‘East is East and West is West, and never the twain shall meet’? - China, Japan and the spat over East (China) Sea

Territorial borders on South and East China Sea are as good as line drawn in water. Too many claims, for this stretch of water body which assumed to have riches, in the form of oil and gas, under her seabed - too valuable for many to drop the claims.

China, Japan and ASEAN

Countries which have powerful navies can assert their arguments by constant patrolling, initiating oil and gas drilling etc in disputed areas; but difficult to assert full control as there are too much things on stake. It is difficult for ASEAN countries, individually or combined, to move against China - whose economic and military strength are still on the assent. After all, many ASEAN countries need Chinese investment. For China, it may be easy to handle ASEAN members one by one, but as a block it’s difficult; especially, when it is clear that both ‘US’ and ‘Japan’ will support ASEAN.

Even though historic rivals, there are a lot of dependency between China and Japan. In terms of power as well as influence in the neighbourhood, there is not much difference between China and Japan.

So anyone can claim a lot of areas, but difficult to change already established claims. Any such action from Chinese end will political isolate her in international arena, and escalate Chinafobia which is already on rise.

In East China Sea

There are a group of islands in East China Sea, called 'Senkaku' by Japanese and 'Diaoyu' by Chinese. Recently, Japanese government bought three of these islands, located between Okinawa and China, from a Japanese family. After this incident, six Chinese maritime patrol vessels entered Japanese controlled waters near the islands in Friday morning, even after the warning issued by Japanese Coast Guard. All ships left the area after spending half a day.

Unlike in the case of standoff with Philippines, this time unarmed Chinese vessels entered the area. Probably to show that, the island is still a contested territory and they are not accepting its nationalization. At the same time Japanese didn't try to stop the vessels, probably to avoid an escalation of tensions.

It may be easier to accept these actions as a measure of protest at the government level, but difficult to sell the points to citizens. For Chinese, it is like Japan occupied their territory; for Japanese, China violated their sovereignty. Apart from this, the entrance of Chinese vessels, even though unarmed (according to New York Times report), to Japanese controlled waters will raise the temperature in the region.

Conclusion

When global economy is slowly recovering, when peace is a rare commodity, there is little stomach for others to digest another spat between China and her neighbours. Claiming an area is one thing, but sending naval assets to show the strength is altogether a different game. If something went wrong, even though accidently, it may assume gigantic proportions and may go out of hand.

Sajeev.

'Emerging Kerala - 2012' and a bunch of hopes

Kerala set milestones in many areas like social development, land distribution, healthcare, women empowerment, education, governance etc. One of the fields left behind was industrial development; while running long and un-ending ideological struggle, both political movements and society forget to set firm steps on the track for industrial development.

It’s not that nothing happened, for e.g. Technopark - Thiruvananthapuram is India's first and largest IT/ITES park, Rajiv Gandhi Centre for Biotechnology (set up in 2002) is one of the pioneering institution in that sector. But, in most of the cases, state failed to follow up and end as a spectator when others cruised in both sectors.

In between, Kerala tried to do something in manufacturing as well. Many didn't take off, and many others comfortably landed inside red tapes. Summits like 'Global Investors Meet (GIM-2003)' raised hope, but failed to fully take off.

In this situation, the recently concluded 'Emerging Kerala - 2012' summit inaugurated by Premier Manmohan Singh, raises new hopes for industry. Small but highly populated states like Kerala has little land to offer for mega projects. NHAI's struggle in expanding the width of National Highways clearly describes this problem.

Some of the projects listed in the summit are critical for the future of economic development in Kerala

Supplementary Gas Infrastructure Project

This is a joint venture (Kerala Gail Gas Limited - KGGL) between, KSIDC and GAIL. KGGL will operate, "City Gas Distribution in Kerala, CNG Stations for KSRTC Buses, establishment of Gas Training Institute, laying of Spur Lines from GAIL's main pipeline, setting up of small Gas based small power generating plants etc. The total investment for the project is estimated at Rs.2,000 Crores ($400 million)".

There are some natural advantages for this project. First of all Kerala seaports - especially Kochi, Vallarpadam ICTT, proposed Vizhinjam port  - are located close to international shipping routes. The same routes which ships a good portion of Oil and Gas from Gulf of Persia to East, South East and Far East Asia. These ports can act as LNG gateway for India.

Moreover in urbanised area like Kerala, pipeline gas distribution network will be easier.

With an expanded LNG terminal in Kochi and supporting gas distribution networks, gas can give a major push to Industry in South India.

Vizhinjam International Deepwater Multipurpose Seaport

We are hearing about this port for decades. Located close to the capital Thiruvananthapuram, if this port really developed and raised to ICTT status, then we will be able to reduce the dependence on Colombo, Singapore and Salala ports for transhipment.

According to government, "dredging, reclamation and basic infrastructure like construction of break-water and quay will be done by Vizhinjam International Seaport Ltd (a company fully owned by Govt of Kerala). Port Operation will be on PPP model. Terminal superstructure will be built by private operator who will also operate and maintain it for 30 years."

Total cost is estimated to be around 7000 Crores ($1.4 billion). Considering the history of Vallarpadam ICTT, Vizhinjam will take another decade to take off. Another problem is capital; I don’t think cash strapped Kerala government will be able to execute it on its own.

It will be better to bring in private players and other port operators like Singapore Port Authority.

Titanium Sponge

One of the rare but valuable metal available in Kerala shores. Currently, Indian Rare Earths Ltd and Kerala Metals and Minerals Ltd (KMML) are operating in this field. It is good to start the production of Titanium sponge, in which is you are ready to move up in the value chain - from the primary operation of exporting the ore to exporting the metal - profits will explode.

Considering the international scenario, where China is holding a virtual monopoly over rare earth materials; major electronics manufacturing countries like Japan will be more than interested to partner.

Petroleum, Chemicals and Petrochemicals Investment Region - PCPIR

"proposed in Kochi...PCPIR is planned in 10,000 acres of land. entire area will be in close proximity to the Kochi Refinery of BPCL...40% of the PCPIR region aggregating 4000 acres will be the processing area."

I am not sure from where 10,000 acres of land will come. If we are waiting for this much land the program will soon find its way to cold storage.

It will be better to take a look at Singapore Petrochemical Complex. 'Petrochemical Corporation of Singapore (Pte) Ltd started as a joint venture between the Government of Singapore, The Development Bank of Singapore Limited and the Japan-Singapore Petrochemicals Company Limited (JSPC). The present shareholders are JSPC (50%) and QPI and Shell Petrochemicals (Singapore) Pte. Ltd. (50%).'

Kochi has the potential to become a petro chemical hub. A good port, near to international shipping channel, wide hinterland, rising industrial needs in South and Western India.

There is a long way between, having the potential and having something. Considering the high level trade union activism, left leaning politics, socialist ideologies, chances are very low for foreign companies like Shell, BP, Exxon, BASF, DuPont, Mitsubishi, Mitsui to come and invest.

GAS Power plant

As shale gas production is exploding in US, its price is coming down in international market. Once gas price is delinked from oil prices and we start importing from Qatar, Iran, Russia etc there is a possibility for abundant gas supply in Western shores of India.

With rising crude oil price, deficiency of Coal in market, political problems related to setting up new Nuclear power plants, gas is in a good position to become energy queen.

With the possible expansion of Petronet LNG's Kochi terminal's capacity from 2.5mn tonne (to be commissioned by the end of 2012), to 5mn tonne by 2014 Gas power plant is very much viable.

"Govt. has accorded approval to set up 1100-1200 MW Gas based Power Project at Cheemeni in Kasaragod District".

Life Sciences Park

"Creating a "cluster of industry (IT, Nano technology, biotechnology & Life Sciences), research institutions and sci-tech academy...would address the IT related needs of the rapidly emerging life sciences industry...260 acres..."

Promising idea, with potential to provide huge number of jobs and possible tax generator for government.

Electronic Park

I am not so sure about the viability of an electronics hardware industry in Kochi due to various reasons. After all we are yet to have a modern microprocessor plant anywhere in India. In such a situation it will be difficult for the wafer industry to take off.

High Speed Rail - HSR

Do we really need an HSR? Additional tracks or dedicated freight corridors will do the job at a lower cost.

Thiruvananthapuram - Kochi first phase billed at 41,245 Crores and Kochi - Mangalore second phase billed at 1.18 lakh crores may end up as a non-starter.

What we need is good rail and road connectivity among seaport, airport, manufacturing areas and India's rail and road networks. HSR can wait.

National Investment & Manufacturing Zone - NIMZ

Kochi-Palakkad (NIMZ) is a good idea in paper, but may not take off with the current grant designs.

Conclusion

I think government needs to identify some core industrial areas for development and focus on there. Port facilities & transhipment, petro-chemical complexes, banking & financial services, Healthcare and tourism looks promising.

Sajeev.

References

1. Emerging Kerala 2012
2. Petroleum chemicals & petrochemical investment region (PCPIR)
3. Kochi-Palakkad National Investment and Manufacturing Zone (NIMZ)
4. High Speed Rail Corridor (HSRC)
5. Electronic Hub
6 Titanium Sponge Project
7. Life Sciences Park
8. Gas Based Power Project at Cheemeni
9. Kerala State Industrial Development Corporation

Global competitiveness Report 2012-13 and India - Moving down in Rankings

GDP Per Capita

British author, actor and film maker 'Brayan Forbes' once told 'Nothing recedes like success'. For India, 'World Economic Forum - Global competitiveness Report 2012-13' showed exactly the same. For second straight year, we went down in rankings, from 51 (2010-11) to 56 (2011-12) and to 59 in 2012-13. However, this is not unexpected; people who are following the events will not be surprised by fall in rankings.

Let’s go through the report which ranked 144 countries.

Worst performing areas for India
 

Problematic areas in doing business

India ranked 101 in 'Health and primary education', a critical sector where we have to invest heavily and judiciously; to stay in the line of growth. In 'Infrastructure' category we are ranked at 84, 'Higher Higher education and training - 86'. In terms of ‘Labour market efficiency' ranking is 82 - an indication that, without improving labour efficiency, we may no longer be able to stay in this highly competitive market. In terms of 'Goods market efficiency' we are in 75 - better position considering the fact that 40% of agricultural produce are getting wasted before reaching consumers. As far as the fate of ‘Goods and Services Tax’ bill is considered, the less said the better.

Problematic factors

In terms of problematic factors, I think corruption stands first. This single entity is one of the major problematic factors - contributing 15.8%. Another, major problem is 'Policy instability' which contributes 7.6%. When central government's decision and policies are frequently changing due to alleged coalition pressure and over care for commanding heights, there is little to wonder about the numbers.

'Inefficient government bureaucracy' contributes 12.7%; 'Inadequate supply of infrastructure' is identified as the biggest problem factor, contributing 20.4%. In the case of later, I won’t criticize government much considering the pressure it has to face when moving ahead with some projects or policies in a highly diversified and overpopulated country like India, where it is difficult to bring all the people to same view point.

However, factors like Inflation and 'Access to financing' contributed only 7.5% and 6.2% only.

Other areas

As expected, in terms of 'Public trust in politicians' India ranked very low. But, the position of 106 is unbelievable, especially after considering the political situation in many countries ranked above India. I wonder how World Economic Forum got this number.

Same thing happened in case of 'Irregular payments and bribes', were we ranked at 99th. There is no doubt that the culture of bribe slowly but steadily eating away the morality of society; but considering the state of many countries listed above, I do have doubt about India's low rankings.

In 'Diversion of public funds' we are ranked at 91, 'Favouritism in decisions of government officials' at 92, 'Burden of government regulation' at 98, 'Business costs of terrorism' 114. Atleast in the last count, we are partially helpless, again, many countries ranked above score nothing better. These abnormalities are forcing me to re-evaluate the usefulness of the ranking itself.

Where we are good?

In terms of 'Judicial independence' we are ranked at 45. Comfortable, but I can’t find any specific problems faced by Indian judiciary which bring it down in the ranks.

We are ranked at 21 in 'Financial market development', 44 in 'Strength of auditing and reporting standards', 39 in 'Strength of investor protection', 52 in Protection of minority shareholders’ interests', 3 in terms of Market size. There is little to say about market size, when the population is so high market will be larger in size. Better ranking in these areas underline the soundness of SEBI, CBDT, IT, IRDA etc.

This report certainly reveals many categories where we have to improve. I won’t accuse the agency of partiality - certainly that is NOT the case, but in terms of country comparison report, this will do little help in many areas. The figures might be based on well established criteria’s, frameworks and standards, but in a practical view point it’s failed in terms of taking realities in to account.

Sajeev.

References

1. 'World Economic Forum - Global competitiveness Report 2012-13'

You can download the report from here - Global competitiveness Report 2012-13.  Don’t forget to take a look in to pages 389-498 and beyond.

Post-dated cheque on the status of Third front?

We were just informed by Samajwadi Party (SP) chief 'Mulayam Singh Yadav' that, decision on Third Front will come only after 2014 LokSabha polls.

'Decision on Third Front only after 2014 polls: Mulayam - The Hindu'

Now the problem is, political parties need to (should) fight elections based on principles and policies that are already in public domain. So that they can decide, whom to vote? and what will be the consequences of voting for a particular candidate.

This is as simple as, the right of a consumer to know the specifications of a mobile phone before buying it. No phone manufactures can say that, "phone which we are going to release on next month may support 3G, but we will say about it only after your purchase".

People have the primary right to know, whom their representatives going to support.

Sajeev.

Karwar Calling - Sitting on the lap of Western Ghats

Western Ghats

In that cool Friday night, we boarded a train to Hubli from Yeshwantpur station. Train was supposed to reach Hubli by 4.30 in the morning, so after getting in, one of the first things we did was checking for our seats. For our bad luck or our fellow traveller's good luck, they occupied the seats (my favourite side-lower). They requested us to shift to upper berth (not in my good list), as he was travelling with family, small kids, some of their tickets are still in RAC status etc... Finally we gave up.

There was a Tibetan family (one guy and his mother) in our compartment. I thought of starting the communication first, but hesitated as they were having dinner. After some time breaking the deadlock, he started; soon we were discussing about Mundgod Tibetan settlement, Rinpoche etc. Some three years back I went to ‘Mundgod’ settlement and Buddhist temples had chocolate prasadam and veg momos from there. They were coming back after visiting Dalai Lama; and corrected my pronunciation of 'Rinpoche'. Well, it’s time to sleep, and so we climbed to our cave in the upper berth.

Unfortunately, ‘Don’ came in the mid night. It came so many times that; the entire boggy lost their sleep. The irony is, owner of the phone was not able to hear Don's sound. It seems like he didn't even care about the person, catching whom is impossible for police from 11 countries. For the person sleeping in lower birth, don was intolerable. He finally woke up from his seat and started shaking the owner of ‘Don’. He suddenly woke up, took his mobile, turned it off and got down at the station.

Hubli

At 4.05 am we reached Hubli. For first time in my life, train reached station before its time; that too, 25 minutes early. From Hubli, we got an auto to new KSRTC bus stand and started waiting (another one hour) for the take off our bus to Karwar. Finally, around 5.30am we (Me, Gokul and Aldrine) started our majestic journey. After crossing 'Kittur Rani Chennamma Circle' bus took a U turn and went back to old KSRTC station, 10-15 minutes here. Close to breaking dawn, we logged in to NH 67.

Western ghats

After leaving the city limits there were not much traffic, or homes in road sides. I slept for some time; but when woke up were were about to enter ‘Anshi National park’. The famous tourist destinations like Dandeli and Kali River basin forests are located here.

Finally we were on the Western Ghats, crossing the mighty mountains from east to west. Small hills were there in both sides of the road, in between some inhabited were there - like pictures we see in the canvas of a talented painter; time seems to be constant and we were in perpetual motion. Cold wind was blowing in through the partially opened side glass window. It was not a dense forest; there were so much gaps in between trees.

Trucks with number plates from Madhya Pradesh, Maharashtra and Karnataka etc were coming in from the opposite direction. Except some stops here and there, we were moving without any disturbance. Close to breakfast time, driver stopped the machine in front of a hotel. There was a well close to the hotel, water level was so high that, if rain persists people can take water from it without the help of pulley or thread. After having Poori- Sabbjji and tea we continued our Odyssey.

Karwar

Accompanied with sizzling rain, we reached ‘Ankola’ after spending some time in a bus stand there we joined the famous NH 66 (Kanyakumari - Panvel Road). There were small but beautiful waterfalls on the sides. We were on our descent and saw the outlines of Karwar port (this is one of the best natural harbours in India, with a small mountain range sheltering it from the sea waves) from a distance. Within a short period of time, we reached Karwar through the sides of Karwar Naval Base (INS Kadamba - Project Seabird). It was not looking like a bus stand. On one side of the junction there was a temple, with architecture different from other temples in Karnataka.

Rabindranath Tagore Beach

Close to Arabian Sea, there is a warship museum (INS Chapel). When we reached the ship, there was no current. So we moved on to Tagore beach which is very close. Don't expect much, this beach required serious clean up. Anyway we walked through the beach for some time. Within a short distance you can see Karwar Port, islands etc.

Warship museum


INS Chapel

 Finally we went back to the museum. The status of ‘Major Rama Raghoba Rane PVC’ stands close to the ship. Major Rana was awarded ‘Param veer Chakra’ for his courage and gallantry during the war against Pakistan (Operations in J & K - 1947).

After buying tickets we went inside. It was indeed an interesting thing to understand the life of sailors in sea. Especially, in ships, where space is a luxury commodity. By the time we reached engine room, current gone once again. However, using my torch we saw the rest of the engine room and climbed to the deck. There was a TV show for the visitors, about Indian Navy in general and its capabilities. After the show we walked back to the city centre.

Bus to Kaiga Nuclear Power plant is available from here. For some time, I lost in nuclear energy. However, call of stomach woke us up and we marched towards a local hotel. Next destination - Canancona (Goa). Within some time we again hit Kanyakumari - Panvel road.


Kali River Estuary

 Kali River Estuary

It is here, the Kali River joins Arabian Sea. From the bridge, Kali River estuary looked magnificent. Good bye Karwar...

Sajeev.

Me @ Chapal

Major Rane

View from Tagore beach



Inside Chapal



Inside



Temple



Compass