In its latest “Index of Failed States“, Foreign Policy magazine has ranked India (at # 110) way ahead of China (and Russia – both at #62) in terms of stability while Pakistan jostles for a position in the “Top 10″ (at # 12) with North Korea (at # 13) – both nuclear armed for good measure.
…and yet the report describes China in words that could have almost been written for India:
“…the growing divide between urban and rural, as well as continued protests in the countryside, reveals pockets of frailty that the central govenment is only just beginning to address”.
For the curious amongst you, the top 3 places in the Index go to Sudan, Iraq and Somalia.
Related posts:
Why India will* overtake China – II
China, India and the “3D Advantage”
India, China and the next decade…
Of Googlies*, Cricket, India and China
.
June 21st, 2007
Posted by
Shantanu |
China, Development Issues, Emerging Markets, Globalization, India |
2 comments
My good friend Tosh (author of “The Rising Elephant“) sent me one of his recent articles last week titled, “Eye On The Tigers” which makes the point that putting the all the BRIC countries in one basket may not only be unwieldy but also confusing and possibly inconsistent.
Excerpts:
The BRICs report published in 2003 by Goldman Sachs – which foresaw the rise of Brazil, Russia, India and China as global economc powerhouses, has acquired the aura of a Delphic Oracle.
Nevertheless, it remains confusing with regard to some key assumptions and conclusions, particularly for policymakers.
The first problem is the heterogeneousness of the BRIC membership. Demographically, Brazil and Russia have a combined population of just 330 million – against 2.4 billion for India and China.
Russia, by many accounts still a nuclear-armed superpower, is essentially an exporter of com m odities to the West and of arms to China and India – which, in some cases, its own armed forces cannot afford.
Russia is also ageing fast: 15 percent of its population is over 65 years old,against a mere 5 percent in India.
For its part, Brazil’s growth is three to four times lower, and its income distribution far more skewered, than India and China.
Indeed, the lack of a meaningful middle class is one reason for Brazil’s stagnation, while its presence in India underpins the surprising spurt in its GDP growth.
More perplexing is Goldman Sachs’s faith in the three-fold gap between Chinese and Indian GDP lasting for the next 25 years.
India has been far more efficient than China in moving up the global value chain.
Its telecoms market is now the w orld’s fastest grow ing.Outbound Indian acquisitions, ahead of China in both quality and scale, are another example.
… All this may be overlooked.
What cannot is the report’s unquestioning faith in the continuity of the current global order.
To show precedents for the BRICs, the Goldm an Sachs team turn to Japan and Germany’s rapid growth after World War II. Such straight-line insight may well apply to Japan and Germany, or Brazil and Russia…
To imagine this is true for India and China, inhabited by a third of the w orld’s population (and sometime soon, half its workforce), is curious.
…Devoid of the yardstick of the dollar, things look quite different . Both within the BRICs,and for the world outside.
For in purchasing power terms, China’s econom y is over tw ice the size of India’s, while India’s is larger than those of Brazil and Russia combined.
More dramatic is the fact that the Indian and Chinese econom ies are together already equivalent to those of the U S or the EU.
*****
I would enourage you to read the article in full – especially if you have anything to do with policy-making in Europe.
June 6th, 2007
Posted by
Shantanu |
China, Emerging Markets, Globalization, India |
2 comments
…now, if that did not grab your attention, I dont know what will!
I chanced upon this great post by friend and fellow VC-blogger Shin on Japanese VCs and the entrepreneurial/VC environment in Japan. The post was prompted by an event organised by The Pink Cow (a cuter version of Open CoffeeClub – check it out!).
Shin included some Q&A from the event in his post – which I think are very interesting and worth reproducing here for anyone who is interested in Venture Capital in Japan and the general VC ecosystem:
Q: What is the difference between the Japanese and US VC models?
[Ans: If you look at the history of the Japanese VC model and the background of the major VC players, you soon realise that the traditional Japanese VC is something quite different from the US (SV) VC model. But things are changing as business practices and competition become more global. Japanese VC is changing, or at least diversifying, in the business models it employs.]
Q: There seems to be a lack of Japanese VCs who really understand technology?
[Ans: Again, traditionally, that was indeed the case, with most of the major VC firms being affiliates (to one degree or another) of stock brokerages, commercial banks and goverment agencies, and the human resources at their disposal were limited, given the traditional lack of liquidity in the human resources market. But again this is changing, with VCs recruiting from industry (people like me), and with boutique VCs also springing up. Most of the top Japanese VC firms are large organisations, and as with any organisation, there are many different types of professionals within the organisation. The key is to find the right person to take your idea to. Stop thinking about the VC firm, and think about the individual VC.] [I thought about this question a bit more afterwards, and I think that the questioner may have some misconceptions about how we evaluate businesses. I wouldn’t say technology is not important, but I think many entrepreneurs overestimate the importance and superiority of their technology or technological skills, and the correlation between focus on technology and business success. I know that some entrepreneurs complain about the fact that VCs focus on issues which they feel to be peripheral, but we do that with justification. Our experience tells us, especially in Japan, that many businesses fail due to issues other than technology. Lack of financial planning, lack of sales/marketing ability, lack of corporate discipline in other areas, etc. It is our duty to point those out and inject some reality into many a technological daydream. The aim of a VC is to invest in a COMPANY, and help make that company successful so we can cash out and return money to our investors. I certainly only invest in businesses where their goals are aligned with ours.]
Q: Don’t VCs stack the odds in their favour with preferred stock structures?
[Ans: That is indeed the US VC model, and although it does happen in Japan too, the reality of the Japanese VC model is that currently the vast majority are common stock investments. (certain investment heavy sectors are more likely to feature preferred structures) There are signs that preferred structures are on the increase, but it is still a small minority of deals which see such structures in place. I personally think that barring a severe downturn, there will be VCs willing to continue using an ordinary stock model, and it is up to the entrepreneur to decide which set of terms and which VCs they want to work with. After all, no one is forcing them to take our money. But this ordinary vs preferred issue has to be understood in context, such as the fact that historically structuring preferred stock was subject to various limitations which made it difficult in practice to use the structure effectively. The small average size of investments is also probably a factor which has prevented VCs pushing for preferred stock and the associated liquidation preference, as is the lack of much M&A activity.]
Shin also mentions in his post that he has been thinking “seriously about…creating a venue for entrepreneurs to meet with each other and with investment professionals in a casual environment“. Perhaps Tokyo is ready for an Open Coffee Club?!
…which reminds me that I finally managed to cross an important “To-Do” off my list last week: went to the Open CoffeeClub meeting at Waterstones (24th)…more on that later.
May 30th, 2007
Posted by
Shantanu |
Entrepreneurship, Japan, Venture Capital in Asia |
5 comments
In the latest issue of TIME, Bryan Walsh has written a fairly balanced piece on carbon emissions – which unfortunately is marred by a (deliberately?) provocative headline, “The Third World Smoke Alarm” (Interestingly, the European edition of the magazine has dropped the “Third World” prefix and has printed the article simply titled “Smoke Alarm”).
It was the sub-heading though that first caught my eye. It read:
“To stop climate change, developing nations must wake up and smell the carbon”…I wish I could have added …”and developed nations must share the burden”.
I have written on this issue before and it is interesting to observe how the blame surreptitiously gets shifted to the developing nations (e.g. the alarmist title – “Third World” Smoke Alarm….surely, if it is an alarm, it is probably a “Global” Smoke Alarm?).
*** Some excerpts below ***
“…Once home to some of the most extensive rain forests in the world, Indonesia is now losing trees at a faster rate than any other nation, to flames but also to rampant logging. …Indonesia’s rapid deforestation is the main reason why this country of 245 million is the third biggest carbon emitter in the world after the U.S. and China.
But as in other developing countries, the Indonesian government says it needs to focus on economic growth to raise its people out of poverty—and that likely means that trees will be cut, cars will be added and carbon emissions will only go up.
…Drawing on the work of thousands of scientists vetted by officials from over 100 countries, the IPCC reported that future carbon emissions could be controlled using current technology like nuclear or renewable energy—and that it could be done without bankrupting the global economy. “Measures to reduce emissions can, in the main, be achieved at starkly low costs, especially when compared with the costs of inaction,” said Achim Steiner, executive director of the United Nations Environment Programme (UNEP)
…As economic growth shifts to the developing world—especially Asia—so will future carbon emissions.
Whether the world can effectively combat climate change will be determined by countries like Indonesia and India—and particularly China, which could pass the U.S. as the world’s top carbon emitter any day.
…But if developing countries choose to ignore global warming, even the most radical actions out of the developed world could be rendered meaningless.
…Because developing nations have emphasized that they can’t afford to jeopardize the pace of economic growth for the sake of the environment, the only climate-change solutions they’re likely to accept will be ones that come cheap.
Fortunately the IPCC says that’s possible—the new report concludes that the cost of stabilizing global carbon emissions by 2030 could require as little as one-tenth of a percentage point per year of global growth through the end of the century.
Those costs will have to be borne by someone, and the developing nations will rightly push for North America and Europe to pick up the check.Expect that argument to be renewed at the next major U.N. climate-change meeting in Bali, Indonesia, at the end of the year.
Developing nations make the point that they’re not responsible for the vast majority of carbon dioxide hanging around in the atmosphere—which was put there by Western countries during their own development over the past 150 years.
They argue that their own per capita-emissions rates are still far lower than those of the West, and that, therefore, climate change isn’t their responsibility.
But future global warming will hinge on how we deal with future carbon emissions—most of which will come from developing Asia. The center of gravity of climate-change politics has moved to China, India and Indonesia. Their decisions will shape the world we live in.”
*** End of Excerpts ***
Find the article in full here.
Finally, here’s a useful chart showing world carbon dioxide emissions by country between 1990 – 2035.
May 23rd, 2007
Posted by
Shantanu |
Development Issues, Emerging Markets |
25 comments
When I first heard of Lokmanch.com earlier this year, I was intrigued.
“Lokmanch”(”People’s Platform” in Hindi) is an independent Hindi news aggregator site operating out of India. About three months ago, I got in touch with the two founders and was impressed by their enthusiasm, passion and obvious love for the business.
Although their position on (and perception of) “Globalization” is very different from my own take on it…I could not help admire the amount of work and energy that they had put in this effort. As it happened. I had the chance to meet with them a few weeks after the first conversation…and I came away from the meeting hooked!
Lokmanch’s vision is simple yet powerful – to make news and content available easily and freely in languages other than English and to be an alternative to current mainstream (English) media in India.
I would like to extend this idea a little further…and this is the dream – to make information/content available to anyone, anywhere and anytime, freely…In the context of India, other than the obvious difficulties in “anywhere” and “anytime”, you also face the challenge of “anyone” since a large number of people do not speak English* – hence the appeal of non-English online news aggregator(s) like Lokmanch. This is what I would call ”Democratizing Content“.
I am excited by this and will be watching them closely…and I wonder if there is any similar site (independently aggregating regional, local news content) catering to the Chinese speaking population?
.
* Although by 2010, India will have the world’s largest number of English speakers and as Prof. David Crystal has memorably noted elsewhere, “When 300 million Indians speak a word in a certain way, that will be the way to speak it.”!
May 17th, 2007
Posted by
Shantanu |
Entrepreneurship, Globalization, India, Miscellaneous |
10 comments
An amazing slideshow by Jeff Branman (Winner of the Best Presentation award at the “World’s Best Presentation Contest” ShiftHappens
.
and for my readers familiar with India, another un-missable one…People’s Choice Winner at the same contest Panipuri by Thakkar
May 15th, 2007
Posted by
Shantanu |
China, India |
3 comments
