ARTICLES : Business, Economy & Technology

[teesra_banda]

Headlines this week
Illinois's top court overturned a $10 billion award for damages against Philip Morris,won by smokers who claimed they had been cheated because they had not been sufficiently warned about the health risks from "light" cigarettes. The decision is a big victory for the tobacco company, which is still waiting to see if a separate $145 billion award in Florida for damages against it and other firms will be reinstated by the state's Supreme Court.

The Case is like this:

A group of smokers sued tobacco giant Altria(Philip Morris is a part of this group) for $ 10.1 billion for misleading them about the dangers of light cigarettes over the past 30 years. The group sued on behalf of 1.1 million people who smoked "light" cigarettes. They argued the smokers had been defrauded by the false claim that the "light" or "low tar" cigarettes promoted at that time were no safer than regular cigarettes and, in fact, could be more harmful.
The smokers did not accuse the company of harming their health. They claimed Philip Morris knew when it introduced light cigarettes in 1971 that they were no healthier than regular cigarettes, but hid that information and the fact that light cigarettes actually had a more toxic form of tar.

In March 2003, Madison County Circuit Judge Nicholas Byron ruled against Philip Morris, fining the company $7.1 billion in compensatory damages and $ 3 billion in punitive damages and fees.

Philip Morris, now a part of Altria Group Inc., insisted its cigarettes performed as advertised. Those advertisements met federal guidelines and never promised lights were less hazardous than other cigarettes, the company said. Smokers who wanted lighter flavor and less tar and nicotine could get that through its light brand, attorney James Thompson, a former Illinois governor, argued for Philip Morris. The company is not to blame if a smoker ended up canceling any health benefits by taking deeper puffs or smoking more cigarettes, he said.
Thompson argued the case should never have been granted class-action status because each person smoked differently and had different reasons for choosing a particular brand of cigarettes. He said the plaintiffs failed to prove that every single customer was defrauded. The plaintiffs argued that requiring individual proof for every person would essentially eliminate class-action cases under state law.

Philip Morris argued that it would go bankrupt if it was required to post a full 12 billion dollar bond while it waited to appeal the case.

In an unusual move, a number of US states intervened on the tobacco company's behalf in order to ensure that it continued to make payments to them under the terms of a previous lawsuit.

The state high court agreed to review the case without waiting for appellate courts to weigh in; it heard oral arguments late last year, and its ruling had been eagerly awaited by Altria investors and detractors alike.

By a 4-2 vote, the court found that the U.S. Federal Trade Commission had authorized such characterizations. In its 109-page decision, the court dismissed the case on the grounds that the US Federal Trade Commission had specifically authorized tobacco companies to characterize their products as "light" or "low tar and nicotine."

If the state high court had agreed with the lower court, Philip Morris would have had to pay about twice its annual operating income. The verdict also could have led to more lawsuits alleging fraud that would focus on a company's marketing rather than the plaintiff's health.

The case may set precedent for many other similar lawsuits which are pending before many courts and this judgement may pave the way for hiving of Krafts Foods by Philip Morris.

[teesra_banda]

Intelligent design (ID) is an anti-evolution belief that asserts that naturalistic explanations of some biological entities are not possible and such entities can only be explained by intelligent causes.* Advocates of ID maintain that their belief is scientific and provides empirical proof for the existence of God or superintelligent aliens. They claim that intelligent design should be taught in the science classroom as an alternative to the science of evolution. ID is essentially a hoax, since evolution is consistent with a belief in an intelligent designer of the universe. The two are not contradictory and they are not competitors. ID is proposed mainly by people at the Discovery Institute and their allies, who feel science threatens their Biblical-based view of reality.

The arguments of the ID advocates may seem like a rehash of the creationist arguments, but the defenders of ID claim that they do not reject evolution simply because it does not fit with their understanding of the Bible. However, they present natural selection as implying the universe could not have been designed or created, which is nonsense. To deny that God has the power to create living things using natural selection is to assert something unknowable. It is also inconsistent with the belief in an omnipotent Creator.
One of the early-birds defending ID was UC Berkeley law professor Philip E. Johnson, who seems to have completely misunderstood Darwin's theory of natural selection as implying (1) God doesn't exist, (2) natural selection could only have happened randomly and by chance, and (3) whatever happens randomly and by chance cannot be designed by God. None of these beliefs is essential to natural selection. There is no inconsistency in believing in God the Creator of the universe and in natural selection. Natural selection could have been designed by God. Or, natural selection could have occurred even if God did not exist. Thus, the first of several fallacies committed by ID defenders is the false dilemma. The choice is not either natural selection or design by God or some other superintelligent creatures. God could have designed the universe to produce life by random events following laws of nature. God could have created superintelligent aliens who are experimenting with natural selection. Superintelligent aliens could have evolved by natural selection and then introduced the process on our planet. There may be another scientific theory that explains living beings and their eco-systems better than natural selection. The possibilities may not be endless but they are certainly greater than the two considered by ID defenders.
Two scientists often cited by defenders of ID are Michael Behe, author of Darwin's Black Box (The Free Press, 1996),andWilliam Dembski, author of Intelligent Design: The Bridge between Science and Theology (Cambridge University Press, 199. Dembski and Behe are fellows of the Discovery Institute, a Seattle research institute funded largely by Christian foundations. Their arguments are attractive because they are couched in mathematical or scientific terms and backed by what seems to be scientific competence. However, their arguments are identical in function to the creationists' arguments: rather than provide positive evidence for their own position, they mainly try to find weaknesses in natural selection. As already noted, however, even if their arguments are successful against natural selection, that would not increase the probability of ID.

Behe is an Associate Professor of Biochemistry at Lehigh University (read this disclaimer from his department). Behe's argument is not essentially about whether evolution occurred, but how it had to have occurred. He claims that he wants to see "real laboratory research on the question of intelligent design."* Such a desire belies his indifference to the science/metaphysics distinction. There is no lab experiment relevant to determining whether God exists.
In any case, Behe claims that biochemistry reveals a cellular world of such precisely tailored molecules and such staggering complexity that it is not only inexplicable by gradual evolution, but that it can be plausibly explained only by assuming an intelligent designer, i.e., God. Some systems, he thinks, can't be produced by natural selection because "any precursor to an irreducibly complex system that is missing a part is by definition nonfunctional (39)." He says that a mousetrap is an example of an irreducibly complex system, i.e., all the parts must be there in order for the mousetrap to function. In short, Behe has old wine in a new skin: the argument from design wrapped in biochemistry. His argument is no more scientific than any other variant of the argument from design. In fact, most scientists, including scientists who are Christians, think Behe should cease patting himself on the back. As with all other such arguments, Behe's begs the question. He must assume design in order to prove a designer. The consensus seems to be that Behe is a good scientist and writer but a mediocre metaphysician.
His argument hinges on the notion of "irreducibly complex systems," systems that could not function if they were missing just one of their many parts. "Irreducibly complex systems ... cannot evolve in a Darwinian fashion," he says, because natural selection works on small mutations in just one component at a time. He then leaps to the conclusion that intelligent design must be responsible for these irreducibly complex systems. Biology professor (and Christian) Kenneth Miller responds:The multiple parts of complex, interlocking biological systems do not evolve as individual parts, despite Behe's claim that they must. They evolve together, as systems that are gradually expanded, enlarged, and adapted to new purposes. As Richard Dawkins successfully argued in The Blind Watchmaker, natural selection can act on these evolving systems at every step of their transformation.*

Professor Bartelt writes:if we assume that Behe is correct, and that humans can discern design, then I submit that they can also discern poor design (we sue companies for this all the time!). In Darwin's Black Box, Behe refers to design as the "purposeful arrangement of parts." What about when the "parts" aren't purposeful, by any standard engineering criteria? When confronted with the "All-Thumbs Designer" - whoever designed the spine, the birth canal, the prostate gland, the back of the throat, etc, Behe and the ID people retreat into theology.*

H. Allen Orr writes:Behe's colossal mistake is that, in rejecting these possibilities, he concludes that no Darwinian solution remains. But one does. It is this: An irreducibly complex system can be built gradually by adding parts that, while initially just advantageous, become - because of later changes - essential. The logic is very simple. Some part (A) initially does some job (and not very well, perhaps). Another part (B) later gets added because it helps A. This new part isn't essential, it merely improves things. But later on, A (or something else) may change in such a way that B now becomes indispensable. This process continues as further parts get folded into the system. And at the end of the day, many parts may all be required.*

Finally, Behe's argument assumes that natural selection will never be able to account for anything it cannot account for now. This begs the question. In fact, some of the things that Behe and other ID defenders have claimed could not be explained by natural selection have in fact been explained by natural selection (Miller 2004).
Continued..

[teesra_banda]

Continued...
pseudoscience
ID isn't scientific and it isn't an alternative to natural selection or any other scientific idea. The universe would appear the same to us whether it was designed by God or not. Science tries to explain how the world works, not why we have this world rather than some other world. It is not part of science to try to prove the world was or was not designed by God. It is not the job of science to try to explain the probability of biological developments happening by chance or not. If anyone wants to speculate about such matters, they are free to do soas metaphysicians. ID is not scientific, but metaphysical. The fact that it has empirical content doesn't make it any more scientific than, say, Spinoza's metaphysics or so-called creation science.

ID is a pseudoscience because it claims to be scientific but is in fact metaphysical. It is based on several philosophical confusions, not the least of which is the notion that the empirical is necessarily scientific. This is false, if by 'empirical' one means originating in or based on observation or experience. Empirical explanations can be scientific or non-scientific. Freud's idea of the Oedipus complex is empirical but it is not scientific. Jung's notion of the collective unconscious is empirical but it is not scientific. Biblical creationism is empirical but it is not scientific. Poetry can be empirical but not scientific.
On the other hand, if by 'empirical' one means capable of being confirmed or disproved by observation or experiment then ID is not empirical. Neither the whole of nature nor an individual eco-system can be proved or disproved by any set of observations to be intelligently designed.

Science does have some metaphysical assumptions, not the least of which is that the universe follows laws. But science leaves open the question of whether those laws were designed. That is a metaphysical question. Believing the universe or some part of it was designed or not does not help understand how it works. If I ever answer an empirical question with the answer "because God made it that way" then I have left the realm of science and entered the realm of metaphysics. Of course scientists have metaphysical beliefs but those beliefs are irrelevant to strictly scientific explanations. Science is open to both theists and atheists alike.

If we grant that the universe is possibly or even probably the result of intelligent design, what is the next step? For example, assume a particular eco-system is the creation of an intelligent designer. Unless this intelligent designer is one of us, i.e., human, and unless we have some experience with the creations of this and similar designers, how could we proceed to study this system? If all we know is that it is the result of ID but that the designer is of a different order of being than we are, how would we proceed to study this system? It is presumptuous to assume that an intelligent designer would create an eye the way a human engineer would design a similar system with a similar function. By appealing to an "intelligent designer" to explain some complex phenomenon is to explain nothing about that phenomenon's relation to its alleged designer. The theory illuminates nothing.
The ID proponents are fighting a battle that was lost in the 17th century: the battle for understanding nature in terms of final causes and efficient causes. Prior to the 17th century, there was no essential conflict between a mechanistic view of nature and a teleological view, between a naturalistic and a supernaturalistic view of nature. Nature could be thought of as a vast purposive mechanism. With the notable exception of Leibniz and his intellectual descendents, just about everyone else gave up the idea of scientific explanations needing to include theological ones. Scientific progress became possible in part because scientists attempted to describe the workings of natural phenomena without reference to their creation, design, or ultimate purpose. God may well have created the universe and the laws of nature, but nature is still a machine, mechanically changing and comprehensible as such. God became an unnecessary hypothesis. Or, if one couldn't live without God, one could identify God with Nature, as Spinoza did, and argue that belief in final causes or purposes in nature is demeaning to God and the height of folly for man.


Source : http://skepdic.com/

Found this humorous piece on net regarding a school's plan to include "INTELLIGENT DESIGN" in curriculum.

OPEN LETTER TO KANSAS SCHOOL BOARD:

CC:

1. DOVER SCHOOL BOARD (PENNSYLVANIA)
   
   
2. OHIO STATE SCHOOL BOARD
   
   
3. RIO RANCHO SCHOOL BOARD (NEW MEXICO)
   
   
4. GRANTSBURG SCHOOL BOARD (WISCONSIN)
   
   
5. COBB COUNTY SCHOOL BOARD(GEORGIA)
   
   
6. SHELBY COUNTY SCHOOL BOARD(TENNESSEE)
   
   
7. CHARLES COUNTY SCHOOL BOARD(MARYLAND)
   
   
8. NAPERVILLE SCHOOL BOARD(ILLINOIS)
   
   
9. DARBY SCHOOL BOARD (MONTANA)
   
   
10. BLUFFTON-HARRISON SCHOOL BOARD (INDIANA)
    

I am writing you with much concern after having read of your hearing to decide whether the alternative theory of Intelligent Design should be taught along with the theory of Evolution. I think we can all agree that it is important for students to hear multiple viewpoints so they can choose for themselves the theory that makes the most sense to them. I am concerned, however, that students will only hear one theory of Intelligent Design.

Let us remember that there are multiple theories of Intelligent Design. I and many others around the world are of the strong belief that the universe was created by a Flying Spaghetti Monster. It was He who created all that we see and all that we feel. We feel strongly that the overwhelming scientific evidence pointing towards evolutionary processes is nothing but a coincidence, put in place by Him.

It is for this reason that Im writing you today, to formally request that this alternative theory be taught in your schools, along with the other two theories. In fact, I will go so far as to say, if you do not agree to do this, we will be forced to proceed with legal action. Im sure you see where we are coming from. If the Intelligent Design theory is not based on faith, but instead another scientific theory, as is claimed, then you must also allow our theory to be taught, as it is also based on science, not on faith.

Some find that hard to believe, so it may be helpful to tell you a little more about our beliefs. We have evidence that a Flying Spaghetti Monster created the universe. None of us, of course, were around to see it, but we have written accounts of it. We have several lengthy volumes explaining all details of His power. Also, you may be surprised to hear that there are over 10 million of us, and growing. We tend to be very secretive, as many people claim our beliefs are not substantiated by observable evidence. What these people dont understand is that He built the world to make us think the earth is older than it really is. For example, a scientist may perform a carbon-dating process on an artifact. He finds that approximately 75% of the Carbon-14 has decayed by electron emission to Nitrogen-14, and infers that this artifact is approximately 10,000 years old, as the half-life of Carbon-14 appears to be 5,730 years. But what our scientist does not realize is that every time he makes a measurement, the Flying Spaghetti Monster is there changing the results with His Noodly Appendage. We have numerous texts that describe in detail how this can be possible and the reasons why He does this. He is of course invisible and can pass through normal matter with ease.

Im sure you now realize how important it is that your students are taught this alternate theory. It is absolutely imperative that they realize that observable evidence is at the discretion of a Flying Spaghetti Monster. Furthermore, it is disrespectful to teach our beliefs without wearing His chosen outfit, which of course is full pirate regalia. I cannot stress the importance of this enough, and unfortunately cannot describe in detail why this must be done as I fear this letter is already becoming too long. The concise explanation is that He becomes angry if we dont.

You may be interested to know that global warming, earthquakes, hurricanes, and other natural disasters are a direct effect of the shrinking numbers of Pirates since the 1800s. For your interest, I have included a graph of the approximate number of pirates versus the average global temperature over the last 200 years. As you can see, there is a statistically significant inverse relationship between pirates and global temperature.




In conclusion, thank you for taking the time to hear our views and beliefs. I hope I was able to convey the importance of teaching this theory to your students. We will of course be able to train the teachers in this alternate theory. I am eagerly awaiting your response, and hope dearly that no legal action will need to be taken. I think we can all look forward to the time when these three theories are given equal time in our science classrooms across the country, and eventually the world; One third time for Intelligent Design, one third time for Flying Spaghetti Monsterism, and one third time for logical conjecture based on overwhelming observable evidence.

Sincerely Yours,

Bobby Henderson, concerned citizen.

[jaismine]

Continued...
Finding the Key
In addition to banking and other reforms, China is also looking to foreigners for new ideas that will allow the country to continue its astonishing economic growth, according to Ted Chu, senior manager of economic and industry analysis at General Motors and a conference speaker.
Chu, who was raised in Shanghai and earned graduate economics degrees at Georgetown University, was a macroeconomist at the World Bank. He cautioned that his remarks do not necessarily reflect the opinion or policies of General Motors. "Please allow these personal observations, not as a professional economist or a representative of a car company, but as one who has been raised in China and is now a citizen of the U.S. and has some understanding of both societies."
Chu noted that change has been remarkably fast in China where per capita GDP has grown 10-fold since 1970, the fastest in the world. China passed Germany in motor vehicle sales in 2002 and is expected to pass Japan next year with sales of over six million vehicles. Such growth has implications for the global economy, Chu said. For example, 60% of Chinese GDP is now linked to global trade and Chinese reserves of over $700 billion help finance the U.S. trade deficit. "Chinese exports to the U.S. are rising dramatically and exports from the U.S. to China are also rising dramatically. There is a lot of potential ahead."
Western analysts have attempted to explain what is going on in China with broad strokes, according to Chu. He pointed to rapid economic growth, urbanization, a high savings rate, cheap labor, strong foreign direct investment, inequality, environmental pollution and over-investment as some of the generalizations about China that are frequently made. Discussions of these issues usually focus on "China today and its short-term growth, but do not provide insights into the future," said Chu. He compared the practice of basing opinions about China's future on the current situation to looking for a lost key at night only under a streetlight.
At the beginning of the 20th century, he noted, economists forecast that Argentina would develop a stronger economy than the United States. A similar bet might have been made on Japan in the 1980s. "Looking at Japan's numbers and statistics gave the impression that Japan was going to take over the world. Today, we are very relaxed about Japan."
Now the attention is on China, said Chu, who went on to discuss some of the common perceptions about China. First, many people believe China's key economic advantage is its vast supply of cheap labor. Chu challenged that idea. "I would like to suggest that cheap labor is not China's advantage, but its problem."
China's biggest economic challenge today is how to stimulate domestic demand, especially private consumption. Chinese workers are not paid well and therefore lack the purchasing power to consume, according to Chu. He said that looking around the world, cheap labor does not necessarily mean a country is competitive. He pointed to the African nations as an example. Other countries have high wages but are not competitive, such as Germany, Italy and Japan. Still other countries, he said, pay high labor rates but remain competitive. The United States, United Kingdom and South Korea fall into this category.
That leaves a handful of nations, including China, Thailand, India, the Czech Republic and Russia, as examples of countries that are inexpensive and competitive. "China becomes the manufacturing floor of the world, not because of cheap labor, but because China has the most open and flexible market," said Chu, adding that productivity improvements and structural reform of economic systems have driven down manufacturing employment in China from 54 million jobs in 1994 to 30 million in 2004.
As China faces higher costs of production inputs, such as energy, the country is under pressure to increase productivity and innovation. "This leads to a two-way Gold Rush. On the one side, Chinese firms are spending a lot on research and development to go up the value chain. On the other side, foreign firms are rushing into China to take advantage of low costs."
Chu downplayed concerns that China's growth will be cut short by projected shortages of resources. "The most reliable signpost for the future is not with statistics but with ideas," he said, noting that China has been importing ideas on a scale that is unprecedented since the Meiji Restoration in Japan in the mid-19th century.
For example, China is studying international accounting standards and looks to Britain, the United States and Hong Kong for securities laws. China is borrowing ideas about military systems from France, developing a Central Bank along the lines of the United States Federal Reserve system and looking to Singapore for exchange-rate policies. Japan's economic power was short-lived because its leaders never promoted fair trade and economic openness, Chu added. "In global developments these days, we tend to worry about things like the spread of bird flu, but the biggest problem is national and political barriers to the spread of the best ideas."
Chu is often asked whether China's political system represents an ideological conflict with the West that would require investors and businesses to consider a big risk premium when it comes to China. Chinese leaders are indeed trying to remain in power, he said. But he went on to say that in a true dictatorship, government retains control through brutality and terror, and ultimately is doomed to fail if it tries to maintain a closed society and does not have the psychological support of the population.
Chu finds it ironic that many countries considered to be operating under a capitalist system actually have more examples of socialism than China. "It is the Communist party that is trying all it can do to adopt capitalist reforms," he said. "The Communist party is not promoting this on the basis of ideology, but only because it works."
There is no denying there are large differences between the economic and political systems of China and the United States, he added, citing differences in the forms of democracy practiced by England in the eighteenth century and its breakaway colony across the Atlantic. "American and British democracies have gone a long way. China has just begun its socioeconomic-political journey."
SOURCE : Wharton
Summary/ Salient Points of the article :
A comparison between China & India is mandatory when one discusses either of the country. There are two main aspects in which India used to & still scores over China. They are : Democracy & Strength of Banking Sector.
Indian banking sector is considered stronger than China's, But in this article author talks on the myth of apparent weakness of China's banking system
Important Points :
- NPA of chinese banks is around 50% of China's GDP, though thats a different story that it played a strong part in financing the economy's growth
- Whereas in case of India the figure stands at 8%
- Chinese govt is taking steps ot strengthn Banks by way of :
1) Increased power to banking regulator, Chinese Banking Regulatory Commission (CBRC)
2) Steps to meet World Trade Organization standards for capitalization and limits on non-performing loans
3) Privatization of Govt Controlled Banks
4) Increased FII in banking sector which bill bring more techincal & operational know how of banking industry to China
These steps coupled with a good forex reserve, limited exposu
re to external debt and an increase in domestic consumption will improve the banking sector's performance.
PS : This summary is bound by limits of my knowledge

hey...i read both ur articles on corporate governence and china's banking sector reforms....gr8 job....nice,informative stuff.

[teesra_banda]

Can the Government Deliver, On Time, Major Reform of Japan's Postal Service?
The reawakening of Japan's economy following more than a decade of decline comes after a series of major economic reforms, but the biggest change may be yet to come.

Privatization of Japan's massive postal savings system, which holds savings and insurance assets valued at $3 trillion for 85% of Japan's population, is set to take place over the next 12 years. The proposal, overwhelmingly endorsed by voters in a September special election, will shift a mountain of assets from government control to private markets. Wharton faculty say the long timetable for carrying out the plan -- which stretches to 2017 -- may help blunt political opposition that is likely to continue, even after the process starts.


Olivia Mitchell, Wharton professor of insurance and risk management, predicts that postal savings reform will be another major step in unwinding the Japanese government's control over the nation's economy. By freeing money up for more private-sector investment, savers could reap better returns and businesses are likely to find more capital available for expansion and other financing needs.


"The Japanese postal service is one of the biggest financial institutions in the world; some people say it is the biggest," says Mitchell. "What's clear is that it is an institution with very far-reaching tentacles throughout Japanese society and the Japanese economy. So discussion of privatizing it bodes well for the modernization of financial markets in Japan."

The reform plan calls for Japan Post to be divided into four pieces: over-the-counter service, mail delivery, savings and insurance. The division would not take place until 2007 and even then, the four parts could remain owned by a holding company that would be 100% controlled by the government for another decade.


In 2017, according to the new law, the savings and insurance units would be released from government control and become private corporations through the sale of their assets on the stock market. The other two divisions would remain under control of the holding company, which by then is to be only one-third controlled by the government. In addition, the holding company would be allowed to buy back shares of the two financial service companies, and the other two units would be allowed to buy shares in the savings and insurance units.


In August, the legislation was voted down in the upper house of Japan's Diet. That prompted Prime Minister Junichiro Koizumi's landslide September victory in a special election in which postal system reform was the focal issue. After seeing strong public support for privatization, earlier opponents changed their votes and the measure became law. "This was a miracle in the political world," said Koizumi in a speech after the law passed. He has been pushing the idea of postal system privatization since 1979 when he served as a junior finance minister.


Financing Post-war Prosperity
The proposal, says Mitchell, will bring historic change to the system, which for more than 100 years collected savings door-to-door in Japan's crowded cities and rural villages alike. Savings amassed this way financed Japan's post-war economic rise, which culminated in its 1980s bubble economy.

"One of the interesting things the Japanese postal system has done is serve as a very efficient savings system," Mitchell points out. "It regularized the collection of small deposits every single week and enabled Japan to have one of the highest savings rates in the world. It's so easy; the postmaster comes around and just collects a few yen from the lady of the household."

The problem, says Mitchell, is that the money was often spent on politically motivated ventures. "Much of the money has gone into socially targeted investment projects the government deemed desirable," she says. "The claim is that the money has gone to build roads to nowhere and retirement communities out in the hills where no elderly people want to live. The money has done good in some instances, but the claim has been that much of this investment is not transparent. Nobody really knows in the light of day where the money is and whether it went to the right place."


The reforms will take a long time, Mitchell adds, but that is to be expected when it comes to restructuring a far-flung organization with 25,000 post office branches and 260,000 employees. "These employees have been strong political supporters of maintaining the system and opponents of the privatization. There will have to be a gradual approach to outsourcing what has been a primary bastion of the Japanese economy." Japanese society, she adds, places value on consensus. It will take time for all the stakeholders in the post office system to move together toward change.


According to Wharton finance professor Ayako Yasuda, the September election signaled a major shift in the political economy of Japan. "The Koizumi victory made it clear to everyone that the constituents that benefited from the old cooperation between political elite and interest groups lost. The constituents who won and supported Koizumi want Japanese firms and banks to be internationally competitive and accountable to shareholders."

The election was also rooted in generational change, she notes. "It arguably marked a tipping point in the demographic shift. The members of the younger generation know they will no longer benefit from the old regime, and for the first time they outnumbered the old guard."


Koizumi's mandate on postal reform may also give him additional power to continue to force change in other Japanese financial institutions, including the banking sector. "The political message here again is that credit allocation in the future will become more efficient in Japan, and banks who fail to see this sea change will fall behind others," Yasuda suggests. "I think this makes it easier for the surviving banks today to more aggressively transform themselves."


Meanwhile, Wharton adjunct management professor Adrian Tschoegl says the value of the postal savings system will be difficult to determine. "The biggest assets are holdings of government bonds which are the equivalent of treasury bonds, plus other bonds issued by various quasi-government and state-owned institutions. There's a question about what those are worth."

As a result, Tschoegl wonders whether outside investors will have much interest in buying a stake in the privatized system. "All the assets are government guaranteed, but that just means the government is on the hook for making good on any shortfall between the value of the assets and the value of the liabilities. What would someone pay for this portfolio? I just don't know how solvent they are."


Another problem is that the savings tend to be based in relatively short-term products while the assets are in long-term bonds. If interest rates rise, he says, that could trigger an interest rate mismatch. "There are a lot of quite thorny practical problems in the privatization that we are nowhere near knowing what to do about. Add in all the politics and the employees whose jobs are at stake, and I'm not sure that what we will see in 2017 is what is envisioned right now."


Changes in the Pension System
Preserving the assets in the postal reform system are critical. Many members of Japan's increasingly elderly population rely on them as the government and private pension systems have come under pressure during the long period of financial stress. Like the United States and Europe, Japan faces a growing elderly population, with fewer workers coming up to pay into state-run pension programs. By 2025, 28% of Japan's population is expected to be over 65 compared to 12% in the United States.


In 2004, the government announced that pension system contributions would rise every year until 2017, when they will stay at 18.3%. Now, the figure is 13.58% of a person's income. Benefits would be decreased to 50.2% of income from 59.3% over the same period. Corporate pensions, too, have been under stress as Japan, Inc. endured the long economic slump, according to Sarah McLellan, an equity analyst at Morgan Stanley in San Francisco and author of a 2004 working paper titled, Corporate Pension Reform in Japan: Big Bang or Big Bust, written for the Pension Research Council at Wharton.

To boost private pensions, the government introduced another financial reform in 2001 creating defined contribution (DC) retirement savings plans, similar to 401(k) programs in the United States. The plans met with limited success at first, but are beginning to increase, with 1,566 plans now in effect.


McLellan says the slow uptake was due mostly to low contribution limits, the equivalent of $4,000 for workers at companies without a pension program and $2,000 for those at a company with an alternative plan. "My view is that the introduction of DC plans will slow down and remain a vital part of increased employee self-responsibility for post-retirement savings, but will not take over the system."


She also notes that traditional defined benefit plans are not concentrated in declining or union-intense industries, like autos and airlines, so the incentive for firms to walk away from pension obligations in a restructuring is not an issue the way it is in the United States. Major U.S. firms, most notably airlines and steelmakers, have unloaded some pension obligations by filing for reorganization under bankruptcy laws.


While Japanese companies continue to struggle to reduce liabilities on their balance sheet, McLellan says most have already gone through the pain of marking down their expected return on pension assets and are adjusting to new pension accounting rules under the International Financial Reporting Standards. "As the working-age population continues to decline in Japan and companies seek new ways to attract and retain talent, pensions can assume an important role in employee recruitment, retention, and total compensation," McLellan suggests. "Increased pension options provide mechanisms to promote labor market efficiency and social welfare."


Slow, but Firm, Steps Forward
Changes in the pension system, along with the monumental postal savings reform, are part of continued efforts to make structural improvements in the Japanese economy. "It seems Japan has, for the last decade, slowly and steadily moved in the direction of financial system reform," says Mitchell. "I think anybody who understands the role of financial markets would agree they are moving in the right direction."


Reform, she adds, is never easy. "With reform, comes dislocation. Consequently, the government has tried to weigh the speed of reform against the pain of dislocation and has stepped gingerly. Now that Koizumi's recent reelection was such a resounding success, it's got to happen."

SOURCE : Wharton

[raka_21]

read this article "Recycling dollars on a Treadmill" by Swaminathan S Aiyankleshar Aiyer(of Swaminomics TOI fame) in Economics Times..

below is little summary, for rest of the article see newspaper of 21st



As we know that there is a huge inflow of dollars in Asian markets, so Asian counteries are recycling the dollars by buying US treasury bonds.But FII's are recycling those dollars back in Indian markets.So ultimately Asian markets are getting even bigger owners of US treasuries and The Americans are becoming huge owners of Asian Equites.

But the actual problem is that we Asians are a tiny owners of US treasuries(cos of huge size of American Economy) and the Americans(FIIs) are becoming majority shareholders of major Asian companies.Asian countries have sm $2000 billon of forex reserves making a tiny fraction of % 8 trillion of US treasuries.Whwre as FII hold of major compnies in Asia(infi, ICICI, Satyam ,HDFC,Samsung etc) is abt 50-75% and it is ever increasing.

consequences:
1: Huge deadweight loss: recycling Dollars entails significant transaction costs.
2: RBI's aim for safe heaven for forex reserves is jeopardised.the in exorable rise of US foreign debt increases the risk of dollar collapse of Asian forex reserves held in safe US treasuries
3: huge loss as return on US treasuries will be far less as compared to the return on Asian Equities
4: Strlisation losses
5: foreign ownership is rising fast which may cause a nationalist backlash

Another thing he adds in last para
What will happen if recycling stops even temporarily??The lack of Asian money will send US bonds crashing and the lack of FII inflow will send asian markets crashing.



p.s : Good work Teesra Banda

[teesra_banda]

KOREANS are sometimes accused of suffering from a bali, bali or quick, quick complex; of sacrificing quality and thoroughness to speed and a driving desire to achieve. In Hwang Woo-suk, heralded as the world's leading stem-cell researcher, this trait has resulted in, at best, sloppy science; at worst audacious fraud.

Dr Hwang, of Seoul National University, made headlines earlier this year when he published a paper in which he claimed to have derived lines of stem cells from cloned human embryos. Stem cells have not undergone the epigenetic modification that tells them to specialise (see article), and can thus turn into any cell type. Dr Hwang's paper, published by Science in June, seemed such an achievement because it was the first to show that, in many diseases, patients might in principle be treated using cells containing their own DNA. Such treatments would, the idea goes, avoid rejection by the patient's immune system since they would not be recognised as foreign.

Rumours that the results were false have been circulating for weeks. A South Korean television station investigated the allegations, but the resulting programme was initially withheld from broadcast because of the strength of public support for Dr Hwang. Suspicions were fuelled still further by the appearance of anonymous blogs on a website frequented by young South Korean scientists. These questioned the authenticity of some of the pictures contained in the seminal paperin particular, the DNA fingerprint analyses used to verify the results of the experiments. The DNA fingerprints from some of the cell lines appeared to match the patients' cells too perfectly and could therefore be duplicates, rather than having come from separate experiments.
Sauve qui peut
After learning of these concerns, the paper's second author, Gerald Schatten of the University of Pittsburgh, asked for his name to be removed from it. A couple of days later, on December 15th, another co-author, Roh Sung-il, claimed Dr Hwang had admitted falsifying data on nine of the 11 stem-cell lines that formed the basis of his findings. Despite being on the list of authors, Dr Roh, who is the head of the MizMedi Women's Hospital, an infertility clinic in Seoul, and who had collaborated with Dr Hwang in the past, said he was not aware of the paper until after it had been published. He added that, because of concerns that someone might steal their scoop, it had been written by Dr Hwang and Dr Schatten only.

In a televised press conference on December 16th, Dr Hwang responded by denying the accusations vehemently. However, he did acknowledge fatal flaws in the paper and asked for it to be withdrawn, something Science will do if all 25 co-authors agree. He also offered his own interpretation of the too-perfect results: that the stem cells were somehow mismanaged, or possibly switched. He conceded that there were only eight cell lines when he offered the paper for review, but said his team created three more lines later.
The presence of the duplicated photos is more difficult to explain. Initially, Dr Hwang presented this as an administrative mistake. However, a junior researcher on the project, Kim Sun-jong, has said his boss ordered him to manipulate photos of two stem-cell lines and present them as 11 separate colonies.

The case has created a sensation in South Korea, where Dr Hwang had been celebrated as a national hero for his achievements in human and animal cloning. These achievements are now coming under scrutiny. Indeed, an earlier paper which announced that Dr Hwang had cloned human embryonic stem cells, published in Science in 2004, is already under attack. The same website that carried details of problems with the 2005 paper is now reporting that a photograph in the 2004 paper is identical to that of a human embryonic stem cell made by the MizMedi hospital and submitted to another journal.

Controversy is also brewing over the culpability of the government. At the centre of the storm is the presidential adviser for science and technology, Park Ky-young, a molecular biologist who was a co-author of Dr Hwang's paper in 2004. The South Korean government has put more than 26 billion won ($26m) into Dr Hwang's research, and is now being blamed for not keeping a closer eye on its protg.

The bali, bali attitude has surfaced in South Korean science more than once in recent years. In November 2004 the International Atomic Energy Agency expressed serious concern that some of the country's scientists had conducted experiments to enrich tiny amounts of uranium. They did so without the knowledge and consent of anyone other than the head of the laboratory where the work was done. And, just last month, Dr Hwang admitted, after more than a year of denial, that he had violated international ethics guidelines by using eggs from two female scientists who worked in his laboratory.

Seoul National University and the University of Pittsburgh are now investigating Dr Hwang's work. He has said he will prove the authenticity of his findings by thawing five remaining frozen stem-cell lines, a procedure he estimates will take around ten days. The schedule could prove tight. Given the weight of the accusations, and despite the Korean temperament that favours quick results, now would be an ideal opportunity to practise patience.

Source : Economist

[shekhar (Shekhar Malik)]

Campus Confidential
Four top-tier B-schools don't disclose grades. Now that policy is under attack


Students say they serve an important pedagogical purpose, allowing them freedom to choose difficult electives, such as asset pricing or advanced microeconomics, without fear that a poor grade will kill job prospects. Pass/fail grading, which allows undergrads to take some classes without endangering their grade point averages, serves a similar purpose. "It allows people to explore," says Christopher Morris, director of career management at Wharton. Nondisclosure also fosters a more collaborative culture, supporters say. "If you were to disclose, it would put some people on a more competitive ," says Serhan Secmen, student president of the Wharton Graduate Assn.

SOURCE : BUSINESSWEEK

i find this point of students pretty convincing. plus i believe that the non-disclosure will give everybody in the class an equal opportunity to have a crack at the best of the recruiters rather than recruiters practising discrimination on the basis of grades. the recruiters take the tests as suited to their needs & eventually they'll be able to get hold of the correct candidate. so why deprive the so-called low graders of the equal opportunity.

plus this non-disclosure also supports the viewpoint that 'marks/grades are not the perfect indicators of one's ability'. one may have low grades due to various reasons out of his/her control.

non-disclosure holds more water in case of top of the league schools. recruiters must know & they know that the class of Harvard,Stanford,Kellog's,Chicago etc. is already at a level much much higher than other schools, thanks to the admission criteria of these schools. and what they'll get out of these schools will be the employees of the 'highest quality' across the globe. so putting some extra effort in analyzing all the students starting on equal footing is a very small price to pay in view of the returns which they'll get.



Regards
SHEKHAR

[govi (Sachin .)]

Introduction
The Indian economy currently portrays a mixedpicture, with few areas of concern and many more areas of positive achievements. However, the crucial and most unambiguous fact is that currently the positive trends (both statistical and qualitative) clearly dominate over adverse developments.Consequently, foreign businesses, investors, India-watchers and observers are upbeat on the short-term prospects of the Indian economy. The India-story is gaining wide currency in international business and policy circles and the future trajectory of the economy is being viewed with lot of interest and optimism.
This brief note aims to review the latest trends in major macro-economic indicators and comments on the emerging outlook and prospects therein.

1. Domestic sector developments

GDP growth - entering a high growth phase
As far as GDP growth trends are concerned, the latest estimates show that the GDP growth during the 2005-06 (April-September) has been 8.1 per cent compared to 7.1 per cent in H12004-05. With such a strong performance in the first half, the current year is expected to clock a GDP growth rate of 7.5 per cent. Also, (with the exception of mining), all the sectors from agriculture to services have recorded higher growth during the current year, implying that the growth is genuinely broad-based.
With the GDP rate average over 7 per cent in three successive years since 2002-03, the Indian economy has entered a high-growth phase. The major challenge before us is to make this rate sustainable and eventually transform it into a 9-10 per cent annual growth.
Agriculture - still a weak link
Decomposing further the GDP growth, agricultural growth is marginally higher at over 2 per cent, and the overall food grain production during the current year may touch 208-210 million tonnes. However, the recent heavy downpour has adversely affected the Rabi sowing of rice and coarse grains in South India.
Agricultural reforms have always wanted, especially those which can facilitate entry of private sector in agriculture in - production, processing, marketing, exports, etc. Changing the legal apparatus of contract farming, movement of food grains, marketing of agri-produce, is being increasingly debated and some policy action ought to be seen in the coming months, in some states.
Industry - on an up swing
Turning to the performance of the industrial sector, the latest IIP data indicates that industrial production has gone up by 8.4 per cent so far till October 2005, over and above the 8.7 per cent rise last year during April-October. In the manufacturing segment, although up only marginally to 9.6 per cent in the current year, the rise is from a very high base of 9.1 per cent last year. The very low growth in mining and a slowdown in electricity generation have prevented the IIP from clocking at a higher growth rate.
Industrial growth in current year
Sector
% Change (April-Oct 04)
% Change (Apr-Oct 05)
Mining
5.3
0.7
Manufacturing
9.1
9.6
Electricity
7.1
5.2
General IIP
8.7
8.4
Source - Industry Ministry, Government of India
Disaggregated data points to a wide spectrum of high-growth segments, particularly capital goods, textiles, beverages, cement, chemicals, steel, etc in the first half of the year (April-September).
High-growth manufacturing sectors
Sector / industry
% Change (Apr-Sept 04)
% Change (Apr-Sept 05)
Beverages
9.2
16.9
Cotton textiles
7.9
11.2
Textile products
6.3
20.3
Chemical products
18.8
13.0
Machinery equipment
24.9
9.2
Transport equipment
11.7
12.1
Capital goods
13.8
13.9
Consumer durables
16.4
12.8
Consumer non-durables
8.2
15.6
Steel
5.6
6.0
Cement
8.0
9.9
Source - CMIE, Monthly Review, December 2005.
Even in the latest CII-ASCON Survey, of the 140 sectors covered, 120 sectors recorded positive growth, of which 70 displayed double-digit growth till September 2005.

1. Industrial growth is clearly on an up swing for the last two years, in the range of 8-9 per cent, indicating that the momentum is likely to be sustained in the medium-term.

1. The current growth is a combination of investmentas well as consumption-driven growth, with consumer goods segments as well as capital goods segments displaying high growth.

CONTINUED

[govi (Sachin .)]

Infrastructure - needs to attract investment flowsLets us review the performance the infrastructure (including energy) sectors. Over the years, one of the binding constraints on the economy's growth momentum has been the below-par growth in most of the critical infrastructure sectors - power, crude oil, railways, coal, ports, etc. The following table indicates the mixed performance of the different infrastructure segments:


Growth of infrastructure Sector
% Change (Apr-Sept) 04
% Change (Apr-Sept) 05
Electricity
7.8
4.7
Coal
6.3
5.3
Crude oil
4.3
-4.9
Refinery throughput
7.3
-0.7
Port cargo
9.8
13.6
Railway freight
6.9
10.1

1. 1. One of the most crucial issues in infrastructure development and management, has been - How best to attract the much-required private sector investment in these sectors? While the record so far in the power sector has been far from satisfactory, the road-building programme under the NHAI has been a reasonably good example of a public-private partnership arrangement.
   
   

1. 1. However, there are stumbling blocks being encountered by the private sector in road-development as well.
   
   

1. 1. Also, it is possible that the latest Model Concession Agreement (MCA) induces the private sector to enhance the proposed quantum of investments.
   
   

As far as the investment scenario is concerned, there is an evidence of rising aggregate investment, as reflected by the following indicators:

1. 1. The CMIE Capex Survey for October 2005 shows a 39 per cent rise in proposed investments over last year.
   
   

1. 1. Resources raised by the primary market during April-November 2005, at over Rs 40,000 crore, are higher by more than 15 per cent over last year.
   
   

1. 1. The non-food credit (as of mid-November) has been 31.4 per cent, on top of a 31.2 per cent rise in the last year.
   
   

1. 1. Reportedly, top Indian corporates have investments of Rs 320,000 crore spread over next 12-18 months in the pipeline, of which 50 per cent are likely to be in greenfield projects.
   
   

1. 1. Foreign investments (FII plus FDI) have risen significantly to about $15 billion in the current year (2005). This clearly reflects the short-term as well as long-term optimism of overseas investors on the prospects of the Indian economy.
   
   

1. 1. As mentioned in the previous section, capital goods production has been on the rise. Simultaneously, capital goods imports have also gone up by about 42 per cent in the first half of the current year, over and above 26 per cent growth in such imports, recorded last year.
   
   

However, the overall implementation rate of the proposed investments has rarely gone above 40-45 per cent, and as such a lot of Investment Climate Reforms by the government and related agencies, are eagerly awaited by the industry, in terms of - starting a business, closure, registration of documents and a host of procedural uncertainties. India still ranks abysmally low on the ease of doing business worldwide, according to the latest World Bank survey.
Interest rates - likely to remain subdued
Interest rates, according to both, the FM and the RBI, are not likely to firm up in the near future. However, given the magnitude and direction of the investment-demand in the economy and considering the inflationary expectations, the low and stable interest rate scenario, may not last for a long time. It needs to be noted that already, the consumer durables and housing loan rates have started rising, in response to growing demand
Inflation - within control
Inflation touched a monthly low of 3.6 per cent in June 2005 but has been rising mainly due to the continuous increase in international crude oil prices, and is currently at 4.7 per cent. Although, at the current level, it is lower than the last years' levels. The demand-pull factors are likely to hold sway and the average rate of inflation is expected to be 5.5 per cent for the current year.
However, due to the less-than-full impact of petroleum price pass-through, the policy makers have managed to keep the inflation rate relatively less volatile. The non-fuel group's rate of price-rise during the current year, has also contributed to overall stability of the aggregate inflation as undirected below:
Inflation rate composition
Sectors
% Change (Apr-Oct) 2004
% Change (Apr-Oct) 2005
Primary articles
4.7
1.5
Fuel group
9.2
10.7
Manufactures
6.8
3.6
All commodities
6.8
4.6
Source - CMIE, December '05
Deficits - a cause for concern
One of the most critical variables is the state of central government finances. The mid-year review of the finance ministry released recently, has dealt at length with the current and emerging fiscal scenario. On the revenue side, while tax collections show a healthy growth in April-September 05, the non-tax revenues have fallen marginally. Total revenue expenditure has gone up by 12-13 per cent, while capital expenditure has declined steeply by more than 15 per cent.
Consequently, none of the FRBM targets for the mid-year have been met and all the three deficit indicators (revenue deficit, primary deficit and fiscal deficit) have once again become a cause of concern. Up to September 2005, estimated revenue deficit is more than 68 per cent of the budget estimate and fiscal deficit is also more than 55 per cent of the budget estimates (mid-year review, finance ministry, December 05)
External sector profile - displaying vigorous growth
The major achievement of the economy in the last 15 years of post-reforms has been the sea change in the external profile, comprising growing exports, stable currency, steady accumulation of Forex reserves and secular decline in the external debt-service ratios.
During the current year so far, the external sector of the economy continues to display the same dynamism and vigour, though the growing current account deficit (CAD), has become a cause for concern compared to a surplus situation, a year ago.
External sector profile
Item
Period
Unit
04-05
05-06
Exports
Apr-Oct
% Change
27.8
22.2
Imports
Apr-Oct
% Change
35.3
33.1
Current account balance
Apr-Jun
$ bn
+3.0
-6.1
Reserves
End-Oct
$ bn
115.6
137.3
Source: Mid-Year Review, CMIE
As far as exports are concerned, the present growth of about 22 per cent is over and above the high growth of 28 per cent during April-October last year. The buoyant growth is a reflection of global economic growth (averaging about 4 per cent in the last two years), and the increasing outward orientation of Indian corporates. Other highlights of the recent export performance are:

1. 1. Continuation of healthy growth in manufacturing, especially chemicals and engineering goods.
   
   

1. 1. Gems and jewellery plus petroleum and allied exports, both have displayed impressive performance, and together contributed more than th of the total exports.
   
   

1. 1. Europe and Asia continue to be the main destinations of export-growth in the last two years, to countries such as South Africa, China, Hong Kong, Singapore, South Korea, UAE, etc. This indicates the growing tendency of the Indian industry to explore and tap newer markets abroad by broad basing export growth.
   
   

The growth in imports during the current year has been much faster than the export-growth due to POL imports, at higher prices since June '05. (The average price of oil from Dubai was almost 50 per cent higher in April-November 2005 at $52 per barrel). However, even the non-POL imports have grown at 28 per cent, indicating rising aggregate domestic demand:
Trends in imports
Item
US $ mn
2004 (Apr-Oct)
US $ mn
2005 (Apr-Oct)
% Rise
2004
% Rise
2005
POL
17242
24915
56.3
44.5
Non-POL
39301
50345
27.7
28.1
Total
56543
75260
35.3
33.1
* It's likely that 2005-06 may end with meeting the government of India's export target of $93 billion.
Mainly because of the high trade deficit, the current account position underwent a radical change in April-June'05, although remittances did display robust growth:
Current account balance (CAB)
Item
$ mn (Apr-Jun) 04
$ mn (Apr-Jun) 05
Trade deficit
-51,74
-15,809
Invisibles
8,564
9,608
Current account balance
+3,390
-6,200
However, since the bulk of current account deficit comprises non-petroleum imports, there is no major cause for concern, as it is still in the prudent range of about 1.5-2 per cent of the GDP.
Rupee - expected to weaken
As regards the outlook of the rupee, the CAD will exert some pressure on the external value of the currency. Recently there has been a mild depreciation of the rupee vis--vis the US$, partly as a result also of the growing strength of the dollar in the international markets. The long-term outlook for the rupee is of a creeping depreciation against the US$.
Concluding remarks

1. The Indian economy is currently well poised for sustaining the present trend of about 7-7.5 per cent GDP growth.

1. If oil prices do not scale newer heights, the inflation rate will continue to be in the acceptable range of 5-5.5 per cent.

1. Revival of the manufacturing sector especially the expenditure and investment plans of leading industries augur well for the investment-led economic growth.

1. Upturn in investment is clearly evident from various indicators.

1. The external sector of the economy remains healthy and robust, with strong export-growth, stable rupee and rising reserves.

1. However, the infrastructure inadequacies continue to haunt the development process.

1. Another binding constraint is in the form of the weak financial position of the central government, with deficit targets unlikely to be met.

1. Overseas-investors' perception is however getting stronger, as they have long-term positive prospects in several emerging sectors of the economy such as - retail; ITES and BPO / KPO, telecom, insurance, realty and construction.

It is hoped that the current optimism within and outside India, do not induce the government to become complacent and delay the much-desired reforms in electricity; labour laws; subsidies; investment climate reforms, etc and disinvestment of PSUs

SOURCE: TATA WORLD

PS: Sorry for not formatting the data in tabular format but the article makes a good read to get a macroview of the trends and prospects

[dreamworkers]

Very interesting thread... Teesra Banda...accept my salutation. Keep it up

[govi (Sachin .)]

CASE STUDY
Nurturing Customer
Loyalty: Bausch &
Lomb Eyecare India
J.P. Singh
Managing Director
Nurturing Customer Loyalty: Bausch & Lomb Eyecare India ___
Theres a scene in Kal Ho Na Ho, a popular Hindi movie where Naina meets her prince charming for the first time. He removes her spectacles and this transforms her life entirely. For some, this is an
innovative new script depicting the confident modern woman. At Bausch & Lomb (B&L;), we understood the psyche for years right down to the name. Five years ago when B&L; were creating a profile of their target customer, we realized that we could not keep referring to our target customer during a communication brief with an agency, as Oh! She is seventeen years old, She is the girl next door and She goes to parties. So we gave her a name, Naina. Our advertising depicted a bespectacled Naina gaining confidence after replacing her glasses with lenses. This assumption was based on
psychographic evidence of confidence levels that we compiled based on our database. Thus all our communications started to portray Naina as more outgoing than a spectacle wearer. This is just
one of the examples of how direct marketing helped us to fine tune our communication to strike the right chord with our audience.
PRODUCT RANGE
We are a global eye care company dedicated to help consumers see, look and feel better through innovative technology and design. In India B&L; has three product lines.
Vision Care
This division deals with lens; lens and eye care products, and vision accessories.
Cataract Surgical
This division deals with intraocular lenses used in the cataract surgery and other ophthalmic surgical products.
Refractive Surgery
This is otherwise known as lasik surgery where eye defects are corrected using laser treatment.
Worldwide B&L; also deals with ophthalmic pharmaceuticals, but this division is not currently functional in India. This wide Customer Responsiveness: A Fad or a Strategy? ___ ranging product portfolio allows us to cater to customers spanning an age group of 1590.
OFFERING THE RIGHT PRODUCTS TO THE RIGHT AGE GROUPS
The nature of the ophthalmic business allows us to start interacting with our customers from an early age. Though not available in India, our pediatric ophthalmology division has more than twenty products worldwide. For the teenagers who want to replace their spectacles we offer contact lenses and lens care products. Once this teenager starts earning and her vision stabilizes she can either choose our value-added lenses or get a refractive surgery done for permanent correction of her eye defect. For customers who are 40 years and above in age, B&L; offers multi focal lens which is suitable for both reading and distant vision. For senior customers (5070), who develop a cataract and require surgical correction we have intraocular lenses, which are inserted into the eye during the surgery. Simply put, we offer total eye care solutions right from infancy to old age.
DIRECT MARKETING TO RETAIN BRAND VALUE
We had strong reasons as to why we chose direct marketing over mass media advertising.
Niche Products
Our target audience was only 17% of the total population who needed vision correction. Further only a small percentage of this 17% would ultimately use our products. Hence we chose direct marketing as the active wastage element would be higher in mass media.
Competitions Failure
Analyzing the market scenario we found that our competitors who had embraced mass media advertising to market their products had failed miserably. One of the companies closed down their operations while the other company was fighting for its survival. This gave us a clear indication that mass media advertising was not beneficial to a company of our nature. Nurturing Customer Loyalty: Bausch & Lomb Eyecare India ___
Limited Resources
Apart from the cost benefit factor in direct marketing we also did not go in for mass advertising because in the initial stages our pockets were not deep enough to sustain a multimedia advertising campaign.
Interactivity and Accuracy
Direct marketing also allows us to maintain a two-way interaction. We get a personalized feedback, which is not possible in the mass media. The second criterion is accuracy. Though the press also gives a response, feedback from direct marketing is more direct and the sample data is much more accurate, faster and indepth.
CREATING THE DATABASE
A great database is essential for any direct marketing campaign to succeed. Also at B&L; we believe that, the earlier the target audience is aware of the product the easier it is to convert them into loyal customers. We start our relationship with our potential customers through eye screening camps we conduct in schools and colleges. The whole vision screening process is outsourced and currently we reach out to three to four lakh students annually. We use the services of two event management agencies, Kidstuff and Settings, for conducting the ground events on our behalf. We also collaborate with a NGO
called VIEW (Vision Improvement Experts Working Council), who guide us on eye care processes. A basic screening for a student, on average, takes about ten minutes. If the screening reveals that the
child is suffering from a vision defect we get in touch with the students parents and advise them to visit an eye care practitioner. This is the first step in identifying our customer and getting in touch
with them.

Continued

[govi (Sachin .)]

KEY LEARNING # 1

Identifying the Right Customer
These processes help us in identifying the right target customer before we actually start communicating with them. Our surveys have revealed that 3540% Customer Responsiveness: A Fad or a Strategy? ___ of the Indian population suffer from vision defects and need correction. Vision defects in this context refers only to the refractive error in eyesight, which would need contact lenses or spectacles to correct it. The data further revealed that of 35%, 17% of the students were aware that they needed vision correction and had taken steps to rectify it. The other 17% were not aware of their eye condition. This data also exposed that 50% of the Indian population who needed vision correction were not aware of their condition. This is a huge percentage and hence capitalizing on this we decided that the right method was to attract the customers at a young age and create an awareness of our products. Another objective of vision screening in schools was to make them aware of eye care, defects and correction.

Outsourcing of Non-core Functions
We outsource the event management and maintenance of our database for two reasons. Firstly conducting events and maintaining the database are not our core business functions. Secondly outsourcing is cheaper because of economies of scale. The agencies have the infrastructure and also the core competency to handle and manage data, which we as an organization may lack. If we were to do it ourselves we would need to build additional infrastructure and hire more people. This would prove to be expensive for us.

MAINTAINING THE DATABASE
For direct marketing to be effective it is essential to maintain and update the database regularly. We have two main sources for data collection. One is the raw data we get from Kidstuff and Settings from the eye screening done at schools and colleges. The other is a more refined form of data from the Fresh Vision Club, which is an exclusive club for all users of Bausch & Lomb contact lenses and lens care products. We also have an online Fresh Vision Club where people can register and avail our services. Currently we have 60,000 members in the Fresh Vision Club. The maintenance of the database is done by our direct marketing agency and is monitored by our in-house marketing team.

KEY LEARNING # 2

Data Loss, Retracking, Refreshing the Core
Two years ago we lost half the database. The loss was not an overnight feature but a Nurturing Customer Loyalty: Bausch & Lomb Eyecare India ___ culmination of periodic losses over three years. Retracking showed that almost 50% of the data had become redundant because people had moved and we had not carefully tracked their movements and updated the database. Hence we had to refresh the core both in the raw data given by Kidstuff and Setting and also in the refined data that we get from our Fresh Vision Club members. From then on we have been more careful and regular in updating the database.




Analyzing the Database
The raw data is collected by the direct marketing agency and the clustering or data managing and formatting is done by them. Once the data is grouped into clusters, B&L; works along with the agency to make it usable for direct marketing.

KEY LEARNING # 3

Choose the Right Profile This exercise also helps us to know our customers exact profile such as age of entry, habits, personal preferences, social preferences and so on. This is an Indian initiative and the designing of the parameters for deprofiling has been adapted to suit this country. This also helps us to fine tune and customize offers to get the best results. Though we have deprofiled we do not claim that we have selected the most important parameters or customized it to a large extent. But it helps in an
overall profile mapping. It has also helped us in developing our recent direct and mass media campaigns. Information in terms of profiling, getting the hookwhich is confidencefor all our communication was pulled out from this database.

Hit the Bulls Eye
The effectiveness of direct marketing is directly related to the quality of communication sent to the customer. Hence our direct marketing agency is involved right from the strategy stage for any
new product or offer. The agency and the marketing team would sit together, discuss, debate and agree upon the right mode to be used to promote a particular product or an offer.

KEY LEARNING # 4

Choose the Right Agency Since the direct marketing agency does the data analyzing for us, it is important that they understand Customer Responsiveness: A Fad or a Strategy? ___ our business and our customers perfectly. Any mistake in the analysis of the data can prove disastrous for the company. Hence
it is important that we partner with the right agency. Basically in an event management agency we look at their credentials in that area of expertise, previous experience, nature of organizations they are working for and the infrastructure they have to conduct a show at ground level. In our direct marketing agency we give priority to the ability to create and innovate and also have the strategic ability to debate and interact and bring out thoughts. FCB Ulka, our direct marketing agency does all the newsletters and mailers and these are in turn monitored by our in-house marketing people.

Timely Communication To convert or to retain a customer we need to keep in touch continuously throughout the year in a phased manner. We do this through the first physical contact during the screening in the schools and colleges. Subsequent communication happens through quarterly newsletters and direct mailers. On an average we have 67 contacts a year. In our line of business, festivals and vacations are the peak buying period and we highlight this period further with discounts and offers. Traffic goes down during exams and certain other periods. But of late this has evened up. So in our communication we have stopped looking at these peaks and evens and have taken a base right through the year to maintain a continuous and steady brand presence.

The Way Forward
Direct marketing has helped us to carve out a presence and build a substantial market share with our monetary limitations. Though we have recently ventured into mass media advertising, it was direct marketing, that gave us the breakthrough and brand awareness in the market place. It has also helped us to stay in tune with our customer s pulse and design right offers for them.

[maverik_2204]

Hi folks..
Kan any1 letme know the internet URL where i Kan learn all about commerce.. Like wht is sensex,what is Dollar rate , GDP,FII,FDI.. My knowledge about these things is almost zeroo ??:...... I'll be glad if any1 kan suggest me intenet website or a book to learn above details ..plzzzzzzzzz help
regards

Harish:

[amit_taneja]

FOR many people, driving is bedevilled by traffic, potholes and parking problems. Hong Kong's wealthy motorists certainly get scant pleasure from their powerful Audis and Ferraris, given the city's hills, winding lanes and endless roadworks. But now the city also harbours an antidote. Nestled among the skyscrapers is the Sideways Driving Club, the world's first virtual racing centre, where speeds of more than 300kph are not only possible, but required.
The club's 12 Australian-made simulators are designed as training tools for real racing car drivers. With a narrow fibreglass cockpit, realistic steering system and a calibrated brake pedal, they mimic the feel of a genuine car, while a video screen shows the track and headphones provide realistic sound. The simulators can be programmed to drive like Formula One, Porsche Carrera, Le Mans or rally cars and drivers can choose from 250 courses, including all of the world's Grand Prix tracks. Customised software means all 12 cars are networked, allowing people to race each other and to add features such as pit stops and even the impact of worn tyres and fuel loads. Proof that this is not merely a souped-up arcade game lies in the fact that professionals are coming to Sideways to train, including Darryl O'Young, who won the Grand Prix in Macau last November.
With Shanghai now hosting a Formula One race each season, Carsten Widderich, a Hong Kong businessman and racing fanatic, decided to tap into the growing regional popularity of motor sport. As a former professional motorbike racer in his native Germany, Mr Widderich knew that many drivers, mechanics and enthusiasts owned a simulator or two for private use. Nobody, however, had thought to turn this into a proper business aimed at the corporate entertainment marketand this led to the birth of Sideways in December 2004.
Around two-thirds of the club's turnover comes from banks, brokers and companies. Events typically include up to three hours of driving; they also serve as a workout, since club driversjust like real racerstypically lose a litre of sweat per hour. The club houses a bar, so drinking and driving is legal, though most customers quickly become too competitive to risk getting sozzled. Mr Widderich does not advertise, but says word of mouth has led to such interest that the club has repaid its $300,000 start-up costs in its first year.
The next step is to franchise the concept internationally. Sideways already has a partner to open a club in London's financial district this year and is planning sites in Shanghai, Beijing, Singapore, Seoul, Taipei and Kuala Lumpur. As a tip to new drivers, Mr Widderich says in certain races, like snow rallies, the fastest way to get around corners is to slide into them sidewayshence the club's name. An interesting thought, but best not tried on the real roads.
Source : Economist

[amit_taneja]

Predicting the unpredictable
Jan 10th 2006 | FRANKFURT
From The Economist Global Agenda

Who needs forecasts? What we want is certainty
THE season for making predictions is coming to an end. According to most analysts we are set for a year of robust equity markets, with the Dow Jones Industrial Average, which passed 11,000 this week, ending up at around 12,000 and the S&P; 500 at 1,400, while the FTSE 100 and the Dax 30 are generally expected to rise to around 6,000 and 5,800 respectively. The euro and the yen will strengthen against the dollar, but not dramatically, while inflationary pressures will force dollar and euro interest rates to rise by a percentage point or so.
Most investors apart from day traders have already decided how to allocate their assets in 2006. Buttonwood can only warn them what earth-shattering events might jerk prices up and down between now and 2007 and knock their carefully identified trends off the screen: for example, a Middle East crisis that redoubles the oil price, or a breathtaking free-fall of the dollar or the Dow. We have seen such things before and we are bound to see something like them again. Prices never go where they are expected to. Benoit Mandelbrot, who created those lovely fractal designs with chaos equations, regards marketslike plants and coastlinesas successions of self-similar but endlessly complex patterns. Prices are as likely to go to 1,000 as to zero, he said in a recent interview.
Seen through those eyes, market forecasts are essentially futile; and they are many times more likely to be wrong than right. But that doesnt prevent more or less every analyst at every brokerage firm or bank from giving his pennyworth at this time of year. Its whats expected of him.
Hats off then to Norbert Walter, chief economist at Deutsche Bank, for going completely off the rails and writing about himself, and his theories on managing a team of bank economists. Good management requires individuals that employees can look up to as role models. Dedication at work is not enhanced if the boss is often late, loves meaningful breaks and does not meet his deadlinesHe should use strong verbs and clear sentence structures and thus be a style guide for his employees.
Most analysts, though, stick to predicting where the Dax or the Dow will be in 12 months, along with the main interest and exchange rates. They have very plausible arguments. Indeed, it is comforting to make believe that the world will progress in linear fashion for the next year. But plausibility is no substitute for certainty.
Naturally, investors want as much hard information as they can get so that the outcome of an investment decision is as certain as possible. One approach would be insider dealing: the achievement of near-certainty by other means. But Buttonwood does not want to encourage such transgression. Even so, he might be able to offer readers some near-certainties for 2006.


For example, it is a sure bet that the volumes of over-the-counter derivatives, interest-rate swaps and options, currency swaps, equity derivatives and credit default swaps will continue to rise over the next 12 months, as they have done since their invention (see charts). It is also near certain that the volume of mergers and acquisitions business and private-equity investment worldwide will continue to rise in 2006.
Banks preparing for the introduction of new capital-adequacy rules (Basel 2) in the European Union and other parts of the world in January 2007 will continue to favour higher-grade credits over riskier ones. That is bad news for smaller, higher-risk companies, which are already feeling the pinch because of declining investor demand for high-yield debt.
Another near-certainty is the continuing flow of investments into global equity and bond funds. It seems there is no mechanism available to check this wall of money, with its tendency to keep investible asset prices unnaturally and perhaps irrationally high. Hence, too, the enormous demand for gold and works of art. A correction is bound to come, but telling when and where is probably a job for analysts at the beginning of 2007.


Meanwhile, there is potential to make money from some of the more predictable events of the coming yearfor example, from a handful of sporting fixtures with almost certain outcomes. Call any good bookmaker and put your money on Oxford to win the Boat Race on April 2nd, Roger Federer to win Wimbledon on July 9th and, if you will forgive Buttonwoods bias, Englands cricketers to retain the Ashes in Australia on or before January 6th 2007.
More seriously, some or all of the following events are likely to happen in 2006, and those who have access to financing from prime brokers could get themselves into position now, if they have not done so already.
First is a fresh accounting scandal in America. The question, of course, is to identify the particular company and its cowboy reporting standards, and to short the stock. Suggestions unfortunately risk a libel suit.
Second is a foreign takeover of a large Italian bank. Take your pick from Banca Intesa, Capitalia, or even the sui generis predator UniCreditand then find some pessimist to sell calls on the stock.
The third likely event is a merger of at least two big European stock exchanges. There are only three to choose from, and each is engaged in ritual courting of the other two. Most canny punters already have stakes in all three, bought at last February's prices.
So much for the money-making opportunities. Sadly, Buttonwood cannot rule out some nasty possibilities, such as a disruptive terrorist attack in a European city, an epidemic of avian flu in Europe or America, another bad hurricane season or an earthquake on the Pacific rim. Financial markets have been remarkably resilient faced with this kind of event. Against a common adversitythe disruption of traded marketsall sides seem prepared to work together. The danger, however, is that several events coincide with, say, a loss of confidence in the dollar, or the collapse of a company involved in global markets. Robust though the financial system appears, it has been tested recently only by operational disruptions that lasted a few hours or days, not by the threat of widespread insolvency.
All the more reason to wish for the forecasts of a reasonably peaceful and prosperous year.
My Comment : Its easy to be foolish when the markets are bullish.

[lass_insane]

Political haze over East Asia vision

Long-term visions of community-building were raised by 16 leaders, including Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao, at the first East Asia Summit (EAS) in Kuala Lumpur in December 2005.


The 10-member Association of South East Asian Nations (ASEAN) was formally anointed the driving force for the journey of all the 16 participant-countries towards the "community." Although the community remained entirely undefined, with not even a political label, the leaders dispersed after ensuring that the pre-summit divergences over its scope did not cause a collapse of the new dialogue itself. Behind the diplomatic scene, China earned praise for keeping the process going, while India was reckoned to be an enthusiastic participant with ideas such as a pan-Asian economic community that could still come into play in the future.

The EAS' idea of a community across the ASEAN terrain, China, Japan, South Korea, India, Australia, and New Zealand is broadly understood to signify the possibility of evolving an economic bloc with strategic and political dimensions as well. However, the larger vision is clouded by the political haze, which the latest series of ASEAN-organised summits has not cleared.

At the core of the process as now visualised is the effort towards an "ASEAN community" involving just the 10 countries of this group. The ASEAN+3 forum, which includes China, Japan, and South Korea, has characterised itself as the main vehicle to realise the long-term goal of a specific East Asian Community (EAC).

This means the proposed EAC will finally subsume the evolving ASEAN community. Much ambiguity, however, prevails beyond this political progression. Noteworthy is the failure of the EAS to clarify whether the EAC will in turn be subsumed by a larger community that all the 16 countries on the scene intend to build over time.

With ASEAN having failed to convince the ASEAN+3, notably China, that the EAC could be upgraded now itself into a community of 16, inclusive of India, the possibility exists for the formation of a plurality of communities. This means ASEAN, ASEAN+3, and EAS existing simultaneously. But what happens if ASEAN should invite the United States, and maybe Russia, to the EAS in the future?

In a telephonic conversation on Sunday, ASEAN Secretary-General Ong Keng Yong, however, said the dominant idea was that of "one common community" in respect of all the 16 participants, although "the destination is not clear yet."
The EAC, at the ASEAN+3 level, had not also been fully defined. As seen from Mr. Ong's perspective, the 16 leaders agreed to complement and also supplement their efforts, currently under way along "parallel tracks."

The U.S. factor

As for the inevitable question about the relevance of the U.S. to the EAS process, Mr. Ong indicated that several ASEAN members were of the view that Washington would continue to be part of the East Asian landscape. It would, therefore, be left to ASEAN to decide whether to stop the EAS "bus" somewhere along the "highway" and pick up the U.S., he maintained.

It is the unresolved U.S. factor, not India's presence, that has given the Chinese foreign policy mandarins much to think about regarding the possible evolution of the EAS process.
There was indeed no disruptive China-India clash of will at the first EAS. More importantly, authoritative Chinese sources emphasise that Beijing is not practising any "Chinese Monroe Doctrine," with or without the "Roosevelt Corollary," of seeking absolute influence over entire East Asia (as alleged in the West).

Speculation about such later-day doctrines flows from China's apparent possessiveness about keeping the proposed East Asian Community as the exclusive domain of the ASEAN+3, despite Beijing's known political differences with Japan, another key player in this forum.
Any other checks and balances? While the overall evolution of the EAS process is still not clear, K. Kesavapany, Director of the Singapore-based Institute of South East Asian Studies, emphasises that ASEAN will remain in the driver's seat in determining the future course of the EAS process.

Source: Hindu

[albatros]

A collection of articles............damn !! and who said there is NO Free Lunch..

thnx ppl...moi need this dose..will try to contribute constructively!!

Cheers!!

[pratset]

hi just found this thread and its very good
keep up the good work people

[govi (Sachin .)]

Ahmadinejads nuclear gamble
Iran has removed the seals on its uranium-enrichment plant at Natanz and says it will resume research on nuclear fuel, ending a two-year voluntary suspension, despite warnings from western Europe, Russia and America. The prospect of some form of sanctions against Iran, either agreed at the United Nations or imposed unilaterally by western countries, is growing. But Iran's president, Mahmoud Ahmadinejad, seems set on a showdown
THE decision by Iran's government to break the seals at its uranium-enrichment plant at Natanz, carried out on Tuesday January 10th, may prove to have been momentous. It marks an end to the Islamic republic's two-year, voluntary suspension of nuclear research agreed with European countries and the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog. It also suggests that President Mahmoud Ahmadinejad is set on a showdownrather than more negotiationwith western countries over his country's nuclear ambitions.

France's president, Jacques Chirac, immediately called the decision, which was flagged last week in a note to the IAEA, a serious error. A spokesperson for the European Union expressed extreme concern that Iran is violating an international agreement not to pursue sensitive nuclear activities, notably the enrichment of uranium. Even Russia, which is seen as an ally of Iran and the country most likely to broker a compromise, said it was worried by the move. On Tuesday Russia's foreign minister, Sergei Lavrov, called on Iran to stick to its international commitments. Such concerns are not limited to diplomats: also on Tuesday, the price of crude ticked up to $64 a barrel; traders said this was largely because of the nuclear impasse with Iran, which is one of the world's biggest oil producers.

Few governments in Europe and America doubt that Iran is using its civilian atomic-energy efforts as a cover for a nuclear weapons programme. Western suspicions are based on Irans record of hiding nuclear work from IAEA inspectors for 18 years until discovered in 2003. Now Iran has spurned a Russian proposal to enrich uranium on its behalf which would have provided material to be used for civilian, but not military, ends. The evidence is piling up that Mr Ahmadinejad is unwilling to compromise.


Last week Ali Larijani, the senior Iranian official in charge of nuclear issues, said his country had a non-negotiable right to resume research. Mr Ahmadinejad added that the Iranian nation and government will defend the right to nuclear research and technology and will go forward prudently. But Iranian delegates then failed to show up to a meeting with the IAEA in Vienna, where they were to explain the purpose of the renewed work. The IAEAs boss, Mohamed ElBaradei, is said to be exasperated by Irans behaviour and its regrettable decision to restart research.

The likelihood of diplomatic confrontation has been growing for months. Iran resumed production of uranium gas in August, to European and American disapproval. Then it announced plans to enrich the gas in centrifuge machines at the plant in Natanz. Efforts by Russian diplomats to broker a compromise have got nowhere. At the same time Mr Ahmadinejad has been taking an ever tougher public stance. He has replaced many moderate diplomats with hardliners. This month he told a gathering of lawmakers that any policy of dtente is not in Irans best interests. He fulminates against Israel with almost clockwork regularity. Last week he willed an early death for Israel's ill prime minister, Ariel Sharon. Previously he called Israel a tumour and suggested it should be wiped off the map or else reconstituted in Europe. In December he called the Holocaust a myth, stirring up wide international criticism.

Worried observers ask where all this is going. Irans case could soon be referred to the UNs Security Council, where sanctionsdiplomatic or economicmay be proposed. Israel worries that Iran could have usable weapons within months. Information seems to be accruing that the Islamic country is up to no good. A British newspaper, the Guardian, last week said European intelligence agencies had produced a lengthy report that fingered Iran (and other would-be nuclear powers) for running a network of traders, phoney companies, state institutions and diplomatic missions to procure the means to develop chemical, biological, nuclear and conventional weapons. Iran is said to be especially active in Azerbaijan, Armenia and Russia as it tries to develop very ambitious missile programmes. The European spies suggested that 16 Russian firms and academic institutes are helpingand profiting fromthe Iranian military effort.

Much seems now to depend on the belligerent Mr Ahmadinejad, who feels he has a mission to reject the Wests frail civilisation and instead, with Irans bumper oil revenues, build a model Islamic country. Though he does not enjoy unanimous support at home, he is backed by the hardline Revolutionary Guardthe same institution that America and its allies suspect of using a civilian nuclear programme as cover to build a bomb. The Guard wields much influence on Irans behalf in next-door Iraq, and could stir up more trouble there for America if the superpower were ever to threaten to clobber Irans nuclear facilities. Abroad, Mr Ahmadinejad seems to rely on tacit support in the Security Council from China and Russia, and may hope that his noisy outbursts against Israel will raise Irans standing in the Arab world.

Source : The Economist