<b>Alternative globalisation </b> -Pinoeer
Bharat Jhunjhunwala
Mainstream economists concede that the present globalisation is unfavourable for the poor countries. But they contend that we must participate in the unfair game and extract as much concession as we can, there being no alternative. We should save as much of our life as we can when the demon has caught hold of us. This thinking is a result of mental slavery.
There is provision in the WTO that any member can give a six months notice and terminate its membership of the organisation. There is no compulsion for us to remain a member of the WTO. We are free to exit the present globalisation bandwagon. We have assumed that the demon has caught hold of us and we are doing his bidding - though really it is only a shadow of the demon.
We have no opposition to the principle of globalisation. Our mantra is that of Vasudev Kutumbakam - the whole world is one family. Our objective is to secure the welfare of all living beings on this earth. Our opposition is to the present model of globalisation which is leading to illfare of large numbers.
The basic inconsistency of the WTO is that it provides protection to the monopolistic control of technologies but prohibits the monopolistic pricing of natural resources. The WTO requires that greater patents protection be provided to holders of new technologies. Monopoly of owners of technology is recognised and even encouraged. The underlying principle is that the owner of a commodity has a right to extract highest price of his goods. Technological knowledge is a good and the holder is entitled to price it monopolistically.
The poor countries own 80 per cent natural resources of the world such as water, soil, forest, oil, mineral, sea, etc. The monopolistic control of the poor countries on their natural resources stands on a similar footing as monopolistic control of the rich countries on technologies. Just as there exists a market for technologies and they are bought and sold, similarly there exists a market for natural resources and they are bought and sold. Both are marketable commodities. The principle of monopolistic pricing of one's commodity is applicable to the rich countries' ownership of technologies.
It should also be applied to the poor countries' ownership of natural resources. Microsoft has the freedom to charge high prices for its software. Similarly, India should have the freedom to recover high prices for its bauxite and manganese ore. The inconsistency in the present globalisation is that monopolistic pricing of technologies is permitted but monopolistic pricing of natural resources is prohibited. The poor countries should come out of the WTO to break free of this unfavourable situation. They should initiate an alternative model of globalisation which places all commodities, technologies and natural resources included, on the same footing.
There are two differences between technologies and natural resources. Technolgy is generated by the owner while natural resources are a gift of nature. Protection to new technologies encourages more inventions while no such advantage accrues from protection to natural resources. The problem with this argument is that natural resources have to be discovered and managed in the same way as new technologies. There is no value to a diamond lying in the field unless one has the necessary knowledge to recognise its value. The knowledge of diamond lying in the field and a molecule having cancer killing property are similar.
People of the poor countries have discovered these natural resources and maintained them for all these years. It is well recognised, for example, that the topsoil is generated by years of dutiful cultivation. It is not merely a "gift" of nature. The poor countries are, therefore, entitled to price their soil and crops produced from it monopolistically as much as the MNCs have a right to charge high price for their drugs. The second difference is that technology has a tendency to spread itself while natural resources have a tendency to constrict themselves. Many efforts are afoot to duplicate Microsoft's Windows software. This will be done sooner or later. The Windows software has a tendency to "grow" or to spread itself. The tendency of natural resources is exactly the opposite. They tend to reduce and get exhausted with time instead of spreading.
Whether monopolistic protection should be provided to technology (or to natural resources or a commodity) that spreads or to one that constricts. It seems that protection should first be given to natural resources. The commodity that tends to exhaust itself should be protected. What is the benefit of giving protection to a commodity that is growing?
It can be said that not providing protection to technologies will put an end to research and development. But what is the purpose of new R&D if it does not reach the people? Moreover, mankind has not waited for patents to discover telegraph, telephone and a host of other technologies. There is no reason to believe that technological advances will come to an end without patents.
The present model of globalisation is inconsistent. Protection is provided to technologies but not to natural resources. Another inconsistency is that free movement of capital is encouraged while free movement of human beings is restricted.
The poor countries should make cartels of their natural resources and indulge in monopolistic pricing - like OPEC did for oil in the 1970s. They should openly violate the TRIPS agreement and copy advanced technologies. Certainly the rich countries will retaliate by imposing high import duties on our exports and deny us new technologies. Both these steps will meet with a failure, though. High import taxes will be as harmful for them as for us. America will have to buy expensive garments from other countries if it imposes high taxes on cheap garments produced in India. Ultimately, they will have to buy our cheap cloth in their own self interest just as they had to unilaterally withdraw economic sanctions imposed after the Pokhran explosions.
The fear regarding access to technologies too is without any basis. A study undertaken by UNCTAD has found that poor countries are finding it more difficult to obtain new technologies after the making of the WTO. The conclusion is that we must challenge the present unfavourable model of globalisation and establish a more just model.
The basic contours of the alternative approach would be as follows. One, poor countries should be encouraged to make cartels of their natural resources. Two, TRIPS and patent laws must be scrapped. All knowledge must be free for the use of people. Three, free movement of human beings should be permitted while nations should be free to impose restrictions on free movement of capital.
Business - Reuters
Belief in Hell Boosts Growth: Fed Report
Tue Jul 27, 4:13 PM ET Add Business - Reuters to My Yahoo!
By Alister Bull
WASHINGTON (Reuters) - Economists searching for reasons why some nations are richer than others have found that those with a wide belief in hell are less corrupt and more prosperous, according to a report by the Federal Reserve (news - web sites) Bank of St. Louis.
Researchers at the regional Federal Reserve bank acknowledged the importance of productivity and investment in the economic process but looked at some recent unconventional efforts to explain differences in national prosperity.
The St Louis Fed drew on work by outside economists who studied 35 countries, including the United States, European nations, Japan, India and Turkey and found that religion shed some useful light.
"In countries where large percentages of the population believe in hell, there seems to be less corruption and a higher standard of living," the St. Louis Fed said in its July quarterly review.
For instance, 71 percent of the U.S. population believe in hell and the country boasts the world's highest per capita income, according to the 2003 United Nations (news - web sites) Human Development Report and 1990-1993 World Values Survey.
Ireland, not far behind the United States in terms of income, likewise has a healthy fear of a nether world with 53 percent of the population acknowledging hell's existence.
FIRE AND BRIMSTONE
"I'm not surprised," said the Rev. Eileen Lindner, deputy general secretary of the U.S. National Council of Churches, when told of the results.
"The expectation that there is a cultural belief in hell or perpetual and eternal punishment for wrongdoing will act as a disincentive to wrongdoing," she said.
The St Louis Fed's researchers took a two-step approach to linking religion and the economy.
"A belief in hell tends to mean less corruption and less corruption tends to mean a higher per capita income," they wrote. It correlated the belief in hell findings of the World Value Series with a measure of corruption produced by Transparency International.
It then looked at the relationship between corruption and per capita gross domestic product and found "a strong tendency for countries with relatively low levels of corruption to have relatively high levels of per capita GDP (news - web sites)."
"Combining these two stories ... suggests that, all else being equal, the more religious a country, the less corruption it will have and the higher its per capita income will be."
The researchers also noted the long tradition among classical economists to equate a society's honesty, and the strength of the rule of law, with economic vitality.
"Adam Smith wrote that one of religion's most important contributions to the economic development process is its value as a moral enforcement mechanism," they said.
Fed Chairman Alan Greenspan (news - web sites) offered a contemporary echo of this view, arguing in a speech earlier this year that modern business still relies on the word of those with whom it deals as he slammed the recent run of corporate governance scandals in the United States for eroding that trust.
None of which cut any ice with nonbelievers.
Ellen Johnson, president of American Atheists Inc., called the study the latest gimmick from the religious establishment to drum up government support.
"Religious people cannot rely on their theology to promote what they do so they turn to other things," she said.
"I cannot imagine what the belief in mythological beings or things that don't exist can do for business. What about the pornographic industry? That is probably very good for growth."
The St Louis Fed's essay "Fear of Hell Might Fire Up The Economy" can be found at: http://www.stlouisfed.org/publications/re/.../c/default.html
Rise of the A&W Managers
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--> These days, being Asian is more an asset than a liability in climbing the MNC corporate ladder. And the country which has surged ahead in the executive talent race is undoubtedly India.
Mr Michael Jenkins, managing director of the Centre for Creative Leadership, says India is recognised as a source of talent in engineering, sciences and software, as well as management.
A growing battalion of Indian chieftains have been cherry-picked to run Fortune 500 empires worldwide. These include new Vodafone CEO Arun Sarin; president and chief financial officer of PepsiCo Indra Nooyi; recently-retired CEO and chairman of Citibank Victor Menezes; former president of United Airlines Rono Dutta; former CEO of US Airways Rakesh Gangwal; former managing director of McKinsey Rajat Gupta and former CEO of Standard Chartered Rana Talwar.<!--QuoteEnd--><!--QuoteEEnd-->
The South Asia Initiative at APARC (Asia Pacific Research Center) and the
Silicon Valley Indian Professionals Association (SIPA) cordially invites you
to:
"The Globalization of Venture Capital"-A panel discussion
With: Farrokh Billimora - General Partner, Artiman Ventures
John Borchers - General Partner, Crescendo Ventures
Bob Kondamoori - Chief Executive Officer, Xalted Networks
Moderator: Rafiq Dossani, Asia-Pacific Research Center, Stanford University
In recent years, the growth of offshoring in startups has posed a key
challenge for the venture capital industry, which has been regionally
anchored until recently.
The challenge is how to add value through the traditional venture capital
(VC) approach of active board involvement, such as assisting with company
strategy, recruitment and fundraising. The complexity for venture
capitalists (VCs) has increased with the shift from offshore manufacturing
to services, the advent of new locations such as India, changing regulatory
structures, and new financing options such as outsourced versus in-house
work and product versus service startups.
Company background:
* Artiman Ventures - Artiman Ventures is an early stage venture capital firm
devoted to investing in world-class entrepreneurs with leading edge
technologies.
* Crescendo Ventures - Crescendo Ventures is an international venture
capital firm that provides early-stage funding and growth resources to
high-potential companies in the communication and enterprise infrastructure
industries.
* Xalted Networks - Xalted is a supplier of broadband equipment to India and
other markets.
Tea and samosas will be served.
RSVP requested to https://www.123signup.com/register?id=fgrtt
Event Date: Wednesday, September 29, 2004,
Time: 5:00pm-7:00pm
Place: Philippines Conference Room Encina Hall, Third Floor, Central
Wing
For more information, please contact Rowena Rosario at wena@s... or
650-725-1954.
What have people heard of crude oil prices ? I think its close to 53-54 USD. What will happen if for example it touches 70-80 ? Is this US elections related ? Will it ease after elections and say Kerry comes to office ? If it doesnt ease and say it hovers around 60-65 will it setup other major skirmishes ? When did it get to such levels before ?
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->When did it get to such levels before ? <!--QuoteEnd--><!--QuoteEEnd-->
Crude oil hit a record $53.04 Oct 2004 a barrel, as oil production in the Gulf of Mexico struggles to get back to normal levels following hurricane Ivan. The price of crude oil was the highest ever recorded since oil futures began trading on the New York Mercantile Exchange in 1983. Over the last year, futures have jumped 67 percent
<!--QuoteBegin-rajesh_g+Oct 11 2004, 10:17 PM-->QUOTE(rajesh_g @ Oct 11 2004, 10:17 PM)<!--QuoteEBegin--> If it doesnt ease and say it hovers around 60-65 will it setup other major skirmishes ? When did it get to such levels before ? <!--QuoteEnd--><!--QuoteEEnd-->
Rajesh:
it's nearing $55/barrel
With sanctions being eased on Libya, it's oil will be back in free market. In Russia, govt controlled hold on oil sector is ripe for foreign investments. With 'democartically elected' rulers in Afghanistan and Iraq US will have oil from sources which were not easily accessible till a couple years ago. Recently Nigeria's having political issues with respect to oil - but can be fixed easily by a bit of 'shock-n-owe' and bringing 'liberation and freedom to those nice folks'.
Meanwhile analysts are predicting a sharp rise in consumption in India and China. Oil/Energy related stocks are on a rise and middle-east elites have plenty of spare change to fund a few more madrassas around the globe.
We live in interesting times...
I am surprised why Indian Govt is not increasing oil price, may be after state election results.
There is enough buffer there to take care of the increase in price
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->There is enough buffer there to take care of the increase in price <!--QuoteEnd--><!--QuoteEEnd-->
Buffer is used for Government project. Looks like UPA is digging foreign reserves.
http://www.iimcal.ac.in/community/FinClub/...sp?which=art143
<b>The Road Ahead </b>
Certainly any country facing current account deficit of 5-6% of GDP would have invited currency crises. But , well US is different case. It can finance its CA deficit by printing its own currency. Put it this way ---
If US is running deficit, some other country would be running surplus. Let say, India is running surplus with US. This inflow of extra dollars into India might drive rupee up. So RBI in order to check rupee gain would purchase dollars from the market and park them in US T-Bills earning 1.25% on them. Thus, effectively US is able to finance its CA deficit, simply by printing more dollars.
<b>But things have changed since 9/11, interest rates are at historic lows, corporate scandals, stock market fall, etc. have shattered investorsâ confidence. Investors are looking at other investment avenues. This has made increasingly difficult for US to finance its CA deficit. Experts believe that all major developing countries have increased proportion of Euro in their reserve holdings. Thus, what we have seen so far is gradual correction of dollar. But analyst says that dollar will have to fall by around 30% to bring CA deficit to sustainable level. Neither Euro nor Yen are in position to bear such large appreciation. Thus, appropriate dollar depreciation will be frustrated, if the Asian economies do not do their part on currency appreciation. China has weight of nearly 10% in dollar trade weighted index. Chinese Yuan, thus will have to play major role in dollar correction</b>.
<b>Mittal Steel announces merger with US-based ISG </b>
New Delhi
Lakshmi N Mittal's Ispat International on Monday announced the acquisition of LNM Holdings and merger with US-based International Steel Group Inc (ISG) in <b>a deal worth $17.8 billion to form the world's largest steel firm Mittal Steel Co</b>. The new entity will have Mr Mittal as the chairman and Mr Aditya Mittal as president and chief executive officer.
From the Economist, A Subscription Site :
<b>ON A ROLL</b>
<b>High steel prices and surging demand for the metal are helping billionaire Lakshmi Mittal to take a bold move into America, in a deal that also creates a new world leader in the industry</b>
<img src='http://www.economist.com/images/ga/2004w44/CGA857.gif' border='0' alt='user posted image' />
LAKSHMI MITTAL, a London-based billionaire of Indian descent, is used to turning a profit from the rusty remnants of the worldâs industrial past. At the last count, he and his family had interests in steel mills in 45 countries, many of them in once down but now up-and-coming parts of central and eastern Europe. This time, though, he is aiming for an even bigger prize.
On Monday October 25th, Mr Mittal announced a two-step deal worth $17.8 billion, which, if successful, will result in the family becoming the worldâs biggest producer of steel. As a preliminary step, Ispat, of which Mr Mittal owns 77%, is to buy LNM Holdings, a company wholly owned by the family. Once merged, the enlarged group, which is to be called Mittal Steel, will take over International Steel Group (ISG), one of Americaâs largest steel producers. Mittal Steel says it plans to offer ISGâs shareholders $42 per share, paid for partly in cash and partly in its own shares. If it comes off, the deal will put the Mittal family in control of a company that has a production capacity of 70m tonnes of steel a year, employs 165,000 people and boasts pro-forma revenues for this year of $30 billion.
Mr Mittal has chosen a good time to do his deals. Steelmakers are riding higher than for a long time. Thanks largely to the economic boom in China, demand for steel has rocketed of late. Indeed, the International Iron and Steel Institute expects world consumption of the metal to jump from 882.6m tonnes in 2003 to 950m this year. Consumption is expected to be higher still in 2005.
Prices of steel have also been rising lately, nearly trebling since the beginning of 2002. A combination of higher volumes and higher prices has transformed the finances of many struggling steelmakers, particularly those in parts of eastern Europe. Firms that have slimmed down their workforces and found ways to produce steel more efficiently have benefited the most. Plants in Kazakhstan, Romania and the Czech Republic that have been bought in recent years by LNM or its affiliates have quickly been turned around.
Thanks to rising demand for steel, producers like Arcelor, until now the worldâs largest producer of the stuff, have managed to push up prices four times during the past year. Some firms are already talking about raising their prices for a fifth consecutive quarter when contracts are reviewed in January. This is not just greed on the part of the producers. It is because their own costs have risen strongly too. The price of inputs has jumped: iron ore is up by about a fifth so far this year. As a result, the steelmakersâ margins are coming under pressure. âThe days of cheap steel are not going to be with us for a few more years,â Peter Fish, managing director of MEPS (International), a firm of consultants, told Lloyd's List. âThe shortage [of steel] that we are experiencing now wonât be as acute next year, but it doesnât mean that the over-supply situation will come back either.â
Indeed, until supply comes more into line with demand, steelmakers will continue to ship the metal as fast as they can. ISG, which is based in Richfield, Ohio, reported record shipments for the most recent quarter. That ISG has been able to crank up its own production to meet demand is due partly to its having also bought two other American companies: Weirton Steel and Georgetown Steel. The company has signalled to the stockmarket that its forthcoming results are likely to be better than expected.
It is not just existing producers that are trying to cash in on the steel bonanza. Upstream producers such as Brazilâs Companhia Vale do Rio Doce (CVRD), the worldâs largest producer of iron ore and pellets, are trying to get into the business of making quality steel. CVRD is talking about forming a partnership with Chinaâs Baosteel, a partly privatised manufacturer, to produce around 24m tonnes of steel a year.
That Mr Mittal is aiming to consolidate his familyâs interests into a single steelmaker whose shares are listed in New York and Amsterdam suggests two things: first, that he expects the boom in steel prices to last for a while longer yet; and, second, that he wants to enlarge and restructure his business while steel prices are still high. Although his and his familyâs operations are based in Britain, Mr Mittal has done most of his business elsewhere in the world. This latest deal suggests that he now thinks that, having blazed a trail in formerly communist countries, it is time to boost his presence in more mature markets.
Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
Mittal steel is one man show. Smart brain and dedication.
A shift of staggering proportions has just occurred -- and it will blindside investors, trip up Wall Street gurus and enrich anyone who grasps it's true implications.
This sweeping shift is already under way. And for investors, uncertain about how to invest in 2005, the real surprise is that President Bush's reelection isn't what's really important. That's because it is Alan Greenspan whose hand will remain on the economy's tiller throughout President Bush's second term.
And Alan Greenspan has just made a radical shift in direction.
This gives you an extraordinary opportunity, as you are about to see.
Never.
Your own success over the next 6 - 12 months does not depend on President Bush's agenda -- but on your grasp of the change that has occurred in "Greenspanomics."
An Important Shift Blindsides Investors
Time was, The Chairman would try to direct the economy.
Try and fail.
The Post-Election Boom
How to Get Your Share
Tighten your seatbelts, folks -- it's going to be a bumpy ride.
The next 12 months will see a productivity surge -- and a market opportunity unlike anything since the early '80s.
But, despite the imminent boom, it'll pay you to invest prudently.
In fact, it'll pay you a lot more than if you blithely believe that this rising tide will lift all boats.
For the last 18 years, subscribers of Young's Intelligence Report have had one mantra: safe and cheap. Safe and cheap -- IN THAT ORDER.
This approach has built the wealth of many hundreds of thousands of families. Some of our subscribers are the grandchildren of Charter Subscribers, and as you can imagine, they've got the "safe and cheap" religion.
If you don't have it, get it now -- or lose a bundle in the year ahead.
Today the economy is virtually impossible to direct -- the system is too complex, too global and simply too vast. And Greenspan has now acknowledged that this is so.
That's why Greenspanomics today is based on shepherding the economy. This means trends already in play -- will continue to play out in 2005.
The Federal Reserve can only influence -- never direct -- those trends.
This represents a huge shift.
That's why, for example, over the summer, Greenspan made two of the most widely-publicized, widely-predicted rate hikes in history.
He doesn't want markets spooked by surprises.
Or, as he has put it, "When events are unexpected...human beings become less able to cope. The failure...induces fear and, hence, disengagement...whether it be entering a dark room or taking positions in markets."
Think about this for a moment.
No more dark rooms.
A transparent, well-lit Federal Reserve.
And markets where prices are set, not by the Federal Reserve but, as Greenspan has said, "by judgments of millions of investors...highly knowledgeable about the prospects for specific investments."
Of course, this is a disaster for conspiracy-freaks and doomsayers!
But for investors who understand that certain trends already developing are now unstoppable -- well, this is a happy, happy day.
Which brings us back the real meaning of Bush's reelection.
You see, by now it is well understood that the economy itself is well beyond any president's control. George W. Bush can not be blamed for the recession that overtook the economy 2 months after his inauguration. Nor, in truth, can he be fully credited with it's recovery.
The last president to wield real influence over the economy was Franklin D. Roosevelt -- and, despite his drastic measures, even he was powerless when the economy plunged back into depression in 1937.
In short, no president has control over the economy.
More recently, the Federal Reserve has become endowed with the mythical power that once was the president's. But Chairman Greenspan's new "handsoff" approach gives us all a wonderful opportunity.
An opportunity to profit, no matter what.
4 Unstoppable Trends Benefit Most
There are four trends that benefit most from laissez-faire Greenspanomics:
1. Energy. We're in the midst of a rip-snorting energy crisis, and Bush can't do very much about it. Oil, natural gas, electrical transmission and coal are your best bets here. Again, complete instructions follow. Don't you dare miss out on this!
2. Regional housing. The big surprise here is that, while housing is indeed a "bubble" in some areas, in most of the country, it is still playing catch up. And right now, 70 million people are migrating to exurban areas -- small towns and customized communities. In the next few pages, I will give you 3 specific investments to make now that cash in on this bonanza.
3. The real digital revolution has arrived, and it is time -- finally -- to get on board. The biggest single investment mistake you could make in the next 12 months is to neglect information technology.
4. Cult brands. When consumers become loyal, fortunes are cemented. Companies that have a better product, know your name, give high levels of satisfaction consistently and, in short, actually give a damn will beat any index you can name in the next 12 months.
Will a weak dollar kill BPO firms?
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->What's the breaking point? According to an internal assessment by the BPO division of an IT major, at Rs 37 (per dollar), profit margins vanish. At Rs 35, companies will close down. If Dr Doom is right, a big shakeout is likely.<!--QuoteEnd--><!--QuoteEEnd-->
Is this true ? At one point I would have thought that this was true but somehow 37 seems like too high. What if BPO companies start moving out of Indian metros into cities like a'bad, kanpur, etc. What do experts think ?
<b>Commentary: India pays steep price for excluding foreign</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->India overtook Hungary, China and Slovakia to take the No. 2 slot behind Russia on the 2004 Global Retail Development index, compiled by the consulting firm A.T. Kearney. The index ranks emerging markets by the size of the opportunity they present to companies like Wal-Mart Stores, Carrefour and Ikea.<!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->That restraint, like much of what remains of India's socialist past, has been perpetuated by outmoded political discourse, which feeds on the fears of the neighborhood shops that control 98 percent of the country's $250 billion retail industry.
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As a result, more than a decade after India began opening up its economy, there is still no Wal-Mart store there, even as the world's biggest retailer added 10 outlets in China last year, taking its total there to 43.
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Ditto for Carrefour. Europe's largest retail chain is absent from a country where discretionary consumer spending is $178 billion a year. That is almost six times the gross domestic product in Slovakia, where Carrefour is present.
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Ikea, the world's biggest home-furnishings retailer, has four stores in Russia. The Swedish company has yet to open one in India.
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After years of speculation that an end to the ban on foreign ownership was imminent, a government minister this month said that a new retail-investment policy would be announced in two months. The rules are expected to be relaxed just enough to give a foothold to global majors without upsetting the government's communist backers too much.
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Further liberalization may happen in small steps.
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"We will have to ensure that foreign investment in retail doesn't replace or displace existing retailers," Trade Minister Kamal Nath said in New Delhi.
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With 7 percent of India's 400 million working-age people deriving their livelihoods from retail, displacement is not a minor issue. At the same time, the concern shouldn't be allowed to become a bugaboo.
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Mohan Guruswamy, chairman of the Center for Policy Alternatives, a New Delhi-based research group, wrote recently in the Hindu Business Line newspaper that if Wal-Mart opened a store in each of India's 35 biggest cities, and if these stores replicated the U.S. chain's employee productivity, 432,000 people would lose their jobs.
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The other argument against foreign direct investment is the "infant industry" case. How will domestic chains like Crossroads and Shoppers' Stop compete with the likes of Wal-Mart, which, as Guruswamy says, "will be able to sustain losses for many years till its immediate competition is wiped out?"
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If Wal-Mart is such a big threat, how come half of the sales in the $3.8 trillion U.S. retail trade industry are still generated by single-store businesses more than four decades after Sam Walton opened his first store in Rogers, Arkansas?
.
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Conventional wisdom says that not all foreign direct investment is equally wholesome. The type that comes in seeking to efficiently utilize a country's natural resources and labor is good; the kind that only seeks a market - like in banking or retail - should be shunned.
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"There is a general misconception that market-seeking FDI in domestic sectors such as retail yields little development impact," says a recent World Bank study by the researchers Vincent Palmade and Andrea Anayiotas. "The opposite is true."
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"FDI in retail," the authors explain, "has been a key driver of productivity growth in Brazil, Poland and Thailand, resulting in lower prices and higher consumption. Large-scale foreign retailers are also forcing wholesalers and food processors to improve. And they are now becoming important sources of exports: Tesco in Thailand and Wal-Mart in Brazil are increasingly turning to local products to feed their global supply chains."
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<b>It is for India to decide if it wants to create jobs for tens of thousands of shop assistants, cashiers and floor supervisors, or so confine investors like Tesco that they can employ only a few hundred engineers. That should be an easy choice in the world's biggest democracy. Surprisingly, it isn't.</b>
<!--QuoteEnd--><!--QuoteEEnd-->
<b>Britain invites India for July G-7 meet in Scotland: report</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->NEW DELHI (AFP) - Britain has invited India for a summit of the Group of Seven industralised nations and Russia to be held in Scotland in July, a report said.
The meeting is to be held from July 6 to 8.
Along with India, China, Brazil and South Africa also have been invited by Britain, which holds the rotating presidency of the group, The Hindu newspaper said. <!--QuoteEnd--><!--QuoteEEnd-->
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