Tuesday, 26 July 2011

One week to go

It is the 26th of July today and there remains exactly a week to go for the 2nd of August, 2011. Sometime between then and now, the Congressmen in Washington D.C will need to arrive at a compromise to ensure that the debt limit of US$ 14.3 Trillion can be raised, failing which the Government of USA faces the prospect of defaulting on its financial commitments.

Should the Republicans and Democrats fail to arrive at a compromise, the outcome could be a disaster with few parallels in the recent past. With most international trade denominated in dollars, a fall in the value of the dollar (which is bound to happen should the default come to pass) will have an adverse impact on exports. Contries like China and Germany, which are heavily export oriented would be the worst affected.

For China, the blow could be on two fronts. For one, the impact on its exports could be significant. Having artificially devalued their currency for so long, the Chinese will need to do a complete overhaul of their economy to reduce their dependence on exports. Secondly, with over a trillion dollars parked in American treasury bills and a higher figure held in foreign exchange reserves, a sudden drop in value will result in a collosal loss. Should the effect on the Chinese economy be severe, we face the prospect of the three largest economies in the world slipping into a vicious spiral (USA and Japan are already in the throes of a seemingly never-ending crisis).

But from a purely American perspective, it remains to be seen how they manage to contain the burgeoning fiscal deficit. Even allowing for the fact that they manage to arrive at a compromise and raise the borrowing limit, its just a case of delaying the explosion rather than diffusing the bomb. With millions of baby boomers set to retire over the next few years, the burden of old age pensions is only set to increase.

For years now, the Government of the USA has been meeting its obligations through debt financing. As long as the economy was sound, there were enough and more investors willing to invest in US treasury bills. The fact that the US Dollar was the most commonly used currency enabled Washington D.C to run on massive budgetary deficits, secure in the knowledge that someone or the other would invest in their bills. But with the prospect of a default looming and the fact of the economy already being deep in recession, it remains to be seen how many investors will be keen on parking their funds in US debt instruments.

Already, five rising economies (BRICS- Brazil, Russia, India, China and South Africa) have signalled their intention to establish mutual credit lines by denominating trade between them in their local currencies. While the modalities of that proposal are yet to be worked out, there's little doubt that the process is going to be accelerated in the light of the impending crisis in the USA. In the medium to long run, there is the very real prospect that more countries will be looking to establish a similar framework with key partners. Should that come to pass, the American Government will find it increasingly difficult to finance its massive budgetary deficits.

The other option normally available would be to channelise domestic savings through the financial sector. But America's consumerist policies which have emphasised expenditure over savings means that the average household simply doesn't have the means to invest in savings instruments. According to the Consumer Credit report issued by the Federal Reserve (8th July 2011), the total consumer debt stands at a staggering 2432 billion. With a population estimated at 308.7 million (according to the 2010 census), it means that the average citizen of the USA is indebted to the tune of US$ 7,878 or so. Given such staggering debt levels, it looks highly unlikely that there is going to be adequate disposible income to be channelised.

In other words, the United States of America is in urgent need of financial restructuring if it is to implement a policy of greater fiscal prudence. For starters, they will need to find ways of changing the spending habits of its citizens. The days of indiscriminate borrowing and spending will have to go, which can be achieved through a combination of fiscal incentives for saving and a tightening of the rules relating to lending. There also is the challenge of increasing the taxes, the bone of contention between the Democrats and Republicans. Much as Americans may resent higher taxes, they need to realise that their Government simply does not have a second choice in this matter.

There is no doubt that such sweeping changes, which would affect the way Americans have lived over the last three decades, will be virtually impossible to implement in the short to medium term. Until then, the USA's budgetary deficit will only keep mounting, which is bound to fuel inflation. In short, the average American citizen is bound to suffer the dual burden of unemployment and rising prices.

In short, the only solution is short term pain for long term gain. Whether the people of the USA and their leaders have the will and the courage to implement it is the bigger question.

Irrespective of what happens between now and 2nd August, the USA is sitting on a bomb waiting to explode.

Monday, 25 July 2011

Selective management?

I happened to read an article on cricinfo.com some days ago, in which former umpire Darrel Harper was reported to have said that allowing Indian captain M.S. Dhoni to get away with his very public criticism of an umpire flagged off an era of 'selective management' by the ICC.

I can largely empathise with Harper. Whatever the reason, it is wholly unacceptable for a captain to publicly speak out against an umpire. If it is indeed true that Dhoni told Harper that India had had problems with him earlier, then Dhoni deserves a suspension, never mind the fact that Darrel Harper did not put it on record or the fact that Harper has a reputation of being an over-bearing and abrasive character.

Nevertheless, Darrel Harper's claim that this 'begins' an era of selective management is absolutely incorrect. I have followed the game closely since the mid 90s and truth be told, selective management has been the way the game has been administered ever since I started following the game- possibly even earlier. I can remember countless instances when the administrators blatantly apply different standards for different people.

There has been much talk about Abhinav Mukund's act of charging at the umpire while appealing in the first test. But there is nothing new in it. Back in 1996-97, two young Indian players in their first season- Saurav Ganguly and Pankaj Dharmani- were fined for similarly charging at the umpire while appealing and Indian paceman David Johnson was fined for dissent for rubbing the shoulder in pain when he was given out caught off his shoulder. The same match refree turned a blind eye to the fact that Shaun Pollock flung the ball at Dravid without provocation in the same series, or that Allan Donald later that season abused Dravid in full view of the cameras in a crucial game.

Less than a year later, the South African captain, in a moment of frustrated impotence passed a whole stump through the third umpire's room after a desperately fought draw at Adelaide. The match refree Ranjan Madugalle did not consider the action significant enough to so issue so much as a warning to Hansie Cronje. The same refree fined Indian seamer Venkatesh Prasad for over the top celebrations when he got a wicket in Australia two seasons later.

The ICC Champions Trophy showcased the game's administration at its inconsistent best again. Chris Gayle was fined for initiating physical contact with Michael Clarke. The match refree Mike Proctor, for some reason best known to himself, did not take into account the fact that it was Michael Clarke who provoked it in the first place. The same refree was in charge when the Harbhajan-Symonds blow up happened a year and a half later. In the proceedings that followed, Mr. Proctor decided that Symonds' claim had a greater ring of truth to it, eventhough he had not a single witness to back his claim.

Take for that matter the Border-Gavaskar trophy in 2008. Remember that incident when Gautam Gambhir accidentally ran into the bowler Simon Katich? Anyone who witnessed Katich's ugly outburst would recollect that it was the Australian southpaw who was at fault in the first place. The match refree Chris Broad did not consider the incident worth acting on. The same Chris broad fined Gambhir later in the series for elbowing Watson, making no account for the abuse that the Australians were dishing out to him.

And to top it all is Stuart Broad. The English fast bowler is a player I admire personally. Nevertheless, even an admirer like me cannot turn a blind eye to his repeated transgressions. Time and again, the young man has acted in a manner that's very petulant and extremely unbecoming of an international player when things haven't gone his way, not least when he flung the ball at Zulqarnain Haider in the Edgbaston test last year. Not even once has he copped a suspension till date. Its hard to imagine a player from the sub-continent getting away with much less.

We could perhaps go on about the number of instances when match refrees blatantly followed different rules for different teams and that is scarcely the objective of this article. That point I wish to make is that there is absolutely nothing new in the selectiveness of the manner in which the game is administered. The only difference is that the newly powerful too are in the list of favoured nations now.

Thursday, 21 July 2011

A mouth watering prospect

As I write, there remain but two hours to go before the action kicks off at Lords in the first test between India and England. This one is going to be a historic occasion: the 100th test match between India and England and the 2000th test match. Yet, the historic significance pales against the prospect of the world's No.1 team up against a worthy contender capable of usurping its place. Add to it the prospect of Tendulkar, Laxman and Dravid- three Indian legends- playing in England one last time, up against what must currently rank as the most potent attack in the world.

For once, there is no need for hype. The context and occasion alone make for a mouth watering prospect. The eyes of the cricket world are on India and England for what could be one of the most keenly contested series in recent times. Predictions as to the outcome of the series have been coming nineteen to the dozen and this writer would like to add his two pence worth to the debate.

Given the conditions, England must rank as slight favourites to win this series for two reasons: England have the clear advantage in the pace department. The playing conditions in England have favoured the pace bowlers in recent years, with bounce and movement for the quicks on offer, which the home side is well equipped to exploit. Secondly, India does not have a settled opening pair. In Abhinav Mukund, they have a youngster playing in his first season of international cricket and this could present an opportunity for England to get a crack at the powerful Indian middle order even before the shine is off the ball.

Nevertheless, England's advantage at the outset only seems marginal, given that seaming conditions could also prove tricky for their own batsmen, who were found struggling against Pakistan last summer. Should Zaheer Khan find his rhythm early into the series, the Zaheer-Ishant-Munaf combination can nullify England's advantage. England have a settled opening pair, but the middle order is not nearly as strong as India's.

The one uncertainty is regarding the spin department. Graham Swann is unlikely to be a major factor against the Indians, given the conditions and Indian batsmen's mastery of spin. And so the one factor that could make a huge difference is Harbhajan Singh. Having struggled for consistency in recent times, it looks unlikely that Harbhajan will be a consistent threat. But in a series between two evenly contested sides, one magic spell from him could well tilt the scales. Should he struggle on the other hand, England could have a field day against him.

In short, for every factor favouring one side, there are mitigating circumstances balancing the advantage. This is the foreteller's ultimately nightmare. Nevertheless, with less than two hours to go before the action commences at Lords', this writer's prediction is 2-1 to England.

Tuesday, 12 July 2011

Congratulations West Indies

Yesterday at Windsor Park, Dominica, the West Indies pulled off one of the great escapes of recent times. Having started the day 81 ahead with just four wickets in hand and 97 overs left against the world's No.1 team, they were dead and buried baring a miracle. And indeed a miracle was what they conjured up.

Many would say that India played too safe, that it was an under-strength Indian team and that there was time lost to rain. All of that is true, but also consider this: this was the world's No.7 side against the No.1 team, a team that had just one series win against quality opposition since 2002 and one that had suffered the indignity of a whitewash countless times over the last dozen years or so, a side that had two misfiring openers and a non-performing veteran in its middle order. To add to it all, there were poor umpiring decisions that went against the hosts.

The number of setbacks would have surely broken the will of most West Indian sides of post-95 vintage. Carribean sides from the recent past have fallen apart with much less reason. This team stuck to its job manfully, restricting India to under 350 on a good batting surface despite being reduced to three bowlers. For that matter, the West Indians ran a close second in the first test- the only game in the series that produced a result.

All considered, the West Indies took several positives out of the series. In Bishoo and Rampaul, they have two spirited bowlers with considerable promise. Once Jerome Taylor and Kemar Roach will be available, West Indies will have a pretty potent attack. On the batting front, Kirk Edwards showed that he has the character required at the highest level, even if his technique needs some fine tuning. Darren Bravo possesses the talent to play at the highest level, if not the application. Marlon Samuels applied himself brilliantly in Barbados and might have done far better but for some poor umpiring at Dominica.

Most importantly, the West Indians showed the character and the pride to fight it out. For perhaps the first time since I started following the game in the mid 90s, they played like a team. There was no tame surrender, the likes of which one has come to expect of them. There may be no extraordinary players in that team, but there is a bunch of committed individuals.

The greatest concern for the West Indies right now is the opening. If the WICB can somehow persuade Chris Gayle to come back and give his best to the team, it is just a matter of time before the West Indies becomes a very competitive team. While they have taken baby steps towards improvement until now, they took a much bigger stride this summer- not a giant stride, but a decisive stride nonetheless. To draw 1-1 with a competitive Pakistani unit and lose 0-1 to the world's No.1 side in a series where they made their guests work much harder than they would have bargained for is no mean achievement for a side at the bottom of the pile.

The challenge for the immediate future is to build on the positives and ensure that unlike countless occasions in the recent past, this one too is not squandered away. The first step is always the most difficult one to take and this summer, West Indies have done just that. Its time the players and the administration got together to ensure that they keep up the good work.

Thursday, 7 July 2011

Wither goes Indian cricket?

Today, 7th July 2011, marks the 30th birthday of Indian captain Mahendra Singh Dhoni and as of now one could safely say that whatever he does from here, he is going to be spoken about in legend. A T20 world cup win, victory in the world cup, India's first series win in New Zealand in 41 years, a drawn series in South Africa (where India had lost every series played until then) and very possibly a series win in the West Indies (where India have won only two series to date), quite apart from taking India to No.1 in the test ranking- such is the CV of M.S. Dhoni.

And yet the signs for the future are worrying. India might be well set to win a series in the carribean, but the two highest scorers are Rahul Dravid and V.V.S. Laxman, two men in their late 30s who are in the twilight of their careers. Of the younger batsmen, only Suresh Raina and Abhinav Mukund (on the evidence of the second innings in Barbados) have shown the ability to tackle challenging conditions. If presented with challenging conditions, as they have been in this series, will the Kohlis, the Pujaras or the (Rohit) Sharmas be able to cope?

There is no reason to believe that the next generation will be unequal to the challenge. With most of them in their early 20s, they still have a long way to go. Let's not forget that an Indian line up that featured Laxman, Tendulkar and Dravid- all in their early 20s back then- was blown out for a paltry 81 at Barbados 14 years ago (on admittedly a minefield of a surface). Let's also not forget that a batting lineup that boasted of Tendulkar, Dravid, Ganguly and Laxman failed to chase down 236 in Zimbabwe back in '98, lost 0-1 in New Zealand in 1998-99 and 0-3 in Australia in 1999-2000. The same lineup was blown out for 100, 66 and 144 in the space of four innings against South Africa in 1996-97.

The young men who oversaw those embarrasing defeats were the very ones whose magnificent efforts saw India rise from from No.7 back in early 2002 to No.1 by the end of the decade. Talented, classy and committed as they were, it took several years experience at the highest level before they attained the temperament, the self-belief and adaptability to become legends. If 2001 is to be taken as the tipping point when it started turning around, then its worth remembering that the fab-4 were all in their late 20s by then.

All of which goes to show that players need investment in time and patience before they mature. The conditions in the carribean have been difficult, as Rahul Dravid has himself admitted. It is crucial that the promising youngsters are given time to settle down and find their feet at the highest level. It is only after exposure to different conditions that they will learn to adapt, as did their seniors who are legends today.

In other words, the challenge that Indian cricket faces today is not the availability of quality players to replace the golden generation. The real challenge is to nurture them, to give them time and opportunity to develop their game so that they will eventually be ready to shoulder the responsibility of taking Indian cricket forward.

Given the fabulous success he has had till date, Dhoni is particularly well placed to bridge the generation gap. It is now upto him and the likes of Gambhir, Sehwag and Yuvraj Singh to nurture the (Rohit) Sharmas, Pujaras and Kohlis. For all that he has achieved, Dhoni at 30 faces an even bigger challenge ahead. Only time will tell whether he will be remembered as a captain who failed to arrest the decline of a great team or as a legendary captain who managed a successful transition despite the loss of legends.

Tuesday, 5 July 2011

An autochthonous path for India

The patent regime in India underwent a sea change in 2005. Up until then, India only granted patents for the production process and not the final product itself (which was meant to protect the pharmaceutical generics trade). The enactment of the Patents (Amendment) Act of 2005 brought the patent regime in India more or less in line with international patent laws. Nevertheless, there have been murmurs from multinationals about the Government of India effectively bypassing the protection granted to patents in the form of compulsory licenses.

For the benefit of the uninitiated: patents are granted only to inventions which constitute new findings hitherto unknown and which are capable of industrial application. Patents (for inventions), Trademarks (for commercial signs) and copyrights (for works of art) constitute the three most common forms of intellectual property rights.

The very concept of intellectual property rights (IPR) is largely alien to the Indian mindset. Historically, sharing of knowledge has been an integral part of Indian culture. The Arthashastra for example, a seminal work on statecraft, borrowed liberally from existing works wherever the author was in agreement with those teachers. The Ramayan and the Mahabharat, the two Indian epics have been embellished over the centuries by multiple writers (incidentally, the legendary Laxman Rekha is not mentioned anywhere in Valmiki’s Ramayan). Most Indian music is based on ragas that were conceived hundreds of years ago.

The very concept of Intellectual Property Rights (IPR) has exclusivity at its foundation, with the originator of the idea conferred exclusive right to exploit the commercial potential of the idea. Excellent as the idea sounds, it does not suit a predominantly rural society like India, where the vast majority of the people are poor. 

For any idea to be useful in rural India it should fulfil two criteria: (a) it should be capable of being implemented rapidly and (b) it should be available at a low cost. Given the time it takes to obtain a patent and the legal costs associated with obtaining and then protecting an intellectual property right in India, it would be far more commercially viable to leave the invention unpatented. For starters, it would enable the inventor to bring his product out in the market immediately and keep the prices low (and as such, affordable).

Secondly, leaving such products unpatented would allow other entrepreneurs to exploit the idea. Most rural entrepreneurs are people with limited financial wherewithal who can serve only a very limited market. An open field not only presents opportunities to other entrepreneurs who can modify inventions freely to respond to varied local conditions, but also makes it possible to spread the benefit of an idea among a much wider user base. Small entrepreneurs offer the twin benefits of high degree of customisation and the ability to provide last mile connectivity. Such flexibility and reach would be simply beyond the means of a major corporate entity.

Another factor that needs to be kept in minding is the Indian way of doing business. Unlike in the west, where the contract is sacrosanct, in the Indian scheme of things the signing of the contract is only the beginning of the relationship and ultimately, the personal relationship between parties to a transaction decides the manner in which the business is done. As such, the concept of granting a license to use the patent would appear to be not only tedious, but also alien to the Indian way of working.

Not even for a moment am I advocating that India should disband its patent regime. The point I wish to make is that while we encourage innovation in this country, we need to take care to ensure that we do not impose conditions that could stifle innovation or in any way prove self-defeating. For reasons already mentioned above, there are far too many innovations that are best left unpatented and as such, it is neither feasible nor desirable to create a patent regime resembling the one used in developed countries. If India is to truly benefit from innovation and entrepreneurial spirit, we need to adopt an autochthonous approach best suited to Indian conditions.