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2017
Asia Needs more Dialogue
Solutions to urban pollution may prove complex
Spread of ESGs could herald new global movement
Investing in quality education is imperative if India wants to reap demographic dividends
China needs to lead in new multi-stakeholder world
China’s B&R initiative leading a resurgence of Asia
Education is key - but long-term: Can we survive?
New wave of robots will be beneficial to all
China needs to continue with its ‘heavy lifting’
Time is right for Chinese firms to invest in Europe
Robots to the rescue for China?
Asian Multinationals are Going Global, But to Where?
China ratchets forward with energy efforts
China’s calm necessary for globalization push
Bridging managerial gaps involves trust-building
China well-placed to power its future through green technology advances
China's new 'springtime' is here
2016
China’s moves show it’s banking on the future
Mindset for action at the G20 summit will be determined by Chinese presidency
Chinese head-hunting intensifies for rare managers that can steer overseas firms
US talk of isolation jars with growing links in Europe and Asia
Electoral rhetoric on global trade not in sync with reality
Is it time to be prudent and consider austerity policies again?
What will we do if we have no oil?
Unlock talent by finding the right fit for a person
The benefits are real and tangible
Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust
Reasons for optimism about the long term
2015
Can big oil go green and win?
Poorer Nations Could Sway Climate Talks
Combating Idleness and Deprivation
How China can be a model of food sustainability for the developing world
Kyoto II – Is it a Done Deal?
A meeting of the two largest economic powers
Why China will experience a 'soft' landing
Beware of superstitions
The Elephant and Dragon move ahead
G-7 target on fossil fuels raises many questions
Why Battle for Net Neutrality in the US Matters Globally
China’s resurgence – the ‘normal new’
Wanted: A managerial culture that embraces cultural differences
China's early education plan a smart investment in the future
The New Normal for China and India
2014
China's infrastructure push offers a sure track to better growth
US-China climate pact a good start, but not quite enough
Rethink the human’s place in the ‘digital revolution’
China springs a carbon surprise
Infrastructure - the invisible hand in full view
Dialogue vital for survival of Iraqi nation
China must nurture a new generation of beautiful minds
Great expectations in China and India
GM Cereals – The Pros and Corns
Time to be Honest about Our Energy Prospects
Weathering the Storm of Climate Change
Making a Big Decision? Beware of Your Biases
West Deserves Better Logistics Infrastructure
Digital Currencies do Represent the Future
From 'Printed' Houses to Wooden Skyscrapers
It’s time to bail out our schools, not our firms
Solution to India’s housing shortage – print new ones!
And the most promising green technologies of 2014 are ...
Transport infrastructure key to domestic, export growth
Oil stopgaps: Not worth risking
2013
Why the US should grant Edward Snowden amnesty
May we be more optimistic!
China headed for another massive social experiment?
A dialogue that worked
Yes, politicians deserve vacations - because we benefit
NPOs, NGOs invaluable as creators of dialogue
Look closer and ask: Is America reinventing itself?
Boston bombings case underlines need for dialogue
Millennium Development Goals or own goals?
As usual it's about balance - and timing - of course
Chinese strategists make right moves for growth
2012
Preparing for tomorrow
Austerity or growth?
Japan in danger of becoming 'just a place to fly over'
Beware of the business cycle?
An inconvenient truth
Limited offer sale: Buy a country
Where did our money go?
Leading from behind - a year of elections is almost over
Driving towards a green future
Waiting for springtime
Preserve or Perish
Startlingly similar Asia policy for Obama, Romney
Globalisation remains an irresistible trend
Google has the edge in smartphone war
U.S. Braces for China's Rise
Mankind’s General Scourge
The summer holidays are over and nothing has changed!
Put the hidden trillions to work
Making sense of India’s woes and wonders
Storm in a teacup!
Let’s give bad bankers a venue to admit their sins
News is about depth, not puff or velocity
Booming India, but too few toilets
Delayed Court decisions doesn't mean one may continue to play 'Great Game'
We need media to reflect on data and offer public a balanced view
Big polluters can lead in forging common purpose
The weighty issue of choosing a leader
EU-India Relations - Facing similar challenges
Educating with a goal
The Judicial Malaise
We are growing out, but not growing up
EU´s retrenchment enigma
Urbulence in the Eurozone and the effect on SMEs
Skolkovo May Help Russia to Diversify
Make things more effective
Tapping into the Commonwealth connection
Innovative models for public finance
Facebook revolution but Indian style
The feel-good factor
Asian investors - a private equity opportunity
India needs to be taller and stronger
China´s low sales volume...
Nations playing leapfrog
Shafts of sunlight
What webs we weave
As performers go to Davos, the circus steals the show
Can we control the politicians?
2011
Europe’s reminiscence
China firms should go for win-win in overseas ventures
Of procrastination...
Making sense of profiteering
Truth about financial mess must be laid bare
Small is also beautiful
China can help Europe with debt crisis
Excising the cancer of global corruption
Education, a critical asset
Arab uprisings set in motion forces of creative destruction
A new era of change
We must ensure better education for all
Beijing wary of bankrolling a lost cause
Asean's re-emergence as a local and global leader
Why India's Role in the Global Economy is Still Work in Progress
Its the leadership, stupid!
Reverse globalisation: The new buzzword
Making sense of profiteering
By Frank-Jürgen Richter
Khaleej Times, November 27, 2011
 

If businesses did not make a profit they would, in effect, be giving away their money, and would fail - putting many associated people out of work: their staff, suppliers and customers. But some firms are accused of profiteering - making unreasonably large profits.

In the western world the service industries and the oil firms spring to mind. Yet in the case of the water, telephones and electricity sectors they have a huge expenditure programme to meet - in terms of maintenance, renewal and expansion of their reach. The oil firms must explore, spending vast amounts on ventures that while likely to produce oil (or gas) may eventually have no yield. Pharmaceutical firms are likewise hampered - research on new drugs is very costly and may not develop a useful product.

No business, however, can justify a vast salary regime. Managers after all are just bosses as in your corner shop- they ought to be prudent entrepreneurs, mindful of their customers´ needs and the costs of goods to fill the shelves: the wrong goods will not sell, and too many errors will lead to a change of manager, or to the failure of the business since no profit is created to expand future business.

On July 30th 2011 there was a call to gather in Datran, Kuala Lumpur to `occupy´ and protest against increasing economic and social inequality. By November 4th there were said to be 2,500 "Occupy" communities spread round the globe all acting mainly peacefully and asking their governments and businesses to become more socially conscious and not to be profiteers. There is a collective judgement that a few people are undemocratic, commanding obscene salaries and having no fear of legal repercussions if they fail in their management tasks.

There is a similar unrest expressed against the laissez-faire capitalist movement run by some governments. Ministers determine what projects will be undertaken by the people´s elected Parliament `for the good of the people´, and they often spend a vast fortune on tasks that ultimately are failures. Failures because of many factors, but most being poor specification, meddling during the project so varying the goals and simply poor management of a project that had not been properly evaluated. The government is, like banks and some major firms, unconcerned by the downside risk of a project as no one is seen to be the manager responsible, and no one gets sacked.

The people are thus angry at all forms of unevaluated expenditure, especially in these austere times - they would prefer to dispense with much direct taxation. They wish to have low levels of direct tax (yet still support some obvious public services like the police, military, education and perhaps health service) so they would have more cash in their pockets to spend on goods carrying indirect taxation. If an individual wished to buy bread or a luxury item it is their choice, and would be taxed accordingly. But if they have little cash to spend, through being made redundant for instance, they may not even be able to buy any bread. It is said that we, as individuals, may be better decision makers than governments or managers of large firms as we evaluate risk at each operation: we are spending our limited savings. Academically we know we do not do this efficiently, but surely we will be better than governments who seem not to consider risk at all?

What can we do about this? Well, in fact, nothing much rapidly. It is said that the top 10 per cent owns 70 per cent of the world´s capital -and this is not going to change overnight. The inequality is measured by economists as the Gini Coefficient and shows the worst country as Namibia (0.847 - with 1.00 being the theoretical worst). As we said, it will take a long time to alter national stereotypes or national inclinations to saving or wealth management - which in the case of the Orient often goes back as far as the edits of Confucius. However, that is too facile an argument - as Ireland, Italy, Finland and Australia are relatively equal (all under 0.622), and they do not carry implicit Confucian values. However, Italy and Ireland, although `egalitarian´ nations, suffer in the European banking crisis.

So again, what do we do about this? One of the complexities of modern life is money or more precisely, the borrowing of money for projects that may not perform well leaving us in debt: which we can´t pay except by further borrowing and betting that bit harder on future winnings. The whole thing becomes untenable without lifting the levels of trust in each other, as we did in the days before much cash circulated-we bartered our way through life, trusting the others to pay in the future. It will be tough on everyone if we collectively wipe out our debts by defaulting. But somehow we must begin again; we must trust deeply, to get the cash circulating and to pay a reasonable salary at each level of society. Then the `bread winners´ will be able to hold up their heads and indeed buy bread once more.

 

Frank-Jürgen Richter is founder and chairman of Horasis that hosts the yearly Global Arab Business Meeting held in Ras Al Khaimah


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