T for Tea..

I had a very interesting experience with a Chinese customer recently in Africa during a business trip. He hosted us in his office and like any other meeting we went ahead to sit around his desk. Instead, he guided us to a seating area with an elaborate arrangement for making fresh green tea (nothing short of a mini kitchen).

Once seated, he proceeded to boil the serving cups in a pot while preparing a boiling water pot, fresh green tea leaves in a strainer pot and separate serving bowls. The discussion started over how they have been performing in the region, the durability of our products, while he was busy with his preparation.

Through out the one hour long exchange of ideas and exploring the future of African market, he diligently made sure our cup was never more than half empty and us being four people, that was quite a lot of personal attention from one individual.

A few lessons I took away from this remarkable culture of hosting :

T for Tolerance : While sipping from a small cup of tea, it is not easy to get excited and be dramatic all the time focusing on the fact that you cannot physically spill the tea. It invariably guides you to be calm, receptive and ensure you never end  flaring up or make a sudden gesture to drive a point. It comes off at the end giving a very positive image of patience being the norm of the discussion.

E for Energy : The slow sipping of the tea gives you time to think, to distract one self from letting the brawn take over the brain emotionally, gives you the energy to focus on how to react. More often than not, when a conversation heads south, we tend to become defensive by instinct but the warm tea ensures that your balance is not lost in words. With a touch of positivity, you are able to focus at your strong points rather than the weaker links of the conversation.

A for Ambience : The gesture of getting your cup filled with fresh tea by the host every five minutes ensures that the exchange of respect is being carried from one to another along with the flow of the green tea. If any inhibitions or points of contention do arise, with the small act of giving breaking up the build up of any walls, it sets a stage of acceptance of different views and respect for the time being spent for the discussion.

Next time you want a productive conversation guaranteed and make your guest feel inspired enough to remember you, serve them with your best tea!

SWF - A distant mirage for India

SWF - Sovereign Wealth Funds are the unsung resilient survivors of the economic adversity witnessed by the world over the past two years. Once viewed suspiciously as conspicuous tools of the Middle East Arabs to bolster their private wealth, it turned out to be the only conglomerate of riches which did not diminish under the knife of recession. But not for all. The same story went way out of line for Abu Dhabi and a few others. The secret lied in the diversity of investments made.

Saudi Arabia made the hay while the sun shone because of its very safe approach of not being exposed to risky ventures whereas Abu Dhabi played the all gun blazing act. And the results are apparent. With Dubai World in tatters and the world markets still grappling with the situation, the word "CREDIT" is going to raise some bad memories for a long time.

A startling fact is the performance of China in all this fiasco. Now this should be of particular interest especially for India because a "How to be a super stable world power" book is being written in the backyard of India by the Chinese. Indian prowess on the stability front is always justified by the foreign reserves it holds.

But the Chinese realized the sustainability power of a SWF long time back and is way ahead of the Asian pack in that race, something which India should seriously consider as an alternative to foreign reserves. A glance at the above chart reflects where India stands at this front since its needless to say, foreign reserves still pose a risk. If for instance, the world recession deepens and say the foreign reserve being held in terms of payments pending from the USA or Europe begin to be faltered, the injuries would come fast and steadily on the Indian economy. Whereas a SWF, clearly remains safe, with constant earnings from the diverse funds it invests in, ensuring a clear way for wealth to continue in the bleakest of times.

Setting aside pools of money earned from the country's reserves is the future step to be taken by India. Usually the funding for a sovereign wealth fund comes from the central bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources. What is apparent is that the types of acceptable investments included in each SWF vary from country to country; countries with liquidity concerns limit investments to only very liquid public debt instruments.

Another story to be learnt is the way SAMA ( Saudi Arabian Monetary Authority) has done a commendable role by smartly investing the surplus cash from the starry days of 2002 -2007 of high earnings through the petrodollar. It did not splurge the excessive earnings by way of construction of dreamlands ( palm-islands in Dubai to be specific) or invest in risky ventures. It concentrated on bolstering its economy via focus on improving education, healthcare and public infrastructure thereby creating a multitude of jobs with the payments guaranteed till 2018 ! This caused the Saudi economy to ride through the bumpy ride of recession smoothly.

What needs to be seen is the twist the Indian success story takes. A few surprises, tougher approach and dexterity for getting things on the implementation cycle is the kind of mix which could still keep India competitive enough to earn respect as the future sustainable economic powerhouse. As the Indian Bollywood mantra goes, its best to ape a bestseller Hollywood movie rather than take the risk of being an original drag !

Earn and spend, no credit !!

"Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."

-- George Washington

(1732-1799) Founding Father, 1st US President, 'Father of the Country'
Source: in letter to J. Bowen, Rhode Island, Jan. 9, 1787

Nothing more aptly sums up the world situation we are in today than the above quote by the Founding Father of USA himself. If at all its to be compared between what the current trend has become to what it used to be, a startling habit, which was looked down upon in a previous time has become the sinking force responsible for costing people there livelihood - CREDIT.

In the small rural villages of India, far away from the dogmatics of the big world , a villager keeps an account with the local cigarette stall, a weekly tab on how many beedis he puffs away and repays at the week end. If at all he fails to repay, his supply of smoking pleasure stops there immediately.

Getting a loan in India, for the common man is still not an easy process. Job guarantee certificate to an independent assesment of your valuable holdings is done thoroughly even for the minimal amounts. And by luck or the stringent guidelines set down by the basic banking system of India, the credit story is at a far cry from there counterparts in the USA or Europe.

This has resulted in the principle of having a control on the amount spent by the average Indian to a large extent. With no credit guarantees and no other way to fulfill every desire, the age old rule of spending according to what your worth in terms of bank balance is, still prevails. Had that moment come wherein every Indian could walk away with a house which he couldn't afford, drove a car way out of his affordable range, then we would have been witnessing the same economic collapse which is being witnessed by those who had it easy for themselves.

As simple as it may sound, spend what you earn, don't go beyond your means for the easy way out - AVOID CREDIT IN EVERY WAY!