Da weekend

1. One hundred forty characters should suffice to comment on EU.

2. EU says ‘We are at a permanent loss‘. (FT)

3. The sorry tale of Europe’s east (FP)

4. India, talks herself up. When China is dominating news from the East it’s tough for caste-conscious biz people.

5. The sorry state of Europe. (Spiegel)

6. Must-read Quincy Jones interview

7. Euro Area banks are among the most zombified by their capital inadequacy and excessive leverage. (Buiter)

8. Michael Jackson (Economist) R.I.P.

That’s OK

Hey baby do what you want

I’ll be your night lovin’ thing

I’ll be the freak you can taunt

And I don’t care what you say

I want to go too far

I’ll be your everything

If you make me a star

Getty Images

India growing at Nano speed

India, one of the BRIC or BRIIC (?) countries, feels the global decline. Moody’s about India:

Year-on-year GDP growth moderated sharply from 7.6 per cent in the September quarter 2008 to 5.3 per cent in the following quarter reflecting the economy was losing momentum.

Chan said moderation confirmed „that the emerging giant is not immune from the global downturn although it is more domestic-oriented compared with its Asian peers“.

The agriculture sector, which supports 60 per cent of the population, contracted 2.2 per cent in the last three months of 2008 from a year ago. The manufacturing sector also shrank in the December quarter, though only mildly by 0.2 per cent.

India being logged off?

A deeply caste-ridden country with 1.1 billion people out of which at least 250 million are desperately poor – 17,000 (seventeen thousand, that’s right) farmers committed suicide in 2008 alone for being unable to pay off credits based on usury – is proud of its IT industry that currently employs close to 2 million people according to Nasscom. In other words, 0.18% of India’s people work in that industry! An industry that is based on dollar-cost-arbitrage! Where cost, or rather the lack of it, is your bargaining chip. True, India makes software, but contract-based. The really cool stuff for example for the iPod Touch is elaborately stitched in Cupertino.

Yet even when costs are the critical reason for mainly US and UK companies to outsource to India, the point comes when companies compare cost savings with quality of service received. You might be inclined to think the current economic scenario just automatically lends itself to turn to India, yet in recent weeks it seems that US companies seem to get second thoughts. And not only that, they turn away from India.

Since the late 1990s, when cheap Internet telephony made it possible for U.S. companies to outsource their call centers, Americans have been complaining, loudly and regularly, about the quality of service. Just last week, Delta pulled a call center out of India because its customers said they hated the service. „The customer acceptance of call centers in foreign countries is low,“ Delta Chief Executive Richard Anderson told his employees in a message. „Our customers are not shy about letting us have that feedback.“

United Airlines has soured on India outsourcing, too, as has Sallie Mae. The student loan company is shifting jobs from India back to the U.S. “Some American outsourcing firms are trying to woo back customers already offshoring to low-cost destinations such as India. Smaller U.S. firms such as Rural America Onshore Sourcing and Xpanxion are attempting to build a sustainable rural outsourcing model in the U.S. at a time when offshore locations such as India are facing a backlash and unemployment rates have touched an all-time high.”

While it would be wrong to extrapolate from these incidents to a general trend, India might want to take a closer self-examination because 

Poor Call-Center Service Angers Indians, Too

One thing is clear, India’s IT industry will not feed the 250 million poor ever. India needs to produce jobs, jobs and jobs. Yet high-caste India delights in its image of being in a cool industry. It might get cold.

Lest anybody forget, Apple famously shut down its initial team of 30 people in 1006 after only 3 months. They had seen enough.

Just a passing remark: I tried to get a quote for an insurance from ICICI. A quote that would take about 60 seconds to look up, yet it took a total of 9 emails spread out over 34 days and 3 different departments. Then it broke off, no quote. And do not expect that an officer would forward your request to the proper department. Oh no, you are a foreigner from behind the Kalo Pani. This is the no, no country.

I sent the same inquiry to three other insurance companies: no answer. And these are not single instances. The best experience is when dealing with gov. agencies. Seven emails to receive an answer is not unusual.

Chinese car man: ‘Hey, I am not Indian.’

Remember India’s pride, the TATA company, making a vanity purchase buying Jaguar and Land Rover? Well, TATA needs now emergency loans for exactly that idiotic deal.

Much smarter what Li Shufu, chairman of Geely, one of China’s largest private carmakers, has to say:

“A brand is closely related to its cultural background. Isolated from that background, it is worthless,” he said, stressing that it would be “not very easy” for Geely or any other Chinese carmaker to make a success of a foreign brand acquisition. “A brand is like a person’s name. Even if I change my name to Hu Jintao, I am not Hu Jintao.”

In an article „Geely cautions on China’s car recovery“ he further has these wise words:

Mr Li also called for caution among Chinese carmakers looking to profit from the current downturn in the world car industry by snapping up distressed brands such as Volvo, Saab and GM Europe.

Last month’s 10 per cent rise in passenger vehicle sales “is driven by a temporary policy” and represents “superficial growth”, he said, noting that “only a strong recovery of the economy can help the Chinese auto market”.

Perhaps something Germany,Opel and the whole German car industry could learn about.

S&P: Slumdog India

Whoops India, what happened? ‘The White Tiger‘ got downgraded by S&P to negative. 

The rating agency is right. The country’s fiscal deficit, combining those of the federal and state governments, is 12% – among the highest among the world’s large economies, according to a Feb 24 report by Morgan Stanley. India’s states are already profligate, but this time, it’s the central government that tipped the scales over. Two large, multi-billion dollar stimulus packages in the past few months have done little to spur the economy. Some of the monies went to support special interest groups, like the real estate lobby. India’s high cost of real estate has already served to undermine the country’s competitiveness. Trying to save the real estate sector is throwing good money after bad. And that’s just one example. There’s been little money set aside to do some real work – get the country’s creaking infrastructure working, and create sorely needed new roads, ports, cities and towns, schools, healthcare centers, power stations.

Don’t expect New Delhi to jump to attention and try and correct its wayward ways. It’s election season, and with national elections scheduled for April-May this year, it’s the time to be merry and give out largesse, so that the Congress can be voted back into power. Expect the Congress to be more spendthrift. Already, the newspapers are choc-a-bloc with full page adverts about the achievements of the various Congress Party ministries. New Delhi is so out of sync with reality, that it’s even taken credit for the Oscar-night successes of Slumdog Millionaire, claiming that it provided the “conducive” climate in India that made it attractive for director Danny Boyle to make the film in India.

India spared from economic gloom?

You keep reading that and it is a little hard to believe. China on a commodities-related buying spree and India enjoying the fruits of some vanity purchases like Jaguar and Land Rover. India had a real estate bubble and Satyam is not an isolated case. Tourism is down 17%. Car purchases are down.

This from the job front:

Just give me a job, even in Africa

BANGALORE: Earlier this week, a recruiter in Bangalore received a CV from a technology professional with this request: „I want to report to a job within a fortnight. It doesn’t matter where the posting is, it could even be somewhere in Africa. I’m losing my job and I have EMIs to honour.“ 

Just a year ago, this same candidate was hesitant to relocate his workplace from Koramangala to ITPL saying it was too far for him, says V G Nirupama, MD of staffing firm AdAstra. „Today, candidates have shed location clauses from their resumes and many are even willing to be posted in tough geographies like Africa, Saudi Arabia and Turkey,“ she says. 

full article

5 lakh job losses so far. A lakh is 100,000.