Poverty and World Bank

Every morning we are greeted with grim news. Economic meltdown, stock slump, housing slump, bear hugs, climate concerns, terrorist attacks, inhibited growth etc. While the rich has lost billions collectively and the poor have nothing to lose as they had nothing in the first place, middle class is bearing most of the brunt. Some of them on the left of the balance have been pushed back to being poor once again.

As the World talks about stimulus packages and rescue efforts and investor confidences, the actually affected parties are really not being cared about. The developing and poor countries are still sufffering with health hazards, poverty, hunger and what not. While all capital banks have done bad innovations to screw middle class, the so-called responsible institutions like IMF, World Bank have done NO innovation whatsoever in all these years for poverty eradication.

Well, how can they? After all, people who sit in cosy Washington offices, sipping Starbucks and watching the Snow Christmas with double coats can hardly relate to hunger driven, water starved, naked children suffering extreme weathers and succumbing to death.

The World Bank is not a sacred organization of any sort. It has been ridden with corruption, scandals, bad leadership, heavy op-burden, excessive employee perks, aimless units amongst others. The institution seeks to serve its interests more than anyone else's. It boasts of over a $1b op-expense every year. It's employees have every benefit/perk - first class travels, tax free salaries, seven-star accomodations, retirement benefits, home-country-travel/education/parking and several other allowances, lifetime employment guarantees, periodic vacations, work from home options for years and what not! And all this under the cover of working towards elimination of poverty!!!

The only reason this institution is even surviving in spite of becoming irrelevant and incompetent is because it is protected by top capitalist nations to push their agenda into developing and poor nations.

The past Presidents of World Bank have spent all their time to fight internal corruption. A proper audit of World Bank would definitely throw people off their seats. Given all this arrogant & complacent behavior, the World Bank cannot even drive poverty out of the beggars in front of their offices, leave alone the countless billions in Africa and poor nations.

As 2009 dawns, Zoellick must make one promise - the bottom of his heart. If he can stop all the useless internal expenses his organization generates, if he can prevent internal corruption, if he can downsize his organization to ensure only the right people remain staffed - that would be the most sincere effort anyone can take to help people live, fight the hunger and wake up everyday with some hope. After all, if profit making companies are forced to downsize, cut costs and make efficient operations, this international burden called World Bank should do something on its part.

(The above is an excerpt from my paper. All the views here are personal.)

World Bank & Satyam

I had a post here on this subject. However after a friend / former colleague and some well wishers at work advised me to take the post out, I have respected their advise and taken it out. Sorry for the disappointment.

Scam + Shame => Satyam!!!

Eight years after Sify (the Internet company of Satyam Computers- sold off a few years back) bought the Indiaworld.Com channels in a whopping Rs. 499 crore cash deal, the promoters and management of Satyam Computers have indulged in their next tomfoolery again. By agreeing to take stakes in Maytas properties and Maytas Infra, both of which are controlled by the same family, the Raju's, Satyam Management & more importantly the board have engaged in the action that makes investors feel stupid.

It is even inconceivable that Raju's and their henchmen thought this deal would go along. How is it possible that a publicly listed company, buys the shares of another, without discussing with the investors and where there is a direct conflict of interest? A look at the valuation for Maytas and any novice would find the ridiculous numbers. The deal would make Satyam a net debt company!! The synergies are not very compelling either. What is the value proposition? "We will build offices, provide infrastructure and software"? The promoters and the management should be kicked for their actions and the board must be summarily fired and legal action needs to be taken for such a impudent move to approve this acquisition.

The bigger problem is that companies like Satyam do lot of hedging, sit on a pile of cash citing risk management during turbulent times. Now all they have done is to engage in most unethical, shameful activities that just makes their pockets bigger, short-changes the investors and puts India Inc. to shame. Satyam is sitting on a Rs. 8000 crore pile. A few days back it was reported by 'analysts' that Satyam would be the safest company to tide over the meltdown storm. But Captain Raju and his crew have ensured that they dont mind sinking the ship if it will mean profits to the family.

This is not expected of a person like Raju, who is hailed as a visionary and has got a number of awards like Businessman of the year and Entrepreneur of the year from E&Y, Dataquest etc. Satyam has now reversed the bid, but investors, clients and associates will start to wonder seriously about the vision of the management and if they have the skills and ethics to lead them forward.

It is time that we form a United Shareholders of India, similar to the one created by Carl Icahn in US and fight for minority shareholder rights.

Disclosure: The author is an investor in Satyam Computers and also was a long term associate of the company in a middle level leadership position.

Nationalized Banks - this is your time

It is a bank for the retired people who have nothing else to do but go wait there all day.

It is a lousy, government organization. It takes hours to get anything done there.

People come, eat lunch, chat, watch TV(!), take breaks & naps and go home. They are least bother about customer service.

While the above applies to any government controlled company in India, I am specifically talking about nationalized banks - like State Bank of India or Canara Bank. You can find the staff highly irritating, very bureaucratic, zero level of customer service, dont-care attitudes and everything that you can complain of. If this were any private company in any sector, the shutters would have been down, the management and staff would have been stoned. But being a nationalized bank, armed with very powerful unions the staff could care less about what management plans or customers think.

How else can you explain the fact that they didnt bother to bring in ATMs and Credit cards into Indian soil for decades until private banks and foriegn banks pushed for it. As much as people blame ICICI for what it has done, but for ICICI, none of the Indian nationalized banks would have even thought about improving customer service. Today a regular savings account in SBI comes with debit card, ATM accesses, Internet Banking and what not !!..

And I think there will be a no better oppurtune moment than now for the nationalized banks to win the faith & love of public. Customers who moved away from these nationalized banks, corporate youth who hate to stand in tellers queues for hours together and NRIs who want to be in control of their money have all now started to pull out their money from private banks like ICICI and are putting them into SBI & Canara & Indian banks. Never before has such a surge of new account openings taken place.

If SBI & others think that this is because of the great customer service that they have or attractive deposits that they offer, they are highly mistaken and awfully arrogant. People move the money into SBI because they think their deposits are insured by the Government of India. And that SBI wont fold and/or run away with their money. If & when the economy stabilizes and there is growth path again, it will be a matter of time the customers find out that making investment decisions with money stuck in a SBI safe is like waiting for a judgement in a Indian court. Customers will take the money and run. And SBI will find itself running to Finance ministry to issue a depositor confidence boosting statement.

So this is the right time for the nationalized banks to improve their service & image. Use all the incoming money to ensure that your operations are made better; hiring is better; services are good; you are more responsive to customer. Ensure that your customer will stay with you because he/she loves your service. Not because they are stuck with you. If SBI & other nationalized banks choose to sleep now and act as if they are kings of Indian banking system, it is a matter of time before mergers happen within them or they get divested and eventually bought out or closed. I know that the socialist circles of India will never let any of this happens, no matter how bad these banks perform, but there is something called as competitive sustainability and without efficiency improvements and innovations, no institution can survive- not even the government itself.

(As a side note, I walked into the newly opened SBI Kondapur @ Hyderabad the other day. It was 11:00 AM. An young chap in his mid twenties sat in one of the teller windows, reading a local newspaper, not bothering to answer the queries customers were asking him. I wonder whether they do a culture fit and actually try and hire the laziest irriating bums to work in these places!)