Mohegan Sun Group Wins License to Open Casino in South Korea

Mohegan Sun Group Wins License to Open Casino in South Korea

Posted by: on Mar 30, 2016 | No Comments

The Mohegan Tribal Gaming Authority, along with KCC Corp, a South Korean chemicals manufacturer, won a bid to develop the Inspire Integrated Resort at Incheon, located west of Seoul, the capital city of South Korea. The Inspire Integrated Resort

MGM Resorts International Delays Opening of New Macau Resort to 2017

MGM Resorts International Delays Opening of New Macau Resort to 2017

Posted by: on Mar 23, 2016 | No Comments

MGM Resorts International has decided to delay the opening of its new resort in the Cotai district of Macau, due to gloomy market conditions. Gross gambling revenues in Macau fell 34% in 2015, to a five-year low of $28.8 billion from a year ago,

Apple vs the FBI – A Case of Privacy vs Security

Apple vs the FBI – A Case of Privacy vs Security

Posted by: on Mar 16, 2016 | No Comments

On December 2, 2015, two terrorists, Syed Rizwan Farook and his wife Tashfeen Malik, killed 14 people and injured 22 others in the city of San Bernardino, California. The couple were shot dead by the police in a shootout following a chase.

Visa Restrictions from China Sharply Hit Macau’s Growth

Visa Restrictions from China Sharply Hit Macau’s Growth

Posted by: on May 6, 2015 | No Comments

Macau’s growth has been sharply hit as anti-corruption regulations in China, along with a ban on smoking in the Macau casinos and visa restrictions for gambling in Macau

China’s Baccarat Connection

China’s Baccarat Connection

Posted by: on Sep 3, 2013 | No Comments

Macau and the Chinese phenomenon are increasingly becoming destinations for every lover of casino games who would like to try their luck, and bankrolls at big fortune. Most of the high-rollers venturing out here are lovers of baccarat.

Free the People, Control the Government: A Lesson from Hong Kong

Posted by: on Jun 29, 2012 | No Comments

It is often believed that countries that are small are easy to govern. It is also believed that high population impedes economic development. There is one nation that shattered these popular beliefs… Hong Kong!

David and Goliath

Posted by: on Aug 20, 2006 | One Comment

What is common to Estonia and China? Estonia is in Europe, China is in Asia. Estonia is just a dot on the map, in China you could fit 212 Estonias. Estonia’s population of 1.5 million is 6.5% of Nepal’s. China has 1.3 billion people, 56 times that of Nepal. Estonia is a democracy, China is ruled by one party. You know China, but are unlikely to have heard of Estonia.

However, something ties these disparate countries together. Both have witnessed incredible improvement in the quality of life of its people during the last decade. Both have gone on the path of economic freedom and their citizens have reaped a huge dividend.

These two countries have forever exploded the myth that you need to be either small to develop as many say, or you have to be big as a few maintain. They prove conclusively that size does not matter. Economic freedom is what matters.

Whenever I talked of Singapore’s or Hongkong’s development, people say, “they are tiny, don’t compare them with us”. Now, when I talk of China, they have no answer.

China shed its ideology three decades ago. While it remained politically closed, with the communist party maintaining a tight control, people were given freedom to buy and sell, foreign investors were welcomed and private property allowed.

The results are apparent to anyone who has visited Shanghai, Beijing or many of the other towns and cities. It is joked that the national bird of China is a ‘crane’; you see so many of them around. 40% of world’s cranes, at one time, were in China; such was the construction activity.

While India stagnated under the weight of its socialist government’s regulations, China torpedoed ahead. For a country of China’s size to grow by 8-10% a year was considered impossible, and yet China achieved this feat not for one or two years but for the most part of the last 30 years. China’s per capita income which, at one time, matched that of India is now twice as much.

This happened with only partial economic freedom. China continues to be hampered by huge and inefficient government undertakings whose accounts remain a mystery. What would happen were these to be privatized and China’s economy was to become as free as that of Hongkong is anyone’s guess? Would it grow by 15% annually or 20%?

India now chases China, with a me too philosophy, and has with liberalization more than doubled its growth rates to 6-7% from its earlier 2-3%. If only India had adopted sensible policies immediately after independence the story would have been different.

You might have seen an Indian company dominating the world’s car markets instead of Toyota. It may well have been a Mumbai based MNC providing the world with a news channel instead of CNN.

In 1991 the Soviet Union, called the Evil Empire by the US President Ronald Reagan, ceased to exist and Estonia achieved independence after 50 years of Soviet occupation. Unlike the other newly created nations, carved out of the erstwhile Soviet Russia, Estonia went in for a big-bang liberalization. It rejected advice from those who advocated a gradual approach.

Mart Laar, Estonia’s former PM, told me that it followed the example of West Germany after World War II. Price controls were abolished, currency allowed to float freely, taxes cut, public enterprises (PE’s) sold and foreign investment was welcomed.

The three largest banks in Estonia which control 90% of its banking assets are 100% foreign owned. Rules are there to facilitate foreign and domestic investors, not to hamper them.

The results of sale of PEs, abolition of the corporate tax on profits reinvested in the domestic economy, elimination of custom duties on most imports and a general pro-business environment were spectacular. The economy took off and its people look forward to the day when they will enjoy Western Europe’s standard of living.

Nepal too can achieve similar success. Its people are as intelligent and not any less industrious. Being too small or having too many people is not a reason to be poor. Take off the economic shackles and the people of this country can do what the Chinese and Estonians are doing.

The Himalyan Times

The Communists of India and China

Posted by: on Jun 13, 2005 | No Comments

What is happening in Kolkata is enough to make Marx and Lenin turn in their graves. The Indian communists of West Bengal have given up their ideology and are going out of their way to attract capital – Indian and foreign.

Kolkata boasts of India’s largest Pizza Hut outlet, as well as highest selling Sony World franchisee. As if these symbols of capitalism were not enough of a reminder of a changed world, Manabendra Mukherjee, minister of IT, in the state’s communist government can look at Westside and Pantaloon malls on Camac Street from his office.

Bengal, a bastion of India’s communist rulers for 29 years, is witnessing a sea change. The communists remain in power but their philosophy could not be more different. They have embraced pro-market reforms with a vengeance – as if to make up for all their failed policies in double quick time.

Bengal’s government encouraged Pepsi to set up its potato processing plant in the state. Currently the company is doubling its 80 crore investment. The state has now become India’s second largest grower of potatoes. Dabur too has set up a fruit processing plant. Moreover, four companies from France have shown interest in investing in food processing. The communist Chief Minister, Buddhadeb Bhattacharya’s, avowed intention is to obtain investment and he doesn’t care whether it is Indian or foreign.

Though Bengal was always India’s top rice producer, it has now become No.1 in producing vegetables and pineapples as well. This has happened because, unlike in the erstwhile Soviet Russia, farms in Bengal are privately owned and whatever the tillers produce they keep.

No wonder Bengal has stunned India with its growth rates, and turnaround in industrial and agricultural development. In the last decade its economy grew by over 7% a year, while even Karnataka – the state which has Bangalore as its pride – could only manage a 6.4% yearly increase in its domestic product. Gujarat at 6.1%, and Haryana at 5.8% were way behind.

This growth has been led by Rs.27,000 crore of private industrial investment flowing into the state in the last 13 years. This investment was higher than in Maharastra, and second only to that in Gujarat.

The communists now woo private capital as if their lives depended on it. The investment in iron and steel projects is in hundreds of crores. Kolkata exports, from minister Mukherjee’s favourite IT complex, software and BPO services valued at Rs.1,400 crores. What is happening in India’s Bengal is no different than what is taking place in Lenin’s Russia and Mao’s China.

China, especially, exhibits capitalism. Its pro-market and pro-investment policies have gone far ahead of India’s in liberating businesses from red tape and controls. Where as India grew by 6.9% in 2004-05, the figure for China was 9.5%. If we account for what has happened since 1980, China is even further ahead. Its average annual growth of 9.5% exceeded India’s 5.7% by a whopping 3.8% every year.

This extraordinary growth in China has been due to its ability to convince investors to regard it as the ultimate opportunity for profits. While in 2001-03, China garnered in excess of 10% of the global foreign investment, India could not even get to the 1% mark.

China has become the world leader in exporting textiles. The success of its private entrepreneurs sends a chill down the spines of world’s competing businessmen. In 2004 alone China exported US$ 97 billion worth of textiles. India could only manage to send abroad textiles valued at US$ 14 billion.

Textiles are not the only success story. China’s manufacturers, across the board, are bedeviling the world with their newfound aggressiveness in closing deals. They are hungry for domination in the world markets and are leaving their competitors in the dust.

It is ironic the way China has jettisoned the teachings of Marx, Lenin, and Mao. Even more ironic, though, is how, in other countries including Nepal, communists still cling to their failed ideology. Let the Nepalese communist parties send their cadres to Bengal, China and Russia. Let them understand how these places, where communism originated, function. On their return, they just might influence their leaders into embracing capitalism, markets, reforms, and hence prosperity.

The Himalyan Times

Copy China, Not India

Posted by: on Dec 6, 2004 | No Comments

The world has woken upto what is happening in China. In the last two years, every international business magazine has done at least one cover story on China. ‘Fortune’ not only put China on the cover in its special October 11, 2004 issue, but devoted the entire magazine to it. ‘Times’ cover had Chinese gymnasts on it in its August 16, 2004 issue. ‘The Economist’ has featured China on its cover in each of the last three months; China’s growing pains were in the August 21-27 issue, September 25 – October 1 featured Chinese leaders, and the November 20–26 reported on China’s growth spreading inland.

Why all this attention? China, in the last century, was largely ignored by the world. The only time the world leaders took note of this country was when it invaded Tibet. Today, any country which ignores China does so at its own peril.

The reason is that China’s 1.3 billion people are beginning to matter. China has become one of the world’s largest market for most goods, it is also one of the world’s principal exporters. China’s demand for oil is insatiable. In 2003, it surpassed Japan to become the world’s largest buyer of oil after the US.

What accounts for its economic clout? The answer lies in the phenomenal growth of the Chinese economy since the 1970’s. In the last three decades China has been growing at 10% per year: This double digit growth has propelled it to the status of an economic superpower.

At a growth rate of 10% an economy doubles itself every seven years. That means in 14 years, the economy quadruples, and in 28 years the economy’s size grows to 16 times of what it initially was. Give the country another 7 years of 10% growth, it will double again becoming 32 times of what it was at the beginning of period from which we are counting.

This is why China which did not count for much in the 1960’s is starting to matter. The evidence of this growth is everywhere. Each major city in China has thousand’s of skyscrapers. Shanghai’s growth puts New York to shame. Shenzhen is growing faster (over 10%) than the growth rate of Singapore and Hong Kong combined. Little heard Chongqing is the world’s largest city with its 31 million people. It is estimated that $200 billion of private capital will be invested in this city alone in the next 10 years.

China has become the world’s trading hub, its exports and imports are growing at a pace at which it is expected to cross the one trillion dollar mark by 2005. Its trade with the US and Japan already exceeds $250 billion.

China has left India far behind. Indians in the 1960’s enjoyed a per capita income which was higher than that of the Chinese. Not any longer. Each Chinese is today, on average, thrice as rich as each Indian.

The difference would have been even greater had India not started to reform its economy and liberalize in the 90’s. It was a case of too little too late for India. If India has to match China, it needs to do far more.

Double-digit growth rates require investment. Huge amounts of it. China understands this, India is just beginning to do so. China gets $50 billion in foreign investment, India aspires to get 10% of that. India will have to do better, much better, it will have to liberalize more, tax less, reform its labour laws, end its reservation policy for small industries, and bring down its inspector and regulatory raj. In other words India would have to become more like China.

Where is Nepal in all this? Unfortunately, it copied India. It needs to stop doing that. Nepal should align itself with the business friendly policies of China and it too will be transformed as China has been. 35 years of even low double digit growth will propel Nepal’s per capita income from its present US$250 to US$8,000 i.e. each Nepali will then earn, Rs.50,000 a month. Wouldn’t that be transformation for real? If this was to happen, Nepal too would attract the world’s attention as China is.

The Himalyan Times

The Chinese Transformation

Posted by: on Oct 4, 2004 | 2 Comments

China today offers us the amazing scenario of a country marching towards economic freedom while remaining politically unfree. Even as the communist rulers of China liberalize their country for business and welcome foreign capital, they maintain their stranglehold on political power.

The result of the loosening of the State’s grip over the economy has been stunning: since 1980, the Chinese per capital income has more than tripled, over 200 million of its people have moved from poverty into middle class, foreign investment has soared to almost US$50 billion exceeding what is invested in India by foreigners by a factor of 20, and it has become one of the world’s principal exporters with its US$350 billion in export of services and goods – beating India’s export by over four times.

Government in China has been slowly but surely reducing its role in the economy. State owned enterprises which accounted for over 80% of the Chinese industrial output prior to 1980 now account for half that figure. This while exports from privately owned companies have skyrocketed. Shenzen, one of China’s dynamic coastal provinces has seen its exports rise from US$17 million in 1980 to US$6 billion in 1991 and today its exports exceed US$35 billion.

This transformation has occurred even as China remains undemocratic; dissent is virtually nonexistent after the Tiananmen square massacre. What this tells us is that however desirable democracy may be for other reasons, it is not indispensable for a country in achieving prosperity and wealth.

Singapore became wealthy under the iron-fisted rule of Lee Kuan Yew. Singapore did not offer parliamentary, electoral, and press freedom to its people as India did. Singapore, however, unlike India and Nepal, gave its people economic freedom soon after the end of World War II. The result: Singapore today is one of the world’s wealthiest economies: its people earn an annual average income of US$27,000.

China’s transformation too is taking place under the iron-hand of its communist rulers. In the first decade of its economic reforms, though China saw mounting political dissent, it was mercilessly quashed: tanks, troops, and bullets were employed in the 1989 attack by the government on demonstrators at Tiananmen.

Economic reforms however continued. Controls on foreign exchange were loosened in the 1990’s leading to the present boom in investments from the US and the rest of the world. Today the world invests more in China than in the US. Stock markets – the prime symbol of capitalism – were set up in Shanghai and Shenzen in the early 90s.

In 1992, the supreme leader of China, Deng Xiaoping, acting more like the free-market Lee Kuan Yew of Singapore than a Maoist, spoke out in favour of the free market policies being followed by the coastal regions of Guangzhou and Shenzen. What happened? All dissent to open market policies was effectively shut up. Who was going to dare speak up against the supreme leader himself? These coastal regions largely freed from bureaucratic red tape and over-bearing controls grew at a sizzling 15% annual rate.

From then onwards there has been no looking back for China. Chinese people, who were at one time called no-good-opium-eaters by their colonial masters, shook the world with their ability to flood every market with goods. The efficiency of Chinese firms makes its competitors quake with fear.

This is not to say that things can’t go wrong in China. The government still exercises controls over vast areas of its economy and that’s where the danger lies. China’s controls over its currency and its inefficient and outmoded State enterprises can lower its growth. Other than that things are good and getting better.

Lessons for Nepal: all it needs is one strong leader who can give the people economic freedom, nothing else is going to make Nepal rich. Democracy and political freedom, important as they may be, are not going to result in Nepal’s progress. That is what we understand from what has happened in China and Singapore over the last few decades.

The Himalyan Times