Do you believe financial ethics should be taught along with accounting courses?

I discuss this from the current Indian perspective. There are many things which even after being taught at home, then at school, at college and at the university, many people love to forget for their own benefit. But does that mean that ethics in finance should not be taught?

Let us analyse a recent financial scam which speaks of corruption to the tune of thousands of crores of rupees at the highest level of governance of cricket in India.

We have reached such a sorry state after the third year of the IPL (Indian Premier League) cricket tournament between club sides here that so many skeletons are tumbling out of the closets of BCCI (Board of Control for Cricket in India) who are the regulators of the game. Lalit Modi's name is taken with utmost respect among his associates in the game as a man who could mint money in millions for them for the last 3 years as the Commissioner of IPL.

Instances like this would form very good case studies for students of business ethics. In India we have such a long list of corrupt people in the public domain that the subject can be made really interesting having more relevance to what is practised and what should not be.

A Story of Appreciation

One young academically excellent person went to apply for a managerial position in a big company. He passed the first interview, the director conducted the last interview and made the last decision. The director discovered from the CV, that the youth's academic result is excellent all the way, from the secondary school until the postgraduate research, never has a year he did not score.The director asked, "Did you obtain any scholarship in school?" and the youth answered "none".

The director asked, " Is it your father pay for your school fees?" the youth answered, my father passed away when I was one year old, it is my mother who paid for my school fees.The director asked, " Where did your mother worked?" the youth answered, my mother worked as cloth cleaner. The director requested the youth to show his hand, the youth showed a pair of hand that is smooth and perfect to the director.The director asked, " Did you ever help your mother washed the cloth before?" The youth answered, never, my mother always wanted me to study and read more books, furthermore, my mother can wash cloths faster than me.

The director said, I had a request, when you go back today, go and help to clean your mother's hand, and then see me tomorrow morning.

The youth felt that it the chance of getting the job is very good, when he went back, he happily wanted to clean his mother's hand, his mother feel strange, happy but mixed with fear, she showed her hand to the kid. The youth cleaned his mother's hand slowly, his tear drop down as he did that. It is first time he found his mother's hand is so wrinkled, and there are so many bruises in her hand. Some bruises incites pains so strong that shiver her mother's body when cleaned with water.

This is the first time the youth realized and experienced that it is this pair of hand that washed the cloth everyday to earn him the school fees, the bruises in the mother's hand is the price that the mother paid for his graduation and academic excellence and probably his future.

After finishing the cleaning of his mother hand, the youth quietly cleaned all remaining clothes for his mother.

That night, mother and sons talked for a very long time. Next morning, the youth went to the director's office The director noticed the tear in the youth's eye, asked: " Can you tell you what have you done and learned yesterday in your house?"

The youth answered, " I cleaned my mother's hand, and also finished cleaning all the remaining clothes'

The director asked, " please tell me your feeling." The youth said, Number 1, I knew what is appreciation, without my mother, there would not the successful me today. Number 2, I knew how to work together with my mother, then only I can realize how difficult and tough to get something done. Number 3, I knew the importance and value of family relationship. The director said, " This is what I am asking, I want to recruit a person that can appreciate the help of other, a person that knew the suffering of others to get thing done, and a person that would not put money as his only goal in life to be my manager. You are hired. Later on, this young person worked very hard, and received the respect of his subordinates, every employees worked diligently and in a team, the company's result improved tremendously. A child who has been protected and habitually given whatever he did, he developed "entitlement mentality" and always put himself first. He is ignorant of his parent's effort. When he started work, he assumed every people must listen to him, and when he became a manager, he would never know how suffering his employee and always blame others. For this kind of people, he can have good result, may be successful for a while, but eventually would not feel sense of achievement, he will grumble and full of hatred and fight for more. If we are this kind of protective parent, did we love the kid or destroy the kid?

You can let your kid lived in a big house, eat a good meal, learn piano, watch a big screen TV. But when you are cutting grass, please let them experienced it. After a meal, let them washed their plate and bowl together with their brothers and sisters. It is not because you do not have money to hire a maid, but it is because you want to love them in a right way. You want them to understand, no matter how rich their parent are, one day their hair will grow gray, same as the mother of that young person. The most important thing is your kid learn how to appreciate the effort and experience the difficulty and learn the ability to work with others to get thing done.

Wide presence of Chinese cos in PoK worries India

It is not only the presence of Chinese troops in PoK and Gilgit-Baltistan region that New Delhi is worried about. The growing economic interest of Chinese companies, particularly in key infrastructure projects located in these areas, is an equal cause for concern among the security establishment here, which fears that Pakistan is encouraging Chinese investment to dilute India’s claim over PoK.

The growing Chinese presence in PoK is likely to be raised when Prime Minister Manmohan Singh meets Chinese Premier Wen Jiabao on Friday in Hanoi. Also, India is likely to draw US’ attention to the issue when President Barack Obama visits India early next month.

According to intelligence reports, about 122 Chinese companies are operating in Pakistan at present, employing approximately 11,000 Chinese engineers and workers. In fact, China is involved in a big way in infrastructure projects — right from construction of roads and bridges, telecommunication, mineral exploration, construction of dams, hydro-power projects to water diversion channels — in PoK and the northern area of Gilgit-Baltistan.

The most strategic of the projects is the Karakoram highway upgradation project. Being implemented under an agreement signed between China Road and Bridge Corporation (CRBC) and the National Highway Authority of Pakistan in December 2007, it is being largely funded with preferential buyer’s credit from China’s Exim Bank. In July 2010, during the visit of Pakistani President Asif Ali Zardari to China, NHA signed MoUs with CRBC for widening of Karakoram highway project Phase-2, connecting Thakot Bridge to Sazin and with the China Gezhouba Group International Engineering Company Ltd for widening the Jaglot-Skardu road.

China and Pakistan are also working on a 750-km-long Pakistan-China rail link between Havellian and Khujerab Pass along the Karakoram highway. A joint venture between Pakistan Railways and China’s Dongfang Electric Corporation is also proposed to run freight train service on the route.

Chinese companies have bagged contracts to construct bridges in PoK. These include a Rs 1.012-billion bridge to be built by Chinese firm CWE on the Jhelum river in Mirpur and five permanent bridges to be constructed by Xinjiang Road and Bridge Construction Company.

The mineralised metallogenic zones in PoK are up for exploration and exploitation by Xinjiang Surpass Mining Company Ltd, which has submitted to the Gilgit-Baltistan government a mining proposal worth $6 million. Besides, the MCC Resources Development Company of China will explore mineral resources in Satpara district.

Chinese telecom company, China Mobile, is a player in PoK and parts of Gilgit-Baltistan and is now planning to maximise its coverage by setting up more cell towers and sites.

Dams are another area where Chinese firms have bagged high-value contracts in PoK and northern areas. Pakistan government plans to begin construction work on the 4,500 MW Diamer-Bhasha dam project, to be completed over 8-10 years, with Chinese finance and using the services of China Three Gorges Project Corporation. Not only has China been involved in construction of Mangla Dam, but a consortium of China Gezhouba Water & Power Company and China National Machinery and Equipment Import & Export is also implementing the 969 MW Neelum-Jhelum hydropower project at a cost of $2.16 billion. In fact, the Water and Power Development Authority of Pakistan has decided to use tunnel boring machines so as to complete the Neelum-Jhelum hydropower project before India’s Kishanganga project.

Other hydropower projects being implemented with Chinese investment are the 7,000 MW Bunji Dam in Astore district of Gilgit-Baltistan and the Kohala project on Jhelum river.

A joint venture named Pakistan-China Sust Port Company is managing the Sust dry port, some 200 km from Gilgit on Karakoram highway along China border. The port was opened in July 2006 to promote trade between the two countries.

Chinese companies Xinjiang Beixin Construction and Engineering Company and CWE are also engaged in reconstruction work in Muzaffarabad, Bagh and Rawalkote areas of PoK after they were hit by an earthquake in 2005.

To promote Chinese investments in PoK, Pakistan is even extending security cover to Chinese engineers and workers, executing mega development projects in PoK. A high-level meeting chaired by Pakistani interior minister Rehman Malik in May had reviewed the security of Chinese personnel working in Pakistan and decided to deploy additional force to protect them. The Chinese ambassador to Pakistan and senior government officials from PoK and Northern Areas were present at the meeting.

China wants to be part of Kashmir dispute

'The China-Pakistan strategic calculus is particularly dominant in this narrative. It is a marriage literally made in the Karakorams.' Why does China worry India's diplomats? Nikhil Lakshman listens in:

How to deal with an "more assertive, more muscular" China represents a huge challenge for Indian diplomats and the country, sources in India's ministry for external affairs (MEA)  revealed. Speaking on the periphery of External Affairs Minister S M Krishna's interaction with senior editors, the sources noted with concern "China's role in Kashmir affairs."

The sources, who spoke on background and did not want to be identified because it would probably upset Chinese sensitivities, were responding to a question posed by Indian Express Strategic Affairs Editor C Rajamohan. He felt that China had gone even further than Pakistan in defining the Kashmir issue.

While Pakistan insists that Kashmir is a disputed territory, he said recent Chinese positions have made it clear that Beijing believes Pakistan occupied Kashmir is Pakistan territory, while India's Kashmir state is the only part of the province that is disputed.

China, like the United States, the MEA sources said, had long held the position that Kashmir was a dispute between India and Pakistan and China favoured the two South Asian neighbours talking to each other to find a resolution to the problem.

When China started issuing stapled visas to residents of Jammu and Kashmir a couple of years ago, alarm bells started chiming at South Block where the ministry of external affairs is headquartered.

"We try to reason it out with the Chinese," one source said, "pointed out that a part of Kashmir is illegally occupied by Pakistan, but we noticed a shift in China's attitude and their continuing to issue stapled visas."

What seems to be coming out of all this, another source added, is that China wants to assert that it is also a part of the Kashmir dispute.

Thirty eight thousand kilometres of Indian territory in Ladakh -- one of the three regions that comprise Jammu and Kashmir state -- was occupied by China after the 1962 war with India.

"The China-Pakistan strategic calculus is particularly dominant in this narrative," the source added, "It is a marriage literally made in the Karakorams."

Alluding to Selig Harrison's article in The New York Times in August which revealed that between 7,000 to 10,000 troops of China's People Liberation Army are stationed in the Gilgit-Baltistan area of Pakistan occupied Kashmir, the source felt that Pakistan had ceded responsibility for those areas to the Chinese.

China is helping Pakistan build high-speed rail and road links in Gilgit-Baltistan that will enable Chinese merchandise to travel from Eastern China to the Gwadar, Pasni and Ormara ports -- all built with Chinese help -- within two days.

All these developments, the source added, had profound implications for the long-standing boundary dispute between India and China. Protracted discussions in recent years have been unable to make significant progress, let alone resolve the complicated boundary question.

However, the source cautioned the editors present not to draw any "doomsday conclusions" about the India-China relationship from the stapled visas for Kashmir residents or the recent denial of a Chinese visa to North Command Commander Lieutentant General B S Jaswal.

"It is not as if the India-China relationship has a frost which we have not been able to permeate," the source noted, "and even though we have not yet built a convergence to find a settlement to the border issue, the border is tranquil and the occasional transgressions have not resulted in any military confrontation."

The ministry of external affairs, the sources pointed out, closely monitors China's actions in South Asia, its interactions with India's neighbours, and indeed across the world.

China's investments and interactions, one source added, are "high profile, but short term," contrasting India's "low profile, but long-term" role.

This source felt that the internal political calculus in China may likely influence recent Chinese actions.

The old Communist system is mutating, the source added, and there is insufficient clarity about the route the current political order will take, especially when President Hu Jintao and Premier Wen Jiabao transfer their powers to the next generation in 2012.

Apart from China's unquestioned economic strength, the source believed it is possible that the new Chinese assertiveness could also be linked to the People's Liberation Army's greater say in matters of statecraft.

The PLA's influence had declined in the Deng Xiaoping era; Deng disapproved of the PLA's fingers in many pies, much like the Pakistan army operates, and had clipped its nails during his years in power.

In recent years, China observers have noted the PLA's resurgence and though a military takeover is not on the cards, the generals clearly influence policy in the backrooms of Chinese governance.

As its strategy to deal with the New China, India has moved to build strategic relationships with many countries who share its apprehensions about the Middle Kingdom -- the US, of course; Russia; Japan, and in recent years, Vietnam, South Korea and Indonesia.

India has always chosen its Chief Guests for the Republic Day parade with an eye on its strategic goals, be it Russia's then president Vladmir Putin, Saudi Arabia's King Abdullah, French President Sarkozy and South Korean President Lee Myung-bak this year.

Unusually, India announced its Chief Guest for Republic Day 2011 early, in August itself: Indonesian President Susilo Banbang Yudoyono. The choice clearly highlights India's desire for a better relationship with Indonesia, a country that shares New Delhi's worries about an assertive China.

"We have laid the groundwork for a better relationship with Indonesia," one source pointed out, "We have paid greater attention. Indonesia is a democratic country with a big population, and traditionally there has been a civilisational relationship with India."

Indonesia, the source added, is increasingly important for India to make a difference in the region.

"What we are seeing now is that the game playing has now begun," the source said, indicating China, "Many rounds will take place and the tensions will not be good for the region."

"But the engagement quotient has got to go up," the source added, highlighting the matured India-China relationship in the last 20 years, the $60 billion worth of trade between the Asian giants, and the increasing Indian corporate presence in Eastern and Southern China. "Not the confrontation quotient."