planned development are long gone, and in a democratic society they are hard to find.  People are hearing so many things that have to bearing to reality or truth, but they are delivered with frequency that is alarming and with such force that the person delivering lies with so much conviction.  Every state is in a state of turmoil and none of the politicians seem to want to give up power, even when they get voted out.  They continue to plot to dethrone whosoever is in power, and simply want to get back into power.  Even democratically elected leaders continue to face dissidence while in power, and in most cases from the first they take elected office they face grave digging.

No one even the president or the prime minister is devoid of the abuse meted out daily by their own party men or opposition.  The language is beyond just foul, it is outrageous in addressing the leaders, by men and women in politics.

There is constant opposition to better governance and there is constant abuse of the office when in power.  When in opposition the daily barrage of criticism is aimed at everything under the moon, and it is never ending.  With so many TV channels and Internet and communications available, it is a daily soap opera of accusations and abuse.  None is spared in the barrage of foul language that transcends from our leaders, and it only continues to get more and more imaginative in negative connotations.  There is also a great deal of truth with the idiotic behavior of elected and wannabe politicians.  There are endless corruption allegations and personal infidelity of leaders, and most of them are getting caught because of the cameras and telephones following them wherever they go and whatever they do.  The irony is the guys who get caught and the guys who do it and don’t get caught are all getting caught on camera or on telephone, and their deeds being recorded for the wild ride the public are being taken for.

We are being fed with scams and escapades, rather than public programs and policy.  The communications channels constantly barge into our life with one more and more scintillating scandal or impropriators, and it is never ending.  The scandal only gets bigger and bigger and scams get larger and larger.  No amount of policing or investigation seem to bother the thick skinned politicians, and they keep thinking of more and more ways of siphoning the public resources for private gains.  They ought to loot enough while in power as the cost of elections keep getting bigger and bigger.  There is no way of stopping this, and my utopian dreams will just be that, dreams.

Tuesday, May 08, 2012

Impossible Diplomacy

Vasu Reddy From Chicago
vasureddy@aol.com

It is perhaps called diplomacy because it is impossible.  Every country has diplomatic channels and diplomats trying to convince people, parties and countries to listen to their agenda for handling things in a fashion that is in their opinion diplomatic.  With so many countries, so many political agendas, so many religious beliefs, and so many people who really don’t see eye to eye with anyone else, diplomacy is practically impossible.

Diplomacy is, defined as the art and practice of conducting negotiations between nations and skill in handling affairs without arousing hostility.  The word diplomacy has been used since the year 1796, and has been generously employed by nations since then.  Every nation has had eminent and competent people represent the interests of their own nation, some as secretaries of state, some as foreign ministers, some as career diplomats, some as special envoys, and whatever name and fashion as required by the instance and incidents.  The United Nations which came into formation in 1945 is full of diplomats that represent their own nation, but also participate in the global efforts to control aggression and find common ground for countries to live in peace and harmony.  The UN was formed in 1945 immediately after the World War II, which saw destruction and death beyond human comprehension, and the nations needed a forum to bring the diverse agendas of many nations into one forum and find common ground for living in peace.

While the UN continues to present a forum for nations to work together and find common ground in promoting peace and harmony, the diplomatic efforts seem to be limited to the people on the floor of UN and not being followed by the people who they are representing.  While the cause is noble the following is difficult to implement for the member nations, and the last couple of decades the diplomatic channels have been working overtime and still there is strife all across the world.

Every country has its own agenda and its own internal issues to deal with.  Every part of the world has population growing exponentially and the even the wealthiest countries are struggling to meet the demands of their own population.  Employment, hunger, weather and seasonal issues, disasters, economic issues and anything else that is possible in each of the countries, big and small are continuously fluctuating and challenging the best of administrations.  No nation is reporting clear budget surpluses and until you are a dictatorship or a closed economy there are global signs of greater demand for products and services, way beyond the supply chain can provide for the demands.

Beyond the imbalance in supply and demand, the continued religious strife, extremism and terror continues to dominate the daily headlines and places a great demand for the diplomatic channels.  Things only are getting worse and out of reach for the normal diplomacy as the extremists have no channel to work with for understanding the issues and coming to peaceful and meaningful resolutions.   Many of the extremists do not represent a country or a region, but they represent beliefs that are taken in context of their own reasoning, and whatever agenda they represent broadly support extremism in nature, and destruction of communities.  Most times this destruction is embarked on the very communities they represent, and also cause harm to unsuspecting civilian life.  No one has ever won by destruction, as everyone is a loser when things gets destroyed or people get killed, and the hatred only gets broader audience by including the newly destroyed community into the unwarranted events that lead to the destruction.

The diplomats or their channels can work overtime, but when there is no way to bring people together to find common ground, there is no possibility for diplomacy.  The communications channels that are available give extremist’s easy access to send messages that reach a vast audience, and drives the fear factor in unsuspecting communities.  How do you handle the fear that comes from fundamentalism, and communal differences?  With all the hatred in making the communities to fear for each other and force the invisible enemy to fight in the guise of religion or fundamentalism, how can diplomacy be possible?

People are fearful of everyone and everything and specially when the normal life gets disrupted in life of people who have no experience of fundamentalism, and if such disruptions reach to every part of the world it is not possible to contain the impact to a select few areas of the world, rather the whole world is an open space which has unexpected and unwarranted disruptions to normal life.  The cost of the disruption in life and destruction of wealth is really unimaginable because of the unmanageable groups of extremists making diplomacy impossible.

Tuesday, May 01, 2012

Advice Is Free

Vasu Reddy From Chicago
vasureddy@aol.com

There is so much of it available in the world; it is the equal to free air.  Human beings love passing on advice to everyone with or without asking for it.  Actually most times advice is unsolicited; it is simply given by everyone and anyone.  With Internet and Mobile telephony at a minimal cost and far reaching, it has become so common to see advice being dished out in every language and every instance, and everyone has an opinion on everything in the world.

When solicited advice is useful and sometimes paid for from reliable and resourceful and experienced people, who still do the same as they did before the advent of communications.  But whenever we open the channels of communications, people are dishing out expert advice; be it through twitter, face book or any other medium that is a form of free and mass communication.

From politicians to cricketers to movie stars and movie makers and wannabe stars have become experts at pasting their advice to the general public and websites are dedicated to makeup stuff for consumption of general public, and with so much conviction on what they are saying, it really is difficult to separate the reality verses gossip.

As much as we enjoy the daily dishing of information on just about everybody it is on overdrive to see a recognized person tweet or talk, and the followers fussing over the details of what it means.  If every person who tweets or writes something can make everyone understand what they exactly meant when they wrote the sentence, it would be a fantastic way of communicating, but typically one writes on impulse or at the moment and goes on to the next minute.  A lot of times when a statement is made or a sentence is written it are a general reaction to the moment, rather than a serious study in time.

When someone gets nominated as a member of parliament, it is not the first time or the last time a recognized personality gets the nomination.  No single person will make the entire parliament a new place to look up to, as the house is itself a democratic entity that functions in its fashion and environment.  Each parliamentarian in their respective term add their efforts to make it a live and vigorous environment that caters to the needs of the public at large, and when they leave they leave a legacy of what they have represented in the years they spent at the house of representatives.

No one person can drive the value systems up or down, nor make immediate or effective decisions for the well being of public.  They all do it collectively while disagreeing with each other, and also agreeing with each other.  For fact they are all voted in or appointed with the public’s interest in mind, rather than selfish or personal interests.  What happens from the time they get elected to the time they complete their term is always questionable as election promises or appointments based on competence in other areas of life, typically may not match; as they are multitude of factors to get to the parliament and then delivering to the promises made to people; as the availability of resources and support for making the available resources are entirely different in reality.

We can spend 24/7/365 in dishing out advice to the politicians and bureaucrats, but how far are we from reality of foreseeing the reality.  A old saying from a wise man was “you can tell me whatever you want and I will do what I believe is the best thing to do”, which is true to just about everyone.  Perhaps we should dish out a little less advice and if we do, first practice it on our own and see if it works.