India: The “Ease” of Doing Business (World Bank Rank)

Posted on September 7, 2011 by

I’ve just started to update my book on doing business in India, and I came across this statement: In 2008, The World Bank ranked India as 120th out of 178 countries in the difficulty of doing business. At that, its rank had improved from 2007, where it ranked #132.

This is the World Bank’s annual ranking, based on a survey about the complexity of regulation. So, I wondered, how has that changed? Had its rank improved further?

Um, no. India ranked 134 in 2011, right behind Malawi, (but ahead of Indonesia). It’s up one rank from 2010′s 135.  China, by the way, is 79. (I’m not sure this makes sense; all the anecdotal stuff I hear is that India is tough, but China is tougher.)

Singapore and Hong Kong come in at #1 and #2. New Zealand’s 3rd, the UK 4th and the US is 5th.

India’s 2009 and 2011 ranks aren’t strictly comparable. The World Bank now evaluates 183 countries, not 178. Also, an indicator on which India performed better than average in 2008 — Employing Workers — has been suspended in the 2011 rankings (it’s being reviewed for methodology).

But still — these rankings are no way an improvement.

WHAT ARE THESE RANKINGS, ANYWAY?

Each year, the World Bank looks at countries across the globe, ranking them on how far they regulate 9 areas of business. The numbers indicate India’s 2011 rank out of 183 countries. A rank of 91 would be above the median, and 92 would be below it. Clearly, India ranks above the median only on two counts, though it’s close on Registering property

  • Starting a Business  (173)
  • Dealing with Construction Permits (157)
  • Registering Property (94)
  • Getting Credit (32)
  • Protecting Investors (44)
  • Paying Taxes (164)
  • Trading Across Borders (100)
  • Enforcing Contracts (182)
  • Closing a Business (134)

The World Bank notes the limitations of this ranking in a note:

The ease of doing business index is limited in scope. It does not account for an economy’s proximity to large markets, the quality of its infrastructure services (other than services related to trading across borders), the strength of its financial system, the security of property from theft and looting, its macroeconomic conditions or the strength of underlying institutions. There remains a large unfinished agenda for research into what regulation constitutes binding constraints, what package of reforms is most effective and how these issues are shaped by the context in an economy. The Doing Business indicators provide a new empirical data set that may improve understanding of these issues.

WHO DOES IT TALK TO?

Unlike many surveys that talk only to a limited audience (e.g. executives of large multinationals) the World Bank’s Doing Business surveys a wide range of people:

Surveys are administered through more than 8,200 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements.

So they’re averaging 40-50 people surveyed per country, though I’m sure the actual number in each place varies quite a lot.

THE BOTTOM LINE?

India’s still an attractive place for companies. But as with people — attractive shouldn’t be confused with easy.

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Brazil’s Population Growth Rate Fell Faster than India’s: Why?

Posted on August 30, 2011 by

A recent National Geographic article grabbed my attention: Brazil’s population growth rate fell sharply in the last three decades.

The article started with a list of names: Jose Alberto; Murilo; Geraldo; Angela; Paulo; Edwiges; Vicente; Rita; Lucia; Marcellino; Teresinha. These were the 11 children of the interviewee, the mother of Professor Jose Alberto Carvalho, one of Brazil’s most eminent demographers. But as for Professor Carvalho himself — well, he and his siblings had a total of 26 children, slightly over 2 each.

With different names, that could have been my story. My father was one of 8 children, two of whom didn’t make it into adulthood. But none of his siblings had more than 2 kids, and some had only one.

It could have been the story of most of my friends in urban India.

Of course, the countries aren’t precisely comparable. Brazil’s GDP at $1.6 trillion in 2009, is similar to India’s $1.4 trillion. (World Bank numbers.)  But Brazil’s population, estimated at 190.8 million in its 2010 census, is one-sixth of India’s.

And yet. It was pretty remarkable. I dug around for the numbers, and here they are:

Brazil is a Catholic country, and large families were the norm. As this graph shows, its population growth through the early 1980s exceeded India’s. And then something happened.

ELECTRICITY, TV, AND FEMALE EMPOWERMENT

The article focused on three factors: female education; electricity; and TV, specifically “novelas” — lengthy and gripping serials about families.  In a nifty graphic, it related the decline in fertility to these three things.

  • In 1960, women averaged 2 years of schooling and 6.3 children. Only 19% of households had electricity; and very few had TV.
  • In 1980, women were up to 3.5 years of school, and down to 4.4 children. More than half of households, 54%, had electricity. Around a third, 36% had TV access.
  • In 2000, women got 8.5 years of education (more than the 7.3 years men averaged), and had only 2.4 children. Nearly all households — 95% — had power, and 90% had TV.

Again, how come?

CITIES ARE WHERE IT’S AT

One underlying factor — people moved into cities, fast.  In 1960, more than half Brazil’s population lived in the countryside. By 1980, only a third did. Now it’s nearly 90% urban.

In India, more than 2/3 of the population is still rural. It’s a lot harder to bring electricity, television, and education to hundreds of thousands of villages than to a few big cities. The graph below shows the percentage of people living in cities in the two countries.

I wondered if this could be replicated in India, and the answer is, probably not. The article touched on the military dictatorship that forced the pace of urban growth, pushing the population into the cities. It had its social costs in cramped housing and dangerous streets and women commuting long distances to work.

SO WHAT ABOUT TV?

I remember when people used to half-joke that the best way to reduce India’s population would be to introduce TV to the villages, so people would be too busy watching to make babies. In Brazil, it’s nearly true.

But not, according the the National Geographic, in quite that way. It’s the role models provided by the novelas. These soap operas present glamorous women (because women like to watch stories about glamorous women, and men don’t exactly mind either), with small families.

Why small families? Well, presumably because it’s difficult to be glamorous when you’re caring for 6.3 children. But also for a much simpler reason: It’s easier to manage a storyline with a reasonable-sized cast of characters. Not to mention a lot easier to film.

The women viewing these programs took the point. Asked why they wanted smaller families than their mothers or grandmothers, they said: Too much work; too much expense.

What’s India watching?

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Updating ‘India Business Checklists’

Posted on August 20, 2011 by

The rights to India Business Checklists — published in 2009 by John Wiley — have reverted to me. (Thanks, JW!)

A lot has changed since I researched it in 2008. A lot more is likely to keep changing in India and the world. I’m looking forward to the massive task of updating this book, then republishing it in a format more suited to continual updating.

I’m open to suggestions about what needs changing, and how it could be better. Email me or leave comments!

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Herds of Vehicles in Bangalore

Posted on July 29, 2011 by

Over a year ago, I posted a funny-but-true piece about driving in India.

I remembered that article recently when I spent some time in Bangalore, or as it now calls itself, Bengaluru. This is a city I’ve been visiting for years since the late 1970s, as it transformed from a bucolic garden city to the chaotic urbanism of today.

These days, Bangalore is an extensive building site, with new multistoreyed developments coming up, an underground metropolitan railway under construction, half-built overpasses, and excavated roads. Many of the streets are narrow neighborhood roads, built at a time when cars were scarce and parking seemed a waste of space. Amid all this is the traffic: cars and trucks, motor-bikes and scooters, auto-rickshaws and cyclists, and a few stray dogs and cats and cows (though far fewer than I saw in Delhi).

Accustomed to the orderly-even-when-clogged traffic flows of the US, I found the chaos of the traffic annoying at first, especially when stuck in it.  The only rule the traffic followed with any consistency was stopping at the red light. Beyond that, it wasn’t that drivers violated traffic rules, it was evident that de facto, there were no rules.

Then, as I observed it, it seemed… familiar. That’s when I realized –  the traffic moves organically, like a migrating herd of animals. It seeks possibilities and general directions. Drivers look for openings they can move into, while being aware of a limited personal space around other vehicles. They indicate their intentions by starting the move, rather than by using mechanical signals.

And, like animals in a herd, they can be noisy; the extended loud honking of trucks, the irritable buzzing of auto-rickshaws, the ringtones of reversing vehicles. The horn is a communication device, and they are no shyer about using them than a flock of geese settling on a lake.

Now it all made sense. The rules for herds: Move in the same general direction as the herd; try not to bump into others; if you see an opening, use it; let others in the herd know of your presence by calling out when necessary. Those are the traffic rules, too. (And red lights, of course.)

Posted in Doing Business in India, General, Infrastructure | Tagged , , , , | 2 Comments

India’s Population, the Decennial Census, and me

Posted on June 30, 2011 by

For a country where a quarter of the people are still illiterate in any language, India conducts a pretty decent ten-yearly census. 2011 is a census year, and the provisional results are out for some of the main indicators. (The actual results won’t be issued until next year after they’ve had a chance to check and reconcile them.)

I’ve been watching these numbers from around 1971 with the intense interest of  a dieter stepping on the scales. India had under half the number of people it has now. Back then, population growth was considered a problem verging on a disaster tending to a catastrophe. Books like Paul Ehrlich’s “The Population Bomb” dominated the discussion. Population growth is still a problem, further stretching already over-stretched resources and building in grounds for conflict. But at least in some areas, people have started talking of the Demographic Dividend, and acknowledging the energy, enthusiasm, and potential of a youthful demographic structure.

So what’s the news this year?

First: India’s population growth rate is declining significantly. From a high of 2.24% per year in the decade ended 1971, it’s down to 1.64% per year in the first decade of the Twenty-first century. Back in 1971, it seemed it would never go down, no matter how much the government pushed the Family Planning message: Do ya teen bachhe bas (2-3 kids, enough).

Of course, it’s a small percentage of a very large number. In ten years, between 2001-2011, India added 181 million people: One Brazil. Five Californias. Still, back then, we talked of India adding one Australia each year. That would have meant an addition of 220 million people over a decade, not 181 million.

By 2025, India expects its population to overtake China’s — which had, after all, implemented its one-child policy about a generation ago.

( The  US, with 310 million people, has the world’s third-largest population. But it’s only a fourth the size of  China, which has 1.34 billion or India, with 1.21 billion.)

When my grandfather was born, India had only one-fifth the population it has now.  Here’s what the population graph looks like:

FEWER KIDS AND MISSING GIRLS

There are actually fewer children under 6 years old in this census (159 million kids) than in the previous, 2001, census (164 million kids). The under-sixes are now 13% of the population, compared with 16% ten years earlier. In a not-so-encouraging development,  the numbers have fallen more sharply for little girls than for little boys: it’s 2.1 million fewer boys, but nearly 3 million fewer girls.

That’s nearly a million missing girls, and it suggests selective abortion (and possibly infanticide or neglect), owing probably to a huge cultural son-preference. Every decade since 1961 there’s been a growing disparity between the girls and boys under six. On the positive side, the sex ratio (number of women per thousand men) has improved slightly from 933 to 940, suggesting that older girls and women are surviving better.

LITERACY IMPROVING

I’d give two cheers for the improvement in literacy. When I was a kid, most people, especially women, couldn’t read. It’s not true any more, and there’s a growing market for print media in India’s many languages. Some 82% of males and 65% of females can read, up from 75% and 54% ten years ago. In another ten or twenty years, perhaps, nearly everyone will be literate.  This isn’t a brilliant achievement, considering that Sri Lanka did it a long time ago, as did the Indian state of Kerala. But it is an achievement.

WHAT’S THE FUTURE?

This graph of India’s population, based on UN projections, shows three different futures out to the turn of the century.

  • In the highest case (red), population crosses 2 billion soon after 2050, and keeps going.
  • In the middle case (pink), population peaks at around 1.7 billion, and then gradually declines to 1.5 billion.
  • In the best case (blue), the peak’s here in 2040, and by the end of the century, population is back to 880 million, back where it was around 1995.

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Internet and Wedding Plans

Posted on June 4, 2011 by

I’ve been away for a while from this blog, and I have an excuse. Our daughter got married. Not that it’s that much of an excuse; she and her fiance (now husband) planned everything themselves, occasionally delegating operational details to us.

Some very few readers of this blog might remember my wedding. I say very few, because it involved a lunchtime foray to the Old Customs House, a government office full of shelves covered in ancient varnish and equally ancient files, graced only by a spectacular old fig tree out front. That was followed by a lunch at the Sea Lounge, and a return to work. That evening, at a friend’s apartment, we recited vows that we’d written ourselves.  Soon afterward, we went to my parents’ home in Delhi, and had an exchange of garlands under the sweet-scented madhu malati creeper on their verandah, and recited the same vows. My parents insisted on a wedding reception; my father being a scrupulously law-abiding civil servant, it was a modest (though very pleasant) tea-time affair at the IIC, within the bounds of the Guest Control Order. And because we’d suddenly been transferred to Tokyo, even the invitations had to be corrected by hand when the date was changed. (And our families first met each other many years after we were married. They liked each other immediately, making us think we probably should have introduced them earlier.) We didn’t even have telephones, much less the Internet which hadn’t then been invented.

This wedding was not that wedding.

This wedding involved several events, and a meeting of the clans. We not only met our co-inlaws, we exchanged online greetings. As with our parents, we liked each other immediately; and we were glad our youngsters, unlike our young selves, hadn’t waited seven years to introduce us.

Had it been in India, we’d probably have arranged it all and outsourced everything. It wasn’t India, it was California, and anyway having ignored our own parents’ well-meaning advice when it was our turn, we certainly had forfeited any right to interfere. The young couple did everything themselves, mostly on the Internet. They researched wedding planning on the internet, read wedding blogs, and found online checklists, and got their own checklists set up. They located their vendors on the Internet, and used Yelp to evaluate them. They hired the make-up artist and the photographer  and the caterers and a seamstress who adjusted the wedding gown and made sari blouses, and the mehndi artist. And on finding the mehndi artist’s website had a wonderful decorated cake, we commissioned one of those as well.

When they had their game-plan set up, it was a thirteen-page handbook sent by email to the key personnel. (Living in multiple cities and time-zones, email was an important means of communication.) They designed their own invitations, printed each one out on the computer printer, and addressed them all by hand.

This was a wedding that arrived on our doorstep in cardboard cartons. They bought everything they needed online: The table cloths. Vases. Candle-holders. Trays. A fire-bowl. Personalized mugs. Dried rose petals. 400 fresh roses. Fortunately, we had space to store everything, there was a lot. Later, wedding presents started to arrive, also in cardboard cartons…

They had a legal wedding, but unlike the Old Customs House, this was at San Francisco’s gracious City Hall, a domed structure with a great marble rotunda and classical carvings. The bride wore white. Her brother brought her red roses.

Then came the ceremonial wedding. The young couple asked our friend Sri to design a kolam geometric pattern especially for them, and she came up with one that was simple, elegant, and incorporated — at their request — an elephant. Using, of course, a computer program to do it, rather than the more traditional rice-flour in water used as a paint on a mud floor…

They requested our friend Aks to officiate, working with a ceremony they wrote themselves. (This was another point of commonality — but our ceremony was maybe a third as long and had no officiant.) It incorporated Shakespeare’s sonnet 116, and the Gayatri mantra — both found online (with a translation of the Sanskrit, too).  It incorporated vows and seven steps and I dos and I wills. It had a role for all the parents, asking us to welcome the new member of our families. (“We will!” we all shouted, enthusiastically.) It happened around a fire, made in the fire-bowl that arrived on our doorstep earlier. And it included an exchange of special-ordered garlands that arrived at the site that very morning…

The bride wore purple. The bridegroom wore a natural silk kurta embroidered in gold. These items were possibly the only major things that weren’t purchased or planned online (though we did check out the India Saree Palace on Yelp before sourcing the clothes from there…)

A wonderful time was had by all. And we’re thrilled to have a new member to our family and a whole new set of relatives!

Posted in Communications, General | 5 Comments

IIM USA: Pinnacle at Coyote Point

Posted on April 28, 2011 by

I spent most of last Saturday at the Coyote Point Yacht Club, not sailing but attending the IIM USA annual convention.  Airplanes came in to land over a seascape of moored boats; the San Mateo Bridge stretched into the distance. But the scenery couldn’t compete: the presentations inside the room were more compelling.

IIM USA is the alum organization for graduates of all the Indian Institutes of Management (IIMs). There used to be only three (A, B & C – Ahmedabad, Bangalore and Calcutta); now there are 6, and more are planned. And enough of these graduates are in the US for a viable and interesting alums group. Ashima Jain, IIM USA’s founder president, did much of the organization. As I said in an earlier post, she’s one of those people who make things happen.

[ETA: IndiaWest carried a report on the same convention, here.]

FROM MEDICINE TO MORTGAGES

The first half of the conference had a healthcare theme. David Green, keynote speaker, is the president of Aurolab, an India-based non-profit entity that provides medical supplies at 5-10% of their commercial cost. Their first product was an intra-ocular lens, which they sell for $4 and commercial companies sell for about 20 times that. It’s achieved by trimming costs and margins — and getting the best professional help. As David pointed out, it’s about using the same set of tools an MBA degree provides, but instead of using them to create shareholder value, they use them “in favor of poor people.” Next up: An inexpensive, Bluetooth-enabled hearing aid, priced at 10% of the current cost of a good hearing aid. Though designed for India, it may well be marketed in the US too.

Pradeep Jaisingh chased a dream back to India from Dallas: World-class cancer care in India. He spoke about how his original vision of building a cancer hospital in Delhi morphed, which proved impossible because of real estate costs, morphed into a chain of “hospitals within hospitals.” His company, International Oncology Pvt Ltd, partners with existing hospitals to set up specialized cancer care units within their institutions. Takeaway quote (which resonated with me because it could be the theme of my book): “The opportunities are tremendous, the challenges  — formidable.”



Professor Shivendu of UC Irvine, a former IAS bureaucrat from India, spoke about Piracy and Privacy on the Web. The Internet facilitates the first and reduces the second. After lunch, a panel of entrepreneurs shared their stories. Nickhil Jakatdar amused us with his tale of founding a start-up with little more than a partner and a great deal of enthusiasm. When they won a business plan competition at US Berkeley, an angel investor wrote them a check for $350 K, and they were off and running. BV Jagadeesh went a more traditional route, raising money against his home. Anna Patterson, once and future Googler, left them to start a new search engine company before being wooed back. And Amit Garg is on the other side of the table: he’s at Norwest Venture Partners and moderated the panel.

Professor Samir Barua, Director of IIM/Ahmedabad, held a discussion about the Institute’s directions as competition increases. In India, the brand is very strong. They get 220 thousand applicants for 3 thousand places (across 6 Institutes). Internationally, it’s less well-known. I asked about women students; back when I was there, I was one of 8 women amid a class of 110 students. What was the situation now? Not much different, it turns out: around 20% of the applicants and between 9% and 17% of the students are women. The discussion then turned to what the IIMs could do to become better-known internationally. Having originated as government-funded institutes, they do have limitations, though those restrictions are gradually being removed.

After that, Gopi Kallayil  (also at Google) spoke about caring for the “Innernet” — the brain and body we live in. His five tips:

  • Focus on the essential;
  • Don’t multitask;
  • Allow for one minute of mindfulness daily;
  • Make appointments for mindfulness on your calendar at least weekly;
  • “Friend yourself.”

Professor Sanjiv Das of Santa Clara University spoke about defaults on home mortgages, from the point of view of the lending banks. The only factor, he said, that determined whether an owner would default was how far under water the loan was. If the value of the loan greatly exceeded the market value of the house, the owner was likely to default. In those situations, banks that wanted to modify loans would be best off reducing principal; next best would be reducing the interest rate. Changing the term of the loan didn’t help.

DANCES WITH VERVE

The evening wrapped up with a unique Bollywood dance performance from the seniors of the Indian Cultural Center at Milpitas. The Jollywood Troupe comprises men and women from 60 to 80, and they gave a delightful show with energy, romance, and finesse. At the end of it, they pulled everyone onto the dance floor to join them.


And the icing on the cake:

The City of Fremont proclaimed 23 April 2011 as IIM USA Day!

Posted in Doing Business in India, General | Tagged , , , , , , | 2 Comments