Weekly Update: A lesson From Tiny Cuba; Succession At Reliance

The tiny Caribbean country, Cuba, is a speck compared to India. Its population of 11 million people is less than half of most Indian metropolises. Cuba struggles to remain afloat, its economy is restricted by US sanctions and revenues from tourism, a major source of income for the nation, has all but dried up since the Covid pandemic began in early 2020. But what is a curious surprise is how Cuba has managed to keep afloat in the wake of Covid. More than 90% of Cubans have been vaccinated with at least one dose of the vaccine; and 83% have been double-dosed. And this while many much larger and more powerful nations with stronger economies have struggled. The other remarkable fact is that Cuba has developed its own vaccines to administer to its citizens.

How did Cuba do it? In early 2020 when the pandemic’s first wave began gathering momentum, Cuba realised that it would need to act fast. Lack of resources and the sanctions imposed on it made it difficult for the nation to import vaccines at huge costs. So it got its own scientists to double up and develop vaccines. Those efforts bore fruit. Early this year, Cuba became the smallest country in the world to develop and manufacture its own vaccines.

Last year, the spread of Covid in Cuba was alarming with the small country reporting hundreds of deaths a week. But this year the story is different. Covid infections have plummeted and deaths are down to two or three a week. But the Cuban “miracle” is the result of something that the erstwhile head of the nation, the late Fidel Castro, had done decades ago. In the late 1980s and early 1990s, Cuba invested heavily in biotech and healthcare, not only in creating pharmaceutical research facilities and hospitals but also in training doctors and other healthcare personnel. The result is a robust infrastructure that is paying back now.

Investing in healthcare is vital for developing countries but often it gets neglected. During the second wave of the pandemic, India’s lack of hospital infrastructure was in sharp focus as patients struggled to get hospital beds and oxygen.

As per the World Health Organisation’s data relating to Domestic General Government Health Expenditure (GGHE-D) as a percentage of GDP in the year 2018, India’s share of GGHE-D in GDP is 0.96%. That figure might have gone up marginally but it is still far lower than in many comparable countries. The lack of public health facilities takes a huge toll on India’s population and even in ordinary times patients have to depend on private medical facilities that are often expensive and poorly regulated.

In extraordinary times such as now, the problem is further exacerbated. Recent reports suggest during the third wave of the Covid pandemic, which is yet to reach the peak in India, there could be an acute shortage of healthcare staff. The nightmarish memories of seriously sick people gasping for oxygen or trying desperately to get hospital beds barely a year ago are still vivid. And the lessons from those experiences have to be learnt. For instance, the majority of Indians are not fully vaccinated (only 44% are, according to official estimates). The need of the hour is for India to accord top priority to healthcare infrastructure–be it through investment in hospitals, training of more healthcare professionals and research. If tiny nations such as Cuba can do it, why can’t India?

Is Reliance Readying For Succession?

Twenty years ago, after Dhirubhai Ambani died, a very public and acrimonious battle broke out between his two sons, Mukesh and Anil. It is widely acknowledged that the former emerged a victor from that spat. Today, Mukesh Ambani has grown his inherited Reliance empire into a US$217 billion empire, spanning oil refining and petrochemicals, telecom and retail, and he is one of the world’s richest businessmen.

Recently, he announced that the group was working on a succession plan. That should come as good news in corporate India. Mukesh who is 64 is still very much an active head of his diversified group but a succession plan at this juncture would be a prudent thing to embark upon. Part of the reason for the fight that he and his estranged brother had was because their father, Dhirubhai, had not clearly earmarked a succession plan. Mukesh has three children, twins Akash and Isha, 30, and Anant, 26.

‘Mukesh’s statement on succession has, predictably, led to speculation about how succession will be managed in the group. Will its businesses be split up and shared as inheritance for his children? Or will there be some other way of ensuring that the process happens smoothly. One theory doing the rounds is that perhaps the plan would be not to split the businesses, given that each of them have a different set of risks and future potential. For instance, in the long run, refining and petroleum could become a sunset industry given the move away from fossil fuels. On the other hand, Reliance’s telecom business is seen to have a brighter future both in India and globally. 

Many believe that the next move by Reliance could be to set up a family trust and bring the flagship company Reliance Industries under it. The trust’s board could have as members, Mukesh himself, his wife Nita, and his three children. That could ensure that the businesses remained under family control and minimise intra-family discord. The coming months would probably reveal what really will be the succession plan at Reliance but corporate India will be eagerly waiting to see how it unfolds.

Weekly Update: Air India Boomerang, A Neta’s Privilege & Richer Ambani

The one thing Air India has become good at is going around the world and at each stop collecting debts. Daily it clocks up $3 million loss for the Indian taxpayer. Now it has decided to go back to base and stop this addiction. That is it has gone back to the point when it first started conflating financial loss with nationalism. It is back home now with the Tatas where it was cocooned and spent its growing years. After a 68-year spree of carefree ‘awaragardi’ it is going to become a responsible airline.

JRD Tata started the airline back in the 1932 and named it Air India in 1948. It was a good airline with growing reputation under the Tata family business. However another family owned business, the Congress Party, probably fancied the name Air India and wanted the brand under it. Although not having enough money, the Congress Party had the power of the State in its hand. So it nationalised Air India in 1953. A lot of good and well working industries, institutions, banks and political entities were nationalised by Nehru’s family over the years with disastrous results.

Air India started well as a national carrier for a while but then started working like the Government. It became a creaky machine, haemorrhaging money and rewarding privilege. The losses started to nose dive into a bottomless pit.

The BJP Government under Narendra Modi, not yet run by a family, saw no advantage in burdening the nation further. The accumulated debt is already some ₹70,000 crore which is nearly $8 Billion, no mean sum. Moreover the family run party has lost both power and financial muscle, so Air India could be freed from serfdom.

Tata Sons as Talace Private Ltd have bought it back from the Government for $2.7 billion. They are happy they have their baby back after it was wrestled away, adopted and abused by the State. Question now is whether Tatas will be able to nurture it back to a responsible, financially viable healthy grown up airline able to compete with the best. Tatas have shown they can both manage and grow world brands, as they have done with Jaguar Land Rover, once a crown jewel in Britain’s manufacturing. With that record, if anyone can resuscitate Air India’s battered, bruised, tortured financial life back into some meaning, the Tata group can.

The Neta Privilege

People saw him. He has allegedly been videoed on site. He has been named by victims and witnesses as the driver or the instigator of the most heinous yet stupid turn of events in the long running farmer’s dispute. Yet Ashish Mishra, the son of Union Minister of State for Home, Ajay Mishra, says he wasn’t there.

Even with videos flying around the world showing cars ploughing in and eight people dead, the Uttar Pradesh government’s response to the black and white crime was, ‘we will set up an enquiry’. Inquiry is a convenient tool learnt from Colonial times to stifle proper police investigation and even throw the issue into an abyss of ‘political do nothing’.

It was the Chief Justice of India who intervened suo moto, meaning that the Supreme Court initiated a case itself. CJI NV Ramana, and Justices Surya Kant and Hema Kohli form the bench. The SC sent notice to Uttar Pradesh Government for an update on the FIR. It was also not impressed by the ‘Special Investigative Team’ as all the personnel were from Uttar Pradesh and obviously under that government. A day later the SC enquired why the chief suspect had not been arrested.

The Neta’s son did not attend the first summons by the police. A second summon was sent and realising that he would have to be arrested now that the SC was involved, the son went to the police. How many crime suspects have the luxury of ‘walking’ at will into a police station?

Despite a team of experienced interrogators, Ashish Mishra (the Neta’s son) failed to answer questions. So they put him under arrest. The arrest is not for ‘suspected act of terror’ not even ‘suspected murder’ but merely for not answering questions!

Meanwhile, the Neta himself has been busy making excuses for his son. First that he was not at the scene saying, ‘He would have been killed if he were there!’ Then he said son was at a family-sponsored function in the village. And explaining the failure to attend the first summons, that the son was ill.

The incident witnessed by many, if not hundreds, was that Netaji’s son’s four wheeler deliberately ploughed into peaceful demonstrators walking home. Four farmers were killed. The crowd then turned onto the vehicle and its owners. The driver and two BJP members were beaten to death by the crowd. Eye witnesses say that Ashish Mishra was either driving or forced his driver to drive into the crowd. Mishra himself escaped.

The incident has put a spotlight on the BJP government and the PM himself. Will he stand by his promise not to be like Congress Family Raj and sack the junior minister as well as allow the wheels of justice to act unhindered or will be protect the ‘extended BJP family’ as Congress used to do? Prime Minister Modi’s integrity is on line as well.

And Ambani Joins Bezos

While more people are becoming poor in India especially due to the pandemic, there is some good news. Mukesh Ambani has become richer by $23.8 Billion last year. He now joins the very select group of people in the world with over $100 Billion assets, such as Jeff Bezos and Elon Musk.

This will be welcome news to many people in India sleeping rough on the streets and who are still waiting for a decent roof over their head, access to clean water and a decent meal a day. Or they may not notice any change in their lives.