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India: Multinationals Have Themselves to Blame, Too


"India: Luring investors will take real change" (Asian Business, June 4) sounds very shallow. While some of the worries about the slowing down of foreign direct investment and ever-changing regulations are correct, the companies that came in were often driven by greed. They arrived with simplistic notions of doing business in India, and they want to run back when they face tough times.

The examples given by the author are mostly of companies that lost money. But a simple analysis will show that they are losing money because of a failure at a business level and not because of poor infrastructure and other cliches cited by the author. Coca-Cola Co. may not be making a profit, but that can be attributed to the waste of money on advertisements that often don't make sense. Also, India is one of the markets where rival PepsiCo Inc. is, with a better strategy, giving Coke a fight. For every Ford Motor Co. or General Motors Corp. that is a failure, there is a Hyundai that is a success.

Sumedh Rajadhyax

Pune, India

"Why investors still shun India" (Editorials, June 4) is short on facts. In a competitive environment, if multinational telcos experience difficulties, that is no proof of rigging. It would be instructive to know the regulatory constraints on foreign consumer-goods giants. I submit that there is, on the contrary, a mad rush to capture the vast numbers [of Indian consumers] starved of their products for the past five decades.

Bureaucracies behave the same way everywhere. Cupidity is transnational in nature. Almost all barriers to foreign investment have been removed. Inability to earn profits is the problem. Multinational corporations have themselves to address. Why blame the system and the country?

G. R. Saha

Calcutta IBM's strategy to get into the corporate-software market ("IBM vs. Oracle: It could get bloody," Information Technology, May 28) is reminiscent of its strategy to get into the personal computer market in the late 1970s. To respond to the explosive growth of Apple Computer Inc., it built and designed a PC with off-the-shelf technology to speed development and a whole network of competing suppliers to keep production costs low. Now, it is attempting the same thing with open source software such as Linux.

Apple, on the other hand, tried to sell the entire computing experience, and eventually its head start vanished. Oracle (whose CEO, Lawrence J. Ellison, sits on Apple's board) is also trying to sell the entire experience. The winners of IBM vs. Apple were Microsoft and Intel Inc. Whoever "wins" the corporate-software business, the sure loser will be Microsoft. Given its track record with mission-critical applications, it will not be able to deliver a competitive product to wedge between these two software behemoths. Will the next Microsoft rise from this head-on war?

Alexis W. Cabot

Rome It seems appropriate that Microsoft calls its new Internet software Passport, since issuing passports is the exclusive province of sovereign governments ("Microsoft," Cover Story, June 4). And while Congress frets about Internet taxes, Microsoft moves aggressively ahead talking "about collecting fees for every e-commerce transaction"--another province of sovereign governments. With its self-funding bank and rising stock value, the sovereign global state of Microsoft issues MS currency to pay its own army (of programmers) in the new cyberworld, and leaves governments tied with the problems of the old world order. The same BusinessWeek issue has another article entitled "Sandy Weill wants the world" (Finance, June 4), which better fits the true goal of Microsoft.

Alan MacDonald

Sanford, Me. I fully agree with Jeffrey Garten's comments on Bush Administration foreign policies that, so far, have antagonized almost everybody. His suggestions in "What business should be telling the President" (Economic Viewpoint, May 14) are well thought out--from the U.S. perspective. But what about the issue of exports by farmers south of the border in Latin America? Trade is a two-way street, and farmers in Argentina, Uruguay, and Brazil are deprived of their traditional world markets because of U.S. farm subsidies. As an example, Argentina's debt situation is now a matter of international concern caused in part by its inability to overcome U.S. trade barriers.

Alfredo de Urquiza

Buenos Aires Gary Becker's "How rich nations can defuse the population bomb" (Economic Viewpoint, May 28) sounds like a recipe for impoverishing the developing countries even more. For years, economists have argued that the single most important factor in economic development is human capital/skilled labor. Now, Becker is advocating opening the doors for the same skilled labor to escape from the developing countries. The policy will result in a vicious cycle: The most skilled people in poor countries escape; the poor countries, bereft of their most skilled workers, get poorer; more skilled people seek to escape the poverty, and so it goes on.

The brain drain from poor countries is alive and well, but does it have to be elevated to policy status?

Samuel K. Andoh

Hamden, Conn.


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