दृष्टिकोण – Indra's Viewpoint

The ‘Times of India’ on October 23, 2006 had shocking news for India. It is a warning bell for all bad things to come from a rogue neighbours. And unfortunately one can’t change one’s neighbours. You are to find a way to live with the rogue ones too. You will have to develop all strength, both physical as well intellectual, to demand respect. The news runs as follows:

The Chinese are planning to dam the Brahmaputra River, known as Yarlung Tsangpo in Tibet, at the Shuomatan point (also known as the big U turn) in China and diverting 200 billion cubic metres of water annually to feed the aging Yellow river through a series of tunnels. The project presents an enormous engineering challenge, but with technology available today, it is doable. China has been known to undertake, and complete, seemingly impossible engineering feats – the Lhasa railway and Three Gorges Dam instantly.

As reported, the plan has the blessings of Chinese president Hu Jintao, a hydro engineer by profession. The project plans to take the diverted water to the country’s northeast – Shaanxi, Hebei, Beijing and Tianjin. If the project goes through, it could strangle one of India and Bangladesh’s biggest sources of water.

The proposed project, called the ‘Greater Western Water Diversion Project’, is part of the gigantic South-North water project that has already been started by China. In August, the Chinese government sanctioned 300 billion yuan to divert water from the upper reaches of the Yangtze river in the Qinghai-Tibet plateau to the upper reaches of the Yellow river in north-western China. It will bring water from the Yalong, Dadu and Jinsha rivers, which are tributaries of the Yangtze, to the upper reaches of the Yellow river.

China today has all the economic and political clout to carry out the project once it decides to go ahead and if that is the way to save the Yellow river. India can only present its case, but it is to be seen if China agrees and drops the project for the sake of Bangladesh and India. And again even if China agrees, what is the guarantee that it would abide by its agreement.

Recently China had built a dam on the Sutlej River. The Chinese foreign ministry acknowledged the dam in Zhada in Tibetan Autonomous Region (TAR), and confirmed to have “considered fully the impact on lower reaches.” India and China even signed an agreement on sharing information on Sutlej, yet during the 2005 Pareechu lake crisis, India drew little comfort from the pact.

Surprisingly, India has not yet talked on the issue with China? Will India take it up with Hu during his impending visit to New Delhi or remain quiet to be known as a good neighbour till the project gets completed? Unfortunately, even after the report in the media, the government doesn’t think it necessary to come out with some clarification to take fear out of the mind of the people of India. As reported, the Indian security officials opine that the prospects of geological disturbances alone may be a big enough challenge to make the project impossible. Why can’t some authentic experts from the Geological Survey of India come out with their views?

Sometimes, I feel miserable when I find leftists of India talking and behaving as the spokesmen of China. I expect some media person to approach Yechuri for an answer to this threat. With his recent study tour of China for SEZs, Yechury might be able to throw some light in favour of the Chinese project. I can’t expect him to talk anything against his faith gurus and their country.

I am surprised why can’t there be a right of representation of such issues some world body.
PS: News
Beijing’s message via CPM: let border wait, push for trade first

And I do also realize why Tibet would have been independent of China. Perhaps, it would have been prudent for Pandit Nehru if he had not agreed that Tibet was part of Mainland China.

PS: Latest News

No plans to divert Brahmaputra: China

Beijing: China has denied media reports that it was planning to divert waters of Brahmaputra river to its Yellow river to feed the parched northern regions.
“China has no such plans to build a dam and divert water from Yarlung Zangbo (Brahmaputra) to the Yellow river,” Chinese foreign ministry spokesman, Liu Jianchao said here when asked to comment on the issue. Liu said he did not have further information on the issue.

On Monday, the external affairs ministry said in a statement.
“We have understandings with the Chinese side under which they provide hydrological information in respect of Brahmaputra and Sutlej rivers during the flood season for flood control and disaster mitigation in downstream areas. We are discussing with the Chinese side the expansion of this cooperation.” PTI

Can India rely Chinese? But, perhaps, there is nothing that India can do.

Some views of Jagdish Bhagwati on SEZs (Special Economic Zones) are here as told to Dinesh Narayanan & Anil G Nair of ‘Times of India’.

Columbia University’s Jagdish Bhagwati opposes India setting up special economic zones, “SEZs are a sort of scaffolding with which you climb into more openness. Hopefully, that demonstration (of openness in SEZs) will show that it is worth having these policies. But now that you have the building, why do you need the scaffolding? Already the policies have changed. So, I think it’s a backward step,”

Bhagwati is one of the world’s most ardent advocates of globalisation. He was shortlisted even this year for Nobel economics prize, but missed.

India needs only clear policies that will integrate the country into the world market. ”We don’t need to learn lessons from China anymore, because the main lesson was outward-orientation. We should concentrate on making the additional reforms for reducing trade barriers.”

China needed SEZs because it had an export-oriented strategy, which relied on its eastern seaboard with four provinces and 700 million workers as a platform to experiment with the policy while the rest of the country remained closed.

”Basically, what they did was to take an export-oriented strategy, which was married into investment as well, because investment was more or less geared to export promotion. We did not cash in on that, partly because we were too scared of foreign investment.”

”And the way it (the SEZs in India) is being managed, you know the politicians are getting their hands on it and ultimately you have to take land. There is nothing wrong with it as long as people pay for it. And if you get politicians to assign it, then you can be sure there is a rent, and clearly when you have something like that, you are offering a temptation to the politicians or bureaucrats or whoever. That is also when you build resentment, when peoples’ lands are taken. But we are a democratic system. ”Similar things are happening in China, which is experiencing land grab. There they have no recourse at all. They don’t have any NGOs to go to, they don’t have a free press, no independent judiciary, and no opposition parties. So, what do they do? At least here it’s being discussed. But as I said, we don’t need the damn thing.”

Somehow, I do not agree with Bhagawati’s damning of India’s SEZs policy. SEZs are coming up almost like the big PSUs such as HMT, BHEL, Steel Plants at Bhillai, Rourkela, Bokaro, and Durgapur, and before that, even private companies in almost new locations- Tata’s TISCO and TELCO at Jamshedpur, Birla’s Jute Mills at Birlapur or Hindustan Motors at Hind Motors. The whole lot of facilities developed and townships grew all around. Presently, no one sets up plants with all the infrastructure such as a township, hospital, and educational institution as the cost of the plant increases, making a new project unviable.

SEZs perhaps are the business solutions to make industrialization of the country viable where the real estate portion of the area will be generating revenues as those will be owned by different users. However, the two things are very important. Promoters of the SEZs must not grab the land without proper compensation to the owners of the land. The owner farmers must get integrated in the project so that they become stakeholders and their future is safe and protected. And secondly, the SEZs must have clear roadmap of the industrial activities so that the creation of employment potential is part of the major primary objectives. Unfortunately, the allocation of SEZs till date doesn’t give a confidence that the manufacturing sector will get a significant boost once those are in place.

I think in all the SEZs, the provision of the professional educational institutions from trade training institutes to specialized engineering and management colleges that provide the required talent for the industrial activities of the zones, must exist. For example, the SEZs of auto components must have trade schools and engineering college specializing in design and manufacturing, a tool room catering to the tooling requirements, and engineering service provider to cater the maintenance and process planning necessity for the units. Similarly, one SEZ for textile manufacturing must have all the infrastructure facilities including a fashion design institute, a research and development laboratory and a machinery-manufacturing unit that will be of use to all the units.

SEZs can be a success, if it is an honest means to get India ahead and not only to provide the easy route to make money.

News
Yechury asks Nath to study Chinese SEZ model

We have left behind those oil lamps that used to light up our Deepawali nights. I still cherish the most vivid memory of lighting competition between halls of residences at IIT, Kharagpur in late 50s. It used be with oil lamps. Now we use just few earthen lamps only for inside near the little home temple. My wife, Yamuna goes for 21 of them.

As desired by Yamuna after seeing the lighting arrangement being made at neighbour’s house, I also went to my electrical shop. The owner is young man. I have been buying all my routine requirements from him. He also arranges for regular maintenance of domestic electrical systems. I asked him to send his electrician with some 10 lighting strings for external decoration as well as one for the temple inside too. As usual, I queried about the source. “Uncle, everything in market this year is Chinese including ‘Ganesh and Lakshmi’ statues that we buy to worship on this day.”

There was nothing to be surprised. Chinese have invaded the Indian market in big way. Earlier it used to be through smuggling, now globalisation and free trade had opened the floodgate for these small little things too. However, I asked about the quality.

” It is fine, Sir. Moreover, you shall not find the Indian ones anywhere.”

“Will you guarantee about the quality?”

” Sir, That I can’t, but then none has complained.”

Gaurav, the owner sent his electrician a day before Dhanteras. He fixed up the lighting and went. The night after Dhanteras, it rained. In evening, I found some of the strings have gone dead. Next day, it was Deepawali. I tried to contact the electrician on his cell phone. He assured to come for a check in the morning. On the day of Deepawali, I contacted Gaurav too. First time he was busy in worship of Goddess Lakshmi. The second time, he did respond but just assured to send his electrician if he came. I knew he was telling a lie. By that time, Yamuna informed that even the one inside on temple has gone off. She was very angry and morose as she thought it to be inauspicious. I kept on trying for the electrician. He came. He tried. He failed to correct the trouble and left blaming the Chinese profusely for the poor quality. Yamuna as usual was very angry on me, as I was not cautious enough to ensure the quality of the purchase. It was in real bad taste. As found out later, Gaurav had many customers complaining on the Deepawali day. He closed his shop and left for home.

Who is at fault? The Indian SSIs can’t compete on price with the Chinese. It is easier for the unscrupulous Indian traders to get the Chinese stuffs in bulk, and get it packed here in individual plastic bags. They hardly bother about the quality. As I understand they never demand it. May be the trade itself is through illegally managed route. The same is the case with the fireworks from China that are available in plenty in market. The traders charge high prices, because they fix up the prices based on opportunity to sell at that price. I call it opportunity price. Who can control it? We can’t leave everything to the government.

India must find a way to assist the small manufacturers to produce all that are being brought in from China for our consumers. As our market itself is huge enough so it becomes quite a good commercially viable business objective to produce these things cheap in our country itself.

I lost my money on the purchase, but more importantly I felt miserable on this auspicious day with this incident because of the poor quality of the Chinese who wish to rule the world. I am sure I shall not be buying anything Chinese hereafter if I could afford.

/

Pre-Diwali Friday became fabulous, a great day for those Indians, who keep track of the Indian Industry moving global that also in big deal. Tata Steel with Corus in league will become the fifth largest steel makers of the world. Tata Steels, as such on its own, has unique strength, its lowest cost of steel production. Tata steel makes primary steel at its Jamshedpur plant at $ 160 a tonne, whereas Corus makes the same at $540 a tonne.

As Ratan Tata confirmed, the acquisition, at $8.1 billion, would get the maximum advantage, as the companies would compliment each other. If complimented properly, the acquisition will make the company strategically very well positioned in steel business. As I understand, Corus has steel for industries such as automobiles, electrical, and engineering’s special sector (aeroplanes). With supply of steel slabs from Jamshedpur, Corus can produce its present products at much cheaper cost. As per one thumb rule estimate, at the current selling price of primary steel in UK, Tata Steel, Jamshedpur will make a clean profit of $120 and Corus will save $130 for very tonne of steel used.

Tata Steel has another overseas steel project, and is close to signing of a MOU with the Iranian government to set up a 5 million tonne steel unit. The project will make Tata access to cheap iron ore and low cost power of Iran. All are great happenings for the company.

Steel sector in India is very much in media with appearance of Posco of South Korea on the scene through its Orissa project. Even Mittal-Acelor is also in fray to set up plant in India. Tata has MOUs for setting up Greenfield projects of steel production in Orissa as well as Jharkhand.

Historically, Tata Steel was the first Indian steel company in India and very soon it will be completing its century. As Tata Steel didn’t expand its capacity, and other private entrepreneurs didn’t enter the sector, it was left to PSU SAIL to meet the country’s steel requirements. SAIL gradually added many plants, but because of government control couldn’t reach the heights that it could have, if it would have been a private company. Tata Steel took advantages of all the concessions granted to PSUs, but failed to expand as other private companies in the world were doing it. Even today, Tata Steel remains at position 56 globally by capacity. I feel bad today because of this, and so must be many. India will not have the world’s largest steel plant in India that it had the potential. Tata with its own energy wing for power production and cheap access to India’s iron ores could have built the capacity in India. That is my agony as Indian. I don’t know if with financial pressure of the huge acquisition, even those MOUs signed by Tatas would materialize or not. Acquisitions are great, but having production facilities provide many other benefits to the nation and its people; and that must be important for business house such as Tatas too.

With changes in industrial policy in favour of globalisation, Tata Steel has found the logically easier route of acquisition to come in the first ten steel manufacturers of the world. Now it is fifth. With Mittal, first and Tata, now, as every one says, India Inc. has arrived.

How Business World Reacts:
Corus Agrees to $8B Tata Steel Offer
Indian Steel Maker Is Ready to Acquire Much Larger British Rival
Tata-Corus
World’s 5th Largest Steel Co
Steeling for the future
Crowning glory: Tata buys up big chunk of UK ‘jewels’
Announced steel projects on course
See what a great media response

What Next
What’s next for Tata Group: An interview with its chairman: Ratan Tata explains how the company is expanding abroad while cultivating an emerging mass market at home.BY Ranjit V. Pandit

Happy Diwali

All lights on in power corridors round the world
Latest
Indian Conglomerate Looks Beyond Purchase of Corus

There are big news and variety of achievements appearing almost daily in media. India is on go. We pray this Diwali that it continues.

‘The Nasdaq is all lit up in New York. The world’s most cited market index is celebrating Diwali by lighting up its building in Indian colours amid the razzle-dazzle of Times Square, part of the increasing attention towards India and its economic and cultural advance in this part of the world.’

On a single day, October 18, 2006, many things happened.

In the biggest overseas acquisition attempt by an Indian company, Tata Steel offered $7.64 billion (around Rs 34,500 crore) in cash for buying Corus, the UK’s largest steel company with a production capacity of 18 million tonnes a year. If the acquisition materialises, Tata Steel can become the world’s sixth largest steel company from its existing ranking of 56.

The Videocon led-consortium agreed to pay Daewoo’s creditors $700 million (around Rs 3,220 crore) for the ailing company. RHJ International is the holding company of the US buyout fund Ripplewood. Daewoo has access to high-end technology for LCD and plasma televisions, which are fast replacing cathode-tube televisions in most countries. Daewoo operates six plants in South Korea and 18 overseas units. Its assets totalled 1.65 trillion won ($1.7 billion) at the end of 2005.

Glenmark Pharmaceuticals licensed the German major Merck to develop a diabetes drug. The deal earns ¤190 million (Rs 1,077.5 crore. More than the earning, the deal is a significant milestone of India’s pharmaceutical sector. Is it not an achievement of the R&D capability of the Indian company?

Nokia, convinced of the huge telecom market of India may soon have a second manufacturing facility in Kolkata after thee first one in production in Chennai. Nokia Siemens Networks, a 50:50 joint venture between Finnish multinational Nokia Corporation and diversified conglomerate Siemens of Germany will set up the facility and invest close to Rs 1,600 crore in stepping up all operations in Kolkata.

National Knowledge Commission (NKC) proposed to connect 5,000 entities -universities, academic institutes, research and development labs and libraries, under the project, titled ‘Knowledge Network’.
And finally a news item from US heartens me, as it symbolizes the grit of Indians who can excel in all odds.

Gujaratis, mainly Patels, own 21,000 of the 53,000 hotels and motels (more popularly known as Potels) in the US. It makes for a staggering 42% of the US hospitality market, with a combined worth of $40 billion. Asian American Hotel Owners Association, which has 9,000 members and 90% of whom are Gujaratis, says Indian-American hoteliers pay $700 million in taxes every year and create a million jobs.

PS: Latest
Corus Board proposes Tatas’ takeover offer

DUBAI, OCTOBER 19: Indians are among the top property investors among non-Arabs in Dubai following the British nationals who top the list.

Unit of India’s IFGL Refractories buys Goricon
Jindals set to aquire Thai steel major
Indian Steel Maker Is Ready to Acquire Much Larger British Rival
Tatas to pay $1 bn cash, Corus backs bid
TATA-CORUS

I read about Hiuen Tsang who came from China to India in 7th century in our history course as student for school final examination. And with a little interest in history of Bihar, I kept on reading whatever and whenever I got about him and his account of Nalanda University.

It was in December1966 that I visited Nalanda as tourist after my adventurous social service work with Jai Prakash Narayan’s Bihar Draught Relief at Noorsarai along with some foreign volunteers. It is interesting to know from media that 2006 has been declared as India-China friendship year. A temple dedicated to the Chinese traveler Hiuen Tsang, lying in ruins for long at the university town of Nalanda has been reconstructed through a joint India-China effort. As reported, various craftspersons, artists and technicians from India as well as China are working in Nalanda to complete the renovation by October 31. Murals from Luoyang near Xiang, Hiuen Tsang’s birthplace, have been flown. A mammoth, gleaming and impressive monastery-like structure-over 56 feet tall-is being readied. Care has been taken to keep the architecture as authentic as possible. A statue of Hiuen Tsang, cast in bronze and weighing 750 kg, stands guard at the entrance. The temple will also house ancient manuscripts from Thailand, Sri Lanka and China. Once the temple is ready after renovation, Hiuen Tsang’s mortal remains, currently housed in Patna Museum, will be formally moved to Nalanda.

The temple will add to the tourist attraction of Nalanda. There is also an ambitious plan to restore some of Nalanda’s lost glory. A new cultural village that can add to visitor’s attraction is on the drawing board

As it appears Nalanda has and can provide a lasting link between the intellectuals of China and India. It is Nalanda where Hiuen Tsang spent almost 12 years in the company of several thousand scholar-monks. Hiuen Tsang studied logic, grammar, Sanskrit and the Yogacara school of Buddhism, and returned with 650-odd Sanskrit texts.

Plans are also afoot to replicate the ancient Nalanda University, where Hiuen Tsang spent considerable time in the 7th century AD. Nitish Kumar is taking a keen interest. Interestingly, Nalanda is his home constituency too. The plan is afoot to set up an international university of Nalanda spread over 500 acres. As reported, Korea, Japan, and Thailand have shown interest to pitch in with the funds. Singapore and Japan officials have already met with CM to discuss the project.

I dream of a University of Nalanda, that can academically compete with the best of the universities in the world in thousands of acres properly landscaped with all academic facilities better than the best of the universities in the world. Let each of the participating country build one college of specific branches of knowledge. Let there be American Institute of Advanced Sciences, German College of Engineering, Italian Institute of Fashion Design, French Institutes of Fine Arts, Russian College of Aeronautical Engineering, Indian Institutes of Applied Philosophy, International Management Institute funded by Switzerland, Asian Agricultural Institute, and many more from different countries but at the same time the best in its core domain knowledge with all the best infrastructure for learning, libraries, auditorium, playgrounds as well as the township. All institutes in the university must be open to all countries based on merit with no quota of any type.

I don’t know if Nitish can take the project as a mission of his life and build something that can be remembered in the same way as old Nalanda University is remembered even today after thousands of years. It is possible if he decides to request either Singapore or Japan to get the project executed.
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