What do you foresee if Oil touches $200 a barrel..??

Just glanced through an interesting article today. ".... some facts highlighted in a recent report by investment bank Nomura. Fact 1: Oil prices were up 128% in Arab-Israel war. Fact 2: Iranian revolution of 1979 sent oil prices up by 77%. Fact 3: 1989 Gulf war saw oil prices jump by 109% in two months of actual infighting. What this means is a trouble in oil rich regions could mean a doubling of crude oil prices....analysts at Nomura have said that crude oil prices could touch $220 a barrel".....

Just a second...did they just say 220..? Well, I don't have the credentials to challenge their findings and credentials. But given the current political scenario in Arab countries (6 out of 12 OPEC countries - Algeria, Iran, Iraq, Kuwait, Libya & Saudi Arabia are witnessing unrest which could soon be translated to instability. and OPEC members collectively hold 79% of world crude oil reserves and 44% of the world’s crude oil production !), it seems pretty much of a possibility....

If  I recall correctly, even during the worst times of the sub-prime crisis, oil touched a peak of $150, may be a tad more or less and too for a very brief period. Imagine what 200-220 numbers could do and this will be much more sustained - may be 6 months to a year. Just sends shivers down the spine. But as the say, lets be optimistic. I thought of 10 positives that we could derive from such a situation, if ever it arises.

1. Witness to History: We would be the only ones to have witnessed at least 2 of the 3 events in history that would change the course of economics for generations to come - The Greatest Depression of the 2010s (post oil surge), The Great Depression of the 1930s and the near-Great Depression of the 2008-09...few fortunate ones would have witnessed all 3 and still survived - Bravehearts !

2. Human Development index: This one's dark...We will finally achieve our millennium development goals. How?..Inflation would send the food prices rocketing to such heights that it will be out of bounds for the BPL families. Govt, which would already be running under heavy deficit, couldn't provide subsidies anymore. With BPL famished, the rest of the population would be well ahead of the goals !

3. Countering Social Evils: It could help us end social evils like drug abuse. In remote areas, where high-class drugs like heroine and cocaine are out of bounds, people use relatively cheap and readily available stuff like petrol. Obviously petrol now being in the elite category, people will have no alternative!

4. Environment: The best effect would be on environment - people will perhaps shun their personal transport and use more of public transport even if it means travelling in crowded buses, rubbing sweaty shoulders, getting late for work etc. This could well spell doom for automotive sector but lets be optimistic. They'll perhaps increase the pace of their research and the size of their investments and come with cheaper hybrid versions sooner than envisaged before.

5. New Traditions :We could witness a paradigm change in traditions - Imagine people exchanging cannisters of petrol rather than clothes, jewellery at marriages !

6. More Gods to Worship - Perhaps temples dedicated to Petrol devta- the only devta to be worshipped without dhoop, aggarbatti, for these items would invite His wrath and the temple would be gutted to flames.

7. Education Reforms: Perhaps new courses like MBA in Petrol mgmt ! - as petrol would determine how you spend your finances, market your goods, carry out your operations or even strategise !

8. New Incentives: Buy 1 toothpaste and get 50 ml petrol free ! Employees would rather ask HRs for some litres petrol rather than pay hike (as high inflation would have rendered 15-20% increment useless).

9. Less Car Thefts: Due to high inflation, thieves will prefer to steal petrol than the car itself (as the running costs would be too high).

10. World's Richest Person : And last but not the least world's richest person might well be an Indian finally ! Ambani might as well buy the Buckingham Palace as his holiday home !

Who said rising crude always spells doom? I just figured out 10 reasons to say 'It Doesn't'. 

The case of Tri-Valley University - Chauvinism as Nationalism?

For the past 15-20 days now, I have been keenly following the Tri-Valley university case - thanks to the terrific media coverage - interviews of radio-tagged students and their parents, panel discussions exhorting  the govt. to come to the rescue of students, ridiculing the American govt official who called the radio tags a fashion accessory and finally taking the credit when radio collars were removed from some. What was however intriguing was the way media's depiction of this whole episode as a 'national' cause, thereby trying to stir nationalism to garner support for the students and that because 'Indian' students were involved we should not take things lying down.

I do not disapprove of Indian govt trying to protect its citizens who are falsely implicated or subject to harsh punishments for minor crimes. The question is should it also vehemently pursue the case of someone who it seems were willingly and knowingly trying to take advantage of the loop holes in the education & work policy in another country and when caught were subject to mere deportation from that country? It was not that their head or hands were chopped off or that they were subject to rigorous imprisonment. Maximum what that punishment meant was that they would be barred from education and entry in that country. And it was not that they were really brilliant students studying in Ivy league universities. For God's sake ! They were just taking online lectures at Tri-Valley.

I will not declare the students guilty before trial. But were these students who claim that they were 'duped' really that innocent to be taken for a ride.

If you are planning to pursue your graduation/ under-grad/Ph.D from a university which is relatively new, far less known and spending some 15-20 lacs, may be more on education, would you not care to browse through the net to find at least some information? At least I would and I did just that; I googled Tri-Valley university and on the first page itself found results which were quite interesting. After the initial 7 links which were primarily focused on the fiasco, the eighth link said in bold letters" TRI VALLEY UNIVERSITY is a BIG FRAUD" - the topic being discussed on a forum catering to Andhraites (since perhaps they have the biggest craze for US). I found similar stories on a forum on immigration. I just glanced at the university reviews on some site and got this observation" TRI VALLEY UNIVERSITY is a BIG FRAUD and all students are also a part of the fraud. If USCIS takes this into consideration all students are subject to deportation.....". The reviewers gave a pathetic 1/10 for most parameters. And these reviews dated much before the fiasco actually happened. What was clearly evident was that it was a sham. No wonder such reviews caught the fancy of ICE officials finally. All it took me was just 15 minuted to know it was a fraud going on there. 


Its impossible to believe those who are caught didn't know all this. All this while the 'Jugaad' at Tri-Valley was working fine. And then suddenly the tables turned. Its not like India where you can even have a Jugaad-on-Jugaad to get your work done. If you can easily manipulate or break the laws of your land, that does not mean that laws everywhere are meant to be broken. Sometimes you might end up paying heavily.


But oblivious of all these facts, the matter is being pursued at foreign minister level with  their Secretary of State and that too to seek immunity for those who have willfully committed fraud - which brings me to the dilemma if we are promoting chauvinism as nationalism? 

C for Car ...err..small car !

What is 'it' that was earlier with Maruti only...then Santro gave 'it' hard competition..GM (Chevrolet), Fiat, Ford and lately VW, Toyota, Nissan and our homegrown Tata Motors have started manufacturing 'it'..And now even Hindustan Motors (the makers of old racehorse Ambassador ), Bajaj, Mahindra-Renault and marquee brands like Mercedes-Benz have joined the bandwagon to announce their plans for 'it'...'It' is nothing but the ubiquitous 'Small Car'.....the eternal Indian middle class dream !

What is clear is that customers are spoilt for choice, they are getting best of features in their limited budgets, a chance to show off their 'phoren' brands, raining discounts and offers and of course 'status correction' in social strata. What is however obscure is what lies ahead, say two years from now when the lucrative Indian market is flooded with small car models from almost every major auto maker.

I'm not worried about the influx of 'n' number of models...I'm more worried on account of two things - our urban infrastructure and safety.

All through these years we have not been able to formulate a reliable, best-of-class urban area development policy- particularly when it comes to housing and traffic management. Traffic management in most of the cities is best described in one word as- chaotic. There are no rules for parking, lane driving, over-speeding etc. Even at night, you see more cars parked on road-side than in the houses/residential complexes. Parking in multiplexes is a pain in the a$$. You spend more time looking for a parking space than shopping ! Getting stuck in a traffic jam for 30-40 mins is pretty normal. Govt.'s flagship Urban Renewal mission programme has made some progress (with acquisition of AC buses in some cities) but major tasks like road widening, flyovers are still a distant dream due to eternal problems of land acquisition, compensation packages, political hijacking of the issue etc. With such a background, its not hard to imagine what would launching of 'n' small, affordable cars do to the situation at time when the spending power of the middle class is increasing by leaps and bounds.'Cars, cars everywhere, not a road to drive'.

With news of recalls everywhere, be it American, German or Japanese auto makers, the quality of small cars will be an area to be closely watched for. While Nano did keep its promise of 1 lac tag, pics of Nanos going in flames have done no good to its sales, with just 589 units sold in November,2010. With so many players fighting for a pie in Indian small car market, pricing will play an important role which implies that input costs have to be kept as low as possible. Policies regarding quality checks have never been stringent in India. Combine both of them (pressure on margins and poor policies) and you get a 'perfect' car suited for Indian roads.

Last but not the least, environmentalists will also have their own arguments.

We can't stop companies from launching new models but what we can definitely do is have good governance, good policies (which is of course a distant dream)...Lets see what future holds for us !

Upheaval in Arab world - Is there more to it than what meets the eyes?

"Tunisian dictator flees country after weeks of public protests"; "Hezbollah moves towards Lebanon govt. control"; "Millions march in Egypt against Mubarak"; "Jordan's king fires govt in wake of protests"; "In Yemen, tens of thousands march against president". 

The new decade has certainly begun on a very high note. Since the time I've been interested in politics (and that's a fairly long time !), I don't remember so many, simultaneous, outcries for "Revolution". While there is a stark similarity  in the cause of the revolution in Tunisia, Egypt, Yemen - All have been ruled by  a single autocrat for almost 30 years- plunging millions in poverty and corruption; the protests in Jordan are due to prolonged recession and burgeoning public debt. Lebanon's transition of power was because Hezbollah withdrew support from ruling coalition.

While to most observers it may look like a expression of popular public sentiment, the consequences arising out of these govt changes may be the beginning of a rapidly changing political equation in the Middle-East. I don't know how many would have noticed but all of the countries mentioned above - Tunisia, Lebanon, Egypt, Jordan and Yemen were till now or are seen as pro-American Arab powers. The only major name missing is Saudi Arabia ( Who knows a change may be underway !).

America was shrewd enough to have its puppets in Egypt, Jordan and Lebanon (which share border with Israel !) - to maintain balance of power in Middle-East (Syria-Iran vs the Pro-Americans). Yemen - which is Arab world's perhaps poorest nation and perhaps Al-Qaeda's next HO - is ruled by Ali Saleh who is seen as pro-West and major American ally in war against terror. Tunisia's despot was perhaps supported as he was seen as a secular person and pro-liberalization (markets for US!).

The tables have turned now. Muslim Brotherhood(MB) is emerging a strong contender in Egypt and Jordan. MB is seen as non-violent but conservationist and does not believe its at war with the West but whether it has ties to terrorism is disputed.(Wikipedia !). The emergence of Hizbollah which has the backing of Iran and Syria would surely be giving sleepless nights to US and Israel by now. If US loses support in Yemen, it can happily forget about eliminating Al-Qaeda . As with Tunisia, it borders Algeria. (Algeria is recovering from fighting between state authorities and Islamist militants). There are fears that political instability in Tunisia will leave it vulnerable to infiltration by disbanded terrorist groups.

With its pawns falling one by one, its time for US to re-think its strategy in the Middle-East. What remains to be seen is whether the protests were only and only pro-democracy / pro-reforms or did anti-Americanism fueled the fire. Even if the native people of these countries would like to keep it as a pro-reformist movement, would the politicians who take over be prudent enough to keep religion separate from state? Does corruption, illiteracy and poverty not make these states perfect playgrounds for likes of Al-Qaeda? Perhaps the coming years would see a real test of diplomacy for US and as for Israel - I would rather not think about it !

Still supporting the revolutions ?? Give it a thought....