News April 23, 2008, 8:16PM EST text size: TT
IBM vs. Tata: Who's More American?
The Indian giant's TCS makes most of its money in the U.S., while Big Blue does the bulk of its business abroad

by Steve Hamm

Quick quiz: Which company is more "American"—Mumbai-based Tata Consultancy Services, or Armonk (N.Y.)-based IBM (IBM)? Evaluate the two based on where they make their sales, and the answer is surprising. TCS, India's largest tech-services company, collected 51% of its revenues in North America last quarter, while 65% of IBM's were overseas.

This juxtaposition helps explain investor reaction to the companies' most recent earnings reports. TCS stock declined by more than 10% on Apr. 21 after it reported that earnings for its fourth fiscal quarter fell short of expectations. IBM, by contrast, beat estimates on Apr. 16. Its stock is up 3% since then and 25% since mid-February.
"No Slackening of Demand"

A tale of two strategies is playing out amid shifting global economic conditions. TCS, like the other top Indian tech-services outfits, has long focused on big American and British corporations. Now that the U.S. is slipping into a recession, the Indian companies are vulnerable. TCS, though, insists its financial shortfall doesn't signal a fundamental weakness. It says a handful of U.S. clients canceled expansion plans in the fourth quarter, and the company agreed to defer payments by two big customers. "There's no slackening of demand," says N. Chandrasekaran, the company's chief operating officer. "The pipeline is good. We just had some specific situations."

IBM's strong results stem from a strategy of diversifying into emerging markets by its services business, which represents about half of overall revenues. Chief Financial Officer Mark Loughridge says IBM has a two-track approach: In the U.S., where clients are economizing, it helps them cut costs, while in emerging markets, it helps customers build out their technology infrastructure.

In India, where IBM is now the No. 1 seller of technology services, its revenues grew 41% last quarter."Our success starts with how global we are, which is intentional," says Virginia M. Rometty, who runs global business services for IBM.
IBM and Accenture: Setting the Bar?

TCS is the most geographically diversified of the top Indian tech-�services companies. Others rely on the U.S. for 60% to 70% of sales, and all are scrambling to broaden their business. TCS, which last year set up a unit targeting emerging markets, saw revenues increase 40% there in the past fiscal year. Infosys Technologies (INFY), India's No. 2 services player, on Apr. 15 warned that it might face a slowdown in demand. It, too, has launched an initiative aimed at China, India, Latin America, and the Middle East. Kris Gopalakrishnan, the company's chief executive, cautions that Infosys is playing catch-up with the likes of IBM and Accenture (ACN). "It will take three years to make a significant difference to our revenues," he says.

Meanwhile, the Indian companies aren't in a terrible spot; after all, their services are designed to help clients simplify their businesses and save money. Until the U.S. economy pulls out of the doldrums, though, they will have to sell more aggressively and plan carefully so they don't end up with too many employees, which would pinch margins.

Hamm is a senior writer for BusinessWeek in New York.

http://www.economist.com/world/la/displaystory.cfm?story_id=11089517

A tale of two Mexicos
North and south
Apr 24th 2008 | CUETZALÁN AND OAXACA
From The Economist print edition

Why can't its stagnant southern states catch up with the rest of Mexico?

IT IS not a place where misery reveals itself immediately. Fields climb over mountains, green as Ireland. A smattering of attractive hotels cater to tourists visiting the local waterfalls. Bells ring out from the two churches that dominate opposite ends of Cuetzalán, a small town in the northern mountains of the state of Puebla. But the appearance of a pastoral idyll conceals a poverty trap.

Mexico's southern states are more mountainous and rural than the north, with a bigger proportion of Indians. And on almost any socio-economic indicator, these areas lag behind the rest of the country. At the bottom are Chiapas, Oaxaca and Guerrero, but parts of Puebla and Veracruz are little better off. In a human-development index comparing Mexican municipalities, drawn up for the United Nations, 95% of the places in the bottom decile are in the south. In the north, 12% of people in rural areas are extremely poor, against 47% in the south, according to the Woodrow Wilson Centre, a think-tank in Washington, DC.

Although politicians have long been aware of this gap, government efforts to tackle it have accomplished little. A grandiose Plan Puebla-Panama, launched by President Vicente Fox in 2001 to develop the south, stayed largely on paper. The “March towards the South”, a scheme of the same year to attract investment, paid businessmen to create jobs that in some cases never materialised, says Gerardo Esquivel, an economist at Colegio de México, a university in Mexico City.

Felipe Calderón, Mr Fox's successor, also has plans. Reasonably enough, these focus on infrastructure: one of the south's obvious handicaps is that getting products to ports and airports, let alone to the United States, is slow and expensive. The government hopes to mobilise from public and private sources investment in roads totalling $28.7 billion over his six-year term, including $6 billion this year. Some of these will be in the south, including a new highway along the Gulf coast and feeder roads to both coasts. Some critics, such as Mr Esquivel, say this is not enough.

Others question whether roads alone can help. José Antonio Aguilar, an official in Puebla, says that the past four years have seen “a total transformation” of his state's infrastructure “but we haven't been able to turn this into growth in income.”

Perhaps the crux of the problem is that there is little incentive for private investment in the south because the population is too poor and dispersed, says Roberto Newell of the Mexican Institute of Competitiveness, a private think-tank. The paradox, says Eduardo León of the Boston Consulting Group, a management consultancy, is that “we must depend on the government to create non-governmental sources of investment.”

The roots of stagnation are complex. As well as difficult geography, they include ethnic discrimination and poor education. In addition, it is both a cause and consequence of economic torpor that politics in the south remains the province of strongmen. Incompetence, corruption and even violence are common. In Puebla, the governor has been accused of helping to cover up a paedophile ring (he denies it, and the federal Congress dropped an investigation). The city of Oaxaca, once a tourist magnet, is only slowly recovering from seven months of protests in 2006 calling for the ouster of the state governor, in which a score of people were killed. Adalberto Castillo, head of a local chamber of commerce, estimates that the state's economy would be some 20% bigger today had the protests never happened.

A self-styled Zapatista revolutionary army took over parts of Chiapas in 1994. It has not formally called off its rebellion, which involves some 20,000 people. But the federal government now quietly supplies electricity and water to the villages the Zapatistas still control, according to Xavier Abreu, an official at the federal government's agency for indigenous people.

The Zapatista rebellion raised Mexicans' awareness of race discrimination. But this remains a problem. The majority of the population in every one of Mexico's 100 poorest municipalities is of indigenous descent, says Mr Abreu. One policy designed to help the poor Indians is bilingual education. But the flaws of the public education system are magnified in the south. In practice, the teachers' union rather than the government controls teaching appointments; the union sometimes appoints a teacher who speaks a different indigenous language to his pupils, according to Mr Abreu. A typical adult in the south has only six years of schooling; the corresponding figure in northern Mexico is 8.1 and 9.7 in Mexico City. And those years of schooling are not full years: local education officials report that in urban areas in the south an average teacher spends only 110 of the notional 200 days of the academic year actually in the classroom. The record is even worse in rural areas.

Mexicans of indigenous descent face cultural barriers too, some of them self-imposed. Mr Newell argues that Mexican society has not negotiated its way around the difficult question of how to retain respect for Indian traditions while integrating the countryside economically. “It is a cruel choice,” he says, “but you have to give up some differentiation.” Amerindian culture dictates maize as the staple crop; a smallholder farming a few acres with a hoe cannot compete with Iowa combines. Better infrastructure and education in the more urbanised north mean that the benefits of Mexico's membership of the North American Free-Trade Agreement have accrued there, while income in the south stagnates because of low productivity.

Yet not all is gloom in the south. In some places there are signs that local government is becoming more efficient. By updating its property registry, Guerrero's state government has raised its annual revenue from property tax by 38%, which officials hope will result in higher public investment. In Puebla, officials are encouraging farmers to switch from maize and coffee to higher-value crops, such as bamboo and fruit. Such schemes are not helped by the fact that government agricultural subsidies go disproportionately to the richer north. And they are exceptions.

The big wealth gap polarises politics, too. In the north, Mr Calderón won 43% of the vote in the 2006 presidential election, while only 24% went to Andrés Manuel López Obrador, his populist rival. But in the south Mr López Obrador won 40%, and Mr Calderón 27%. This regional divide contributes to political gridlock. The right plays to its electoral strength in the north, and the left to its constituents in the south, squeezing out opportunities for compromise and progress. The latest example concerns a desperately needed reform to liberalise Mexico's declining state-owned oil industry, opposed by Mr López Obrador. The south instinctively favours big government and mistrusts private initiative.

With each passing year, the socio-economic gap widens. Monterrey, Mexico's northern industrial capital, is starting to resemble south Texas. Many parts of the south still look like a northern extension of Guatemala. But unless the government shows a greater ability and willingness to tackle its problems, the south will not just remain stuck in its poverty trap but risks handicapping the country as a whole

Hafsia Hersi to star in 'Kirkuk'
Rezo Films selling film internationally
By NICK VIVARELLI
Hafsia Hersi is attached to star in "The Flowers of Kirkuk," a Romeo and Juliet tale that marks a rare co-production between Europe and Iraq.

Gallic boutique Rezo Films is selling the film internationally. Hero Talabani, wife of Iraqi president Jala Talabani, is among co-producers of the pic, set during Saddam Hussain's ethnic clensing in Kurdistan.

Hersi is a recent winner of the Venice fest's Marcello Mastroianni prize for promising actress, as well as a Cesar nod in the same category.

Iranian-born Fariborz Kamkari wll helm the pic. His Tehran-set "Black Tape" unspooled in Venice and Edinburgh, and was banned in Iran.

"Flowers" producer is Fabrizia Falzetti via her Rome-based FARout Films. Hero Talabani's Sulifilm, based in Sulemany City in northern Iraq. Talabani also owns Kurdistan satellite channel Kurdsat, the first Kurdish satellite channel and the most popular onechannel. Kurdsat has been airing ads searching for extras and about 1,000 candidates have responded.

Gallic producer Vincent Macheras and his Lorival shingle, Swiss producer Marcel Hoehn and Swiss TV T&C are also on board as co-producers.

Located 150 miles north of Baghdad, Kirkuk was among Kurdish cities where Saddam used chemical weapons against Kurdish Iraqi civilians starting in the early 1980s. The romance at the center of "Flowers" is between a young woman from Baghdad and a Kurdish doctor who is trying to save the victims of Saddam's attacks.

Read the full article at:
http://www.variety.com/article/VR1117986311.html

Qatar gets into film biz with 'Rumi'
Project budgeted at $25 million
By NICK VIVARELLI, ALI JAAFAR
The gas-rich Gulf state of Qatar is getting into the international film biz with "Rumi -- The Fire of Love," an English-language biopic of Rumi, the 13th century Persian poet and a founder of Sufism, with Deepak Chopra on board as script consultant.

Pic, casting in L.A. for an A-list U.S. star to topline, is budgeted at $25 million, the bulk of which is to be provided by the Qatar Foundation, headed by Sheikha Mouza, wife of the emir of Qatar.

Indian helmer Muzaffar Ali, who has long been associated with Sufi music and Sufism, will helm "Rumi" with Oscar-winning lenser Vittorio Storaro on board behind camera.

Italo producer Igor Ubaldi is shepherding via his Rome-based Istar Prods.

Uboldi said shooting is expected to start in January in Turkey and other Middle Eastern locations where the founder of the order of the Whirling Dervishes embarked on his spiritual quest in the Middle Ages.

Rumi's poetry has been widely translated globally, with millions of present-day readers.

The project, which charts Rumi's quest from the age of 12 and his transformation into an ecstatic mystic, had previously been set up in the United Arab Emirates. Project is believed to have been nixed by the Abu Dhabi-based regulatory org National Media Council after local concerns were voiced over the depiction of Sufi Muslims drinking and dancing.

Qatar is the world's largest supplier of liquified natural gas. Execs in the Gulf state, home to ink-generating news channel Al-Jazeera, have been prepping plans to enter the film biz for some months now. The "Rumi" project is the first of what is expected to be a number of film initiatives announced this year.

Read the full article at:
http://www.variety.com/article/VR1117986234.html

http://www.nytimes.com/2008/05/25/opinion/25pintak.html?_r=1&oref=slogin&pagewanted=print

May 25, 2008
OP-CHART
Misreading the Arab Media

By LAWRENCE PINTAK, JEREMY GINGES and NICHOLAS FELTON

“ARABIC TV does not do our country justice,” President Bush complained in early 2006, calling it a purveyor of “propaganda” that “just isn’t right, it isn’t fair, and it doesn’t give people the impression of what we’re about.”

The president’s statement, along with the decision by the New York Stock Exchange to ban Al Jazeera’s reporters in 2003, is a prime example of how the Arab news media have been demonized since the 9/11 attacks. As a result, America has failed to make use of what is potentially one of its most powerful weapons in the war of ideas against terrorism.

For proof, in the last year we surveyed 601 journalists in 13 Arab countries in North Africa, the Levant and the Arabian Peninsula.

The results, to be published in The International Journal of Press/Politics in July, shatter many of the myths upon which American public diplomacy strategy has been based.

Rather than being the enemy, most Arab journalists are potential allies whose agenda broadly tracks the stated goals of United States Middle East policy and who can be a valuable conduit for explaining American policy to their audiences.

Many see themselves as agents of political and social change who believe it is their mission to reform the antidemocratic regimes they live under.

When asked to name the top 10 missions of Arab journalism, they cited:
political reform,
human rights,
poverty and
education as the most important issues facing the region,
trumping Palestinian statehood and
the war in Iraq.

Overwhelmingly, they wanted the clergy to stay out of politics. And, aside from the ever-present issue of Israel, they ranked “lack of political change” alongside American policy as the greatest threats to the Arab world.

Though many Arab journalists dislike the United States government, more than 60 percent say they have a favorable view of the American people. They just don’t believe the United States is sincere when it calls for Arab democratic reform or a Palestinian state, as President Bush did again this month in Egypt.

Make no mistake, the Arab press has many flaws:
1. including being subject to state control;
*only 26 percent of our respondents said they felt their fellow Arab journalists “act professionally” and

*only 11 percent said they were truly independent in their work.

Nevertheless, Arab news outlets are more powerful and free today than at any time in history.

If the next administration is going to try to reach out to the Arab people, it won’t get far by blaming the messenger.

Lawrence Pintak is the director of the Kamal Adham Center for Journalism Training and Research at the American University in Cairo and the author of “Reflections in a Bloodshot Lens: America, Islam and the War of Ideas.” Jeremy Ginges is an assistant professor of psychology at the New School for Social Research. Nicholas Felton is a graphic designer in Brooklyn.