Friday, February 22, 2008

Water water, nowhere


Lack of water is fuelling conflicts worldwide!
Water Water water, nowheregives life, but its scarcity can lead to chaos and mayhem. Said to be the main cause of the Six Day War, between Israel and its neighbours, water (or lack of it) has influenced tempers and tensions all over the world. So much so that Anwar Sadat, once he had signed the peace treaty with Israel said that the only way he could foresee another war with the former enemy would be if he had to protect his water resources.

The current conflict in Darfur region of Sudan, which has captured the world’s attention and become the cause celebre for many Hollywood stars, also has its roots in the water crisis gripping the region. The conflict that so far has claimed more than Lack of water is fuelling conflicts worldwide!450,000 lives and displaced more than 2.5 million and which pits the more prosperous north against the impoverished south shows no signs of abating. A combination of adverse environmental factors, drought, desertification and increase in the population has pushed cattle rearing, ethnic Arab nomads from the north into the land of non-Arab farming communities in the south. The tussle for limited water has snowballed into this major humanitarian crisis, which threatens to destabilise the entire region. Sudan has been experiencing record lows in rainfall for the past many decades, turning millions of hectares of semi–arid land into desert. Already 12% of the forest cover has been lost in the last 15 years. Now it turns out that there may be water available after all, albeit under the ground. Scientists from Boston University’s Remote Sensing Department have claimed to have found a huge underground lake in the region. Covering an area of 30,750 sq km, (about the size of the 10th biggest lake in the world), this underground miracle if realised to its full potential, could meet all present and future needs of the people in Darfur. Let’s hope there’s someone left to use it.

Edit bureau: Amarpal Malhi

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Source :
IIPM Editorial, 2007

IIPM and Professor Arindam Chaudhuri (Renowned Management Guru

Thursday, February 14, 2008

Capex at the apex

IIPM International Student Exchange Programme

Indian firms know no stopping...

Fourth ‘Capital’ising on expenditureconsecutive year of 7% plus economic growth, and certainly Indian companies did play a crucial role in this growth. Some were born, some expanded, while some changed their internal structures; as India Inc. continued the capital expenditure binge in the 2006-07, as well. Even the hike in domestic & international interest rates failed to deter the investment plans of Indian companies. So, how’s the outlook of FY ’08?

According to RBI’s analysis in its ‘Corporate investment: Growth in FY ’07 and prospects for FY ’08’, capital expenditure of Rs.592 billion was expected to have been incurred during FY ’07 of projects sanctioned up to 2005-06. Fresh sanctions during FY ’07 envisaged substantial capex of another Rs.958 billion. Not only that, the number of projects and the number of high cost projects also increased.

“Fund-Indian firms know no stopping... raising by way of ECB, IPOs/ FPOs/Rights Issues and others were primarily used to finance companies’ expansion and capital expenditure plans. As many as 110 non-financial companies of the private corporate sector raised Rs.298 billion through rights/public issue, 3/4th of which was used for fixed investment,” says Prithvi Haldea of Prime Database. As percentage of aggregate project cost, power (18.1%), coke & petroleum (15.5%) & metals & metal products (14.1%) had a major share, while infrastructure businesses like telecom, hotels & restaurants, ports & airports and coke & petroleum witnessed massive increase in the aggregate project cost, as compared to previous year.

As far as FY ’08 is concerned, there exists a ‘limited’ downside, states the report; downside in the form of interest rates, currency appreciation and a bit if moderation because of cyclical downturn. In this regard, it must be noted that curb on ECB will surely hamper the capex plans of many midsized companies, hence India Inc. might see increased expansion at a decelerated pace.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2007

IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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