Tuesday, August 4, 2020

What do you think of the forced exit of China’s ByteDance from the U.S. and the transfer of Tik Tok to Microsoft?

This was an interesting question that came up in a social media platform. To me, this seems to be yet another case of Business and Geopolitics playing out in front of us.

Let me start with another example before I answer this question. Some years ago, I worked for Syngenta, a multinational that had large operations in the US too. (footnote) The company, worth more than $45 Billion, had intellectual property in key areas of agribusiness - including specialized hybrids and GMO corn, soybeans seeds and pesticides, herbicides and insecticides.

The Chinese have over 1.4 billion people to feed. And to feed the growing masses, they need a lot of livestock. They need a lot of corn and soybeans to feed industrial farms producing pork and beef (to feed the pigs and cows).

To produce a lot of corn and soybeans they need modern agricultural technology, that companies like Syngenta have. Before bidding for the company, the Chinese began refusing entire shipments of Corn/soybeans grown using Syngenta’s technology (Reuters: Syngenta risks fresh China corn dispute with unapproved trait).

American farmers began lobbying the congress to get Chinese to allow shipments of their Corn/soybeans. After a bit of back-and-forth, the Chinese ‘relented,’ and then ChemChina, the country’s national Chemical company made a bid to buy-out Syngenta

There were murmurs from US congress whether to let the strategic deal pass, but they remembered China’s refusal of corn shipment and relented. Syngenta was bought out by the Chinese. (Fortune: ChemChina Clinches Its $43 Billion Takeover of Syngenta).

Fast forward to the present. Tik Tok has morphed into a hugely popular social media App that has also been used for social activism.

Recently, there was a lot of coverage about how TikTok was used to inflate the number of attendees at President Trump’s political rally, throwing organizer’s plans for a toss. (NYT: “TikTok Teens and K-Pop Stans Say They Sank Trump Rally”).

This was perhaps a wake-up call for the Trump administration: How a social media platform controlled by Chinese could be used to manipulate American election rally.

The Americans seem to be using a chapter from China’s playbook back at them: Threaten to ban the Chinese owned Tik Tok and then get an American tech giant (Microsoft) to make a bid for it.

Footnote: I am using publicly available information to draw the analogy between these companies

Friday, June 19, 2020

Dear Indian, you want to exit the Chinese Dragon? Easier said than done!

This week, Indians watched footage of gruesome hand-to-hand combat between Indian and Chinese soldiers in the inhospitable, high-altitude terrain in Galwan Valley, the "Chinese occupied" part of Laddakh. After watching video snippets of Indian soldiers brutally attacked with iron rods and clubs, passions in India are running high.

While most Indians await the government’s promised military retaliation for the killing of 20 of its soldiers in Laddakh, there has been a rush for a grassroots movement to boycott Chinese goods, services and investments.

Rush to boycott “Made in China”

The clamor to boycott Chinese goods began even before this week’s gruesome killing of Indian soldiers. Amul’s long running advertisement campaign, that is known for its timely reaction to current events had its Twitter account briefly blocked in early June after its anti-China message “exit the dragon?”

China has been fledgling its economic muscle around the globe and its economy is largely dependent on exports. With nearly 11% of its imports coming from China, India currently has a $59.3 Bn (£47.7 Bn) trade deficit with the Dragon. Therefore, there is an argument to be made for an economic retaliation.

Plan for an economic retaliation? 

Anti-China protests have broken out sporadically all over India, with effigies of the Chinese leader, Xi Jinping, set on fire. The Indian news outlets have begun carrying footage of local political leaders and activists going from shop-to-shop handing out pamphlets about boycotting Chinese products.

The central government, sensing the mood of the public has jumped on the boycott Chinese bandwagon. After the attack on its soldiers this week, the central government ordered telecom providers (including BSNL) and other private companies to ban all future Chinese deals and equipment upgrades. Chinese companies will also be banned from participating in tenders for future projects, which is likely to include plans to upgrade 4G services in India. (NDTV Article)

Can Indians really boycott Chinese products and services?

The Chinese have a direct or indirect footprint on almost all the products, gadgets and service you touch. If you look around you, you can probably spot trinkets, household gadgets, smartphones and computing devices that are marked as “made in China,” which are easy to identify (and target for boycotting). However, identifying products and services from startups and Indian enterprises may not be as easy as it seems.

A recent report by foreign policy think tank ‘Gateway House: Indian Council on Global Relations,’ has estimated China linked investments in India’s tech start-up sector alone at $4 billion.
Many startups that Indians are familiar with have major Chinese investments, including Big Basket, Byju’s, Delhivery, Dream 11, Flipkart, Hike, MakeMyTrip, Ola, Oyo, Paytm, Paytm Mall, PolicyBazzar, Quikr, Rivigo, Snapdeal, Swiggy, Uddan, Zomato.

Does #BoycottChineseProducts include boycotting these startups that employ hundreds of thousands of Indians?

Most multinationals make and assemble products with complex supply chain that includes manufacturing of components in dozens of countries that include China. These components travel from one Distribution center to the next across geographic boundaries before being assembled in a specific country.

Products that we associate as American or European like Apple’s iPhones, iPads, Amazon’s Kindle or even Levi's, Nike and Adidas’s apparel are all either assembled in China or made with Chinese made components.  Identifying the ‘country of origin’ of products or even components that go into assembly of such end products is not as easy as it sounds.

And then there is a matter of practical consumerism that is hard to wean away from. For example, OnePlus, a China-based smartphone maker, saw its latest model sold off within minutes in India this Thursday, despite growing calls for boycott of Chinese goods following a border conflict between the Asian neighbors.

Bottomline: While #BoycottChineseProducts makes for a nice sound-bite, and a few local politicians, activists and digirati will get a 15-minutes-of-fame ripping up a “Made in China” trinket, these actions may not have real economic consequences on Chinese exports or China’s trading surplus with most nations.

Monday, June 15, 2020

RIP Gopi: Local cable guy electrocuted

A week ago, I heard that Gopi, the neighborhood cable guy had been electrocuted while surveying cables tangled on the roof of a house nearby. He suffered sever burns, and after a couple of days in the hospital, he passed away.

I was saddened to hear about the tragic death of the affable 26-year-old who worked hard to keep the neighborhood cable operations running.

After a sever thunderstorm, customers had complained of cable outage and Gopi had gone to the roof of a house in the neighborhood to check the wires. The severed cable wire had apparently tangled over a live electrical wire on the railing. When the unsuspecting Gopi tried to remove the untangled cable, he was instantly electrocuted.

RIP Gopi: DOD: 4 June 2020 (Sanjay Nagar area, Bengaluru, India). After Gopi's funeral, neighbors came together to hold an impromptu memorial. Some laminated a printout of his obituary and posted it on poles near the cable operator's office.

In urban India, it is all too common to see broadband and television cable wires hanging over electric poles and running over rooftops of houses and buildings nearby.  It is common for such tangling of wires to lead to frequent accidents and electrocutions. According to a TOI article,
Every year thousands of Indians are getting electrocuted in freak accidents on streets dotted with damaged power cables. In 2015 alone, 9,986 electrocution deaths were recorded across the country with Madhya Pradesh, Maharashtra and Rajasthan each witnessing over 1,000 casualties, according to latest data available with the National Crime Records Bureau.

Tangled Electric Wire Stock Video Footage - 4K and HD Video Clips ...

Monday, June 1, 2020

Encroachment in the neighborhood. Experience with #BBMP Sahaaya : Thumbs up for the response

I recently came across an 'encroachment' on a covered Storm Water Drain in my neighborhood, and as a conscientious neighbor, decided to act on it rather than just mull it over.

This was a rather blatant attempt to encroach on a public land on a busy thoroughfare. New BEL Road, for those of you know North Bengaluru, has morphed into a rather tony commercial thoroughfare. 

Someone or a group had decided to encroach on that prime space and erected a 'structure' on the foot-path facing the main road. Left un-attended, the folks would soon start a shop/commercial enterprise, and the illegal structure would eventually be accepted as a part of the landscape. 

I noticed this during my morning walks and was in two minds about complaining to the local civic authorities. From my past experience, I knew of BBMP's Sahaaya app and portal that is actively monitored by the civic authority. (My past experience with BBMP

I started by logging a complaint and uploaded a mashup of the picture and google-map location, briefly explaining the problem.

I got a SMS notification about my Grievance#:200369xx that had been logged. During the next few weeks, I continued to get messages on my smartphone while the Grievance was escalated through their hierarchy. 

During the past couple of weeks, I also got a call from a couple of officials confirming the location of my complaint. I explained the details of the issue and landmark to the oficials. 

I eventually got a message "Grievance#: 200369xx regarding footpath encroachment status has been changed from Registered to Resolved By Staff(Desg): Eranna(AE). Remark: Encrochment is cleared ." During my recent walk by that area, I noticed that the structure was indeed gone! 

Kudos #BBMP Sahaaya and the team for acting on a resident's complaint. Let's keep our neighborhoods clear of encroachments ! 

Saturday, May 30, 2020

Indian Migrant crisis – an avertable failure of business, government and society ?

The world has been fascinated by stories of migrant workers caught in the unforeseen COVID-lockdown in India. After Indian government announced a drastic country-wide lockdown on 24th March, stories of the plight of migrant workers began making the rounds.

Netizens around the globe were captivated by the plight of workers through pictures – thousand s of migrants marching on desolated highways with a few personal belongings and toddlers in tow. Indians were appalled when foreigners like Ivanka Trump tweeted pictures of the crisis - the picture of a migrant girl cycling thousands of kilometers with an ailing father.

We were also shocked but helpless to read about dozens of tired migrants being mowed down by a speeding train. (link) The plight of migrant workers was front-and-center during the initial phases of lockdown in India.

Failure of business, government and society

There is a lot of hand wringing and finger pointing about this crisis from politicians of different stripes and government officials. Much of it is attributed to the failure of government and bureaucracy; some of it justified. This was after all an unintended consequence of lockdown intended to save scores of Indians from the impending pandemic. What went unsaid was the role of business leaders and commercial enterprises in contributing to this fiasco.

 © Danish Siddiqui | Credit: REUTERS

The other day, I was zooming with a friend who owns a mid-sized steel rolling mill near Jaipur in Rajasthan. He was lamenting over the plans for reopening his plant that was challenging since most of his workers – migrants from Bihar – had returned back ‘home’ and were reluctant to come back to work.

When I casually asked why he couldn’t hold them back during the lockdown, he admitted that he had stopped paying them after the plant shut in March. Afterall he had a business to run and couldn’t pay workers when he wasn’t generating revenue. What went unsaid was the fact that his business generated tremendous profit margins during normal times, that was sufficient for him to tide over this crisis easily.

Businesses have been unwilling or unable to pay workers during the extended lockdown. This is a story that has been amplified across urban India millions of times, aggregating to a humanitarian crisis.

Commerce: at the intersection of Business and good Governance

This crisis has also exposed the dark underbelly of the Indian growth story – shiny new gated apartment complexes, malls, flyovers and Metros are being built by legions of faceless migrant workers – many from improvised states of Bihar, UP and North East who migrated to urban metropolis en masse.

These undocumented daily wage earners hired and managed by subcontractors and agents live in shanties hoping to save enough and eventually return back home. The construction companies, builders and factories pay these middlemen a tidy sum to source and manage these workers from other parts of the country.

The builders and industrialists also lobby governments to ensure a laissez faire hire-and-fire policy and scant social security for migrant workers. Creative hiring under layers of sub-contractors ensures diluted worker benefits and protections.

During past few months when images of mass migrations began surfacing, there were large debates on the ineptitude of the government and the lack of preparedness in addressing this humanitarian crisis. There was a grain of truth to this as the government machinery was totally unprepared. To be fair, the Prime Minister, while announcing the lockdown had urged businesses not to withhold worker wages. Such an appeal by the government leader didn’t come with a teeth of enforcement. Needless to say, the appeal was totally disregarded by business leaders – including my friend – who were focused on self-preservation. Such is the nature of commercial enterprise. 

Commerce beyond lockdown

Large hearted philanthropists from across the country have been announcing donations to help PMCARES and other charities. The Digirati and media has been tracking and applauding the donations, conveniently forgetting the root cause of this crisis. 

Forget donating to PMCARES and other crisis funds, one wonders if things would have turned out different if business enterprises had just paid their workers and assured them of normalcy during surreal times? Things may have been different as we look at the world beyond lockdown; businesses leaders – like my friend – wouldn’t be out struggling for workers to restart their operations.  

As we look at the green shoots of economic activity looking past the crisis, it may also be worth reflecting on the role of benevolent business practices. Pillars of commerce are dispassionately focused on numbers – topline and bottomline, profit and loss – but businesses are also run by humans. Perhaps business leaders should be taking a page out of noted industrialist Ratan Tata’s playbook. At the end of his entrepreneurial life, The Economist obituary (link) quoted the essence of Tata’s management philosophy "I want to be able to go to bed at night and say that I haven't hurt anybody."

Monday, May 11, 2020

When will the Covid-19 pandemic end? Looking at life beyond lockdown

With nearly half of mankind under some form of government-imposed lockdowns and stay-at-home orders, the end of the Coronavirus Pandemic seems to be front and center in our minds. Almost all of us are struggling with answers to questions like “When will the Covid-19 pandemic end? “how will this end?” and “when will life get back to normal?”

In a recent NYT Article, Dr. Jeremy Greene, a historian of medicine at Johns Hopkins explains that “pandemics typically have two types of endings: the medical, which occurs when the incidence and death rates plummet, and the social, when the epidemic of fear about the disease wanes.”
When people ask, ‘When will this end?,’ they are asking about the social ending. One can argue that we are already seeing the social ending to the Covid-19 pandemic saga.

New-normal: Social Distancing and telecommuting at work

During the past few months, nearly all economic activities around the globe came to an abrupt standstill for weeks on end as leaders began reacting to the outbreak of Coronavirus pandemic across the globe.

Business leaders, who quickly moved to shutter operations in line with national and local lockdown regulations, began watching the unrolling of the restrictions in parts of the world with reduced cases of COVID-19.  In many organizations, especially in the technology sector, telecommuting and work-from-home became the norm.

Company-men – self included – were quick begin parroting phrases like ‘new normal,’ surreal, once-in-a-generation and unprecedented times while trying to come to grips with the uncertainty of the pandemic.

What does end-of-lockdown feel? Not very different

By all accounts, the social ending to the lockdowns and restrictions isn’t going to be as dramatic or abrupt as the start. For one, people are willing and ready for such a change; and many are yearning to go back to life as it was.

The other day, I was in a zoom session with a colleague from China that was among the first nations to rollback lockdown restrictions. After weeks of working from home, employees there are back to work wearing masks, learning to live with additional social distancing norms and ubiquitous temperature checks at offices and all public places.

While people have begun to get back to work, and factories and manufacturing have resumed, the gears of the broader economy are slower in turning forward. Leaders around the globe are closely watching the Chinese blueprint to either follow along or modify as their situations dictate.

Onward to ‘new normal’ or back to old-normal?

After two consecutive nationwide lockdowns spanning one-and-half months, the Indian government announced a slow easing of the curbs with a ‘partial’ lifting of lockdown last week. By the end of the week, it felt like a giant had woken from its slumber. One can already see a few minor traffic jams accompanied by honking on roads by restless motorists. Shops have started opening, and it almost feels like ‘social distancing’ is a thing of the past. In the narrow grocery aisles masked-customers are back to shoving each other while selecting vegetables and fruits; the six-feet-rule be damned.

While it was jarring to see the American President abruptly rollback federal restrictions, leaving state governors to work through a hodgepodge of local regulations, he doesn’t seem to be alone.  After reacting strongly to address the outbreak of pandemic, government leaders around the world seem to be certain of one thing: they cannot indefinitely lockdown societies while awaiting a vaccine for Coronavirus, or for the death rates to plummet.

Commerce, just like life itself, must go on

States and cities around the world that have slowly lifted lockdown bans are beginning to see economic activity resume. While multinationals and large companies are being cautious in re-starting operations, small businesses are already rolling up their shutters.

Government officials are beginning to parrot how “people must learn to live with the virus” while following prevention guidelines.” Just as the crisis-management and pandemic-preparedness of governments across the globe was uneven, the way individual communities around the globe move forward after lockdowns is going to be asymmetrical.

With governments around the world finally abdicating their role in combating this deadly virus, the ‘end’ of the Covid-19 pandemic is going to be a bit of an anti-climax. And in a way, the much awaited new-normal may not look or feel very different. At least not in the short term.

Wednesday, April 15, 2020

Here is why Trump’s decision to pause WHO funding may be a good thing

The Trump administration’s recent decision (link) to withhold funds for World Health Organization (WHO), is generating a tremendous amount of media attention.  This week, the American president tried to blame the WHO for its role in COVID-19
“failing to adequately investigate early information about the virus’s ability to spread from one human to another and for not calling out China on its alleged lack of transparency over the virus.” During a news conference at the White House, Mr. Trump said “The WHO failed in its basic duty and must be held accountable. So much death has been caused by their mistakes.”

To be fair, the United States is a major donor to the UN and WHO. According to the world body, top voluntary contributors include United States of America, United Nations, Republic of Korea, Australia, Gates Foundation, Japan and European Commission. In 2017, America made over $100 contributions. (link: WHO) In addition, over $400 voluntary contributions were made from the United States.
Source kff.org

It’s too early for finger pointing

To be fair, the WHO has been at the front and center in tracking the progress of COVID-19. After a couple of months of closely tracking the outbreak of the virus, the WHO announced on 11th March it was upgrading COVID-19 to a Pandemic
“We have therefore made the assessment that COVID-19 can be characterized as a pandemic. 
Pandemic is not a word to use lightly or carelessly. It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death.” 

The day WHO upgraded COVID-19 to pandemic there were about 1629 cases in America as per the CDC. President Trump also announced a ban on travel from Europe on 11th March, and followed up with a National emergency declaration on March 13th

Source: CDC

The trump administration is under tremendous pressure as the number of cases in the US escalate and the response has been patchy. They are looking for points of failure and perhaps a scapegoat. After initial attempts to call it a “China virus” backfired (link), the world health body is emerging as a convenient scapegoat.

Who is WHO?

Trump’s move may turn out to be a good thing as headlines on the decision to pause WHO funding generates a renewed attention on the role of the world health body in the modern world order. Trump’s announcement on WHO is also stirring a political debate in America, which will also generate interest among Americans. The average American Joe and Jane, who hadn’t heard of WHO will be curious to know more about the world body.

While America donates over $100 million of WHO’s $2+ Billion budget, it is not the only donor. All these headlines continue to generate interest in WHO and its activities, which in turn will lead to other donors stepping in. Large global donors like the Gates Foundation with billions at its disposal can easily make up the shortfall if America backs out of its commitment.

The risk of not contributing its dues to the world body is greater for America. By not donating, America and its researchers risk losing their standing. Part of the aid to world bodies comes in the form of contributions in kind, including time and experience of American doctors, researchers and CDC. Such experiences are mutually enhanced by collaboration between researchers; and the world will be a better place if American researchers and CDC continue to collaborate with their global peers.