Ride on our Dreams, Ride to the Moon!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Long have we suffered
Too long have we been ignored
Poisoning, self-immolation, drowning
suicides and murders, you name it
Been there, seen that.
Promised the green revolution,
Only to be subsidized in to impoverishment
Herded like cattle in to morchas and stampedes
Guinea pigs for MNCs testing their wares
Are we gullible illiterates? Followers in herd-mentality?
Mass sacrifices at the altar of vote politics?
'Beneficiaries' of many a policy
that enrich the politicians and businesses
who pander our poverty among the powers that be?
Have we been reduced in to dated statistics
for trend analysis in annual reports?
Are we guinea pigs in life insurance scams?
Organ donors for foreigners wealthy?
Insipid, stale news unfit for Headlines Today
displaced in the papers by district sports?
Trashed in oblivion, never picked again?
Now that the lands are in lien,
and we have drowned in misery
Shall we change vocations,
break ships that moved foodgrains?
Move in to town to cook and clean
live in the jhopdi by your high-rise
for a few grains of rationed, export-quality wheat?
Suppressed seemingly in to eternal slavery,
what hope should we hold out now
for our family, our children, their future?
Elections are drawing near,
Perhaps our voices seem a tad louder?
Shall we seek the fruits of democracy?
Equal opportunity, equal access, constitutional rights,
Why, even mere human rights?
Schools for our children, water to drink
A place to call home, remunerative farming?
Or, as they beckon us, shall we
make a beeline to the party leader's?
Perhaps lady luck will smile this time
in order of torture, if not penury?
Will the nuke deal change our lot?
Will color cellphones hasten aid?
Will intra-day hedging in commodity futures
bring my child a meal a day?
Will the PSU IPOs pull us out?
Will policy reform do us good?
Should we buy a handful BT cotton seed
with 'trickle down' disaster relief?
Sell our lands away for an SEZ?
After all, the Green Revolution has passed us by
(Yes Sir, green it was very!)
Shall we now await the IT revolution?
Beep a number come loan-default time?
Is this the nation Gandhi died for?
Where Mother Teresa led by example?
Are we worthy of Ambedkar, Amte and Bhave?
Is this the India they envisioned?
As we sleep in the open and gaze at the sky
The stars seem dimmer and farther away
They may steal our lands and our home
but our dreams, they shall always be
May our dreams be the wind beneath your wings.
Ride on our dreams, Ride to the moon
And when you are there, don't look back,
Go on, go for the stars!
Saturday, October 27, 2007
Monday, October 22, 2007
IPOs, Lies and Videotape (Yes, Lies, All Lies!)
IPOs, Lies and Videotape
(Yes, Lies, All Lies!)
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Ever so often, the media draws our attention to the zooming stock markets and what the sky-high PE multiples portend for valuation and future course of the market. In developed economies, the stock market is so large and so mature, that practically no IPO, no matter what size, dents the market. The story is very different in emerging economies like China and India where large state-run enterprises, fed with government protection and subsidy, are privatised by offering them in IPOs to the stock market. The relative size of these IPOs in relation to the market capitalization, though small, is significant enough to induce market volatility as investors pull out of their existing holdings to subscribe.
In developed nations, these decisions are unnecessary, even illegal. Entrepreneurs take their enterprise to the market at a time they judge convenient or optimal. That brings to the fore many questions: What the IPO size should be (ie, which enterprise to offer and what percent of the stockholding), when it should be offered; whether it should be graded and what the price band should be. And even presuming the market regulator works independently of the ruling party in the center (yup, have a good laugh!), in what order should the regulator permit these IPOs to open in the market? At any given time, there are 50-odd companies that have filed their prospectus with the regulator. Are these issues timed according to quality? Quality as certified by the grading authority, a certification that is presently entirely optional, giving rise to the signaling and lemons problem economists talk about. (If my IPO is truly a good prospect, why would I have it certified? Then again, I could signal to investors by having it certified. And to the contrary, certification may enhance my image if my prospects aren't that good. After all, I can arrange four quarters of PAT rising at 40% from a quarter with loss!) Do the regulators yield with regard to the timing if the pricing is closer to the government's wishes? (After all, large listing gains are beneficial to FIIs and the stupid small investor who is also a voter!) Wouldn't it be more transparent and informative, if these entrepreneurs competed with each other to bid for IPO slots?
Now that's an idea worth exploring. Entrepreneurs who realize that timing is as much a decision variable as pricing and certification will bid different amounts for their IPO slot depending on the condition of the market, their prospects, their needs and the (perceived) number of competitors. The bidding will ensure that those firms that wish to 'strike the iron when it is hot', perhaps for want of funds to expand, (or reasons not that abstruse) will bid high for a slot. High-priced IPOs will seek the market when the PE is inflated. Bargain IPOs will be deferred to tepid markets. The market PE may not zoom higher than do the realty stocks on BSE. The ruling party, FIIs and IPO funds may no longer be able to play hokey with your fortunes at the market. And that would do the long term investor a lot of good.
Then again, don't read much in to this column. It may have already been 'purchased' away! These days, even lies command a price!!!!!
(Yes, Lies, All Lies!)
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Ever so often, the media draws our attention to the zooming stock markets and what the sky-high PE multiples portend for valuation and future course of the market. In developed economies, the stock market is so large and so mature, that practically no IPO, no matter what size, dents the market. The story is very different in emerging economies like China and India where large state-run enterprises, fed with government protection and subsidy, are privatised by offering them in IPOs to the stock market. The relative size of these IPOs in relation to the market capitalization, though small, is significant enough to induce market volatility as investors pull out of their existing holdings to subscribe.
In developed nations, these decisions are unnecessary, even illegal. Entrepreneurs take their enterprise to the market at a time they judge convenient or optimal. That brings to the fore many questions: What the IPO size should be (ie, which enterprise to offer and what percent of the stockholding), when it should be offered; whether it should be graded and what the price band should be. And even presuming the market regulator works independently of the ruling party in the center (yup, have a good laugh!), in what order should the regulator permit these IPOs to open in the market? At any given time, there are 50-odd companies that have filed their prospectus with the regulator. Are these issues timed according to quality? Quality as certified by the grading authority, a certification that is presently entirely optional, giving rise to the signaling and lemons problem economists talk about. (If my IPO is truly a good prospect, why would I have it certified? Then again, I could signal to investors by having it certified. And to the contrary, certification may enhance my image if my prospects aren't that good. After all, I can arrange four quarters of PAT rising at 40% from a quarter with loss!) Do the regulators yield with regard to the timing if the pricing is closer to the government's wishes? (After all, large listing gains are beneficial to FIIs and the stupid small investor who is also a voter!) Wouldn't it be more transparent and informative, if these entrepreneurs competed with each other to bid for IPO slots?
Now that's an idea worth exploring. Entrepreneurs who realize that timing is as much a decision variable as pricing and certification will bid different amounts for their IPO slot depending on the condition of the market, their prospects, their needs and the (perceived) number of competitors. The bidding will ensure that those firms that wish to 'strike the iron when it is hot', perhaps for want of funds to expand, (or reasons not that abstruse) will bid high for a slot. High-priced IPOs will seek the market when the PE is inflated. Bargain IPOs will be deferred to tepid markets. The market PE may not zoom higher than do the realty stocks on BSE. The ruling party, FIIs and IPO funds may no longer be able to play hokey with your fortunes at the market. And that would do the long term investor a lot of good.
Then again, don't read much in to this column. It may have already been 'purchased' away! These days, even lies command a price!!!!!
Saturday, October 20, 2007
Auto Loans! Dime a Thousand Dollars!
Auto Loans! Dime a Thousand Dollars!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
7 years after returning to India, I am still getting used to the way in which policies are set in this country. Recently, I read that the Honorable FM exhorted PSU banks to find ways to lower the interest rate on loans. Specifically, he sought lower interest rates to stimulate the auto sector growing at less than the 'target' rate. That got my old moth-balled brain whirring. Isn't that what the doctor ordered for our beleaguered transport sector? Apparently, what we need is not investment in good roads, road-widening and flyovers, more buses, an MRTS or a better traffic management, but more vehicles on the road. More vehicles for urban traffic that moves at a snail's pace negotiating congestion and snarls. More cars, more smoke-belching RAVs, more vans and more trucks on narrow roads getting narrower by the day. Wonder what motivated the FM's request. Does the Government's IO model reveal new vehicle purchases as the best means to increase the GDP? Perhaps it the best means to couch the increase in CO2 emissions required to accept a baseline emissions in a global warming treaty? If so, the minister figures it right that reducing the interest rate charged by banks is the appropriate policy prescription. After all, the upfront fixed cost is the largest obstacle to purchasing vehicles. And if banks can lower the interest rate on loans to an extent that large, smoke-belching vehicles are affordable even to the clerk scrutinizing the loan document, then that must herald good times in the stock market to those invested in the auto and the steel sector. Right?
Wrong. Aren't we doing exactly the opposite of what we should be? Shouldn't our focus be on infrastructure first? Shouldn't infrastructure projects qualify for the lowest interest rate? And even we do wish to lend money for vehicle purchases, shouldn't we price in the externalities caused by vehicles, if not in 'time of day' road pricing and emissions taxes, then in loans rates? Shouldn't loan rates vary with the emissions performance or the size (and fuel) of the vehicle? Personally, and I suspect many among us, would either defer the purchase or buy a smaller (cleaner) vehicle if the loan rate were 20% instead of 10%. And banks would have more money to divert to transport infrastructure projects at lower interest rates. Wider roads, flyovers and an MRTS. Faster traffic and cleaner air. Now that make a big difference to urban congestion and air quality.
And, I suspect, to the GDP as well, if only years later.
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
7 years after returning to India, I am still getting used to the way in which policies are set in this country. Recently, I read that the Honorable FM exhorted PSU banks to find ways to lower the interest rate on loans. Specifically, he sought lower interest rates to stimulate the auto sector growing at less than the 'target' rate. That got my old moth-balled brain whirring. Isn't that what the doctor ordered for our beleaguered transport sector? Apparently, what we need is not investment in good roads, road-widening and flyovers, more buses, an MRTS or a better traffic management, but more vehicles on the road. More vehicles for urban traffic that moves at a snail's pace negotiating congestion and snarls. More cars, more smoke-belching RAVs, more vans and more trucks on narrow roads getting narrower by the day. Wonder what motivated the FM's request. Does the Government's IO model reveal new vehicle purchases as the best means to increase the GDP? Perhaps it the best means to couch the increase in CO2 emissions required to accept a baseline emissions in a global warming treaty? If so, the minister figures it right that reducing the interest rate charged by banks is the appropriate policy prescription. After all, the upfront fixed cost is the largest obstacle to purchasing vehicles. And if banks can lower the interest rate on loans to an extent that large, smoke-belching vehicles are affordable even to the clerk scrutinizing the loan document, then that must herald good times in the stock market to those invested in the auto and the steel sector. Right?
Wrong. Aren't we doing exactly the opposite of what we should be? Shouldn't our focus be on infrastructure first? Shouldn't infrastructure projects qualify for the lowest interest rate? And even we do wish to lend money for vehicle purchases, shouldn't we price in the externalities caused by vehicles, if not in 'time of day' road pricing and emissions taxes, then in loans rates? Shouldn't loan rates vary with the emissions performance or the size (and fuel) of the vehicle? Personally, and I suspect many among us, would either defer the purchase or buy a smaller (cleaner) vehicle if the loan rate were 20% instead of 10%. And banks would have more money to divert to transport infrastructure projects at lower interest rates. Wider roads, flyovers and an MRTS. Faster traffic and cleaner air. Now that make a big difference to urban congestion and air quality.
And, I suspect, to the GDP as well, if only years later.
Thursday, October 18, 2007
Imagine
Imagine
http://myprofile.cos.com/gangar
Imagine a tussle
between haves and the have-nots
the government and the industry
between man and nature
Imagine global warming
add to it some rhetoric
some deception, some demagoguery
'science', 'policy', and yes, politics
and what do you have? Hmm Hmmmmmmmmm
Why do I think WW-III
was almost a better choice?!
Imagine a conspiracy
so deep, so high;
a conspiracy hatched decades ago
a conspiracy to deny
Imagine MNCs of yesterday
leveraging their hold on lawmakers 'from the outside'
buying in to inventions of tomorrow
only to suppress them for technologies past,
holding deprived nations to environmental ransom
So what if it costs the earth
The earth is but a place to despoil!
Whoa! Ho! Ho! Hooooo oo!
Imagine a nexus
a nexus between religion, industry and government
(don't you forget the mafia!)
a nexus that enslaves the common man
Imagine slavery reintroduced
slavery hand-in-glove with discrimination,
slavery in schooling, in recruitment
and what do you have, Ow Ow Owww!
You may say we are a free people
but are we really?
Imagine large FIIs joining hands
with P-notes, derivatives and options
manipulating markets
playing a zero-sum game on mutual funds
even as they make their millions
Imagine a trap,
to net all you whiz-kids
switching from equity to bonds
in just the nick of time
Imagine controlling the IPO pipeline,
timing issues to FII interests
Imagine exchange rate manipulation
and wonder how the rich got richer over the poor
even under a commie government
Hey Heyyyyyyy!
Imagine John Lennon
revealing plots in his ballads
getting shot in the open
Imagine what his last words would have been
Imagine his imagination
and sleep over it?
...
...
Shout, Shout........C'mon, I'm talking to you!
http://myprofile.cos.com/gangar
Imagine a tussle
between haves and the have-nots
the government and the industry
between man and nature
Imagine global warming
add to it some rhetoric
some deception, some demagoguery
'science', 'policy', and yes, politics
and what do you have? Hmm Hmmmmmmmmm
Why do I think WW-III
was almost a better choice?!
Imagine a conspiracy
so deep, so high;
a conspiracy hatched decades ago
a conspiracy to deny
Imagine MNCs of yesterday
leveraging their hold on lawmakers 'from the outside'
buying in to inventions of tomorrow
only to suppress them for technologies past,
holding deprived nations to environmental ransom
So what if it costs the earth
The earth is but a place to despoil!
Whoa! Ho! Ho! Hooooo oo!
Imagine a nexus
a nexus between religion, industry and government
(don't you forget the mafia!)
a nexus that enslaves the common man
Imagine slavery reintroduced
slavery hand-in-glove with discrimination,
slavery in schooling, in recruitment
and what do you have, Ow Ow Owww!
You may say we are a free people
but are we really?
Imagine large FIIs joining hands
with P-notes, derivatives and options
manipulating markets
playing a zero-sum game on mutual funds
even as they make their millions
Imagine a trap,
to net all you whiz-kids
switching from equity to bonds
in just the nick of time
Imagine controlling the IPO pipeline,
timing issues to FII interests
Imagine exchange rate manipulation
and wonder how the rich got richer over the poor
even under a commie government
Hey Heyyyyyyy!
Imagine John Lennon
revealing plots in his ballads
getting shot in the open
Imagine what his last words would have been
Imagine his imagination
and sleep over it?
...
...
Shout, Shout........C'mon, I'm talking to you!
Wednesday, October 3, 2007
Rate (C/G)ut the Earth!
Rate (C/G)ut the Earth!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I am no macro-economist, at least not with the credentials of Greenspan, Bernanke or Dr. Reddy. But I do know that lower inter-bank interest rate set by the Fed cascades down as lower interest rates on home loans and credit card loans on one hand, and to easier credit for businesses on the other. A surprise decision to lower interest rate ultimately means more real disposable income in the hands of the working class and induces higher consumption which in turn spurs production and investment, not to mention a spurt in stock markets globally. Not surprisingly, the boost in consumer confidence and higher economic activity augurs well for the incumbent party that seeks to 'soft-launch' the economy in its campaign to retain power. So what could be wrong with this tried and tested strategy? Nothing, if one did not care beyond the boundaries of one's nation and this generation. But in today's global economy, a move toward a lower interest rate regime by a leader of the industrialized nations, serves as a signal and sets a precedent that is followed by other industrialized and developing nations. The start of a lower interest rate cycle in the US sparks off rate cuts across the globe and turns, what is a purely domestic, even a political, ploy in to a global meltdown of interest rates. And with that restarts the unchecked growth in the chugging economies of South-East Asia.
Now that would not be such a ghastly proposition if the increase in economic activity were environmentally benign. But isn't that the sore spot? Living as we do in 2007, with a century of unchecked carbon emissions behind us and a veritable deluge of emissions on the horizon, even the most trivial increase in global economic activity, sets off alarm bells among global warming experts and environmental policy planners searching desperately for low-cost emissions reductions. In a world where 'luxury and lifestyle' is the mantra of the day, reductions in the cost of borrowing fuel a consumer boom that exacerbates everything from plastic and water pollution to global warming. Makes you wonder if that rate cut was at all warranted. After all, and if you ask me, the sub-prime crisis was carefully orchestrated to provide cover for underground 'just' and 'nefarious' purposes like the Iraq war, energy security and the Cheney Campaign Fund. And I do not buy in to the 'risk of recession' argument that has been bandied about as another reason for the rate cut (Besides, what is the logic behind handing out interest rate cuts to an indebted nation so it may consume and splurge more to 'support' the global economy?). If the FRB governors were at all cognizant of their actions on global economic activity and its environmental repercussions, they would have chosen to raise interest rates, not lower them. It is unbecoming of fed governors, whose decisions alter the course of the global economy and environment, to play in to the political game that has been designed to ensure the election of a Republican President. It will be another 5 to 10 years before we realize the full impact of the rate cut decision on the global environment, by which time it would have already been too late for anything but the most costly and drastic measures, which, predictably, we would be even less likely to undertake. Perhaps the rate cut would then have achieved its purpose? Scorched earth policy. Pray, what is it?
Did you know HSBC has come out with a 'Climate Change Index' to facilitate indexing arbitraging and benchmarking stocks that would be benefited from climate change? Now you may hedge your Carbon Emission Reduction credits, or for that matter, 3-month pork belly futures against 20-year options on climate change stocks. Short-term capital gains attract a 10% tax.
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I am no macro-economist, at least not with the credentials of Greenspan, Bernanke or Dr. Reddy. But I do know that lower inter-bank interest rate set by the Fed cascades down as lower interest rates on home loans and credit card loans on one hand, and to easier credit for businesses on the other. A surprise decision to lower interest rate ultimately means more real disposable income in the hands of the working class and induces higher consumption which in turn spurs production and investment, not to mention a spurt in stock markets globally. Not surprisingly, the boost in consumer confidence and higher economic activity augurs well for the incumbent party that seeks to 'soft-launch' the economy in its campaign to retain power. So what could be wrong with this tried and tested strategy? Nothing, if one did not care beyond the boundaries of one's nation and this generation. But in today's global economy, a move toward a lower interest rate regime by a leader of the industrialized nations, serves as a signal and sets a precedent that is followed by other industrialized and developing nations. The start of a lower interest rate cycle in the US sparks off rate cuts across the globe and turns, what is a purely domestic, even a political, ploy in to a global meltdown of interest rates. And with that restarts the unchecked growth in the chugging economies of South-East Asia.
Now that would not be such a ghastly proposition if the increase in economic activity were environmentally benign. But isn't that the sore spot? Living as we do in 2007, with a century of unchecked carbon emissions behind us and a veritable deluge of emissions on the horizon, even the most trivial increase in global economic activity, sets off alarm bells among global warming experts and environmental policy planners searching desperately for low-cost emissions reductions. In a world where 'luxury and lifestyle' is the mantra of the day, reductions in the cost of borrowing fuel a consumer boom that exacerbates everything from plastic and water pollution to global warming. Makes you wonder if that rate cut was at all warranted. After all, and if you ask me, the sub-prime crisis was carefully orchestrated to provide cover for underground 'just' and 'nefarious' purposes like the Iraq war, energy security and the Cheney Campaign Fund. And I do not buy in to the 'risk of recession' argument that has been bandied about as another reason for the rate cut (Besides, what is the logic behind handing out interest rate cuts to an indebted nation so it may consume and splurge more to 'support' the global economy?). If the FRB governors were at all cognizant of their actions on global economic activity and its environmental repercussions, they would have chosen to raise interest rates, not lower them. It is unbecoming of fed governors, whose decisions alter the course of the global economy and environment, to play in to the political game that has been designed to ensure the election of a Republican President. It will be another 5 to 10 years before we realize the full impact of the rate cut decision on the global environment, by which time it would have already been too late for anything but the most costly and drastic measures, which, predictably, we would be even less likely to undertake. Perhaps the rate cut would then have achieved its purpose? Scorched earth policy. Pray, what is it?
Did you know HSBC has come out with a 'Climate Change Index' to facilitate indexing arbitraging and benchmarking stocks that would be benefited from climate change? Now you may hedge your Carbon Emission Reduction credits, or for that matter, 3-month pork belly futures against 20-year options on climate change stocks. Short-term capital gains attract a 10% tax.
Saturday, September 29, 2007
Global Students in the Global Commons... Or, Mere Wishful Thinking?
Global Students in the Global Commons....or, Mere Wishful Thinking?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I was never the best in my class, at least through school. Nope, not even the top ten. And yet, I wrote a PhD thesis at Penn State. Now I wonder whether all those ahead of me made it better than me. Many did, but some did not. And not because they weren't interested. Foreign studies are quite resource-intensive. The string of tests and exams that must accompany the application cost quite a bundle, as does the application fee at many universities. Add to it the airfare and partial funding, (not to mention the winter jacket and $25 haircuts!), and the numbers turn daunting, especially for those from middle-class backgrounds unwilling to mortgage their parent's home for personal gains.
But where is this leading to. Hmm, ... to a thought quite concrete and serious. The world is rampant with inequality, especially for students. Though societies increasingly prize true intelligence, free flow of intellect is impeded for various reasons – for lack of resources or on account of various global events, strife and conspiracies. An outright genius in one nation misses out the good life for want of opportunities, information, institutions and resources, while another, inferior by orders of magnitude in another nation, climbs to the top merely because he was the least dumb among frogs in the local community well! Then there is the matter of separation of talents and its 'aficionados'. There is little logic to a world in which geniuses in certain fields of art or science live 12 hours and many Berlin Walls away from those who would nurture them and bring out the best in them. That's not equal opportunity, millenium goals not withstanding! In fact, I'd go a step further, even if on a limb, and assert that there are many parents who are secretly disappointed with their children - parents who believe their children do not appreciate the sacrifices made for them; parents who wish their children, for their own good, learned their lesson early in life; parents willing to break out of the traditional mold of protective parenthood to appreciate the need for justice, opportunity and equality in the broader community. What we need, more than empty rhetoric, is optimal re-allocation of the future generations across this diverse world in a manner that maximizes their potential and their contribution to society, even while providing them the right incentives early in life.
Suppose we do not endow children with either citizenship or property at birth. Suppose they must 'earn' their citizenship and their livelihood by competing one-on-one with all students worldwide. True, various inequalities and obstructions persist across nations to this day. For the moment, let us wish that away by providing for a formal system of 'handicaps'. Now suppose students worldwide wrote a global-citizenship-cum-placement exam at the end of 12 years of schooling. On one side, 50 million hopeful students looking forward to the best that this world can offer in terms of citizenship and career, and on the other,130 countries searching for the best minds and citizens of the future from the global commons, and a million corporations searching for their employees of the future. A giant database of participants, their academic records along with their handicaps and their preferences on one side and, on the other, a database of countries, universities, ('step-parents') and future employers lining up for students/citizens/employees of certain interests and abilities. Add an algorithm that maximizes joint utility of market participants, and what you have is an optimal matching of student interests and abilities with country/employer/university needs.
A global academic placement exam that comes with citizenship offers is likely to provide the necessary incentive for citizens of both rich and poor nations to compete, especially if passing the exam enables these budding students to 'corporatize' themselves and trade their worth on the 'academe-cum-citizenship' 'stock' market. Suppose each student participant was given a certain number of 'shares' based on his performance in the exam and his handicap. Suppose each student was permitted to sell his/her shares to fund further studies. The 'student-corporate' could now fund his/her studies at the best university that (s)he can afford and that accepts him/her, with the proceeds of the share sale. Who would buy them? Parents and schools, informed investors, his 'mother country', and especially those shrewd in evaluating the potential of the young will not mind investing in the hope they will benefit when that person's 'networth' multiplies over the years with his earnings and contribution to society. After all, a genius in hand is worth more than a million 'ornery' heads! Wouldn't that be to the common good of children, parents, nations and their economies? (Then again, who would have thought Prasad would end up writing humor columns of no interest to anyone!)
Great visions?........or mere hallucinations?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
I was never the best in my class, at least through school. Nope, not even the top ten. And yet, I wrote a PhD thesis at Penn State. Now I wonder whether all those ahead of me made it better than me. Many did, but some did not. And not because they weren't interested. Foreign studies are quite resource-intensive. The string of tests and exams that must accompany the application cost quite a bundle, as does the application fee at many universities. Add to it the airfare and partial funding, (not to mention the winter jacket and $25 haircuts!), and the numbers turn daunting, especially for those from middle-class backgrounds unwilling to mortgage their parent's home for personal gains.
But where is this leading to. Hmm, ... to a thought quite concrete and serious. The world is rampant with inequality, especially for students. Though societies increasingly prize true intelligence, free flow of intellect is impeded for various reasons – for lack of resources or on account of various global events, strife and conspiracies. An outright genius in one nation misses out the good life for want of opportunities, information, institutions and resources, while another, inferior by orders of magnitude in another nation, climbs to the top merely because he was the least dumb among frogs in the local community well! Then there is the matter of separation of talents and its 'aficionados'. There is little logic to a world in which geniuses in certain fields of art or science live 12 hours and many Berlin Walls away from those who would nurture them and bring out the best in them. That's not equal opportunity, millenium goals not withstanding! In fact, I'd go a step further, even if on a limb, and assert that there are many parents who are secretly disappointed with their children - parents who believe their children do not appreciate the sacrifices made for them; parents who wish their children, for their own good, learned their lesson early in life; parents willing to break out of the traditional mold of protective parenthood to appreciate the need for justice, opportunity and equality in the broader community. What we need, more than empty rhetoric, is optimal re-allocation of the future generations across this diverse world in a manner that maximizes their potential and their contribution to society, even while providing them the right incentives early in life.
Suppose we do not endow children with either citizenship or property at birth. Suppose they must 'earn' their citizenship and their livelihood by competing one-on-one with all students worldwide. True, various inequalities and obstructions persist across nations to this day. For the moment, let us wish that away by providing for a formal system of 'handicaps'. Now suppose students worldwide wrote a global-citizenship-cum-placement exam at the end of 12 years of schooling. On one side, 50 million hopeful students looking forward to the best that this world can offer in terms of citizenship and career, and on the other,130 countries searching for the best minds and citizens of the future from the global commons, and a million corporations searching for their employees of the future. A giant database of participants, their academic records along with their handicaps and their preferences on one side and, on the other, a database of countries, universities, ('step-parents') and future employers lining up for students/citizens/employees of certain interests and abilities. Add an algorithm that maximizes joint utility of market participants, and what you have is an optimal matching of student interests and abilities with country/employer/university needs.
A global academic placement exam that comes with citizenship offers is likely to provide the necessary incentive for citizens of both rich and poor nations to compete, especially if passing the exam enables these budding students to 'corporatize' themselves and trade their worth on the 'academe-cum-citizenship' 'stock' market. Suppose each student participant was given a certain number of 'shares' based on his performance in the exam and his handicap. Suppose each student was permitted to sell his/her shares to fund further studies. The 'student-corporate' could now fund his/her studies at the best university that (s)he can afford and that accepts him/her, with the proceeds of the share sale. Who would buy them? Parents and schools, informed investors, his 'mother country', and especially those shrewd in evaluating the potential of the young will not mind investing in the hope they will benefit when that person's 'networth' multiplies over the years with his earnings and contribution to society. After all, a genius in hand is worth more than a million 'ornery' heads! Wouldn't that be to the common good of children, parents, nations and their economies? (Then again, who would have thought Prasad would end up writing humor columns of no interest to anyone!)
Great visions?........or mere hallucinations?
Sunday, September 23, 2007
Trade Your Personal GHG Emissions Rights
Trade Your Personal GHG Emissions Rights
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
These days, with the cacophony of words, ads and noises from people and machines, one is not sure whether a certain thought is 'original', smoked out and fed back in with a minor suggestion, transmitted by 'telepathy', heard around or 'stimulated' as part of an IPR test (or is merely a regurgitation of what has already been published). Yet, these considerations should not matter when an idea is in the interest of global commons. So, hear ye, hear one, hear all!
We are already in an era where one could buy in to emissions offsets to pay for the environmental excesses of our actions. Those environmentally conscious buy emissions offsets, ie, reductions in emissions elsewhere, for their business or leisure activities, for example, flying. As an economist, I have mixed reactions. Emissions offsets are an interesting means of obtaining voluntarily participation from the population at large in containing global warming. This is particularly important when our heads of states are unable to agree to a common charter of emissions reduction strategy. But it worries the theoretician in me that the emissions offsets are not strictly the classical optimal tax on emissions-generating activities. The Offsets firm charges you for every gram of CO2 attributable to you. As to how they arrive at that estimate is a mystery. How would you 'divvy up' emissions from a plane flight across the 20 first class passengers, 30 business class and 200 economy class passengers, some of whom would not have traveled if the fare had not been discounted heavily? And what about those bags of mail accompanying your baggage? More importantly, how does the firm know how much of the externality is internalized in the fare and how much not? After all, aviation fuels and air travel are taxed and the fact that the tax is for revenue purposes does not detract from its environmental qualities. Right? So, do these offset firms compute the amount of tax reflected in the fares with different degrees of discount in them? I'd be surprised if they did. More importantly, do they achieve efficiency and global participation? I think not.
If it is truly global participation that we desire, why not consider creating a personal lifetime quota of GHG emissions – call it 'personal emission rights' (as opposed to endowing the industry with the right to emit)? Every human being could be endowed with a tradable and bankable lifetime quota of GHG emissions on birth. Those who wish to engage in emissions-releasing activities, whether individuals, industry or the government, would need to buy emissions units from the online market. Sounds interesting? It is, at least on paper. That quota could be, perhaps should be, equal for every citizen of the world. To grapple with the rising trend in global warming, it might be necessary to denominate the bequeath in the prevailing and projected CO2 concentrations. Higher the ambient CO2 concentration, the lower the initial bequeath. As an add-on rider, one could even add or invalidate an annual emissions amount from all 'quota holders' depending on the change in ambient CO2 concentration.
One may buy or sell emissions units from the online market participants much like you bank, buy or sell stocks and ETFs. Every purchase of airline ticket, cruise vacation or car rental, a bag of rice or atta and the likes would attract a deduction from your emissions quota when you swipe your card to pay. A child born to a wealthy with a lifetime quota of, say 10 tonnes GHG, could buy emissions units from a child born in Sub-Saharan Darfur, thus paying for his/her environmentally damaging lifestyle even while enriching the seller for accepting a lower standard of living. Call this an anti-poverty strategy, if you would so like to. The lifetime quota provides opportunity for parents and the child to plan important activities over a lifetime, in particular, GHG-intensive activities like weddings, vacations, or the purchase of a car. If the price of quota units were sufficiently high, one could even postpone purchases or trade the vacation in (Hey, $5000 dollars for missing out on a week's vacation ain't bad, at least for those not on the World's 100 Richest list!). Some would trade their quota units for a lumpsum at an opportune time (for tuition perhaps?). Others, like the pious in Tibet, could collect a handsome pot for their next life if they so wished, or 'bequeath' it to the aged or paraplegics wishing to fly in to the 'tequila sunrise' or the 'sunset on Santa Monica boulevard'.
As for business, clearly, industries, firms and corporations would need to buy emissions units from the general public to 'fund' their emissions-releasing activities. The price of emissions would be dictated by demand and supply in an online global emissions market. Firms would plan their investments and activities taking cognizance of their GHG-intensiveness, and the price of quota units. A basic materials refiner would pay much more than a computer chip maker, in the process internalizing his release of GHG emissions. As the public feels more apprehensive of global warming, they would have the option to 'retire' banked emissions units, thus decreasing supply and increasing the going price of emissions units. This would provide a signal to the industry to move to cleaner technology, reduce production or increase product prices – eventually resulting in moderation of economic activity and a reduction in emissions. Online global trading permits spatially and temporally efficient allocation of activities. The system puts a price on CO2 emissions – a price that is endogenously determined by the perception of participants in the emissions market. It has all the advantages of an emissions trading systems proposed by environmental economists and more. It induces a competition for low-emission activities and prods the adoption of cleaner technologies as a means to reduce costs and increase profits. It brings about global re-allocation of production and consumption and redistributes wealth in an equity-enhancing manner.
I could say more, but time is fast running out on the blue planet. To close this blog, as useful as the concept of emissions offsets is in starting a trend of voluntary participation in global warming reductions, what we need is an online global, emissions units banking and trading facility, not merely voluntary participation in emissions offset. How I wish this system were retroactive. Haven't driven a car or traveled on plane for ages now!
Hey, no cruise vacations in Alaskan waters with scantily-clad babes either!!! Hey!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
These days, with the cacophony of words, ads and noises from people and machines, one is not sure whether a certain thought is 'original', smoked out and fed back in with a minor suggestion, transmitted by 'telepathy', heard around or 'stimulated' as part of an IPR test (or is merely a regurgitation of what has already been published). Yet, these considerations should not matter when an idea is in the interest of global commons. So, hear ye, hear one, hear all!
We are already in an era where one could buy in to emissions offsets to pay for the environmental excesses of our actions. Those environmentally conscious buy emissions offsets, ie, reductions in emissions elsewhere, for their business or leisure activities, for example, flying. As an economist, I have mixed reactions. Emissions offsets are an interesting means of obtaining voluntarily participation from the population at large in containing global warming. This is particularly important when our heads of states are unable to agree to a common charter of emissions reduction strategy. But it worries the theoretician in me that the emissions offsets are not strictly the classical optimal tax on emissions-generating activities. The Offsets firm charges you for every gram of CO2 attributable to you. As to how they arrive at that estimate is a mystery. How would you 'divvy up' emissions from a plane flight across the 20 first class passengers, 30 business class and 200 economy class passengers, some of whom would not have traveled if the fare had not been discounted heavily? And what about those bags of mail accompanying your baggage? More importantly, how does the firm know how much of the externality is internalized in the fare and how much not? After all, aviation fuels and air travel are taxed and the fact that the tax is for revenue purposes does not detract from its environmental qualities. Right? So, do these offset firms compute the amount of tax reflected in the fares with different degrees of discount in them? I'd be surprised if they did. More importantly, do they achieve efficiency and global participation? I think not.
If it is truly global participation that we desire, why not consider creating a personal lifetime quota of GHG emissions – call it 'personal emission rights' (as opposed to endowing the industry with the right to emit)? Every human being could be endowed with a tradable and bankable lifetime quota of GHG emissions on birth. Those who wish to engage in emissions-releasing activities, whether individuals, industry or the government, would need to buy emissions units from the online market. Sounds interesting? It is, at least on paper. That quota could be, perhaps should be, equal for every citizen of the world. To grapple with the rising trend in global warming, it might be necessary to denominate the bequeath in the prevailing and projected CO2 concentrations. Higher the ambient CO2 concentration, the lower the initial bequeath. As an add-on rider, one could even add or invalidate an annual emissions amount from all 'quota holders' depending on the change in ambient CO2 concentration.
One may buy or sell emissions units from the online market participants much like you bank, buy or sell stocks and ETFs. Every purchase of airline ticket, cruise vacation or car rental, a bag of rice or atta and the likes would attract a deduction from your emissions quota when you swipe your card to pay. A child born to a wealthy with a lifetime quota of, say 10 tonnes GHG, could buy emissions units from a child born in Sub-Saharan Darfur, thus paying for his/her environmentally damaging lifestyle even while enriching the seller for accepting a lower standard of living. Call this an anti-poverty strategy, if you would so like to. The lifetime quota provides opportunity for parents and the child to plan important activities over a lifetime, in particular, GHG-intensive activities like weddings, vacations, or the purchase of a car. If the price of quota units were sufficiently high, one could even postpone purchases or trade the vacation in (Hey, $5000 dollars for missing out on a week's vacation ain't bad, at least for those not on the World's 100 Richest list!). Some would trade their quota units for a lumpsum at an opportune time (for tuition perhaps?). Others, like the pious in Tibet, could collect a handsome pot for their next life if they so wished, or 'bequeath' it to the aged or paraplegics wishing to fly in to the 'tequila sunrise' or the 'sunset on Santa Monica boulevard'.
As for business, clearly, industries, firms and corporations would need to buy emissions units from the general public to 'fund' their emissions-releasing activities. The price of emissions would be dictated by demand and supply in an online global emissions market. Firms would plan their investments and activities taking cognizance of their GHG-intensiveness, and the price of quota units. A basic materials refiner would pay much more than a computer chip maker, in the process internalizing his release of GHG emissions. As the public feels more apprehensive of global warming, they would have the option to 'retire' banked emissions units, thus decreasing supply and increasing the going price of emissions units. This would provide a signal to the industry to move to cleaner technology, reduce production or increase product prices – eventually resulting in moderation of economic activity and a reduction in emissions. Online global trading permits spatially and temporally efficient allocation of activities. The system puts a price on CO2 emissions – a price that is endogenously determined by the perception of participants in the emissions market. It has all the advantages of an emissions trading systems proposed by environmental economists and more. It induces a competition for low-emission activities and prods the adoption of cleaner technologies as a means to reduce costs and increase profits. It brings about global re-allocation of production and consumption and redistributes wealth in an equity-enhancing manner.
I could say more, but time is fast running out on the blue planet. To close this blog, as useful as the concept of emissions offsets is in starting a trend of voluntary participation in global warming reductions, what we need is an online global, emissions units banking and trading facility, not merely voluntary participation in emissions offset. How I wish this system were retroactive. Haven't driven a car or traveled on plane for ages now!
Hey, no cruise vacations in Alaskan waters with scantily-clad babes either!!! Hey!
Sunday, September 16, 2007
Public (Sector) and Private (Equity) Hallucinations
Public (Sector) and Private (Equity) Hallucinations
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Living in a socialist country with government-sponsored 'public sector' enterprises, it is easy to forget what the objectives of these entities are. In truth, they are oriented more to the nation's cause of infrastructure development, to a less-endorsed extent employment generation, and, as I would like to (mis)believe, to raise the per-capita consumption of various goods and services (why else would they compare inter-country per-capita figures in Planning Commission documents?). With government appointed board members who take their orders from their political masters at the Ministry, these entities also serve to control investment, prices and inventories in the market, not to mention stock up goods meant for subsidized distribution. I half-suspect, the government plays a strategic 'duopolistic' game with the private players – the government's interpretation of the 'dominant firm' type competition!
Anyway, the point I would like to make here is that different entities have different objectives that influence their market behavior. A PSU perforce seeks to satisfy its Ministry (the Government typically owns a majority if not a overwhelming share of stock). And the Minister is not satisfied with a dividend cheque. The PSUs must fund his pet projects, favor his clients (So what if the tender is closed; reopen it and pull my contractor in), share in his obligations, provide him opportunities to make welfare announcements of various kinds and, of course, pull in funds for his political masters even while negotiating wages and benefits with various cadres of workers and officers. And don't forget the obligation to participate in national cause of reducing inflation by cutting back prices! I'd be surprised if any of these PSUs even have an optimization model to guide their actions.
Talking about profit max models, gone are the days when the company economist could plug in prices in to his LP model that spit out production of various products at various production sites along with a matrix of inputs. In these days of stock options, commodity hedging, derivatives trading and switching strategic regimes, the conventional optimization model merely achieves static efficiency – at most. Depending on the ownership structure of the firm (promoter's stake and the amount/nature of stock options), 'policy stability', firm's investment plans and market structure, a true inter-temporal model of profit maximization could be very complicated indeed. It is an open question whether our managers in the public and private sectors appreciate these complexities. It's another question whether they should even take cognizance of it (In the land of inferiors, laissez faire is immortal!)
Did you say 'laissez faire'? Enter the Dragon, I mean the private equity firms – staffed by those shadowy smart necks who did not socialize in the Corporate Strategy lecture at your Ivy League College! Admittedly, there are different kinds of private equities with different motives, but I mean those who takeover a (publicly-listed, perhaps loss-making) business, turn it around, and exit when its stock price zooms by a factor of a hundred – all in a period of a decade or so. Surely, they do not go by your profit max model? Profit max move aside. It is the day of EPS growth-based optimization models – the only denominator that investors recognize! Pray, what is that? These private equity players have a gameplan that achieves their goal that is squarely focused on actions that turn the stock attractive in the market. Engineering mergers and bankruptcies, working with the elected representatives to modify regulations and the books to their advantage, reappraising markets and product mix across the quality dimension, product differentiation, focused advertising around brand-recognition, focusing on IPR-protected markets and anticipating the future with knowledge of yet unpublished technological advances – these are the hallmarks of these entities. Behind them, I presume, is the unholy troika of MIT brains with hybrid financial-economic-accounting models, large international consulting organizations and strategic investors with supercomputers that churn all the data that the CIA and World Bank/IFC could conceivably gather to evaluate the course of international economies, stock markets and sectoral trends under alternative strategies. What chance do 'mortals' have against these behemoths?
Makes you wonder, if they are so efficient at their game, why not turn our sick PSUs over to these guys? They could even share in the spoils when these PSUs are offered in a public IPO following the turnaround. Food for thought!
More hallucinations, anyone?
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
Living in a socialist country with government-sponsored 'public sector' enterprises, it is easy to forget what the objectives of these entities are. In truth, they are oriented more to the nation's cause of infrastructure development, to a less-endorsed extent employment generation, and, as I would like to (mis)believe, to raise the per-capita consumption of various goods and services (why else would they compare inter-country per-capita figures in Planning Commission documents?). With government appointed board members who take their orders from their political masters at the Ministry, these entities also serve to control investment, prices and inventories in the market, not to mention stock up goods meant for subsidized distribution. I half-suspect, the government plays a strategic 'duopolistic' game with the private players – the government's interpretation of the 'dominant firm' type competition!
Anyway, the point I would like to make here is that different entities have different objectives that influence their market behavior. A PSU perforce seeks to satisfy its Ministry (the Government typically owns a majority if not a overwhelming share of stock). And the Minister is not satisfied with a dividend cheque. The PSUs must fund his pet projects, favor his clients (So what if the tender is closed; reopen it and pull my contractor in), share in his obligations, provide him opportunities to make welfare announcements of various kinds and, of course, pull in funds for his political masters even while negotiating wages and benefits with various cadres of workers and officers. And don't forget the obligation to participate in national cause of reducing inflation by cutting back prices! I'd be surprised if any of these PSUs even have an optimization model to guide their actions.
Talking about profit max models, gone are the days when the company economist could plug in prices in to his LP model that spit out production of various products at various production sites along with a matrix of inputs. In these days of stock options, commodity hedging, derivatives trading and switching strategic regimes, the conventional optimization model merely achieves static efficiency – at most. Depending on the ownership structure of the firm (promoter's stake and the amount/nature of stock options), 'policy stability', firm's investment plans and market structure, a true inter-temporal model of profit maximization could be very complicated indeed. It is an open question whether our managers in the public and private sectors appreciate these complexities. It's another question whether they should even take cognizance of it (In the land of inferiors, laissez faire is immortal!)
Did you say 'laissez faire'? Enter the Dragon, I mean the private equity firms – staffed by those shadowy smart necks who did not socialize in the Corporate Strategy lecture at your Ivy League College! Admittedly, there are different kinds of private equities with different motives, but I mean those who takeover a (publicly-listed, perhaps loss-making) business, turn it around, and exit when its stock price zooms by a factor of a hundred – all in a period of a decade or so. Surely, they do not go by your profit max model? Profit max move aside. It is the day of EPS growth-based optimization models – the only denominator that investors recognize! Pray, what is that? These private equity players have a gameplan that achieves their goal that is squarely focused on actions that turn the stock attractive in the market. Engineering mergers and bankruptcies, working with the elected representatives to modify regulations and the books to their advantage, reappraising markets and product mix across the quality dimension, product differentiation, focused advertising around brand-recognition, focusing on IPR-protected markets and anticipating the future with knowledge of yet unpublished technological advances – these are the hallmarks of these entities. Behind them, I presume, is the unholy troika of MIT brains with hybrid financial-economic-accounting models, large international consulting organizations and strategic investors with supercomputers that churn all the data that the CIA and World Bank/IFC could conceivably gather to evaluate the course of international economies, stock markets and sectoral trends under alternative strategies. What chance do 'mortals' have against these behemoths?
Makes you wonder, if they are so efficient at their game, why not turn our sick PSUs over to these guys? They could even share in the spoils when these PSUs are offered in a public IPO following the turnaround. Food for thought!
More hallucinations, anyone?
Thursday, September 13, 2007
Pollute Not the Oceans
Pollute Not the Oceans
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
It was, with Africa, the Arctics and the Antarctic, one of the ultimate unknowns, the ultimate expanse, the fear of many a mariner in the centuries gone by. No longer. Today, practically every inch of the ocean is mapped. No sea, strait or island has escaped the marauding humans. It is perhaps an unwritten law of nature that destruction follows where man sets foot. After turning the atmosphere and land in to the toilet of the industry, overrunning lakes, and polluting rivers, it is now our hallowed duty to commit the ultimate insult to God's world. Let's exploit the purity of the oceans as well!
Not that it has escaped our attention. Honestly, if the oceans are yet sought after, it is not because we haven't tried to despoil it. Those ignorant or otherwise not informed may wonder if human activity has left any mark on the ocean systems. For one, the ocean waters are noticeably warmer, thanks to human activity. A warmer ocean means more evaporation, more humidity and rainy afternoons. Not too long ago, the media reported changes in ocean currents, thanks to global warming. Imagine a world with the Labrador current turning warmer and exacerbating the melting of the ice in the Arctic circle. Imagine the hapless creatures of the deep when their migratory and reproductive patterns are overturned and overrun by human-induced climate change. Sea-level rise caused by melting of polar ice caps could overrun beaches and coastal eco-systems that took centuries to develop. We discharge treated (and untreated) sewage in to the oceans, sometime not half a kilometer from beach revelers. The floods wash in to oceans stuff that escapes the sewers. Oil spills during crude/product transfer at the port or from grounding of tankers make news headlines ever so often. Add to that the widening and deepening of ports and shallow straits, land reclamation from shallow seas, sub-marine archaeological digs, mid-sea dumping of garbage, the discharge of water and sewage from cruise liners, discharges from deep-sea oil production, and the ever expanding global trade by sea, and what do you have? We don't need a rocket scientist to tell us that human influences are fundamentally, and perhaps irreversibly, altering the physical, chemical and biological systems of the oceans and that could mean the difference between life and death for marine creatures.
The more I think of these matters, the more I am convinced that human economic systems will always expand by exploiting unpriced resources and their services (land, air, lakes, rivers and oceans) without limits (or more correctly, until resource deterioration hurts the capitalist's purse). We could price these resources in, but achieving that through regulations in 110 countries with 22 different types of legislative/judicial processes amid the not infrequent changes of governments, despite the Sea Conventions and IMO rules, can be a very discouraging experience. Why not create a single global stewardship of the oceans, much like the GEF, but smaller and more focused, and endow it with the right to police and exact payments for various services provided by oceans across the seven seas? If a Sustainable Oceans Administration were funded by matching its profits (revenues from services net of costs of environmental remediation) from the stewardship of the oceans, then, it would have the incentive to permit truly sustainable exploitation of the oceans. It would have, on one hand, the knowledge to price ocean services according to demand and the damage imposed, and on the other, the werewithal to fund corrective actions that limit environmental damage to the oceans.
What's that I hear? ..... Sure, we could wait until the sea turns green from human avarice and apathy!
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
It was, with Africa, the Arctics and the Antarctic, one of the ultimate unknowns, the ultimate expanse, the fear of many a mariner in the centuries gone by. No longer. Today, practically every inch of the ocean is mapped. No sea, strait or island has escaped the marauding humans. It is perhaps an unwritten law of nature that destruction follows where man sets foot. After turning the atmosphere and land in to the toilet of the industry, overrunning lakes, and polluting rivers, it is now our hallowed duty to commit the ultimate insult to God's world. Let's exploit the purity of the oceans as well!
Not that it has escaped our attention. Honestly, if the oceans are yet sought after, it is not because we haven't tried to despoil it. Those ignorant or otherwise not informed may wonder if human activity has left any mark on the ocean systems. For one, the ocean waters are noticeably warmer, thanks to human activity. A warmer ocean means more evaporation, more humidity and rainy afternoons. Not too long ago, the media reported changes in ocean currents, thanks to global warming. Imagine a world with the Labrador current turning warmer and exacerbating the melting of the ice in the Arctic circle. Imagine the hapless creatures of the deep when their migratory and reproductive patterns are overturned and overrun by human-induced climate change. Sea-level rise caused by melting of polar ice caps could overrun beaches and coastal eco-systems that took centuries to develop. We discharge treated (and untreated) sewage in to the oceans, sometime not half a kilometer from beach revelers. The floods wash in to oceans stuff that escapes the sewers. Oil spills during crude/product transfer at the port or from grounding of tankers make news headlines ever so often. Add to that the widening and deepening of ports and shallow straits, land reclamation from shallow seas, sub-marine archaeological digs, mid-sea dumping of garbage, the discharge of water and sewage from cruise liners, discharges from deep-sea oil production, and the ever expanding global trade by sea, and what do you have? We don't need a rocket scientist to tell us that human influences are fundamentally, and perhaps irreversibly, altering the physical, chemical and biological systems of the oceans and that could mean the difference between life and death for marine creatures.
The more I think of these matters, the more I am convinced that human economic systems will always expand by exploiting unpriced resources and their services (land, air, lakes, rivers and oceans) without limits (or more correctly, until resource deterioration hurts the capitalist's purse). We could price these resources in, but achieving that through regulations in 110 countries with 22 different types of legislative/judicial processes amid the not infrequent changes of governments, despite the Sea Conventions and IMO rules, can be a very discouraging experience. Why not create a single global stewardship of the oceans, much like the GEF, but smaller and more focused, and endow it with the right to police and exact payments for various services provided by oceans across the seven seas? If a Sustainable Oceans Administration were funded by matching its profits (revenues from services net of costs of environmental remediation) from the stewardship of the oceans, then, it would have the incentive to permit truly sustainable exploitation of the oceans. It would have, on one hand, the knowledge to price ocean services according to demand and the damage imposed, and on the other, the werewithal to fund corrective actions that limit environmental damage to the oceans.
What's that I hear? ..... Sure, we could wait until the sea turns green from human avarice and apathy!
Tuesday, September 11, 2007
The Nuclear Ballot Dance
The Nuclear Ballot Dance
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
General elections are not exactly 'once in a blue moon' events. Though meant to occur quinquennially, I suspect they are held more often, perhaps every three-four years on average. Each election is touted as a momentous, historically important event; yet, few are as important as the one being suggested among political circles these days. Dissension in the UPA coalition regarding the 123 agreement and comments by Advani give credence to rumours of an impending election. With the economy in overdrive, the monsoons obliging, and inflation tamed for the immediate future, this is as good an opportunity that Sonia will ever get to 'spring a surprise'.
An election is not just the choice of one candidate or party over another to rule us. It is an occasion to take stock of promises, achievements and failures, and prepare the nation to renew the battle and confront various issues – from the past and of the future. The nuclear agreement with the US is a once in a century or country's lifetime sort of deal. It stands as the testament to the resolve of two nations to forge a peaceful nuclear future. Standing at the threshold of a peaceful nuclear future, as we do, today, this election, whether scheduled for the next month or next year, is one of unparalleled importance to the country. Undoubtedly, it will be labeled a nuclear ballot – a ballot that the US will watch closely to gauge the interest and involvement, opinions, preferences and resolve of India's masses with regard to the 123 accord.
Admittedly, there are many issues. Should nuclear treaties be negotiated by a coalition government in which the right hand would rather not know what the left is doing? Should political parties explicitly come out with their position on the 123 agreement and on the larger question of nuclear disarmament vs nuclear detente (and will they stick to those positions if surprised at the ballot box)? What does the 123 agreement imply for our nuclear fortunes vis-a-vis Pakistan and China or for that matter, nuclear terrorism (now that a nuke can be camouflaged inside a briefcase and detonated by remote instruction from the ISS!)? More to the point, should voters declare their nuclear preferences independent of their vote for party candidates, ie, should we add an issue ballot to the election? In any case, how do we deal with issues that affect future generations, perhaps the country's future for centuries, not just the next 3 years and 49 weeks?
Most parties have come out with their stand on the matter. Not surprisingly and apparently, the Left has back stabbed the UPA from within the government, stalling the ratification process. But that raises the question as to why the US would negotiate for years with a left-supported coalition government? Surely, they don't want a general election to ratify the treaty? Something is amiss, if you ask me. Perhaps the Left is but a mouthpiece for the NDA, which has strategically chosen not to take a hardline positions ahead of the polls (speaking for another is a tried and tested strategy of evasion). Perhaps the US seeks the ratification of the Indian people – a general election - to the agreement? Perhaps it is the US Presidential elections. Perhaps Global Warming politics. Perhaps a little of each. Whatever the truth, the prospect of elections are real. That brings to the fore the question of 'bundled agenda'. How will the left, the right and regional parties rank and group their platforms on various issues? Will political parties take their stand on 123 taking account of the leanings of their supporters, or will they try to have them buy in to it by offering a 'candy' of an 'FDI funded' stock market? Will the traditional vote banks stand if the left does a 180 degree turn on the nuke issue? Thankfully, it seems that the 123 agreement will not bring about specific-sector biases. Thus, a decision one way or another will only affect our overall prospects, not the fertilizer or fuel subsidy – at least in the short-run. Besides, the fact that 'bread and butter issues' dominate the reasoning of the common man, implies that a popular mandate for one party cannot be interpreted as endorsement of its stand on the 123 agreement. Thus, the return of UPA or, more realistically, some form of Congress-led coalition cannot be presumed the nation's approval apropos the agreement (unless, it so campaigns – which it is unlikely to). For this reason, the only resolution to this dilemma is, perhaps, a parallel issue ballot on the 123 agreement with the general election. We should require parties to explicitly state their position on the proposed agreement as part of their campaign platform. Citizens then vote twice at the ballot box, once for a government, and once regarding the 123 agreement. In the latter ballot, the vote could be for a party or a yes/no on the agreement or its significant issues/clauses. In this manner, the entire country could be polled and its opinion reflected in our final decision on the nuclear agreement.
An average voter would ask what the costs and benefits of signing on to the 123 agreement are. For one, signing an accord with the US relieves us of participating in an escalating nuclear cold war of nerves with Pakistan and China. A war can devastate a country by wiping out decades of progress and handicap its future beside washing away trillions in wealth. Ask the Iraqis. Peace is worth a lot of money. India could divert the ballooning defense budget to peacetime needs and meet its goals of better infrastructure, universal education, a better equipped law and order machinery and basic human needs (In layman's terms, a hundred schools instead of one Agni ICBM). With the US as an ally, we could forge commercial alliances that exploit their advanced technology and our human resource expertise. The US gains a much-needed foothold in to South-Asia to counterbalance the growing might of the Chinese and the dangerous impatience and resentment in Pakistan. And of course, George Bush may claim another feather in the cap in his quest for nuclear demilitarization. There are costs too. We will no longer be a NAM country, bound as we will be in to sub-serving the cause of the US (not that non-alignment ever mattered much). Our reactors and research centers will be under 'IAEA' inspection. We know what that means. Our researchers will be put under the horseblinds of the US and the IAEA. Funds meant for thorium-cycle research will be diverted to food irradiation and nuclear refining of crude oil. And India will take a back-seat in global warming matters and follow the lead of a country that has anticipated the phenomenon so well that it now benefits both by adapting and responding to it. (Hell, we might as well grow wheat on the land leased underneath the Iceland icecap!). A benefits-maximizing decision in the context of these and other strategic angles is well-nigh impossible. But that should not stop our politicians, policymakers and indeed, us citizens, from examining and weighing the 123 agreement in different contexts before coming to a decision. It is our duty to act pro-actively and ensure that our country takes an informed decision on the nuclear pact with the West - one that could be the first step in our eventual integration with the G-8, but could also be our doom if we choose to play petty politics that has many a time made our democracy the laughing stock around the world.
Ganga Prasad G. Rao
http://myprofile.cos.com/gangar
General elections are not exactly 'once in a blue moon' events. Though meant to occur quinquennially, I suspect they are held more often, perhaps every three-four years on average. Each election is touted as a momentous, historically important event; yet, few are as important as the one being suggested among political circles these days. Dissension in the UPA coalition regarding the 123 agreement and comments by Advani give credence to rumours of an impending election. With the economy in overdrive, the monsoons obliging, and inflation tamed for the immediate future, this is as good an opportunity that Sonia will ever get to 'spring a surprise'.
An election is not just the choice of one candidate or party over another to rule us. It is an occasion to take stock of promises, achievements and failures, and prepare the nation to renew the battle and confront various issues – from the past and of the future. The nuclear agreement with the US is a once in a century or country's lifetime sort of deal. It stands as the testament to the resolve of two nations to forge a peaceful nuclear future. Standing at the threshold of a peaceful nuclear future, as we do, today, this election, whether scheduled for the next month or next year, is one of unparalleled importance to the country. Undoubtedly, it will be labeled a nuclear ballot – a ballot that the US will watch closely to gauge the interest and involvement, opinions, preferences and resolve of India's masses with regard to the 123 accord.
Admittedly, there are many issues. Should nuclear treaties be negotiated by a coalition government in which the right hand would rather not know what the left is doing? Should political parties explicitly come out with their position on the 123 agreement and on the larger question of nuclear disarmament vs nuclear detente (and will they stick to those positions if surprised at the ballot box)? What does the 123 agreement imply for our nuclear fortunes vis-a-vis Pakistan and China or for that matter, nuclear terrorism (now that a nuke can be camouflaged inside a briefcase and detonated by remote instruction from the ISS!)? More to the point, should voters declare their nuclear preferences independent of their vote for party candidates, ie, should we add an issue ballot to the election? In any case, how do we deal with issues that affect future generations, perhaps the country's future for centuries, not just the next 3 years and 49 weeks?
Most parties have come out with their stand on the matter. Not surprisingly and apparently, the Left has back stabbed the UPA from within the government, stalling the ratification process. But that raises the question as to why the US would negotiate for years with a left-supported coalition government? Surely, they don't want a general election to ratify the treaty? Something is amiss, if you ask me. Perhaps the Left is but a mouthpiece for the NDA, which has strategically chosen not to take a hardline positions ahead of the polls (speaking for another is a tried and tested strategy of evasion). Perhaps the US seeks the ratification of the Indian people – a general election - to the agreement? Perhaps it is the US Presidential elections. Perhaps Global Warming politics. Perhaps a little of each. Whatever the truth, the prospect of elections are real. That brings to the fore the question of 'bundled agenda'. How will the left, the right and regional parties rank and group their platforms on various issues? Will political parties take their stand on 123 taking account of the leanings of their supporters, or will they try to have them buy in to it by offering a 'candy' of an 'FDI funded' stock market? Will the traditional vote banks stand if the left does a 180 degree turn on the nuke issue? Thankfully, it seems that the 123 agreement will not bring about specific-sector biases. Thus, a decision one way or another will only affect our overall prospects, not the fertilizer or fuel subsidy – at least in the short-run. Besides, the fact that 'bread and butter issues' dominate the reasoning of the common man, implies that a popular mandate for one party cannot be interpreted as endorsement of its stand on the 123 agreement. Thus, the return of UPA or, more realistically, some form of Congress-led coalition cannot be presumed the nation's approval apropos the agreement (unless, it so campaigns – which it is unlikely to). For this reason, the only resolution to this dilemma is, perhaps, a parallel issue ballot on the 123 agreement with the general election. We should require parties to explicitly state their position on the proposed agreement as part of their campaign platform. Citizens then vote twice at the ballot box, once for a government, and once regarding the 123 agreement. In the latter ballot, the vote could be for a party or a yes/no on the agreement or its significant issues/clauses. In this manner, the entire country could be polled and its opinion reflected in our final decision on the nuclear agreement.
An average voter would ask what the costs and benefits of signing on to the 123 agreement are. For one, signing an accord with the US relieves us of participating in an escalating nuclear cold war of nerves with Pakistan and China. A war can devastate a country by wiping out decades of progress and handicap its future beside washing away trillions in wealth. Ask the Iraqis. Peace is worth a lot of money. India could divert the ballooning defense budget to peacetime needs and meet its goals of better infrastructure, universal education, a better equipped law and order machinery and basic human needs (In layman's terms, a hundred schools instead of one Agni ICBM). With the US as an ally, we could forge commercial alliances that exploit their advanced technology and our human resource expertise. The US gains a much-needed foothold in to South-Asia to counterbalance the growing might of the Chinese and the dangerous impatience and resentment in Pakistan. And of course, George Bush may claim another feather in the cap in his quest for nuclear demilitarization. There are costs too. We will no longer be a NAM country, bound as we will be in to sub-serving the cause of the US (not that non-alignment ever mattered much). Our reactors and research centers will be under 'IAEA' inspection. We know what that means. Our researchers will be put under the horseblinds of the US and the IAEA. Funds meant for thorium-cycle research will be diverted to food irradiation and nuclear refining of crude oil. And India will take a back-seat in global warming matters and follow the lead of a country that has anticipated the phenomenon so well that it now benefits both by adapting and responding to it. (Hell, we might as well grow wheat on the land leased underneath the Iceland icecap!). A benefits-maximizing decision in the context of these and other strategic angles is well-nigh impossible. But that should not stop our politicians, policymakers and indeed, us citizens, from examining and weighing the 123 agreement in different contexts before coming to a decision. It is our duty to act pro-actively and ensure that our country takes an informed decision on the nuclear pact with the West - one that could be the first step in our eventual integration with the G-8, but could also be our doom if we choose to play petty politics that has many a time made our democracy the laughing stock around the world.
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