Weekend reading links

1. This should strike a chord with several readers who have attended team retreats,

Anyone who has spent a long time in an office job will have suffered the indignities of a training day. The group-bonding exercise where workers fall into each other’s arms, as if they were part of a 1960s encounter group. The overenthusiastic guest lecturer who constructs a lengthy and banal presentation out of a series of random nouns. The debate about the company’s future which turns into an exercise in Stalinist self-criticism. It all resembles one of those nightmares when you find yourself marooned back in the school classroom.

If there is one good thing about the current pandemic, it is that no one is being sent to an awayday event at a seaside resort or a country retreat. Perhaps the whole idea will become less fashionable.

2. As oil prices have been plunging China has been stocking up on its oil reserves,

... about 200m barrels of oil went into storage in China in the first three months of the year, as the government, refiners and other buyers stocked up on inexpensive oil... In April the Shanghai International Energy Exchange approved new storage capacity for Sinopec and PetroChina, national energy giants.

Time for India too to lock in cheap oil and also co-ordinate and support its large corporate oil importers similarly buy contracts.

3. A friend forwarded this nice game about the impact of the Covid 19 lockdown on India's poor households.

4. This Mark Tully oped is a nice description of the problems faced by migrants. And this very good interview of P Sainath. This is another description. 

5. Why has this not generated the level of scrutiny and debate it deserves,

Uttar Pradesh, for instance, has suspended, for three years, all but four labour laws. The changes will need to be approved by the Centre, where central labour laws are involved, and all indications are that they will be... Uttar Pradesh explained the suspension as necessary to attract industry and create employment. Yet, among the labour laws that have been suspended are those related to unions, the settlement of disputes, and, most important, those prescribing working conditions. Madhya Pradesh said it will exempt all new factories from most provisions of the overarching Factories Act, 1948, for 1,000 days. Among the exemptions are those related to working conditions and the health and safety of workers.

See this interview of a labour union leader. Pratap Bhanu Mehta and Amir Ullah Khan explains the problems with such hastily done reforms.

6. The Economist covers India's UPI digital payments system which besides lowering all entry barriers also disrupts the duopoly in the digital payments gateway. This, when it realises its full potential, could become a global trend-setter in digital money transactions.

7. This is an example of the wrong lesson to draw from Covid 19,

Zaha Hadid Architects, a big British firm, has designed an eco-friendly building in Sharjah, a city in the United Arab Emirates, with “contactless pathways”, where employees rarely need to touch the building with their hands. Doors open automatically using motion sensors and facial recognition; lifts (and even a cuppa) can be ordered from a smartphone.

Instead, as the article itself points out, the more sustainable lesson should be to focus on cleanliness.

8. Ashok Gulati has a set of prescriptions for agriculture marketing side reforms,

While the APMC markets can keep doing their business as usual, it is time to open channels for direct buying from farmers/farmer producer organisations (FPOs). Any registered large buyer, be it processors or retail groups or exporters must be encouraged by providing them with a license, that is valid all over India. They should be exempted from any market fee and other cesses as they will not be using the services of the APMC market yards. E-NAM can flourish if grading and dispute settlement mechanisms are put in place. Private mandis with modern infrastructure need to be promoted in competition with APMCs.

9. Other countries should follow suit on this in their respective Covid 19 stimulus programs,

France, Denmark and Poland exclude tax haven-registered companies from coronavirus-related aid; others should follow suit and broaden the exclusion to benefit from taxpayers.

10. Covid 19 has exposed the limitations of e-commerce and grocery e-tailers in India. Kirana shops, which have stayed open to service communities, have emerged strengthened.

India's 18 million traditional family-run neighborhood stores called kirana are pulsing with life during the lockdown... Kirana stores are the go-to places for consumers as modern shopping malls remain closed and web-based delivery options such as Grofers, Amazon and Walmart-owned Flipkart have not proved nimble enough to adapt to the stringent shortage of manpower and traffic movement restrictions created by the world's largest lockdown in the South Asian country of 1.3 billion people. Deepak Provision store also sells a diverse array of foods such as fresh vegetables, beans and eggs as well as daily necessities such as soap. Over the two months of the lockdown so far, the 110-square-meter shop's sales have increased a whopping 300%. "The e-commerce players have a five-day delivery gap while ours is fifteen minutes," said owner Deepak Gupta. "We also offer credit for the poorer sections [of society] and all kirana stores have a storage godown nearby -- so that supplies of all major brands come in and, given that we are family-operated, our ability to home supply has been relatively unhindered."

11. Market concentration and globalisation in the food industry,

Although farms are, by their nature, local, much of the rest of the food industry is global. The supplies of seed, fertiliser, machinery and fuel that farmers need come from far afield. The companies that tie the system together—giant middlemen like America’s ADM, Bunge and Cargill, Louis Dreyfus, based in the Netherlands, and Olam International, based in Singapore—all operate on a worldwide basis, sourcing, storing and shipping agricultural commodities for foodmakers like Kraft or Unilever. Their size and global reach lets them make a lot of money on quite narrow margins. They can quickly swap one source for another to accommodate changes in supply or demand, smoothing prices and keeping the system flexible.

In the past 20 years the industry has seen increased concentration of ownership as firms chase the advantages of scale. Half of America’s poultry market—the largest in the world—is now controlled by just four firms. Two of the six largest mergers in the 2010s were between companies in food and drink. Emerging markets, where changing diets and urbanisation create fresh demand, have spawned giants of their own. Brazil’s JBS is the largest meat-processing company in the world. China’s largest food manufacturer, COFCO, has gobbled up a bevy of established traders as it keeps the grain flowing to Beijing.

12. The Economist points to the likelihood of emergence of travel bubbles, "binding together countries that have fared well against the coronavirus". 

The first bubble is due to come to life on May 15th between Estonia, Latvia and Lithuania, among Europe’s best performers in taming the virus. Their citizens will be free to travel inside the zone without quarantine. The next might be a trans-Tasman bubble, tying New Zealand to Australia’s state of Tasmania, both of which have kept new cases down. China and South Korea have launched a “fast track” entry channel for business people... Based on an analysis of infection data, The Economist sees two large zones that could emerge as bubbles, subsuming the smaller ones that are now being formed. The first is in the Asia-Pacific region, where countries from Japan to New Zealand have recorded fewer than ten new infections per 1m residents over the past week. The second is in Europe: using a laxer threshold—fewer than 100 new cases on the same basis—the bubble could reach from the Baltic to the Adriatic, and take in Germany (see map). Our Asia-Pacific bubble would, thanks to China and Japan, account for 27% of global gdp. Our European one would make up 8%.

For a start, I don't think this is practical. Its administration will be challenging. Further, "clean" countries or regions will not remain permanently so, and the bubble will therefore have to be very dynamic, thereby exacerbating its administrative challenges. Then there is the undesirable scenario of it being successful, which would end up excluding large parts of the developing world. An illustrative consequence, 

If, for instance, Vietnam enters the Asia-Pacific bubble and Indonesia does not, investment that might have flowed to the latter could be diverted to the former.