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Saturday, September 29, 2007

Rupee and the IT sector

The hardening rupee has been one of the major focal points of the IT industry of late. A 10% appreciation in the last one year has made a serious dent on the global competitiveness of the Indian IT sector.

Apprehensions that some segments of the IT/BPO business may be flying out of India has made the industry bigwigs somewhat nervous.

In a bid to combat their growing concerns about the rupee appreciation, some of the industry leaders have even called for slowing down the rate of salary hike in the sector, and of course as expected, others have reiterated their right to peg the salaries wherever they wish. Free market, etc. Thus increasingly, there is a tacit expectation, if not a strident demand, from the sector that the government should manage the appreciation of the rupee better. Never mind its impact on inflation and interest rates.

Well, no harm in having one’s expectations and hopes and sending some gentle signals along those lines. But even as those gentle signals are finding their audience, there are certain aspects of the issue everybody connected should take note of.

From a mere 5% of a $33 billion total Indian exports in 1996-97, today (2006-07) the IT sector accounts for a hefty 25% of the $120 billion total exports from India. This represents a compounded annual growth of 35% for the IT sector over a 10-year period, making IT the fastest growing and the biggest export-oriented sector in the country. Clearly then, if the rupee is getting steadily stronger, the Indian IT sector has had a strong hand in making it so! In short, the IT sector has become a victim of its own success.

After all, if the IT exports rode on a historically weak rupee, it is only natural that in due course, the forces of international markets will bring about a correction. That’s international territory in the financial markets.

That is how industries and nations grow up and learn to cope, as well as find, develop or invent other strengths to stay afloat in a competitive market. And the Indian IT sector can be no exception to this standard rule. It only stands to reason that after decades of reigning strong, the hardest currencies of yesteryears like the US dollar, the Deutsche mark, the pound sterling, the yen or the French franc give way to currencies of the emerging economies.

There was a time when the Japanese automakers faced the same problem as the Indian IT sector today, only much worse — namely that of a super hard yen. Their companies would struggle to spend millions in R&D for devising a superior carburettor design that would bring the cost of a car down by $85, only to see a strong yen push the car price up by $300 the next morning. But the Japanese auto industry learnt to cope. That’s when they unleashed their Lexuses, Accuras and Infinities into the western world.

Clearly, our IT sector needs to find similar market solutions, rather than seriously expect or hope for a government handholding. You either have a free market or you do not. The sector will have to reduce its dependence on conventional export markets; tap hitherto untapped markets, say, among the rapidly emerging east European countries; negotiate their contracts in rupee rather than dollars; get a lot more India-centric; move up the value chain; draw in work-force from the fringe states to bring about superior wage arbitrage and do a whole lot of other things so that the sector is driven more by quality and value than by the softness of the rupee.

To illustrate one of the above points, let us see how our IT sector can become more India-centric. Take Cambodia. For tourists visiting Cambodia, the visa is on arrival. And the software and the system installed at the beautiful Siem Reap airport is so advanced that visas for an entire plane load of tourists is cleared in 15 minutes flat. IT is on its best display here, including the computers on the immigration desk taking your picture on the spot. The same is true of the passes issued as you enter Angkor Vat. The column of vehicles at the entry gate moves faster than our vehicles do at most of our Toll Gates.

During the few seconds a car stops at the entry to Angkor Vat, the tourist’s picture is taken and the laminated pass issued for one or three days as required, complete with his or her picture and other details, such as, name, date, time, etc. Don’t we have enough and more scope in our own country for our IT sector to address, without worrying excessively about exports? We are a big enough country to do much of our ‘exports’ out of Bangalore and Hyderabad to a couple of dozen of states within the country.
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An artist’s calling


A passion for art and history led Lim Muy Thean to becoming a respected artisan in Cambodia.

If you studied art at one of the most prestigious fine arts schools in the world – the École Nationale Supérieure des Beaux-Arts (National School of Fine Arts) in Paris – and your fellow alumni included artists like Claude Monet and Edgar Degas and fashion designers, Valentino and Hubert de Givenchy, what would you do?

You could become a celebrity painter and command a six-figure price tag for each piece of your artwork.

Or, you could be like Lim Muy Theam.

Lim set aside his dreams and journeyed to a place he once fled from 15 years ago to take part in the rebuilding of a country ravaged by three decades of war.

Lim is one of the few overseas-educated Cambodians who are helping to revive the Khmer craft industry and manage the successful Artisans d’Angkor (AA).

As the art-design director, Lim’s job is to create new products and introduce new collections for AA.

He also designs the chic AA stores with simple lines to showcase the elaborate craftwork.

“We are not simply just producing artefacts of Angkor temples,” says the genial Lim during an interview in his Siem Reap office.

“My job is to come up with the right colour, proportions, shapes and designs that people can appreciate and want to put in their homes.”

But how did Lim, who speaks fluent French, English and Khmer, end up with AA?

The journey home

Born in Takeo Province, south of Cambodia, Lim was nine when the Khmer Rouge regime fell and Vietnam invaded Cambodia in 1978. Amidst the widespread famine and the trauma caused by the genocide, hundreds of thousands of Cambodians fled the country.

Lim’s family was among the refugees who arrived in France in 1980. Lim was separated from his family and adopted by a French family.

“I was exposed to arts and culture since young,” says Lim, who visited his Cambodian family during summer holidays when he was growing up. Traditionally, Cambodian parents raise their children to pursue practical careers like in business or computers.

“But my French family saw my artistic talents and passion for art and history. They pushed me to follow my dream,” says Lim.

At that time, the Cambodian community in France only talked about politics, the rebuilding of Cambodia after the war, and not arts or culture, Lim adds.

After high school, Lim enrolled in the École Bulle, Paris (one of the largest trade schools in France) to study interior design and graphics. In 1992, he gained admission into the tough and prestigious École Nationale Supérieure des Beaux-Arts.

In 1994, he made the life-changing decicison to return to Cambodia.

“With my arts knowledge, I wanted to see how I can share and give what I had learned in France to my people,” says the idealistic artist. Growing up in France, Lim used to hear about the sublime Angkorian Empire and the glory of Khmer arts. But when he finally returned to Cambodia, he was shocked.

“There was no presence of any art or style, people didn’t even speak very well. They were just trying to feed themselves,” says Lim, who initally worked as a painter and did a few exhibitions in an art gallery.

So he set out on a mission to learn about Khmer art and style.

For three years, he devoted himself to learning about his country. He trawled through temples and pagodas around the country, visited people’s homes, and studied whatever artwork and artefacts he could lay his hands on. The Khmer Rouge regime had tried to wipe out any reminder of Cambodia’s past – its artisans, cultural artefacts, statues and books.

“I'm interested in how Cambodians live their everyday lives and use things like spoons and pots, the house they live in – the equilibrium of the designs,” says Lim, 39. “And I try to find the relationship between the aesthetics of the Angkor temples and present-day Cambodians' lives.

Inevitably, Chantiers-Écoles (whose programme was still in its infancy) roped in the designer to help them set up a modular training and look into the technical and artistic aspects of the programme.

Daunting tasks

At Chantiers-Écoles, one of Lim’s roles was to reintroduce the traditional method to the trainees. But there were no precedents and virtually all the information on arts and crafts had to be researched, compiled or rediscovered.

Lim was lucky to track down some of the old master craftsmen who were still alive and based in Phnom Penh. Most of these artisans are from Battambang, a once dynamic city that sits between the Thai/Cambodian bordertown of Poipet and Phnom Penh.

At the beginning of the 20th century under French rule, Battambang experienced a rebirth of craft traditions with French and Siamese stylistics influences. The city produced skilled craftsmen, artists and musicians who later moved to Phnom Penh.

Over three years, Lim studied how the masters worked and took notes and pictures. He then taught the traditional process to youths who have zero background or knowledge in arts and crafts.

“These youths have never been to school and they had no concept of time and discipline,” explains Lim. “We had to figure out what language and method to use to make them understand without using technical jargons. We could only use visual tools to teach and motivate them.”

It was a learn-as-you-go process for both the teachers and trainees.

He spurs his trainees to look at links to their cultural past. Ancient temples dot the country and even in the boondocks, there is a presence of style and aesthetics. Cambodians also grew up with folktales told by their ancestors.

“We’re not a fine arts school, we give basic skills to the artisans so they can work as a team within our network. In this modern economy, our artisans can’t work on his own out there because he doesn’t hail from a traditional craftsman’s family.

“But people will give value to quality, aesthetic beauty and detail,” says Lim.

“Even when we do reproductions, we respect the material, the process of creating the craft and try to understand what our ancestors have done, the years they spent to carve a masterpiece and try to feel their spirits in our work.

“One of the most challenging things for me is, though I can come up with excellent designs that meet international standards, we still have to figure out how to transmit that message to our artisans about something so refined and with the right colour or shapes. It takes time.”

What delights Lim is that over time, the artisans have become sensitive to aesthetics.

“Even on weekends after work, when they're eating or lazing in their hammocks, they chat about proportions, what is good, what colour mixes well with another. They love to work on special orders, as they are freer to express their individual creativity.”

A pat in the back

After 10 years with AA, Lim can look back and be proud of one thing: He started working with 50 artisans and now AA has more than 600 artisans.

He walks alongside the artisans as they journey through life, from their apprenticeship to securing a stable job and starting a family.

“Now they have their own houses, and in the weekends, they can ride their motorbikes with their families to Angkor Wat, have a drink in front of the temple and spend a leisurely time,” says Lim, smiling.

“To most people, this may sound simple, but it is a big success to have this stable and ‘normal’ life in Cambodia.”

Today, one in three Cambodians still live on less than 2000 riels (RM1.70) a day (UNDP Cambodia). And most villagers from rural Cambodia have never stepped foot in Siem Reap.

But AA has created over 1000 jobs for its artisans and staff involved in marketing, retail, design and logistics.

“We have affected maybe a total of 4,000 to 5,000 Cambodians' lives, plus the children who are the future of Cambodia,” says Lim.

“I think I've been part of this good work.”
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