Anand Krishna’s musings

India began very well in yesterday’s ODI against Australia at Bangalore. But the all-too-familiar storyline began to play out yet again, as one partnership frustrated our bowling attack. Worse, our attack leaked runs like a sieve. Michael Clarke made his highest ODI score of 130 runs (he seems to relish playing at Bangalore, which, if memory serves me right, is also where he scored a test century on debut when Australia last toured India). After having lost their top 4 batsmen relatively cheaply, Australia amassed a potentially match-winning total of 307. I say “potentially” because these days, many teams (India included) regularly score at over 6 runs an over. And remember, this was a 50 over match and not the shortened, 20 over version.

But the way India started, one did not get the confidence that we would make it. Both Lee and Johnson bowled with fire and accuracy and pretty soon, we lost Sachin, who looked woefully out of touch. That was when I think God decided to intervene and save us the blushes. After all, we had just won the world T20 championships less than a week ago, and it wasn’t fair that our crcketing demigods be exposed for being what they are- mere mortals.

I hope this fright brings the team back to terra firma and we wil be more focused on the basics at Kochi, where we play the second ODI on Gandhi Jayanti. Gandhiji was an apostle of peace, but don’t count on either team giving (or getting) any quarters on Gandhiji’s birthday.

Here’s to a good game of cricket. And as always, may the better team win!

Almost 7 years after he first became world chess champion in December 2000, Vishwanathan Anand has again become world champion. The icing on the cake is that he is now also ranked #1 in the world. Chak de India!

Having watched several editions of India’s most popular TV shows (Voice of India, Indian Idol, Sa Re Ga Ma…) aimed at uncovering singing talent, I am firmly convinced that the SMS based voting process currently being used is inherently biased. Often, some of the best talent does not make the cut simply because they are not able to garner enough votes. There are several reasons for this:

1. People who SMS their preferences may not be good judges of musical talent. Some may in fact vote based on the song (because it is his/her favorite), rather than the singer’s voice, diction, taal, singing ability and so on.  
2. Some states can be chauvinistic about the sons and daughters of their soil and a mass SMS movement can skew numbers big time. The difficulty is that not all states are equally enthusiastic about supporting their sons and daughters. Parochialism in such matters can go against genuine talent- and the best singers may lose out when the number of SMS “votes” received is the only criterion for selection.
3. Sending these SMS can be expensive and several viewers may just not bother.
4. Not all “gurus”/”ustaads” (many of who are themselves accomplished singers/music directors and are tasked with coaching participants and providing comments/advice live) are willing to “market” their “shagirds” to the voting public; some do a brilliant job of tugging at people’s heart strings, while others seem almost uninterested.
5. Mobile phone penetration varies widely across the country, as also between urban and rural India; some candidates are thus automatically disdvantaged.
6. Where international contestants are involved, the chances of people from their home countries watching and voting are perhaps even more limited. (OK, I concede that last night, Amanat Ali from Faisalabad, Pakistan made it to the finals of Sa Re Ga Ma Pa- and personally, I think the young man is very talented and sang very well).

I sincerely feel that the contestants would be better served by having a qualified panel of judges who evaluate peformances “live” and at the venue. And if you really want to broad-base the evaluation, let the members of the audience present vote. (Of course, this may introduce bias based on how many friends/relatives a partciular contestant has at the venue).

Of course, the entire perspective above is irrelevant if you view this genre of programs not as something designed to uncover talent, but just to shore up the top- and bottom- lines of mobile telephony service providers (for them, this is a terrific marketing program). There’s my cynicism taking over…… so I better stop.

But seriously, folks- please do respond and let me know your views on this subject.

In the past few months, there have been multiple instances of toys, pet food and even toothpaste manufactured in China being recalled from stores in the US. In all cases, the reason was the same: higher than permissible levels of lead or other harmful chemical substances.

How will this impact our globally interconnected economy? While the precise impact is hard to establish, it is fair to say that there will be a huge (and adverse) impact. And the impact will be felt by several constituents of our global society.

Clearly, Chinese manufacturers will get hurt because of the recall. Not only will they probably not get paid (or be asked to ship another lot free as compensation), their production schedules will go awry. Inventories will pile up, and offtake will slow down. The employees of the factories that manufacture these products will be unable to pay their workers (as much or on time), leading to a drop in disposable incomes for those families.

America’s busiest shopping season is less than 2 months away, and toys are clearly a huge piece of the holiday shopping. And at a time when the US economy itself is showing signs of weakening and slowing down, demand for lower priced products (i.e. Chinese products) would have been higher. The sub-prime crisis will force lenders to become more stringent about who they lend to; credit will be hard to get- and so more expensive gifts may remain unsold. Again, inventories will pile up, and US retailers will suffer- as will their shareholders. So too will the shareholders (and employees) of the companies that manufacture and export these items- say garment exporters from India, Sri Lanka, the Dominican Republic and so on. In turn, this will impact the GNP growth of these economies, which could well have an effect on exchange rates and local stock markets.

And all this does not even take into account the sadness of the kids (or adults) who did not get the gifts they wanted.

With winter round the corner in the US, demand for oil/gas will be higher. Rising oil/gas prices may fuel inflation- which in turn, will impact exchange rates.

So while there is much to be said about the benefits of globalization, the current scenario is also a grim reminder that there is much about the economics of globalization that we do not know.

No sooner did the Australian cricket team land in India than their captain, the redoubtable Ricky Ponting, started his mindgames. He has said that the added burden of Indian cricket fans’ expectations (subsequent to India becoming World T20 cricket Champions) would make it that much harder for the home team. While Dhoni has apparently not reacted (a wise move, I say!), Sreesanth and Robin Uthappa have (unfortunately, in my opinion) made some comments. The media has hailed this “tit for tat” tactic as a manifestaton of the new India that can give back better than it gets and so on. But I would offer some unrequited and gratuitous advice to the youngsters: let your ball and bat do all the talking. Do not get caught in the trap that the wily Ponting has laid for you. Do not let your focus be distracted by the Australians’ mindgames. Remember that in the Mahabharata, Arjuna saw only the eye of the fish (the target) and was thus able to shoot his arrows bang on target. The other competitors saw a whole lot of other things around the target and little wonder that they were not as successful.

Your immediate goal is to win the series against Australia. And do not let anything get in your way. Enjoy yourselves- and good luck!

Ancient Rome had a saying that went something like this: “They raise you the higher that the heavier you may fall”. Our cricket team would do well to remember this. I am not for a moment saying that what they have achieved by becoming World Champions of twenty twenty cricket is not worthy of praise. Their achievement is wonderful and must be celebrated (as indeed it was by tens of thousands of proud and jubilant fans braving inclement weather to line Mumbai’s roads and greet the team).

But Ponting’s Australian cricket team is already here and while they may not overtly accept that they seek “revenge”, we would be naive to believe that they will not go all out to crush India. Australia’s repiutation of being “all conquering” has been badly dented by Zimbabwe, Pakistan and India in the last 2 weeks and make no mistake, they are smarting badly.

What I am saying is something that is well-known in the world of investment banking- “you are only as good as your last deal”. And so it is for our cricket team. All said and done, the twenty twenty win is now a part of history. For Dhoni and his team, the current reality is the 7 match ODI series against the Australians. Both teams must adapt to the change in format quickly and go back to “classical” 50 over strategies and tactics- and that may not be as easy as flicking a switch. But the basics remain the same, no matter what form of cricket it is: bat well, bowl well and field well.

Good luck India and Australia. And as always, may the better team win!

PS: Yesterday morning, as I was headed to the airport, my cab driver asked me something I had been pondering myself: do Sachin, Dravid and Ganguly really have a place in our ODI side? He felt not. Post your views and we can have an interesting discussion on whether or not India’s batting triumvirate is history.

Turns out that over the past 6 months or so, the market capitalization of Reliance Industries has more than doubled. With this, Mukesh Ambani’s net worth too has gone up from being around $20B in March (the Forbes list of the world’s richest men) to around $45B in September. Not bad, eh?

So now we have L N Mittal and Mukesh Ambani featured among the world’s five richest people. If you are wondering who the other three are, well, it’s Bill Gates and Warren Buffett from the US and Carlos Slim from Mexico. 

Forget the billionaires. Even in terms of millionaires, India has the fastest growing number- thanks to rising salaries, eye-popping bonuses and stock options. And in turn, this financial independence is enabling many professional managers are turning entrepreneurs. This is good, because new business models will emerge, new ideas will come out- and collectively, all these will propel India to become one of the world’s top 3 economies in the next 15 years.

Surely, another “chak de India” moment, would you not say?!

Time was when the susidiaries of global companies operating in India would pick their best managers and send them for 2-3 year stints to the parent company in the US or Europe.  The wheel has now turned full circle, with India postings now becoming highly desirable for foreign executives. Expatriate salaries are still very attractive and include an element of “hardship allowances”, but I doubt that too many MNC managers who are serious about their careers will now look at India as a “hardship posting”.

At a session on strategy and leadership that I attended earlier today, one of the speakers was a professor from INSEAD. She made a very interesting statement- that, to me, represents another “chak de India” situation.  She said that 10 years ago, her students (especially those from India) sought her assistance in finding them suitable jobs in Europe and the US. These days, because many of them finish at the top of their class, many get good breaks in the west. So what? She went on to say that most of her students of Indian origin (and a small but steadily increasing handful of others) are now keen to work in India, often at the start of their careers.

Some Indian companies have developed structured internship programs to attract fresh graduates to India and give them an opportunity to immerse themeselves in the culture of our country and company- with the expectation that they can be excited to join as full-time employees when they complete their 2-3 month projects.

We as a nation have a terrific opportunity to get ahead. And the generations currently in the productive workforce have an unparalleled opportunity to contribute directly to this process of development.

To all of them I say- carpe diem (”seize the day!”). Chak de India! 

India has just won the inaugural ICC Twenty Twenty World Championship, beating traditional rivals Pakistan. Clearly, the title “world champions” is itself cause for huge celebrations. But the icing on the cake is that in the past couple of months, Indian tennis, badminton, field hockey and soccer have all taken India to levels that were associated with non-Indian nations. It is this “broad based rally” in Indian sport that makes me want to say, “chak de India”!

About 2 weeks ago, when the inaugural edition of the ICC World T20 championship began in South Africa, most cricket pundits dismised India as no- hopers. If not Australia, South Africa would win. Former England captain Nasser Hussain had in fact called out India and England as the “weakest” teams in the competition. Just over 2 hours ago, India won the final against Pakistan, and in the process, reminded several of us that trying to predict the outcomes of cricket tournament can be as easy (and just as accurate!) as predicting the weather. 

It was an absorbing game of cricket. Undoubtedly, the print and electronic media- and other bloggers-will devote several column inches and bytes to cover the tactics, scores, individual performances and of course, the “turning points” in the game. So I shall not comment on those. What I will point out is that unlike India-Pakistan cricket matches played during the 70s, 80s and perhaps even the 90s, this game did not radiate raw animosity and hatred between the teams- something that was perhaps palpable in previous eras. Perhaps this is because the two teams have a younger set of players, who belong to one generation further from the one that suffered the pangs of Partition or suffered the consequences of wars of 1965 and 1971. Or maybe the anger is channeled into bowling, batting and fielding better. 

As I watched the last overs, I felt a strange thought enter my head: even if we lose this game, we fought well and there is no shame. Congratulations, Team India. And congratulations, Team Pakistan, for a gallant fight. Any which way, I think the game of cricket has emerged stronger and better. And T20 is here to stay- for all the chatter about it being a game of “hit and giggles”.

An important, but less-obvious facet of “chak de India” is the emergence of small-town India. This is visible in many different ways:

1. “Tier 2″ towns like Mysore, Coimbatore and Mohali are attracting IT majors, who are setting up delivery centers. For employees, the savings potential is higher because the cost of living is lower in these locations (with relatively little loss in salary) and quality of life is better (shorter commutes, more personal time, less pollution). For employers, infrastructure costs are controlled, and attrition is managed more effectively.
2. Locations like Baddi in Himachal Pradesh now boast of world-class computer and pharmaceutical manufacturing plants. Think of the employment opportunities this creates for the local population- especially for those people who might otherwise have depended on agriculture or tourism. Even if it is only the newer generations that are employable in these new industries, it is a start that would have been unimaginable even 5 years ago. Some NGOs have started training and hiring village youth (e.g. in Andhra Pradesh) for activities like fund raising. The youth get exposed to new opportunities, while the NGO does not have to worry about losing people from a key function every few weeks- a bigger risk in urban India. And with telecom infrastructure in semi-urban and rural India picking up, this idea is not any more inefficient than if executed from a town or city.
3. We should know in a few hours from now whether Prashant Tamang or Amit Paul is this year’s Indian Idol. So what is the connection…, you wonder?! Well, both these highly talented singers come from relatively small towns (Darjeeling and Shillong respectively). Till a few years ago, such programs would not have even looked beyond the top 4-5 metros. But look at the number of aspirants this time from smaller cities like Indore, Lucknow, Pune etc.
4. The character of “Soi Moi Kerketa” (who would keep saying “Ho” in the movie “Chak de India”) is from Jharkhand. See http://209.62.107.50/movie/chak-de-india/cast/18887
5. While once Indian men’s cricket was dominated by players from the larger cities like Mumbai, Delhi, Bangalore and Hyderabad, we now have players like R P Singh, Sreesanth and M S Dhoni, our newest cricket captain- from smaller towns and state teams that have perhaps not produced (m)any national cricketers before.

To me, all these are examples of the “chak de India” phenomenon- and bode well for us as a nation.

Just over 6 months ago, both India and Pakistan crashed ignominiously out of the ICC World Cup cricket (the 50 over version)- losing to the so-called “minnows”. And now, in a miraculous reversal of fortunes, it is these two long-time rivals that will clash at the ICC T20 finals in Jo’burg on Monday, Sept 24. Over the last fortnight or so, both teams have  demonstrated a sense of urgency, hunger and passion that were all too absent in both teams for the last few years. So what has changed?

Notwithstanding the roiling caused by change of coaches, the Shoaib incident, the BCCI-ICL wrangle and India’s triumvirate deciding to give the T20 a miss, the biggest change has been the decision, by both sets of selectors, to blood new players (even if it was for a genuine want of choice). Irrespective of why the “seniors” from either country were not in the squad, it must be said that stronger legs, smaller egos and bigger hearts  make a powerful combination indeed- and induce a confidence not seen for some time in eiher team. In Dhoni, India have a young captain with a very positive mindset. Shoaib Malik of Pakistan is no different.

It is a brave (and foolhardy) person that would try to predict what will happen at the Wanderers on Monday.  But no matter what the outcome, the world will be in for a terrific game of competitive cricket. Of this, I am sure.

Good luck teams- and may the better team win!

The first T20 (”twenty-twenty”) cricket world cup being played in South Africa has shown that what Sunil Gavaskar calls “ultra limited overs” cricket is loaded against bowlers. But interestingly, many games in the tournament thus far have proved that contrary to popular perception, batesmen do not need to “slog” to score even at the frenetic 1.5-2 runs per ball. Good “cricketing shots” can be just as productive. Shoaib Malik and Misbah ul Haq did not have to “slog” their way to victory over Australia. In yesterday’s South Africa vs New Zealand game, Justin Kemp proved exactly the same point. But even without slogging, the number of boundaries and sixes that get hit in a T20 match is amazing. (And to think that 50 over games can go by without a single six being hit by either team). 

But without a question, the most scintillating display of batting pyrotechnics in the tournament so far (and indeed, in any form of cricket for some time now) was Yuvraj Singh’s single-handed destruction of England bowler Stuart Broad. 6 successive sixes at Kingsmead (Durban) came almost effortlessly from Yuvi’s bat yesterday (OK, so one was a mistimed shot that comes this close to being a “slog”). Yuvi now holds the record for the fastest 50 runs scored in any form of cricket- off a mere 12 balls.

Whether it was Flintoff’s remarks to Yuvraj or his spotting of Dimitri Mascarenhas halfway through the over- and the desire for revenge-that caused the rush of blood, will probably never really be known (in spite of Yuvi’s own statements). But this should go some way in alleviating Yuvraj’s misery at having conceded so many sixes off his bowling in England. And without a doubt, young Stuart Broad will have nightmares that will prominently feature Yuvraj Singh (not unlike what Shane Warne confessed to after receiving a royal, “Sachin Tendulkar class” working over some years ago). Flintoff was seen shaking his head almost in disbelief, while Collingwood described it as the best “striking” he has ever seen.

All in all, an amazing performance. Go India!- or should I say “chak de India”!

India continues to reign supreme as the pre-eminent outsourcing destination for IT and BPO services. This in spite of emerging destinations around the world- countries in Eastern Europe, South East Asia, Latin America, and of course, China.

The large talent pool and knowledge of English scale are clearly key reasons for the industry to have thrived thus far in India. But to hope that these will forever remain a competitive advantage is naive at best and foolish at worst. India’s expected GDP growth rate will be in the 9-10% p.a. for at least the next 5 years- driven partly by rising exports and partly by the demand expansion within the country. New industries will emerge, new foreign companies will set up shop in India and existing Indian companies will continue to grow rapidly. All this will require new talent- and this talent too will have to come from the same pool that today serves the IT and ITES industries. Wage costs will spiral, talent quality will decline and the magnificent edifice of the Indian IT & ITES industry as we know it today will start to crumble.

So what is the solution? Apart from the obvious resonse of establishing new delivery centers in other cost-effective locations (in the initial years, these savings will be offset by the investment required for infrsatructure, training etc.), what is needed is for India to explore new frontiers in outsourcing. If clinical research, equity research and legal research can be done from India, why not large-scale outsourcing of advertising processes such as creative & copy or indeed, even design and analysis of market research? Let the brief be developed “in-market” and passed on to a team of bright designers and copy writers in India. Why should “product design” and “services” be separated? Why not outsource engineering design- as well as manufacturing- to India?

The key is to expand the scope of what can be outsourced to a remote location such as India. The really smart western MNCs will look to use their outsourcing centers in India to develop products for local markets as well- so that they don’t lose out on the burgeoning demand in India.

If we can do all this right, it will surely be another case of chak de India.

The world awaits with bated breath to see what the US Federal Reserve (technically, the FOMC- the Federal Open Market Committee) will decide in its meeting tomorrow. Chairman Bernanke and his colleagues have a tough call to make. A cut in the federal funds rate of at least 25 basis points is widely expected- and has already been factored into the equity (and debt) markets- not just in the US, but around the world as well. So if interest rates are not cut, equity markets may see even more volatility. Bond markets, though, will probably benefit. But more importantly, not cutting interest rates (or cutting them too late) increases the risk of a US recession. And when the US sneezes, many other economies will catch a cold too.

The recent bad news on job losses/unemployment and generally tight credit (thanks to the subprime lending problem) may impact consumer spending during the year’s most critical holiday season. Autmobile purchase decisions, like holidays, may be put on hold. All this, combined with increasing costs (e.g. on account of the toy industry seeking more stringent tests on itself) may further squeeze margins of companies. And a weak quarter of earnings will only push matters over the edge.

If interest rates are indeed cut as expected, credit supply will improve. However, with oil prices hovering at around the $78/barrel mark and winter rapidly approaching, Mr Bernanke has to take a call on whether cutting interest rates could unleash even more inflationary pressures- something the US economy can do without.

Damned if he does and damned if he doesn’t- boy, I am sooooo glad I am not in Fed chairman Ben Bernanke’s shoes!