Monday, May 4, 2015

Governance and the Indian citizen; Under pressure, McDonald's mulls shake-up; The Pac Man effect on Philippine economy

1 Governance and the Indian citizen (Khaleej Times) Indian Prime Minister Narendra Modi’s foreign charm offensive is paying dividends, but his party is losing the governing edge at home. After the rout in the Delhi state elections, the Bharatiya Janata Party ate humble pie in the West Bengal civic bodies polls last week.

It didn’t help matters that the party is seen as favouring rich corporate houses while neglecting the downtrodden and farmers who make up a bulk of voters. The Trinamool Congress Party, led by its firebrand Chief Minister Mamata Banerjee, swept the state with 70 municipal seats. The BJP was hoping to make inroads into the state but after this debacle it is evident that the party lacks grassroots support. As the Modi government completes a year into its term in office, the prime minister and his cabinet appear to have lost touch with reality.

The ordinary citizen of the country, who strives for the basics of life, has been distanced from the corridors of the decision-making apparatus in New Delhi. Corruption and poverty continue their daily dalliance. A land acquisition bill to help set up industry has met with resistance from all quarters, corporates excluded.

An embattled opposition led by the Congress party, former socialist parties, Left parties and regional satraps have smelt blood and are hoping to make political capital out of it. The ploy is working already, and it’s hurting the BJP’s push into new states it had hoped to capture after the high of the national elections last year when Modi swept the polls with his vision for a new, resurgent India.

Since then, the prime minister and his government have failed to provide inclusive governance the country deserves by taking all sections of the people with it. Right-wing outfits and individuals have put the ruling BJP on the backfoot with their vitriolic comments against minority communities. 

Religious places have been targeted; unseasonal rains have led to crop failures and farmer suicides.
The ruling party has done little to curb the impression that the majority Right has the might to settle historical scores in a secular, democratic country. Brand India may be on the rise abroad but Brand Modi is on the wane at home. Politics is a great leveler as the New Delhi state and West Bengal local elections have shown.


2 Under pressure, McDonald’s mulls shake-up (Rupert Neate in The Guardian) The chief executive of McDonald’s has admitted that the world’s largest burger chain is “not on our game” as he announced sweeping changes designed to revitalise the company which is rapidly losing customers to new a breed of customer-focused fast-food chains.

“The reality is our recent performance has been poor. The numbers don’t lie,” Steve Easterbrook, McDonald’s new president and CEO, said. Easterbrook said he was “not interested in average for this business” and the company needed more “hard-edged accountability”. The 47-year-old said the corporate structure of McDonald’s had made it too slow to respond to the needs of its 69 million daily customers.

On Monday, McDonald’s workers announced plans to gatecrash the shareholder meeting later this month with “the biggest-ever protest” demanding an end to “poverty wages” paid to its staff. McDonald’s has reported six straight quarters of sagging sales, depressed profits and another miserable outlook. 2014 was one of the worst years in its 60-year history. It has more than 36,000 restaurants around the world.

The current geographic structure will be replaced by one that groups countries by the challenges they face. From 1 July the new structure will consist of four groups: the US (its largest market representing 40% of sales), international lead markets (Australia, UK, Canada, France and Germany), high-growth markets (such as China, Russia and South Korea) and foundation markets (the rest of the world where the company will take a step back in favour of increased franchising.)

The company also plans to cut $300m in costs by around 2017. The company said it’s too early to say how that will affect jobs. It will also increase the proportion of restaurants franchised globally over the next four years to 90% from 81%.


3 The Pac Man effect on Philippine economy (Leisha Chi on BBC) In the southern Philippines city of General Santos, there is a dusty little barangay, or village, where boxer Manny "Pac Man" Pacquiao recalls having slept in the streets, starving and hungry. He grew up there with a family so poor, they often went to bed having only drunk warm water for dinner. To earn money, he dropped out of school as a teenager to fight at local fiestas for a winning purse of 100 pesos, or less than $4 (£2.60).

In a sign of how far he's come, this weekend he earned at least $100m in the "fight of the century" against American rival Floyd "Money" Mayweather Jr. The highly anticipated bout took about half a decade to organise and is the richest event in the history of boxing.

Pacquiao wasn't able to defeat Mayweather. Despite his loss, the 36-year-old remains a hero in locals' eyes and there is speculation he may turn to politics and possibly run for president in the coming years. Following his sporting success, he's become so influential in the Philippines it can be said that he single-handedly boosts the economy each time he fights.

Some analysts have gone so far as to claim the Philippines' currency the peso rises ahead of his matches. One media report said the peso strengthened against the US dollar in six out of 10 of his last critical fights. Tickets to the match at the MGM Grand Garden in Vegas officially ranged from $1,500 to $10,000. In the Philippines, it is estimated that more than a quarter of its population live under the poverty line, or with less than $2 a day.

Sky Cable charged a pay-per-view rate of 2,500 pesos. Others paid 800 pesos per head to watch Sunday's fight in a cinema. Operator SM Prime Holdings said it sold 100,000 tickets for showings in 200 of its 300 cinemas. Even the Philippines' biggest power distributor Manila Electric (Meralco) benefited. It said electricity usage is about 10% higher during Pacquiao fights.

Then there are the lucrative sponsorship deals. When Pacquiao first went professional, he only had one advertiser willing to pay for their logo on his trunks. In Las Vegas on Sunday, they generated about $2.5m after at least six companies paid for a space on his shorts, including Philippines telecoms giant Smart Communications.

Small businesses have benefited from the "Pac Man effect" as well. In a small shopping mall in Quezon City, a suburb of Manila, the Bunny Baker café has seen an increase in traffic after its owners created a life-sized cake of the boxer. The biggest and simplest way Pacquiao contributes to the local economy is through taxes. He is the Philippines' top individual taxpayer. He drew $42m in earnings last year, a figure that will exponentially increase following his fight with Mayweather. Their bout was the richest in boxing history having generated as much as half-a-billion dollars.

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