Monday, September 29, 2008

Health scheme has to meet its objective

Raghu argues that if the grandoise health scheme has to meet its objective of reaching out to 5,70,000-odd villages across the country, and provide better health care facilities to the poor, the various healthcare services need to be rendered free. At present, the cost differential between home deliveries and institutional ones – Rs.200 compared to Rs.2000, respectively) – is too high, and this is a prime reason for the decline in institutional deliveries. There is a need to optimally utilise the resources.

Lack of medical staff is an issue. Despite an increase in OPDs, the employee strength in Nagrota remains the same, 153. In the absence of adequate number of specialists, the problems relating to implementation are heightened. The same is true for other FRUs; there are no general surgeon posted in many places, and several patients are refused because of a lack of specialists.

H. Dhiman, a gynaecologist at Dera Civil Hospital, agrees: “We do not have doctors; there are only 9 in Kangra district.” According to him, NRHM is a failure. Too much money has been spent with too little returns, and there is fight between quality and quantity. “Consider the case of Palampur, where there are 14 specialists and patients go there primarily because of the services they provide. If we have adequate number of specialists, we too can provide the needed services. The programme is successful in Khundiyan and Samot because of local donations. If you provide adequate services, people donate.” But then how does he explain the success of Nagrota? “If you have people like Raghu and Kulbhushan Sood (Head, Dera), success is assured.”

Pravin Sharma (MLA, Palampur), too is aware of the deficits of the scheme. He explains, “First of all, the current centres, sub centres, PHCs, and FRUs should have adequate facilities and specialists, and then only the new ones should come up.” The reach of the programme is still inadequate and, according to Kuldeep Guleria, a local journalist, “the media has played an active role to promote the scheme, but remote areas still face the same old problem. The programme is active when there is political pressure.”

In the end, it’s always the political will at both the central and state levels that matters. Only a change in attitude among the Indian policy makers can provide health for all Indians.
The Snapshot

In 2007-08, Rs.475,000 was allocated for the purpose in Nagrota; of this, Rs.298,000 has already been utilised this fiscal

In Himachal Pradesh, the number of girl children for every 1,000 male children went up from 815 in 2006 to 846 in 2007; the number of OPDs on an annualised basis doubled

Administrators take suggestions from staff and patients in a bid to improve health services; the concept of quality circles is catching up

The Problems

The number of institutional child deliveries has come down from 0.52 lakh in 2005-06 to 0.49 lakh in the next year

Lack of medical staff is an issue; in many cases, there are no general surgeons to treat the patients

Too much money is being spent under the scheme to get too little returns; there is a constant fight between quantity and quality

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Thursday, September 25, 2008

Changing its spots

It’s greenfield for now, but Mittal could always revert to Plan B

Ironically, while his Indian origin was quite overhyped during the Arcelor acquisition talks, steel tycoon Lakshmi Mittal has taken quite a while to develop a serious India focussed business strategy. But that is now changing fast.

On February 7, 2008, Arcelor-Mittal joined hands with Shivalik Bimetal and Germany based DNick to set up a metal cladding plant in India to tap opportunities present across the globe. Exactly four days after this agreement was announced, Arcelor-Mittal received provisional approval to acquire close to 7,700 acres of land from Orissa Government to set up the plant’s first leg.

Earlier, in 2006, Mittal had announced setting up a 24 MMTPA greenfield capacity in India, with 12 MMTPA each in Jharkhand & Orissa with total investment of $20 billion. Ashok Jainani, Head of Research, KSL India, says, “Setting up a steel plant requires all the patience, energy one has. There are many sensitive issues like environment, policy et al to be addressed cautiously.”

The question is why is Mittal not planning inorganic growth in India, which has been his preferred route? Arcelor-Mittal has a three point growth charter, aim for product diversification; acquire assets, which add up to the value chain and expand in more and more geographies. Sudhir Maheshwari, EVP Finance & M&A Head, Arcelor-Mittal, told B&E, “Consolidation will continue to form core part of our strategy. But India is a different ball game. It offers huge raw material resources unlike other geographies. Going greenfield in India makes more sense at the moment...” But that could be an eventuality, as per experts. After all, in China, L. N. Mittal slowly & steadily constructed his empire around Hunan Valin. Aditya Mittal, CFO, Arcelor-Mittal revealed to B&E, “We are not really following two different strategies. It is one strategy; expansion in key markets. India is currently about greenfield…” So while the company is not revealing its cards yet, it has rightfully kept its options wide open.
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Wednesday, September 24, 2008

Multi-problem solver

Reflects the country’s policy objectives and abilities
Change is the only constant phenomenon in life! If you thought this is the most boring cliche you’ve ever heard, it just seems that our government perhaps has never even heard about it, what with their focus never fully understanding the dynamic changes that developing economies undergo. One reason why multi-year budgeting is perhaps the doctor’s order of the day for us!

Countries like Australia, Austria, New Zealand, the United States, Germany and Great Britain are all picking up the threads of multi-year budgeting, which is in vogue today. And why not, especially as it spells out the means to correct fiscal problems, to estimate fiscal upshots under alternative economic conditions, to provide for a stable and consistent budget and to involve different ministries during the process. A variant of this approach is the Medium Term Expenditure Framework. Multi-year Budgeting is also called Forward Budget, Expenditure Review, Forward Estimates and by other nomenclatures in different countries, and it also has plenty of methodologies, which could be prudent to developing countries like India. This newfound approach could be a worthy fiscal policy and management tool, and could reflect the country’s policy objectives and administrative abilities as it also involves the line ministries in the budget process.

Although the usage of Multi-year Budgeting is on the rise, one can still not gloss over the fineprints of its shortcomings. For instance, the inclination towards over-estimation of economic growth and resources available during the forecast period and also probability of spending agencies to view the forecasted expenditure as an entitlement are aspects which governments have to bear in mind while going about implementing this technique. But in spite of these, Multi-year Budgeting is surely a great way to get an economy into a proper perspective.

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Tuesday, September 23, 2008

Just what was needed - some good news!

A scrutiny into the polls conducted by US reveals quite disturbing realities
The U.S. occupying army in Iraq (euphemistically called the Multi-National Force-Iraq) carries out extensive studies of popular attitudes. Its December 2007 report of a study of focus groups was uncharacteristically upbeat. The survey found that a sense of “optimistic possibility permeated all focus groups ... and far more commonalities than differences are found among these seemingly diverse groups of Iraqis.”

This is “good news, as per a military analysis of the results,” Karen deYoung reports in The Washington Post. The “shared beliefs” were identified in the report. To quote deYoung, “Iraqis of all sectarian and ethnic groups believe US military invasion is the primary root of violent differences among them, and see departure of ‘occupying forces’ as the key to national reconciliation.” Also, Iraqis seem to accept the highest values of Americans, as established by Nuremberg Tribunal – that aggression – “invasion by its armed forces” by one state “of the territory of another state” – is “the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole.”

More good news was reported by Gen. David Petraeus and Ambassador to Iraq Ryan Crocker during the extravaganza staged on Sept. 11, 2007. They provided figures to show that the Iraqi government was greatly accelerating spending on reconstruction, reaching a quarter of the funding set aside for that purpose. But the Government Accountability Office found that the actual figure was one-sixth of the reported, a 50% decline from the preceding year. More good news is decline in sectarian violence, attributable in part to success of the murderous ethnic cleansing that Iraqis blame on the invasion; there are fewer targets for sectarian killing. But it is also attributable to Washington’s decision to support tribal groups that had organized to drive out Iraqi al-Qaida, and to an increase in US troops.

Iraqis are not alone. A Canadian-run poll found that Afghans are hopeful about the future and favor the presence of Canadian and other foreign troops. The small print suggests that only 20% “think the Taliban will prevail once foreign troops leave.” Three-quarters support negotiations between the US-backed Karzai government & Taliban, and over half favour a coalition government.

Recent polls in Pakistan also provide “good news” for Washington. Fully 5% favour allowing US or other foreign troops to enter Pakistan “to pursue or capture al-Qaida fighters.” Some 9% favour allowing US forces “to pursue and capture Taliban insurgents who have crossed over from Afghanistan.” Almost half favour allowing Pakistani troops to do so. Only a little over 80% regard US military presence in Asia and Afghanistan as a threat to Pakistan, & an overwhelming majority believe US is trying to harm the Islamic world. The good news is it’s a major improvement over October 2001, when a Newsweek poll found that “83% of Pakistanis surveyed say they side with the Taliban, with a mere 3% expressing support for the US,” over 80% described Osama bin Laden as a guerrilla & 6% a terrorist.

Amid the outpouring of good news from across the region, there is now much earnest debate among political candidates, government officials and commentators concerning the options available to the US in Iraq. One voice is consistently missing: that of Iraqis. Their “shared beliefs” are well known, as in the past. But they cannot be permitted to choose their own path any more than young children can. Only the conquerors have that right. Perhaps here too there are some lessons about the “clash of civilizations.”

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Monday, September 22, 2008

Bulls & bears in the year of the rat!

As China begins to taste the ups & downs in the markets, its appetitive for taking risks and aligning itself with global speculators will only increase in the near future
Snowstorm, subprime-blows and dollar-hurricane, all seem to be acting in tandem to pull down Shanghai Stock Exchange from maintaining the bull run. The rather laid-back Chinese markets, which had hardly seen much activity during 2000-2005 (the index had stuck to 1,000 mark, despite strong economic fundamentals), had suddenly caught on with the global financial trends in the past two years – registering an all time high of 5,500. But the first month of 2008, caught the bull by the horns, paving way for the bears to pierce the bubble, based on over-valuations and high rate of speculations seen in the Chinese markets. According to experts, the Chinese shares before the current fall was trading at “price-to-earning ratios of 50 and forward ratios of 40.”

Now, the Chinese investor is certainly not very familiar with these bulls & bears parlance. It is only in 1994 that the bourses first opened in the communist mainland and it is for the first time that China is experiencing a market meltdown. “The typical Chinese household still has over 70% of its savings in bank deposits, compared with 30% in Japan, less than 25% in Europe & less than 20% in the US. Even India, whose per-capita income is less than half that of China’s, the average household has only 40% of its savings in banks, the rest in bonds and equities,” says Steven Xu, Chief Representative, China, with the Economist Group. However, despite the melt-down in the markets, “the outlook on the Chinese mainland banking system remains stable rather than positive as continued strong economic growth is counterbalanced by the structural problems faced by the banking sector,” Standard & Poor’s informed B&E.

The million dollar question obviously is, will Chinese Government intervene to boost dwindling morale of its retail investors and ensure that they have full domestic backing for hosting Olympic Games? Apart from maintaining optimum pollution levels, the Chinese Government is already grappling with the snowstorm, the worst in past 50 years.

The stock markets have already made the contingency plans ready to meet the eventuality of worsening weather and eventual power blackouts. It is reported that Shanghai Stock Exchange has a 30-tonne oil store – enough to supply power for one week. China will soon learn to grapple with the busts & boon in the markets. It will have to soon imbibe that it cannot remain de-coupled from the global economy for too long.

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Saturday, September 20, 2008

Bullets on the way to ballots

The post-poll violence in Kenya is nothing but pure political greed
It seems ice has finally started to melt in Nairobi. After unsuccessful attempts by Kofi Annan, former UN Secretary General & African Union Chairman, John Kufuor, to broker peace, EU Commissioner Louis Michel has finally persuaded President Kibaki to meet Orange Democratic Movement (ODM) leader, Raila Odinga, soon. The high profile delegation also announced that it would await the outcome of dialogue between President Kibaki & the ODM leader before deciding its future course of action. Meanwhile, Michel said as a friend of Kenya, the European Union (EU) was optimistic that the present political state of affairs would be resolved through political dialogue. Meanwhile, Peter Anyang Nyong’o, ODM Secretary General said that ODM & its partisans would continue their peaceful passive resistance until the Kibaki Government shows that it wants dialogue to resolve the crisis. He also accused Kenyan police of killing many demonstrators in several cities by using live ammunition.

Reacting to the present state of affairs in Kenya, noted Kenyan expert, Jacqueline M. Klopp, School of International and Public Affairs, Columbia University told B&E, “All these advocates of violence have lived with complete impunity. They have learned that they could preach hate, organise youth to kill & displace, and be rewarded with a cabinet post. They could get rid of voters who were unlikely to support them. They could use violence for bargaining power at the national level.” The violence has mottled Kenya’s reflection as a stable nation in a disturbed region, diluted its democratic credentials and exposed the fundamental tribal outlook behind its politics.

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Tuesday, September 16, 2008

Who will witness s(elections)?

World may not witness a major transformation in 2008
Election has always been crucial for the future of any nation. Though 2008 is a crucial year because there is election in most of world powers or dominating countries but estimations show that there will hardly be any major change in their leadership. Ramifications of elections in major countries may remain skeptic and theatrics.

Inspite of much hue and cry, election in the US will be worth watching closely. The US election seems to be more of a race between many bright leaders than two political parties. And in rest of the countries, it will be selection, rather than election. Russia, Zimbabwe, Cuba are also going to have presidential elections in 2008. Putin might replace himself with a new face but leadership will remain with him. Castro is thinking of retirement but he or his legacy will remain to dictate Cuba’s destiny. President Robert Mugabe remains irreplaceable since 1980s. And election in Pakistan is never 100% election. It always waits for resurrection. Whatever the outcome, Musharraf will remain the strongman backed by influential military. In other countries going to polls, there will be a minor leadership change in Egypt, Syria, North Korea, Turkmenistan, Zimbabwe, Belarus, Venezuela, Kazakhstan, Uzbekistan and Tajikistan.

In the era when democracy proves to be the only major recipe for success over other political ideologies and seems to be the only solution for human rights, equality, corruption, and tool for any other way of socio-economic upliftment, the year might not witness a major transformation from the prevailing status. Future of many countries remains in the hands of few individuals. Where the solution lies then? Perhaps, an alien can answer this than a conscientious person…

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Tuesday, September 02, 2008

Raise a toast to the scientific edge

There isn’t much about new CEO John Lechleiter to enthuse the markets about Eli Lilly at present, but this diligent scientist may well prove more than a handful for competition

When John Lechleiter joined Eli Lilly and Co. 29 years back as a Senior Organic Chemist, little did he know that he would reach this far. Thirty seven years hence, Lechleiter has been appointed as President and Chief Executive Officer of the company, replacing Sidney Taurel, the current Chief Executive. Lechleiter will assume office from April 1, 2008. As Lechleiter recently said to Forbes, “Who would’ve thought that a kid who joined the company in 1979 as an organic chemist, wearing his whites, would be standing here today?” Taurel passed the baton to Lechleiter at a time when the company, in the last six years, has incurred losses amounting to $6.8 billion in sales to generic competition.

Chief Executives normally have a flair for financial numbers, but this guy is different, for his core competence is science. Label it as a trendsetting expedience or a step well thought of by the company, fact is that in an era where the top slot has invariably been occupied by sales & marketing executives, the appointment of a scientist can be truly considered as an epoch in the pharmaceutical industry. Undoubtedly, Lechleiter’s scientific expertise should provide Eli Lilly an edge over other drug making companies especially in the R&D. Buoyed by the announcement on December 18, the company’s stock price rose slightly to reach 53.49 cents (trading at 56.06 cents currently on January 8).

A native of Louisville, Ky., Lechleiter is a recipient of a Ph.D. in organic chemistry from Harvard. In 1986, he was made the manager of research and development projects for Europe. In 1993, he became the V.P. of pharmaceutical product development. Lechleiter was appointed senior V.P. of pharmaceutical products in 1998. He became the executive V.P. of pharmaceutical operations in early 2004. Lechleiter is a member of American Chemical Society. He is also at present serving on the Visiting Committee of Harvard Business School.


Undoubtedly, Lechleiter has climbed the top of the ladder ostensibly by his skills and knowledge. But there is no denying the fact that he lacks the global experience and multi-lingual skills of Taurel. Taurel stated on the change, “John has been preparing for his new role as my successor for several years.” An elated Lechleiter proclaimed, “We will stand firm by the timeless values laid down by our founders, yet act decisively to maintain our strong competitive position.”

Given his role and responsibility, the first thing that tops his list of agendas is to replace some of its best selling drugs, slated to lose their patents over the next few years. Eli Lilly & Co. has always been passionately focussed on R&D. With $15.6 billion sales in 2006 (less than a third of industry leader Pfizer with $48.3 billion), yet its R&D expenditure for the fiscal year 2006 was close to 20% of revenues (Pfizer spent 15.7%). And indeed, the investments may bear fruit as the drug maker is all set to introduce as many as six new drugs by 2011, at the same time when its top selling drugs, Zyprexa and Cymbalta lose their patents.

Managing short term expectations & long term growth objectives will continue to be his most compelling challenge. But with a clear road map, one could well expect Lechleiter to make it a smooth ride for Eli Lilly stakeholders, who sorely miss the good old days when Eli Lilly’s stock was trading at above 100 cents levels.
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