Saturday 8 February 2014

Simple Math of FDI in Retail - numbers - is there falsehood or half-truths?

1. Claim that FDI in Retail will increase jobs.
1a. If that is true, then more people will have to take a cut of the Retail Pie. So, is that good for everyone in retail business? Won't they all have to take a cut in pay for the same 'consumption levels'?

1b. The presence of foreign brands will then have to increase the consumption - that is the only way to add jobs and also keep salary levels of retail business (if not increase the prosperity of those in this business). How will the presence of FDI suddenly increase consumption? Will people magically have more money to spend?

2. So why are they not talking about loss of many other jobs?
2a. More jobs have to be lost in order for the same consumption to support the new jobs, and also the profits that the foreigners are coming in, to take out. Isn't that true?

2b. So, if foreigners pump in money, they need to take out profits, that is over and above what is paid to the new jobs and people in retail business. So, if consumption is same wouldn't it reduce the income levels & also cause job losses?

3. FDI will increase efficiency and reduce costs to consumers.
3a. So, if cost to consumer is reduced, then that means less total money for the jobs, isn't it? Same consumption level means more loss of jobs & lower incomes.

3b. If cost is reduced and more jobs are made, then consumption has to be at phenomenal levels to really make it true - simple maths, isn't it?

In Summary:We the consumers in our infinite wisdom and selfishness should sacrifice the many jobs in retail, increase our spending much more and kill many jobs, so that we can get capital as well as send more profits to a foreign country.

NOTE: This has not taken into consideration other complicated points like taking our resources, making things with our people, causing environmental problems here (as we are at fault to not enforce these things) and take a profit out of our own spending!

Thursday 23 January 2014

No longer nuts about coconuts? Rupees 3000 per 100 ml soon...


About a year or two ago there was a sudden jump in price of Tender Coconut (from usual Rs. 10 to Rs. 25). I wondered why and how this happened. Now, I think there could be a long drawn man-made problem here within India. Here are some seemingly disparate points that may be leading to this and lead to worse things in future...

1. Systematic brainwashing of Indians that the oils we use are causing health problems - including coconut oil, sesame oil and groundnut oil.
2. Pushing oils based on what the foreigners can grow in their areas - like Sunflower & Olives.
3. Pushing "seemingly" better methods for maintaining hair. They are pushing chemicals, sprays, gels, etc.
4. Naturally a reduction in demand for Coconut oil.
5. Next step reduction in demand for Coconut.

Intentionally killed - right adjacent to really good coconut farms near the National Highways, Tamilnadu



6. Real-estate demand going higher and higher in value as it is pushed up due to a variety of factors - black-money, Foreign investment in real-estate, more NRIs investing in Indian real-estate bubble.
7. Agriculturists turning to intentionally destroying coconut farms to convert them for commercial purposes - schools, colleges, big community housing, or just cut into plots & sell by projecting more growth in real estate prices.
8. Even though laws are supposed to be in place for prevention of such mis-use of agricultural lands, there are enough people hand-in-glove (plus using loop-holes of demonstrating dying trees) to make these commercial switches.
9. Demand for tender coconut has not reduced much, even though demand for the oil has reduced a lot. Hence price for tender coconut has shot up a lot.


Closer view of the farm
What is expected in future? As I saw on my visit to Kodaikanal by road - along many places in the drive up and down, including river delta areas - more coconut farms are being let to rot, or intentionally killed for other uses.

It is going to make coconut oil (I still feel it is good when used in appropriate ways and in moderation - as was done 30-40 years ago or earlier) as well as tender coconut costly in coming years.

We should not be surprised if someone announces in 2025 "Coconut oil from Africa is best balm for wounds, hair, etc. Please buy at Rs. 3000 per 100ml" OR if another company patents coconut and its properties in America / Europe while anyway importing it from Central America / Africa!