Friday, March 21, 2008

India Earns Its Spurs and Loses Its Stripes: The Plight of the Tiger

The year is 2020. India is close to fulfilling the promise of India Vision 2020, the brainchild of India's former president, A.P.J Abdul Kalam. It was an ambitious plan that started 15 years ago with the stated aim of transforming India into a "developed country".

Why the quotes? For starters, the phrase is so subjective that it is impossible to attach a satisfactory definition. But there is another reason that really puts the so-called development into perspective. India's rise into the ranks of industrialized nations has come at a terrible price: the loss of is natural habitat and ecosystems. While there have been many victims (both flora and fauna) of this rapid march towards development, no other story is more tragic than the near-extinction of the Panthera tigris bengalensis, or the Royal Bengal Tiger.

In 1972, the Government of India launched 'Project Tiger', a conservation project aimed at reviving the tiger habitat in India, home to more than half the world's tiger population to this day. While the idea was noble, the story of Project Tiger is an illustration of how bureaucracy stifles new initiatives. A 2004 census of the tiger population across the nation's 28 tiger reserves revealed some startling data. The tiger population had declined in most reserves, and in one case, the Sariska Tiger Reserve in Rajasthan, once the hunting ground of the Maharaja of Alwar, the population had been wiped out completely. The number of tigers in India has dwindled to 1,500 odd, down from even 3,000 at the turn of the century, a mere eight years ago.

A combination of poaching and village encroachment in so-called protected areas has had a deadly impact on the habitat of the Royal Bengal Tiger and other endangered species. One of the prime drivers of poaching has been the illegal tiger parts trade for use in traditional Chinese medicine. Caches of tiger skins, rhino horns, bear paws and elephant tusks are openly sold in parts of Asia and are transported across borders with impunity.

To its credit, the Indian Government has been taking steps to prevent poaching, but the efforts have largely been in vain. There is an urgent need to achieve the following:

1. Manage the demand of traditional Chinese medicines by either
a. Banning the tiger parts trade outright, or
b. Legalizing the trade and breed tigers in captivity for this purpose
2. Relocate settlements and villages that are currently situated in protected national wildlife reserves to other areas, and give villagers a sustainable form of living.
3. Cross-breed tigers and other animals in captivity (inbreeding causes problems) and release them into the wild in a scientific manner (environmentalists are divided on this method)
4. Create new habitats for the most endangered species to prevent eradication of the whole population due to localized natural and man-made calamities.

William Blake, the English poet wrote the poem 'Tiger' more than a century ago:

'Tiger, tiger, burning bright
In the forests of the night,
What immortal hand or eye
Could frame thy fearful symmetry?'


One can almost visualize the aura and glory of the tiger in Blake's immortal words.

Unless we conserve our natural habitat and protect its inhabitants, the development of India, and other developing countries will be incomplete. Indeed, we shall have regressed by losing our most precious treasure.

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Tuesday, March 18, 2008

Populism in American Politics: Why the Next President Needs to be an Elitist

Amid the ruckus of 3AM calls, superdelegates, and allegations of racism, one curious factor has been lost in this presidential race: the increasingly important role of populism in American politics, especially during election year.

All three candidates in the fray are singing a distinctively populist tune. Barack Obama (Anti-NAFTA), Hillary Clinton (Job-protectionism) and John McCain (National Security) have significantly racheted up their appeals to the working-class. One cannot really blame them for adopting this strategy. By and large, this section of Americans voters is increasingly wary of free trade causing jobs to be shipped overseas, as well as being fed up with the confused approach to national security of the current administration.

The results have shown that this particular strategy is paying handsome dividends. On the Republican side, McCain has sewn up the party's nomination despite being viewed with suspicion by the party's more conservative section. Even his detractors admit that McCain is someone who has the right background and qualifications to right America's national security policy. On the Democratic side, Clinton has always appealed to the White, working-class populace and to her credit, she has maintained her support base, as evidenced by her victory in Ohio and her positive poll numbers in Pennsylvania.

Obama's case is a bit more complicated. He started off weak, but made rapid ground in the race, largely due to his appeal to educated, urban males and Blacks. However, he has recently changed tack and his campaign rhetoric has taken a more populist approach. His calls for "change", heady slogans such as "the urgency of now" (whatever that means) and his staunch anti-NAFTA stance are viewed as his attempts to maintain support amongst swing voters.

In a recent article in the Financial Times, Alan Greenspan has argued that a free-market, tarriff-free approach should continue to be the cornerstone of American economic policy, the one success of the current administration. The venerable banker has history on his side. A protectionist economic approach has always tended to pay dividends in the short-term, but has typically backfired over the course of multiple business cycles.

Take the current credit crisis. Amid the carnage on Wall Street, one silver lining for the top investment banks has been what are known as Sovereign Wealth Funds (SWFs), assets held by governments in another country's currency. These comprise of financial instruments, such as stocks, bonds and derivatives. It is hard to believe, but had it not been for SWFs, behemoths like Citi and Merrill Lynch would have been in an even worse situation than they currently are.

Thus far, most Western economies, including the U.S', have maintained regulations that have allowed freer capital and labor flows. Given that US economic policy still sets the tone for the Europeans, the current rhetoric in the American electoral landscape could set a dangerous precedent in the years to come.

Alexander Hamilton, America's first treasury secretary, and a staunch Federalist, believed that the well-educated elite should set the nation's economic agenda. All three presidential candidates in the 2008 race would do well to follow his sage advice.

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Monday, March 17, 2008

Fed's Bailouts: Money for Nothing

$2 can buy you a lot of things. Even today, with the dollar approaching historic lows, $2 goes a long way in most places on earth. It can get you a burger at McDonalds, or a Pound Sterling, or even a month's supply of medicines for a child in sub-Saharan Africa (Thanks for the references, Elon). On Wall Street, it is a small fortune, if today's news is anything to go by.

In a deal that was fast-tracked by the federal government to avoid bankruptcy of Bear Stearns, the nation's fifth-largest investment bank, JP Morgan announced that it was buying out the beleaugured said bank for $236.2 million, at $2 a share, in a press release issued before the markets opened today. This price was a fraction of its book value less than month ago. The Federal Reserve (Fed) and the US government did their part by extending a gurantantee of $30 Billion of Bear Stearns assets.

I am confused. First, on March 11th, the Fed bails out investment banks by giving them a $200 billion gift - essentially, an offer to buy their AAA-rated debt in exchange for treasury bonds. This, after it was revealed that said banks had made some rather questionable decisions with their excessive exposure to the subprime market, contributing to the world-wide credit crisis. In effect, the Fed (ergo, the tax-payer) is paying for the mistakes of a few greedy suits at the nation's top investment banks.

The reasoning goes that not doing so would lead to a severe liquidity crisis, which apparently, is much worse than what the financial markets are facing right now. Fair enough. But surely the people who led us to this situation will have to pay for their mismanagement, right? Absolutely, but only if you count multi-million payouts for outgoing CEO's as punishment. To add insult to injury, the hedge funds that have contributed to this crisis by their short-plays, stand to gain from the fall in the market indices by covering their short positions.

So, the lesson from the Fed for irresponsible lenders for creating a crisis that has led to a global credit contagion? No worries. Mistakes happen. Oh, and here is $200 Billion to help ease your troubles. The lesson for the average investor like you and me? If your market investments have lost a significant portion of their value largely due to a crisis that was created by a select group of lenders, tough luck to you.

Finally, here are some numbers for you to ponder: Chuck Prince, Citi's ousted CEO, left with vested stock holdings valued at $94 million and roughly $53.1 million in salary he received over the four years during his tenure as CEO. He also received a pension of $1.74 million and another one million stock options. That's a lot of $2 bills.

In the meanwhile, I am off to get a burger at McDonalds. Unlike the Fed's largesse, which keeps giving, the burger at the Mac is a limited time offer.

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Saturday, March 15, 2008

The Americanization of Cricket

February 20th will be remembered as the day the Americanisation of world cricket commenced. Is America taking to cricket? Actually, the converse. Cricket is taking to America. It is the day that player auctions were held for the inaugural version of the Indian Premier League (IPL), a two-month long cricket tournament that will be organized by BCCI, India's cricket board.

$1.5 Million. For the average Joe, that amount is hard to grasp. For the average Indian, even more so (even with its new-found riches, India is still largely impoverished). That's 2 Juhu sea-facing mansions, 30 Porsche Carreras, 200 Rolex Oyster watches. That's $1.5 Million for two months work. Nothing wrong with that.

Unless, of course, you are talking about two months of hitting a red leather sphere with a wooden paddle, or catching said sphere with oversized leather gloves. The benefeciary of this largesse, Mahendra Singh Dhoni, the new ringleader of the circus that is Indian cricket, is probably most deserving of this bounty. The man has just led his country's cricket team to a tournament victory over her most capable rival. Indeed, he probably earned it last year, when he led his young team to glory in a tournament for Twenty20, the latest episode in cricket's march towards crass commercialisation.

Sure, sports such as tennis, club soccer and golf are commercialized, but are still thriving. Indeed, they are going places where they have never been before. Asia is the new frontier for these sports, and are poised to take off to an order of magnitude. But comparison of present-day cricket to a different set of sports is more apt. American sports. America's sports leagues - baseball, American football and basketball are probably the richest in the world, barring England's Premier League. But these sports are characterized by what Disraeli termed 'Splendid Isolation', who, of course, was describing Britain's foreign policy in the late 19th century, but this phrase may well be used to describe the landscape of American sports.

Played and watched mostly by locals, these sports have little appeal outside the shores of North America. Declining interest levels have made desperate tactics such as cheerleaders, halftime show gimmicks, and slick P.R the norm in American sports. Overinflated egos (Stephon Marbury of the NY Knicks and almost every NBA player worth his bling), callousness (Michael Vick of the dog-fighting infamy), drug scandals (Clemens, Giambi in baseball, Marion Jones in athletics), cheating (Bill Belichik of pro football) are the result.

Cricket, while certainly more global and pristine, is still limited to the Commonwealth, and is likely to remain so, given the intricacies of the sport, which make cricket, cricket. While other sports have the potential to grow in Asia, specifically India, cricket is already there, and there is no other country (with the exception of China) where it can grow on such a massive scale.

All this may be moot, and cricket's 'glorious uncertainties' may well win out over the 'certainties' of commercialization. But I have a feeling that cricket will go the way of American sports. Why do I think that? Well, to start with, I could give you 1.5 million reasons....

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Friday, March 14, 2008

Listening to The Silence

Silence. I hear silence. I have so much to say, and so I hear ambient nothingness. Is it really silence, or are all the sounds canceling themselves out?

Noise. The defining characteristic of our time. A cacaphony of voices, opinions, advice, reviews, commentary, talk. "Talkte raho!", as the nightwatchman in your mind would say. What about listening? As in, closing the oral orifice, and opening the aural. Hmmm...

But Buzza, why do you write a blog when you advocate listening? Get in line like the rest of us and wait your turn to talk, you say. Ok baba, I admit it....I am a creature of my generation. I love talking. But I hope (against hope) that by blogging on my four favorite topics - Economy, Politics, Sports, and Nature, I may end up learning something from the multitudes of talkers on the Intertubes. In the process, maybe learn the art of listening. And maybe, just maybe, hope that the noise in my head heeds to the silence outside.

With that said, here goes.....