January 30, 2006

FAA's Mr_ Chew Tackles High Costs, Chronic Lateness

Air-Traffic Chief Struggles
To Negotiate Capitol Hill;
A Job Nobody Wanted
Union Writes a Bitter Letter
January 30, 2006; Page A1

WASHINGTON -- Russell Chew sat on an early-morning plane to Texas staring out the window at nearby snow banks. His plane, already 45 minutes late in leaving, needed to be de-iced.

For Mr. Chew, a dentist turned pilot who now runs the nation's air traffic control system, the delay was more than an inconvenience: It was a source of professional frustration. Glancing at his watch, he fretted that his plane's late departure would ripple through the congested system all day. "This is why it's impossible to run on time when it snows," he said.

Mr. Chew can't control the weather, but it's his job to deal with it -- along with an array of man-made problems plaguing the Federal Aviation Administration's overburdened air traffic control system. A former top executive at American Airlines, Mr. Chew, 53 years old, was tapped two and a half years ago to bring business principles and discipline to a sprawling operation dogged by cost overruns and outdated technology.

The FAA, created in 1958, oversees air safety, inspects airplanes and aids airports. But its biggest job is running the air traffic control system, a nationwide network of navigation aids, computers and 36,000 employees who guide 34,000 aircraft carrying 2.2 million travelers from one airport to another every day.

In 2000, amid growing frustration over flight delays, the Clinton administration proposed privatizing air traffic control. Rejecting that approach, Congress instead created a semiautonomous unit within the FAA, called the Air Traffic Organization, to be headed by a chief operating officer. The job was considered so thankless that it went begging for three years until Mr. Chew finally agreed to take it.

The former corporate insider found an operation with a host of challenges. The agency had no good way to track its costs. Billions of dollars had been wasted over the previous two decades on technology upgrades that often didn't work. Gridlock loomed as air travel grew ever more popular.

Since taking the job, Mr. Chew can point to several successes. He has overhauled the FAA's accounting system to more closely track costs and saved money by eliminating middle managers and closing offices. He has won respect for his mastery of the system's nuts and bolts.

But as a numbers man in a political and bureaucratic world, he has been frustrated as well. Congress has blunted his cost-cutting efforts by ordering spending on projects the FAA considers low-priority, such as a $3 million volcano-monitoring system in Hawaii. Even Mr. Chew's boss says he needs to get better at schmoozing Washington's power brokers to achieve savings.

Meanwhile, relations with the union of air-traffic controllers have hit one of the lowest points since 1981, when President Ronald Reagan fired striking controllers. The union's chief has branded Mr. Chew a failure.

Still ahead is perhaps the biggest challenge of all: updating the system under which controllers monitor planes in the air via tracking beacons on the ground. Mr. Chew and the FAA want to switch to satellite-based tracking but must persuade Congress to greenlight the multibillion-dollar program.

When Mr. Chew was at American Airlines, he expressed doubt that the FAA could ever be successfully overhauled. "The agency suffers from structural problems that even the best management team in the world would have difficulty fixing," he told Congress in 1999. "Little did I know," he says today, "that I would be here, trying to deal with it."

Mr. Chew grew up in Thousand Oaks, Calif., the grandson of Chinese immigrants. His father, a dentist, pressured him to choose a stable career and Mr. Chew followed him into dentistry. But he took up flying, ferrying freight and celebrities on weekends, and eventually decided to pursue his passion for aviation full time.

His love for flight is matched by a fascination with logistics. Years ago, when he visited Disney World with his wife Jill, he marveled at the shuttle-bus system that carried visitors around the park. "Wouldn't it be fun to visit Disney operations," he remembers saying. "You're nuts!" she replied.

About Russell Chew:
Born: Jan. 18, 1953
Education: Stanford University, 1970-73; dentistry degree, University of Southern California, 1978
Career highlights: American Airlines, 1985-2003; Federal Aviation Administration, 2003-present
Hobbies: Folk guitar, ragtime piano, bluegrass banjo, film, astronomy
Advice for getting to destination on time: Take the first plane of the day -- before the system has a chance to clog up.
On staying calm: "It's a real conscious effort on my part. No matter how bad the traffic gets, no one in the public wants to see a hysterical FAA guy."

In 1985, Mr. Chew joined American Airlines as a pilot. After flying for a few years, he did so well on a training test that he was tapped to help run the pilot-testing program. He rose quickly through management ranks to become chief of operations where he had a bird's-eye view of the aviation system's troubles. His duties included rerouting flights delayed by bad weather and tackling congestion.

Early on, he realized that airlines needed efficient air-traffic control at the FAA if they wanted planes to arrive on time and an ability to add more flights. Yet industry officials saw the FAA merely as a passive provider of services rather than as a partner. Agency employees, for their part, knew the airlines didn't have any alternative to dealing with the FAA -- and acted that way, Mr. Chew and others say.

In 2003, Mr. Chew, with some trepidation, took the chief operating job at the Air Traffic Organization. He took a salary cut (the job paid him $174,000 last year). He says he was motivated by a sense of public service. "I was thinking my company and no company had a future unless we fix this," he says.

He began by putting in place practices that are commonplace in the corporate world. He ordered the agency's first inventory of equipment and eliminated a dozen mid-level management jobs, saying there were too many deputies for anyone to feel accountable. He began weekly meetings with top managers to try to instill a sense of shared purpose. "In business, if one element of the company does poorly, everyone suffers," he says. In government, "if one does poorly, the other says, 'I did my job.' "

A few months into the job, Mr. Chew was dismayed to learn that a new computer display system for controllers was set to be deployed to more than 160 sites at a cost of $3 billion. Terry Bristol, who runs the program, says the attitude at the FAA was "you don't just put it at one location, you put it at every location." But after Mr. Chew objected, Ms. Bristol's team deployed the equipment to just 47 sites, saving $1.5 billion.

Constant Concern

On-time performance is another constant concern. Mr. Chew begins each day with a 7:30 a.m. operations call where he and his top managers review a spreadsheet showing how many planes were delayed or cancelled the previous day and what caused the problems. The FAA never had this rich source of data, Mr. Chew says, until he insisted on measuring everything. Now, he says proudly, "all the metrics fill up our scorecard." To reduce hours-long delays at airports from bad weather, Mr. Chew devised a system that spread the pain. Airplanes destined for the troubled city are now held at their home airports, even if the weather there is good, to relieve pressure on the affected area.

The cost-accounting system Mr. Chew developed told the FAA for the first time how much it costs to handle a single airplane or install a piece of technology. The new accounting showed it cost $457 to handle one jet on one flight in 2003. Mr. Chew's cost cuts helped bring that down to $440 the next year, the FAA says.

Proving that the FAA can spend its budget wisely is critical to getting Congress to sign off on the satellite-based air traffic control system. Land-based beacons are unable to pinpoint a plane's location with complete accuracy. To avoid midair collisions, controllers have to allow extra space between planes in case the beacon data are slightly off. A network of satellites would allow more planes to fly at once and make it easier to handle the projected 25% increase in air traffic over the next decade.

Some FAA managers are pleased by Mr. Chew's efficiency drive. Barbara Cogliandro, an air traffic manager at a facility in Vint Hill, Va., knows for the first time the cost of operating her facility, which she says was $42 million in 2004. And she now knows the price of "strips" -- paper forms carrying key data for a given flight that get passed from one controller to the next. A box of 13,000 strips costs $134.

"Before I'd call and say, 'I need strips,' and the people at the regional office would say, 'OK, we'll send you 100,000 strips,' " says Ms. Cogliandro.

But Mr. Chew also faces resistance. He isn't the first outsider to show up at the FAA with a plan for change. Agency employees "feel if they don't like something, they can simply wait it out," says Norm Fujisaki, who retired last year after three decades with the agency.

More than two years ago, Mr. Chew hatched a plan to consolidate nine regional offices into three, saving up to $460 million over 10 years. Some FAA officials who work outside of Mr. Chew's unit appealed to FAA Administrator Marion Blakey to block the plan. The consolidation was finally announced last month but hasn't yet been implemented. Many FAA employees "see any kind of change as very threatening," says Ms. Blakey.

Other battles are on the horizon. The FAA has 43 centers that handle air traffic when planes are outside the immediate vicinity of an airport. The Government Accountability Office, the congressional watchdog group, and others have said the FAA could save money and operate more efficiently by slashing the number of centers. But lawmakers are sure to fight the closing of facilities in their districts.

Pushing through the change will require political savvy, which Mr. Chew, by many accounts, has in short supply. "To be successful as an executive over any significant part of government, you're going to have to be able to operate in a politically strategic way," says Ms. Blakey, who hired Mr. Chew. "It may be fair to say he's still learning that."

A Hard Lesson

He got a hard lesson in the politics of closing facilities when the FAA proposed consolidating and contracting out flight service stations. These small offices give private pilots in small planes weather information and a place to file their flight plans. These pilots supported the plan, which promised to save $2 billion over a decade. But because it eliminated some federal jobs, lawmakers and labor unions balked. The Republican-controlled House of Representatives followed the lead of liberal Rep. Bernie Sanders of Vermont to scrap the plan.

The plan eventually was restored after negotiations with the Senate. Still, the debacle showed that Mr. Chew "doesn't get the politics," says Phil Boyer, executive director of the Aircraft Owners and Pilots Association. He remembers telling Mr. Chew early on, "I think you're underestimating the role that Congress plays as the board of directors of this FAA." Says Mr. Chew: "I'm not a salesperson in that way."

He also has been frustrated by the power of Congress to force the FAA to spend money on lawmakers' pet projects such as the volcano-monitoring system and multimillion-dollar instrument-landing systems for tiny airports in Nebraska, Iowa and Alaska. Backers of these projects describe them as necessary for safety but they aren't FAA priorities.

Mr. Chew says he's committed to serving out his term, which expires in 2008, despite rumors that he is about to quit. "He pulls his hair out in big clumps because it drives him crazy," says John Carr, who heads the National Air Traffic Controllers Association, the controllers' union.

The union has posed its own problems for Mr. Chew. NATCA initially welcomed him. As recently as last fall, Mr. Carr praised him in an interview as someone with an "engineer's mind" who likes to solve problems. Occasionally, the two met for coffee near their homes in Virginia. But the relationship unraveled amid angry talks over a new contract for controllers. Mr. Carr was furious when he saw Mr. Chew participating in a November news conference at which FAA officials portrayed controllers, who make an average of $128,000 a year, as overpaid.

Mr. Carr wrote Mr. Chew a bitter letter, four and a half pages long, that reads like the breakup of a romance. "Your call for union participation as a priority was a joke, a hollow shell, a charade, a cruel hoax," he wrote. Talks on replacing the expired contract are continuing.

In an interview, Mr. Chew brushed off the letter. "Here's the reality," he said. "Labor can't divorce from management and management can't divorce from labor."

Mr. Chew isn't letting up on his cost-control drive. At a recent meeting at the FAA's Fort Worth regional office -- his destination on the day his plane was delayed by bad weather in Washington -- Mr. Chew exhorted employees to pay attention to spending. He clicked through PowerPoint slides to prove that the FAA will run out of money on its present course.

With a "metrics driven, data driven, performance driven" organization, he argued, "you can always make the case for more money." The alternative, he said, is aviation gridlock. "We need to take control," he told the FAA employees. "We need to dictate our future."

January 20, 2006

Serious Journalism, now increasingly on NPR

Many television journalists[from the bigger networks] say they are fed up with the move toward consumer-friendly news-you-can-use and away from weightier subjects like foreign affairs and government.


TV News Stars Move to NPR And Sound Off

January 20, 2006; Page A9

When Ted Koppel appeared on Comedy Central's "The Daily Show" in 2002, he plugged National Public Radio to so much studio applause that host Jon Stewart cracked, "Somebody got themselves a tote bag."

At the time, Mr. Koppel was simply another NPR admirer. Now, the former "Nightline" anchor is getting more than just swag -- he's got a new part-time job with NPR, joining the growing ranks of television news stars who are seeking refuge at the Washington, D.C., public broadcaster.

While some of the NPR recruits, like Mr. Koppel and CBS newsmen Walter Cronkite and Daniel Schorr, have joined the organization at the end of their long broadcast TV runs, other television news talent is defecting to NPR mid-career. ABC News, for example, has almost become a farm team for NPR. Last week, NPR announced it had hired Michel Martin, an ABC News correspondent, to jump-start a new program targeting African-American listeners. Last month, it reeled in Robert Krulwich, another ABC News correspondent, to join its science squad. The new hires will be greeted by a familiar face: ABC News correspondent Michele Norris signed on to NPR in 2002.

Network news is increasingly generating prospects for NPR in part because some broadcast journalists think the networks are veering away from serious, in-depth reports. Many television journalists say they are fed up with the move toward consumer-friendly news-you-can-use and away from weightier subjects like foreign affairs and government. And many also see news of any sort as an increasingly low priority for their employers. For example, "Nightline" came close to losing its perch in a humiliating 2002 episode when ABC brass unsuccessfully tried to lure in David Letterman's nightly comedy show to replace it.

"[NPR's leaders] still believe it is the responsibility of the journalist to focus the attention of the listener on issues that are important," says Mr. Koppel, who will provide analysis about 50 times a year to shows like "Morning Edition" and "All Things Considered." "All too many media outlets right now think the correct way to lead is to take a poll, or study the demographics, and see what it is that the people who are most attractive to the advertisers would hope to see on television."

"When I started at ABC News, it was a large division of a communications company, only radio and television stations," says Ms. Martin, recalling the days before Walt Disney Co. bought the company. "Now, it's a small division of an entertainment company, and that creates different pressures."

The star recruits come from television, not radio, because commercial radio isn't a breeding ground for the kind of serious journalists that NPR covets. Commercial radio emphasizes quick-summary news while public radio news tends to go more in depth, executives from both formats say. "I think the difference between big, booming-voice commercial radio and NPR is a lot further than the difference between NPR and 'Nightline,' " says Scott Simon, host of NPR's Weekend Edition.

For the most part, the television stars aren't snatching away jobs from veteran NPR staffers. The newbies tend to become special commentators, like Mr. Koppel, or join newly formed shows, like Ms. Martin. But for some posts, in-house talent has to compete with top journalists from print and television. "What it means for people coming up through member stations is that the bar is probably a little bit higher," says Sam Fleming, managing director for news and programs at Boston's WBUR, traditionally a feeder station to National Public Radio.

NPR's big ambitions got a boost in 2003, when it received more than $200 million as a gift from McDonald's heiress Joan Kroc. The organization cranked up an existing plan to expand its news division, adding staff, beats and bureaus.

The buildup extended to overseas, where most other news organizations are scaling back. NPR News has 36 bureaus in total, up from six in 1990. The news operating budget is about $59 million this year, up from $38 million in 2001.

Newspaper reporters, amid cutbacks in print media, have also been drawn to NPR as a place that seems willing to support journalism that has gravitas. Bill Marimow, former editor of the Baltimore Sun, joined NPR in May 2004 and is managing editor. He's brought in several former Sun reporters, including David Greene to cover the White House, and Laura Sullivan to cover criminal justice. NPR also recently hired John Hendren from the Los Angeles Times to cover the Pentagon and Elizabeth Shogren, also formerly of the Times, to cover the environment.

NPR has 25.3 million listeners, up from 22 million in 2004. It's impossible to attribute all the growth to the recent hires, but at least some longtime listeners seem to appreciate the new blood. Peggy Bachman, a museum docent in Bloomington, Ind., and NPR devotee, likes the concept of bringing in "people of quality, whose names we know." She adds that "it lends even more credibility to their news programs." Mrs. Bachman has noticed several former television journalists on public radio, but she has a particular fondness for veteran talking head Cokie Roberts, who for years has worked for both ABC News and NPR.

Many of the new staffers aren't completely severing their ties to their old jobs. Ms. Martin will contribute occasional pieces to ABC, to help compensate for the large pay cut she took to join public radio. (David Westin, ABC News president, told his staffers in an email that the network is "delighted that we are able to continue to benefit from her talents and reporting.") But the free-lancing won't plug the entire gap, forcing some personal budget cuts, big and small. "I'm going to save a lot of money on haircuts," Ms. Martin says, adding she is dreading telling her stylist to no longer expect her every two weeks.

As for Mr. Koppel, who will be working primarily for the Discovery Channel, "I'm not in any danger of becoming excessively rich at the expense of NPR," he jokes. Jay Kernis, NPR's senior vice president of programming, said he made clear from the start of negotiations that public radio salaries were lower than Mr. Koppel's usual compensation.

"We said, 'You have to find somebody else who will pay you a lot of money, so we can pay you a little money,' " Mr. Kernis recalls, and Mr. Koppel concurred. "He said, 'Jay, this is not about the money.' "


January 18, 2006

Wal-Mart Trains Sights On India's Retail Market

U.S. Chain Lobbies
For Chance to Sell
To Huge Population
By ERIC BELLMAN in Mumbai and KRIS HUDSON in Dallas
January 18, 2006; Page A9

Wal-Mart Stores Inc. is knocking at the door of India, whose billion-person economy is largely untouched by modern retailing but might soon let foreign competitors into the sector.

India's prime minister and finance minister recently suggested that movement toward opening the country's retail markets would begin over the next six months. And while initial measures might not make room for the biggest retailers, any opening would be an auspicious sign for the big chain stores. Meanwhile, Wal-Mart and others in its niche -- which are increasingly hungry for international sales -- have been laying groundwork by building relationships with suppliers and distributors and wooing politicians and consumers. Last month, the U.S. company applied for government approval to open its first liaison office in India, which would permit it "to engage in undertaking research and business development activities."

The subcontinent's massive middle class is shopping like never before as its aspirations and purchasing power swell with the country's economy. But the world's biggest retailer has been locked out because of strict government barriers to foreigners owning retail businesses. That could start to change soon, officials and analysts say.

According to estimates by McKinsey & Co., India's $250 billion retail business is the world's eighth-largest. The consultancy firm, in estimates many analysts consider conservative, says the country's retail sector will expand more than 7% a year for the next five years.

The real attraction of India is its retail inefficiency. More than 95% of retail sales in India are made through 12 million mom-and-pop shops, newspaper stalls and tea stands. Sales by modern retailers in branded, professionally managed chain stores are expected to climb more than 15% a year during the next decade.

"Many smart people -- much smarter than I -- believe that India could be the next China," said John Menzer, vice chairman of Wal-Mart's U.S. stores and former head of international operations. "So, certainly, as a retailer, it's a place where we'd like to be."

The developing world is becoming increasingly important for big international retailers as competition slows growth in developed markets. Wal-Mart has struggled in some affluent countries, facing difficulty righting an acquired operation in Japan, stiff competition in the U.K. and restrictive trade and labor laws in Germany. The company has fared better in many Asian and North and South American countries, and it claims strong growth in Mexico, Canada and Brazil.

Wal-Mart and other global names rely increasingly on international operations for growth. In the first nine months of Wal-Mart's current fiscal year, the retailer's international operations -- which account for 20% of its sales -- saw operating income climb more than 10% while its U.S. stores notched gains of less than 7%.

While Wal-Mart and its global peers haven't been allowed into store ownership in India, the U.S. company has been building its local presence for years. In 2005, it bought about $1.5 billion of Indian sheets, T-shirts and jewelry to supply its stores around the world. Wal-Mart has been surveying the market, building a local team of managers and meeting politicians and bureaucrats.

Wal-Mart executives have been among the industry's strongest lobbyists. The company has used high-profile executive visits and pamphlets to preach to India's public and political leaders -- even those from India's Communist Party -- about how international retailers can transform distribution systems and lower prices. Last July, Wal-Mart Chief Executive Lee Scott traveled from the company's Bentonville, Arkansas, headquarters to Washington, D.C., to talk with India's prime minister, Manmohan Singh, during his U.S. visit.

Wal-Mart's global competitors, including Carrefour SA of France and Metro AG of Germany, have teams in India talking with regulators and potential local partners. "We have taken a long-term view that we will be there" in India, says Gerard Freiszmuth, managing director of Carrefour India who moved to New Delhi to help prepare for the market-opening. Meanwhile, a spokesman for Tesco PLC said the U.K. retailer has no plans to enter India.

India's leaders want to attract the international capital and expertise needed to modernize the country's retail industry and distribution system. Indian Finance Minister P. Chidambaram said in November the first steps to open the market could happen during the first quarter of 2006.

To be sure, India has been talking about opening the retail industry to foreign investment for more than a year. It has been blocked by opposition from leftist parties that support the Congress Party's ruling coalition. Communist leaders are concerned foreign retailers will hurt the tens of millions of people dependent on small shops for their livelihoods. Wal-Mart argues that international players are key to streamlining national distribution systems to cut waste and stabilize prices for perishables.

The U.S. company has another carrot to dangle in front of India: its huge buying power. Once it opens stores in a country, it is more likely to supply its international stores with that country's products. Even without stores in India, Wal-Mart is already a bigger consumer of Indian products than many countries.

From China, the company exported $20 billion in goods last year. "What we found in China as we get stores on the ground and get more mass, we get to know a lot more of the suppliers," Mr. Menzer told analysts last year. "And when we know the suppliers, it gives us the opportunity to learn the product of the suppliers and actually export them."

That is easier said than done in India, given its poor infrastructure. The company will likely have to build distribution systems from scratch and struggle with bad roads and power outages. It will also have to contend with new national retail chains, such as Shoppers' Stop Ltd. and Provogue (India) Ltd.

While India might not allow 100% foreign ownership in retail businesses right away, it might allow smaller stakes with restrictions, analysts say. It could allow minority stakes with Indian joint-venture partners or limit foreign investment to specific businesses such as groceries or luxury goods. At first, the government is likely to restrict the locations and number of stores allowed.

Whenever and however India opens up, Wal-Mart hopes to apply lessons learned in other emerging markets. When it first arrived in China more than 10 years ago, it mistakenly stocked stores with bestsellers from the U.S. It quickly learned that the average Chinese consumer didn't have closet space for boxes of 40 rolls of toilet paper.

Wal-Mart now has 51 stores in China and plans to open 39 more this year. While Chinese operations account for less than 1% of Wal-Mart's $285 billion in sales, its China sales could quickly climb to $20 billion, says Emme Kozloff, an analyst with Sanford C. Bernstein & Co.

In the subcontinent, Wal-Mart is aiming for slow and steady growth. "It has to be a measured pace that supports the government's desires," Mr. Scott, the CEO, said at an investors conference last year.


January 15, 2006

Sabeer Bhatia on Bangalore and Indians

Thinking out of the box and teamwork is all you need to succeed, Sabeer Bhatia tells Ruma Singh

I work out everyday....

Every morning, wherever I am, I go for a run, do yoga, go to the gym. My day starts at 7 am with a workout. I get to work by 10.15, work till 7 pm. Luckily, much of my work is by email or phone. I love the golf course in Bangalore. If it didn’t exist, I probably wouldn’t visit! I feel claustrophobic here. The noise pollution is awful. We’re killing our parks for our own children. Indians don’t care beyond their homes, which are spick and span — they throw their garbage right outside. It’s true even in software development — this thinking of ‘self ’. People work for themselves. I tell my programmers, you must work as a team. If your teammate doesn’t succeed, you won’t. Indians looks only at marks, at IQ. But what you need is EQ — emotional quotient. Brilliance is an isolating individual characteristic. Indians must understand the concept of growing the pie. When you’re creating a new market, things should work not just for yourself, but your partners and rivals. Then business will grow for everyone and we’ll all benefit. But that thinking doesn’t exist yet. It’ll take time and markets will be lost.

I enjoy golf....

I started in Bangalore, on the army course. I understand the importance of academics, but not at the expense of sports. A healthy mind houses a healthy body. We have to create a society of thinkers. Why send kids for only quiz contests? They don’t need to learn by rote, they must learn to think outside the box. Initially, in the US, I took a course in philosophy. In the test, I got a D. I asked the professor why — “I read the books,” I said. “I’ve read them too,” he replied, “I wanted to know your opinion, not that you’d read them. That’s plagiarism.” That’s when it occurred to me that the purpose of education is to think beyond. It’s knowledge based on enquiry, not reading and reproducing. That’s only possible along with sports and extra-curricular activities. I don’t believe in nerds who play zero sports. Those guys won’t be the most successful in life. But you have to be good at academics, too. Don’t neglect it. Thank goodness parents allow kids to choose different careers like sports, art, and music these days. Earlier, it was, “Forget it, go study!” Being an army kid, I wasn’t afraid to leave home. It was a better opportunity, the best education available. It was an adventure for me. That’s why I’ve never been afraid of new things — I’ve adjusted to living both in India and the US.

It’s not all bad about Bangalore....

There have been plenty of positive changes too. There’s tremendous optimism, everyone has a job, is motivated. There’s a rise in consumerism. Everything’s available here now. On the down side, while the private sector is doing fantastically, the government sector is getting worse. The Indiranagar flyover hasn’t been completed in four years! In San Francisco’s Bay Area, they’ve retro-fitted the Bay Bridge — all 22 miles over the ocean in two years! They’ve worked all night, and haven’t blocked traffic even a day. Why can’t we do that? Bangaloreans must start putting pressure on the system. There must be more public awareness, and the media has a role to play. A newspaper in San Francisco ran photos of people responsible for work not getting done — like potholes. We too can get the guys responsible.

Being busy....

I’ve brought that on myself. I spent a year and a half relaxing, playing golf. Then I felt I missed out being in the thick of things. Now I have 5-6 projects in hand. There’s great fun in creating new products and services, and with the Internet, there’s no single individual with monopoly. A success story can spring from anywhere. It’s all about intellectual capital — organizing for the end consumer.

When I started, things weren’t so easy....

Now you can get a billion users in six months — that’s what’s truly exciting. Now people are selling millions of dollars worth of goods on the Internet — from books, shoes to rare diamonds. It’s all easy once you have a subscriber base. I’ve not done enough yet — there’s much more to do. Hotmail was big, but this year, I’ll be doing something even bigger. The trick is to solve problems for a few people, then it can work for many more. It’s encouraging that there’s a rush of companies coming up, and more being built. It bodes well for India. But we need a made-in-India product company that’s successful. I’m hoping I can help some of them become successful.

Marriage? Hopefully, it’ll happen this year....

My parents won’t decide. It’s my life, I have to live it. It’s a modern society. People are settling down later. I still have a lot of single friends. I come to Bangalore for work, to be with family and connect with friends. I love being amongst people, their warmth. I feel at home here. The chaos doesn’t bother me. If life there is surreal, life here’s a reality show. Everyone cares about everyone else, and things move forward in a slow eco-system.

January 13, 2006

Jim Rogers Says Japan's Falling Birthrate Raises Debt Concern

Jan. 13 (Bloomberg) -- Investor Jim Rogers, who co-founded the Quantum fund with George Soros in 1970, said he wouldn't increase his holdings of Japanese stocks because the country's falling birthrate will make it harder to pay the national debt.

Japan's record-low birthrate caused the population to shrink last year for the first time since the nation began to compile data in 1899, the health and welfare ministry said in December. That decline will accelerate should the birthrate fail to recover, Rogers, 63, said at a symposium in Tokyo on Jan. 7.

``Japanese stocks will rise further in 2006 and 2007, so I will not sell them,'' Rogers said. ``But I have no intention of buying more Japanese stocks because of the serious problem of the declining population.''

A declining workforce may reduce the tax revenue for the government, making it harder to pay back the nation's 800 trillion yen ($7 trillion) debt. The government has said that the birthrate needs to rise to 2.1 to maintain Japan's current population of about 127 million.

``If the current birth rate, which is the lowest in the major developed countries, continues, there will be no Japanese,'' he said. ``Who will pay the enormous debt?''

Japanese women have an average of 1.26 children, the health ministry said. That's compared with 2.04 in the U.S., and 1.8 in China, according to Japan's Statistics Bureau. Deaths in Japan probably outnumbered births by about 10,000 in 2005, the health ministry report said.

The nation could increase its birthrate, allow more immigrants, or accept a decline in living standards, said Rogers, adding that Japan would probably choose the last option.

Waseda's Women

Rogers said in an interview that he visited Tokyo's Waseda University to try to find out why Japanese women are reluctant to give birth. The three female students he interviewed told him they wouldn't have babies before they reach 30, because they want to focus on their careers.

At a seminar for private investors on Jan. 7, Rogers told the Japanese audience that having children was important to keep the economy growing.

He said he used to think having children was waste of time and it was better to focus on investing. He changed his mind after the birth of his daughter, now three.

``If you have no kids, it's time to get on with it, even if it means taking time off,'' he told the seminar audience.

Concern about the declining population hasn't stopped other overseas investors buying Japanese equities. Foreigners were net buyers of Japanese shares last year, purchasing a record 10.3 trillion yen worth of stocks, the Tokyo Stock Exchange said yesterday. The Topix share index has risen 41 percent in the past six months.


January 12, 2006

iPod success shows risk of Japan firms 'missing boat': minister

Thursday • January 12, 2006

Sony's failure to invent its 'own iPod' before Apple provides a lesson to other Japanese firms about the danger of being caught napping by foreign innovators, a government minister warned.

Heizo Takenaka, Japan's Minister for Internal Affairs and Communications, said Apple's lead over Sony, the inventor of the Walkman, in digital music players showed the need for wider reform of business practices and regulation.

"Apple's iPod provides a pointer to future possibilities as well as a lesson," Takenaka said in an interview with the Financial Times published Thursday.

"Although it would have been natural for a Japanese electronics company to have developed the iPod, unfortunately, the concept of distributing music over the net did not take off in Japan, so it was Apple rather than Sony that developed the iPod", he said.

Sony had indeed launched a digital player before Apple but failed to capitalise on it because of obstacles in developing the music download market in Japan, the newspaper noted.

Sony, an icon of Japan's postwar boom in technological innovation, is now struggling to reverse a slump in its fortunes by slashing 10,000 jobs as it heads for a annual loss of 10 billion yen (88 million dollars).

Takenaka said Japan's telecom and media industries needed to revamp outdated business practices and improve regulation. This could bring a five-fold expansion in annual sales for the two markets in Japan, he estimated.

"The media market is about 4,000 billion yen (35 billion dollars), the telecoms market is 16,000 billion yen so together they are 20,000 billion yen.

"Instead of fighting frantically over this pie, there is an opportunity to grow it to 40,000 billion yen or 100,000 billion yen."

He noted that US giant Time Warner's revenues alone were more than those of the whole Japanese media industry.

Takenaka said he had asked a special taskforce to draw up recommendations on reforming business practices and regulation by the end of June.

He believes outdated business practices, vested interests and regulatory obstacles are hindering the full development of goods and services that harness new technology and the Internet, the FT said. — AFP

January 11, 2006

New Programs Spur Working Poor To Begin Saving

Incentives, Counseling Inspire
People to Clean Up Debts;
Setting Aside $50 a Month
Just Paying Bills Is a Struggle
January 11, 2006; Page A1

Americans are rotten at saving. To encourage thrift, the government hands out billions in tax breaks, mostly to the nation's wealthiest half. The other half, it's long been assumed, either cannot or will not save.

In recent years, a growing number of state governments, nonprofit groups, foundations and private companies have been running pilot programs to induce poor and working-class Americans to save. The results, they say, are surprising: When participants get the right incentives and financial counseling, many open savings accounts, arrange for payroll deductions, and begin accumulating assets.

A Pennsylvania state program helped Michelle Simmons, 37 years old, to go from living on the streets to owning her own home, and inspired Dorothy Beale, 36, to clean up her debts and qualify for a mortgage. Another program outside St. Louis helped Charlin Hughes, a 36-year-old single mother of five, to begin saving for a home. Both programs offer to match participants' savings, but only if they consistently save and agree to attend financial-planning classes.

The programs are drawing support from both the left and the right. Advocates say they could become productive successors to liberal anti-poverty programs of the 1960s and conservative welfare reforms of the 1990s.

But proponents acknowledge it is difficult to persuade many poor people that they can afford to save, even with financial incentives. And rolling out such a program nationally would be expensive, costing about $40 billion over 10 years, according to one estimate.

Ms. Simmons says she was a "hope-to-die dope fiend" living in cardboard boxes on the streets of Los Angeles when she was arrested in 1998 for prostitution. Freed from prison after one year, she returned to her hometown, Philadelphia, and found low-paying work. With the help of a nonprofit agency that helps administer Pennsylvania's Family Savings Account Program, she got financial advice and opened an individual development account, or IDA.

The program offers to match participants' savings of up to $2,000 over three years with state and federal funds. Households with incomes of no more than twice the poverty level (about $40,000 for a family of four) are eligible. They must save at least $10 a week and attend a series of financial-planning classes. IDA savings must be used for college, job training, buying a home or starting a business.

By 2003, Ms. Simmons had saved $1,007. The program matched that amount, producing enough for the down payment on a $50,000 home from Habitat for Humanity.

There are more than 500 asset-building projects across the country, whose participants have opened more than 20,000 savings accounts. Thirty-three states support such programs on a small scale, using state funds and federal welfare-to-work subsidies for savings matches, and contracting with nonprofits to run the programs. Demonstration projects have also spread around the world from Canada to China. Great Britain last year became the first country with a national program of savings accounts for each child at birth.

The U.S. savings rate -- the percentage of after-tax income that Americans save -- has declined for nearly three decades. In 1984, it was 11%. In 2005, it dropped into negative territory, meaning that Americans were spending more than they earned.

One-third of U.S. households have no financial assets. An additional one-fifth have insignificant holdings. But households with about $2,000 or more in assets, including retirement savings, are ineligible for basic welfare programs, which provides a disincentive for the poor to save.

Broader Goal

The savings programs have their roots in the work of Washington University professor and social worker Michael Sherraden. His 1991 book, "Assets and the Poor," argued that governments and charitable groups should move beyond traditional welfare's aim to provide the poor with income to meet immediate needs. The broader goal, he wrote, should be to help the poor save money, which can provide them a stepping stone to escaping poverty.

He proposed that the federal government provide IDAs for every child at birth, regardless of family income, tapping public and private funds for initial deposits. The poor would get bigger initial deposits, and also matches for their personal savings, up to a limit. He argued that the accounts, coupled with financial education, would promote long-term savings for college, job training, buying a home or starting a business.

To Mr. Sherraden's surprise, his book was widely discussed by economists and others, and he became well-known in the anti-poverty world. Some critics, mainly from the political left, expressed skepticism that the poor would be able to save, given their struggles just to make ends meet. But Mr. Sherraden's proposals drew interest from community groups, governors, members of Congress, and from the first Bush and Clinton administrations. Private foundations stepped in with funds for testing the approach. Led by the Ford, Charles Stewart Mott and Annie E. Casey Foundations, philanthropic groups continue to provide much of the money for such programs. Mr. Sherraden says he is frustrated that the programs have yet to expand beyond experimental projects.

Advocates of asset-building programs concede it is difficult to get low-income people to save. "The biggest hurdle is just getting them to believe they can save," says Chris Krehmeyer, executive director of a St. Louis nonprofit social agency, Beyond Housing/Neighborhood Housing Services. Given "the struggles of keeping the utilities on, paying your bills, keeping the car running and just dealing with life," he says, even $10 a week is a huge amount.

In Washington, support for a bigger federal role in asset-building programs for low-income Americans ranges from conservative Republicans such as Sen. Rick Santorum of Pennsylvania, former housing secretary Jack Kemp and former House Speaker Newt Gingrich, to left-of-center Democrats and potential 2008 presidential candidates Hillary Clinton and John Edwards.

Thus far, budget deficits and partisan politics have stymied advocates of a nationwide policy. During his 2000 presidential campaign, George W. Bush advocated fighting poverty "by building the wealth of the poor." He proposed a $1 billion tax credit for banks that match some savings deposits of low-income workers. As president, he didn't make the proposal a priority, and it died in the House, in part for reasons unrelated to the proposed credit.

In 2001, Congress created the Saver's Credit, the only federal savings incentive designed for low- and middle-income households. It reduces taxes on savings of up to $2,000 a year for people making less than $50,000 a year. But Americans who don't owe income taxes aren't eligible. About 40% of Americans don't earn enough to have an income-tax liability, according to the Retirement Security Project, an academic venture sponsored by the Pew Charitable Trusts.

The government spends about $150 billion a year on tax breaks to encourage retirement savings, which mainly benefit the affluent. About 70% go to the top one-fifth of earners, the Pew project concluded. Many simply shift existing savings into tax-favored accounts. The 40% of Americans who don't have tax liabilities do not qualify for these breaks. And most low-income workers do not have jobs that offer 401(k) retirement plans.

"We are kidding ourselves if we think we are expanding savings" with "a grotesque array of savings incentives that do nothing for low-income Americans," says Fred Goldberg, the top Treasury Department tax official and Internal Revenue Service commissioner in the administration of President George H. W. Bush.

Numerous ideas have been floated for encouraging low-income workers to save more. Making enrollment in 401(k) plans automatic for new hires is one. Giving taxpayers the option of saving all or part of their annual tax refunds -- sometimes by offering them a financial incentive -- is another. Tests of that concept in Tulsa, Okla., by a community and academic team, and in St. Louis, by H&R Block and the Retirement Security Project, showed that some people were willing to save a portion of their refunds.

More ambitious, and costly, are the proposals to roll out IDA-like accounts on a national scale. A bipartisan bill introduced in Congress to establish so-called Kids Accounts for every newborn, with greater federal funding for the poor, would cost an estimated $40 billion over 10 years.

Pennsylvania started its Family Savings Account Program eight years ago, making it one of the first statewide IDA programs. The program gets about $1 million annually from the state, and another $1 million from federal welfare funds.

Starting a Halfway House

After Ms. Simmons was released from a California prison, she found work in Pennsylvania as a telemarketer. She wanted to start a halfway house for women newly released from prison, so she took a self-employment course run by the Women's Opportunities Resource Center, a local social-service agency. She learned there about the savings-match program, and signed up. To save money, she shopped at thrift stores and went without cable television, a cellphone or manicures.

Today, she owns a three-story townhouse in Norristown, just north of Philadelphia, which she bought in 2003. She has regained custody of two daughters, who have their own bedrooms. Not far away stands the halfway house she opened. In three years, she has housed 33 women fresh from jail and "graduated" 17 to jobs and housing, she says. She urges residents to open IDAs. "I sell it," she says. "I tell them, 'This is an investment, y'all.' "

Ms. Beale and her three children were living in her mother's house when she heard about Pennsylvania's IDA program in 2003. Despite her $40,000-a-year hospital clerical job, debt had piled up after a divorce. She'd had her car repossessed and had exceeded limits on three credit cards. She opened an account and signed up for evening money-management classes. "I hadn't even realized I was spending more than I was making," she says.

To save, she cut out manicures and cable television, and shopped only for "needs, not wants." By saving $80 a month, she accumulated about $1,000 in a year. She added another $1,000 from her tax refund, entitling her to the $2,000 maximum match. With help from agency counselors, she cleaned up her credit rating by paying off small debts and negotiating payment plans with her credit-card companies and utilities. By September 2004, she had a $77,000 mortgage for a townhouse in northeast Philadelphia.

In her kitchen "bill corner," Ms. Beale keeps her budget in a journal. She still saves about $50 a month, and also contributes to a 401(k) retirement account and a college-savings plan for her children. She has opened savings accounts for all three.

With funding from Ford and other foundations, a consortium of social-service organizations is testing Mr. Sherraden's idea to encourage savings early in life at 13 sites across the country. At Delmar-Harvard Elementary School in mostly working-class University City, Mo., outside St. Louis, 50 students are in the third year of a four-year pilot program managed by Beyond Housing. Each student received an initial $500, and a promise that his or her own savings would be matched dollar-for-dollar. They receive $2 for attending each weekly meeting of the "I Can Save" club.

On a recent afternoon, more than a dozen second- and third-graders met after school, then trudged a couple blocks to Commerce Bank to make deposits. Nine-year-old Jessica Washington deposited $50. "I earned it, and my mom gave me some," she said. Seven-year-old Alexia Luckett deposited her $4 check for attending meetings. Sometimes she brings her earnings from cleaning her room, but this time, she said, "my mom didn't have the money."

The children do not know their balances. But all agree on what the money is for: college. That is drummed into them by their teachers and parents, who also attend workshops. The most recent data show that through November, the 7- to 9-year-olds had saved a total of $64,093. The average account contained $866.

Beyond Housing also oversees IDA accounts for about 80 adults. One year ago, Ms. Hughes, the single mother of five, was homeless. Now she has $50 a month deducted for her IDA from the $31,000 a year she earns working at an insurance office.

According to Beyond Housing accounts manager Linda Thomson, if Ms. Hughes saves $1,500 over 30 months, sometime in 2007 she will get a two-to-one match of $3,000 -- half from United Way of Greater St. Louis Inc. and half from federal funds. With that $4,500, plus closing costs from the nonprofit, she could get an affordable mortgage of about $85,000, Ms. Thomson says.

Last fall, a fire destroyed the townhouse Ms. Hughes had been renting since May, along with her family's possessions. A member of her church provided temporary housing. By December, her savings plan was still on track. "It was hard to save, but for the money coming out of my check automatically," she says.

Ms. Hughes says she tells her kids "no" a lot. There were no Christmas presents this year. "I have to lead by example," she says. "I can't tell my kids what to do if I don't do it myself."

January 10, 2006

The silent diabetes epidemic

An estimated 800,000 adult New Yorkers - more than one in every eight - now have diabetes, and city health officials describe the problem as a bona fide epidemic. Diabetes is the only major disease in the city that is growing, both in the number of new cases and the number of people it kills. And it is growing quickly, even as other scourges like heart disease and cancers are stable or in decline.

Already, diabetes has swept through families, entire neighborhoods in the Bronx and broad slices of Brooklyn, where it is such a fact of life that people describe it casually, almost comfortably, as "getting the sugar" or having "the sweet blood."

But as alarmed as health officials are about the present, they worry more about what is to come.

Within a generation or so, doctors fear, a huge wave of new cases could overwhelm the public health system and engulf growing numbers of the young, creating a city where hospitals are swamped by the disease's handiwork, schools scramble for resources as they accommodate diabetic children, and the work force abounds with the blind and the halt.

The prospect is frightening, but it has gone largely unnoticed outside public health circles. As epidemics go, diabetes has been a quiet one, provoking little of the fear or the prevention efforts inspired by AIDS or lung cancer.

In its most common form, diabetes, which allows excess sugar to build up in the blood and exact ferocious damage throughout the body, retains an outdated reputation as a relatively benign sickness of the old. Those who get it do not usually suffer any symptoms for years, and many have a hard time believing that they are truly ill.

Yet a close look at its surge in New York offers a disturbing glimpse of where the city, and the rest of the world, may be headed if diabetes remains unchecked.

From the readers forums:
andradepaulanyc - 10:54 AM ET January 9, 2006 (#18 of 39)

What is to have a family member with diabetes...

I live in Brazil, and I believe we are also having a not so big but still dangerous version of this kind of diabetes crisis here too.
At least in Sao Paulo, the country's major city, many people have had the same life conditions as in New York: little exercise, high fat and sugar diets.
Three generations of my family have diabetes. My great-grandmother, grandmother and her brother had, and also my mother has it.
I never took it seriously until nowadays. I have learned in the past five years what desperation is.
My mother had 3 diabetes pregnancies 20-23 years ago. The first baby she lost a week before the caesarian. Then came me and my brother, both born with 8 months, and required her to spend the last 2 months of pregnancy at the hospital. Diabetes came once for all about 15 years ago.
5 years ago my mother was going through laser surgery for her eyes. Now she is blind in one eye and has low vision in the other.
She was a very active and independent person, but got into depression since then (sometimes it comes just a little, sometimes really bad), because now she depends on someone else to help her on everything, and she can't stand it.
Three years ago she started doing "peritoneal" dialysis at home, because her kidneys weren't functioning anymore and she doesn't have strong veins to do it through her blood at the hospital. Frequent travels that she loved so much became scarce. Dialysis in the beginning was manually, four times a day, each one lasting more than an hour. Then the Brazilian government provided a machine that makes dialysis during the night, while she sleeps. As she can't do it herself because she can't see anymore, my father prepares it every single day for her. He too had to stop doing many things he liked, not enjoying his so deserved retirement as it should be after working almost 30 years for Ford in Brazil.
Two years ago, during complete exams in order to get into the kidney transplant list, it was found a heart artery almost closed. My mother went through heart surgery, substituting the bad artery by one from her leg. Then the leg's wound got an infection, although my father was restless taking her to the hospital to clean it correctly. By then I was leaving New York City and coming back to Brazil.
She wasn't feeling anything on her legs by then, not even cold, warm, or pain. She even broke one toe, and we just knew because it started swelling.
More wounds on her legs and feet came. Started almost dumbly, like pulling a simple dry skin on her heel, or a scratch on the shank. A humid skin between the two smallest toes came out once. It infected, and then she had her toe amputated. Now she is fighting to heal it, but itwhat became a big wound. My father preferred to hire a professional nurse to clean it twice a day. It's still opened and there is a risk to loose the whole foot. It's a slow battle, day by day.
She has been on bed for many months, because is hard to walk. A few months ago my father decided to buy her a wheelchair, so sometimes she eats at the table or watch TV with us in the living room, but that's becoming rarer each day. That's make her tired.
As this article says, my mother really seems much older. Although she is 54 years old and my father is 8 years older than she, it seems the opposite.
Both of them, instead of a peaceful and happy retirement, are aging more tired and unhappy each day as I have never seen before. There is little I can do to help, since they live 300km away from me.
I'm concerned about my life too, and especially about my brother's. He's obese, and doesn't like to exercise. My problem is dieting. I try hard to eat correctly but every so often I crave to eat what I shouldn't. But at least I'm not sedentary, and keep doing glucose tests every month. My chances of developing Diabetes are pretty high, and I really wouldn't like to be my family's forth generation with the disease.
Diabetes is really a hard battle for any family.


January 8, 2006

Swami & Friends

Call it the Power of Pranayam. Swami Ramdev’s supporters have taken to the streets and politicians are queuing up in the yogi’s support. As the bones-in medicine controversy rages on, Sunday Times finds out who is running out of breath and why
Avijit Ghosh and Jaskiran Chopra

In a land where mendicants know a hundred ways to serve soul curry, he is revered as the master healer. For millions every morning, Swami Ramdev is the 5 am family physician, the omniscient interpreter of maladies. For many with galloping blood pressure, breathless asthma, and soaring blood sugar, the yogi on sunrise television is the last port of refuge.
So when CPM politburo member Brinda Karat furnished an ambiguous lab report to level allegations of animal fat and human bones being used in his medicine, morning newspapers in every kasbah across Uttaranchal sold out within hours. A few hours later, the newspapers reappeared at market crossroads to form incendiary material in angry hands. Angrier slogans against the CPM MP knifed through the cold mountain air. Soon the broadsheets were used to torch hastily constructed Karat effigies as spontaneous protests broke out in the hill state.
The dissent was not restricted to Uttaranchal, the swami's main base. And it wasn’t confined to right-wing groups either. In Agra, middle-aged women organised yoga on the streets, causing traffic jams. In Lucknow, supporters held a peace yagna. Karat effigies were burnt even in Left-ruled Kolkata. And the vortex of events has caused many to wonder: Why are millions queuing up in his support?
To begin with, only a limited number of Ramdev followers have ever used his medicine. Most owe their improved health to the breathtaking art of pranayam that Ramdev teaches. Since ancient times, yoga is known to repair ailing bodies, restore wilting spirits. Gurus have peddled it in Hardwar ashrams, in Houston halls. But many have been defeated by the daunting asanas: the sirshasanas, the vrikshasana and the like. Ramdev, however, has concentrated on pranayam, breathing exercises that are easy for the aging and the obese. “By simplifying it, he has made yoga far more accessible,” says furniture designer Rekha Krishan, who has attended a camp. ‘‘Thanks to pranayam, my 70-year-old husband’s high blood sugar has dipped to normal.” And that’s without any medicine.
Architect Nirupama Chanana, who attended a camp at Hardwar at the insistence of her family doctor, recalls: “Many who had benefited from his classes had come to the camp as a thank-you gesture. Some of them were allopathic doctors, including one from Sweden.”
It is people like these who form the backbone of the support base that Ramdev has assiduously built since 1991. Clearly, his primary appeal lies in the power of his pranayam rather than his ayurveda pills. Acharya Balkrishanji, director, Divya Yog Pharmacy, points out, “While Swami Ramdev started teaching pranayam about 15 years ago, we started selling medicines only a yearand-a-half back. The turnover is Rs 1 crore annually.” In fact, during most of his camps and TV programmes, Ramdev suggests home remedies.
Which is perhaps why Karat’s allegation — that remains to be conclusively proven in labs — hasn’t cut ice with a majority of his followers. By curing them, or at least providing them a degree of relief, he has built a substantial popular base. Social scientist Ashis Nandy calls him a ‘‘folk hero”. This is illustrated by the innumerable SMSes —
Jab tak suraj chand rahega, Ramdev tera naam rahega —running on news channels.
Ramdev began teaching yoga in Hardwar. In the beginning, there were only a few students. The Divya Yoga Mandir Trust was formed in 1995. Once he started appearing on TV in 2002, his fame zoomed. Now the name, Swami Ramdev, throws up 17,500 web pages on Google. Like most New Age gurus, the master of breath has expanded his repertoire. Now his trust markets books, cassettes and VCDs. Says Acharya Balkrishanji, “Our overall assets are worth Rs 45 crore.” 
Born as Ram Kishen at Kalwa village in Haryana’s Narnaul district, Ramdev ran away from home at 16, studied at various gurukuls and performed sadhna in Himalayan caves. The shrunken left eye is the only reminder of a paralytic stroke he suffered as a toddler — he is said to have cured himself through yoga. The super-fit yogi of indeterminable age sleeps for five hours, eats only fruits and vegetables and enjoys pillion-riding on twowheelers. Ramdev also regularly speaks out against fast-food and MNCs. One of his favourite lines is, “Cola matlab toilet cleaner.” He also claims to have never watched a movie or ever had sex. “I sublimate my libido to positive energy through yoga,” the New York Times quoted him as saying.
Ramdev’s camps are always well-attended. Every breath he takes is dutifully imitated by 40,000 men and women or more, while the ambience is lightened by the swami’s banter. Even his digs at MNCs and fast-food are never aggressive. His lexicon is a mix of Hindi, English, biology and native common sense. When explaining the famous kapalbhati — where the stomach obeys the commands of breath — he says, “Everytime it goes in and out, you burn one calorie.” Golden words for weight-watchers.
Watch him on TV and you see a friendly dispenser of wayside wisdom, rather than a pulpitpreaching saint. And though his idiom is occasionally religious, he seems to be enjoying the secular exercise of making people healthy. If politicians cutting across ideologies have joined the pro-Ramdev bandwagon, it is because they understand the people’s pulse. But the point is deeper. Ramdev's followers are not driven by faith — unlike some other godmen — but by their own experience. And despite the adverse but inconclusive medical report, they are unwilling to change their opinion. And they are making no bones about it.

January 7, 2006

How U_S_ Auto Industry Finds Itself Stalled by Its Own History

From Sales to Labor Costs, Once-Storied GM, Ford Grapple with Past Practices
A Need to 'Change or Die'
January 7, 2006; Page A1

A big cloud looms over the U.S. auto industry as executives and dealers gather next week in Detroit for the annual North American auto show -- their equivalent of the Oscars.

Normally, the cars are the stars. But this year, the industry is riveted by a far more urgent matter: the problems afflicting the Motor City's beaten-up giants, General Motors Corp. and Ford Motor Co. -- and whether they can ride them out.

In many ways, the industry's current woes are aggravated by legacies that go back to their days as icons of America's industrial power -- hobbling everything from their sales efforts to their corporate cultures.

Early last century, Ford mastered assembly-line production with its Model T and paid $5-a-day wages that put autos in reach of the masses. GM, under legendary early leader Alfred P. Sloan, refined modern management methods and made the car a status symbol. It rolled out a wide range of brands -- and features from tailfins to wraparound windshields -- designed to suit every purse and purpose.

Post-World War II deals between the auto makers and the United Auto Workers union set a new standard of ever-better wages, health-care and pension benefits. That helped create a prosperous middle class of consumers, especially in the Upper Midwest -- who in turn drove the car-crazy American way of life.

The idea of either company filing for bankruptcy protection was simply unthinkable.

No more. Saddled by high labor costs and swamped by foreign competition from Toyota Motor Corp. and others, the two are now symbols not of America's economic might but its vulnerability to more nimble Asian and European manufacturers.

In the last two decades, the U.S. market has transformed from a cozy, three-way oligopoly -- including Chrysler Corp., now part of Germany's DaimlerChrysler AG -- to a knife fight among six to eight global players, all of which have substantial manufacturing operations in the U.S., Mexico and Canada.

Last year, GM's U.S. market share -- close to 50% at the company's height -- fell to 26.2%, while Ford's was down to 18.6%. Both earned "junk bond" ratings on their debt -- raising the prospect they may have to seek bankruptcy protection.

Bond analysts and traders say that based on how bonds are currently trading, Wall Street is putting the odds of a GM bankruptcy at about 40%. For Ford, the betting odds now are about 25%.

Yet for all that, the mindset of the old days persists, despite more than a decade of attempts to adapt to the new reality. The challenge is similar to that in the steel and airline industries, in which once-dominant players concluded that filing for Chapter 11 bankruptcy protection was the only way out of their mazes.

Detroit's leaders, including GM Chairman and Chief Executive Rick Wagoner and Ford Chairman and CEO Bill Ford, deny any plans to follow suit. But both also say they understand the new world, and promise big restructuring plans this year. U.S. car makers must "change or die," declared Mark Fields, newly appointed president of Ford's Americas operations, last week.

Still, tackling their "legacy costs" is proving to be a highly complicated challenge, as a look at some of GM's problems illustrates.

Most industry executives use "legacy costs" as shorthand for health and pension obligations owed to retirees -- usually cited as the industry's No. 1 problem. But GM's real legacy costs constitute a vicious circle that go well beyond those issues, affecting decisions about employees and production capacity, marketing and corporate culture. Progress in one area often hampers it elsewhere.

Take GM's longstanding agreement with the UAW to pay laid-off hourly workers nearly full wages long after their jobs are eliminated. Dubbed the "Jobs Bank," this has stirred concern for investors asking how GM can cut costs and sell its vehicles at more competitive prices if it can't stop paying unneeded workers.

GM won't disclose the costs of the Jobs Bank, but analysts estimate that it covers about 5,000 people. At roughly $100,000 per person each year, including benefits, that puts its estimated cost at $500 million a year -- roughly $110 for each vehicle GM sold in the U.S. in 2005.

Some analysts say GM takes a big hit on indirect costs too. The need to pay idled workers is part of the reason that GM in recent years has sustained production of models that weren't in demand. To move the excess inventory, GM resorted to ever-more-costly discount deals. A recent estimate by CNW Marketing Research put GM's per-vehicle discount spending for 2005 at an average of more than $5,000 a vehicle, compared with $2,853 for Toyota.

The Jobs Bank is a legacy of the early 1980s, when then-Chairman Roger B. Smith was embarking on a strategy to automate GM's North American factories. In a recent interview, UAW President Ron Gettelfinger and UAW Vice President Richard Shoemaker, who heads the union's GM department, said the Jobs Bank originally was a company proposal, aimed at convincing UAW leaders not to oppose new technology.

"The idea was, 'You help us get productive and we'll bring work in' " to occupy the displaced workers, Mr. Gettelfinger said.

But that decision came back to haunt the company in later years as it began to embrace Toyota's methods of car making, which substitute discipline and a focus on eliminating wasted worker effort for fancy machines. They spurred much faster productivity gains than anyone expected and redefined the productivity debate in the auto business.

But the Jobs Bank never got redefined. Instead, after fighting a series of costly strikes with the UAW in the mid-1990s, GM management concluded it was better to build a harmonious relationship than provoke fights. The bank has survived successive rounds of contract bargaining, including the most recent round in 2003.

In the consumer arena, GM is saddled with another legacy: The years, mainly in the 1980s and 1990s, when its vehicles suffered from inferior quality and reliability compared with the best Japanese brands. Many consumers thought GM also lagged in its designs. As GM Vice Chairman for Product Development Robert Lutz said earlier this year, "We had interiors that can only be described as 'functional.' They had very little about them that was aesthetically pleasing."

Mr. Lutz has spent much of the past four years pushing GM's designers and engineers to create better-looking cars that will erase memories of GM's drab 1980s and 1990s vehicles. But that's easier said than done.

Last April, when GM hosted a competitive-drive event at a race track outside Chicago, customers formed long lines to try out the new Volkswagen Jetta and BMW 3-series. But there was no wait to drive many of GM's touted vehicles, such as the Chevrolet Malibu. The only GM cars that drew attention at the Arlington International Racecourse were the Chevy Corvette and the Cadillac CTS-V.

"It became a pain, because you had to wait a while to drive a BMW 5-series or another GM competitor," said Jeff Henderson, an Algonquin, Ill., resident who owns a Honda Accord sedan and Toyota Sienna minivan. "You couldn't help but notice the lines were pretty small for the GM vehicles." GM, he said, "does have some great products out there, but they don't have the reputation for quality that Toyota has."

It's the kind of comment that Mark LaNeve, GM's North American marketing chief, hates to hear. "We've got to overcome that," he said. "Maybe we've been too reluctant to admit our competitive problems in the past."

GM plans to kick off an aggressive new marketing strategy next week, which will stress quality and new, lower base prices on most models. "In some ways, we're going to turn back the clock," Mr. LaNeve said. "The Japanese offer a good product at a good price. Our cars are just as good, and you're paying more for that Japanese product."

Mr. LaNeve didn't discuss details in advance, but said he plans a "straightforward message on competitiveness, price advantages." In some cases, that will mean calling out specific competitors, like Toyota and Ford, sometimes on a model-by-model basis.

But the mission is complicated by another legacy: the complex structure GM has built in the U.S. over 97 years. The company currently sells cars and trucks under eight U.S. brands, compared with six in the 1950s when its market power was at its zenith. It has 7,500 dealers selling just over 26% of the market. Toyota's roughly 1,400 dealers sell just over 13% of the market.

Over the years, GM executives mostly have rebuffed calls to focus their marketing, design and engineering resources on fewer brands and models. The company did kill the Oldsmobile brand in 2000. But the phase-out was messy, taking several years and costing about $1 billion in expenses related to buying out Oldsmobile dealers, who had claims to compensation under state-franchise laws and GM's dealer agreements.

Mr. LaNeve says he's not planning to kill any more brands. Instead, he's trying to get Buick, Pontiac and GMC dealers to consolidate so they can sell a slimmed-down portfolio of vehicles under those three brands. As of now, he says, stores in which those three brands account for 60% of volume have been merged. "If we really do it right, we get better financial results," he said.

But when? Mr. Wagoner won't say, although he has hinted that he expects 2006 to be better than 2005. With most industry executives forecasting flat overall U.S. sales in 2006, and competitors such as Toyota lining up big new model blitzes of their own, though, it's not likely GM will get much relief from pricing pressure.

Coming in 2007, GM faces perhaps the toughest legacy test: negotiating a new contract with the UAW. UAW leaders, in letters sent to rank-and-file members, have justified decisions to accept cuts in health care by warning that if GM filed for bankruptcy protection, workers could wind up with even less. But UAW leaders are under fire from dissidents who believe they have been too quick to accept cuts to health-care benefits

In an unusual move, a group of Ford UAW members last week formally challenged the procedures the UAW used in a recent ratification vote for a package of health-care cuts at Ford that passed by a narrow 51%-49% margin.

The irony is that if Mr. Wagoner achieves somewhat better financial results this year, that could make it harder for him to persuade UAW workers to accept painful cuts needed to save the company in the long term.

---- Gina Chon contributed to this article.

January 4, 2006

Govt hospitals sound death knell for patients

By Shivani Sharma/TNN

Awoman’s eyes are eaten out by ants, leading to her subsequent death in Kolkata. A 22-year-old accident victim in Ahmedabad dies of burns, thanks to a short circuit in a ventilator that was supposed to keep him alive. Amputated limbs of patients are given to relatives for lack of means to dispose hospital waste in Rajkot. In Bangalore, a tube just used to induce vomiting in a patient is thrust into the next patient’s mouth without washing, let alone sterilising. Fresh sheets are spread over blood-soaked bed matresses in Ludhiana to disguise unsanitary conditions.
These tales of horror from across the country have a common source—government hospitals. The heart-rending reality does not end here. And sadly enough, there are no lessons learnt. Only on Monday, a newborn was charred in an incubator in Hyderabad.
Negligence and unsanitary conditions are cited as side-effects of the weight of sheer number of patients and limited resources at the disposal of health authorities. For example, industrial city Ludhiana has just one 100-bed civil hospital catering to a population of 30 lakh. Migrant labourers queue up everyday in foul smelling hallways, but most return unattended.
Dardi Sewa Trust worker Kanubhai Soni, based in Ahmedabad, says one would have to be very lucky to get an anti-rabies shot in any of the municipal hospitals in Gujarat. A patient who lands up at the emergency may have to wait three to four hours to catch the attention of a doctor.
The reason: Over 30% posts of doctors in the state are vacant. “This is more so in the public hospitals in rural areas where doctors do not wish to go due to lack of infrastructure,’’ says a senior health official.
Nurses, too, are hard pressed. Though the Nursing Council of India prescribes one nurse for every three patients, there is severe shortage of nurses in majority of the hospitals, forcing the authorities to rope in attendants to double up as nurses during night shifts. 
Bangalore’s Victoria Hospital superintendent Dr K V Ashok Kumar says they are helpless. “We have 192 nurses for 1,000 patients as against the requirement of 750 nurses to work three shifts. Since medical students will have to be exposed to on-the-job training, often they end up assisting senior doctors on duty, specially during night shifts.’’
Bowring Hospital in the same city may boast of a special ward for the state’s politicians, but there is no ICU and many wards face the mortuary, forcing patients to look at dead bodies throughout the day.
Rajendra Hospital, Patiala, faces 30% shortage of doctors—surgery and medicine being the main hit. According to Jeewan Jyot Kaur, president of the Nursing Staff Union, the nurses-patient ratio is abysmal and vacancies are not being filled.
(With inputs from Ahmedabad, Bangalore, Patiala, Ludhiana, Chandigarh and Shimla)

January 2, 2006

China's Workers See Thin Protection In Insurance Plans

Policy Woes
China's Workers
See Thin Protection
In Insurance Plans

Under State Health Program,
'Big Sickness' Is Pricey;
Doctors Demand Cash
Mr. Hu Buys His Chemo Drugs
December 30, 2005; Page A1

SHANGHAI -- Hu Cunxi thought he understood the financial risks of "big sickness" -- or "da bing" -- the common Chinese term for cancer, stroke and other life-threatening diseases.

He had edited a popular Chinese manual on household finances that encourages readers to load up on medical insurance. He himself had bought a policy from a unit of New York-based insurer American International Group Inc. He saw it as prudent backup to the government-mandated coverage he received as an editor at the state-owned Shanghai Financial News.

Five years ago, Mr. Hu's wife, Cao Meihua, a high-school teacher, was diagnosed with "big sickness." Then Mr. Hu himself fell ill. Now both husband and wife, who are in their late 40s, are battling advanced cancer, and occupy adjacent wards of a Shanghai hospital.

China's high-cost hospital system swiftly overwhelmed the insurance coverage they had through their state jobs. Mr. Hu's AIG policy wasn't designed to cover such medical calamities. Their treatments have consumed their life savings and his parents' retirement nest egg. They are now broke.

"We used to be white-collar workers," says Mr. Hu, who seethes with anger about the quality of his government insurance. "Now, we're in poverty."

More than two-thirds of China's 1.3 billion people have no health insurance at all, and many cannot afford any medical care. But under China's pay-as-you-go health-care system, even those with insurance are often forced to make agonizing decisions about whether they can afford treatment for serious illness. Problems with insurance coverage have become a crisis for China's growing urban middle class, eating into support for the ruling Communist Party.

As recently as the late 1970s, the Chinese government controlled all hospitals, employed all doctors, and offered almost universal health-care coverage. In the cities, the state provided insurance to civil servants, factory workers and their families. Collective farms provided care in the countryside. But the entire system began breaking down in the early 1980s as market-style reforms led collective farms to disband and money-losing factories to close. Tens of millions of workers were left without jobs or insurance.

A decade ago, Beijing began looking for a new health-insurance model. In 1998, government authorities introduced a national program called Basic Medical Insurance. All employers are required to provide employees with some coverage for both routine medical problems and "big sickness." To fund the plan, workers contribute 2% of their salaries, on average, and employers contribute an additional 7.5%. Family members, however, are not covered, and children must rely on limited insurance programs provided by schools. Authorities enforce the requirements for state companies, but large parts of the booming private sector ignore it.

The government plan has many gaps. At the end of 2003, it offered insurance protection to 109 million urban workers. That constitutes less than 20% of China's approximately 600 million urban dwellers. Coverage in rural areas is even spottier. Studies show that three-quarters of private-sector employees remain uninsured.

The Basic Medical Insurance itself is limited. Typically, it covers 70% to 80% of hospital charges. Patients must pay the rest, in cash. Seriously ill patients who cannot raise sufficient money are forced to check out of hospitals, or to opt for less expensive courses of treatment. Basic drugs are covered, but expensive new medicines such as powerful anti-cancer drugs are not.

"It's a real problem," concedes Mao Qunan, spokesman for the Ministry of Health. "People should consider commercial insurance."

Chen Ailian, a 65-year-old volunteer at the Shanghai Cancer Recovery Club, was diagnosed with breast cancer 17 years ago. "If I had got sick today, I would never have survived," she says. She needed surgery, so her state-owned sewing-machine factory sent a note to the hospital promising payment. The operation cost $500, but she didn't have to pay any of it.

Today, hospital emergency rooms demand cash up front, whether or not a patient has insurance. Insured patients pay for everything from gurneys to emergency surgery, then apply for reimbursement later. Those without cash are denied treatment.

A Wrenching Decision

In 2003, He Guofu turned up at a Shanghai emergency room six hours after suffering a stroke. The surgeon told Mr. He's wife, Sun Yuanzhen, that her husband needed surgery to relieve pressure on his brain. He told her it would cost $7,000 to operate, paid in advance, but warned her there was only a 50-50 chance the procedure would help.

Mr. He, who worked at a state-owned construction company, and his wife, a retired statistician, were not poor. They both had insurance. But they didn't have that kind of cash on hand, and Mr. He's employer refused to advance it, even though insurance was likely to reimburse at least some of it.

Ms. Sun hesitated. It was a Friday night. She decided to think about it over the weekend. The 50-50 odds worried her. By Monday, she had decided to borrow the money, but the surgeon told her it was too late to operate.

Her indecision still tortures her. Her husband, who is 54, is now bedridden and requires spoon-feeding, and Ms. Sun struggles to pay her teenage son's school fees. She regrets that she didn't scramble to raise the money and gamble on the surgery. "Everything was a blur," she says. "I was so confused."

Health-care costs in China are rising rapidly, turning hospitals into symbols of unfettered capitalism. Chinese and international health experts blame runaway costs in part on an effort to make treatment more affordable for the poor. Authorities capped prices for basic drugs and procedures at below-market rates. But they let hospitals compensate by profiting on almost everything else, from advanced drugs to sophisticated diagnostic tests.

That decision created an incentive to provide high-end treatment that has transformed Chinese hospitals, making world-class care available to those who can afford it. Even small-city hospitals, once technological backwaters, boast CT scanners. In each of the past five years, Shanghai hospitals have spent nearly $100 million on sophisticated medical equipment, says Hu Shanlian, a professor of health management at the city's Fudan University and an adviser to the Chinese government. Drug sales account for 45% of the revenues of Shanghai hospitals, he says. "The health system is really in a crisis," he says.

Doctors, many of them employees of state-owned hospitals, also have an incentive to steer patients toward high-cost treatments and drugs. The average monthly pay for Shanghai doctors is less than $400, not much more than a taxi driver working overtime can make. But they can double their incomes through bonuses earned by prescribing tests and by dispensing drugs with high profit margins. Few medical systems in the world link doctors' pay so directly to revenue from patients, health-care economists say.

Mr. Mao, the Ministry of Health spokesman, contends that market forces have gone too far. "If you only trust the market, you will have a disaster," he argues. The government needs to play a leading role, he says.

The practices of hospitals and doctors are only lightly regulated by Beijing, and there is little self-regulation. China lacks the kind of medical professional associations that set ethical standards, hear complaints and punish wrongdoers in the U.S. and other countries.

When Chinese authorities decided on the national insurance plan, they failed to recognize an inherent design flaw: The system reimburses hospitals for at least a portion of whatever care they choose to deliver. In effect, government economists acknowledge, the state has become a blank check for doctors. The system encourages doctors to overprescribe expensive drugs and tests, economists say, then to charge patients for whatever their insurance does not cover.

In the U.S., health insurers guard against that outcome through "utilization review," a process under which they evaluate the medical necessity of hospital treatment. Tests and procedures deemed unnecessary are not reimbursed. Although the effectiveness of such reviews varies, the process discourages blatantly unnecessary treatments. In China, there are typically no such review procedures.

Most health-insurance plans in the U.S. also set out-of-pocket maximums for patients facing medical catastrophes. In addition to protecting seriously ill patients from financial ruin, the caps provide another incentive for hospitals to control costs: Large bills have to be justified to the insurance companies responsible for paying them.

A World Bank study of China by economists Adam Wagstaff and Magnus Lindelow concluded that patients with insurance are sometimes persuaded to undergo far more expensive treatments than the uninsured. Chinese doctors have "strong incentive to favor high-tech care over basic care," which may be more costly and sophisticated than necessary, the report said. Insurance may "actually increase the probability of large out-of-pocket payments," the report concluded. There is no formal complaint procedure for patients, the economists added.

The Ministry of Health's Mr. Mao says the government has spent two years negotiating with hospitals over how to make drug prices and profit incentive systems more reasonable. "It's a very complicated issue," he says. "It takes time. We don't want to get it wrong and then have to start all over again."

The Chinese government's share of total health spending has plummeted. Between 1978 and 2003, private outlays as a percentage of total health-care spending rose from to 60% from 20%, government figures show. The shift comes as chronic diseases such as cancer, which are costly to treat, replace contagious ones like tuberculosis as the biggest burden on the medical system.

Chinese government officials have acknowledged that health care has become such a financial burden to people, even to those with insurance, that it threatens social stability. President Hu Jintao has pledged to increase government health spending.

The government is trying to expand state insurance coverage to more people in cities and the countryside. In cities, officials are trying to set up a network of government-funded community health centers as a first stop for patients. They would provide basic care and advise patients about treatment options, drugs and hospitalization.

Adding Coverage

Before "big sickness" struck in 2000, Mr. Hu, the editor, and Ms. Cao, his wife, were making nearly $5,000 a year. In China, that put them at the bottom edge of the middle class. They had married late and were childless, which gave them some financial freedom. They bought a two-bedroom apartment with a $25,000 mortgage from China Construction Bank.

They both had insurance through their state employers. Like growing numbers of upwardly mobile professionals, they decided to supplement it for extra peace of mind. Believing that his government insurance would cover any "big sickness," Mr. Hu turned to American International Assurance Co., a unit of AIG, for personal accident insurance.

Like other Western insurers, AIG is betting demand will grow for private health insurance to cover gaps in government coverage. Mr. Hu's insurance agent at AIG, Wu Caihong, does a brisk business selling "big sickness" policies that offer lump-sum cash payments to policyholders who fall ill. She says she tells her customers that extra medical insurance "isn't a nice-to-have, it's a must-have."

Ms. Wu says that after selling Mr. Hu the accident policy, she tried repeatedly to persuade him to buy "big sickness" coverage. But by then, Mr. Hu's wife had contracted breast cancer, and Mr. Hu had no spare money for premiums on a new policy.

Ms. Cao, who had retired from her teaching job, still had government insurance coverage, but it did not cover the expensive form of chemotherapy she needed. Mr. Hu went into overdrive to make ends meet. He set out to earn extra cash at night by editing books he hoped would sell to China's hobbyists. He dashed off 11 books in four years, including a history of Chinese teapots and a collector's guide to subway tickets. But sales were disappointing, and the extra work has earned him to date only $1,500.

Last year, doctors informed Mr. Hu that he had stomach cancer. He also learned that his government insurance would not cover the kind of chemotherapy he needed. To save money during his first year of treatment, he relied on a mixture of medicines covered by his insurance. This year, after the cancer spread to his liver, he switched to a more powerful drug regimen recommended by his doctor. The new drugs were much more expensive -- and he had to buy them himself.

The more aggressively they battled their cancers, the deeper he and his wife pushed themselves into debt. They borrowed money from friends and relatives. Mr. Hu tried to sell their apartment, but he found that superstitious Shanghai buyers shun houses where "big sickness" has struck. He says even old friends, worried that being around him would bring bad luck, stopped dropping by.

So far, they have spent about $25,000 for her treatment and $12,000 for his. "When you get this disease, there's no bottom line," says Mr. Hu, a scholarly man who now has dark rims beneath his eyes. A Communist Party member, he is furious that so few drugs are covered by his government insurance.

In desperation over their illnesses, Mr. Hu and his wife have turned to religion. He became a devout Christian after a group of elderly women from a local church stopped by his hospital bed to pray. A black Bible sits by his pillow in the hospital ward. These days, he relies on donations from members of his congregation to help foot his hospital bills.

Ms. Cao's breast cancer has spread to her lungs, leaving her close to death. "We're both intellectuals. We're supposed to know about insurance," she says. "But we realize now that insurance just doesn't work. If you want to stay alive, you have to pay yourself."

--Ellen Zhu Shanghai and Kersten Zhang in Beijing contributed to this article.