Submitted by: Ashley Breneman

Most of us have never known what it means to be poor.  I know as college students we may feel constantly broke, but we never wonder if we will have the basic necessities to survive including food, water, and shelter.  Many of us may be boggled down in student loans at the moment, but we have an understanding that these loans will be paid off soon enough after starting our careers. 

A portion of the population in India has risen out of poverty in recent years due to the increases in job opportunities that have resulted from outsourcing.  However, a large part of the population lives on just $2 a day and is living in unstable and crowded shanties.  Many of these individuals also carry a heavy amount of debt with no way to repay them.  This has caused men and women like Malika to resort to the unthinkable, selling their body parts for money.

See this National Geographic episode Woman Sells Her Body Parts describing Malika’s story and how her neighbor Raji ripped her off.  Although the trading of body parts is illegal in India, it continues to occur because of back-alley brokers, corrupt officials, doctors and desperate individuals.  The Indian government passed Act 42: The Transplantation of Human Organs Act in order to block the trade of human organs.  This Act prohibits all commercial trading of body parts and allows organs to be removed only for therapeutic purposes.  A few problems exist with this law.  The first problem is that the last clause allows the law to be manipulated.  Who is to say which kidneys were removed for therapy and which were not?  The second problem results from the fact that many states have not yet adopted this act. 

The buying and selling of human organs is a highly controversial issue.  Before making a decision on whether you think this black market should continue, here are a few matters to think about:

 If law continues and is strongly enforced:
-The number of people who may die without the kidneys from India
-Citizens in the U.S. are paying upwards of $40,000 and the donors are only receiving about $3,000 of this
-Indians will likely continue to sell kidneys; which may result in decreased medical care for the donors

 If trade becomes legalized:
 -Donors may get to see a larger portion of the money
 -Many lives will be saved
-Indians will be able to repay debt and/or have the money necessary to support their family

In my opinion, I believe the market will continue as long as there are desperate Indians wanting to rise out of poverty and a continued demand from foreigners.  In this case, I believe it is much more safe for the donor’s health to have the procedure done in a clean environment as opposed to some back alley shack.  The ultimate decision should come down to the donor as long as they are not forced into the situation. 

Interestingly enough, the body parts trade is not only limited to India.  China is currently engaging in the trade, but in a much more invasive and unethical way.  Chinese nationals have been executing prisoners with their prime agenda being to harvest and sell their organs.  Contrary to the law of India, China has no opposition to the body parts trade as long as the donations are voluntary.  Clearly this is not the case with the prisoners.  See this related article in the Times Body Parts for Sale. 

What are your thoughts of this thriving market in both China and India?

Submitted by: Jamie Hastings

We have not talked about military power much lately and I pondered for a long time whether to bring up the subject. Nonetheless, while we have been talking in depth about the trading of goods that deal mostly with consumerism, it is clear that that’s not all that has been passing across the borders of China, India, the U.S., and numerous other countries around the world. I see this subject as being a big deal and while I am not extremely informed on the subject, I have been trying to enlighten myself. It is an important topic because arms and weapons sales are a part of business and sometimes make monumental economic impacts when it comes to embargoes and trade agreements. Countries don’t always play nice with each other a person may not want to conduct business in a country where political ties are on the rocks. This blog may not evoke a lot of debate and may only serve as a chance to learn. I am not extremely opinionated on the following topics, but very intrigued.

Nuclear Arms Information:

For some of you, a lot of this information might be common knowledge, but it wasn’t for me. Look on this site and click on the country flags to get a quick rundown on their nuclear status. With whom are they trading nuclear technologies? The countries of interest to me are the U.S., China, India, Russia, Iran, Israel, North Korea, and Pakistan. The two other nuclear powers that are not on my list are the U.K. and France. I am most interested to see that some of our best trading partners could have questionable technology exchanges with some of our most potential adversaries. It is interesting to see that not everybody plays by the rules (including the U.S.) or even acknowledges them.

An interesting Conventional Arms Deal:

I am interested in flying for our military, so lately I have been following India’s interest in procuring a new MMRCA or Medium Multi-Role Combat Aircraft to replace its aging Soviet fighter fleet. Traditionally, India has been an arms trading partner with Russia, but they are now looking towards other suppliers for new fighters. When and if this deal goes through, it is big business as we are talking about billions of dollars. Here is an article that gives a brief description of the planned purchase and this great article, gives a good look at who is closing these big deals. Maybe arms sales would be a good profession for us as MBA graduates? It will be interesting to see where India decides to buy their new fighter and if any of The United States’ past sales has any effect? Remember that we sold Pakistan numerous Block 50/52 (an advanced version) F-16’s over the past few years. Also of some interest to those who have always thought that the U.S. is the top dog in all things military (as I always thought), we are not always correct. We play war games with India annually and in the fighter realm, they almost always come out on top as they have a great Air Force and superb pilots. Also something to think about, when arms sales are made, that technology is fair game (i.e. our fighter aircraft technology could go to Russia via India). Nonetheless, these decisions are closely evaluated by the U.S. government. Should we be worried about our technologies falling into others hands? Is it important to stay close with India as we may have future political problems with other countries in the near vicinity? Perhaps China?

I invite comments, further findings, and insights on these topics. This topic is not very specific and I apologize, but it may be of some interest to you. Like I said earlier, perhaps this will only inform you as it has me, but perhaps good questions would be:

Do you think weapons will affect economic relationships in the future? Were you surprised with whom countries are trading nuclear technologies and do you see future conflicts? Is this simply a political issue or do economics play an important role?

Submitted by: Andrea Muntzel

You can imagine my surprise when I turned on the TV Tuesday morning only to see Good Morning America doing a segment on Mumbai.  The show is doing a new reporting stint on the “biggest” things in the world.  Why were they in Mumbai?  It is because the city is the most populous in the world, with the potential to dwarf the total population of the entire Australian continent in just a few years.  Although the initial draw of the city was its colossal population, the segment didn’t dwell on that.  Instead, they attempted to show a snapshot of the many faces of Mumbai.  Those who chose to read the Khanna book Billions of Entrepreneurs will surely remember the portion dedicated to India’s “soft power.”  Khanna quotes Joseph Nye, a member of the Clinton administration, when describing soft power as “the ability to get what you want through attraction rather than coercion or payments.  It arises from the attractiveness of a country’s culture, political ideals, and policies.”  Contrast this with China’s hard power which is gauged by how well the country can “coerce and get its way through military power and economic weight.” 

Since we are in business school, it would make sense that we often fall into focusing on that “economic weight” portion of hard power.  It seems clear though, that India lacks the hard power of China but is still finding success economically.  Something must be said for the magnetism that emanates from India’s soft power.  I’m not sure how long GMA keeps its videos up, but I hope you get the chance to see them.  It’s a series of five short video segments on things as diverse as the slums of Dharavi to Bollywood to our favorite game, cricket. 

GMA Video Link

Just to keep in mind when you watch, notice how many times the words ‘spirit’ and ‘determination’ are mentioned.  Observe the ‘electrifying energy’ that surrounds Mumbai and ‘binds the spirit of the people.’  Finally, how does soft power ultimately affect business in India?  How does it affect the people drawn to doing business in these countries?  According to Khanna, China lost a lot of its soft power during the Cultural Revolution.  We all know there’s something to be said for efficiency, but how important of a factor is culture in business? 

From the videos, we can see that Mumbai’s chaotic, bustling, and energy-rich culture has given birth to at least one interesting business prospect: Tiffinwallas.  Essentially delivery men, these individuals pick up business people’s homemade lunches at their house and then deliver them to their work, making so few mistakes and resulting in such incredible efficiency that Mumbai’s tiffinwallas have a 6-sigma rating!  We’ll have to talk to Professor Olsen about that one next quarter…

In my opinion, soft power is inextricably related to business power.  Regardless, though, even during dead week, these videos can put a smile on your face.

Submitted by: Jessica Harris

I grew up around agriculture so I hold it very close to my heart. I pride myself on living in the highest agriculture producing state in the US. As I’ve been learning more about China, I could not help but ask myself “What is agriculture in China like?” I mean, they have 1.3 billion people to feed! That’s 23% of the world’s population!!!! But then I got to thinking, what about food safety in China. After our last Chindia meeting, I couldn’t help but be freaked out a little bit after Dr. Carr repeatedly reminded us to eat LOTS of fruit while we are there so we avoid getting “backed up”. And, though I know this trip is based around business aspects of China, China has the largest agriculture economy in the world making up 15.2% of their GDP, as well as the most valued, so I thought it would be good to do a quick rundown of it. Plus, I imagine that we will all be eating while we are there and are a bit curious as to how their standards compare to ours.

The main crops grown in China are rice, corn, wheat, soybeans, cotton, and apples. Their main livestock production includes pork, beef, dairy, and eggs. All agriculture production, as well as packaging, containers, chemical, additives, drug production, and business regulation is overseen by the Chinese government. In 2003, the Chinese government attempted to consolidate all food regulation under the State Food and Drug Administration of China, but they are still having issues with it. Regardless, the government is under both public and international pressure to solve food safely problems. Why? Because of incidents such as counterfeit baby formula killing thirteen babies, lead contaminated longkou noodles, soy sauce made from human hair (and I freak out when I find one of my own hairs in food), alcohol drinks made from industrial alcohol, an entire elementary school coming down with food poisoning after lunch, and counterfeit drugs, just to name a few.

So what has been done in order to make sure incidents like this are eliminated, or at least reduced? “In October 2007, China approved new legislation aimed at improving and monitoring national standards in food production. New laws will standardize food production and clamp down on illegal activity in the industry.” (Gale, Fred. “China at a Glance: A Statistical Overview of China’s Food and Agriculture.” April 2002.) Alright…that sounds great in theory, but incidents continue to occur. Here in the US we have the FDA and the USDA that standardize and inspect out food and even though we also have our own problems (who can forget the ecoli spinach, or the recent peanut butter situation), we are able to trace the problem directly back to the source and perform a recall on the products.

My question for all of you, why isn’t a system similar to this implemented in China?

Submitted by: Amy Cook

If you are reading the Khanna book this quarter you may recall that in the opening pages the author is lamenting the fact that well-educated Americans know so little about China and India. My personal experience coming into this course was that I knew a little about China and almost nothing about India. My public education included some ancient Chinese history, explanation of basic Chinese politics and a book report on The Good Earth. To my recollection, (and I hope this has changed) I was taught next to nothing about India.

So, I decided to do a little extra research starting with the role of Mahatma Gandhi. I knew Gandhi was an important political figure who challenged British rule through peaceful demonstration, that he was a vegetarian and that he was eventually assassinated. What I did not know was that he had four sons before actively practicing bramhacharya (celibacy), studied law in London, started the civil rights movement for Indians in South Africa, was imprisoned for many years and organized the “Quit India” movement which eventually helped lead to Indian independence from British rule in 1947. Gandhi is now considered India’s “Father of the Nation” and his birthday, October 2nd is a national holiday. For an illustration of how important Gandhi is to India’s government and people, check out this recent Wall Street Journal article “Gandhi’s Glasses Going, Going, Gone”:

http://online.wsj.com/article/SB123630107964246957.html

Did the rest of you have a similar educational experience (or lack thereof)? If so, I invite you to take some time and do a little research on Indian history and culture. Just a few other interesting and relevant concepts I came across were: the influence of the British East India Company, Jawaharial Nehru, Jainism, Sikhism, Lord Vishnu (as related to Hinduism), and the Constitution of India. But like I said, those are just a few, feel free to add to the list!

Submitted by: Cece Reyes

Ratan Tata of the Tata Group envisioned building an eco-friendly People’s Car. For the Tata Group, the Tata Nano, a mass consumption blockbuster, has been developed to deliver a one lakh rupees or $2500 people’s car and is catering to newly developing economies, and India in particular. After a long road since the original launch in January 2008, the Nano is due to enter the Indian marketplace later this month.

The Tata Group, since 1868: Click here
Tata Motors: Click here
Tata Nano: Click here

With 10 years of experience in the auto industry beginning with the Tata Indica, the Tata Group began development of a new super low cost car. Tata’s inspiration for the Nano was the common sight of entire families driving around on a single scooter, and the early concepts were merely more than a next generation scooter or rickshaw. However, the Tata Group determined that “the market does not want a half car. The market wants a car.”

“And if we want to build a peoples’ car, it should be a car and not something that people would say, Ah! That’s just a scooter with four wheels or an auto rickshaw with four wheels or not really a car and I was reminded of a very interesting concept that Chrysler did many years ago when they developed an Asian car. It was a plastic car and for those who may not know or remember, it was one piece, the whole car from front bumper to back bumper, moulded in one piece of plastic, half of it and the other half. And it was welded together to make the whole car. “ - Ratan Tata

Because the Nano has been designed with this concept of a plastic car, the company is able to save huge manufacturing costs by adding pigments to the plastic and avoiding the painting process altogether.

Interview with Ratan Tata before the launch in 2008: Click here

Much of the recent talk of the new super low cost cars has been spurred by the announcement of the Nano Tata in 2008. After many delays including protests from displaced farmers and a later relocation of the factory, the Nano Tata is scheduled to enter the Indian market later this month. The fact is that the low cost of the vehicle will likely enable millions of early adopters, to join the shopping spree, which will ultimately soar the car ownership numbers not only in India but around the world. Today, India imports 70% of its crude oil, so increased oil consumption will inevitably lock India into greater dependence on oil.

The current market for the Nano’s competition of inexpensive vehicles consists of the Chinese-manufactured Jinagling Alto, the Chery QQ and the Geely MR, in addition to the Japanese-made Suzuki Maruti 800, the car used as a benchmark for designing the Nano. All of these vehicles have a price ranging between $3,800 and $5,000. And Renault-Nissan announced last year that it will be launching a super low cost vehicle that will be marketed mainly to the Indian marketplace in the year 2010. The price is said to be around the $2,500-3,000, in direct competition with the Tata Nano.

The competition in the super low cost car market: Click here

Renault-Nissan-Bajaj: Click here

So we are starting to see that Tata’s new car is already forcing other manufacturers to consider lower prices and to introduce their own super low cost vehicles, thus creating a growing demand fr cars and increasing their accessibility. If we look at the big picture of the Nano effect and its copycats, there will inevitably be downward pressure on used-car prices. Imagine a Nano with an employee discount and 0% APR. Will the face of India and that of the emerging economies be inundated with super low cost vehicles? Referring to Tata’s Nano, Indian climate change expert R K Pachauri, chairman of the Intergovernmental Panel on Climate Change, says the One Lakh Car is giving him “nightmares”.

We can hope that Tata has achieved his goals regarding the “eco-friendly” element. “The Nano is about 10 feet long and 5 feet wide, has four doors and can accommodate four adults. Its two-cylinder engine is expected to get around 47 miles to the U.S. gallon — a crucial statistic in this age of sky-high oil prices. And Tata Motors claims that it will produce lower emissions than two-wheelers.” The number of Indians who own passenger cars is low right now, about 8 in 1000, but the number is growing rapidly – and with 250,000 Nano’s about to hit the streets, it will be increasing soon. It is estimated that 1,500 cars a day are hitting the road in India.

And, so much for the People’s Car, last year farmers and activists staged violent protests at Tata Motor’s Singur plant saying local people were forced off prime farmland to make room for the plant. The government said that the affected farmers were ‘compensated’. The protests continued and in October 2008 the Tata group decided to move their factory to Sanand, India (that’s near Ahmedabad, in the state of Gujarat). The plant covers1,100 acres (445 ha), and can produce 250,000 units annually, which could be expanded to up to 500,000.

Protests in August 2008: Click here

Factory move in October 2008: Click here

New location October 2008: Click here

In addition to the Tata plant, there are many other manufacturers that are setting up shop in India. Mercedes-Benz has a new manufacturing plant in Chakan in Pune

Ford has a plant in India as do Hyundai and Maruti Suzuki, and GM has recently announced that they have plans for a facility in India as well. A significant portion of their plans, in light of the dismal economy, revolve around a series of mini cars similar to the Chevrolet Spark. Take a look at the Spark India website, they call it a “music” car and are marketing them with a chance to win iPods.

What a coincidence, the iPod Nano and the Tata Nano share a name. Click here

Other manufacturers in India:

Click here

Click here

Submitted by: David Caldwell

I came across a rather depressing piece while browsing the internet: an exposé about an Indian worker named Rewa Ram, entitled “My life cleaning Delhi’s sewers.” The article describes the job of one of India’s lower castes: the untouchables, or “Dalits.” While just reading about Ram’s experience is enough to induce nausea, he says “I am not educated, I come from a very poor family of untouchables. What else can I expect…At least I have a government job and I am able to feed my children. I get into this hell every day but then this is my job…I live smelling death, but it is fine.”

Ram’s response seems of indicative of a glass ceiling above the lower classes. When I started to think more in depth about what kinds of influences were keeping the Dalits down, I realized that I had almost no understanding of the caste system or social stratification – it’s just not something that I’ve ever had a lot of exposure to. This is why I’m so excited about getting to go to India to learn about their society first-hand.

Related to the previous article, I stumbled across another piece that caught my interest: a Fora.tv video about The Privatization of Water. While I don’t claim to be any sort of environmental advocate, one part of this video caught my attention. Alan Snitow talks briefly about how much more expensive bottled water is than municipal water sources, but American consumer guilt isn’t what he’s interested in. At 00:35:45 into the talk, he mentions that the “real problem [he] sees with bottled water is best seen in other parts of the world.” Specifically, he observes than in India, the middle and upper classes drink bottled water because there is a perception that the municipal water supply is unhealthy. As a result, the only support for improving public water systems comes from the country’s poorest citizens – essentially limiting their access to clean, affordable water by robbing them of any sort of political clout.

Snitow chastises the privatization of water sources all over the world by companies such as Nestle, Coca Cola, and Pepsi. This grates harshly against my experiences with business and education – until now, I’ve been a staunch believer that private industry was the best way to get many things done; after all, competition brings out the best in people, right? When I’m talking to my friends about a poor performance or a substandard service, I often jokingly say that “it’s good enough for government work!”

To reconcile these two conflicting ideas, I’ll have to think back to our Macro Economics course (GSB 533) last spring, in which Dr. Marlow taught us that when governments create restrictions and incentives in markets, they may achieve certain social objectives, but it won’t be as efficient an allocation of resources to their highest value uses as if the government had embraced a laissez-faire attitude. I appreciate that at the end of the day, we didn’t learn whether governmental intervention was right or wrong, but that it was up to us to decide what we thought was the most important, and to act accordingly to pursue those goals. As it pertains to Rewa Ram, it’s up to the Indian government to decide whether or not it wants to resist foreign and domestic investment in municipal replacements at the cost of efficiency, or if it wants to embrace them at the cost of its most destitute people.

Submitted by: Andre Ourthiague

Our cricket match is upon us, and there most of us will soon realize that we don’t exactly have a future as professional bowlers.  We are faced with a sport many of us have never even seen played, so I figured it would be nice to share a story about this very topic.

Major League Baseball is America’s national pastime, but a very large number (30%) of professional baseball players were born outside the United States. However, there has never been an Indian born player signed to a contract by an MLB team. Recently, a reality TV show called “The Million Dollar Arm” focused on this very topic. The show went to India to find the best baseball pitcher in a country that has almost zero exposure to American baseball. The winner would receive a cash prize and a tryout in front of big league scouts.  (See below link.)

sports.espn.go.com/broadband/video/videopage?videoId=3785319

The stars of the show are currently working towards becoming Major League Baseball players. They have kept a very detailed blog (see below link) since the show aired where they discuss what they have experienced. Outside of baseball and training they talk about movies ranging from “Bad Boys 2” to “Slumdog Millionaire,” they discuss attending an American wedding ceremony, and they describe in detail what it’s like trying to adapt to the United States. In the business of major league sports it’s always nice to have a few people you really enjoy rooting for.

Million Dollar Arm

Submitted by: Nick Chamness

A few years back while studying abroad in Australia, I took a modern Japanese history class. It took a look at the post WWII era of Japanese history and politics, and also shed light on its relations with other Asian countries. One of the most interesting things I remember learning was the fact that many Japanese do not even consider themselves as Asian. This has in the past, created a superiority complex which has led to some bad decisions (i.e. rape of Nanking) and thus causing soured relations with many other Asian countries. To this day there are many Chinese who have not forgotten what the Japanese did to them over 70 years ago.

With that being said, I spent the better part of a semester in Australia researching whether or not North Korea posed a threat to Asia, in particular Japan. My conclusion was that while threatening, Kim Jong Il stands to lose far more than he would gain by using force against his neighbors. I felt he was using his nuclear program to leverage other nations giving him things he needed (i.e food, natural resources, money) to maintain his power. Whether or not you agree with my conclusion is for you to decide. This all could change with a new leader in North Korea. (see today’s article in Chicago Tribune: U.S. wary of possible successor to Kim Jong Il in North Korea, Hillary Clinton says).

The U.S. plays an important role in helping to maintain stability in the region. As China becomes more powerful it could start throwing its weight around. Japan has become more and more nervous as its neighbor has grown into an industrial powerhouse. Small disputes like the one over the uninhabited islands in the Yellow Sea, could potentially become more dangerous in the future as China becomes more confident. The U.S. backs Taiwan and vows to protect it against Chinese takeover. We are also a strong supporter of Japan and would side with them in a dispute with China (China announces military dialogue with U.S.).

What is your take on both China and North Korea’s intentions? Will China avenge the Rape of Nanking? Will North Korea attack Japan? Can Hillary Clinton put us on good terms with China and help guide them into a responsible role as a superpower? Does China stand to gain anything by attacking Japan? Any other thoughts and comments?

Click HERE for about the best visual I have seen to date to help people understand an important facet of the current economic mess we are in. (And look for the brief link/reference to China.)

Per a list serve I belong to, I am advised that some people in finance field have commented that it’s a pretty good piece, but also caution that the video falls short in addressing the high level of fraud that was working up and down the pipeline for years, the level of gambling involved with the various forms of mortgage-backed swaps, options, and derivatives that were promoted by Wall Street bankers and Ivy League MBAs (who were clueless about the associated risks), and the backstop role played by our federal government through Fannie Mae and Freddie Mac that made the whole thing possible.

Your thoughts?

And what about this … if you were asked by a Chinese person at English Corner (if we are able to visit it on this year’s trip; timing will be tricky as this event only takes place on Friday nights but I will do what I can to schedule it in) to explain our current economic predicament, and the role/guilt China plays in this story, does this piece help you better do so? And does English Corner look to be of interest to you (It better; as it will help you better understand part of China’s comparative advantage on certain issues!).

And how would you respond if said person, in their patriotism and love of China looking to knock the US said that Chinese Premiere Wen Jiabao was right and on solid ground to publicly rap the knuckles of the US at a recent Davos forum (click HERE for details reported in a recent WSJ article) for its “recklessness” and for primarily being the party who is responsible for world’s deepening economic slump? I.e., will you sheepishly agree, diplomatically push back against said charge, or other, and why/what will you say?

And now that you have read his book, what would Fareed Zakaria say about all of this?