India Ranks Sixth as Worst Country for Business

 As U.S. and European countries economic growth is being obstructed, the businessmen are making plans to invest in the countries with emerging markets to churn out better profits. Countries like Brazil, Russia and Indonesia have experienced huge FDI records in 2011 which is 3 times more than last year. The business people’s assumption of making great money from the establishment in these countries is just a myth. The rules and regulations in these nations can destruct the growth as they follow very strict laws. Here are the countries that are named as a worst place for business establishment.

 

1. Venezuela:

 Venezuela is the most difficult place to do business. This country ranks amongst the world’s 50 biggest economies. The South American nation faces huge problems in the tax payment process. A lot of hindrances are faced when people have to approach for loans, investor protection laws and cross border trading. The companies in Venezuela spend 864 hours per year on the payment of taxes which is two times more than the time taken in Caribbean and other parts of Latin America. The GDP of the country in the year 2010 was $387.8 billion and the FDI was $1.4 billion. The time taken in the country is four times more than OECD countries. Even though the country has one of the world’s largest oil and natural gas reserves most of the people in the country live in poverty. Being a socialist country, the privatization of business is a great difficulty. The oil sector under the control of the government is one of the main incomes for the nation. The strict currency controls has limited the distribution of money among people. When money is withdrawn from the bank, the account holder should provide not only the signature but also the finger prints and sometimes also photographs. ATMs have their own money withdrawing limits per day. Identification is even required for minimal purchases like groceries. Another major problem in the nation is inflation. The inflation rate in the country is getting out of control as the annual inflation is summed as 26.5 percent.

2. Ukraine

The second largest country in Europe stands second in the list of worst countries to do business too. The country’s GDP in the year 2010 was $137.9 billion and the FDI is worth 6.5 billion. Ever since the country got freedom from Russia, it is expecting to incorporate with Western Europe and merging with Russia as they provide most of the country’s energy needs. Even Ukraine has strict tax payment formalities, construction authorizations and electricity access. The business in Ukraine takes 27 days to pay taxes. The 57 percent of the business profits are to be paid as taxes so hardly people get money for their living. For the construction permit, the country takes twice over the number of days when compared to OECD countries. The political issues are also one of the major reasons. The orange revolution where Viktor Yanukovych supported the reconciliation with Russia resulted to the mass protest. The political wrangling in Ukraine is always in news.

3. Algeria:

Fifth oil rich nation in the world is stands third in the most difficult countries to do the business. The country’s GDP and FDI in the year 2010 were $159.4 billion and $2.3 million respectively. The nation is greatly dependent on the hydrocarbon sector as they are one of the largest providers of natural gas to the European Union. People in Algeria face a lot of issues for initializing the business, getting access to electricity, registration of property and filing taxes.  Maximum of 48 days is taken for registering a property and about half year to get an electricity connection. The political conflicts in the Arab countries had a positive impact on Algeria’s social and political scenario. The expenses by the government for improving the social and political situation has led to the public sector wage increase and liberal food subsidies IMF has predicted the nation’s economic growth will increase by 3 percent in the year 2012. But this growth will deter in coming years as the gas production from the oil fields has reached the end and will come to an end.

4. Philippines:

This Asian country hardly attracts other countries to make any money investment. The FDI rate in this country is just 1.7 percent out of which 10 nations are from the ASEAN. The GDP of the country is $199.6 billion which is also not that great to brag about. The country has enormous mineral wealth which still unexploited which is a greatest drawback. The country does not encourage speaking of English which is another reason for not having great communication with their neighboring countries and fall in economic growth. The imbalanced legal system, sadism and government polices hardly encourage foreign business to enter the nation. The country is bad for starting a business and resolving bankruptcy which takes around 6 years whereas it is one year and seven months in OECD countries. The Philippine president Benigno Aquino visited U.S., China and Japan to generate more foreign investment and to let them know the changes happening in the country after failed and corrupt administrations in the by the previous leaders. The china tour cashed in about $9 billion investment.

5. Nigeria:

Africa’s largest oil producing nation is the fifth worst country for business. Political turmoil and religious conflicts is the major reason for being a worst place for business. Accessing of electricity, registering property for business is a great pain in this nation.  This country is a jackpot for energy and resources companies but the trading of oil has stimulated violence and corruption in Niger delta. Many tycoons had to close down the production due to increase in oil pilfers. The FDI in this nation according to 2010 is $6.1 billion. The people in this oil rich country live in less than $2 per day. The country is polluted and the political instability has led to the great suffering by people.

6. India:

One of the superpower economy in the world has also made into the list because of corruption in government offices. Bribe is the major reason as for establishment of business a person has to give millions of money and the court takes at least 4 years to activate the contract.  Even the real estate suffers in this country because of huge delay in issuing a construction permit. There are recent issues where India has been fighting against political and government scandals have piled up $39 billion revenue which also created a public dissatisfaction with the politicians.  The unsocial environment has not hampered the reputation of the country when it comes to foreign investment. UNCTAD predicted India as a home for second largest population in world and also listed the country in the top 5 attractive destinations for international investors over 2010-12.

Cyrus Mistry named Ratan Tata's successor

Mumbai: Tata Sons chairman Ratan Tata has appointed 43-year-old director of Tata Sons and Tata Elxsi (India) Cyrus Mistry his successor. Mistry will work with Ratan Tata over the next year and take over from him when Tata retires in December 2012.

The board of directors of Tata Sons at its meeting on Wednesday appointed Cyrus P Mistry as deputy chairman.
Endorsing the appointment, Ratan Tata said, "The appointment of Cyrus P Mistry as deputy chairman of Tata Sons is a good and far-sighted choice. He has been on the Board of Tata Sons since August 2006 and I have been impressed with the quality and caliber of his participation, his astute observations and his humility. He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the Group on my retirement."

Mistry, currently managing director of Shapoorji Pallonji Group, has been a director of Tata Sons since August 2006. Born on July 4, 1968, Mr Mistry graduated from the Imperial College, London with a BE in civil engineering. He also holds a masters degree in management from the London Business School, and is a fellow of the Institution of Civil Engineers.

Apart from the Tata Group, he also serves as a director on the board of several other companies, including Shapoorji Pallonji & Co, Forbes Gokak, Afcons Infrastructure and United Motors (India).

After his appointment as deputy chairman of Tata Sons, Mistry thanked the selection committee and the Board and said, "I feel deeply honoured by this appointment. I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look forward to Mr Tata's guidance in the year ahead in meeting the expectations of the Group. I take this responsibility very seriously and in keeping with the values and ethics of the Tata Group I will undertake to legally dissociate myself from the management of my family businesses to avoid any issue of conflict of interest."

The five-member panel appointed by the Tata Sons board to find a successor to the chairman has seen its mandate evolve over time. Tata Sons had said while forming the committee to find a successor that the group would require someone with experience and exposure to direct its growth amidst the challenges of the global economy.

In May, the group said the selection committee had interviewed several candidates, both internal and external, but no final decision had been taken. Since then, the consensus within has been that the group is not yet ready for an expatriate leader.

According to sources, the panel which has had about six meetings so far in Bombay House has devised a structure within which the new boss would operate as it would be hard for an individual to fill the big shoes of Ratan Tata.

About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The biggest of these trusts are Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which were created by the families of the sons of Jamsetji Tata.

Various candidates, including Tata's half-brother and son-in-law of Pallonji Mistry, Noel Tata and PepsiCo Chairperson Indra Nooyi were speculated to succeed Tata.

Tata, who took over as Chairman in 1991 from JRD Tata, is responsible for bringing the group to the global map with the acquisitions of Corus Steel and Jaguar Land Rover.

Hottest business secrets revealed on Facebook, Twitter

New Delhi: Corporate espionage has been made easy by social networking websites as a well-devised strategy can result in the leak of valuable business secrets by employees and ex-employees, according to a study by Cyberoam, the security vertical of IT company Elitecore Technology.

"You just need to get into the social network of the company, worse still, you just need to be an internet search expert to get information that required ages to find," Cyberoam Senior Vice-President for Product Management Abhilash Sonwane told PTI.

He added that by tracking the social networking activities of employees and ex-employees, an intangible set of information about the company -- such as core values, hierarchy, communication patterns, industry environment and employee morale -- can be derived without having to physically enter the organisation.

"Besides the intangibles, the tangible information such as intellectual property, financial information or even trade secrets can be available by monitoring the organisation's social presence," Sonwane said.

Cyberoam conducted a study early this year and selected a random set of 20 small and medium companies and tried to find out what could be derived from their social media and networking presence.

The 20 organisations included eight from the USA, four from India, two from Germany, seven from the UK and a couple from Singapore and Australia.

These firms belonged to the IT, manufacturing, pharma and PR, banking and financial institutions, consultancies and even media and entertainment industry, Sonwane said.

"We could find out information like the employees were not getting their salaries on time, there were cash flow issues in the organisation, salary checks were bouncing. As a result, the employees were looking for new jobs," he said.

Cyberoam extracted and collaged information from linkedin status updates, interactions on Facebook and by following the Twitter accounts of employees.

The research noted that employees were making premature broadcasts of launches, conferences, quarterly earning calls and financials through posting from their own Facebook and Twitter accounts.

At least one negative point about the 20 organisations covered in the study was available through the social media, according to Cyberoam. Seventeen of the organisations' employees talked about internal issues that would not have been available had it not been for social media leaks.

"Around eight organisations disclosed information confidential to their companies, financial details, prior announcement of senior management moving out, etc," Sonwane said. 

Ford India invests R 4000 crore in Gujarat

Gandhinagar/Ahmedabad: In what could be described as a major success for the Gujarat government, leading carmaker Ford India on Thursday announced an investment of Rs 4,000 crore for setting up car manufacturing and engine plants in Sanand. This is one of the biggest investments by Ford outside North America.

Ford India has finalised 460 acre site in Sanand, next to the Tata Nano plant, for setting up state-of-the-art vehicle manufacturing facility and an engine plant. The plants will have the initial capacity to produce 2.4 lakh cars and 2.7 lakh engines in a year. The twin facilities, expected to go on stream in 2014, will create 5,000 direct jobs and many more indirect jobs.

"We are very happy to be in Gujarat, the land of Gandhi. We are very impressed with the dynamic nature of the people here, and the pro-business government," Ford Asia Pacific and Africa President Joe Hinrichs told reporters. The plant in Gujarat is part of Ford's strategy to expand in India to cater to the fast-growing domestic car market as well as to cater to the international markets, he said.

Earlier, Ford India and the state government signed two MoUs for the Rs 4,000 investment, in Gandhinagar. The MoUs were signed by principal secretary of industries department, Maheshwar Sahu, and Michael Boneham, MD of Ford India, in the presence of Chief Minister Narendra Modi and Joe Hinrichs.