IT OUTSOURCING IN नेपाल

In today's global scenario outsourcing is now a growing trend among a wide range of business. Some business outsource to reduce costs, others outsource to focus their main efforts on core operations. Globalization has set the world economy on a momentum wherein protectionist national policies cannot prevail and one must opt to outsource in order to enjoy the lion's share of global market.

For Nepal potential is immense in case of making itself as an alternative to outsourcing destination. With the revolution in internet technology and the spread of internet many company based on BPO (Business Process Outsourcing) like Radiant Technologies Pvt. Ltd. (working for clients in USA and AUS), Serving Minds pvt ltd, E-serve, Web-Nep (many more to name) has already started working in Nepal and they are performing well. Education levels in countries in Eastern Europe and Asia have grown quickly, as a result traditional knowledge advantages of western countries have diminished these days. Driven by fierce competition and price pressure in the west many international companies are looking towards country like Nepal for outsourcing there job.

Every country hooks for a niche, like Netherlands (Holland) is focusing on designing circuits. For Nepal it can look for IT related services. We have more then 4800 IT graduates per year produced by IT colleges. These IT grads with immense creativity and knowledge needs to be promoted by companies and should build IT outsourced job to provide platform for them. Although India and China are the preferred outsourcing destinations at the present the rising costs in India and legal problems in China has forced western multinational companies to find new destinations for outsourcing. Poland is coming up in Eastern European region, and then there is Russia and former Yugoslavia. In the Asian region, I believe Nepal, Sri Lanka would be a great destinations because of the lower costs, sizeable English speaking population and availability of trained manpower. Outsourcing main driving force is a cheap labor. Apart from cheap labor for companies like Serving Minds pvt Ltd English also play an important role.

Countries like India, Philippines and Singapore are with high English literally rates and are till now have been a major outsourcing destination. Increasing labor cost in these countries can provide good opportunity for Nepal as an alternative to these countries. As companies can go to any length to get the cheap labor the question is, whether you want to hire a Customer service executive, IT professional or Clerk in USA for $7500, or in India for IRS 7500 or in Nepal for Rs 7500, no doubt the obvious answer is Nepal.

As India has garnered profit from outsourcing in recent years, this phenomenon has undoubtedly assisted it for its 7.5% per year growing economy; prospects for Nepal can likely be very good as well because the main advantages that Nepal posses are its comparatively higher rate of English literacy with cheap labor force and good pool of IT graduates. We can state a thousand odd reasons as to why you should outsource to Nepal. But the most important reason will always be "Cost Benefits". The value proposition that Nepal has is that you get high quality expertise at low costs, so undoubtely one will consider outsourcing to Nepal as an good alternative if it gets 45% savings without having to make a compromise on quality.

Cheers

A.M Dixit

Picture source: http://www.ramro.com/photo/flash.jpg

(I have published this article in national daily few months back, data might have been changed)

Keynesian stroke in Twenty First Century

In year 2008 the death of the dream of global free-market capitalism was shadowed over the world economy. Where in an interview by CNN CEO of Deutsche Bank Mr. Josef Ackermann said "I no longer believe in the market's self-healing power." The financial meltdown did not belong to its universe. This Global crash brought a reminder of the volatility and fragility of capitalist economies, and an end to hopes that booms no longer culminated in busts. And now this all at a once economic downturn has brought Keynesian theory of economics in the light. If you are a student of Economics you might have gone through theory by John Maynard Keynes "The General Theory of Employment, Interest, and Money." Where he pointed out that in a downturn, an economy simultaneously has idle factories, unemployed workers and too little spending. This creates the possibility of a virtuous circle: Getting people to spend more will put the factories back to work, staffed by the previously unemployed workers. Put it another way, in the short run, when the economy is operating below its potential, expanding demand can create supply. This theory sought to bring about a revolution, commonly referred to as the "Keynesian Revolution" in 1936 A.D during the time of great depression. Unfortunately later on 1970s his theory was suppressed by economist like Milton Friedman and other who were less optimistic about the ability of interventionist government policy to positively regulate the economy. In this era he may no longer be taught on economics courses, and many economics students may not even know who he is, but in the wider political culture he is still a potent memory. Rober Skidelsky in his book 'Keynes:the return of master' says "He has been credited with rescuing capitalism once before, so it is not surprising that he should be back on the front page of Time, and spoken of approvingly even in the Wall Street Journal

However, the advent of the global financial crisis in 2008 has prompted a rethinking of the relevance of Keynes' ideas. The Return of Keynesianism can be understood in the context of various competing perspectives from which policy recommendations originate. A key issue of contention is the optimal level of government intervention in economic affairs. Keynesian words came to practice when robust government intervention were done to tackle the financial crisis and with consensus of Government bodies a series of major bailouts followedv(starting on September 7 with the announcement that the U.S. government was to nationalize the two firms which oversaw most of the U.S. mortgage market—Fannie Mae and Freddie Mac). Further more appointment of Lawrence Summers, Timothy F. Geithner and Christina Romer to principal economic positions in his administration by US Presdent Barack Obama reflected Keynesian thinking. In a speech on January 8, 2009, President Obama unveiled a plan for extensive domestic spending to combat recession, further reflecting Keynesian thinking. The plan was signed by the President on February 17, 2009.

The greater the role of finance in the modern economy, the more unstable the economy is likely to be, and a key role of the state is, therefore, to find ways to build trust by creating greater stability. Keynes did not advocate a single policy valid for all times and all circumstances, such as deficit financing. Given the uncertainty inherent in economic affairs, governments needs to be prepared to experiment the best ways to stabilise the economy in the circumstances that they faced. We can say that the stroke by J.M Keynese, which helped to recover from the Great Depression is one again played in Twenty First Century at 2008/2009 to prevent other one.

Cheers frm:
A.M. Dixit

Write ups source:
a) http://en.wikipedia.org/wiki/2008%E2%80%932009_Keynesian_resurgence
b) www.economyprofessor.com
c) http://www.newstatesman.com/books/2009/09/keynes-economics-economy-crash

Picture source:
www.economyprofessor.com

Cheese Banking-?

In the period when recession is hitting, one bank in Italy takes Cheese as collateral. In Italy Cheese business is a Big business but these days even cheese makers are feeling a pinch from the economic downturn, so what they really need is support from banks. And in one part of the country that exactly for what they have got known as “Cheese Banking”.

Due to recession today price of Parmesan is approximately seven euro per kilogram but a year ago it was at least 10 Euros and there about a ring of cheese weighing 80 pound valued worth 300 Euros. So I guess you are really curios to know how this Cheese Banking does really work?....In MILAN - All that is golden in bank Credito Emiliano's temperature-controlled vault is not precious metal, but something equally prized in Italy: aging Parmesan cheese. A cheese maker would turn a percentage of Permesan into banks warehouse and in return Cheese maker would get a certificate that would be given to the bank to secure a loan. Banks vault nearly has about 410000cheese wheels, with fully capacity deposits would be worth 130 million EUROS. So precious is the cheese that each 80-pound wheel, worth about 300 euros, is branded with a serial number so it can be traced if it is stolen. The bank offers loans for as long as 24 months, equal to the time it takes the parmesan to age, at the euro interbank offered rate, plus 0.75% to 2%. The bank gives producers as much as 80% of the value of the product, based on current market prices. The Parmesan loan business contributes just 1 percent to the bank's annual revenue — but is critical to its image in the region, where agriculture is a key economic driver, said William Bizzarri, director of the Credito Emiliano subsidiary that deals in Parmesan deposits.

The regional bank in Italy accepts parmesan as collateral for loans, helping it to keep financing cheese makers in northern Italy amid the worst recession since World War II.I know its very fascinating to imagine that you want a loan for 900 Euros. So you walk into the bank and the manager says: "OK, how many wheels of Parmesan cheese do you have for collateral?" You answer, "I have three wheels." (Each wheel is worth 300 Euros.) "Fine, we'll take your three wheels as collateral for your loan," he says and draws up the contract. Meanwhile, you take your three wheels to the warehouse for inspection. All cheese must be aged for at least one year. Cheese that does not meet the strict standards at the warehouse is downgraded and the price reduced. After the inspection is completed, the bank manager gives you a check for 900 Euros. Not only does the bank take cheese as loan collateral, the interest rates on those loans are low because the bank actually houses the collateral for the loan, i.e. the cheese

The program allows Parmesan producers to pump cash into their business by using their product as collateral while it is otherwise sitting on a shelf for the long aging process, its history goes back when Parmesan cheese were used for financial operations since the Middle Ages, producers say it is ever more important because it ensures that credit keeps flowing during otherwise tight times. This is both due to its value, since each compact wheel holds the equivalent of 550 liters of milk, and the fact that aging takes years, making financing necessary until the product can be sold.

Parmesan wheels lend themselves well to use as collateral because they are eminently traceable. Each form is stamped with the month and location where it was produced, and after 12 months of aging, it earns the Parmesan imprint on it and those mark help identifies stolen cheese, in given case.

I am sure you have heard E- Banking, Online Banking but never heard this CHEESE BANKING…so remain fascinated till next issue....say CHEESE :D

From:

A. M . Dixit


Picture Source:
a)http://farm1.static.flickr.com/39/123179592_4744bacedb.jpg
Write up references:
a)http://itn.co.uk
b)http://www.bloggingstocks.com/2009/02/25

Being part of Global Enterprise Experience-2008

It was in the year 2008 when I participated in GEE online Business proposal competition; this experience was totally new to me. I would just like to share you some of my experience during the time and what concept our team built up to participate in event. Until that day as a business school student I was acquainted only with the real project works communicating with my collage friends. But when I participated in GEE (Global Enterprise Experience) 2008 project I got the chance to form a team of global participants. It was like dream come true to me because I remember once I told my friend “What if we formed a team from different parts of the worlds and have a single undertaking?”. Initially I was not confident about whether I will be able to deliver and remain committed in what will be asked for me to do, but my team leader Tanuja Patel, Sergio and my friend Ashish with other group members were continuously in touch with each other. With fruitful guidance from Deb (our coordinator) it was more than easy for us to continue our work.

Our Concept of business:

In this virtual world where Millions of people in the world currently excluded from financial markets represent, not only a potentially large profitable market, but a new angle from which to reduce world poverty, one which is much more pragmatic and decisive than just charity. Our proposal was focused upon the fact that a huge untapped market for mirco-pension exists in the developing world as demographic trends show the number of elderly people is rapidly increasing. This concept begins with a voluntary compensation plan to grow into offering other financial products and services to the worlds’ poor and not only targeting the elderly but families also to help provide self-employed poor individuals with lifelong financial security. Pensions, currently unavailable to the majority of poor people, could offer this hope. Liberty Financial Solutions mission was to ‘Democratize the capital markets’ and bring financial products closer to the world’s 4 billion poor starting with voluntary pension plans with almost no minimum capital requirements at the time that it provides complementary financial education to its clients. Educating the consumers is a key element of the marketing strategy which will include educating the target market on the benefits of managing their personal finances as well as the products we wish to offer them and their benefits. We targeted to finance and supply both products using our association with Cajas de Compensacion. This was parallel to concept of similar structured non-profit organizations like Building Societies in Latin America that provide credit, health, education and recreation to their affiliates. The business concept we proposed was not to be considered ‘written in stone’, but a flexible template that fits the existing social dynamics of each city. In order to understand those dynamics and particularly understand ‘poverty’ as defined by each city or country we should, first of all, put together a think tank with prominent minds of the academic sector, for instance; urbanists, economists, sociologists, as well as the financial sector. This would assist in determining the needs of the poor in a given city/country, how to possibly meet their needs as well as find or fill any gaps in the current or future financial market.

Although we didn’t bag the first prize but our effort on the research and concept to establish Liberty Financial Solutions was appreciated by all. This experience brought a first milestone in my life where I was given “Voveo Commitment Award” for my continuous effort for completing the business proposal in cyber team. I would like to thank GEE (Global Enterprise Experience) 2008 project team for giving me this opportunity to get involved in global project and be acquainted with such a talented team members, I miss my GEE team and hope to be part of it in near future.

CHEERS to all

A.M. Dixit

अ बुक Review of FREAKONOMICS

“This sensation will apparently redefine the way you observe the modern world.”- A.M.Dixit

It’s been couple of years when I started buying novels and books for my own, and one of the most interesting books that I ever read was FREAKONOMICS by Steven Levitt & Stephen J. Dubner. Through influential storytelling and ironic insight, Levitt and co-author Stephen J. Dubner shows that economics is, at root, the study of incentives -- how people get what they want, or need, especially when other people want or need the same thing. One becomes spell bound when you have to go deeply thorough questions like “Which is more dangerous, a gun or a swimming pool? What do schoolteachers and sumo wrestlers have in common? Why do drug dealers still live with their moms?” ….Right! these may not sound like typical questions for an economist to ask. But S. D. Levitt and S.J Dubner isn’t a typical economist. They are much like scholars who studies the stuff and riddles of everyday life, from cheating and crime to sports and child rearing and whose conclusions regularly turn the conventional wisdom on its head.

In FREAKONOMICS, they set out to explore the hidden side of... well, almost everything. From the inner workings of a crack gang, the truth about real-estate agents, the myths of campaign finance to the telltale marks of a cheating schoolteacher. This book usually begins with a mountain of data and a simple, unasked question leaving readers to solution of newly created unknown. As Leveitt sees it, economics is a science with excellent tools for gaining answers but with a serious shortage of interesting questions. His particular gift is the ability to ask such questions which when scratched from root will leave you fascinated.

The fieriest admission in the book refers to a distant cause of the dramatic crime rate drop of the 1990s, which was unlikely predicted by criminologist; political scientist similarly learned forecasters to be horrible future, as did Presient Clinton during that time. Mr Levitt and Dubner in explaining the Hidden side of everything states – “It wasn’t; gun control or a strong economy or new policy strategies that finally decreased the American crime wave. Policies and Security were among other factors, the reality that the pool of potential criminals had dramatically shrunk was with legalization of abortion in the early 1970s. As far as crime is concerned, it turns out that not all children are born equal. Not even close, Decades of studies have shown that child born into an adverse family environment is far more likely than other children to become a criminal. And the millions of women most likely to have an abortion were often models of adversity. They were the very women whose children, if born, would have been much more likely than average to become criminals. But because of legalization of abortion these children weren’t born. This powerful cause would have a drastic, distant effect: years later, just as these unborn children would have entered their criminal primes, the rate of crime began to plummet.”

There are numerous cases and questions this book drills into and every time you get close to the unabsorbed facts you become captivated. We define morality as how we would like the world to work, then economics represents how it actually does work, combining economics, morality and unobserved facts this book FREAKONOMICS has enough riddles and controversial stories to last a thousand cocktail parties. But more then anything else this sensation will apparently redefine the way you observe the modern world.

CHEERS


A.M. Dixit

Chaos

Nomad zephyr,
Chanting songs of lament,
Gush into my ear,
I try to smile but my lips can only part
The future is unspoken,
Present is heart wrenching,
May no child of demon be born tomorrow
All we can do is pray

AMONGST CHAOS- Dibya Karki

(There is truth in these words. They are not the mark of weakness, but of power. They speak more eloquently than thousands of tongues. They are the sound of overwhelming grief and never-ending patriotism).


Picture source (www.nus.navigators.org.sg)

FROM REBELLIONS TO GOVERNMENT, WHAT NOW?

Total of 106 seats out of 189 constituencies-till now, leading in most of constituencies where counting continues and expected to have more then 50% of the total members in the house, in the world history it is hard to find Rebels turned into government with huge majority at such a short period. Although I am not very well acquainted with the world politics but would not be amazed if there is a great deal of discussion in Foggy Bottom (metonym for the United States Department of State) Washington and Secretariat Building South Block in New Delhi about this surprising result of CA election.
Most of us might be wondering what led Maoist get the win in such a majority by defeating major parties in Nepalese politics and moreover Nepali Congress so called Goliath of the game. Analysts’ prediction about the election result has turned upside down; it’s been like a fairy tale story come true for Maoist because not even in real sense Puspa Kamal Dahal (Prachanda) would have imagined his party will win in such a manner. We can see this scenario of vote cast by people in various angles like; Did Nepalese wanted a change from same old head of politicians and their unimplemented ideologies? or Did they dared to take fruitful risk by giving the chance to Maoist? Because maoist striked hard by their campaign which was focused on minorities. I am sure that Nepalese are not so immature to vote without rational thinking and neither are they naïve in nature to vote forgetting what Youth Communist League so called brother group of Maoist party has done in past (some good and many bads). The views piles up as it differs from person to person, and who knows anything I quote will disappoint either of the parties. :D

I am not writing my thoughts to criticize the failure and appreciate the winner but I am wondering what will be the scenario now because the results are unexpected. Washington still has the tag of “terrorists” on the head of Nepalese Maoist even though they signed a peace deal with mainstream parties in late 2006 ending a 10-year of insurgency and declared that they were ready to embrace democracy, but the tag still pops up. There are many things that might change (can be bad or good) but there are certain major issues that is still hunting in our mind like; what will be the view point of International donors who serve as the life blood for the financial condition of the country and the NRN organization that has been formed for overall development in the Nepal because these organization focuses to boost foreign investment and if real communism is expected to follow then self sufficiency notion will shadow the country’s economy.
Future will determine whether people were rational enough or not and anything that’s not par with the expectation will surely disappoint us (Nepalese). So let’s hope for the best and prepare for the worst cause things are changed now.


Picture source (http://blog.com.np/united-we-blog/2006/11/25)
Sketch by Dewen via Kantipur