Professional Documents
Culture Documents
1
Bangladesh mandate (The Tribune)
2
Ecological guardrails being dismantled (The Tribune)
3
SBI report: K-shaped questions (Indian Express)
4
After ECI guidelines, charting a path to disability inclusion in politics
(Indian Express)
5
Good growth, low demand: On the NSO projection (The Hindu)
6
Investor confidence: On the two-day Tamil Nadu Global Investors
Meet, GIM 2024 (The Hindu)
7
Why international law matters (The Hindu)
8
A looming crisis: How India can balance its water demand and
supply across sectors? (Financial Express)
9
The nudge that UPI needs: NPCI chief proposes UPI fee for large
merchants, sparks debate on digital payments (Financial Express)
10
Now, jobs are more skills-based (Business Line)
11
Did a 1997 merger ruin Boeing? (Finshots)
TTBR (Topics To Be Read) 10 January 2024
PRIME Minister Sheikh Hasina-led Awami League has recorded a landslide victory in
the Bangladesh parliamentary election. The triumph — fourth in a row for the ruling
party — was a foregone conclusion after the Awami League’s main rival, the
Bangladesh Nationalist Party (BNP), decided to boycott the election. Describing it as
the people’s victory, Hasina said Bangladesh had been able to set an example of
holding free, fair and neutral polls. Even though the voter turnout was low (around 40
per cent) and there were stray incidents of violence, election observers from India and
other countries have lauded Bangladesh’s apex electoral body for doing a good job.
The Hasina government had invited observers from several nations as well as
multilateral organisations in a bid to make the poll process transparent.
Striking a discordant note, the US has claimed that the polls were not free or fair, while
regretting that not all parties participated in the ballot. The US State Department has
said that Washington remains concerned over the arrest of thousands of Opposition
members and reports of irregularities on election day. UN High Commissioner for
Human Rights Volker Türk has urged the newly elected government to take steps to
renew the country’s commitment to democracy and human rights.
The road to democracy has been a difficult and painful one for Bangladesh. ‘Father of
the Nation’ Sheikh Mujibur Rahman and most of his family members were
assassinated on August 15, 1975, by a group of army personnel. The next decade and
a half witnessed military dictatorship, which enfeebled the country politically as well
as economically. Over the past decade or so, Bangladesh’s economic resurgence has
gone hand in hand with political stability. The voters’ mandate needs to be respected
by all, even as it is the government’s responsibility to probe allegations of electoral
malpractices and highhandedness. The BNP does not have the moral right to cry foul
as it chose to stay away from the ballot, which is the cornerstone of democracy.
TTBR (Topics To Be Read) 10 January 2024
Little attention has been paid to the shifting terrain of the Himalayan
zone
It emerged that most of the deaths took place due to the pilgrims freezing in the sub-
zero temperatures outside their guest-houses. These were heated by gas-fuelled
heaters. The pilgrims did not have adequate winter clothing. At 18,000 ft, there were
several hundred pilgrims in these temporary hutments. No one seemed to have asked
whether such a high-altitude location had the carrying capacity for so many pilgrims.
It is not clear whether the post-mortem led to major changes in managing religious
tourism. I do not think so. It will be recalled that as a result of the Kedarnath floods
and storm surge, most of the guest-houses, hotels and tea shops on the Gangotri
highway were washed away. In any case, they should not have been allowed to be
constructed right on the banks of the river itself. As a result of the disaster, it was
announced that no construction would be allowed at least 100 metres from the mid-
river channel on to the river bank and the area 300 metres beyond would be treated
as a regulated zone. When I travelled on the Gangotri highway a few years later, the
guest-houses, hotels and tea shops were all back right next to the river itself.
It is not one’s argument that there should not be any economic activity in the
Himalayan zone, nor that the demands of national security should not be addressed.
Religious pilgrimage is a legitimate activity in a country where faith is so much part of
our lives. However, all these activities must take into account the ecological fragility of
the Himalayan zone. Projects, of whatever nature, should be undertaken only after
very rigorous environmental impact studies. When projects are approved, it is
imperative that the regulations laid down are scrupulously followed. Often, they are
not.
There are strict rules regarding debris disposal whenever major earthwork is
undertaken. In most cases, one finds the debris being dumped next to the construction
site itself. This blocks the natural drainage in the area, leading to waterlogging in the
upper reaches and severe drought in the lower reaches, adversely affecting local
communities and their livelihood.
There are also strict rules on maintaining an appropriate distance between blasting
sites. I recall that while I was undertaking border infrastructure surveys during the
period from 2004 to 2015, the gap to be maintained between blasting sites was 12 km.
But blasting was sometimes carried out for a road project even within a 3-km range
because of the pressure to complete projects expeditiously. This has the effect of
greatly disturbing an already shifting and loose terrain in the Himalayas.
The amended Forest Conservation Act, 2023, has eased the curbs on project activity
in the Himalayan zone by exempting from its purview those which are of national
security importance up to 100 km from the international borders, the Line of Actual
Control (with China) and the Line of Control (with Pakistan). This is self-defeating
because if the built-up border infrastructure, including roads, is frequently washed
TTBR (Topics To Be Read) 10 January 2024
A new research report by the State Bank of India (SBI) seeks to “debunk” claims of
India’s “K-shaped” economic recovery and asserts that the repeated use of the phrase
is “flawed, prejudiced, ill-concocted and fanning interests of select quarters to whom
India’s remarkable ascendance… is quite unpalatable”. A K-shaped recovery essentially
TTBR (Topics To Be Read) 10 January 2024
suggests that there has been a stark difference in the way different sectors of the
economy recovered after the pandemic. It indicates that while the overall economic
growth numbers look robust, there is a growing underlying inequality. The SBI report’s
arguments against it are far from persuasive.
The report says that the “patterns emanating from income, savings, consumption,
expenditure and policy measures aimed at empowering the masses — from Ujjwala to
Ayushman Bharat and from Awas Yojana to maternal/neo-natal welfare — question
the efficacy of using ages-old proxies like low two-wheeler sales or fragmented land
holdings to support some pre-destined narratives of India not doing well”. It argues
that the muted post-pandemic sales of two-wheelers “could reflect households
reconfiguring their savings towards physical assets (real estate) and a not too small
buyers’ percentage shifting to used/entry-level cars (substitution effect)”. It cites data
from Zomato as an example of rising disposable income in non-metro areas. And looks
at the income tax data for FY22 to note that the Gini coefficient had declined
significantly from 0.472 to 0.402 between FY14 and FY22. The decline in income
inequality is because of a “Great Migration” at the bottom of the pyramid; 36.3 per
cent of individual tax return filers belonging to the lowest income in FY14 have left the
lowest income group and shifted upwards, finds the report.
The SBI report suffers from some fundamental flaws. If the government has been
forced to extend the scheme of subsidised food grain to 800 million Indians, does it
not suggest deep economic distress? In a country where a minuscule percentage of
people pay direct income tax, how reasonable is it to draw conclusions from tax data
about broader inequality? Isn’t income tax data nominal and as such affected by
overall inflation? Why are tractor sales a better representative of the rural (not farm)
economy than two-wheeler sales? The list of questions is longer than the report’s
conclusions.
On December 21, the Election Commission of India released an advisory for political
parties to follow disability-sensitive terminologies. The 11 guidelines can broadly be
put into three categories: Disability-inclusive communication by political parties and
their members, accessibility of information and inclusion within party frameworks. The
guidelines on communication relate to the usage of ill-health terminologies for
persons with disabilities (PwD), dehumanising or using PwDs to depict incapacity or
perpetuate stereotypes. The guidelines around accessibility relate to information
accessibility on political party websites and holding events at accessible places. The
third head provides for the development of training modules on disability for party
workers and endeavours to include PwDs at all levels of a political party.
Recent instances have underlined the need for these guidelines. For example, in
September 2023, Tamil Nadu leader A Raja compared Sanatan Dharma to people with
leprosy and HIV in a derogatory manner. National leaders have also used disability in
a demeaning manner, especially during election speeches. Such instances dehumanise
PwDs and perpetuate stereotypes, resulting in an “attitudinal barrier” under the Rights
of Persons with Disabilities Act, 2016.
Political inclusion is an ignored aspect within the Indian realm of disability. Although
these guidelines are a reformative step in that direction, an effective strategy is still
required.
First, these guidelines are only an “advisory”, though the phraseology of a few
guidelines is in mandatory language. For instance, guidelines under the disability-
inclusive communication head use words like “should” and “shall” before and after the
instructions. However, other guidelines, especially under the inclusion within the
political party framework, are still incorporated in discretionary terms, for example,
using “may.” A uniform mandate under all three heads is needed.
Second, it is understood that these guidelines are still not part of the Model Code of
Conduct. The advisory mentions that the breach of guidelines related to disability-
TTBR (Topics To Be Read) 10 January 2024
inclusive communication would make political parties and their members prone to
action under section 92 of the RPwD Act. It’s unclear whether a breach of other
guidelines will also invoke this provision. Section 92 is a punishment provision for
atrocities against PwDs. These guidelines must be given teeth by including them within
the MCC on the lines of gender guidelines.
Third, there is some ambiguity within the guidelines with respect to the usage of
specific phraseology. For instance, it cites words like “blind”, “deaf” and “dumb” as
examples of wrong terminologies. Although their translation in Hindi or another
language might be derogatory, these are technical words to refer to people with visual,
hearing, and speech disability. A detailed list of disability-sensitive words and
phraseology under the UN Disability Inclusion Strategy can guide the ECI.
Fourth, the draft National Policy for PwD released last year for public consultation
didn’t have any chapter on political inclusion. The ECI advisory says that “political
parties must endeavour to include PwD at all levels as members and party workers”.
It also prescribes adherence to accessibility norms by political parties, which are the
first instance of access to political space for PwD. As these guidelines are expected to
catalyze the political inclusion of PwD, a chapter on political inclusion in the national
policy should be incorporated. This will align with the principles of Article 29 of the UN
Convention on the Rights of Persons with Disabilities.
Lastly, we still have no data on the number of legislators with disabilities. The ECI still
doesn’t have any column on disability in the nomination forms and affidavits filed by
contestants during elections. The lack of data has contributed significantly to the
political exclusion of PwDs. It is hoped that the ECI will also correct this anomaly. The
2024 elections are an opportunity to address this lack. It can be the second step
towards the political inclusion of PwD.
The writer Shashank Pandey is a lawyer and policy consultant on disability law. He
is also a founder of the Politics and Disability Forum
The first advance estimates of national income for the current fiscal year present a
picture of an economy on steroids — of government spending. While the NSO has
made bold to project real GDP growth marginally quickening to a 7.3% pace, from
2022-23’s 7.2%, scrutiny of sectoral output figures that together form the gross value
added, and the demand data reflected in expenditure numbers posit an economy still
searching for durable drivers of consumption-led growth. While overall GVA growth is
seen slowing to 6.9%, from the preceding fiscal’s 7%, the agriculture, livestock, forestry
and fishing sector — the bedrock of the rural economy, one of the largest providers of
work and the second-largest generator of economic value outside the services
economy — will see output expanding by 1.8%, the slowest in eight years and less than
half of 2022-23’s 4% pace. And even this pace of growth may be optimistic given the
estimated shortfall in kharif output and lag in rabi sowing, particularly in paddy and
pulses. Equally, the second-largest component of the services economy, the omnibus
trade, hotels, transport, communication and broadcasting sector — also a large
provider of jobs — is estimated to witness more than a halving in the pace of growth
— to 6.3%, from 14% last fiscal. Here too, the estimates reflect the trend evident in
the NSO’s November 30 release of second-quarter GDP estimates, and underscore the
underlying loss of momentum in the post-pandemic rebound in services.
On the demand side, private final consumption expenditure — the largest component
of GDP with a share that till two decades ago exceeded 60% — is projected to log its
slowest non-pandemic year expansion in more than 20 years. At 4.4%, private
consumption spending growth is estimated to have been at its lowest ebb since the
pandemic and accompanying lockdowns caused spending to contract by more than 5%
in 2020-21, and just over half of 2022-23’s 7.5% pace. With the rural economy
struggling under the impact of the monsoon vagaries and the resultant weakness in
farm output, demand for producers of a range of goods from soaps and detergents to
packaged foods and two-wheelers is yet to regain any kind of vigour in the hinterland.
Gross fixed capital formation, which includes government capital spending, remains
the main bright spot and driver of momentum. The NSO pegs GFCF growing 10.3% to
reach a record 34.9% share of GDP this fiscal. With the general election just ahead,
policymakers face an unenviable choice — keep the spending spigot fully open to prop
TTBR (Topics To Be Read) 10 January 2024
up growth at the risk of fiscal slippage, or tighten the purse strings and risk further loss
of momentum.
Tamil Nadu must match its growth aspirations with action on the
ground
By getting industry leaders to commit to invest ₹6.64 lakh crore through 631
Memoranda of Understanding (MoU) signed over the course of the two-day Tamil
Nadu Global Investors Meet (GIM 2024), the M.K. Stalin government seems intent on
using job creation to steer the State on a growth trajectory. The projections of an
additional 26.90 lakh jobs including 14.54 lakh through direct employment are meant
to reinforce Tamil Nadu’s reputation as an economic power house. In sheer numbers,
the success of the 2024 edition dwarfs the outcomes in 2019 and 2015. It has attracted
investments in green energy, e-vehicles, non-leather footwear, automobiles,
advanced electronic manufacturing, defence and aerospace and the time-tested
Information Technology and digital services. Significantly, going beyond the developed
Chennai and Coimbatore regions, these investments are distributed across the State,
including deep down south. With the creation of support infrastructure in tier 2 and 3
cities and towns, this could pave the way for balanced regional development and
partially prevent migration to urban centres that are bursting at the seams. Nine
advanced nations had come in as partners and over 30 countries were participants in
the conclave, whose global nature is what has inspired new entrants such as Vietnam’s
EV leader VinFast to seize the opportunity to enter the Indian market from Tamil Nadu.
That multinational and domestic groups including Hyundai, Tatas, Adani, Qualcomm
and Saint Gobain are keen to expand their footprint shows a level of investor
confidence in Tamil Nadu’s economic and governance climate.
TTBR (Topics To Be Read) 10 January 2024
International law and its attendant structures are not ideal. But the
world would be worse off if they weren’t there
Israel’s bloody war in Gaza has caused unprecedented death and destruction. Images
of terrified and screaming children have stained humanity’s collective conscience. This
war started when the world was still reeling from the shock of Russia’s brazenly illegal
invasion of Ukraine, which, too, has caused devastation. These two wars have led
many to pronounce the death of international law, especially the rule prohibiting the
use of force in international relations — the crown jewel of the United Nations Charter
codified in Article 2(4). But this is not the first time international law has been declared
dead. More than 50 years ago too, Thomas Franck argued that Article 2(4) was dead
because it worked on the flawed assumption that the permanent members of the UN
Security Council would continue to cooperate after World War-2.
TTBR (Topics To Be Read) 10 January 2024
While it is true that the international community has abjectly failed in preventing or
stopping these wars, penning an obituary for international law is a grave mistake. True,
international law suffers from several structural deficiencies. In fact, critical scholars
would trace the origin of the ongoing and past military conflicts in the genealogy of
international law laced with imperial and colonial character. It is also a fact that, unlike
municipal law, international law lacks a global police force to enforce it successfully,
notwithstanding the growth of several international courts and tribunals. Yet,
international law matters.
Moving beyond compliance
Critics argue that a poor compliance record with international law is sufficient to show
that it is inconsequential. Indeed, a central preoccupation of several international
lawyers has been on compliance or rule observance of international law to determine
its efficacy. However, as Robert Howse and Ruti Teitel argue, the concept of
compliance is inadequate to understand whether international law has normative
effects. A narrow focus on rule compliance elides international law’s normative
interaction with different actors, both State and non-state. For instance, national
courts often use international law to interpret domestic law to enlarge its content,
even if that international law has not been implemented through domestic legislation.
Thus, assessing the usefulness of international law requires shifting the benchmarks
away from a general theory of compliance. And if compliance alone was the matrix to
determine the efficacy of law, a lot of domestic law would also have to be declared
useless, given the innumerable violations in municipal legal systems.
Somewhat related to Howse and Teitel’s point is Harold Hongju Koh’s argument that
states are accustomed to complying with international law through a complex
transnational legal process. In other words, when a country engages with international
law, it triggers a complex process of institutional interactions whereby global norms
are debated, interpreted, and internalised by that nation’s domestic legal system. In
Koh’s world view, this transnational legal process that leads countries to obey
international law is important because there are certain material benefits or policy
goals, such as combating climate change or fighting terrorism, that only international
law can help achieve.
Accountability
However, as Monica Hakimi argues, the significance of international law cannot be
limited to material outcomes because the fundamental attribute of any legal system
should be its ability to distinguish between sheer public power and legitimate
authority. Hakimi argues that international law matters because, through its
argumentative practices, it has the potential to hold those who wield public power
accountable for their conduct. In December, South Africa moved the International
TTBR (Topics To Be Read) 10 January 2024
Court of Justice (ICJ) alleging that Israel’s conduct in Gaza violates the Convention on
the Prevention and Punishment of the Crime of Genocide. This is a case in point. This
accountability need not always be in the form of punishing the decision-makers for
non-compliance. However, accountability stems from several actors such as states and
private individuals invoking international law to ask questions of those in power and
make a case if their actions are illegitimate. While this system of holding those in
power accountable is not ideal, it does push countries and actors to explain their
conduct. For example, the Israel Defence Forces have tried to explain how their
military offensive is consistent with international law. While one may disagree with
their explanations, the fact that Israel has attempted to legitimise its actions using the
phraseology of international law in the eyes of various constituents who are paying
attention is critical.
International law and its attendant structures are not ideal. But the world would be
worse off if they weren’t there. Israel would not have to explain its conduct to the
larger world, and there would be no ICJ to hear a complaint against it. As Nanjala
Nyabola writes, even if there is no universal compliance with international law,
especially international humanitarian law, there is a universal aspiration towards
compliance. International law must be moulded and accentuated to become an
instrument that holds the powerful accountable in international relations.
International law should be marshalled each time men who are drunk with power wish
to act as they please. The world needs more, not less, of fair international law to
constrain expansionist, imperial, and illiberal propensities.
Prabhash Ranjan teaches at the Faculty of Legal Studies, South Asian University.
Views are personal.
participation in groundwater planning has shown promising results in the past and
scaling it up through government schemes is a favourable step.
India’s success in ensuring food security by 2030 will largely depend on its approach
to managing water. Understanding water as a part of a nexus while drafting and
amending policies will be key to a water and food-secure future.
(The authors Kangkanika Neog & Ekansha Khanduja are programme associates at
the Council on Energy, Environment and Water, CEEW)
India’s relationship with Maldives—a key maritime neighbour in the Indian Ocean with
a special place in its vision for SAGAR (Security and Growth for All in the Region)—is
passing through a testing period. For starters, there was a pro-China regime change in
the island nation with the new President, Mohamed Muizzu, formally requesting India
to withdraw its military presence from Maldives.
He is currently on a state visit to China instead of a customary first trip to India which
is the normal practice of immediate neighbours. As if all of this wasn’t bad enough,
three young ministers tweeted derogatory remarks about Prime Minister Narendra
Modi after he promoted beach tourism in Lakshadweep and the people of India. The
social media backlash was predictably swift with the Maldives government suspending
these ministers and stating that their opinions are personal and do not represent its
views. But the damage has been done which threatens to be a potential pain point for
the bilateral relationship.
TTBR (Topics To Be Read) 10 January 2024
For Maldives, the big question is the extent to which tourist arrivals from India will be
impacted by this ministerial kerfuffle. To be sure, there are reports of future flight
bookings being cancelled and trade bodies asking for a boycott of business dealings
with the island nation. But as of now, Indian carriers are not looking to reduce flights
to Maldives. Hotels in that country are still full of holidaying Indians.
Last year, tourists from India accounted for 12% of total arrivals, closely followed by
the Russians and Chinese visitors. So, the potential absence of arrivals from India per
se is unlikely to cripple the tourism industry of Maldives which accounts for one-thirds
of its economy and more than 60% of foreign exchange receipts. For all the social
media frenzy, Lakshadweep is no threat to Maldives until it improves its infrastructure
to attract high-end tourism. This will happen with the faster development of cruise
tourism and global majors participating in a bigger way on India’s waterways and
resorts along the 7,500 km-long coastline.
For all the current strains in Indo-Maldives ties, it is important to bear in mind the
interdependencies that cannot be wished away. This has been even admitted by
Maldives’s president in an interview to the Times of India. While he said that India not
withdrawing its forces from the island nation amounts to disrespecting the will of
Maldivians, he backed defence cooperation with India, including the efforts to build
the operational readiness of the Maldives National Defence Force saying that it was
based on mutual respect and trust. “India is our closest neighbour. That is geographical
reality. India is one of our closest friends. We share traditional and cultural roots. That
is a historical fact. These realities will not change,” he emphasised.
For such reasons, the current controversies must blow over and not bedevil the
bilateral relationship. India’s aid serves the developmental interests of Maldives. India
has substantially contributed in areas like people’s welfare, humanitarian assistance
and disaster relief. India has been the first responder for the Maldives notably during
the coup attempt in 1988, tsunami of 2004, and drinking water crisis in 2014. During
the last five years, more than 450 multi-faceted missions have been carried out to
safeguard the maritime security of Maldives. These interdependencies must continue
to be fostered despite the pro-China tilt of the regime in Maldives.
The job market in India is constantly changing, and we are now witnessing a significant
shift towards skills-based hiring. The old-fashioned approach to hiring, which relied on
academic qualifications and work experience, is giving way to a more dynamic method
that prioritises specific skills.
This shift reflects a wider recognition that skills, rather than just degrees, are the key
to success in today’s highly competitive job market.
A skills-first hiring approach gives priority to a candidate’s practical abilities over
traditional qualifications. It is relevant today because it provides equal opportunities
for all, allowing talent to shine beyond academic labels. The advantages of this
approach include a more inclusive job market and the ability to tap into hidden talent.
According to a report titled ‘The State of Skills-Based Hiring 2023’, 86 per cent of
employees believe that they are more likely to secure their dream job when the hiring
process includes skills-based hiring.
Disturbing data
However, the latest data from the Periodic Labour Force Survey (PLFS) is alarming: a
whopping 86 per cent of individuals aged between 15 and 59 years have not received
any form of vocational training.
It is high time that we focus our efforts on converting this pool of individuals into
skilled human capital.
Therefore, high schools and post-secondary education institutions must design their
curriculum to focus on skills. The New Education Policy (NEP) 2020 rightly emphasises
the need for standardised vocational training courses in high schools.
NEP’s goal
To achieve the NEP’s goal of increasing the gross enrolment ratio in higher education,
including vocational education, to 50 per cent by 2035, further action is needed. This
TTBR (Topics To Be Read) 10 January 2024
requires the addition of 3.5 crore new seats to higher education institutions (HEIs) and
focusing on a flexible curriculum with creative combinations of subjects.
We must integrate vocational education with mainstream education and allow for
multiple entries and exits with appropriate certification. It is imperative to establish
Multidisciplinary Education and Research Universities (MERUs) at par with the Indian
Institutes of Technology (IITs) and Indian Institutes of Management (IIMs).
The growing integration of advanced technologies like generative AI, machine
learning, cloud computing, and data science continue to propel business and alter
business operations; the demand for upskilling in technology remains robust.
Companies are increasingly seeking professionals with specific skills to fill key roles in
areas such as valuation analysis, financial research, investor relations management,
and risk analysis within this domain.
Dismantling barriers
Skills-first hiring is a new approach that is dismantling traditional barriers to offer
global work opportunities irrespective of educational background or regional
certifications. For instance, IBM India has adopted a ‘skill-first’ approach in 20 per cent
jobs where college degrees do not matter. In 2012, IBM implemented this approach in
the US by removing the four-year college degree requirement from about 50 per cent
of its jobs. Ten years later, 29 per cent of the present IBM US workforce in hardware,
software, and consulting does not have a college degree. A study conducted between
2017 and 2022 showed that US employers reduced degree requirements for 46 per
cent of middle-skill positions and 31 per cent of high-skill positions.
The rise of skills-based hiring can be attributed to several factors. One of the key
drivers is the fast-paced evolution of technology, which has made some skill sets
obsolete while creating an insatiable demand for new ones. As industries digitize and
automate, employers are looking for candidates who have the technical expertise
required to navigate this new world.
In a country as diverse as India, this inclusive hiring model allows for recognition and
utilisation of a tapestry of skills that may be overlooked in a more rigid, qualification-
centric system.
It has the potential to unlock millions of jobs that do not require a college degree and
represents a significant departure from traditional hiring practices. The rapid evolution
of technology, which is paving the way for a more comprehensive and dynamic
professional future.
The writer DINESH SOOD is a Co-Founder and MD of Orane International, a Training
Partner with the National Skill Development Corporation (NSDC) Views are personal.
TTBR (Topics To Be Read) 10 January 2024
The Story
At 5 pm on 5th January, 171 passengers boarded an Alaska Airlines flight from Oregon
to California.
But barely 10 minutes in the air and cruising at 16,000 feet, this routine flight quickly
turned into a nightmare…
The plane broke!
Or rather, a part of the plane disappeared. A gaping hole emerged, the wind rushed
in, phones and caps were sucked out, oxygen masks dropped, and the passengers
clung on for dear life.
The pilots made an emergency landing. And let’s just say that, luckily, everyone made
it out alive.
But all eyes are on Boeing now. Its 737 Max 9 variant has been temporarily banned
from taking off in the US. And the problem for Boeing is that it’s another body blow in
a long series of problems in the past few years. Remember when two of its Max airlines
plummeted to the ground in 2018 and killed hundreds of people on board?
Yeah, things aren’t looking good for the plane manufacturer. And we must ask —
where did it all go so wrong for Boeing?
Well, it probably all began in the summer of 1997.
TTBR (Topics To Be Read) 10 January 2024
Boeing wanted to establish dominance and show the world who was boss in the airline
industry. So it decided to acquire another plane manufacturer called McDonnell
Douglas. It was a massive merger worth $14 billion.
Now after the merger, the new entity retained the Boeing name. It was expected since
it was Boeing that splashed the cash. But the problem was that the culture of
McDonnell Douglas seeped in. And that changed the face of Boeing completely.
See, the Boeing of the pre-merger era was called an ‘engineers’ company’. The ones
who made these flying machines called the shots. Costs didn’t matter and it was only
quality and design that did. They wanted to ensure that only their best ideas took to
the skies. Safety was paramount. And the Chief Financial Officer who was answerable
to Wall Street about costs didn’t care much about trying to impress the bankers either.
But after the merger, everything changed.
The CEO of McDonnell Douglas actually became the CEO of Boeing. A chairman with
no aviation background, but who’d worked in General Electric, was also appointed.
The company started paying attention to creating shareholder value which was hardly
a priority earlier. And as one article put it, “Now, a passion for great planes was
replaced with a passion for affordability.” Boeing even turned to outsourcing critical
operations. Sure, it made the balance sheet ‘asset light’, but, it came at the cost of
quality.
To top it all off, they even moved management headquarters away from where all the
engineering took place — from Seattle to Chicago.
At first, no one said anything. Sure, there was a joke that went, “McDonnell Douglas
bought Boeing with Boeing’s money.” But it was a harmless observation. The planes
kept rolling off the conveyor belt.
But then 2018 happened. And the death of Boeing’s culture came to the fore.
See, American Airlines was looking to place an order with Boeing’s rival Airbus. Airbus
had created the A320neo which was more fuel-efficient. And while initially, Boeing
scoffed at Airbus, the call from American Airlines was a jolt out of the blue. That’s
when Boeing realised it had fallen behind.
But it didn’t have time on its hands to innovate and build something from scratch. And
that’s when the McDonnell Douglas way of doing things caught on — instead of
spending $20 billion on a new plane, Boeing budgeted a puny $2.5 billion and decided
to tweak its iconic 737. Technical drawings for the model were being churned out at
double the pace, workers from other departments were pulled in for the Max project,
and timely delivery took precedence over quality. The idea was to make small but
TTBR (Topics To Be Read) 10 January 2024
significant changes to 737 while sticking to the original design so that pilots wouldn’t
really have to be retrained either.
But, flying a machine in the sky isn’t child’s play. Apparently, from 2010 to 2014,
Boeing’s CEO never mentioned safety even once in their annual statement. And we all
know what happens when ethics and quality fly out of the window!
And in 2018, when two 737 Max planes crashed and killed hundreds of people,
everyone knew that it was the billion-dollar merger with McDonnell Douglas that
ultimately became Boeing’s downfall.
The sad part?
The problems don’t seem to be ending.
In the past couple of years, Boeing has said that some of its aircraft might have loose
bolts that could be dangerous. It said that one of its suppliers drilled holes in the wrong
places for some jets. And it even stumbled in its quest to build the US President’s new
Air Force One.
For Boeing, the merger from 1997 is coming back to haunt it. The Max is the best-
selling plane in Boeing’s history. And 76% of the company’s outstanding order book
involves variants of these aircraft. And it’ll be a tough task to convince people that
Boeing has not forgotten how to build an aeroplane.