Pareto principle at work in Arunachal ?

Ever wondered why 20% of the time expended produces 80% of the results,

• Or, 80% of your phone calls go to 20% of the names in your phone list,
• Or, 20% of the paper has 80% of the news,
• Or, 80% of the news is in the first 20% of the article,
• Or, 20% of the people causes 80% of the problems,
• Or, 80% of the problems in the world are because of Religion and its 20% of any Religion that are followed for the good.
  

          80-20 % observation is a very interesting way to look at the things happenings around the world, whose extension over the business world has been used to achieve the so called benefits of socio-economic upliftments, for the 80% of the people who happens to serve 20% of the people. The impinging reverberation of this stark inequality calls forth for a new class of world over.

This disproportion theory of 20-80% is popularly known as the Pareto principle which was first propounded by Vilfredo Pareto(1848-1923). He observed that 20% of the people of Italy who formed the upper strata of the societal hierarchy nearly owned about 80% of the wealth. The concept of such disproportion in the society was thus put forward by Pareto. The exact value of 20 and 80% are not necessarily true or significant every time. But, the thread of truth attached with such disporportion distribution of wealth is something that can't be overlooked.

And the same stands true for what we can observe in Arunachal Pradesh. Only the politicians, their relatives, bureaucrats, engineers and few elite contractual players etc reaps the benefits of the funds that were supposedly meant for the overall development. So, its the wealthy 20% arunachali population that owns the 80% of the wealth. Now, if we further ponder upon how the fund-flow system in Arunachal assumes figure... then one might have to oblige with the fact that... there is more than 80% probability that these 20% of the people representing the wealthy arunachalis is somehow spun around in the same network that remains exclusively theirs.


Now, what does other 80% of the Arunachali people do... people who represents the middle and lower section of the SEC ( socio economic classificatory groups )?
A good question... and the answer is - 80% of the whole arunachal population competes amongst eachother for the scarce and limited 20% of the fund. This 80% of the population represents the people who are frustrated for this un-equitable distribution of wealth which by no exception is a handiwork of an economic system that works only for the sustainment of its existence rather than existing for people who needs the most.


This vicious cycle of 80-20% in wealth distribution is multiplicative in nature, which makes it imperative for the people in the border of this distinctive groups of 80-20 to find a way into the upper 20. And for this to happen they have no other option but to get into the nexus of this cyclic proportionate distribution of wealth.


Going by definition of any economic community run by a government that is being elected by the overall population the following points would have been achievable:
- the 20% of the people who work for the 80% of the people would have been responsible for distribution of 80% of the wealth to atleast 80% of the people.
- The reversed implication of Pareto principle would have been observed.

But, the subtle truth of asking for an Utopian kind of society in present context is too much to ask for. Again, a reedemable and a healthy proportion much in favor of society at large isn't an impossible feat to achieve. An conscientious effort to bring in this slow but imminently desired change in the 80-20% has to be brought forth.

Days of reckoning the same wouldn't be far if we believe that onus lies on each one of us.

A society of new economic order can wait!

Read more...

Recession or the slowdown ?

Just a snippet from the Aarohan Case Study meet ( or rather contest ) organized by students of Supply Chain Management of SIIB. 

When your attendance count is among the least in the class and the institute makes it rather mandatory to keep a minimum of 90%, failing which you wouldn't be allowed to sit for the placements...then you have no option but to oblige even if it meant keeping your ass glued to a remotely located seat of the auditorium for straight 7 hours.  Well, today was one such day... various experts and gurus from supply chain industry were among the dignified judges for the ocassion and I had to hear all they had to pour out... but am glad that I did that! 

The theme of the event was ...the Supply Chain in recessionary period ... which everyone by the end had to agree that it was slightly termed wrong. Should have been - supply chain in slowdown period, not recession. 

Everyday, newspapers flaunts about the troubling time all the B-schools are facing due to the recession in the bearish market which months ago was bullish. But, in an Indian context...is it really recession for us. It is certainly a recession for the western markets in U.S because of the mortgage crisis, failure of the investment banks and finally leading to liquidity crisis... but does it work and mean the same for India. 

Indian economy, which was liberalised in 90s was the biggest thing that had happened to India to see it going up the ladder of economic power block of the world. And till, to the day it stands true. Government of India with its economic regulatory bodies has been the prime reason why India isn't facing, what we would have called the real recession. 

Whenever there is recession worldwide we see Indian government intervention through RBI cutting/increasing the repo/reverse repo rates. Which makes a perfect sense of the globalized economy we are tangled with. Recession somewhere is bound to have some sort of impact on the economy elsewhere. 

The recent collapse of two U.S Investment companies ( Meryll lynch & Lehman bros ) filling for bankruptcy finally triggering the panicky of Recession worldwide remains the ubiquitous and most popular explanation of the topsy turvy economic condition. But, when we bring it down to Indian context this would have never happened. Indian economy though liberalised remains a protected economy and thats for every good reason. The GOI with its apex regulatory bodies intervenes everytime it senses companies in troubled water. Hence, when we talk about Indian market, we would hardly find any companies filing for bankruptcy. And this remains the most attractive part of the protected Indian economy. 

If this isn't Recession with so many companies around employing job-cutting tactics then what is it?

And along with that we have various organizations predicting a GDP of 5-6% for subsequent years until and unless we get a government ruling at the centre which is open to foreign investments.

There is a healthy difference between the Recession and the Slowdown - which is what Indian economy is facing as of now. Recession can be termed as a period of negative growth for more than two quarters in a row and on the other hand slowdown is when the economy is growing at a slower rate, and is very Industry specific. Recession is a vicious cycle that sees a fall in profits of the overall market and tremendous decline in the economic growth rate, leading to cost-cutting methods companies start employing. Which ultimately results into large figure of unemployment and reduced spending power of the consumers. But, on the other hand what India is witnessing is just a slower growth rate of economy. 

You might one to go through this article as well Capitalmoney

In any marketing lectures of B-schools, quite often we get to hear about 'Blue Ocean Strategy' which exists vis-a-vis to 'Red Ocean Strategy'. These strategies were coined by two harvard grads Kim and Mauborgne and which they later went on to publish under the header Blue Ocean Strategy. 

For those who aren't familiar with these terms,

Blue Ocean strategy refers to a kind of business strategy that promotes creation of new market space known as "blue ocean" rather than contesting in an existing competition intensive market. These blue oceans are created when a company achieves value innovation beside adding value for both the company and the buyer. The trademark of such strategy is that it kills the competition to get a market of its own. 

One of the speaker of the Aarohan SCM summit pointed out very succinctly that it's only during good economic condition Industry people talk about Blue oceans and the red oceans. Quite obvious, merrier times would represent more blue oceans, and any company employing blue ocean strategy trying to find a new blue ocean for itself. The blue oceans gets more blue-ed. 

But what about when the economy is in a slowdown phase? Does it simply means diminishing needs of the consumers? Where does these marketing jargons go then? 

This scenario would tantamount to 'Red Oceans', where the market space gets crowded and the prospects for profit and growth are highly reduced because of the decrease in purchasing power. But, would that implicate that needs of the consumers have decreased? Certainly not... Then how do we justify the cost-cutting measures companies suddenly start using whenever market is bearish. Wouldn't creating or finding a blue ocean amidst the red oceans in these hard times describe the excellent value addition any company can add to itself and for the that matter the consumers too. 

What better marketing strategy and branding would that be, but quite far away from what we can expect from Indian market, which remains one of the most risk aversive market. Maybe for all good reasons ( whatever it is ). 

To end it in an optimistic way, all gone well...  we are in slowdown, not recession for certain! :)

Read more...

" Petro Dollar Vs Petro Euro " - The new Oil wars

I recently came across this insightful article and thought, shared it with you all. This article has most of the points covered that is also apparently shown in a popular documentary ZEITGEIST. 

-------------------------------------------------------------------------------------------------------------

Why the Dollar Bubble is about to Burst? IRAN HAS REALLY DONE IT...more deadlier than the nuclear..

The Voice (issue 264 -) ran an article beginning, ' Iran has really gone and done it now. No, they haven't sent their first nuclear sub in to the Persian Gulf . They are about to launch something much more deadly -- next week the Iran Bourse will open to trade oil, not in dollars but in Euros' This apparently insignificant event has consequences far greater for the US people, indeed all for us all, than is imaginable.

Currently almost all oil buying and selling is in US-dollars through exchanges in London and New York . It is not accidental they are both US-owned..

The Wall Street crash in 1929 sparked off global depression and World War II. During that war the US supplied provisions and munitions to all its allies, refusing currency and demanding gold payments in exchange.

By 1945, 80% of the world's gold was sitting in US vaults. The dollar became the one undisputed global reserve currency -- it was treated world-wide as `safer than gold'. The Bretton Woods agreement was established.

The US took full advantage over the next decades and printed dollars like there was no tomorrow. The US exported many mountains of dollars, paying for ever-increasing amounts of commodities, tax cuts for the rich, many wars abroad, mercenaries, spies and politicians the world over. You see, this did not affect inflation at home! The US got it all for free! Well, maybe for a forest or two.

Over subsequent decades the world's vaults bulged at the seams and more and more vaults were built, just for US dollars. Each year, the US spends many more dollars abroad that at home. Analysts pretty much agree that outside the US , of the savings, or reserves, of all other countries, in gold and all currencies -- that a massive 66% of this total wealth is in US dollars!

In 1971 several countries simultaneously tried to sell a small portion of their dollars to the US for gold. Krassimir Petrov, (Ph. D. in Economics at Ohio University ) recently wrote, 'The US Government defaulted on its payment on August 15, 1971 . While popular spin told the story of `severing the link between the dollar and gold', in reality the denial to pay back in gold was an act of bankruptcy by the US Government.' The 1945 Breton Woods agreement was unilaterally smashed.

The dollar and US economy were on a precipice resembling Germany in 1929. The US now had to find a way for the rest of the world to believe and have faith in the paper dollar. The solution was in oil, in the petrodollar. The US viciously bullied first Saudi Arabia and then OPEC to sell oil for dollars only -- it worked, the dollar was saved. Now countries had to keep dollars to buy much needed oil. And the US could buy oil all over the world, free of charge. What a Houdini for the US ! Oil replaced gold as the new foundation to stop the paper dollar sinking.

Since 1971, the US printed even more mountains of dollars to spend abroad. The trade deficit grew and grew. The US sucked-in much of the world's products for next to nothing. More vaults were built.

Expert, Cóilínn Nunan, wrote in 2003, 'The dollar is the de facto world reserve currency: the US currency accounts for approximately two thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all world exports are denominated in dollars. In addition, all IMF loans are denominated in dollars.' Dr Bulent Gukay of Keele University recently wrote, 'This system of the US dollar acting as global reserve currency in oil trade keeps the demand for the dollar `artificially' high. This enables the US to carry out printing dollars at the price of next to nothing to fund increased military spending and consumer spending on imports. There is no theoretical limit to the amount of dollars that can be printed. As long as the US has no serious challengers, and the other states have confidence in the US dollar, the system functions.'

Until recently, the US-dollar has been safe. However, since 1990 Western Europe has been busy growing, swallowing up central and Eastern Europe . French and German bosses were jealous of the US ability to buy goods and people the world over for nothing. They wanted a slice of the free cake too. Further, they now had the power and established the euro in late 1999 against massive US-inspired opposition across Europe , especially from Britain - paid for in dollars of course. But the euro succeeded.

Only months after the euro-launch, Saddam's Iraq announced it was switching from selling oil in dollars only, to euros only -- breaking the OPEC agreement.. Iran , Russia , Venezuela , Libya , all began talking openly of switching too -- were the floodgates about to be opened?

Then aero planes flew into the twin-towers in September 2001. Was this another Houdini chance to save the US (petro) dollar and the biggest financial/economic crash in history? War preparations began in the US But first war-fever had to be created -- and truth was the first casualty. Other oil producing countries watched-on. In 2000 Iraq began selling oil in euros. In 2002, Iraq changed all their petro-dollars in their vaults into euros. A few months later, the US began their invasion of Iraq .

The whole world was watching: very few aware that the US was engaging in the first oil currency, or petro-dollar war. After the invasion of Iraq in March 2003, remember, the US secured oil areas first. Their first sales in August were, of course, in dollars, again. The only government building in Baghdad not bombed was the Oil Ministry! It does not matter how many people are murdered -- for the US , the petro-dollar must be saved as the only way to buy and sell oil - otherwise the US economy will crash, and much more besides.

In early 2003, Hugo Chavez, President of Venezuela talked openly of selling half of its oil in euros (the other half is bought by the US ). On 12 April 2003, the US-supported business leaders and some generals in Venezuela kidnapped Chavez and attempted a coup. The masses rose against this and the Army followed suit. The coup failed. This was bad for the US .

In November 2000 the euro/dollar was at $0.82 dollars, its lowest ever, and still diving, but when Iraq started selling oil in euros, the euro dive was halted. In April 2002 senior OPEC reps talked about trading in euros and the euro shot up. In June 2003 the US occupiers of Iraq switched trading back to dollars and the euro fell against the dollar again. In August 2003 Iran starts to sell oil in euros to some European countries and the euro rises sharply.. In the winter of 2003-4 Russian and OPEC politicians talked seriously of switching oil/gas sales to the euro and the euro rose. In February 2004 OPEC met and made no decision to turn to the euro -- and yes, the euro fell against the dollar. In June 2004 Iran announced it would build an oil bourse to rival London and New York , and again, the euro rose. The euro stands at $1.27 and has been climbing of late.

But matters this month became far, far worse for the US dollar. On 5th May Iran registered its own Oil Bourse, the IOB. Not only are they now selling oil in euros from abroad -- they have established an actual Oil Bourse, a global trading centre for all countries to buy and sell their oil!

In Chavez's recent visit to London ; he talked openly about supporting the Iranian Oil Bourse, and selling oil in euros. When asked in London about the new arms embargo imposed by the US against Venezuela , Chavez prophetically dismissed the US as 'a paper tiger'.

Currently, almost all the world's oil is sold on either the NYMEX, New York Mercantile Exchange, or the IPE, London's International Petroleum Exchange. Both are owned by US citizens and both sell and buy only in US dollars. The success of the Iran Oil Bourse makes sense to Europe , which buys 70% of Iran 's oil. It makes sense for Russia , which sells 66% of its oil to Europe . But worse for the US , China and India have already stated they are very interested in the new Iranian Oil Bourse.

If there is a tactical-nuclear strike on - deja-vu - `weapons of mass destruction' in Iran , who would bet against a certain Oil Exchange and more, being bombed too?

And worse for Bush. It makes sense for Europe , China , India and Japan-- as well as all the other countries mentioned above -- to buy and sell oil in Euro's. They will certainly have to stock-up on euros now, and they will sell dollars to do so. The euro is far more stable than the debt-ridden dollar. The IMF has recently highlighted US economic difficulties and the trade deficit strangling the US-- there is no way out.

The problem for so many countries now is how to get rid of their vaults full of dollars, before it crashes? And the US has bullied so many countries for so many decades around the world, that many will see a chance to kick the bully back. The US cannot accept even 5% of the world's dollars -- it would crash the US economy dragging much of the world with it, especially Britain .

To survive, as the Scottish Socialist Voice article stated, 'the US , needs to generate a trade surplus to get out of this one. Problem is it can't.' This is spot on. To do that they must force US workers into near slavery, to get paid less than Chinese or Indian workers. We all know that this will not happen.

What will happen in the US ? Chaos for sure. Maybe a workers revolution, but looking at the situation as it is now, it is more likely to be a re-run of Germany post-1929, and some form of extreme-right mass movement will emerge...

Does Europe and China/Asia have the economic independence and strength to stop the whole world's economies collapsing with the US ? Their vaults are full to the brim with dollars.

The US has to find a way to pay for its dollar-imperialist exploitation of the world since 1945.. Somehow, eventually, it has to account for every dollar in every vault in the world.

Bombing Iran could backfire tremendously. It would bring Iran openly into the war in Iraq , behind the Shiite majority. The US cannot cope even now with the much smaller Iraqi insurgency. Perhaps the US will feed into the Sunni v Shiite conflict and turn it into a wider Middle-East civil-war. However, this is so dangerous for global oil supplies. Further, they know that this would be temporary, as some country somewhere else, will establish a euro-oil-exchange, perhaps in Brussels .

There is one `solution' -- scrap the dollar and print a whole new currency for the US . This will destroy 66% of the rest of the world's savings/reserves in one swoop. Imagine the implications? Such are the desperate things now swimming around heads in the White House, Wall Street and Pentagon.

Another is to do as Germany did, just before invading Poland in 1938. The Nazis filmed a mock Polish Army attack on Germany , to win hearts and minds at home. But again, this is a finger in the dam. So, how is the US going to escape this time? The only global arena of total superiority left is military. Who knows what horrors lie ahead. A new world war is one tool by which the US could discipline its `allies' into keeping the dollar in their vaults.

The task of socialists today is to explain to as many as possible, especially our class, that the coming crisis belongs purely to capitalism and (dollar) imperialism. Not people of other cultures, not Islam, not the axis of evil or their so-called WMDs. Their system alone is to blame.

The new Iranian Oil Bourse, the IOB, is situated in a new building on the free-trade-zone island of Kish , in the Persian Gulf . It's computers and software are all set to go. The IOB was supposed to be up and running last March, but many pressures forced a postponement. Where the pressure came from is obvious. It was internationally registered on 5th May and supposed to open mid-May, but its opening was put off, some saying the oil-mafia was involved, along with much international pressure. ............................ In 2007 Crude was trades around 60 usd. Everyone know dollar was getting weaker and weaker day by day. Than US with the help of their two NYMEX & IPE exchange started rising the price of crude by Future trading on crude( called speculation). Today crude is around 140 usd. It means whole world who were paying 60 usd, now paying 140 usd, means demand of dollar increase to 230% and dollar start again rising. Even OPEC recently that in hike og crude, 60% contribution is due to speculation (Future market). Moral of story is USA has & will go to destroy any nation to keep its monopoly of dollar in world. 

Read more...