Nov 10, 2015

Travelogue - Bali

So we were at this island two weeks before the 'Rinjani' explosion & Chotta Rajan's arrest here made news.

Uluwatu - One of the best Views in Bali
      Indonesian Rupiah or IDR is one of the most depreciated currencies that I've come across. People discount the last three zeros in the currency :) .. Despite not being a net exporter of fuel, Indonesia seems to have kept the fuel rates at very low levels ( Actually comparable to middle east levels ) , thereby resulting in huge pressure on currency . Most of the fuel consumed here apparently comes from Brunei.

Rice cultivation / Rice Garden
    On the demand side, the tourism industry is booming.  The Island seems to have emerged from the downturn that came along with the bomb blasts of 2005. Even though the currency is very weak, nothing from food to souvenirs is cheap for tourists. Essentially, as the demand is there, the prices are also marked-up  . Government seems to be investing well in the infrastructure as well.. Largely good roads, an exceptionally large airport, very little law and order problem.

  One of the most fertile countries we have been to - practically all varieties of crops and fruits seems to grow here. Probably, that's because of the volcanic soil .Organic farming & associated culinary is a major tourism activity here. And if you are into that, I would say, don't miss out on that aspect in Bali.  The way in which they cultivate rice is quite interesting .  Hill slopes are leveled to create a terrain with many steps where paddy is planted.

   Highlight of Bali was  'Luwak Coffee' for me.  Apparently, one of the most expensive variety of coffee sold across the globe ,  it tastes good as well :) .  And you should not miss the Luwak coffee plantation tours if you are in this island. We picked up a packet of Luwak Coffee :)  .. Believe me, you won't have any apprehensions in tasting this once you see them making it
Luwak Coffee + a variety of others

Bali has something to offer for all segment of tourists -- From the party hopping crowd to the old age couples, you have a range of attractions from water sports to spirituality available here.

 I got a feeling that the Balinese population is deeply religious . Every well-off family apparently builds a temple next to their house. So, this temple building  is probably the next biggest economic activity after  tourism & allied businesses.

 The interior roads of Bali gave me a feeling that I was travelling in Rural Kerala ( especially Northern Kerala - minus the political part )  .. Curved roads, small rural shops , lush greenery all around .

As usual with any island nation, many spots with good views,  apparently you need to spend time to travel to North Bali if you have to experience the natural splendor in its full glory.

Oct 10, 2015 , Net Neutrality & Why Zuckerberg is Right ?

Seldom has people's ignorance surprised me so much than last month when this entire episode of Digital India & played out in the mainstream & social media  .  Regardless of whether or not you are supporting digital India , its absolutely ridiculous to even think that changing your profile pic will "register you as a supporter" of  .  Facebook or any other corporation does not work on any form of democratic decision making in such initiatives ( and they should never )  .  So, whether you change your profile pic or not has got nothing to do with

It also made me think about a point that I emphasized in my last post on this subject .  People tend to be taken in when you put a liberal dose of words like 'liberal' , 'neutral' , 'equal' , 'democratic'  - so on and so forth. The central point in trying to understand this entire proposition is accepting the fact the internet connectivity that you and I enjoy has a cost. And it is congested at many points in many degrees. When a service has an underlying cost,the best way to utilize it rationally is in making people the right amount of money for the right kind of service.

Facebook is not just doing this out of altruistic intentions . They too have a selfish motive. And that motive is to create an underlying eco-system where people are connected based on their social interactions ( the social graph ) so that they can do good amount of targeted advertising or monetize any other kind of revenue generator that they may bring along.  But if they end up creating a platform that gives connectivity and access to millions of people who cannot afford to have that otherwise, it should be welcomed ..  The potential that internet connectivity (even if limited ) can bring to the lives of rural population is really great. Scores of small scale business owners are seeing 'market' differently after the advent of e-commerce. Whether that's in the field of agriculture / education / anything else,  having an accessible connectivity is a game changer. is a platform designed keeping all this in consideration.. It does not support apps that are bandwidth heavy, it welcomes third party apps - Actually it promotes an android / ios type ecosystem for the unconnected world.

Few arguments that have been put against are

(1) If Facebook is so altruistic , why don't they just subsidize a data-connectivity charge for the  rural population   ?

Let's face it - Facebook is not just altruistic . It is a corporation which needs to come up with business models. If a business model goes hand-in-hand with social change, there's no reason to oppose that.  Also, these data-caps / bandwidth subsidies etc goes with an underlying assumption - it is that people are rational to use it appropriately. That is not often correct when it comes to the rural masses. One of the reasons cash subsidies in lieu of public distribution systems have not worked out well in developing world is that the cash is utilized for unintended things - alcohol / gambling / entertainment  - other than the primary intended areas - education / food / health . The same goes in this context. A large percentage of population is quite likely to use a subsidized & unrestricted bandwidth in movie downloads / videos / games .

(2) Would this stifle the chances of a small company incoming up with a next generation app ?
- If you glance the annual reports of any telecom company , you will realize the fact that data connectivity is the main driver of revenue growth . Telecom companies always have an incentive to market data plans that make more and more bandwidth heavy applications to the end consumer. Infact a subsidized platform like ( that offers bare basic internet with limited sites ) would be a good launchpad for telecom companies to upgrade customers to the next level of unrestricted internet. So, I would  say that fear is unfounded - except may be for monopoly markets.  And telecom in India is not at all a monopoly.

Any platform or connectivity has a cost - and someone needs to bear that cost - In this case, that cost is carried by telecom players, facebook and any other partner on this platform should make your connectivity charges much cheaper. Today as we are paying a flat fee for unrestricted content, we are effectively cross-subsidizing a bandwidth heavy gamer / movie downloader. If any of you have used Google Apps platform, is an extended concept of that .  And I think in this case, Zuckerberg is more correct than Tim Berners Lee    

Aug 4, 2015

Travelogue - Hamburg

Hanseatic city of Hamburg, as they address themselves is quite interesting. The word Hanseatic comes from the German word Hanse / Hansa signifying the league of cities or merchant association formed to align the policies to maritime trade.

If the Southern German cities like Stuttgart & Munich are known for their automobile expertise, Hamburg is about shipping & transportation. A huge container port with a beautiful harbour, Hamburg embodies the shipping culture into itself.  The maritime museum dedicated to various aspects of shipping from history to engineering ,  the infamous Reeperbahn ( Hamburg's red-light district ) ,  Hafencity - A modern city formed out of old harbor area & reclaimed land,   a la-Venetian style canal system ,  the city is quite engaging in itself.  

The star-attraction in this city was undoubtedly a place called 'Miniature Wunderland' . See the pics & Video .. This is a place where you should take your kids in the age group 10 - 15. Anyone can enjoy it though.

It actually made me realize why Germany is still an engineering super-power. Kids who grow exposed to this as well as the Maritime museum will develop a keen interest in engineering & shipping. Those interests will be honed naturally in a growing teen.  Probably this is the way in which the automobile industry in southern Germany builds engineering talent as well .  Compare this to the state in India where only a miniscule proportion of the engineering first year students know what they are really getting into.
A model in Miniatur Wunderland

One of the rail models in Miniature Wunderland

Hamburg, just like Singapore, preserves the harmony with nature exceptionally well.. There is this beautiful 'Lake Alster' , right in the middle of the city. Unpolluted, serene, Alster cruise will really make you wonder if you are truly in a big city like Hamburg.  Apparently, many millionaires have bought homes on the shores of Alster, pushing up the real-estate prices to sky-high levels

Just like Berlin, Hamburg is exceptionally well connected with U-bahn & S-bahn services,. We never hired a cab in the two days spent here.

Hamburg is bidding for 2024 summer Olympics. I wish I can return to see the games then in this wonderful city!

Jul 18, 2015

Travelogue - Berlin

Berlin lives & breathes history. No other city in the world would have gone through these many transitions in the last 100 years. From the rule of Kaiser William II, Weimar Republic, Nazi rule , war destruction, cold-war divide, re-unification, I wonder what all a 100 year old Berliner would have gone through. A 5 KM radius from Brandenburg Gate bears a number of sights relating to these times and much earlier as well.

The most remarkable thing about Germany that I've felt is the openness to admit mistakes. That is in-built into their culture. And Berlin has beautifully combined this openness & its apology to humanity with symbolism so that it is ingrained in every child who grows up in this city. Every historical memorial has an interesting twist or the other.

Holocaust Memorial - Berlin
Perhaps the most poignant one is the holocaust memorial next to Brandenburg gate.  Built at a staggering cost of about 25 Million Euros by Peter Eisenman , anyone's first reaction would be  - "Is this a staggering waster of money" ? .. But as you explore this and listen to the stories ( Narrated by our wonderful guide Jess  ), you tend to realize the rationale.. You cannot build an eye-candy to 'celebrate' this dark chapter in history of mankind. The idea is that one should feel a hollowness, should spare a thought for the millions murdered, it should leave an uneasiness in your mind -  all for a reason - so that anything like this should never be allowed to repeat.  As you sit back and think about it, I think this monument makes great sense.  Locate quite near to Hitler's bunker ( which is all covered now  - Only a car park is there at the site ),
Site of  Hitler's Bunker
this is a sad reflection of the generation whose life & aspirations were taken away from them

 The Neue Wache ( New Guardhouse ) is an interesting memorial along the same lines. Originally built during the time of Kaiser William III, dedicated & rededicated
     Neue Wache , Central Memorial for the
victims of  war & dictatorship
many times, this houses a statue of a mother crying over her dead son in a war. The building has an opening in the ceiling exposing the statue to the changing weather of snow & rain.

Almost opposite to this, is this area called BebelPlatz where Nazis did the infamous book-burnings . An empty shelf underground which can be seen though glass stands as the memorial. Engraved on a plaque next to it - "Das war ein Vorspiel nur, dort wo man Bücher verbrennt, verbrennt man am Ende auch Menschen"  ( "That was only a prelude; where they burn books, they will in the end also burn people" ) 
East German Mural painting giving a propaganda about how
good life is under Communist Rule

A photograph of an East German uprising crushed by Soviets.
The photo is of the same dimensions as the painting

This symbolism is not just limited to the war era. There is this Mural painting by East Germans depicting " how good" is the life in East Germany during the cold war time. Next to it, there is a photo of the same length which frames a picture of an uprising in East Germany which was crushed by the communist rulers with Soviet backing. 

The area from the holocaust memorial to Check-Point Charlie & beyond is referred as 'Topography of Terror' which has several of the infamous Third Reich buildings of SS, Gestapo & much more. 

Numerous graffiti adorn most of the sections of Berlin wall as well as check-point Charlie.

To sum it up, Berlin beautifully combines history, its apology to the world and sensitizes the current generation of the past . Happened to
At Check-Point Charlie, The military check point separating
Berlin into different zones during the cold war
hear a teacher explaining the Nazi rule, war & its aftermath to a set of school kids. The way they are explaining is by telling the history objectively - telling the kids that our nation made terrible mistakes once upon a time - takes a lot of candidness

There are a large number of museums / exhibitions in the city. We could see Reichstag only from outside as well. To cover this city fully, one would need a full week I think.

Perhaps the city with the most integrated public transport system that I've seen so far. Buses,trams, U-bahn, S-bahn.  If you are physically fit, there is no reason for you to hire a cab to see this city. The 3 day Berliner pass was well worth it with discounts in museum entries as well.

Highly Recommended if you are in Berlin - Original Berlin Walks  . Perhaps the best way to experience this city 

Jul 1, 2015

Travelogue - Prague

"None of us remember how or when we reached back. But all of us reached back hostel at some point in time"   - Overheard from a group of students who were discussing about last night's party. That signifies Prague for the youth .  Perhaps one of the cheapest partying capitals of the world.

Prague @ Night
The first impression that you get once you land in Prague is just like any other modern European city - impressive duty free shops, modern cars, you would find it difficult to spot any of those remnants of socialism or communism.  City is very well connected by a tram, metro & bus service .
Astronomical Clock

What Not To Do in Prague

We took an unplanned cruise through river Vltava which flows through the Czech capital. Perhaps, I'm drawn a lot more into these cruises after the magnificent Bosphorous cruise in Istanbul . Prague has nothing much to offer in this cruise other than Czech Music & good food - and perhaps a few photographic opportunities. So, if you are in Prague, this is something that one should not waste their time & money in.

What To Do in Prague

Take a walking tour escorted by a guide - We did this next morning and was really good. You are taken on top of Prague Castle Hill and from there, you start the walk down all the way seeing the castle, nearby shopping streets , Charles Bridge & Astronomical Clock.

Musicians, Portrait artists & road-side vendors along with the crowd gives sort of an old-life charm to Charles Bridge .A relic of the old Roman Empire -  Kamenný most  as they call in local language -  the bridge is perhaps the most visited landmark in Prague

What captured my imagination in Prague was a different landmark - John Lennon's wall -  
It was interesting to see the outpouring point of protests of an oppressed society. More on this in a separate post later
Charles Bridger @ Night

Franz Kafka lived in Prague . His house is converted into a museum now. If you are into those kind of philosophies, it could be an interesting visit as well

The so called Velvet revolution changed the face of Prague. For Czechs, it was an immersion into the end-less world of opportunities. Its leader & first democratically elected president of Czechoslovakia - Vaclav Havell - has a unique place in the heart of people over here. The airport in Prague is named after him.

Prague's beauty is that it is converging point of the new world partying crowd & the old / middle aged crowd who throng to see the medieval part .  It gives an impression that everyone - from the street-side artist to the elite rich can enjoy life here .

May 29, 2015

Game Theory, Nash Equilibrium & Grexit

John Nash died last week. Someone asked me about the significance of his work and the so-called Nash Equilibrium & Game Theory which won him the Nobel Prize. It made me think a while.  Lot of economic theories are just theories with very little practical applications. Is this game theory like that ? 
Much of the geo-political situations , competitive decisions in many industries can be modeled by applying game theory principles. If you model the problem correctly, this can give you pretty good insights into your competitor's strategy & give a lot of structure & logic to your decision making . I could think of no better example than the looming possibility of Greek default & subsequent exit that media has labelled as the Grexit question
But before that, how do you translate / model a problem into a Game Theory situation where we can apply the Nash Equilibrium principles . I stumbled upon a structured approach illustrated very well here 
Its important to understand the modelling part here . You need to model the Co-operate / Not Cooperate aspect into strategies / positions here. You maybe tempted to model Greece's strategy as 'Default on Debt' / 'No Default'. But that,s actually the result of a competitive position , not the position in itself. And once you have modeled the competitive strategies, you need to assign pay-offs ( which can be just a relative number ) to those .
These payoff values are debatable. But as long as those are relatively OK, that serves the purpose ( unless you are getting into the next level of probabilistic calculations there ) 
Now, Identify Greece's best strategy to EU's ' Restructure the debt'  position. That is always to do the fiscal reforms. If you don't do the fiscal reforms, you tend to risk EU's co-operation, potentially fail to repay further installments etc 
What's Greece's best response to EU's 'No restructuring stance'  ? It is still to do the fiscal reforms as unless they do that, they risk defaults, potentially fall out of Euro.
Whats EU's best response to Greece's 'Do the fiscal reform' position ? Their best response is to do the restructuring as, if they don't do that, Greece may still default on its debt inspite of fiscal reforms and  EU / IMF may miss further repayments
EU's best response to Greece's 'No reform' position ? A grexit is a position that everyone wants to avoid at all costs. So, EU's best response is still to restructure the debt so that Greece can continue to pay the reduced debt interest & continue to be in Euro  
So, where do the strategies overlap in ?  Do the reform, Do the re-structure column.  Greece has played its part very cleverly till now. They have made the repayments so far, they have tried some reforms. They are trying to nudge EU & IMF into the Co-operate proposition now. We'll get to know by June - 5 & may be later in the month, whether they reach a ' Co-operate Co-operate' position 
Now, what does John Nash say ? " Nash equilibrium is a solution concept of a non-cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy"
So, if they reach a Do the reform - Do the restructure position, no side has got anything to gain by moving off into a different position subsequently.
Let's see how it turns out ! 

May 23, 2015

Economics Of Retail Loyalty Programs

 I'm a great fan of Carrefour Loyalty programs scheme here in UAE. I think Indian retailers ought to learn a thing or two from the way they have designed it, purely from a perspective of maximizing long term profit .. I haven't seen anything close-by to the way this operates - may be its there in the developed markets of West.

Carrefour operates this loyalty points scheme - for every purchase, you accumulate varying number of points depending on the items that you buy. Once you reach 500 points, you get a 50 AED voucher.  There are two kinds of underlying point boosting schemes -  on certain days there are things like extra points / double points thats available to anyone who buys certain products  . These are presumably linked to Inventory clearing items.  So, sometimes, you get extra points for buying washing liquid , sometimes for biscuits etc.  Why I feel this is linked to inventory clearing  -  These items are usually set at the start of the week and often run out by the end of the week ( i.e, thursday ).

 The second set of 'loyalty boosters' is what it makes somewhat unique.. Based on your purchasing pattern, you get a set of coupons - like if you spend 50 dhm for meat / fish, you get 75 points etc ( within so and so date )  .  What Carrefour is doing here is to 'upsell' you or introduce you to new categories, which you usually don't spend. So, I've never bought beef from there. But I regularly get these coupons linked to those.  And these would be typically high-margin stuff for them. One of the mistakes that businesses do in designing this step is that they mix the inventory-clearing objective & upselling objective. This is a mistake that usually erodes their margins.

There is a flaw in their algorithm / logic here though. If I buy baby diapers & baby food together in a single purchase, I'm quite less likely to get a coupon which is going to incentivize me for buying either of these .On the other hand, if I buy only baby diaper in a purchase, I'm much more likely to get a coupon incentivizing me to buy baby food. Because the system apparently thinks that it is a related category - so let me prompt this customer to buy from that.  Similarly, if you buy fruits only in a single purchase, you are quite likely to get a coupon incentivizing your purchase either in vegetables / breakfast items / dairy products . I'd like to know if this hypothesis holds well in other carrefour-type loyalty schemes

So if you live near a Carrefour supermarket, I think staggering your purchase by categorizing your purchase items into largely non-overlapping categories can benefit you ( the consumer ) most

Economically, this is something that I'd call as a second-generation loyalty program. Plain loyalty programs like 'earn & burn' schemes still dominate the retail landscape in this part of the world ( Shukran points is the best example ) .  Those lack an ability to 'upsell'  / bring customer into higher margin products.  Carrefour does that nicely. This is important in retail business as unlike in services industries ( airline / hotel / dining ) etc, the marginal cost of goods is still high. So, you need to find ways to move beyond an 'earn & burn' reward scheme by catching in the customer & leveraging their spending power to the maximum.

Apr 11, 2015

Why Internet Should Not be Neutral ?

The chorus of 'open' , 'neutral' and 'free'  tend to capture the imagination of social media quite quickly. Back during my school and college days, there was this enormous campaign for 'free software' , without realizing what was 'free' in that context. Likewise , over the last month, the Net-Neutrality campaign has caught up the attention everyone . Much of this is misunderstood  & misinterpreted by the media.

The basic underlying question in this whole debate is - 'Can an internet service provider prioritize / de-prioritize certain content over the rest' ?  It is not easy to answer that unless you understand the underlying realities & implications.

There is this concept called price discrimination in Economics. It is all about pricing different consumers differently for the same service. In airline world, there are a number of different fare classes for the same sector. So, it is quite likely that the passenger sitting next to you has paid a totally different fare.  It is the dream of every business owner to do this in a perfect way - or achieve perfect price discrimination .  There is a different 'marginal utility' for any service from a customer's perspective. So, the price that he / she is willing to pay for a service could vary a lot.  So, if a producer can price the product correctly to each and every customer, he is maximizing his benefit or 'producer surplus'

Producer surplus is not just about maximizing producer's profit. It is an important component of a free-market mechanism. Adam Smith's 'invisible hand or self-directing market & unintended societal benefits cannot be achieved unless producers have a chance to maximize their surplus. Putting it in another way, unless producers are rewarded for their produce to the right level, they don't have any incentive to do more.

In a telecom/internet world, this is functioning more like a two-sided platform. There are two important players - end consumers & content/app/web providers.  ISP's like Airtel , Vodafone etc being the platform between them .

The argument put forward by proponents of net-neutrality is that if I have paid an amount for say 1GB of data, I get to decide which app / site I'm using - ISP's don't have any business to prioritize any of those.

Lets view the situation in a different way. Assume that there are only 3 applications - Facebook, Youtube, Ted  - that consume 100% of bandwidth . And lets assume that in a city, the overall customer base's bandwidth usage results in a bandwidth consumption of Youtube - 90%, Facebook - 9% and Ted - 1 %

Now, lets pick three consumers & their ideal or desired bandwidth usage profiles being
C1  ( FB - 90% , YT - 9 %  Ted - 1% )
C2  ( FB -10% , YT - 60% , Ted 30% )
C3  ( Ted - 90% , FB - 8 % , YT - 2 % )

For C3, the net-neutral world is a nightmare.  Owing to the   overall bandwidth usage distribution, his favorite content never gets delivered properly.  So, by paying an identical fare for the data plan, isn't he cross-subsidizing the population who are just hogging up the bandwidth by consuming FB & YTube?  Neither are C1 & C2 getting the ideal data consumption plans.

Can we imagine a system where C1, C2 & C3 are able to draw up a data plan based on their own bandwidth usage patterns ?  Essentially, we are talking about the so called 'anti-neutral world' here

From an ISP's perspective, this is all about creating certain priority lines and making each consumer & app provider or maker pay for the bandwidth usage as per their desired needs.  In a 'Net-Neutral' world, neither consumer , nor producer surplus is achieved - thereby making it an inefficient market infrastructure.

There is an underlying catch / danger here -  Can a company - say facebook -owing to their dominant market power buy the entire bandwidth capacity with Airtel and restrict the entire population to facebook only ?  I'd say, in  a monopolistic world, it would have been possible. But not in an ultra-competitive industry like telecom.

Would this lead to a world where, if you are a new App-maker, you would find it difficult to reach the consumers -  Maybe for a high bandwidth consuming application. But I'd say again that if your App is good, there would always be a segment of demand & that demand will find its way through the market

It is far better to live in an anti-neutral internet than in the present scheme of things where 90% of the available bandwidth is consumed by pirated movie downloads & streaming services without them paying their proportional bit for the bandwidth usage

For another interesting take, read Tim Harford's article on this

Mar 17, 2015

Travelogue - Cairo

Hardly did the aircraft touchdown, people started standing up and pulling down luggage from the overhead lockers, started ringing up their friends & relatives. ..Wow - I'm finally travelling in a sector just like my hometown Calicut where this happens on a regular basis.

Welcome to Africa !!! . Finally I set my foot on the erstwhile dark continent & the  'untapped economic potential' of 21st century.

The one hour taxi drive from Airport to Novotel hotel in central Cairo was so convincing that I don't think I'll ever dare to drive a car here . Driving here needs a different set of skills altogether. You zig-zag, you maneuver, yet you maintain the speed .

The chaos in Cairo just reminded me of Mumbai. A city with an ever increasing influx of people, Everyone struggling to make ends meet .  The drive next morning to Giza was just like driving through a Mumbai suburb.

The imposing pyramids took our breath away. The important thing about Egypt & Cairo is that unless you are without a guide , you'll not enjoy the trip.  Even in places like Moscow, where you can't read or communicate much in their language, you can manage without a guide if you are a bit tech-savvy ( trip-advisor, maps, language apps, etc ) .

But here in Cairo

* You need someone who shows you the monuments by telling the right mix of history
* You need someone to negotiate the rates , get tickets , gets you out of the chaos
* You feel safe with the guide overall

Fortunately we picked an extremely helpful agency ( ) .

The guide took us through the story of pyramids - I have to say that it was a heavy & interesting dose of Egyptology . What Pyramids made me realize is that the boundaries of human endurance are far far higher. In an age without machines, if they had to build it, with the most minutest of the details taken care of, it would have been an incredible effort.

But the best experience in Pyramids was not the sight in itself, it was the sound and light show at night. The history of Pyramids narrated by Antony Hopkins & Omar Sherief was really an awesome experience. A snippet from that embedded here.

If you are in Cairo, this is the experience that you should not miss at any cost.

Next to the pyramids, you have the Sphinx, the largest monolithic statue in world. Near the Sphinx you can see the ruins of a funerary chamber where the mummification used to take place

Visited a perfume factory & papyrus factory nearby the Pyramids. Again these are the places which you will miss unless you go with a guide.

The next major stop was the famous 'Egyptian Museum' in central Cairo. It is said that if you spend one minute seeing each of these artifacts, it'll take nine months to see this museum fully.  King TutanKhamun's artefacts, countless mummies, Rosetta stone ,.. This was a lifetime experience for someone like me who likes history a lot. And, fortunately the guide - Ahmed, knew enough & was passionate about Egyptology. Unfortunately, no photographs permitted here.

To be frank, Cairo is not a place where you would find comfortable roaming around on your own. Street vendors swarm upon you accosting you to visit their shops . Heavy military presence is there in the city throughout - that makes you feel secure, but yet uncomfortable. But the experience of pyramids & museum makes up for it.

It is a sad part that a place that is so rich in history has lost out on tourism front over the last few years because of political troubles.  Since the inflow of tourists have dwindled , it has made the local traders a bit desparate for business. That manifests unfortunately into this over-accosting of visitors.

I wish good times return to this place soon so that my generation don't miss on this wonderful piece of history on our planet.

Feb 14, 2015

Travelogue - Alexandria

“You can get a car of any make done here. Half of the city drives a BMW”  - remarked our guide Ahmed, as he wriggled us through the narrow lanes outside Alexandria railway station. It was an exaggeration.. However, for those who wonder where the second-hand / third-hand vehicles of the developed world end-up, the answer is Africa.  An average car-workshop guy here should be much more skilled than a car-mechanic in the West. Here to succeed he needs to mix and match. Body of a Benz, engine of a Chevy, I guess you can find any combination here.

We reached Alexandria after a three-hour train ride from Cairo. Though I did harbor expectations of capturing at-least fleeting images of the Nile Delta, those were quashed quickly. The feeling that you get while the train approaches ‘Misr’ station is exactly the same as that of train approaches to Mumbai or Delhi. Cramped & incomplete houses, people struggling to make ends meet, it is as good as any metro city in developing world in those aspects.

Alexandria - Corniche
Alexandria was ancient world’s gateway to Africa. It does not have the importance that it held in those days. But you can see remnants of the bygone era. Greco-Roman buildings, monuments, Italian influence, Turkish & Mediterranean style cuisine. This would be one of the most cosmopolitan cities in Africa. We even came across a movie theatre which was playing Shah Rukh Khan’s “Happy New Year”

As you navigate through the old city, you could see posters of Hosni Mubarak, Morsi & Sisi in various quarters showing how politically charged-up the atmosphere is.
Pompei’s Pillar & Roman Catacombs –  Most tourist guides would cover these two for you.  The historical significance apart, these might not appeal much to an average visitor.

Citadel at the place of 'Light House of Alexandria'

The sight of the Corniche blew away our tiredness.; Yesteryear’s wonder – “The lighthouse of Alexandria” is no longer there. Only a castle stands at its place. That’s from where you can get the best view of the Corniche skirting the Meditteranean.   This is where the legendary Mark Antony & Cleopatra lived once upon a time - a time when Alexandria was perhaps the center of the world.

I was surprised to hear that lot of Indians frequent to this city – And the reason behind that – 100 odd Kilometers to west of Alexandria lies this place – El Alamein, one of the prominent battle grounds of World war II . Thousands of soldiers of various nationalities lay buried there. Their relatives visit those sites even now.  Alexandria has a massive library – Bibliotheca Alexandria – One of the largest libraries in modern world.  We didn’t have enough time to cover that.

Alexandria left an impression of an old wise man in me. Someone who refuses to be taken lightly, yet who is not quite powerful to fight its way into prominence, but quite content with the age-old wisdom & intellect.

Jan 23, 2015

The Economics of Swiss Franc's Float

A Swiss watch or vacation in Zurich is going to cost you much much more.. The more I read, more I feel like I should have taken a Swiss trip before the this float decision
Much has been written about this. For a good introductory read, you can check the Mint article . Most of the literature of this decision has focused on the macro underpinnings. While it is true that the macro factors forced SNB to take this decision, I think it is important to understand the micro-economic implications of currency pegging & its aftermath
Switzerland is a country known for its political stability. It stood insulated from even the world-wars. Such a place , coupled with its banking laws naturally has an appeal for black & white money from risk averse people across the world.
The currency pegging was introduced by SNB to protect the economy from the global financial crisis. For a country, preventing appreciation of currency is quite easy -- Just print more money. The effect of this can be quickly assessed by checking a few numbers in SNB Balance sheet
If you look at period from 2010 - 2014, the total balance sheet size has approximately doubled ( CHF 269 billion to 525 billion ). If you look at where this has gone into, you would notice that bulk of it is  foreign currency investments ( 204 to 475 billion ) .  This is not accompanied by a proportional increase in economic activity or growth irrespective of which indicator you use to assess it ( GDP growth / consumer price / inflation ) .  This is best illustrated another two numbers in the same PDF. Bank notes ( value ) in circulation over the same time period has increased only by about 6%, whereas the deposits in domestic banks have grown about 9 times .  So, where this money has gone into ?  The obvious answer in all such economies is Real Estate
In such a situation, currency pegging ( i.e, capping appreciation ) makes matters worse for the local population.  Since the local economy has not really picked up, an average coffee-shop owner / farmer still sees his inflows largely the same in value ( CHF terms ). And when he goes to buy a home , he's kicked out of market by investors ( or, rather, risk-averse people ) who bring in Euros ( where, economic activity is much higher than CHF ) & convert it at a fixed rate to CHF.
The impact of this is lack of availability of affordable housing .Though the intention of currency peg was to keep the industry competitive, encourage investment, it ends up sidelining the local population.   At a micro-level, this drives huge resentment . Given the fact that ECB was about to take a cue from US Fed, currency peg would have left SNB with a very risky balance sheet - something which looks like a hedge fund betting on property & currency - and a disgruntled local population.   
In an increasingly connected economy, it is never a prudent decision to peg the appreciating exchange rate. Adam Smith's "Invisible Hand" or market forces would catch up with you sooner or later.