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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Senor VS who wrote (1757)	7/10/1998 5:03:00 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 12475

The author, Jim Rogers aka "Mr. Bowtie", has more or less proved himself to be a nut. A couple of years ago, he was suggesting that investors sell all their US stocks and buy Sri Lankan black pepper! And if you dig deeper, you might also find him extolling the investment opportunities in Timbuctoo! I have heard the same bloke talk in an NPR interview about 6 months ago, where he was saying that over the next 3 or 4 decades, India would break up into smaller kingdoms. However, he said India "will do fine" for the next 2 to 3 decades -- as if investors will be helped by somebody ringing a bell when India makes the transition from prosperity to anarchy! As for claims about the "world's largest middle-class", here is an article by Shashi Tharoor that puts things in proper perspective : -------------------------------------------- A View of the World -- Myth of the Middle-Class Shashi Tharoor Whenever I hear foreigners talking about the 'Indian middle-class', I wonder what they mean. Much of the clamour about economic reforms has focused on this somewhat chimerical 'middle-class', a construct that may be sociological but is not entirely logical. The conventional wisdom is that this middle-class is some 300 million-strong, larger than the entire domestic market of the US, and, together with a very rich upper-class, has both the purchasing power and the inclinations of the American middle-class. Today's economic mythology sees this new Indian middle-class ripe for international consumer goods. Our television channels and glossy magazines overflow with ads for foreign brand names, from Daewoo's Cielo cars to Ray-Ban sunglasses. This is why Kellogg's rushed in with their cornflakes; Nike got our then cricket captain, Mohammed Azharuddin, to endorse their sports shoes; Mercedes Benzes are already rolling off the automotive production lines; and Johnny Walker Black Label scotch has become an Indian brand, not just one purveyed by smugglers. It was once said that more bottles of Johnny Walker Black Label were sold in India than were distilled in Scotland. Now, the joke will literally come true. But Kellogg's, I hear, has been dismayed by the weak response of the market; Nike is far from turning a profit; Mercedes knows they will sell very few cars; and Johnny isn't walking with quite the same strut as before. The reason is simple: the Indian middle-class is not quite what it's cracked up to be in the West. Most members of the Indian middle-class are quite content with their idlis or puri-bhaji for breakfast and have no desire to eat expensive bits of shredded cardboard merely because their American counterparts do so. Most find Bata shoes expensive enough; Nike's prices are simply phenomenal. A survey conducted between 1986 and 1994 by the National Council of Applied Economic Research (NCAER) in New Delhi has already largely debunked the myth of the Indian middle-class. After questioning 182,600 urban and 99,150 rural families, the survey found that India's consumers could be divided into five classes, not three: (1) the very rich, or six million people; (2) the ''consuming class'' of some 150 million; (3) the ''climbers'' (a lower middle-class of 275 million); (4) the ''aspirants'' (275 million, who in the West would be classified as ''poor''); and finally, (5) the destitute (210 million). It's only among the six million very rich that there exists a sustainable interest in Kellogg's, Nike or Mercedes-Benz. Not that Indians aren't spending more and acquiring more: since the 1980s, there has been a Reaganesque boom in buying. Forty million Indians own television sets, even if many of these are black-and-white sets bought second-hand. All but the most destitute own wrist-watches, bicycles and portable radios. Cumulatively, the NCAER survey concluded, India has a ''consuming population'' of 168 million to 504 million people. All of which suggests that though we do have a middle-class, it consumes fewer 'consumer goods' than the working-class in the West. The dollar signs may well be lighting up in the eyes of some foreign manufacturers who are looking at India, but they may not shine so brightly in those of the manufacturers of brand-name consumer goods. ----------------------------------------------

To: Senor VS who wrote (1757)	7/10/1998 5:50:00 PM
From: JPR	Respond to of 12475

Ravi: Your ref: worth.com Jim Rogers, who usually comes on CNBC on Fridays, once mentioned that the East Asian economy is better than Indian economy. He even mentioned that India will divide into many parts. Now he has changed his mind considering the new realities. The article throws a positive light and I would say that he understands India better now than before. JPR

To: Senor VS who wrote (1757)	7/10/1998 9:21:00 PM
From: Mohan Marette	Respond to of 12475

On black pepper,nutmeg,the great Indian middle class and the investment biker. The great Inidan Middle class-Fact or Fallacy. Ravi: Thanks for the link to the article. I 'duno' about Old Jimmy,he comes up with some wild ideas,first it was commodities [the CRB index has been on a downward spiral ever since I have been following it.] then like Dipy said it was black pepper in Sri Lanka [in all fairness to Jimmy one could have made some money on these belive I know as we have them back home-it is over $5 bucks a kilo now was even more,nutmeg will fetch you a pretty penny too these days.] blah blah blah. He was also touting Asia for a while and anybody who listened to him would have been in the poor house by now,well that is ok for Jimmy as he might have already made his money and he can afford to make wild-ass statements. I think old Jimmy is way ahead [perhaps by a century or more]of everybody else in thinking. He also predicted the break-up of Indonesia in 5 years but I haven't heard about the Indian break-up theory until now. I don't know what is the truth and what is not particularly considering there is a lot of unaccounted money in India and at the same time there is also a large number of unaccounted destitutes.One thing is for sure though that is in Kerala things are changing and it not about the super rich but the regular people.You should drive through the rural areas of Kerala and you will know what I mean. Myths and fallacies.[warning quite exhaustive] india-today.com Meet India's the super rich india-today.com Indian social climbers guide. india-today.com Best regards Mohan 'The nutmeg/black pepper farmer' Marette. PS: I also do have problem with statistics of any kind particularly one that is put out by government of India or anyone in India. Whatever happened to Sankar anyway??????