Oc t ober Dec emberi s s ue
Vol umeI V, I s s ueI
4
t h
Anni versary i ssue
Foreword Dear Readers, It gives us great pleasure to bring to you the 4th Anniversary Issue of e-GloBuzZ, the quarterly e-periodical of IBS@SIMSR. Throughout the academic year 2013-14 so far, IBS@SIMSR continued to have rewarding interactions regularly with Senior Executives of companies engaged in International Business and eminent personalities with substantial international exposure. Some of the notable Senior Executives of foreign multi-nationals operating in India, who graced IBS@SIMSR interactions, were: Mr. Manikandan Vijayaraghavan, Director-Finance, Deutsche Bank and Mr. Sanjiv Navangul, Managing Director-Janssen India, Johnson and Johnson India Ltd. These interactions were covered in the last issue of e-GloBuzZ, July-Sept 2013. We were privileged to have with us for the 4th Anniversary on 18th November2013, Mr. Prafulla Gupta, MBA from Harvard Business School, who was also a former Senior Partner at Booz, Allen & Hamilton and Prof. Dr. Porus Olpadwala, Dean Emeritus, College of Architecture & Planning, Cornell University, USA. The focus in this quarter Oct-Dec 2013 was on three major IBS@SIMSR events: 3rd International Business Conference, PANGEA 2013 concluded successfully on 19th October 2013, 4th Anniversary celebration of IBS@SIMSR held on 18th November 2013 (since IBS@SIMSR was inaugurated on 18th November 2009). The 3rd major event during this quarter is the forthcoming International Business Day on 21st Dec 2013 as a part of Institute level prestigious annual event Samavesh. We will cover the International Business Day at Samavesh 2013 in our next issue of e-GloBuzZ in Jan-Mar 2014. Last week Nelson Mandela, a globally respected Leader and humanitarian passed away. We have paid a tribute in this issue to Late Nelson Mandela, who not only shaped the future of South Africa, but also touched many lives positively across the world. We hope you like this issue of e-GloBuzZ, which, like the previous issues of e-GloBuzZ, has articles on diverse topics within International Business and world affairs, written by students, both from PGDM-International Business and other SIMSR programs. IBS@SIMSR requests our esteemed SIMSR faculty and students to contribute articles for the next issue of e-GloBuzZ, Jan-Mar 2014. Best Wishes for a very happy and rewarding New Year to our readers. Prof. C. P. Joshi Faculty Mentor, IBS@SIMSR Area Chairperson (General Management) & Program Coordinator (PGDM and PGDM– sInternational Business)
E-GLOBUZZ
A TRIBUTE TO NELSON MANDELA
1
COVER STORY US FEDERAL SHUTDOWN OF 2013
2
ADAPT OR DIE
4
COUNTRIES IN FOCUS
Faculty Mentor Prof. C.P. Joshi Editor– Sanghmitra Varma Sayoni Maitra Divya Midha Hardik Dhagai Meenakshi Vyas Designers– Manu Manaswi Aayush Velaga Ankur Chauhan
WINDS OF CHANGE USHER IN MYANMAR
6
GREECE NEEDS A REBOOT
8
VIETNAM- THE RISING JEWEL
10
Did you know? Trimurti Gupta Sanghmitra Varma
14
Circulations– Praneeta Shukla, Sabika Naqvi
PERSONALITY IN FOCUS MARIO DRAGHI KNOWLEDGE CENTRE BITCOIN: BREAKING MONETARY BARRI-
16
ERS
IBS UPDATES IBS LAUNCHES ITS NEW LOGO
18
IBS EVENTS PANGEA 2013 BY IBS@SIMSR
19
IBS CELEBRATES ITS 4TH ANNIVERSARY
20
All the views expressed in this magazine reflect the personal opinions and views of the authors and do not reflect IBS@SIMSR views
A Tribute to Nelson Mandela, a true statesman; a man destined to lead and a freedom icon Shagun Changoiwala (PGDM-IB, 1st Year) Bharat Ratna, the highest Indian civilian award, much before being conferred with the Nobel Peace Prize in 1993, which he shared with Mr. Klerk, who helped him to get a release from the prison three years earlier than the declared sentence. Mr. Klerk also bought peace to the ongoing apartheid.
N
elson Mandela, South Africa’s first President, who transformed the country from apartheid to a democracy and emerged as an international icon of justice, passed away at the age of 95 on 5th December, 2013. By the time of his death, he was declared as the greatest persona of mankind. The idea of greatness now retires into the historical shadows. As the saying goes “Death is not the greatest loss. The biggest loss is something that dies inside us while we continue to exist”. But everything has not come to an end, as he has left us with a great legacy richer than anything money can buy. He endured great personal hardship when he was imprisoned for nearly three decades, so that others could have a life full of dignity, equality and opportunity. He fought against discrimination and exclusion, but rose above hardest of the evils to heal and reconcile a fractured nation. He lived his life by virtues of honesty, trust sharing with peace, without even once compromising on his beliefs or his principles. "India, in particular, had great affection and regard for him. Inspired by Mahatma Gandhi's principle of Ahimsa (non-violence), his mission was a moral bulwark for our principled struggle against apartheid in South Africa that was marked by violent attacks during those days. It also reflected India’s fight for a world free from violence. We were highly honored when Nelson Mandela accepted
Nelson Mandela is one of the most inspirational people without whom we would have been living in a largely restricted world even today. Apart from making a difference to the quality of life globally, he did serve the world with many other teachings too. He inspired us to believe that no hurdle is too big; no way is too hard to choose, and no rival is so powerful for us to quit. “The sun keeps rising each day, necessarily not as bright as yesterday, but the show must go on!!”
The important message he delivered to the world is that forgiveness is not our weakness. It was evident when he quoted: “Its reconciliation & forgiveness but at no cost any form of revenge”. He was crystal clear about the fact that just as it could not be a country of white men in power; it could not be a country of black domination either. In the future, the majority would need the minority and viceversa. Ultimately there is a power in forgiveness too, both in granting and seeking it. In a true sense, he showed us the path of truth and strength of human spirit inspiring us in many ways with his work, his life and his words. The legacy he has left us with is one we will always cherish and we will always thank God for Nelson Mandela. Let us all join together to mourn the legend who never differentiated any individual on the basis of their ethnicity and saw everyone as a human being to be treated with equal respect and dignity.
May his soul rest in peace knowing that he leaves behind many who will always continue his struggle, his fight and carry forward his legacy.
US Federal Government Shutdown of 2013 VISHNU MANASA KANCHIRAJU & SAKSHI SINGHANIA(PGDM IB 2013-15)
U
S Federal Government shutdown occurs when
The recent shutdown took place as a result of a funding
laws funding the government are not passed
gap. This was created by the two chambers of the Con-
by the Congress. The US government’s fiscal
gress, the House and the Senate, after they failed to agree
year is from October 1 to September 30 and these laws
on two aspects. One aspect was the funding of Patient
need to be passed for proper functioning as mentioned in
Protection
Republicans critiqued that imposing medical device will lead to sending jobs overseas. Democrats support the law saying that it will increase the access to health care.
and
Affordable
Care
Act,
also
called
the US Constitution. Government
Obamacare, and the other being Debt Ceiling. Currently
shutdown doesn’t imply that US
the House is dominated by the Republicans and the Sen-
has no government. Services important for law and order definitely function normally. Other departments function only with minority of their staff reporting
and performing basic functions. Some of the government institutions are entirely shut down. Till date, the US has faced three major federal government
ate by the Democrats. Obamacare needs funding from the
shutdowns. The first shutdown took place in 1978 and
Federal Budget the next fiscal year. The House Republi-
lasted for 18 days, when Jimmy Carter was the president.
cans insist on a new bill to defund Obamacare.
The issue was related to a defence bill which included the
Obamacare aimed at making health insurance mandatory
funding of a nuclear-powered aircraft carrier. In 1995-
for Americans. Republicans feel that it'll hurt employers
1996, the second shutdown which lasted for 21 days,
and add to overreach by the federal government. Republi-
took place during Bill Clinton’s tenure as the president.
cans critiqued that imposing medical device will lead to
This shutdown was caused due to the conflict in funding
sending jobs overseas. Democrats support the law saying
of Medicare, education, environment and public health in
that it will increase the access to health care. Obamacare
the 1996 federal budget. The recent shutdown took place
prevents those with pre-existing medical conditions from
from October 1 to October 16, 2013 under the presidency
being denied health insurance, and advocates that those
of Barrack Obama. This shutdown resulted due to the fail-
who have health insurance will no longer pay indirectly to
ure of the Congress to pass a law related to appropriating
those who show up in emergency rooms uninsured.
funds for the fiscal year 2014.
Another reason for shutdown was that of the Debt Ceiling.
Business Name
Debt ceiling is the limit fixed for the money that the gov-
led to a lost productivity equivalent to $2.0 bn. It was esti-
ernment can borrow. It was first introduced in 1917 and
mated that the shutdown would cost the economy about
since 1960, the government has raised it 78 times. Cur-
$55 bn and as per Goldman Sachs the GDP growth of US
rently it is set at $16.7 trillion and it was estimated that by
would be reduced by 0.9%. Key government functions
October 17 this limit would be exceeded. Had the debt
such as health services, training and support of traffic con-
ceiling not risen by then, the US would have begun to de-
trol services were affected and also national parks, monu-
fault on its debt, for the first time. Once when it nearly hap-
ments, museums remained closed.
pened in 2011, the US credit rating was downgraded. Re-
A temporary solution was found to the US shutdown on Oct
publicans indicated that they will demand concessions
16, 2013. Congress passed an interim appropriations bill
from Democrats on spending so as to raise the debt ceil-
with majority from both the Senate and the House. The
ing. President Obama opinionated that there will be no
deal funded the US government until January 15, 2014
negotiation on the issue as defaulting on the national debt
and raised the debt ceiling of the country until February 7,
would make Americans ‘deadbeats’.
2014, which finally ended the economic shutdown.
The shutdown had major consequences. One of the significant effects of this shutdown was that approximately 800,000 government employees were furloughed, which
Did You Know Singapore has the highest ratio of millionaires in the world.
Did You Know USA’s biggest export to China for the last 5 years has been trash.
Adapt Or Die ANIRBAN CHAKRABORTHY(PGDM IB 2013-15)
W
hat if, one morning you woke up and real-
Kodak had captured 90% market share in the USA and
ized that your business is obsolete. What
enjoyed 70% margins.
would you do to reclaim your market and
become relevant in your business again? Can you leverage this opportunity to take your business to new heights? This scenario is the prelude for the article–staying relevant in the current economic scenario. In the current volatile
One needs to constantly monitor his business’s relevance in the market and acclimatize quickly enough to maintain it .
environment companies need to be flexible to remain relevant. The adage ‘Either you change or you die’ holds perfect in today’s time
Kodak was caught unaware as the realms of photography
and age. One needs to constantly
moved from Analog to Digital. The company simply could
monitor his business’s relevance
not match the pace with which the transition was taking
in the market and acclimatize quickly enough to maintain
place. With the advent of digital photography people could
it.
create, edit, store and share images instantly. As a result,
Let us look at some real life examples of such a nightmar-
Kodak’s core competence had started to become obsolete. In Jan 2012, the company filed bankruptcy. It reemerged from bankruptcy in Sep 2013, but only as a pale shadow of its former self. The lesson to be learnt from the Kodak saga is that unless your business possesses ongoing relevance, you are not going to survive however good you may be in your business. If you focus only in the current market space you might miss on the bigger picture.
ish scenario. We all remember Eastman Kodak, which
Let’s move on to the next example. In 1991, Nokia lost its
used to sit pretty at the top till a few years ago. Founded in
major market when the Soviet Union dissolved as an eco-
1892 it was a quintessential American company whose
nomic entity but this proved to be a blessing in disguise for
brand was known worldwide due to its “film photography”.
the company. Earlier the company focused on manufactur-
Business Name
ing paper, rubber and wood-based products. Mobile
it had itself created. Nokia could not establish its strong
manufacturing was a miniscule portion of the company’s
hold in the US market and it did not focus on the Smart-
business. Nokia realized the potential in this miniscule
phone arena, the telecom industry’s fastest growing area. By 2012, Samsung had captured the market big time and production of Nokia fell below the breakeven point. Microsoft acquired Nokia in Sep 2013 for $7 bn –a remarkably low price considering Nokia’s market share of $77 bn five years ago. So the biggest hurdle is how do you ensure that your company is relevant? One thing which can be done is to ask
portion and decided to leverage on it for future growth. By
yourself the hypothetical questions of the nightmare sce-
1994, Nokia sold its industrial units and got listed in NYSE
nario: if your biggest market or your core business van-
as a premier manufacturer of mobiles, hence creating a
ishes over night, can you think of ways to bring impetus to
completely new market space. Such was the dominance
the business? This mental exercise will keep you agile and
of Nokia that the market share of Nokia was more than
help you monitor the underlying relevance of your busi-
the combined share of its top three competitors.
ness.
Nokia could not afford to be complacent having established itself as the market leader in this new market space. Over the recent years Nokia failed to keep pace with the latest technological developments in the market
Did You Know After Coca-Cola was forced out of India in 1977, the Indian Government started its own brand of cola known as Double Seven.
Winds of Change in Myanmar HARDIK DHAGAI & ANIRBAN CHAKRABORTHY (PGDM IB 2013-15)
S
itting on the floor of a semi-furnished flat in cen-
the Research Unit signifies that they are taking rapid
tral Yangon, men in the early twenties are tapping
strides to transform the NLD.
vigorously on the old laptops and occasionally
NLD was founded in 1988 by Ms Suu Kyi and others to
gazing at the bits of paper pieces scattered around them.
stand against the dictatorial military rule in Myanmar but
These men would easily pass for college going guys fid-
all these years it has found it very difficult to function with
dling with their Facebook. These
its full potential. The party’s power had been on the wane
men are in the Research team
because most of its leaders were put behind bars and
of NLD (National League for
tortured and the party was declared illegal. However, since
Democracy). It is Myanmar’s
2011 under the reins of the President Thein Sein’s de-
main opposition party and is led
mocratic reforms, the party has been on the verge of
by Ms. Aung San Suu Kyi. They
power. It won 43 out of 44 seats in the by-elections con-
need to produce a weekly media
tested in 2012. If the same trend continues in 2015 gen-
-monitoring report shortly which
eral elections, NLD could sweep the parliament and Miss
NLD was founded in 1988 by Ms Suu Kyi and others to stand against the dictatorial military rule in Myanmar but all these years it has found it very difficult to function with its full potential.
will provide links to all the main references to the NLD and
Suu Kyi can become the president.
Myanmar in the international press.
There has been a complete reversal in the party’s fortunes
These people don’t have any office so they meet at Mr.
but many people still feel that the party has not been able
Nay Chi Win’s flat. Mr. Win is the founder of the Unit at the
to keep pace with the changes. The party was criticized
age of 32. The only accessory the team working at his
vehemently in its first National Congress Meet in March
place is a whiteboard. His main concern is whether he
due to its dominance by old leaders. Moreover, there were
would be able to afford the rent. However, the founding of
accusations that Miss Suu Kyi is largely inaccessible and
Business Name
the party members do not have any voice in policy making.
been sent to USA for English training and to learn democ-
Some even go to the extent of complaining that the party
racy.
does not have a basic policy formation framework so it is
There has been constant criticism from all quarters due to Miss Suu Kyi’s continued isolation from the party and also on her lack of willingness to deliver the required knowledge on policy framing to others. Also, the leadership has been trying to get the clauses in the constitution changed so that Miss Suu Kyi can become President in 2015.
highly underprepared to form the government in two year’s
These arguments have irked her advisers. They have im-
time. And so the young generation party members have
plored the people to be more patient considering the short
taken it upon themselves to carry the baton ahead.
time frame and slender budget at their disposal. While she
The research unit was set up by Mr. Nay Chi Win to
is being attacked for being isolated from the party, she is
“institutionalize” and “decentralize” the party because he
frustrated that nobody is willing to raise his voice against
felt it was too dependent on Miss Suu Kyi. Training is pro-
her. Fame has allowed her to control a world audience
vided to NLD members in local branches all around the
and at the same time taken her away from her own peo-
country. The cadres who make it Yangon are given training
ple.
on basic administrative functions and Public Relations. They are also provided training in personal grooming by Ms. Tin Moe Lwin who is a famous model. The MPs have
Did You Know The campaign of Amul girl is the oldest continuous running campaign in the history of advertising.
Did You Know How massive is IKEA? It consumes 1% of the world’s wood!
Greece Needs a Reboot MEENAKSHI VYAS (PGDM RM 2013-15)
D
espite being a developed nation, Greece has
some spotlight on the global platform to Greece, provided
been a troubling pot for quite a while now.
better infrastructure, support from other countries but re-
Though July reports show that the trade deficit
cession in 2008 proved it be the worst performer. Austere
has slightly reduced, a lot more damage has already been
measures were introduced; imports were reduced, but it
done. Global investor community has lost confidence in
hardly made any mark on the report card. Today, Greece
Greece and the currency is in a
hangs in a delicate balance between economic sanctions
bad shape. Traditionally, Greece
from Euro zone, remittances from expatriates, shipping
has been an exporter of food,
and tourism revenues and revival methods to reboot its
Today, Greece hangs in a delicate balance between economic sanctions from Euro zone, remittances from expatriates, shipping and tourism revenues and revival methods to reboot its economy.
beverages and textiles. Although the Current Account Deficit reduced marginally during recession, it has always been a cause of concern. Tourism recorded a robust growth even during reces-
sion years and contributed 15% to GDP. Unemployment and low productivity are the biggest prob-
economy. The culprit in the entire scenario is the huge
lems for Greece. Machinery, transport equipment, fuels
borrowings made over the time.
and chemicals are major imports in Greece. Greece, a
According to a recent report, Greece government has taken many measures to simplify and ease pre-customs and customs norms to encourage exports. The key pointers in this proposal seek to reduce the number of days needed to export by 50% and reduce cost by 20% by 2015. A single national clearance window for exports has also been proposed. With intent to improving trade relation across borders and attracting foreign investors, sound export policy is under creation. Government has shown keen
capitalist economy, has 40% of public sector contributing
interest in resolving issues related to lack of information
40% to its GDP. Athens Olympic Games in 2004 provided
and transparency; this will help to boost confidence in
Business Name
start-up firms. For example, providing information regard-
beverages and textiles. I wouldn’t call it a lost battle for
ing the number of items approved for imports and exports,
Greece, because as a nation Greece has a plethora of re-
clearing unnecessary documents for set up procedures,
sources, trustworthy trading partners and warming up re-
legal and fair procedures will be promoted. Greece relies
forms. If played patiently and wisely, Greece can regain its
on tourism, services and exports for most of its GDP. Infra-
lost aura and stance.
structure of the country is pretty well settled since Greece remains one of the developed countries. Hence, Greece has little to worry in this sector. Outside EU, United States is Greece’s largest trading partner. Traditionally, Greece has been an exporter of food,
DID YOU KNOW
DID YOU KNOW SONY’s most successful business is selling Insurance, which contributes about 63% of their total profit.
The Hard Rock Cafe is owned by the Seminole Tribe of Florida. They purchased Hard Rock Cafe International Inc. and all related entities for almost $1 billion in March 2007.
Vietnam- The Rising Jewel Pham Thi Huyen, PGDM-Marketing (2012-14)
V
ietnam, officially the Socialist Republic of Viet-
terminated by France. The French administration imposed
nam, is the easternmost country on the Indo-
significant political and cultural changes on the Vietnam-
china Peninsula in Southeast Asia with a popu-
ese society. A Western-style system of modern education
lation of around 88.78 million (2012). Vietnam
was developed. The French created plantations and pro-
has a long seacoast in the eastern side, is bordered by
moted the export of tobacco, indigo, tea and coffee. How-
China to the north, Laos to the northwest and Cambodia to
ever, their policy was strict for civil rights, the Vietnamese
the southwest. Its capital city is Hanoi – the second larg-
suffered a lot in this period. A nationalist political move-
est city in Vietnam after Ho Chi Minh City (Old name: Sai-
ment soon emerged, with leaders such as Phan Boi Chau,
gon – a gem stone city of Indochina during USA domi-
Phan Chu Trinh, Phan Dinh Phung, Emperor Hàm Nghi and
nated). Other major cities of Vietnam are Da Nang (main
Ho Chi Minh fighting for independence. The French main-
city of center Vietnam) and Hai Phong (the most important
tained control of their colonies until World War II, when the
northern seaport due to its large maritime facilities).
war in the Pacific led to the Japanese invasion of French Indochina in 1941. The Japanese Empire exploited Viet-
History
nam's natural resources to support its military campaigns,
Vietnam has one of the longest histories in the world. Ac-
leading to the Vietnamese Famine of 1945, which caused
cording to researchers, Vietnam’s history has been divided
up to two million deaths.
into seven periods from 500,000 BC. These being: Prehistory, Bronze Age, Dynastic Vietnam, French Vietnam, First Indochina War, Vietnam War and Reunification & Reforms. During the Dynastic Vietnam period, Vietnam was dominated by China for over 1000 years. The Chinese rule immensely influenced the Vietnamese administration, law, education, culture, literature and language. In 938 AD, after a millennium of Chinese domination Vietnam re-
The Chinese rule immensely influenced the Vietnamese administration, law, education, culture, literature and language.
gained complete independence. For centuries to come, China continued its attempt to gain dominance over Vietnam, but the citizens of Vietnam never stopped fighting to stay independent.
In the 17th century, Vietnam’s independence was gradually
The year 1925 also marked the founding of the Viet Nam Thanh Nien Cach Menh Dong Chi Hoi (Revolutionary Youth League) in Guangzhou by Ho Chi Minh. Ho Chi Minh is also called the Father of Vietnam. He was influenced by the Marxist-Leninist revolutionary doctrine. In 1941, the Viet Minh, a communist and nationalist liberation movement, sought independence for Vietnam from France and the
end of the Japanese occupation. Following the military
also reached the shores of the Red River Delta. A maritime
defeat of Japan and the fall of its puppet Empire of Viet-
trade among China, India and Indonesia used the delta as
nam in August 1945, the Viet Minh occupied Hanoi and
a convenient stopover. Among the array of goods and
proclaimed a provisional government, which asserted national independence on
2nd
September. The first govern-
ment of Vietnam was formed Ho Chi Minh's Democratic Republic of Vietnam. After independence in North Vietnam, United States reasoned to support South Vietnam against the communist insurgency. The United States gradually increased their contribution to the Vietnam military. US forces became involved in ground combat operations in 1965, and at their peak they numbered more than 500,000. After that they indulged in nonstop bombing on North Vietnam, causing many deaths of both, American and Vietnamese people involved in warfare. During this time, Vietnam received lots of support from China and the Soviet Union. On 2 nd
While the Vietnamese aristocracy clung to Chinese Confucianism, during most periods the common people emb ra ced Budd his m, adapting it to fit their own indigenous religions and world view.
ideas, thus brought to Vietnam was Buddhism from India. While the
Vietnamese
aristocracy
clung to Chinese Confucianism, during most periods the common people embraced Buddhism, adapting it to fit their own indigenous religions and world view. During the French
colonial period, the Vietnamese culture was influenced by the Europeans in terms of religion (Catholicism) and handwriting language (Latin alphabet). Since independence, the cultural life of Vietnam has been deeply influenced by government controlled media and socialist programs.
July 1976, North and South Vietnam were merged to form
Vietnam’s religion is a mix of Buddhism, Confucianism,
the Socialist Republic of Vietnam. The war left Vietnam
Catholicism and Taoism. Vietnam’s visual art is strongly
devastated, with the total death toll standing between
influenced by the Chinese Buddhist art. Vietnamese music
800,000 and 3.1 million, and many thousands crippled by
varies from three regions: North, Central and South. Water
the use of chemical weapons such as Agent Orange.
puppetry is a distinct Vietnamese art which had its origins
Culture
in the 10th century and is very popular in the northern region. Vietnamese cuisine is created by the traditionally cultivated wet rice and extremely diverse follow regions. One of the nation’s most famous dishes is the Pho. The national costume of Vietnam is the Ao Dai. However, Ao Dai is worn only in traditional festival, school uniform and wedding. In daily life, Vietnamese clothes are Western styles. Political The Socialist Republic of Vietnam follows a single-party socialist republic framework, where the President of Vietnam is the head of the state and has executive power. The
Vietnam is known as the Cultivator of Wet Rice and the
Prime Minister of Vietnam is the head of the government,
nation of the Fertile Plains of the Red River Delta in north-
in a one-party system led by the Communist Party of Viet-
ern Vietnam. Vietnam is considered as part of the East
nam. Legislative power is vested in the National Assembly
Asian Culture due to long term dominance by the Chinese.
of Vietnam. The Judiciary is independent of the Executive.
During the Chinese millennium, other cultural influences
The election for the President of the Socialist Republic is
done in period of five years and is decided by the National about 25% of the country’s energy consumption. Besides Assembly of Vietnam. The political environment of Vietnam that, mining and quarrying are also important industries that has been very stable after independence. At present, Mr. contribute to GDP and provide employment to the workforce. Truong Tan Sang is the President and Mr. Nguyen Tan Dung The growth rate of GDP for this industry is 9.34% per year. is Prime Minister of the socialist Republic of Vietnam.
Vietnam’s banking system consists of a combination of state -owned, joint-stock, joint-venture and foreign banks, but the
Economy
state-owned commercial banks predominate over most of
Vietnam is a developing country and is a well known emerg- the state-owned enterprises. Vietnam has two stock exchanges the Ho Chi Minh Stock ing market with an attractive location and a stable political
Vietnam’s major ASEAN
environment. After 1991, the Vietnam economy experienced exports are crude oil,
Exchange (HOSE) and the Hanoi
rapid growth with average GDP growth rate at 7.3%. IT was computers, rice, steel,
Stock Exchange (HNX).
the target market of many global firms then. Vietnam has gas and petrol, phones become a leading agricultural exporter and has served as an
and components, coffee.
nam Dong (VND).
attractive destination for foreign
Vietnam’s banking system consists of a combination of state-owned, jointstock, joint-venture and foreign banks, but the state-owned commercial banks predominate over most of the state-owned enterprises.
Vietnam’s currency is called Viet-
investors. Nowadays the econ- International Relations omy of Vietnam relies largely on Foreign Direct Investment to attract capital from overseas to support its continual economic development. Over the past 20 years, FDI inflows into Vietnam have increased tremendously in terms of share of investment,
The Vietnamese government’s policy is very liberal towards other countries. As of July 2013, Vietnam has diplomatic relations with 182 nations throughout the world. Vietnam became a member of ASEAN in 1995 and the WTO in 2007. Besides that, Vietnam is also a member of the World Bank, IMF, The Asian Development Bank and APEC. A critical relationship of Vietnam is with ASEAN.
trading turnover and GDP per- ASEAN Free Trade Area (AFTA) was established in January centage. As of December 2012, the country is home to 1992. The AFTA effectively removed trade barriers such as 14,522 valid foreign investment projects with a total capital tariffs in order push for freer trade among member states. of over US$210.5 billion. This led to the creation of opportunities for companies with In terms of demographic, Vietnam has 70% of its population in working age (from 15 to 65 years). In 2012, GDP was 141.69 USD billion, growth rate at 5% and inflation rate was 9%. The economy has been unable to achieve its targets in the recent years because it was affected by the slower lending as banks strain under the weight of bad debt incurred largely by the state sector. Economic sectors are Agriculture, Energy, Industry and Manufacturing, Service and Tourism, and Banking & Finance. In 2012, the best performing sector was Agriculture. During this year, Vietnam became the biggest coffee ex- an ASEAN presence to take advantage of the 10 different porter and also the top supplier of rice to the world. Petro- economies in the region by way of the Common Effective leum is the main source of energy which contributes to Preferential Tariff Scheme. Vietnam’s major ASEAN exports
are crude oil, computers, rice, steel, gas and petrol, phones various fields. 6 (six) scholarships are also awarded under and components, coffee. If comparing with other countries GCSS scheme annually to Vietnamese students for the unin the block, Vietnam is the potential location as center dergraduate, postgraduate degrees and for pursuing reamong members in block.
search at Indian universities.
India and Vietnam relations
New Road
The Republic of India and the Socialist Republic of Vietnam enjoy strong bilateral relations in terms of economic and cultural ties. Bilateral trade touched US$ 2.5 billion in 2008 and continues to grow rapidly. Vietnam’s exports to India in 2008 registered an increase of 47% over 2007 and reached
More than thirty Indian companies have set up Representative Offices in Vietnam. A large majority of these offices are located in Ho Chi Minh City. India now ranks 11th among the main export markets of Vietnam.
USD 389 million. More than thirty Indian companies have set up Representative Offices in Vietnam.
A large majority of these
offices are located in Ho Chi Minh City. India now ranks 11th among the main 4export markets of Vietnam. In the first seven months of The new trend of many international manufacturing enter2011, the two-way trade value prises has been to look for relocation or expansion of their was over US$2 billion, 41 percent China operation to capture alternative markets and thus,
more than the same period last year, with US$1.3 billion by hedge their risk of operations in China. Vietnam is a huge imports from India and US$739 million by Vietnamese ex- market for consumption, is also easy to connect with ASEAN ports. Major commodities exported from India to Vietnam are animal feed, machinery & equipment, pharmaceuticals and pharmaceutical materials, ordinary metals, material for plastics, iron & steel, leather & textile materials, medicinal ingredients, cotton and pesticides.
countries in terms of location and tax deduction. Besides that, the Vietnamese government offers many attractive advantages for foreign businesses, including a number of preferential policies and tax incentives, free trade status within the thriving ASEAN region and a variety of economic zones and industrial parks with an abundance of low priced labor. Vietnam will become the most attractive place for
India’s imports from Vietnam are largely dominated by com- companies that are looking for emerging markets. modities such as coal, pepper, rubber and cinnamon. Computer hardware parts, garments and textiles also figure among prominent items imported from Vietnam.
Both India and Vietnam have been working to strengthen their cultural ties as well. The Indian Council for Cultural Relations (ICCR) annually organizes the Cultural Exchange Program, signed between the Government of India and the Government of Vietnam for studying, training and research in
Personality in FocusMario Draghi KINNAR GALANI (PGDM-IB 2013-15)
H
e is the 9th most powerful personality
Mario Draghi brings a rich experience with him. He
in the world according to Forbes Power-
was previously appointed the Head of the Bank of
ful People list of 2013, is the most
Italy- the central bank of Italy. From 1984 to 1990,
popular name in the news since the European crisis
Mario was the Italian Executive Director at the World
and he is, none other than, Mario Draghi. Draghi is
Bank. During the tenure of 1991-2001, he was the
the 66 year old President of the European Central
Director General, Italian Treasury. He was also the
Bank. He succeeded Jean-Calude Trichet as the third
Vice Chairman of Goldman Sachs International from
Draghi is the 66 year old President of the E u ro pea n Ce n tra l Bank .He was also the Vice Chairman of Goldman Sachs International from 2002-2005.From 2006-2011, he headed the Financial Stability Board (FSB), an international organization that seeks to head off the risk from the global financial systems.
President of the European
2002-2005. From 2006-2011, he headed the Finan-
Central Bank on 1st November,
cial Stability Board (FSB), an international organiza-
2011, after being appointed
tion that seeks to head off the risk from the global
by the leaders of 17 eurozone
financial systems.
countries.
Mario has earned the nickname “Super Mario” for
He was born in Rome on 3rd
having navigated through the minefield of Italian poli-
September 1947, and com-
tics ingeniously.
pleted his graduation from La
The European Central Bank is the eurozone’s central
Sapienza University under the
bank which is responsible for the currency Euro and
supervision of Federico Caffé-
administrating the policies of 17 European Union
a notable economist. In the year 1996, he earned a
states which makes use of the Euro. The main objec-
PhD in economics from the renowned Massachusetts
tive of the ECB is to maintain the eurozone’s price
Institute of Technology, United States of America in
stability.
Economics with his thesis “Essays on Economic
In late 2009, the Eurozone was entering one of the
Growth” under the supervision of two other well
worst sovereign debt crises and the former President
known and Nobel Prize winner economists Franco
Jean-Claude Trichet had resisted strongly within the
Modigliani and Robert Solow.
European Central Bank to providing any contempla-
tion to Greece which had defaulted on its debt. Jean-
ing cost low. It also helped the government to finance
Claude Trichet had faced a serious criticism for the
themselves in the time of crisis. On 7th November
European Central Bank’s response towards the great
2013, Mario dropped the interest rates to a record
recession.
low to prevent rapid disinflation in the eurozone.
After the end of his term in October 2011, Mario had
However many economists argue that the OMT pro-
the herculean task of maintaining the financial unity
gram may have pacified the financial market but it
and stability across the seventeen European states.
will not help in meaningful recovery. The OMT pro-
In 2011, Mario took his first move by inundating the
gram has the potential to backfire and it may have
bank with cheap liquidity using a program called the
already backfired even though it is not used.
Long Term Refinancing Operation (LTRO) which
Mr. Draghi is credited for his efforts which have pre-
helped in stabilizing the banks and prevented the
vented the eurozone from collapsing and tearing off
seizing up of the inter-bank lending market.
from each other. However the uncertainty and latent
On 26th July 2012, Mario Draghi said at an investor’s
challenges in the measures implemented by ECB to
conference in London, “Within our mandate, the ECB
solve the problem of euro crisis will surely put his fire
is ready to do whatever it takes to preserve the
-fighting skills to real test.
euro”, he added “And believe me it will be enough.” In September 2012, he revealed his nuclear move of ECB would see buying unlimited quantities of shortterm sovereign bonds which would keep the borrow-
BITCOIN: Breaking Monetary Barriers MANU MANASWI & KUSHAL SUNEJA (PGDM IB 2013-15) Ever thought of a currency which defies all theories
key must be entered by the wallet owner to send Bit-
about money till date, which is neither regulated by
coins. New Bitcoins are created by an algorithm and
any country or central bank but by a cryptography
computing power is taken from all computers on the
algorithm, a currency which even doesn’t require your
Bitcoin network. The entire network is then used to
personal identity to transfer funds across borders and is acceptable irrespective of the country you are using it in. Welcome to the world of digital currency: Bitcoin. Bitcoin is an open source peer-to-peer electronic money and payment network introduced in 2008 by pseudonymous developer "Satoshi Nakamoto".
monitor and verify both the creation of new Bitcoins
Though nobody could ever trace him, the idea has
through mining and the transfer of Bitcoins between
$1.5 billion under circulation.
users. Each new transaction is broadcast across the
How does it work?
Bitcoin network and a log is maintained called block
Bitcoin is an open source peer-to-peer electronic money and payment network introduced in 2008 by pseudonymous developer "Satoshi Nakamoto". The system is based on cryptographic code which acts as money and can’t be replicated on the network
The system is based on
chain which is validated every 10 minutes. The sys-
cryptographic code which
tem thus makes it computationally nearly impossible
acts as money and can’t
to make any illicit transaction like using same code
be replicated on the net-
again or reversing the transaction after the seller has
work. As soon as you in-
dispatched the item. That is because having such
stall the Bitcoin app on
forged transactions validated and attached to the
your computer or mobile a
globally accepted block chain would require outpac-
wallet is generated. This
ing the network's combined computing power.
wallet has public address and private keys. Anyone
Confused..? J Well don’t worry; understanding the
can send Bitcoins to a wallet using the public address
technology behind is not our prime objective. Let’s
provided by the owner of the wallet, while the private
focus on what it’s bringing to trade.
search engine started accepting Bitcoins for some Recent news:
services offered by its subsidiary Jiasule.
World’s first Bitcoin ATM exceeds $1M in trans-
Observers believe that digital money will prove bene-
action volume within one month says “The
ficial to developing countries as it will provide a cur-
Guardian”
rency immune to manipulations done by powerful
Bitcoin tops $1,000 as Virtual Money Gains
central banks of the world. For example when a gov-
Popularity reports “Bloomberg”
Experts clash over crypto-currency reports “BBC news”.
How governments and markets are reacting? U.S. Senate Committee on Homeland Security and Governmental Affairs called a hearing on the risks and benefits of digital currencies such as Bitcoin on Nov 18, 2013. The point of concern for majority of stakeholders was that it is not in their interest to allow digital currency be an offshore industry. Their concern was due to the fact that currently none of world’s three big Bitcoin exchanges are in USA. BTC China alone constitutes for one third of world’s Bitcoin transactions where it has been a big success. United States has now understood that Bitcoin will grow either ways, with or without its investments and seems to be working on strategy to find its way through. In China, where government generally has tight regulation on internet and businesses, it has not stepped in to regulate Bitcoin. Instead CCTV and the newspaper “People’s Daily” both state run media houses ran positive reports on digital money last summers. In October, Baidu which runs China’s most popular
ernment bails out a failed bank or insurance company by printing more currency, it actually debases the currency as a whole in favor of a few which is actually the condition of world since 2007. Digital currency attracts since it is immune to all such nuances. Ernie Allen, the president and C.E.O. of International Centre for Missing and Exploited Children, said, “We believe that the digital economy can achieve social good, particularly in bringing about real financial inclusion for the 2.5 billion adults on the planet today without access to banks, credit cards, or the mainstream financial system.”
IBS@SIMSR Launches its New Logo SAYONI MAITRA (PGDM-IB 2013-15) & DIVYA MIDHA (PGDM 2013-15)
W
e at IBS@SIMSR believe in evolving with
cates our vision of transcending borders to understand the
the world and continuing to grow. This
forces that drive the world. These multi-dimensional driving
change in our logo, as a visible part of our
forces are represented by the surrounding, forward moving
steps towards rebranding, is
spokes. This forward move-
intended to align ourselves
ment symbolizes our consis-
with the idea of a more dy-
tent effort to enhance global
namic
sensitivity.
and
focused
'us'.
The new logo has come by
This logo is an interpretation
way of our attempts to lu-
of the very same objective
cidly visualize our ideology
which is at the heart of our
as a team driven to engage
committee, which is to act as
in constantly building stu-
an instrument for students
dents' domain knowledge in
to gain knowledge of the
the realm of international
global business environment
affairs while functioning as a
and connect them to busi-
connect between the stu-
nesses worldwide. It is with
dents and industry
experts, our guests and our alumni.
Dear readers, this is what the transformed 'us' stand for vis-Ă -vis the renewed logo. The new logo is a picture of the globe surrounded by forward rolling spokes. The globe indi-
great pleasure that we share this with you!
IBS@SIMSR Hosts Pangea 2013
1
Meenakshi Vyas (PGDM-RM 2013-15) 9th October, 2013 witnessed another successful
our honourable Director Dr. Satish Ailawadi and our es-
annual
conference
teemed guests. Introductory addresses were delivered by
PANGEA 2013 at SIMSR. Taking forward the pur-
Director Sir and Prof. C. P. Joshi, the Area Chairperson,
International
Business
pose of IBS@SIMSR to bring education and industry together to enrich the students through interaction with sen-
General Management and Program Coordinator for PGDM and PGDM-International Business. The event was graced by our most eminent speakers: Mr. Sunil Bahl (Vice Presiior and competent company executives, this flagship event
dent) - Sara Hong Kong Ltd, Mr. Rohit Pandya (General
brings various industry experts together on one platform to
Manager) - ECGC, Mr. Rishikesh Joshi (Head, Corporate Services) - L&T Infotech and Mr. Somashekhar (VP, Treasury and Forex Management) - AXIS Bank. They spoke on various interesting topics like Third Country Trading, Country Risk Mitigation, challenges in entering new markets and the latest developments in Treasury and Forex management worldwide. Students interacted with the industry panellists and discussed various other topics in a brief Q and A session. Finally the conference closed with the vote
address and interact with the SIMSR students.
of thanks given by our Faculty Mentor-IBS@SIMSR Prof C.
The event began as scheduled at 10:30 am in the Red
P. Joshi.
Auditorium of the Institute with lamp lighting ceremony by
IBS@SIMSR Celebrates its 4th Anniversary on 18th Nov 2013 DIVYA MIDHA (PGDM 2013-15)
O
ne ought to focus on ‘we’ and ‘us’ and
great event on our team’s 4 th anniversary on 18 th
not on ‘I’ and ‘me’ to be a person of
Nov, 2013.
worth in today’s world.
IBS@SIMSR thanks you all for gracing the occasion
“Vasudhaiv Kutumbakam”
and making it a success.
This has been the crux of wisdom from all our Vedas
The celebrations commenced with SIMSR prayer,
and scriptures and moral stories, probably since
followed by a welcome address by Prof. C P Joshi.
time immemorial, and no one could have explained
He cast light on the motto of IBS@SIMSR i.e. to com-
it better than our esteemed guest Mr. Prafulla
plement classroom learning through interaction with
Gupta.
international experts. Sir also talked about various
Friends! We are talking about the recently and suc-
events conducted by IBS@SIMSR over the last four
cessfully concluded 4 th Anniversary of IBS@SIMSR.
years and about our very own quarterly e-publication
With
e -
(From Left to Right) Dr Porus Olpadwala, Ms. Kanchi Daiya, Prof C.P.Joshi, Shri Sameer Somaiya and Mr Prafulla Gupta guidance of our mentor Professor C P Joshi, hard
GloBuzZ.
work of the team and pleasing presence of a lovely
We also had the privilege of having with us another
and lively audience, we were able to pull together a
esteemed guest Prof. Dr. Porus Olpadwala.
Mr. Prafulla Gupta, who has over 40 years of inter-
Cornell University, Ithaca, New York answered que-
national experience and has worked in more than
ries of students related to higher studies abroad.
40 countries in diverse sectors like Management
Ms. Kanchi Daiya, Manager, New Initiatives at
Consulting, FMCG, Banking, Petrochemicals & Phar-
Somaiya Vidyavihar also graced the occasion.
maceuticals, enlightened us with the lessons of life.
This very interactive session ended with a vote of
He was Senior Partner at Booz, Allen & Hamilton,
thanks by Prof. C P Joshi.
USA.
As our Director Prof. Dr. S C Ailawadi said in his in-
He emphasized on judgment skills, power of expres-
augural address at PANGEA 2013 on 19 Oct, 2013,
sion, ability to build institutions, leadership capabil-
“IBS@SIMSR has achieved many milestones and
ity, strength of character and ability to take deci-
many are yet to be achieved�.
sions to be the keys to success for aspiring manag-
We are confident of achieving new challenging mile-
ers today.
stones with your continued support.
Prof. Dr. Olpadwala, who is on the Academic Board of Somaiya Vidyavihar and is Dean Emeritus of College of Architecture, Art & Planning, Professor Emeritus Department of City & Regional Planning -
Did You Know While the global agency, the United Nations has 193 members, the behemoth global beverage giant Coca Cola is sold in 205 nations. Now Cuba and North Korea are the only two countries where Coke is not sold.
Fora nys ugge s t i onsc ont a c tusa t i bs . s i ms r @s oma i ya. e du K. J . Soma i yaI ns t i t ut eOfMa na ge me ntSt udi e sa ndRe s e a r c h Soma i yaVi dya vi ha r , Vi dya vi ha r (E) Mumba i