4th

Anniversary issue

Volume IV, Issue IOctober-December issue

Dear Readers,

It gives us great pleasure to bring to you the 4th Anniversary Issue of e-GloBuzZ, the quar-

terly e-periodical of IBS@SIMSR.

Throughout the academic year 2013-14 so far, IBS@SIMSR continued to have rewarding

interactions regularly with Senior Executives of companies engaged in International Busi-

ness and eminent personalities with substantial international exposure. Some of the nota-

ble Senior Executives of foreign multi-nationals operating in India, who graced IBS@SIMSR

interactions, were: Mr. Manikandan Vijayaraghavan, Director-Finance, Deutsche Bank and

Mr. Sanjiv Navangul, Managing Director-Janssen India, Johnson and Johnson India Ltd.

These interactions were covered in the last issue of e-GloBuzZ, July-Sept 2013.

We were privileged to have with us for the 4th Anniversary on 18th November2013, Mr. Prafulla Gupta, MBA from Har-

vard Business School, who was also a former Senior Partner at Booz, Allen & Hamilton and Prof. Dr. Porus Olpadwala,

Dean Emeritus, College of Architecture & Planning, Cornell University, USA.

The focus in this quarter Oct-Dec 2013 was on three major IBS@SIMSR events: 3rd International Business Conference,

PANGEA 2013 concluded successfully on 19th October 2013, 4th Anniversary celebration of IBS@SIMSR held on 18th

November 2013 (since IBS@SIMSR was inaugurated on 18th November 2009). The 3rd major event during this quar-

ter is the forthcoming International Business Day on 21st Dec 2013 as a part of Institute level prestigious annual event

Samavesh. We will cover the International Business Day at Samavesh 2013 in our next issue of e-GloBuzZ in Jan-Mar

2014.

Last week Nelson Mandela, a globally respected Leader and humanitarian passed away. We have paid a tribute in this

issue to Late Nelson Mandela, who not only shaped the future of South Africa, but also touched many lives positively

across the world.

We hope you like this issue of e-GloBuzZ, which, like the previous issues of e-GloBuzZ, has articles on diverse topics

within International Business and world affairs, written by students, both from PGDM-International Business and other

SIMSR programs. IBS@SIMSR requests our esteemed SIMSR faculty and students to contribute articles for the next

issue of e-GloBuzZ, Jan-Mar 2014. Best Wishes for a very happy and rewarding New Year to our readers.

Prof. C. P. Joshi

Faculty Mentor, IBS@SIMSR

Area Chairperson (General Management) & Program Coordinator (PGDM and PGDM– sInternational Business)

Foreword

E - G L O B U Z Z

Faculty Mentor - Prof. C.P. Joshi Editor– Sanghmitra Varma Sayoni Maitra Divya Midha Hardik Dhagai Meenakshi Vyas Designers– Manu Manaswi Aayush Velaga Ankur Chauhan Did you know? Trimurti Gupta Sanghmitra Varma Circulations– Praneeta Shukla, Sabika Naqvi All the views expressed in this magazine reflect the personal opinions and views of the authors and do not reflect IBS@SIMSR views

A TRIBUTE TO NELSON MANDELA COVER STORY US FEDERAL SHUTDOWN OF 2013 ADAPT OR DIE

COUNTRIES IN FOCUS WINDS OF CHANGE USHER IN MYANMAR GREECE NEEDS A REBOOT VIETNAM- THE RISING JEWEL

PERSONALITY IN FOCUS MARIO DRAGHI

KNOWLEDGE CENTRE BITCOIN: BREAKING MONETARY BARRI-

ERS

IBS UPDATES IBS LAUNCHES ITS NEW LOGO

IBS EVENTS PANGEA 2013 BY IBS@SIMSR IBS CELEBRATES ITS 4TH ANNIVERSARY

1 2 4

6 8 10

14

16

18

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20

N elson Mandela, South Africa’s first President,

who transformed the country from apartheid

to a democracy and emerged as an interna-

tional icon of justice, passed away at the age

of 95 on 5th December, 2013. By the time of his death, he

was declared as the greatest persona of mankind. The

idea of greatness now retires into the historical shadows.

As the saying goes “Death is not the greatest loss. The

biggest loss is something that dies inside us while we

continue to exist”. But everything has not come to an end,

as he has left us with a great legacy richer than anything

money can buy. He endured great personal hardship when

he was imprisoned for nearly three decades, so that oth-

ers could have a life full of dignity, equality and opportu-

nity. He fought against discrimination and exclusion, but

rose above hardest of the evils to heal and reconcile a

fractured nation. He lived his life by virtues of honesty,

trust sharing with peace, without even once compromising

on his beliefs or his principles.

"India, in particular, had great affection and regard for

him. Inspired by Mahatma Gandhi's principle of Ahimsa

(non-violence), his mission was a moral bulwark for our

principled struggle against apartheid in South Africa that

was marked by violent attacks during those days. It also

reflected India’s fight for a world free from violence. We

were highly honored when Nelson Mandela accepted

Bharat Ratna, the highest Indian civilian award, much be-

fore being conferred with the Nobel Peace Prize in 1993,

which he shared with Mr. Klerk, who helped him to get a

release from the prison three years earlier than the de-

clared sentence. Mr. Klerk also bought peace to the ongo-

ing apartheid.

Nelson Mandela is one of the most inspirational people

without whom we would have been living in a largely

restricted world even today. Apart from making a differ-

ence to the quality of life globally, he did serve the world

with many other teachings too. He inspired us to believe

that no hurdle is too big; no way is too hard to choose, and

no rival is so powerful for us to quit. “The sun keeps rising

each day, necessarily not as bright as yesterday, but the

show must go on!!”

The important message he delivered to the world is that

forgiveness is not our weakness. It was evident when he

quoted: “Its reconciliation & forgiveness but at no cost any

form of revenge”. He was crystal clear about the fact that

just as it could not be a country of white men in power; it

could not be a country of black domination either. In the

future, the majority would need the minority and vice-

versa. Ultimately there is a power in forgiveness too, both

in granting and seeking it.

In a true sense, he showed us the path of truth and

strength of human spirit inspiring us in many ways with his

work, his life and his words. The legacy he has left us with

is one we will always cherish and we will always thank God

for Nelson Mandela. Let us all join together to mourn the

legend who never differentiated any individual on the ba-

sis of their ethnicity and saw everyone as a human being

to be treated with equal respect and dignity.

May his soul rest in peace knowing that he leaves behind

many who will always continue his struggle, his fight and

carry forward his legacy.

Shagun Changoiwala (PGDM-IB, 1st Year)

A Tribute to Nelson Mandela, a true

statesman; a man destined to lead and

a freedom icon

U S Federal Government shutdown occurs when

laws funding the government are not passed

by the Congress. The US government’s fiscal

year is from October 1 to September 30 and these laws

need to be passed for proper functioning as mentioned in

the US Constitution. Government

shutdown doesn’t imply that US

has no government. Services im-

portant for law and order defi-

nitely function normally. Other

departments function only with

minority of their staff reporting

and performing basic functions. Some of the government

institutions are entirely shut down.

Till date, the US has faced three major federal government

shutdowns. The first shutdown took place in 1978 and

lasted for 18 days, when Jimmy Carter was the president.

The issue was related to a defence bill which included the

funding of a nuclear-powered aircraft carrier. In 1995-

1996, the second shutdown which lasted for 21 days,

took place during Bill Clinton’s tenure as the president.

This shutdown was caused due to the conflict in funding

of Medicare, education, environment and public health in

the 1996 federal budget. The recent shutdown took place

from October 1 to October 16, 2013 under the presidency

of Barrack Obama. This shutdown resulted due to the fail-

ure of the Congress to pass a law related to appropriating

funds for the fiscal year 2014.

The recent shutdown took place as a result of a funding

gap. This was created by the two chambers of the Con-

gress, the House and the Senate, after they failed to agree

on two aspects. One aspect was the funding of Patient

Protection and Affordable Care Act, also called

Obamacare, and the other being Debt Ceiling. Currently

the House is dominated by the Republicans and the Sen-

ate by the Democrats. Obamacare needs funding from the

Federal Budget the next fiscal year. The House Republi-

cans insist on a new bill to defund Obamacare.

Obamacare aimed at making health insurance mandatory

for Americans. Republicans feel that it'll hurt employers

and add to overreach by the federal government. Republi-

cans critiqued that imposing medical device will lead to

sending jobs overseas. Democrats support the law saying

that it will increase the access to health care. Obamacare

prevents those with pre-existing medical conditions from

being denied health insurance, and advocates that those

who have health insurance will no longer pay indirectly to

those who show up in emergency rooms uninsured.

Another reason for shutdown was that of the Debt Ceiling.

VISHNU MANASA KANCHIRAJU & SAKSHI SINGHANIA(PGDM IB 2013-15)

US Federal Government

Shutdown of 2013

Republicans critiqued

that imposing medical

device will lead to

sending jobs overseas.

Democrats support

the law saying that it

will increase the ac-

cess to health care.

Business Name

led to a lost productivity equivalent to $2.0 bn. It was esti-

mated that the shutdown would cost the economy about

$55 bn and as per Goldman Sachs the GDP growth of US

would be reduced by 0.9%. Key government functions

such as health services, training and support of traffic con-

trol services were affected and also national parks, monu-

ments, museums remained closed.

A temporary solution was found to the US shutdown on Oct

16, 2013. Congress passed an interim appropriations bill

with majority from both the Senate and the House. The

deal funded the US government until January 15, 2014

and raised the debt ceiling of the country until February 7,

2014, which finally ended the economic shutdown.

Debt ceiling is the limit fixed for the money that the gov-

ernment can borrow. It was first introduced in 1917 and

since 1960, the government has raised it 78 times. Cur-

rently it is set at $16.7 trillion and it was estimated that by

October 17 this limit would be exceeded. Had the debt

ceiling not risen by then, the US would have begun to de-

fault on its debt, for the first time. Once when it nearly hap-

pened in 2011, the US credit rating was downgraded. Re-

publicans indicated that they will demand concessions

from Democrats on spending so as to raise the debt ceil-

ing. President Obama opinionated that there will be no

negotiation on the issue as defaulting on the national debt

would make Americans ‘deadbeats’.

The shutdown had major consequences. One of the signifi-

cant effects of this shutdown was that approximately

800,000 government employees were furloughed, which

Singapore has the highest ratio

of millionaires in the world.

Did You Know

USA’s biggest export to China for

the last 5 years has been trash.

Did You Know

W hat if, one morning you woke up and real-

ized that your business is obsolete. What

would you do to reclaim your market and

become relevant in your business again? Can you leverage

this opportunity to take your business to new heights?

This scenario is the prelude for the article–staying relevant

in the current economic scenario. In the current volatile

environment companies need to

be flexible to remain relevant. The

adage ‘Either you change or you

die’ holds perfect in today’s time

and age. One needs to constantly

monitor his business’s relevance

in the market and acclimatize quickly enough to maintain

it.

Let us look at some real life examples of such a nightmar-

ish scenario. We all remember Eastman Kodak, which

used to sit pretty at the top till a few years ago. Founded in

1892 it was a quintessential American company whose

brand was known worldwide due to its “film photography”.

Kodak had captured 90% market share in the USA and

enjoyed 70% margins.

Kodak was caught unaware as the realms of photography

moved from Analog to Digital. The company simply could

not match the pace with which the transition was taking

place. With the advent of digital photography people could

create, edit, store and share images instantly. As a result,

Kodak’s core competence had started to become obso-

lete. In Jan 2012, the company filed bankruptcy. It re-

emerged from bankruptcy in Sep 2013, but only as a pale

shadow of its former self.

The lesson to be learnt from the Kodak saga is that unless

your business possesses ongoing relevance, you are not

going to survive however good you may be in your busi-

ness. If you focus only in the current market space you

might miss on the bigger picture.

Let’s move on to the next example. In 1991, Nokia lost its

major market when the Soviet Union dissolved as an eco-

nomic entity but this proved to be a blessing in disguise for

the company. Earlier the company focused on manufactur-

ANIRBAN CHAKRABORTHY(PGDM IB 2013-15)

Adapt Or Die

One needs to con-

stantly monitor his

business’s relevance

in the market and ac-

c l imat ize qu ickly

enough to maintain it .

it had itself created. Nokia could not establish its strong

hold in the US market and it did not focus on the Smart-

phone arena, the telecom industry’s fastest growing area.

By 2012, Samsung had captured the market big time and

production of Nokia fell below the breakeven point. Micro-

soft acquired Nokia in Sep 2013 for $7 bn –a remarkably

low price considering Nokia’s market share of $77 bn five

years ago.

So the biggest hurdle is how do you ensure that your com-

pany is relevant? One thing which can be done is to ask

yourself the hypothetical questions of the nightmare sce-

nario: if your biggest market or your core business van-

ishes over night, can you think of ways to bring impetus to

the business? This mental exercise will keep you agile and

help you monitor the underlying relevance of your busi-

ness.

ing paper, rubber and wood-based products. Mobile

manufacturing was a miniscule portion of the company’s

business. Nokia realized the potential in this miniscule

portion and decided to leverage on it for future growth. By

1994, Nokia sold its industrial units and got listed in NYSE

as a premier manufacturer of mobiles, hence creating a

completely new market space. Such was the dominance

of Nokia that the market share of Nokia was more than

the combined share of its top three competitors.

Nokia could not afford to be complacent having estab-

lished itself as the market leader in this new market

space. Over the recent years Nokia failed to keep pace

with the latest technological developments in the market

Business Name

After Coca-Cola was forced out of

India in 1977, the Indian

Government started its own brand

of cola known as Double Seven.

Did You Know

S itting on the floor of a semi-furnished flat in cen-

tral Yangon, men in the early twenties are tapping

vigorously on the old laptops and occasionally

gazing at the bits of paper pieces scattered around them.

These men would easily pass for college going guys fid-

dling with their Facebook. These

men are in the Research team

of NLD (National League for

Democracy). It is Myanmar’s

main opposition party and is led

by Ms. Aung San Suu Kyi. They

need to produce a weekly media

-monitoring report shortly which

will provide links to all the main references to the NLD and

Myanmar in the international press.

These people don’t have any office so they meet at Mr.

Nay Chi Win’s flat. Mr. Win is the founder of the Unit at the

age of 32. The only accessory the team working at his

place is a whiteboard. His main concern is whether he

would be able to afford the rent. However, the founding of

the Research Unit signifies that they are taking rapid

strides to transform the NLD.

NLD was founded in 1988 by Ms Suu Kyi and others to

stand against the dictatorial military rule in Myanmar but

all these years it has found it very difficult to function with

its full potential. The party’s power had been on the wane

because most of its leaders were put behind bars and

tortured and the party was declared illegal. However, since

2011 under the reins of the President Thein Sein’s de-

mocratic reforms, the party has been on the verge of

power. It won 43 out of 44 seats in the by-elections con-

tested in 2012. If the same trend continues in 2015 gen-

eral elections, NLD could sweep the parliament and Miss

Suu Kyi can become the president.

There has been a complete reversal in the party’s fortunes

but many people still feel that the party has not been able

to keep pace with the changes. The party was criticized

vehemently in its first National Congress Meet in March

due to its dominance by old leaders. Moreover, there were

accusations that Miss Suu Kyi is largely inaccessible and

HARDIK DHAGAI & ANIRBAN CHAKRABORTHY (PGDM IB 2013-15)

Winds of Change in

Myanmar

NLD was founded in 1988

by Ms Suu Kyi and oth-

ers to stand against the

dictatorial military rule

in Myanmar but all these

years it has found it

very difficult to function

with its full potential.

Business Name

been sent to USA for English training and to learn democ-

racy.

There has been constant criticism from all quarters due to

Miss Suu Kyi’s continued isolation from the party and also

on her lack of willingness to deliver the required knowl-

edge on policy framing to others. Also, the leadership has

been trying to get the clauses in the constitution changed

so that Miss Suu Kyi can become President in 2015.

These arguments have irked her advisers. They have im-

plored the people to be more patient considering the short

time frame and slender budget at their disposal. While she

is being attacked for being isolated from the party, she is

frustrated that nobody is willing to raise his voice against

her. Fame has allowed her to control a world audience

and at the same time taken her away from her own peo-

ple.

the party members do not have any voice in policy making.

Some even go to the extent of complaining that the party

does not have a basic policy formation framework so it is

highly underprepared to form the government in two year’s

time. And so the young generation party members have

taken it upon themselves to carry the baton ahead.

The research unit was set up by Mr. Nay Chi Win to

“institutionalize” and “decentralize” the party because he

felt it was too dependent on Miss Suu Kyi. Training is pro-

vided to NLD members in local branches all around the

country. The cadres who make it Yangon are given training

on basic administrative functions and Public Relations.

They are also provided training in personal grooming by

Ms. Tin Moe Lwin who is a famous model. The MPs have

The campaign of Amul girl is the

oldest continuous running

campaign in the history of

advertising.

Did You Know

How massive is IKEA? It

consumes 1% of the world’s

wood!

Did You Know

D espite being a developed nation, Greece has

been a troubling pot for quite a while now.

Though July reports show that the trade deficit

has slightly reduced, a lot more damage has already been

done. Global investor community has lost confidence in

Greece and the currency is in a

bad shape. Traditionally, Greece

has been an exporter of food,

beverages and textiles. Although

the Current Account Deficit re-

duced marginally during reces-

sion, it has always been a cause

of concern. Tourism recorded a

robust growth even during reces-

sion years and contributed 15% to GDP.

Unemployment and low productivity are the biggest prob-

lems for Greece. Machinery, transport equipment, fuels

and chemicals are major imports in Greece. Greece, a

capitalist economy, has 40% of public sector contributing

40% to its GDP. Athens Olympic Games in 2004 provided

some spotlight on the global platform to Greece, provided

better infrastructure, support from other countries but re-

cession in 2008 proved it be the worst performer. Austere

measures were introduced; imports were reduced, but it

hardly made any mark on the report card. Today, Greece

hangs in a delicate balance between economic sanctions

from Euro zone, remittances from expatriates, shipping

and tourism revenues and revival methods to reboot its

economy. The culprit in the entire scenario is the huge

borrowings made over the time.

According to a recent report, Greece government has

taken many measures to simplify and ease pre-customs

and customs norms to encourage exports. The key point-

ers in this proposal seek to reduce the number of days

needed to export by 50% and reduce cost by 20% by

2015. A single national clearance window for exports has

also been proposed. With intent to improving trade relation

across borders and attracting foreign investors, sound ex-

port policy is under creation. Government has shown keen

interest in resolving issues related to lack of information

and transparency; this will help to boost confidence in

MEENAKSHI VYAS (PGDM RM 2013-15)

Greece Needs a Reboot

Today, Greece hangs

in a delicate balance

between economic

sanctions from Euro

zone, remittances

from expatriates,

shipping and tourism

revenues and revival

methods to reboot its

economy.

Business Name

beverages and textiles. I wouldn’t call it a lost battle for

Greece, because as a nation Greece has a plethora of re-

sources, trustworthy trading partners and warming up re-

forms. If played patiently and wisely, Greece can regain its

lost aura and stance.

start-up firms. For example, providing information regard-

ing the number of items approved for imports and exports,

clearing unnecessary documents for set up procedures,

legal and fair procedures will be promoted. Greece relies

on tourism, services and exports for most of its GDP. Infra-

structure of the country is pretty well settled since Greece

remains one of the developed countries. Hence, Greece

has little to worry in this sector.

Outside EU, United States is Greece’s largest trading part-

ner. Traditionally, Greece has been an exporter of food,

The Hard Rock Cafe is owned by the

Seminole Tribe of Florida. They

purchased Hard Rock Cafe

International Inc. and all related

entities for almost $1 billion in March

2007.

DID YOU KNOW

SONY’s most successful business is

selling Insurance, which contributes

about 63% of their total profit.

DID YOU KNOW

V ietnam, officially the Socialist Republic of Viet-

nam, is the easternmost country on the Indo-

china Peninsula in Southeast Asia with a popu-

lation of around 88.78 million (2012). Vietnam

has a long seacoast in the eastern side, is bordered by

China to the north, Laos to the northwest and Cambodia to

the southwest. Its capital city is Hanoi – the second larg-

est city in Vietnam after Ho Chi Minh City (Old name: Sai-

gon – a gem stone city of Indochina during USA domi-

nated). Other major cities of Vietnam are Da Nang (main

city of center Vietnam) and Hai Phong (the most important

northern seaport due to its large maritime facilities).

History

Vietnam has one of the longest histories in the world. Ac-

cording to researchers, Vietnam’s history has been divided

into seven periods from 500,000 BC. These being: Prehis-

tory, Bronze Age, Dynastic Vietnam, French Vietnam, First

Indochina War, Vietnam War and Reunification & Reforms.

During the Dynastic Vietnam period, Vietnam was domi-

nated by China for over 1000 years. The Chinese rule im-

mensely influenced the Vietnamese administration, law,

education, culture, literature and language. In 938 AD,

after a millennium of Chinese domination Vietnam re-

gained complete independence.

For centuries to come, China

continued its attempt to gain

dominance over Vietnam, but

the citizens of Vietnam never

stopped fighting to stay inde-

pendent.

In the 17th century, Vietnam’s independence was gradually

terminated by France. The French administration imposed

significant political and cultural changes on the Vietnam-

ese society. A Western-style system of modern education

was developed. The French created plantations and pro-

moted the export of tobacco, indigo, tea and coffee. How-

ever, their policy was strict for civil rights, the Vietnamese

suffered a lot in this period. A nationalist political move-

ment soon emerged, with leaders such as Phan Boi Chau,

Phan Chu Trinh, Phan Dinh Phung, Emperor Hàm Nghi and

Ho Chi Minh fighting for independence. The French main-

tained control of their colonies until World War II, when the

war in the Pacific led to the Japanese invasion of French

Indochina in 1941. The Japanese Empire exploited Viet-

nam's natural resources to support its military campaigns,

leading to the Vietnamese Famine of 1945, which caused

up to two million deaths.

The year 1925 also marked the founding of the Viet Nam

Thanh Nien Cach Menh Dong Chi Hoi (Revolutionary Youth

League) in Guangzhou by Ho Chi Minh. Ho Chi Minh is also

called the Father of Vietnam. He was influenced by the

Marxist-Leninist revolutionary doctrine. In 1941, the Viet

Minh, a communist and nationalist liberation movement,

sought independence for Vietnam from France and the

Pham Thi Huyen, PGDM-Marketing (2012-14)

Vietnam- The Rising Jewel

The Chinese rule im-

mensely influenced the

Vietnamese administra-

tion, law, education,

culture, literature and

language.

also reached the shores of the Red River Delta. A maritime

trade among China, India and Indonesia used the delta as

a convenient stopover. Among the array of goods and

ideas, thus brought to Vietnam

was Buddhism from India. While

the Vietnamese aristocracy

clung to Chinese Confucianism,

during most periods the com-

mon people embraced Bud-

dhism, adapting it to fit their

own indigenous religions and

world view. During the French

colonial period, the Vietnamese culture was influenced by

the Europeans in terms of religion (Catholicism) and hand-

writing language (Latin alphabet). Since independence,

the cultural life of Vietnam has been deeply influenced by

government controlled media and socialist programs.

Vietnam’s religion is a mix of Buddhism, Confucianism,

Catholicism and Taoism. Vietnam’s visual art is strongly

influenced by the Chinese Buddhist art. Vietnamese music

varies from three regions: North, Central and South. Water

puppetry is a distinct Vietnamese art which had its origins

in the 10th century and is very popular in the northern

region. Vietnamese cuisine is created by the traditionally

cultivated wet rice and extremely diverse follow regions.

One of the nation’s most famous dishes is the Pho. The

national costume of Vietnam is the Ao Dai. However, Ao

Dai is worn only in traditional festival, school uniform and

wedding. In daily life, Vietnamese clothes are Western

styles.

Political

The Socialist Republic of Vietnam follows a single-party

socialist republic framework, where the President of Viet-

nam is the head of the state and has executive power. The

Prime Minister of Vietnam is the head of the government,

in a one-party system led by the Communist Party of Viet-

nam. Legislative power is vested in the National Assembly

of Vietnam. The Judiciary is independent of the Executive.

The election for the President of the Socialist Republic is

end of the Japanese occupation. Following the military

defeat of Japan and the fall of its puppet Empire of Viet-

nam in August 1945, the Viet Minh occupied Hanoi and

proclaimed a provisional government, which asserted na-

tional independence on 2nd September. The first govern-

ment of Vietnam was formed Ho Chi Minh's Democratic

Republic of Vietnam.

After independence in North Vietnam, United States rea-

soned to support South Vietnam against the communist

insurgency. The United States gradually increased their

contribution to the Vietnam military. US forces became

involved in ground combat operations in 1965, and at

their peak they numbered more than 500,000. After that

they indulged in nonstop bombing on North Vietnam, caus-

ing many deaths of both, American and Vietnamese peo-

ple involved in warfare. During this time, Vietnam received

lots of support from China and the Soviet Union. On 2nd

July 1976, North and South Vietnam were merged to form

the Socialist Republic of Vietnam. The war left Vietnam

devastated, with the total death toll standing between

800,000 and 3.1 million, and many thousands crippled by

the use of chemical weapons such as Agent Orange.

Culture

Vietnam is known as the Cultivator of Wet Rice and the

nation of the Fertile Plains of the Red River Delta in north-

ern Vietnam. Vietnam is considered as part of the East

Asian Culture due to long term dominance by the Chinese.

During the Chinese millennium, other cultural influences

While the Vietnamese

aristocracy clung to

Chinese Confucianism,

during most periods the

common people em-

braced Buddhis m,

adapting it to fit their

own indigenous religions

and world view.

done in period of five years and is decided by the National

Assembly of Vietnam. The political environment of Vietnam

has been very stable after independence. At present, Mr.

Truong Tan Sang is the President and Mr. Nguyen Tan Dung

is Prime Minister of the socialist Republic of Vietnam.

Economy

Vietnam is a developing country and is a well known emerg-

ing market with an attractive location and a stable political

environment. After 1991, the Vietnam economy experienced

rapid growth with average GDP growth rate at 7.3%. IT was

the target market of many global firms then. Vietnam has

become a leading agricultural exporter and has served as an

attractive destination for foreign

investors. Nowadays the econ-

omy of Vietnam relies largely on

Foreign Direct Investment to

attract capital from overseas to

support its continual economic

development. Over the past 20

years, FDI inflows into Vietnam

have increased tremendously in

terms of share of investment,

trading turnover and GDP per-

centage. As of December 2012, the country is home to

14,522 valid foreign investment projects with a total capital

of over US$210.5 billion.

In terms of demographic, Vietnam has 70% of its population

in working age (from 15 to 65 years). In 2012, GDP was

141.69 USD billion, growth rate at 5% and inflation rate was

9%. The economy has been unable to achieve its targets in

the recent years because it was affected by the slower lend-

ing as banks strain under the weight of bad debt incurred

largely by the state sector.

Economic sectors are Agriculture, Energy, Industry and

Manufacturing, Service and Tourism, and Banking & Fi-

nance. In 2012, the best performing sector was Agriculture.

During this year, Vietnam became the biggest coffee ex-

porter and also the top supplier of rice to the world. Petro-

leum is the main source of energy which contributes to

about 25% of the country’s energy consumption. Besides

that, mining and quarrying are also important industries that

contribute to GDP and provide employment to the workforce.

The growth rate of GDP for this industry is 9.34% per year.

Vietnam’s banking system consists of a combination of state

-owned, joint-stock, joint-venture and foreign banks, but the

state-owned commercial banks predominate over most of

the state-owned enterprises. Vietnam has two stock ex-

changes the Ho Chi Minh Stock

Exchange (HOSE) and the Hanoi

Stock Exchange (HNX).

Vietnam’s currency is called Viet-

nam Dong (VND).

International Relations

The Vietnamese government’s policy is very liberal towards

other countries. As of July 2013, Vietnam has diplomatic

relations with 182 nations throughout the world. Vietnam

became a member of ASEAN in 1995 and the WTO in 2007.

Besides that, Vietnam is also a member of the World Bank,

IMF, The Asian Development Bank and APEC. A critical rela-

tionship of Vietnam is with ASEAN.

ASEAN Free Trade Area (AFTA) was established in January

1992. The AFTA effectively removed trade barriers such as

tariffs in order push for freer trade among member states.

This led to the creation of opportunities for companies with

an ASEAN presence to take advantage of the 10 different

economies in the region by way of the Common Effective

Preferential Tariff Scheme. Vietnam’s major ASEAN exports

Vietnam’s banking system

consists of a combination

of state-owned, joint-

stock, joint-venture and

foreign banks, but the

state-owned commercial

banks predominate over

most of the state-owned

enterprises.

Vietnam’s major ASEAN

exports are crude oil,

computers, rice, steel,

gas and petrol, phones

and components, coffee.

are crude oil, computers, rice, steel, gas and petrol, phones

and components, coffee. If comparing with other countries

in the block, Vietnam is the potential location as center

among members in block.

India and Vietnam relations

The Republic of India and the Socialist Republic of Vietnam

enjoy strong bilateral relations in terms of economic and

cultural ties. Bilateral trade touched US$ 2.5 billion in 2008

and continues to grow rapidly. Vietnam’s exports to India in

2008 registered an increase of 47% over 2007 and reached

USD 389 million. More than thirty

Indian companies have set up

Representative Offices in Viet-

nam. A large majority of these

offices are located in Ho Chi Minh

City. India now ranks 11th among

the main 4export markets of Viet-

nam. In the first seven months of

2011, the two-way trade value

was over US$2 billion, 41 percent

more than the same period last year, with US$1.3 billion by

imports from India and US$739 million by Vietnamese ex-

ports.

Major commodities exported from India to Vietnam are ani-

mal feed, machinery & equipment, pharmaceuticals and

pharmaceutical materials, ordinary metals, material for plas-

tics, iron & steel, leather & textile materials, medicinal ingre-

dients, cotton and pesticides.

India’s imports from Vietnam are largely dominated by com-

modities such as coal, pepper, rubber and cinnamon. Com-

puter hardware parts, garments and textiles also figure

among prominent items imported from Vietnam.

Both India and Vietnam have been working to strengthen

their cultural ties as well. The Indian Council for Cultural Re-

lations (ICCR) annually organizes the Cultural Exchange Pro-

gram, signed between the Government of India and the Gov-

ernment of Vietnam for studying, training and research in

various fields. 6 (six) scholarships are also awarded under

GCSS scheme annually to Vietnamese students for the un-

dergraduate, postgraduate degrees and for pursuing re-

search at Indian universities.

New Road

The new trend of many international manufacturing enter-

prises has been to look for relocation or expansion of their

China operation to capture alternative markets and thus,

hedge their risk of operations in China. Vietnam is a huge

market for consumption, is also easy to connect with ASEAN

countries in terms of location and tax deduction. Besides

that, the Vietnamese government offers many attractive

advantages for foreign businesses, including a number of

preferential policies and tax incentives, free trade status

within the thriving ASEAN region and a variety of economic

zones and industrial parks with an abundance of low priced

labor. Vietnam will become the most attractive place for

companies that are looking for emerging markets.

More than thirty Indian

companies have set up

Representative Offices

in Vietnam. A large

majority of these offices

are located in Ho Chi

Minh City. India now

ranks 11th among the

main export markets of

Vietnam.

H e is the 9th most powerful personality

in the world according to Forbes Power-

ful People list of 2013, is the most

popular name in the news since the European crisis

and he is, none other than, Mario Draghi. Draghi is

the 66 year old President of the European Central

Bank. He succeeded Jean-Calude Trichet as the third

President of the European

Central Bank on 1st November,

2011, after being appointed

by the leaders of 17 eurozone

countries.

He was born in Rome on 3rd

September 1947, and com-

pleted his graduation from La

Sapienza University under the

supervision of Federico Caffé-

a notable economist. In the year 1996, he earned a

PhD in economics from the renowned Massachusetts

Institute of Technology, United States of America in

Economics with his thesis “Essays on Economic

Growth” under the supervision of two other well

known and Nobel Prize winner economists Franco

Modigliani and Robert Solow.

Mario Draghi brings a rich experience with him. He

was previously appointed the Head of the Bank of

Italy- the central bank of Italy. From 1984 to 1990,

Mario was the Italian Executive Director at the World

Bank. During the tenure of 1991-2001, he was the

Director General, Italian Treasury. He was also the

Vice Chairman of Goldman Sachs International from

2002-2005. From 2006-2011, he headed the Finan-

cial Stability Board (FSB), an international organiza-

tion that seeks to head off the risk from the global

financial systems.

Mario has earned the nickname “Super Mario” for

having navigated through the minefield of Italian poli-

tics ingeniously.

The European Central Bank is the eurozone’s central

bank which is responsible for the currency Euro and

administrating the policies of 17 European Union

states which makes use of the Euro. The main objec-

tive of the ECB is to maintain the eurozone’s price

stability.

In late 2009, the Eurozone was entering one of the

worst sovereign debt crises and the former President

Jean-Claude Trichet had resisted strongly within the

European Central Bank to providing any contempla-

KINNAR GALANI (PGDM-IB 2013-15)

Personality in Focus-

Mario Draghi

Draghi is the 66 year

old President of the

E uro pea n Ce ntra l

Bank .He was also the

Vice Chairman of Gold-

man Sachs International

from 2002-2005.From

2006-2011, he headed

the Financial Stability

Board (FSB), an interna-

tional organization that

seeks to head off the

risk from the global

financial systems.

ing cost low. It also helped the government to finance

themselves in the time of crisis. On 7th November

2013, Mario dropped the interest rates to a record

low to prevent rapid disinflation in the eurozone.

However many economists argue that the OMT pro-

gram may have pacified the financial market but it

will not help in meaningful recovery. The OMT pro-

gram has the potential to backfire and it may have

already backfired even though it is not used.

Mr. Draghi is credited for his efforts which have pre-

vented the eurozone from collapsing and tearing off

from each other. However the uncertainty and latent

challenges in the measures implemented by ECB to

solve the problem of euro crisis will surely put his fire

-fighting skills to real test.

tion to Greece which had defaulted on its debt. Jean-

Claude Trichet had faced a serious criticism for the

European Central Bank’s response towards the great

recession.

After the end of his term in October 2011, Mario had

the herculean task of maintaining the financial unity

and stability across the seventeen European states.

In 2011, Mario took his first move by inundating the

bank with cheap liquidity using a program called the

Long Term Refinancing Operation (LTRO) which

helped in stabilizing the banks and prevented the

seizing up of the inter-bank lending market.

On 26th July 2012, Mario Draghi said at an investor’s

conference in London, “Within our mandate, the ECB

is ready to do whatever it takes to preserve the

euro”, he added “And believe me it will be enough.”

In September 2012, he revealed his nuclear move of

ECB would see buying unlimited quantities of short-

term sovereign bonds which would keep the borrow-

Ever thought of a currency which defies all theories

about money till date, which is neither regulated by

any country or central bank but by a cryptography

algorithm, a currency which even doesn’t require your

personal identity to transfer funds across borders

and is acceptable irrespective of the country you are

using it in. Welcome to the world of digital currency:

Bitcoin.

Bitcoin is an open source peer-to-peer electronic

money and payment network introduced in 2008

by pseudonymous developer "Satoshi Nakamoto".

Though nobody could ever trace him, the idea has

$1.5 billion under circulation.

How does it work?

The system is based on

cryptographic code which

acts as money and can’t

be replicated on the net-

work. As soon as you in-

stall the Bitcoin app on

your computer or mobile a

wallet is generated. This

wallet has public address and private keys. Anyone

can send Bitcoins to a wallet using the public address

provided by the owner of the wallet, while the private

key must be entered by the wallet owner to send Bit-

coins. New Bitcoins are created by an algorithm and

computing power is taken from all computers on the

Bitcoin network. The entire network is then used to

monitor and verify both the creation of new Bitcoins

through mining and the transfer of Bitcoins between

users. Each new transaction is broadcast across the

Bitcoin network and a log is maintained called block

chain which is validated every 10 minutes. The sys-

tem thus makes it computationally nearly impossible

to make any illicit transaction like using same code

again or reversing the transaction after the seller has

dispatched the item. That is because having such

forged transactions validated and attached to the

globally accepted block chain would require outpac-

ing the network's combined computing power.

Confused..? J Well don’t worry; understanding the

technology behind is not our prime objective. Let’s

focus on what it’s bringing to trade.

MANU MANASWI & KUSHAL SUNEJA (PGDM IB 2013-15)

BITCOIN:

Breaking Monetary Barriers

Bitcoin is an open source

peer-to-peer electronic

money and payment net-

work introduced in 2008

by pseudonymous developer

"Satoshi Nakamoto". The

system is based on crypto-

graphic code which acts as

money and can’t be repli-

cated on the network

search engine started accepting Bitcoins for some

services offered by its subsidiary Jiasule.

Observers believe that digital money will prove bene-

ficial to developing countries as it will provide a cur-

rency immune to manipulations done by powerful

central banks of the world. For example when a gov-

ernment bails out a failed bank or insurance com-

pany by printing more currency, it actually debases

the currency as a whole in favor of a few which is ac-

tually the condition of world since 2007. Digital cur-

rency attracts since it is immune to all such nuances.

Ernie Allen, the president and C.E.O. of International

Centre for Missing and Exploited Children, said, “We

believe that the digital economy can achieve social

good, particularly in bringing about real financial in-

clusion for the 2.5 billion adults on the planet today

without access to banks, credit cards, or the main-

stream financial system.”

Recent news:

World’s first Bitcoin ATM exceeds $1M in trans-

action volume within one month says “The

Guardian”

Bitcoin tops $1,000 as Virtual Money Gains

Popularity reports “Bloomberg”

Experts clash over crypto-currency reports

“BBC news”.

How governments and markets are reacting?

U.S. Senate Committee on Homeland Security and

Governmental Affairs called a hearing on the risks

and benefits of digital currencies such as Bitcoin on

Nov 18, 2013. The point of concern for majority of

stakeholders was that it is not in their interest to al-

low digital currency be an offshore industry. Their

concern was due to the fact that currently none of

world’s three big Bitcoin exchanges are in USA. BTC

China alone constitutes for one third of world’s Bit-

coin transactions where it has been a big success.

United States has now understood that Bitcoin will

grow either ways, with or without its investments and

seems to be working on strategy to find its way

through.

In China, where government generally has tight regu-

lation on internet and businesses, it has not stepped

in to regulate Bitcoin. Instead CCTV and the newspa-

per “People’s Daily” both state run media houses ran

positive reports on digital money last summers. In

October, Baidu which runs China’s most popular

W e at IBS@SIMSR believe in evolving with

the world and continuing to grow. This

change in our logo, as a visible part of our

steps towards rebranding, is

intended to align ourselves

with the idea of a more dy-

namic and focused 'us'.

The new logo has come by

way of our attempts to lu-

cidly visualize our ideology

as a team driven to engage

in constantly building stu-

dents' domain knowledge in

the realm of international

affairs while functioning as a

connect between the stu-

dents and industry experts, our guests and our alumni.

Dear readers, this is what the transformed 'us' stand for

vis-à-vis the renewed logo. The new logo is a picture of the

globe surrounded by forward rolling spokes. The globe indi-

cates our vision of transcending borders to understand the

forces that drive the world. These multi-dimensional driving

forces are represented by the surrounding, forward moving

spokes. This forward move-

ment symbolizes our consis-

tent effort to enhance global

sensitivity.

This logo is an interpretation

of the very same objective

which is at the heart of our

committee, which is to act as

an instrument for students

to gain knowledge of the

global business environment

and connect them to busi-

nesses worldwide. It is with

great pleasure that we share this with you!

SAYONI MAITRA (PGDM-IB 2013-15) & DIVYA MIDHA (PGDM 2013-15)

IBS@SIMSR Launches

its New Logo

1 9th October, 2013 witnessed another successful

annual International Business conference

PANGEA 2013 at SIMSR. Taking forward the pur-

pose of IBS@SIMSR to bring education and industry to-

gether to enrich the students through interaction with sen-

ior and competent company executives, this flagship event

brings various industry experts together on one platform to

address and interact with the SIMSR students.

The event began as scheduled at 10:30 am in the Red

Auditorium of the Institute with lamp lighting ceremony by

our honourable Director Dr. Satish Ailawadi and our es-

teemed guests. Introductory addresses were delivered by

Director Sir and Prof. C. P. Joshi, the Area Chairperson,

General Management and Program Coordinator for PGDM

and PGDM-International Business. The event was graced

by our most eminent speakers: Mr. Sunil Bahl (Vice Presi-

dent) - Sara Hong Kong Ltd, Mr. Rohit Pandya (General

Manager) - ECGC, Mr. Rishikesh Joshi (Head, Corporate

Services) - L&T Infotech and Mr. Somashekhar (VP, Treas-

ury and Forex Management) - AXIS Bank. They spoke on

various interesting topics like Third Country Trading, Coun-

try Risk Mitigation, challenges in entering new markets

and the latest developments in Treasury and Forex man-

agement worldwide. Students interacted with the industry

panellists and discussed various other topics in a brief Q

and A session. Finally the conference closed with the vote

of thanks given by our Faculty Mentor-IBS@SIMSR Prof C.

P. Joshi.

IBS@SIMSR Hosts

Pangea 2013

Meenakshi Vyas (PGDM-RM 2013-15)

O ne ought to focus on ‘we’ and ‘us’ and

not on ‘I’ and ‘me’ to be a person of

worth in today’s world.

“Vasudhaiv Kutumbakam”

This has been the crux of wisdom from all our Vedas

and scriptures and moral stories, probably since

time immemorial, and no one could have explained

it better than our esteemed guest Mr. Prafulla

Gupta.

Friends! We are talking about the recently and suc-

cessfully concluded 4 th Anniversary of IBS@SIMSR.

With

guidance of our mentor Professor C P Joshi, hard

work of the team and pleasing presence of a lovely

and lively audience, we were able to pull together a

great event on our team’s 4 th anniversary on 18 th

Nov, 2013.

IBS@SIMSR thanks you all for gracing the occasion

and making it a success.

The celebrations commenced with SIMSR prayer,

followed by a welcome address by Prof. C P Joshi.

He cast light on the motto of IBS@SIMSR i.e. to com-

plement classroom learning through interaction with

international experts. Sir also talked about various

events conducted by IBS@SIMSR over the last four

years and about our very own quarterly e-publication

e -

GloBuzZ.

We also had the privilege of having with us another

esteemed guest Prof. Dr. Porus Olpadwala.

DIVYA MIDHA (PGDM 2013-15)

IBS@SIMSR Celebrates its 4th

Anniversary on 18th Nov 2013

(From Left to Right) Dr Porus Olpadwala, Ms. Kanchi Daiya, Prof C.P.Joshi, Shri Sameer Somaiya and Mr Prafulla Gupta

Mr. Prafulla Gupta, who has over 40 years of inter-

national experience and has worked in more than

40 countries in diverse sectors like Management

Consulting, FMCG, Banking, Petrochemicals & Phar-

maceuticals, enlightened us with the lessons of life.

He was Senior Partner at Booz, Allen & Hamilton,

USA.

He emphasized on judgment skills, power of expres-

sion, ability to build institutions, leadership capabil-

ity, strength of character and ability to take deci-

sions to be the keys to success for aspiring manag-

ers today.

Prof. Dr. Olpadwala, who is on the Academic Board

of Somaiya Vidyavihar and is Dean Emeritus of Col-

lege of Architecture, Art & Planning, Professor

Emeritus Department of City & Regional Planning -

Cornell University, Ithaca, New York answered que-

ries of students related to higher studies abroad.

Ms. Kanchi Daiya, Manager, New Initiatives at

Somaiya Vidyavihar also graced the occasion.

This very interactive session ended with a vote of

thanks by Prof. C P Joshi.

As our Director Prof. Dr. S C Ailawadi said in his in-

augural address at PANGEA 2013 on 19 Oct, 2013,

“IBS@SIMSR has achieved many milestones and

many are yet to be achieved”.

We are confident of achieving new challenging mile-

stones with your continued support.

Did You Know

While the global agency, the United

Nations has 193 members, the

behemoth global beverage giant Coca

Cola is sold in 205 nations. Now Cuba

and North Korea are the only two

countries where Coke is not sold.

For any suggestions contact us at ibs.simsr@somaiya.edu

K.J.Somaiya Institute Of Management Studies and ResearchSomaiya Vidyavihar, Vidyavihar( E )

Mumbai