India’s relationship with the US: It’s economic, stupid!

I’ve argued in the past that India’s relationship with the US should not be predicated upon this or that nuclear deal, bromides about shared values and such, and carping about Pakistan every time an Indian official travels to the US.

Arvind Panagriya of the Brookings institution says it much better than I could. He asks what’s in it for the US to have a closer relationship with India, and what that should entail. The answers he finds are that the US interest in India is informed by where it sees the Indian economy, not now (11th largest in the world, behind Brazil and China) but in 15-20 years after growth at 10% per annum.  He also rightly states that there is little the US and Indian governments can do to move the relationship forward, other than cooperation in generic mom-and-apple-pie areas such as environment, clean energy and the like. The real relationship is built on solid economic interests, such as investments, import/export and outsourcing. Panagriya’s last sentence is the most impactful –  ”While continuing dialogue has signalling value, the ultimate key to achieving a true partnership remains sustained rapid growth that turns India into a $5 trillion economy in no more than 15 years”. Read the entire essay at http://www.brookings.edu/opinions/2010/0623_india_us_relations_panagariya.aspx

In other words, as Abhishek Bachchan so eloquently lip synchs in Hinglish, “The whole thing is that ki bhaiya, subse bada rupayya”. Restated for my American readers, it means “economic interests trump all else”. Nuclear power plants matter a lot more than nuclear bombs, in the ultimate analysis.

India’s $35 computer — something new or Simputer redux?

From the old country comes news that a $35 computer has been developed. Going by the looks of it, it’s a touch-screen device with Wi-Fi. As usual, the IT press, both local and foreign is getting all excited about it, and calling it an iPad competitor.

I’m not sure how realistic the $35 price target is.  On an iPad, the LCD alone costs in the region of $80-90 according to some estimates. Even the cheapest LCD, together with an Intel Atom or ARM CPU, minimal RAM and some Flash easily comes up to around $100 or so. And that’s not even taking into account the cost of the operating system, which one can assume will be Android or some other free Linux variant. This reminds me of a recent $10 computer that turned out to be nothing but a plastic brick with wires running into it, and the Simputer, a PalmPilot clone of a decade ago. The latter was much talked about as a device that would bring computing to the masses. Reams were written about India’s technical prowess in designing the Simputer. The device never saw the light of day other than, perhaps, a few prototypes.

My suspicion is this… that the Indians were given a deadline by some government minister to come up with a computer that could be shown to the general public as a $35 gadget. And one of the project team members had a great idea… fly to China and get an iPed!

I would place much greater trust in claims of a $35 computer if they were made by the private sector in India, say by the Tatas of Nano fame, or by Wipro, or better still, by the Chinese, who after all, are at this point light years ahead of India in cheap manufacturing. The scientists that supposedly designed this thing have no experience with consumer electronics design, or any form of manufacturing. I’m not exactly sure how they arrived at the estimate of $35, given their lack of experience.

This is not to denigrate the country of my birth. India has had some remarkable successes, with cell phones in the hands of every second Indian, an amazing supply of low-cost hatchbacks starting at $2500, a line of motorcycles that won China’s best compliment — the creation of a knockoff, and an unbelievably vibrant entertainment industry comprising Bollywood and countless channels of every hue that are seen far and wide in Asia and Africa. Keep in mind, though, that all of this came from private enterprise, not from researchers in some government institute.

07/26/10 Update: The Indian press has now started to say much the same thing.

Where there’s an incentive, there’s action. Just wait and watch

From Tyler Cowen at the Marginal Revolution blog comes this story, originally reported in the Hindustan Times: Delhi cops will now get awards for bringing injured people to hospitals instead of waiting for an ambulance to do the honors. In the past, Delhi police were reportedly reluctant to transport the injured to hospitals, for fear of soiling their uniforms. Now, blood on the uniform will win them awards. Literally.

Here’s the problem with this: where’s there’s an incentive, there is action. Therefore, if a poor shmuck is lying on the road with, say a fracture, but little in the way of bleeding, it is not worth the policeman’s while to take him to hospital. The uniform will get somewhat stained, the policeman will have to fill in a lot of paperwork, and perhaps attend court, with not much incentive owing to very little by way of blood flow. Or perhaps, the policeman will eventually take him to hospital, but will first take a detour to the local butcher’s for some blood to enhance the redness. If the victim is merely unconscious, say through a concussion, there is much money to be had in delivering a few blows so that the blood flows freely.

Think my suspicions are unwarranted? Think again, and think again. Where there’s an incentive, there is action.

Its all downhill from here

I’m just reading reports of Steve Jobs’ press conference where he insisted that the reception issues plaguing the iPhone 4 were not that big a deal, that all smartphones had similar problems, and that if it would make consumers happy, he’d throw in a ring of rubbery plastic to put around the rim (also known as a “Bumper”).

I (and many other observers) commented about Apple’s strategy and success in light of the hugely successful iPad rollout. What I’ve learned since then is that there’s a very thin line between confidence and pride in one’s product, and hubris. It would appear that Jobs is on the wrong side of the line.

Apple’s products are aspirational, “halo” products. You don’t buy an iPad because you just want to browse the web. If that was all you wanted, any cheap netbook would do fine. An iPad stands for design elegance, getting things right, quality, engineering, and owning something from a cool company that has a finger on the pulse of innovation.

Similarly, owning an iPhone is more than about running applications and making phone calls. Palm sells phones that are functionally equivalent. Samsung and Nokia have scores of such phones that provide similar functionality, not to talk about the Android crowd. Owning an iPhone has a lot to do with the intangible attributes: quality of engineering, touch and feel, the aura of an Apple product, the hip glass-and-metal design, the “retina” display.

It is exactly these intangible attributes that have been severely damaged by Apple’s head-in-the sand ostrich response to the iPhone problem. Regardless of the magnitude of the physical problems with reception, the intangible problems with people’s perception have been severe, and are likely to harm Apple for the long run. the iPhone is now a phone with a defect, hidden by a plastic ring. Gone are the attributes of beauty, sleekness, great design, quality of engineering, and such. The damage to Apple’s brand will carry over to its other products such as the iPad.

One can see parallels between Apple and Toyota. The latter insisted that there was nothing wrong with its accelerator pedals and that consumers were pressing the accelerator when they meant to brake. For the longest time, no admission was made of any fault, and the corporate strategy was to stonewall. Similarly, with Mr. “Don’t-hold-it-that-way” Jobs, the corporate strategy is to claim that there is no problem, and if consumers don’t like the iPhone, they are free to return it for a refund.

Now is a good time to short Apple’s stock.

India’s obsession with Astrology

Astrology ranks right up there with Cricket in the importance Indians assign to it. While in days past, it required the creation of detailed horoscopes and much reading of palm lines, today it has morphed into analyzing and adjusting the spelling of one’s name and other such methods to improve one’s lot in life.

According to the Jumaani family, one of the more popular “scientists” in this profession, “each alphabet [sic] of your name has a certain value, and the sum total of this should be in harmony with your date of birth to have a smoother sailing in life”. Various celebrities have taken to this technique to improve their personal or business prospects. For example, the movie originally titled “Singh is King” became “Singh is Kinng”. Down-on-his-luck actor Ajay Devgan became Ajay Devgn overnight, hoping that the loss of the vowel would bring him gains on the silver screen and his pocketbook. Suzanne, wife of Bollywood heart-throb Hritik Roshan became Sussanne, in the reported hope that whatever was ailing their relationship would go away.

Politicians too, got in on the act. Some set upon reworking their names with hopes of electoral victory. The chief minister of the southern state of Karnataka went from being Yediyurappa to Yeddyurappa. The neighboring state of Tamil Nadu saw one of its prominent politicians go from being Jayalalitha to Jjayalalithaa. That great steward of Indian culture, the Bharatiya Janata Party of go-mutra fame, even proposed setting up university courses in Astrology. It was only the loss of power in the next general election that prevented the creation of a “Star Wars” style clone army of newly minted astrologers with M.A. and Ph. D. degrees.

The Indian “science” of Vaastu, similar to the Chinese Feng Shui, has likewise come into vogue. Vaastu deals with such details of a building as where the doors and windows are located, the direction in which the building and entry door face, and even the direction of one’s bed. Whole hordes of Vaastu ”consultants” have sprung into operation, charging would be real-estate purchasers a small fortune to analyze the Vaastu-appropriateness of their prospective purchases.  I have often said, only half in jest, that the best way to buy an apartment in India would be to seek one out with poor Vaastu. Because no one would want it, the asking rate for it would be significantly lower than other similar apartments. Only the lack of money in general, and the concern about not being able to sell it back into the market at a later date (for the very same reason) have dissuaded me from doing so.

When asked to explain how numerology or Vaastu affect an individual, the usual explanation is that it all comes down to “vibrations”. You see, each “name” has a vibration. And you need the right quantity and kind of vibrations. Not too many, not too few. Apartments too have vibrations (not to be confused with those that occur during an earthquake; these are of the paranormal kind). The apartment’s vibrations have to be consistent with your vibrations and those of the planets in your horoscope. If I were to talk about a car’s vibrations, the service advisor at my local Toyota dealer would have dollar signs in his eyes, expecting the impending repair order. However, an Indian knowledgeable in the astrologic arts would recognize it as a function of the car’s color, make, model, year of manufacture and registration number. And they better be the right vibrations, unless the poor owner wants to break his neck in a traffic accident.

When I speak with a parent, in-law, uncle, aunt or other elderly relative about astrology in general,  the point I make in my conversations is simple… if this stuff works better than random chance even a minuscule fraction of the time, all that someone has to do is to borrow a ton of money, fly over to NY and speculate in Wall Street. As long as they’re making a little more than they lose on a predictable basis, any number of people will be willing to provide working capital. Besides, I reasoned, if the stuff was even remotely effective, the CIA would have paid out at least $25 million for Bin Laden’s scalp. Unfortunately, rather than persuade my interlocutors, I succeed in getting called a maverick, or worse, a heretic.

Come to think of it, my career ambitions are higher than the IT project management and business analysis that I’m currently doing. And, I could do with a few pounds off the middle, and a shiny new automobile. Time to call the Jumaanis to see what can be done about my name.

–Jjaggadeeeshh

A small victory for market forces

It appears that the Government of India has got out of the business of subsidizing motor fuel prices. What a novel concept, and one coming just a couple decades after the collapse of that mecca of fiat pricing, the Soviet Union. Indian motorists can now pay the actual costs of their consumption without the distortion induced by either government subsidies or government cross-subsidies.

Unfortunately, the prices of kerosene (a common cooking fuel) and cooking gas are still immune to market forces. As prices of diesel and gasoline go up in lockstep with those on the global market, expect a lot more adulteration of these fuels with the still-subsidized kerosene. Additionally, expect a lot of cars to continue to be jerry-rigged to accept cooking gas as fuel.

Don’t Like Your Grades, We’ll Fix Them

The New York Times reports that law schools are retroactively improving students’ grades to help them find a job in this economy. I can almost see the mailings now…

Dear Mr. Jar Jar Binks,

You will be happy to know that your law degree is now worth more! We have retroactively changed your CGPA from 2.0 to 3.5. We hope this will better help you find employment. Please do not forget our endowment when your new GPA starts bringing in the big bucks. If you want further improvement in your scores from a decade ago, please do not hesitate to speak with our endowment director. I’m sure we can work something out.

Sincerely,

Boss Nass

Dean

Gungan School of Law

Sachin Tendulkar for Field Marshal

From the old country comes the news that one of its most prominent cricketers is now an Honorary Group Captain of the Indian Air Force. Sure Sachin hits a lot of balls into the air, and with great force. But does that mean he deserves an honorary Air Force appointment? Where is the connection? Whose brilliant idea was this?

I propose further awards for the Master Batsman along these lines. A few years down the road, he can be considered for Field Marshal (hitherto awarded to the likes of Sam Manekshaw and Kodanda Cariappa, who actually fought and won wars). Better still, how about an honorary government minister right now (Cabinet rank), with all the trappings, including a white Ambassador car? Wait — he’s better than that; he needs to be honorary Prime Minister. Scratch that, let’s make him honorary President.

I’ve never heard of such absurdity in the US. As far as I know, Babe Ruth and Ted Williams held no positions in the USAF, honorary or otherwise. They were professional players who were very successful. Their fans loved them, and that’s that.

PS: The rumour out of Delhi is that the Indian Government is considering anointing Fijian of Indian origin, Vijay Singh, an Admiral of the Navy in recognition of his having launched golf balls into water hazards many times over the course of his career.

Buying an eBook reader? You’ve got some great deals available

Barnes and Noble has now introduced a Wi-Fi only version of its Nook e-reader for $149. Additionally, the 3G version now costs $199, a reduction of $50.  Amazon has followed suit with the Kindle for $189. Be forewarned, though, that a new Kindle is expected late in summer 2010.  

Right now, the juggernaut is Apple’s iPad which can do much more than just book reading for a pricier $500. The advantage with the iPad is that its a full-page screen and can display PDFs while retaining all their formatting. Neither the Kindle nor the Nook (in their 6-inch version) will display PDFs without “reflowing”, which totally munges the formatting. For most people that can afford it, the iPad is the better purchase — it does a lot more than books, and the screen is nice and bright, and fast.

However, if you travel a lot, and want something compact that has excellent battery life, that you can carry with you, then the devices from Sony, Barnes and Noble or Amazon are all good purchases.

More Proof of H1B Misuse

A while ago, the USCIS issued what is now known as the Neufeld Memo that set out various scenarios where an employer-employee relationship existed.

This memorandum was met with much opposition from the IT “Body Shopping” industry that specializes in importing workers on the H1B visa, and subcontracting them out to various temporary positions. This is in violation of the laws because there is no job opening when they are hired; most are hired, then spend a couple months applying on job sites for a temp job. When that is over, they move on to the next temp job. Additionally, in violation of the law, such “employees” are not paid when they are between projects, i.e. on the bench.

The Neufeld memo has significantly impacted body shops’ ability to conduct business as usual. Proof can be seen in the number of filings for H1B visas in 2010, which is running lower at the same point in time than it did in 2009. One would have expected the opposite situation to be true, because of the recovery in 2010, and the consequent demand for temporary jobs.

Faced with a memo that, for all intents and purposes, destroyed the business model of the body shops, they have filed suit. It is quite possible that the Neufeld memo may be overruled by the courts on various technicalities (though in the opinion of this commentator, the reasons and rationale were sound).

It is interesting to look at some of the plaintiffs in the suit:

• Company A has 89 H1B visa holders out of 95 employees
• Company B employs 45 H1B visa holders out of a total staff of 50

 Now, if these firms were legitimate businesses, providing staffing to the IT industry, one would find a healthy proportion of US-based workers among their staff (Green Card holders and US Citizens). Why is it that they don’t employee either of these two categories of workers? One could argue that the business model is based on providing legal cover for imported labor, and not necessarily providing any consulting services per se. Another possibility is that wages are so poor that no one with a choice of working for another employer would prefer to work with such companies (H1B visa holders are in a period of indentured servitude until they get a Green Card; for some, this process takes over a decade).